Exhibit 10.4
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AMENDED AND RESTATED REIMBURSEMENT AGREEMENT
Dated as of March 31, 2003
Among
CHARTER MAC EQUITY ISSUER TRUST,
Account Party
and
FLEET NATIONAL BANK,
Agent
FLEET NATIONAL BANK,
Issuing Bank
and
THE PARTICIPANTS NAMED HEREIN FROM TIME TO TIME
Participants
Letter of Credit Facility up to $35,000,000.00
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Table of Contents
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ARTICLE 1. DEFINITIONS AND GENERAL MATTERS...................................................1
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SECTION 1.1..............................................................Defined Terms 1
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SECTION 1.2....................................................................General 1
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SECTION 1.3......................................................Accounting Principles 2
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ARTICLE 2. AGREEMENT TO ISSUE LETTER OF CREDIT; LETTER OF
CREDIT AND L/C SCHEDULES.........................................................2
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SECTION 1.4....Commitment to Issue Letter of Credit and L/C Schedules; Procedures 2
(a) Establishment of Letter of Credit Facility.............................2
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(b) Procedures for Issuance of Letter of Credit and L/C
Schedules..............................................................4
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(c) Drawings under the Letter of Credit....................................4
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(d) Limitations............................................................5
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(e) Allocable Share of the Maximum Credit Amount; Addition
of Eligible Lease-Up Bonds to Letter of Credit Facility;
Deletion of Eligible Lease-Up Bonds from Letter of Credit
Facility................................................................5
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(a) with respect to Covered Eligible Bonds
which were included in the most recent
Applicable L/C Schedule and which are to
remain Covered Eligible Bonds under the
Applicable L/C Schedule, the Account Party
shall provide the calculation of the
Allocable Share of the Maximum Credit
Amount for each such Covered Eligible Bond
based upon the applicable Bond and
Property information included in the most
recent Servicer's Report furnished to the
Agent pursuant to Section 10.1(g)(i)
hereof, with such calculations to be set
forth in an Allocable Share Calculation
Certificate in the form of Exhibit I.....................5
(b) the Account Party shall specifically
identify in a Bond Withdrawal Notice any
Covered Eligible Bonds which were included
in the most recent Applicable L/C Schedule
which
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the Account Party has elected to withdraw
from the Letter of Credit Facility (and
which are, therefore, not included in the
pro forma Applicable L/C Schedule).......................5
(c) with respect to additional Bonds which
the Account Party is requesting to be
included as Covered Eligible Bonds (with
no such request being permitted during any
Extension Period), the Account Party shall
furnish the Agent with a Bond Eligibility
Determination Request in the form of
Exhibit J, pursuant to which:............................6
(i) the Account Party shall certify
that each such Bond is an Eligible
Lease-Up Bond as of the date of the
request for inclusion as a Covered
Eligible Bond and that it
reasonably expects such Bond to be
an Eligible Lease-Up Bond as of the
subject Quarterly L/C Re-Schedule
Date;............................................6
(ii) the Account Party shall provide the
Agent with the Eligible Lease-Up
Bond Supporting Documentation
relating to such Eligible Lease-Up
Bond, including, without
limitation, the Projected
Stabilization Date of such Eligible
Lease-Up Bond;...................................6
(iii) the Account Party shall certify
that no Event of Default has
occurred and is continuing at the
time of such request;............................6
(iv) the Account Party shall certify
that, after giving effect to the
Allocable Share of the Maximum
Credit Amount which would be
attributed to such Bond, the sum of
(x) the aggregate amount of the
Allocable Share of the Maximum
Credit Amount for all Covered
Eligible Bonds to be covered by the
subject L/C Schedule, plus (y) the
amount of any then Unpaid Drawings,
would
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not exceed the Maximum Credit
Amount; and......................................6
(v) the Account Party shall certify
that there has not occurred any
Material Change to the Transaction
Documents........................................6
(d) with respect to Covered Eligible Bonds
that are secured by Properties which have
become Stabilized Properties (and which
are therefore not to be included on the
Applicable L/C Schedule), the Account
Party shall provide the Agent with the
applicable Stabilization Confirmation (if
not previously provided to the Agent)....................6
(e) the Account Party shall provide the Agent
with written confirmation from each of the
Beneficiaries of their respective approval
of the pro forma L/C Schedule............................7
(f) Ineligible Project Bonds...............................................7
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(g) Voluntary Withdrawal of Covered Eligible Bonds.........................8
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(h) Termination of Allocable Share of Maximum Credit Amount................8
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(i) Amendment of Applicable L/C Schedule...................................8
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SECTION 1.5...............................................Extension of Expiration Date 9
(a) Procedures and Conditions for Extension................................9
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(b) No Obligation to Extend...............................................10
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(c) Extension Period......................................................10
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(d) Termination of Letter of Credit Facility..............................10
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ARTICLE 3. REIMBURSEMENT AND OTHER PAYMENTS...............................................10
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SECTION 1.6..................................Repayment of Draws under Letter of Credit 10
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SECTION 1.7...............................................................Default Rate 11
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SECTION 1.8...............................................................Late Charges 11
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SECTION 1.9...................................................Payment of other Amounts 11
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SECTION 1.10...........................................................Lawful Currency 11
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SECTION 1.11......................................Payments without Setoff or Deduction 12
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SECTION 1.12.................................................Future Legal Requirements 12
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SECTION 1.13...............................................Future Capital Requirements 13
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SECTION 1.14...............................................................Certificate 13
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SECTION 1.15.........................................Computations of Interest and Fees 14
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ARTICLE 4. LETTER OF CREDIT FACILITY FEES.................................................14
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SECTION 1.16......................................................Letter of Credit Fee 14
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SECTION 1.17.......................................................Unused Facility Fee 14
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SECTION 1.18....................................................Issuing Bank's Charges 14
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SECTION 1.19................................................................Other Fees 15
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SECTION 1.20.............................................................Fees; General 15
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ARTICLE 5. CONCERNING LETTER OF CREDIT....................................................15
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SECTION 1.21............................................................Responsibility 15
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SECTION 1.22..............................................Honoring of Letter of Credit 15
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SECTION 1.23.....................................................Risk of Account Party 15
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SECTION 1.24...............................................Concerning Specified Rights 16
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SECTION 1.25......................................Practices Governing Letter of Credit 16
SECTION 1.26...................................................Relationship of Parties 16
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SECTION 1.27.........................................Transfers of the Letter of Credit 17
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ARTICLE 6. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT....................17
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SECTION 1.28................................................Restatement Effective Date 17
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(a) Satisfactory Credit Documents.........................................17
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(b) L/C Schedule No. 3....................................................17
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(c) No Default under Transaction Documents................................17
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(d) No Material Change....................................................17
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(e) Warranties and Representations Accurate...............................17
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(f) Officer's Certificates................................................18
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(g) Preferred Shares Covenants............................................18
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(h) Constituent Documents and Entity Agreements...........................18
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(i) Votes, Consents and Authorizations....................................18
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(j) Incumbency Certificate; Authorized Signers............................18
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(k) Corporate Structure...................................................19
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(l) Litigation............................................................19
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(m) Financial Statements..................................................19
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(n) Examination of Books and Assets.......................................19
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(o) Compliance with Law...................................................19
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(p) Legal and other Opinions..............................................19
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(q) Payment of Fees.......................................................20
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(r) No Event of Default...................................................20
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(s) Additional Documents..................................................20
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(t) Further Assurances....................................................20
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SECTION 1.29..........Addition of Eligible Lease-Up Bonds to Letter of Credit Facility 20
(a) Representations True; No Event of Default.............................20
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(b) No Legal Impediment...................................................20
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(c) Governmental Regulation...............................................20
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(d) Proceedings and Documents.............................................21
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(e) No Adverse Changes....................................................21
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(f) Other Certificates....................................................21
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ARTICLE 7. AUTHORIZED REPRESENTATIVES.....................................................21
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SECTION 1.30........................Continuing Authority of Authorized Representatives 21
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ARTICLE 8. OBLIGATIONS ABSOLUTE...........................................................21
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SECTION 1.31......................................................Obligations Absolute 22
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SECTION 1.32.......No Liability on Account of Issuance or Transfer of Letter of Credit 22
SECTION 1.33..................................................Other Persons Not Liable 23
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ARTICLE 9. WARRANTIES AND REPRESENTATIONS.................................................23
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SECTION 1.34.....................................................Transaction Documents 23
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SECTION 1.35.......................................................No Event of Default 23
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SECTION 1.36.....................................................Financial Information 23
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SECTION 1.37.............................................................No Violations 24
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SECTION 1.38.............................................................No Litigation 24
(a) Account Party and Charter Mac.........................................24
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(b) Other Charter Entities................................................24
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SECTION 1.39.....................................Franchises, Patents, Copyrights, Etc. 24
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SECTION 1.40...................................................Good Title and No Liens 24
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SECTION 1.41............................................................Entity Matters 24
(a) Organization..........................................................25
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(b) Ownership, Subsidiaries and Taxpayer Identification
Numbers...............................................................25
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(c) Authorization.........................................................25
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SECTION 1.42.........................................................Valid and Binding 26
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SECTION 1.43...........................................Deferred Compensation and ERISA 26
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SECTION 1.44.....................................No Materially Adverse Contracts, Etc. 26
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SECTION 1.45.............................Compliance With Other Instruments, Laws, Etc. 26
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SECTION 1.46................................................................Tax Status 26
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SECTION 1.47...............................Holding Company and Investment Company Acts 27
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SECTION 1.48......................................................Certain Transactions 27
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SECTION 1.49..........................................................Credit Documents 27
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SECTION 1.50........................................................No Material Change 27
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SECTION 1.51.......................................................No Broker or Finder 27
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SECTION 1.52...................................Background Information and Certificates 27
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SECTION 1.53.............................................................Reaffirmation 27
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SECTION 1.54..........................................Existing Reimbursement Agreement 28
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ARTICLE 10. COVENANTS.....................................................................28
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SECTION 1.55.....................................................Affirmative Covenants 28
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(a) Punctual Payment......................................................28
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(b) Maintenance of Office.................................................28
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(c) Records and Accounts..................................................28
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(d) Compliance with Transaction Documents.................................28
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(e) Bond Documents........................................................29
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(f) Notices...............................................................29
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(i) Ineligible Bond Status.........................................29
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(ii) Defaults.......................................................29
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(a) The Account Party will promptly notify the
Agent in writing of the occurrence of any
Event of Default known to the Account
Party...................................................29
(b) If any Person shall give any notice to the
Account Party (or to any Subsidiary of the
Account Party, if the Account Party has,
or, if in the exercise of appropriate
diligence as the parent of such
Subsidiary, reasonably should have had,
actual knowledge thereof) or take any
other action involving the Account Party
(or involving any Subsidiary of the
Account Party, if the Account Party has,
or, if, in the exercise of appropriate
diligence as the parent of such
Subsidiary, reasonably should have had,
actual knowledge thereof) in respect of a
claimed default (whether or not
constituting an event of default) under
any note, evidence of indebtedness,
indenture or other obligation, including,
without limitation, the Insurance
Agreement, the Liquidity Facility or any
other Transaction Document, to which or
with respect to which the Account Party or
any of its Subsidiaries is a party or
obligor, whether as principal or surety,
and such default would permit the holder
of such note or obligation or other
evidence of indebtedness to accelerate the
maturity thereof, which acceleration would
have a material adverse effect on the
Account Party, the Account Party shall
forthwith give written notice thereof to
the Agent
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describing the notice or action and the
nature of the claimed default...........................29
(c) The Account Party will provide the Agent
with copies of any notices required to be
provided by any Charter Entity to MBIA
pursuant to Section 3.4(d) of the
Insurance Agreement.....................................29
(d) The Account Party will promptly notify the
Agent in writing of the occurrence of any
event of default under any of the Bond
Documents relating to a Covered Eligible
Bond....................................................30
(iii) Notification of Claims against Covered Eligible
Bonds..........................................................30
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(iv) Notice of Litigation and Judgments.............................30
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(g) Financial Statements and Reports......................................30
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(i) Monthly Statements.............................................30
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(ii) Quarterly Statements...........................................30
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(iii) Compliance Certificate.........................................30
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(iv) Additional Financial Information...............................31
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(h) Existence; Conduct of Business........................................31
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(i) Insurance.............................................................31
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(j) Taxes and Trade Debt..................................................31
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(k) Compliance with Laws, Contracts, Licenses, and Permits................31
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(l) Indemnification Against Payment of Brokers' Fees......................32
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(m) Fiscal Year...........................................................32
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(n) Place for Records; Inspection.........................................32
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(o) Costs and Expenses....................................................33
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(p) Indemnification.......................................................33
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(q) Amendments to Credit Documents........................................34
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(r) Account Party Financial Covenants.....................................34
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(i) Adjusted Tangible Net Worth....................................34
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(ii) Fixed Charges..................................................35
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(iii) Leverage.......................................................35
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(s) Further Assurances....................................................35
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(t) Revenue Bond Valuation................................................35
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SECTION 1.56........................................................Negative Covenants 35
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(a) Liens.................................................................35
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(b) Merger; Sale of Assets................................................35
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(c) Loans and Advances....................................................36
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(d) No Material Modifications.............................................36
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(f) Effect of Amendment...................................................36
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ARTICLE 11. EVENTS OF DEFAULT.............................................................36
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SECTION 1.57.........................................................Events of Default 36
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(a) Failure to Pay........................................................36
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(b) Failure to Perform....................................................36
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(c) Breach of Representation or Warranty..................................37
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(d) Failure to Pay other Indebtedness.....................................37
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(e) Insolvency............................................................37
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(f) Involuntary Proceedings...............................................37
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(g) Judgments.............................................................37
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(h) Cancellation of Credit Documents......................................37
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(i) ERISA.................................................................38
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(j) Indictment............................................................38
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(k) Material Adverse Change...............................................38
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(l) Change in Control.....................................................38
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(m) Regarding Charter Mac.................................................38
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(n) Mortgage Warehousing Facility.........................................38
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(o) Acquisition Line Facility.............................................38
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(p) Bond Warehousing Facility.............................................38
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(q) Transaction Documents.................................................38
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(r) Failure to Pay Dividends..............................................39
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SECTION 1.58..........................................................Certain Remedies 39
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(a) Establishment of Funded Reserve.......................................39
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(b) Accelerate Debt.......................................................39
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(c) Pursue Remedies.......................................................39
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(d) Power of Attorney.....................................................39
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SECTION 1.59...........................................................Written Waivers 39
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ARTICLE 12. SET-OFF.......................................................................40
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SECTION 1.60...................................................................Set-Off 40
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SECTION 1.61...........................................................Right to Freeze 40
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SECTION 1.62.........................................................Additional Rights 41
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ARTICLE 13. THE AGENT AND THE PARTICIPANTS................................................41
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SECTION 1.63................................Rights, Duties and Immunities of the Agent 41
(a) Appointment of Agent..................................................41
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(b) Administration of Letter of Credit Facility by Agent..................41
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(c) Delegation of Duties..................................................42
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(d) Exculpatory Provisions................................................42
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(e) Reliance by Agent.....................................................42
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(f) Notice of Event of Default............................................43
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(g) Participants' Credit Decisions........................................43
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(h) Agent's Reimbursement and Indemnification.............................43
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(i) Agent in its Individual Capacity......................................44
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(j) Successor Agent.......................................................44
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(k) Duties in the Case of Enforcement.....................................44
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SECTION 1.64......................Respecting Issuance of Letter of Credit and Payments 45
(a) Participations in Letter of Credit....................................45
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(b) Nature of Obligations of Participants.................................46
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(c) Payments to Agent.....................................................47
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(d) Distribution of Liquidation Proceeds..................................47
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(e) Adjustments...........................................................48
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(f) Setoff................................................................48
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(g) Distribution by Agent.................................................48
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(h) Delinquent Participant................................................49
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SECTION 1.65..............................................Assignment and Participation 50
(a) Conditions to Assignment by Participants and Issuing Bank.............50
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(b) Certain Representations and Warranties; Limitations;
Covenants.............................................................50
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(c) Register..............................................................51
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(d) Participations........................................................52
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(e) Disclosure............................................................52
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(f) Miscellaneous Assignment Provisions...................................52
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(g) No Assignment by Account Party........................................53
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SECTION 1.66....................................................Administrative Matters 53
(a) Amendment, Waiver, Consent, Etc.......................................53
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(b) Deemed Consent or Approval............................................54
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ARTICLE 14. GENERAL PROVISIONS............................................................54
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SECTION 1.67...................................................................Notices 54
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SECTION 1.68................................................Parties Bound; Integration 56
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SECTION 1.69..........................................Waivers, Extensions and Releases 56
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SECTION 1.70...............................................Governing Law; Severability 57
(a) Substantial Relationship..............................................57
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(b) Place of Delivery.....................................................57
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(c) Governing Law; Sealed Instruments.....................................57
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(d) Severability..........................................................57
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SECTION 1.71...................................................Consent to Jurisdiction 57
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SECTION 1.72.........................................................JURY TRIAL WAIVER 57
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SECTION 1.73..................................................................Survival 58
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SECTION 1.74.........................................................Cumulative Rights 58
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SECTION 1.75.......................Claims Against Agent, Issuing Bank, or Participants 58
(a) Account Party Must Notify.............................................58
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(b) Remedies..............................................................59
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(c) Limitations...........................................................59
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SECTION 1.76..............................................................Counterparts 59
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SECTION 1.77.......................................................Time Of the Essence 59
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SECTION 1.78............................................................No Oral Change 59
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SECTION 1.79........................................................Monthly Statements 60
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SECTION 1.80.................................................Acknowledgment of Joinder 60
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EXHIBITS AND SCHEDULES
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Exhibit A - Definitions
Exhibit B - Form of Covered Eligible Bond Report
Exhibit C - Form of L/C Schedule No. 3
Exhibit D - Form of L/C Schedule
Exhibit E - Letter of Credit (with L/C Schedule No. 2)
Exhibit F - Preferred Shares Covenants
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of L/C Schedule Request Certificate
Exhibit I - Form of Allocable Share Calculation Certificate
Exhibit J - Form of Bond Eligibility Determination Request
Exhibit K - Form of Bond Withdrawal Notice
Exhibit L - Form of Stabilization Confirmation
Exhibit M - Charter Mac Covenants
Annex M - 1 Existing Permitted Indebtedness
Annex M - 2 Revenue Bond Valuation Methodology
Schedule 7 - Authorized Representatives
Schedule 9.8(b)(i) - Account Party Organizational Documents
Schedule 9.8(b)(ii) - Taxpayer Identification and State Organizational Numbers
Schedule 9.8(b)(iii) - Outstanding Options, Etc.
Schedule 9.15 - Certain Transactions
Schedule 10.1(i) - Insurance
Schedule A - Participants, Commitments, and Commitment Percentages
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AMENDED AND RESTATED REIMBURSEMENT AGREEMENT
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THIS AMENDED AND RESTATED REIMBURSEMENT AGREEMENT (this "Agreement") is
made as of March 31, 2003, by and among CHARTER MAC EQUITY ISSUER TRUST (the
"Account Party"), a Delaware statutory trust, FLEET NATIONAL BANK ("Fleet"), as
Agent (in such capacity, the "Agent") for itself, the Issuing Bank, and the
Participants, and as the Issuing Bank (in such capacity, the "Issuing Bank"),
and the Participants.
RECITALS
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The Account Party, the Agent, the Issuing Bank, and Fleet, as the sole
Participant thereunder, are parties to a certain Reimbursement Agreement dated
as of December 10, 2002 (the "Existing Reimbursement Agreement"), pursuant to
which Fleet, as the Issuing Bank, issued the Letter of Credit and has issued L/C
Schedule No. 2 (superseding the Initial L/C Schedule). The Permitted Transfer
has occurred, and the beneficiary under the Letter of Credit currently is the
Administrative Agent.
On and subject to the terms and conditions set forth herein, Fleet (in
its capacity as Agent, Issuing Bank, and sole Participant) and the Account Party
desire to amend the Existing Reimbursement Agreement to, among other things, add
Citicorp USA, Inc., as a Participant, and to restate certain provisions of the
Existing Reimbursement Agreement.
This Agreement is not intended by the parties to constitute either a
novation or a discharge or satisfaction of the indebtedness and obligations
under the Existing Reimbursement Agreement (which indebtedness and obligations
shall remain outstanding hereunder on the terms and conditions hereinafter
provided).
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
ARTICLE 1.
DEFINITIONS AND GENERAL MATTERS.
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SECTION 1.1 Defined Terms. For all purposes of this Agreement,
except as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms not otherwise defined herein shall have the meanings
given to such terms in Exhibit A hereto, which is incorporated by reference
herein and made a part of this Agreement.
SECTION 1.2 General. Unless otherwise specified in the Credit
Documents: (a) references in a Credit Document to "Sections," "Exhibits," and
"Schedules" are to sections, exhibits, and schedules in and to such Credit
Document, (b) references in a Credit Document to
any document, instrument, or agreement (i) shall include all exhibits,
schedules, and other attachments thereto, (ii) shall include all documents,
instruments, or agreements issued or executed in replacement thereof, to the
extent permitted hereby, and (iii) shall mean such document, instrument, or
agreement, or replacement or predecessor thereto, as amended, supplemented,
restated, or otherwise modified from time to time to the extent permitted hereby
and in effect at any given time, (c) wherever from the context it appears
appropriate, each term stated in either the singular or plural shall include the
singular and plural, and pronouns stated in the masculine, feminine, or neuter
gender shall include the masculine, the feminine, and the neuter, (d) unless
explicitly set forth to the contrary, a reference to a "Subsidiary" means a
Subsidiary of the Account Party or a Subsidiary of such Subsidiary, and a
reference to an "Affiliate" means a reference to an Affiliate of the Account
Party, (e) titles and captions of Articles, Sections, subsections, and clauses
in any Credit Document are for convenience only, and neither limit nor amplify
the provisions of this Agreement, (f) unless otherwise indicated, all references
to time are references to Boston, Massachusetts, time, (g) all references to
money (including the symbol "$") are to lawful currency of the United States,
(h) references to "including" mean including without limiting the generality of
any description preceding that word, (i) the rule of construction that
references to general items that follow references to specific items are limited
to the same type or character of those specific items is not applicable in the
Credit Documents, (j) references to any Person include that Person's heirs,
personal representatives, successors, trustees, receivers, and permitted
assigns, and (k) references to any Legal Requirement include every amendment or
supplement to it, rule and regulation adopted under it, and successor or
replacement for it.
SECTION 1.3 Accounting Principles. Except as otherwise specifically
provided in this Agreement, all accounting and financial terms used in the
Credit Documents and the compliance with each financial covenant therein shall
be determined in accordance with GAAP, and all accounting principles shall be
applied on a consistent basis so that the accounting principles in a current
period are comparable in all material respects to those applied during the
preceding comparable period.
ARTICLE 2.
AGREEMENT TO ISSUE LETTER OF CREDIT; LETTER OF CREDIT AND L/C
SCHEDULES.
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SECTION 1.4 Commitment to Issue Letter of Credit and L/C Schedules;
Procedures.
(a) Establishment of Letter of Credit Facility. Pursuant to the
Existing Reimbursement Agreement, at the request of the Account Party, the
Issuing Bank established this letter of credit facility, to be continued and
maintained as provided in this Agreement (the "Letter of Credit Facility") in
order to provide credit support from time to time in respect of Eligible
Lease-Up Bonds, so that such Eligible Lease-Up Bonds, which otherwise would not
qualify as Seasoned Bonds under the Insurance Agreement, shall constitute
Seasoned Bonds
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thereunder (after giving effect to the credit support provided to such Eligible
Lease-Up Bond by the Letter of Credit Facility). Subject to the terms and
conditions of this Agreement and, as applicable, the Letter of Credit:
(i) (x) on the Initial Issuance Date (A) the Issuing Bank
issued the Letter of Credit and the Initial L/C Schedule in favor of the
Owner Trust and the Origination Trust (each, a "Beneficiary," and
collectively, the "Beneficiaries"), as their interests then appeared
with respect to each then Covered Eligible Bond, and (B) the Permitted
L/C Transfer was consummated, and (y) on each Quarterly L/C Re-Schedule
Date, the Issuing Bank shall issue a replacement L/C Schedule in favor
of the Beneficiaries, as their interests may appear with respect to each
Covered Eligible Bond (L/C Schedule No. 2 having been issued on December
31, 2002, and L/C Schedule No. 3 to be issued on the Agreement Date).
(ii) (x) prior to the Permitted L/C Transfer, each
Beneficiary was entitled to draw under the Letter of Credit in
accordance with the terms thereof upon, from and after the occurrence of
a Drawing Event occurring on or prior to the Expiration Date relating to
such Beneficiary's Covered Eligible Bonds, and (y) from and after the
Permitted L/C Transfer, only the Administrative Agent may draw under the
Letter of Credit in accordance with the terms thereof upon, from and
after the occurrence of a Drawing Event occurring on or prior to the
Expiration Date, or on a date that is no more than five (5) Business
Days before the Expiration Date, with respect to any Covered Eligible
Bonds.
(iii) the Issuing Bank agrees to pay from its own funds the
amount of any conforming Drawing made in accordance with the terms and
conditions of the Letter of Credit, and regardless of whether any
Participant fails to reimburse the Issuing Bank for such Participant's
pro rata share thereof, or the Agent has been granted any Collateral
therefor,
(iv) the Account Party agrees to reimburse the Issuing Bank
for the amount of any Drawings made under the Letter of Credit, with
interest thereon as provided for herein, and to pay the Issuing Bank and
the Agent the fees provided for herein,
(v) the Participants agree to pay to the Agent, for the
benefit of the Issuing Bank, their respective Commitment Percentages of
all Unpaid Drawings, and
(vi) the proceeds of all Drawings shall be paid directly by
the Issuing Bank to the Administrative Agent in accordance with the
Funding Instructions, to be held and administered by the Administrative
Agent in accordance with the terms and conditions of the Administration
and Custody Agreement.
-3-
(b) Procedures for Issuance of Letter of Credit and L/C
Schedules. On the Agreement Date and each subsequent Quarterly L/C Re-Schedule
Date, the Issuing Bank shall (i) issue to the Administrative Agent, for the
account of the Account Party, a replacement L/C Schedule, which shall thereupon
become the Applicable L/C Schedule, and (ii) provide the Beneficiaries with a
copy of the replacement L/C Schedule. The Letter of Credit shall be deemed to
have been automatically amended upon the issuance of each Applicable L/C
Schedule and on any date that an Applicable L/C Schedule is deemed to have been
amended as provided for in this Agreement. Each Applicable L/C Schedule shall
reflect (i) the recalculation of the Allocable Share of the Maximum Credit
Amount of each Covered Eligible Bond under the immediately preceding Applicable
L/C Schedule which remains a Covered Eligible Bond, (ii) the elimination of each
Covered Eligible Bond which became a Stabilized Property or in respect of which
a Stabilization Failure Drawing was made during the period between Quarterly L/C
Re-Schedule Dates (or between the Initial Issuance Date and the first Quarterly
L/C Re-Schedule Date, as the case may be), and (iii) the addition (which may not
occur during any Extension Period), withdrawal, or deletion of any Covered
Eligible Bonds pursuant to Sections 2.1(e), 2.1(f) and 2.1(g) hereof.
(c) Drawings under the Letter of Credit. Provided that a Drawing
Event has occurred and is continuing, Drawings under the Letter of Credit may be
made following presentation to the Issuing Bank, at the Drawing Office, which
presentation may be made by facsimile transmission, in accordance with the terms
and conditions of the Letter of Credit: (x) from time to time prior to the
Expiration Date, of a Stabilization Failure Draw Notice, or (y) on a Business
Day which is not more than five (5) Business Days prior to the Expiration Date,
of an Expiry Draw Notice, and (z) in the case of all Drawings, such other
documents as may be required to be presented pursuant to the terms of the Letter
of Credit. Drawings shall be disbursed by the Issuing Bank (solely from its own
funds) in accordance with the Funding Instructions, or dishonored (if such
Drawing does not conform with the requirements of the Letter of Credit) by 4:00
P.M. (Boston time) on the third (3rd) Business Day after presentation of
purportedly conforming documents. For the purposes of the preceding sentence
(and not for the purpose of determining whether a Drawing was timely presented),
presentation of a Drawing Notice made after 12:00 Noon (Boston time) on any
Business Day shall be deemed made on the next Business Day. The amount of any
Drawing under the Letter of Credit shall be equal to, in the case of:
(i) A Stabilization Failure Drawing, an amount equal to the
Allocable Share of the Maximum Credit Amount for the Covered Eligible
Bond as to which the subject Stabilization Failure occurred and
respecting which the Issuing Bank has received such Stabilization
Failure Draw Notice.
(ii) An Expiry Drawing, an amount equal to the aggregate
Allocable Share of the Maximum Credit Amount of each Covered Eligible
Bond that is secured by a Property which is not a Stabilized Property as
of such time.
-4-
(d) Limitations. Notwithstanding any provision of this Agreement,
the sum of (i) the aggregate amount of the Allocable Share of the Maximum Credit
Amount of each Covered Eligible Bond under the Applicable L/C Schedule, plus
(ii) the amount of any Unpaid Drawings, shall at no time exceed the Maximum
Credit Amount.
(e) Allocable Share of the Maximum Credit Amount; Addition of
Eligible Lease-Up Bonds to Letter of Credit Facility; Deletion of Eligible
Lease-Up Bonds from Letter of Credit Facility.
(i) Subject to the terms and conditions hereof, commencing
with the Agreement Date, and on each Quarterly L/C Re-Schedule Date
occurring thereafter prior to the Expiration Date, the Agent will issue
a replacement L/C Schedule (which, upon such issuance, will become the
Applicable L/C Schedule) in favor of the Administrative Agent, a copy of
which shall be furnished to the Account Party and the Beneficiaries, to
reflect (x) the recalculation of the Allocable Share of the Maximum
Credit Amount of each Covered Eligible Bond which is to remain a Covered
Eligible Bond under the Applicable L/C Schedule, and (y) the addition of
Covered Eligible Bonds (which shall not be permitted during any
Extension Period), and (z) the deletion or withdrawal of Covered
Eligible Bonds.
(ii) No more than thirty (30) days, and no less than fifteen
(15) days, prior to each Quarterly L/C Re-Schedule Date, the Account
Party shall submit to the Agent, for its review and approval, a pro
forma Applicable L/C Schedule to be issued on the next Quarterly L/C
Re-Schedule Date, together with a certification by an Authorized
Representative of the Account Party in the form of Exhibit H hereto (an
"L/C Schedule Request Certificate") as to the following matters and any
supporting documentation referred to below:
(a) with respect to Covered Eligible Bonds which
were included in the most recent Applicable L/C
Schedule and which are to remain Covered Eligible Bonds
under the Applicable L/C Schedule, the Account Party
shall provide the calculation of the Allocable Share of
the Maximum Credit Amount for each such Covered
Eligible Bond based upon the applicable Bond and
Property information included in the most recent
Servicer's Report furnished to the Agent pursuant to
Section 10.1(g)(i) hereof, with such calculations to be
set forth in an Allocable Share Calculation Certificate
in the form of Exhibit I.
(b) the Account Party shall specifically identify
in a Bond Withdrawal Notice any Covered Eligible Bonds
which were included in the most recent Applicable L/C
Schedule which the Account Party has elected to
withdraw from the Letter of Credit
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Facility (and which are, therefore, not included in the
pro forma Applicable L/C Schedule).
(c) with respect to additional Bonds which the
Account Party is requesting to be included as Covered
Eligible Bonds (with no such request being permitted
during any Extension Period), the Account Party shall
furnish the Agent with a Bond Eligibility Determination
Request in the form of Exhibit J, pursuant to which:
(i) the Account Party shall certify that
each such Bond is an Eligible Lease-Up Bond as of
the date of the request for inclusion as a
Covered Eligible Bond and that it reasonably
expects such Bond to be an Eligible Lease-Up Bond
as of the subject Quarterly L/C Re-Schedule Date;
(ii) the Account Party shall provide the
Agent with the Eligible Lease-Up Bond Supporting
Documentation relating to such Eligible Lease-Up
Bond, including, without limitation, the
Projected Stabilization Date of such Eligible
Lease-Up Bond;
(iii) the Account Party shall certify that
no Event of Default has occurred and is
continuing at the time of such request;
(iv) the Account Party shall certify that,
after giving effect to the Allocable Share of the
Maximum Credit Amount which would be attributed
to such Bond, the sum of (x) the aggregate amount
of the Allocable Share of the Maximum Credit
Amount for all Covered Eligible Bonds to be
covered by the subject L/C Schedule, plus (y) the
amount of any then Unpaid Drawings, would not
exceed the Maximum Credit Amount; and
(v) the Account Party shall certify that
there has not occurred any Material Change to the
Transaction Documents.
(d) with respect to Covered Eligible Bonds that
are secured by Properties which have become Stabilized
Properties (and which are therefore not to be included
on the Applicable L/C Schedule), the Account Party
shall provide the Agent with the applicable
Stabilization Confirmation (if not previously provided
to the Agent).
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(e) the Account Party shall provide the Agent
with written confirmation from each of the
Beneficiaries of their respective approval of the pro
forma L/C Schedule.
(iii) No less than two (2) Business Days prior to the
Quarterly L/C Re-Schedule Date, the Agent shall notify the Account Party, the
Administrative Agent, and the Beneficiaries that either (x) the Agent and the
Issuing Bank have approved the pro forma L/C Schedule (including, without
limitation, the addition of any requested new Eligible Lease-Up Bonds as Covered
Eligible Bonds), in which event the Issuing Bank shall issue the L/C Schedule on
the subject Quarterly L/C Re-Schedule Date in the form of such pro forma L/C
Schedule, or (y) that the Agent and the Issuing Bank have not approved all or
any portion of the pro forma L/C Schedule, in which event the Issuing Bank shall
issue an L/C Schedule (to be the Applicable L/C Schedule) on the subject
Quarterly L/C Re-Schedule Date covering only such Covered Eligible Bonds, with
such Allocable Shares of the Maximum Credit Amount, as the Agent and the Issuing
Bank shall have determined not to be objectionable. Each Applicable L/C Schedule
shall upon issuance be sent by telecopier to the Beneficiaries, the Account
Party, and the Administrative Agent with the original to be sent to the
Administrative Agent by one of the other methods of giving notices under Section
14.1.
(f) Ineligible Project Bonds. In the event that any Covered
Eligible Bond becomes an Ineligible Project Bond, the Account Party and the
applicable Owner Beneficiary shall cause any one (1) of the following events to
occur within seven (7) Business Days after such Bond becomes an Ineligible
Project Bond:
(i) Eliminate such Ineligible Project Bond from the
Applicable L/C Schedule, by giving the Agent a Bond Withdrawal Notice
covering such Ineligible Project Bond. Upon the delivery of a Bond
Withdrawal Notice, the Applicable L/C Schedule shall automatically be
deemed amended to eliminate the Bonds identified therein for withdrawal;
or
(ii) Unless such event has occurred during any Extension
Period, in which case the option set forth in this clause (ii) shall not
be available, substitute on the Applicable L/C Schedule an Eligible
Lease-Up Bond for the Ineligible Project Bond; provided, however (x)
after giving effect to the removal of the Ineligible Project Bond from
the Letter of Credit Facility and the substitution of another Eligible
Lease-Up Bond therefor, the sum of the aggregate amount of the Allocable
Share of the Maximum Credit Amount of all Covered Eligible Bonds which
are subject to the Letter of Credit Facility, plus any Unpaid Drawings
shall not exceed the Maximum Credit Amount, (y) the Account Party shall
deliver a Bond Withdrawal Notice covering the Ineligible Project Bond
being withdrawn and a Bond Eligibility Determination Request with
respect to the Eligible Lease-Up Bond proposed for such substitution,
and (z) the Account Party and the applicable Owner Beneficiary shall
execute and deliver to the Agent such documentation
-7-
as the Agent shall reasonably require to reflect the withdrawal of the
Ineligible Project Bond from the Letter of Credit Facility and the
replacement of same with a substitute Eligible Lease-Up Bond and
otherwise satisfy the applicable requirements of Section 2.1(e)(ii)(c)
with respect to such requested substitute Eligible Lease-Up Bond. Upon
the satisfaction of the applicable requirements of this Section
2.1(f)(ii) and Section 2.1(e)(ii)(c), the Applicable L/C Schedule shall
automatically be deemed amended to eliminate the subject Ineligible
Project Bond and to add the substitute Eligible Lease-Up Bond as a
Covered Eligible Bond; or
(iii) Deposit into the Cash Collateral Account an amount
equal to the Allocable Share of the Maximum Credit Amount of the subject
Ineligible Project Bond, with such funds at all times constituting cash
Collateral to the Agent and the Issuing Bank to secure all Obligations,
and the Account Party shall execute and deliver to the Agent a Cash
Collateral Pledge Agreement and such other and further instruments,
documents, and agreements as the Agent may reasonably require in
connection therewith. Upon the completion of the foregoing, as confirmed
by the Agent in writing, such Ineligible Project Bond may continue as a
Covered Eligible Bond for up to an additional one hundred eighty (180)
days or until the Expiration Date, if earlier. The Agent shall return to
the Account Party any Collateral held by it hereunder in respect of any
Bond in respect of which no Drawing has been made and as to which (x)
the Account Party elects to exercise either of the options, to the
Agent's satisfaction, set forth in clauses (i) and (ii) (other than
during any Extension Period), above, or (y) the Property securing such
Bond has become a Stabilized Property.
(g) Voluntary Withdrawal of Covered Eligible Bonds. From time to
time prior to the Expiration Date, the Account Party may voluntarily withdraw
Covered Eligible Bonds from the Applicable L/C Schedule by giving the Agent a
Bond Withdrawal Notice covering the Bonds to be so withdrawn. Upon the delivery
of a Bond Withdrawal Notice, the withdrawn Bonds shall no longer be Covered
Eligible Bonds, and the Applicable L/C Schedule shall be automatically deemed
amended to eliminate such Bonds.
(h) Termination of Allocable Share of Maximum Credit Amount. From
and after the date on which the Agent receives a Stabilization Confirmation as
to a Property which secures a Covered Eligible Bond, or a Bond Withdrawal Notice
with respect to a Covered Eligible Bond (including one which has become an
Ineligible Project Bond), and without further notice to the Account Party, the
Administrative Agent, either Beneficiary, or any other Person, no Person shall
have any right to request a Drawing in respect of such Bond, and such Bond shall
be deleted from the Applicable L/C Schedule and released from the Letter of
Credit Facility without further action by the Agent, the Issuing Bank, the
Account Party, the Administrative Agent, or either Beneficiary, and the
Applicable L/C Schedule shall be deemed automatically amended as of such date to
eliminate such Bond as a Covered Eligible Bond.
(i) Amendment of Applicable L/C Schedule. If and whenever any
Applicable L/C Schedule is deemed to have been amended in accordance with
applicable
-8-
provisions of this Agreement, such amendment to such Applicable L/C Schedule
shall be effective immediately and automatically in accordance with such
applicable provisions, and the Issuing Bank shall promptly (i) issue to the
Administrative Agent, for the account of the Account Party, an amended and
restated replacement Applicable L/C Schedule to reflect each such amendment, and
(ii) provide the Beneficiaries with a copy of the amended and restated
replacement Applicable L/C Schedule. Any delay or failure of the Issuing Bank to
issue such amended and restated replacement Applicable L/C Schedule shall not
negate the effectiveness of the subject amendment.
SECTION 1.5 Extension of Expiration Date.
(a) Procedures and Conditions for Extension. If on the initial
Expiration Date there are any Covered Eligible Bonds then on the Applicable L/C
Schedule, the Expiration Date may be extended to no later than December 9, 2004
(with the period from the initial Expiration Date to the extended Expiration
Date being referred to herein as, the "Extension Period"): either (x) upon the
written notification from the Agent to the Account Party, the Beneficiaries, and
the Administrative Agent not less than thirty (30) Business Days prior to the
Expiration Date that the Issuing Bank has elected to extend the Expiration Date,
and stating the new Expiration Date, or (y) upon receipt of the written request
of the Account Party given to the Agent not less than forty-five (45) days, nor
more than one hundred twenty (120) days, prior to the Expiration Date, the Agent
and the Issuing Bank, in their sole and absolute discretion, may elect to extend
the Expiration Date (as relating to Covered Eligible Bonds on the Applicable L/C
Schedule as of the initial Expiration Date), and provide written notification to
the Account Party, the Beneficiaries, and the Administrative Agent stating the
new Expiration Date not more than thirty (30) Business Days after the Agent's
receipt of the Account Party's extension request. With respect to each of clause
(x) and (y), above, the Account Party hereby covenants and agrees as follows
(other than to the extent waived by the Issuing Bank, in its discretion, and
whether or not such waiver has been requested by the Account Party or any other
Person):
(i) The Account Party shall pay to the Agent, for the
account of the Issuing Bank (for the benefit of the Participants), on
the commencement date of the Extension Period, an extension fee equal to
0.375% of the Maximum Credit Amount (or any portion thereof) to be
extended, as determined solely by the Agent;
(ii) The Account Party shall execute and deliver such
documentation as the Agent may reasonably require in connection
therewith, all of which shall be in form and substance acceptable to the
Agent and the Issuing Bank; and
(iii) (x) At the time of any such written extension request
from the Account Party to the Agent, there shall exist no Event of
Default hereunder or under any of the other Credit Documents, and (y) on
the first day of the Extension Period there shall exist no uncured Event
of Default.
-9-
(b) No Obligation to Extend. The Account Party hereby agrees that
the Issuing Bank has no commitment or obligation to extend the Expiration Date
beyond December 9, 2003, unless each of the conditions for the Extension Period
set forth in Section 2.2 above shall have been satisfied or waived by the Agent
and the Issuing Bank with respect to such Extension Period. No extension (other
than an extension at the Issuing Bank's election pursuant to Section 2.2(a)(x))
shall be effective unless and until the Agent has confirmed, in writing, the
Account Party's compliance or waiver with all conditions precedent to the
extension of the Expiration Date.
(c) Extension Period. During the Extension Period, if any, no
Bonds which were not Covered Eligible Bonds on the initial Expiration Date may
become such, including in the event that a Covered Eligible Bond becomes an
Ineligible Project Bond.
(d) Termination of Letter of Credit Facility. If the Issuing
Bank's Credit Rating shall drop to lower than A by S&P or A2 by ▇▇▇▇▇'▇, then,
upon at least three (3) Business Days notice to the Agent and the Issuing Bank
(which notice the Agent shall promptly transmit to each of the Participants),
with the written consent of the Beneficiaries and the Administrative Agent, the
Account Party shall have the right to terminate the Letter of Credit Facility,
in its entirety, without premium or penalty, in which event (i) such notice
shall have the effect of a Bond Withdrawal Notice as to all then Covered
Eligible Bonds, (ii) the Account Party shall immediately pay to the Agent, for
the account of the Issuing Bank (for the further ratable benefit of the
Participants, as the case may be), all outstanding Unpaid Drawings and all
accrued and unpaid interest on all Obligations, and all other outstanding
Obligations, including accrued fees up to such date determined on a prorated,
per diem basis, (iii) the Maximum Credit Amount and all Commitments shall
thereupon be reduced to zero, and the Letter of Credit Facility shall terminate,
and (iv) the Issuing Bank and the Account Party shall reconcile (either in cash
from the Issuing Bank, or as a credit against amounts due by the Account Party,
as the case may be) the Letter of Credit Fee over the period from the beginning
of the quarter in which such termination occurs and the date of such
termination, determined on a per diem basis.
ARTICLE 3.
REIMBURSEMENT AND OTHER PAYMENTS.
---------------------------------
SECTION 1.6 Repayment of Draws under Letter of Credit. The Account
Party hereby agrees to pay to the Agent, for the account of the Issuing Bank, on
the date which is two (2) Business Days after any Drawing, a sum equal to the
amount of such Unpaid Drawing, together with interest on such sum from the time
paid by the Issuing Bank at a per annum rate equal to the Prime Rate. If the
amount of an Unpaid Drawing is not reimbursed by 12:00 noon (Boston time) on the
second Business Day following such Drawing, interest shall accrue on such amount
from such time until paid at the Default Rate. The obligations of the Account
Party under this Section 3.1 to reimburse the Issuing Bank with respect to
Unpaid Drawings (including, in each case, interest thereon) shall be absolute
and unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment
-10-
which the Account Party may have or have had against the Agent, the Issuing
Bank, or any Participant, including, without limitation, any defense based upon
the failure of any Drawing under the Letter of Credit to conform to the terms of
the Letter of Credit or any nonapplication or misapplication by a Beneficiary of
the proceeds of such Drawing; provided that the Issuing Bank shall be
responsible (subject to the limitations set forth elsewhere in this Agreement)
for its gross negligence or willful misconduct (as finally determined by a court
of competent jurisdiction) in connection with Drawings made under the Letter of
Credit.
SECTION 1.7 Default Rate. If the Account Party fails to make when
due any payment required hereunder or any Credit Document, the Account Party
shall pay interest on such amounts at a per annum rate equal to the Default Rate
until such amounts have been paid in full.
SECTION 1.8 Late Charges. The Account Party shall pay, upon billing
therefor, a "Late Charge" equal to five percent (5%) of the amount of any
Obligations which are not paid within ten (10) days of the due date thereof.
Late Charges are: (a) payable in addition to, and not in limitation of, the
Default Rate, (b) intended to compensate Agent for administrative and processing
costs incident to late payments, (c) not interest, and (d) not subject to refund
or rebate or credit against any other amount due.
SECTION 1.9 Payment of other Amounts. The Account Party further
agrees to pay the following:
(a) On demand, all expenses of the Issuing Bank and the Agent
(including reasonable attorneys' fees and expenses and disbursements) in
connection with the negotiation, preparation, execution, and delivery of this
Agreement, the Letter of Credit, and of any other document and agreement between
the Account Party and the Issuing Bank or the Account Party, the Agent and the
Participants; and
(b) Any and all reasonable attorneys' fees, out-of-pocket
expenses and other costs hereafter incurred by the Issuing Bank, the Agent or
any Participant, which fees, expenses and costs are directly or indirectly
related to or in respect of the Issuing Bank's, the Agent's or the Participant's
efforts to protect, collect and/or enforce any of their respective rights,
remedies, powers, and privileges against or with respect to the Account Party
(whether or not suit is instituted against the Account Party) and/or with
respect to any security held by any of them, and/or in connection with any
liability asserted, claimed, and/or threatened against the Issuing Bank, the
Agent, or any Participant on account of or in respect of the Letter of Credit.
SECTION 1.10 Lawful Currency. All payments by the Account Party to
the Issuing Bank or the Agent hereunder shall be made in lawful currency of the
United States and in immediately available funds at the Agent's office at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇. Whenever any payment hereunder is due on
a day other than a day on which the
-11-
Agent is open to the public to transact banking business (other than a Saturday
or Sunday), such payment may be made on the next succeeding Business Day.
SECTION 1.11 Payments without Setoff or Deduction. All payments by
the Account Party hereunder and under any of the other Credit Documents shall be
made without setoff or counterclaim and free and clear of and without deduction
for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof or
taxing or other authority therein unless the Account Party is compelled by law
to make such deduction or withholding. If any such obligation is imposed upon
the Account Party with respect to any amount payable by it hereunder or under
any of the other Credit Documents, the Account Party will pay to the Issuing
Bank or the Agent (as Agent for the account of the Participants) or (as the case
may be) the Agent for its own account, as applicable, on the date on which such
amount is due and payable hereunder or under such other Credit Document, such
additional amount as shall be necessary to enable the Issuing Bank, the
Participants or the Agent to receive the same amount which the Issuing Bank, the
Participants or the Agent would have received on such due date had no such
obligation been imposed upon the Account Party. The Account Party will deliver
promptly to the Agent certificates or other valid vouchers for all taxes or
other charges deducted from or paid with respect to payments made by the Account
Party hereunder or under such other Credit Document.
SECTION 1.12 Future Legal Requirements. If any present or future
applicable Legal Requirement shall:
(a) subject the Issuing Bank, any Participant or the Agent to any
tax, levy, impost, duty, charge, fee, deduction or withholding of any nature
with respect to this Agreement (other than taxes based upon or measured by the
income or profits of the Issuing Bank, such Participant or the Agent); or
(b) materially change the basis of taxation (except for changes
in taxes on income or profits) of payments to the Issuing Bank, the Agent or any
Participant of any amounts payable to such person under this Agreement or the
other Credit Documents; or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by, or
deposits in or for the account of, or loans by, or commitments of an office of
the Issuing Bank or any Participant; or
(d) impose on the Issuing Bank, any Participant or the Agent any
other conditions or requirements with respect to this Agreement, the other
Credit Documents; or
(e) impose on the Issuing Bank or any Participant any other
conditions or requirements relating to any Letter of Credit
-12-
and the result of any of the foregoing is
(i) to increase the cost to the Issuing Bank or any
Participant of making, funding, issuing, renewing, extending or
maintaining or participating in the Letter of Credit, as applicable; or
(ii) to reduce the amounts payable to the Issuing Bank, such
Participant, or the Agent hereunder on account of the Letter of Credit;
or
(iii) to require the Issuing Bank, such Participant or the
Agent to make any payment or to forego any interest or other sum payable
hereunder, the amount of which payment or foregone interest or other sum
is calculated by reference to the gross amount of any sum receivable or
deemed received by the Issuing Bank, such Participant or the Agent from
the Account Party hereunder,
then, and in each such case, the Account Party will, within ten (10)
days of the written demand made by the Issuing Bank or the Agent setting
forth in reasonable detail the effect of the applicable Legal
Requirement, at any time and from time to time and as often as the
occasion therefor may arise, pay to the Issuing Bank or the Agent (for
the benefit of the subject Participant, if applicable) such additional
amounts as will be sufficient to compensate the Issuing Bank, such
Participant or the Agent for such additional cost, reduction, payment or
foregone interest or other sum.
SECTION 1.13 Future Capital Requirements. If any present or future
applicable Legal Requirement (whether or not having the force of law) or the
interpretation thereof by a court or governmental authority with appropriate
jurisdiction affects the amount of capital required or expected to be maintained
by the Issuing Bank, any Participant or the Agent or any corporation controlling
the Issuing Bank, such Participant or the Agent and the Issuing Bank, such
Participant or the Agent determines that the amount of capital required to be
maintained by it or such corporation is increased by or based upon the existence
of this Agreement and the other Credit Documents, then the Issuing Bank or the
Agent may notify the Account Party of such fact, and the Account Party shall pay
to the Issuing Bank or the Agent (for the benefit of the subject Participant, if
applicable) from time to time within ten (10) days of the written demand made by
the Issuing Bank or the Agent setting forth in reasonable detail the effect of
the applicable Legal Requirement, as an additional fee payable hereunder, such
amount as the Issuing Bank, such Participant or the Agent shall determine in
good faith and certify in a notice to the Account Party to be an amount that
will adequately compensate the Issuing Bank, such Participant, the Agent, or
such corporation in light of these circumstances for its increased costs of
maintaining such capital.
SECTION 1.14 Certificate. A certificate setting forth any additional
amounts payable pursuant to Sections 3.7 or 3.8 hereof and a brief explanation
of such amounts which
-13-
are due, submitted by the Issuing Bank, any Participant or the Agent to the
Account Party, shall be prima facie evidence that such amounts are due and
owing.
SECTION 1.15 Computations of Interest and Fees. All computations of
interest hereunder (including the Default Rate) and of the fees payable under
Sections 4.1, 4.2, and 4.3, hereunder shall be made on the basis of a year of
360 days for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest or fees are
payable. All changes in the rate of interest resulting from changes in the Prime
Rate shall take place immediately without notice or demand of any kind.
ARTICLE 4.
LETTER OF CREDIT FACILITY FEES.
-------------------------------
SECTION 1.16 Letter of Credit Fee. The Account Party agrees to pay
the Agent, for the benefit of the Issuing Bank (which the Issuing Bank agrees to
pass-through to the Participants pro rata in accordance with their Commitment
Percentages), for the period from the Agreement Date to but excluding the
Expiration Date (as it may be extended pursuant to Section 2.2), payable
quarterly in advance on the first day of January, April, July, and October of
each year, a Letter of Credit Fee (so referred to herein) in an amount equal to
1.50% per annum, of the aggregate amount of the Allocable Share of the Maximum
Credit Amount of all Covered Eligible Bonds for the subject quarter, as set
forth on the Applicable L/C Schedule issued by the Issuing Bank on the most
recent Quarterly L/C Re-Schedule Date (and on the Issuance Date with respect to
the Initial L/C Schedule). In the event that the average daily aggregate amount
of the Allocable Share of the Maximum Credit Amount for all Covered Eligible
Bonds during any quarter is less than or greater than the amount as of the first
day of such quarter, the Agent and the Account Party shall reconcile the
difference by appropriately adjusting the amount of the Letter of Credit Fee
otherwise payable on the next quarterly payment date, or, with respect to the
period ending on the Expiration Date, by a cash payment due on such date.
SECTION 1.17 Unused Facility Fee. The Account Party agrees to pay
the Agent for the benefit of the Issuing Bank (which the Issuing Bank agrees to
pass-through to the Participants pro rata in accordance with their Commitment
Percentages), for the period from the Agreement Date to but excluding the
Expiration Date (as it may be extended pursuant to Section 2.2) or the
termination of the Letter of Credit Facility pursuant to Section 2.2(d) hereof,
payable quarterly in arrears on the first day of January, April, July and
October of each year, on the initial Expiration Date, and, if the Letter of
Credit Facility is terminated in accordance with the provisions of Section
2.2(d) hereof, on the date of such termination, an Unused Facility Fee (so
referred to herein), computed at a rate per annum equal to the Applicable Unused
Facility Fee Percentage on the average daily Unused Commitment during such
quarter. No Unused Facility Fee shall accrue or be payable during any Extension
Period.
SECTION 1.18 Issuing Bank's Charges. The Account Party agrees to pay
the Issuing Bank's reasonable customary fees, service charges, commissions or
other charges
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imposed by the Issuing Bank with respect to the issuance and any modifications
of the Letter of Credit and each L/C Schedule, which shall be payable as
incurred, including, without limitation (a) payment of transfer charges of 1/4
of 1% of the Maximum Commitment Amount for any transfer of the Letter of Credit
permitted by the Issuing Bank, other than the Permitted L/C Transfer if it
occurs within thirty (30) days after the Agreement Date, and (b) a fee of $75.00
for discrepancy/re-examination fee(s) for each set of discrepant documents
presented with any Drawing.
SECTION 1.19 Other Fees. The Account Party shall pay to the Agent
and/or the Issuing Bank, for their own accounts, such other fees as have been
agreed to in writing by the Account Party.
SECTION 1.20 Fees; General. Except as specifically provided herein,
the Account Party shall not be entitled to any rebate, refund, or relief with
respect to the Letter of Credit Fee, the Unused Facility Fee, or any other fee
or amount paid hereunder on account of the expiry of the Letter of Credit or the
reduction to the Maximum Credit Amount, and all of said fees shall be deemed
fully earned on the date when due and shall not be refunded in whole or in part
to the Account Party in any event, including, without limitation, the expiry or
surrender of, or any reduction in the amount of, the Letter of Credit.
ARTICLE 5.
CONCERNING LETTER OF CREDIT
---------------------------
SECTION 1.21 Responsibility. None of the Agent, the Participants,
the Issuing Bank, the Issuing Bank's correspondents, or any advising,
negotiating, or paying bank with respect to the Letter of Credit shall be
responsible in any way for:
(a) The performance by either Beneficiary of that Beneficiary's
obligations, if any, to the Account Party;
(b) The form, sufficiency, correctness, genuineness, authority of
any person signing; falsification; or the legal effect of; any documents called
for under the Letter of Credit if (with respect to the foregoing) such documents
on their face appear to be in order.
SECTION 1.22 Honoring of Letter of Credit. The Issuing Bank may
honor, as complying with the terms of the Letter of Credit and of any Drawing
thereunder, any drafts or other documents otherwise in order, but signed or
issued by an administrator, conservator, trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, liquidator, receiver, or
other legal representative of the party authorized under such Letter of Credit
to draw or issue such drafts or other documents.
SECTION 1.23 Risk of Account Party. All directions, correspondence,
and funds transfers relating to the Letter of Credit are at the risk of the
Account Party. The Issuing Bank
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shall have discharged its obligations under the Letter of Credit which, or the
Drawing under which, includes payment instructions, by the initiation of the
method of payment called for in, and in accordance with, such instructions (or
by any other commercially reasonable and comparable method). The Issuing Bank
shall not have any responsibility for any inaccuracy, interruption, error, or
delay in transmission or delivery by post, telegraph or cable, or for any
inaccuracy of translation, unless any of the foregoing shall be caused by the
gross negligence or willful misconduct of the Issuing Bank, as determined by a
final order of a court of competent jurisdiction in a proceeding to which the
Issuing Bank is a party, which is not subject to further appeal.
SECTION 1.24 Concerning Specified Rights. The rights, powers,
privileges and immunities of the Agent, the Participants, and the Issuing Bank
specified in or arising under this Agreement are in addition to any heretofore
or at any time hereafter otherwise created or arising, whether by statute or
rule of law or contract.
SECTION 1.25 Practices Governing Letter of Credit.
(a) The Letter of Credit shall be subject to the International
Standby Practices 1998 (issued as International Chamber of Commerce Publication
No. 590), in effect, or the most recent revision or success thereto which shall
be in effect from time to time ("ISP98"), the terms of which are known to the
Account Party and which are incorporated by reference herein. In the event of a
conflict between this Agreement and ISP98, the terms of this Agreement shall
control.
(b) The Issuing Bank is authorized to interpret the Letter of
Credit in accordance with rules, regulations, and customs prevailing at the
place and time during which the Letter of Credit is available or Drawings are
made or negotiated.
SECTION 1.26 Relationship of Parties. The Account Party recognizes
that:
(a) The Issuing Bank has issued the Letter of Credit (and has
issued and will issue L/C Schedules) as a financial accommodation to the Account
Party, without regard to the terms, conditions, or circumstances which relate to
the underlying transactions which the Letter of Credit supports.
(b) The Agent, the Participants (as of the Agreement Date), and
the Issuing Bank (other than as a Liquidity Bank) have not participated in the
establishment, negotiation, or documentation of the underlying transactions
which the Letter of Credit support.
(c) Except for Fleet's participation as a Liquidity Bank and as a
lender and an agent under the Bond Warehousing Facility, the Agent, the
Participants (as of the Agreement Date), and the Issuing Bank have no financial
or other interests in either Beneficiary.
(d) The Issuing Bank is irrevocably obligated to honor a proper
Drawing under the Letter of Credit, regardless of whether or not a Participant
reimburses the Issuing Bank for an Unpaid Drawing.
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SECTION 1.27 Transfers of the Letter of Credit. The rights and
interests of the Beneficiaries in the Letter of Credit may be transferred only
in accordance with the terms thereof to the Administrative Agent, which transfer
was consummated on the Initial Issuance Date (the "Permitted L/C Transfer").
Except as the Agent and the Issuing Bank reasonably may determine the context
otherwise requires in any one or more particular instances or as to any one or
more provisions of this Agreement, references to the "Beneficiaries" and a
"Beneficiary" in this Agreement shall continue to be to the Beneficiaries.
ARTICLE 6.
CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT.
------------------------------------------------------------
SECTION 1.28 Restatement Effective Date. It shall be a condition
precedent of the effectiveness of this Agreement and the issuance of L/C
Schedule No. 3 pursuant to this Agreement, that each of the following conditions
precedent be satisfied in full (as determined by the Agent and the Issuing Bank
in their discretion, which discretion shall be exercised in good faith), unless
specifically waived in writing by the Agent and the Issuing Bank at or prior to
issuance of L/C Schedule No. 3:
(a) Satisfactory Credit Documents. Each of Credit Documents shall
have been duly executed and delivered by the respective parties thereto, and
shall be in full force and effect and shall be in form and substance reasonably
satisfactory to the Agent and the Issuing Bank.
(b) L/C Schedule No. 3. All applicable conditions under the
Existing Reimbursement Agreement for the issuance of L/C Schedule No. 3 shall
have been satisfied in accordance with the terms thereof.
(c) No Default under Transaction Documents. There shall not have
occurred and be continuing any default or event of default under any of the
Transaction Documents.
(d) No Material Change. No material adverse change shall have
occurred in the financial condition, business, affairs or operations of the
Account Party since the date of its financial statements most recently delivered
to the Agent as of September 30, 2002.
(e) Warranties and Representations Accurate.
(i) All warranties and representations made by or on behalf
of the Account Party to Agent or the Issuing Bank pursuant to the Credit
Documents shall be true and accurate in all material respects and shall
not omit any material fact necessary to make the same not misleading.
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(ii) To the extent that any warranties and representations
made by or on behalf of the Account Party under the Transaction
Documents relate to the Covered Eligible Bonds and the ability of the
Account Party to perform its obligations and liabilities under this
Agreement and under the other Credit Documents, all such warranties and
representations made by or on behalf of the Account Party pursuant to
the Transaction Documents shall be true and accurate in all material
respects and shall not omit any material fact necessary to make the same
not misleading.
(f) Officer's Certificates. The Agent shall have received a
Certificate executed by an Authorized Representative stating that, among other
things, the representations and warranties made by the Account Party to the
Agent and the Issuing Bank in the Credit Documents to which it is a party are
true and complete as of the date of such Certificate, and that no Event of
Default has occurred.
(g) Preferred Shares Covenants. The Account Party shall not be in
default of any Preferred Shares Covenant.
(h) Constituent Documents and Entity Agreements. The Agent shall
have received from each of the Account Party and Charter Mac a copy, certified
as of a recent date by the appropriate officer of the State in which such Person
is organized and/or by an authorized certifying officer of such Person, as
applicable, to be true and complete, of any amendments or additions to the
Constituent Documents and any other organizational documents of such Person from
those furnished to the Agent and the Issuing Bank in connection with the Initial
Issuance Date.
(i) Votes, Consents and Authorizations. All actions on the part
of the Account Party and Charter Mac necessary for the valid execution, delivery
and performance by (x) the Account Party of this Agreement and the other Credit
Documents to which it is or is to become a party, and (y) Charter Mac of the
Joinder to this Agreement, shall have been duly and effectively taken, and
evidence thereof satisfactory to the Agent shall have been provided to the
Agent. The Agent shall have received from the Account Party true copies of that
Person's resolutions adopted by that Person's Board of Trustees authorizing the
transactions described herein, each certified by that Person's Secretary as of a
recent date to be true and complete.
(j) Incumbency Certificate; Authorized Signers. The Agent shall
have received from the Account Party and Charter Mac an incumbency certificate,
dated as of the Closing Date, signed by a duly authorized officer of such Person
and giving the name and bearing a specimen signature of each individual who
shall be an Authorized Representative: (i) as to the Account Party and Charter
Mac, to sign, in the name and on behalf of such Person, each of the Credit
Documents to which such Person is or is to become a party; (ii) with respect to
the Account Party, to make requests to add Eligible Lease-Up Bonds to the Letter
of Credit Facility; and (iii) to give notices, provide certifications, and to
take other action on behalf of the Account Party under the Credit Documents and
on behalf of Charter Mac with respect to the Joinder.
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(k) Corporate Structure. The Agent shall be satisfied in all
respects with the legal structure and capitalization of the Account Party and
all documentation relating thereto.
(l) Litigation. There shall be no pending or threatened
litigation involving the Account Party and/or Charter Mac or any other Charter
Entity which, in the judgment of the Agent, could have a material adverse effect
on such Person or the ability of the Account Party to perform its obligations
under the Credit Documents or the ability of Charter Mac to perform its
obligations under the Joinder to this Agreement, and no judgment, order,
injunction or other similar injunction or other similar restraint prohibiting
any of the transactions contemplated hereby shall exist.
(m) Financial Statements. The Agent and the Issuing Bank shall
have received such financial statements and other information and projections as
the Agent shall have reasonably requested, and the information shall be
satisfactory to the Agent and the Issuing Bank.
(n) Examination of Books and Assets. The Agent shall have been
afforded the opportunity prior to closing to review the books, records, leases,
contracts, pension plans, workers' compensation and retiree health plans, ERISA
matters, insurance coverage and properties of the Account Party and Charter Mac
and to perform such other due diligence regarding the Account Party and Charter
Mac as the Agent shall have reasonably required, the results of which review and
due diligence shall have been reasonably satisfactory to the Agent and its
counsel.
(o) Compliance with Law. The Agent shall be reasonably satisfied
that (i) the Account Party has obtained all material and appropriate
authorizations and approvals of all governmental authorities or any other third
parties (including, without limitation, any approvals required by the
Beneficiary and/or any of the other parties to the Transaction Documents),
required for the due execution, delivery and performance by the Account Party of
each of the Credit Documents to which it is or will be a party and for the
perfection of or the exercise by the Agent and the Issuing Bank of their
respective rights and remedies under the Credit Documents, and (ii) the Letter
of Credit Facility as well as all other transactions contemplated hereby, shall
be in material compliance with, and the Account Party shall have obtained, all
material and appropriate approvals pertaining to, any applicable laws, rules,
regulations and orders, including, without limitation, all governmental,
environmental, ERISA retiree health benefits, workers' compensation and other
requirements, regulations and laws and shall not contravene any charter, by-law,
debt instrument or other material Contractual Obligation of the Account Party
and its Subsidiaries or of Charter Mac and its Subsidiaries.
(p) Legal and other Opinions. The Issuing Bank and the Agent
shall have received an opinion addressed to the Issuing Bank and the Agent and
dated as of the Agreement Date, in form and substance reasonably satisfactory to
the Agent and the Issuing Bank, from the Account Party's counsel, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, LLP.
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(q) Payment of Fees. The Account Party shall have paid to the
Agent all fees and expenses required to be paid upon or prior to the Restatement
Effective Date, as applicable, pursuant to the Existing Reimbursement Agreement,
this Agreement and the other Credit Documents.
(r) No Event of Default. There shall not be any Event of Default
under any of the Credit Documents.
(s) Additional Documents. The Account Party shall have provided
such additional instruments and documents to the Agent and/or the Issuing Bank
as the Agent, the Issuing Bank or their counsel may have reasonably requested.
(t) Further Assurances. In addition to the execution and delivery
of this Agreement and the other Credit Documents, the Account Party shall
execute such other documentation as may be required by the Agent and/or the
Issuing Bank.
SECTION 1.29 Addition of Eligible Lease-Up Bonds to Letter of Credit
Facility. Without limiting any other provision of this Agreement, including,
without limitation, the provisions of Section 2.1(e)(ii)(c) above, the addition
of Eligible Lease-Up Bonds to the Letter of Credit Facility as Covered Eligible
Bonds after the Restatement Effective Date (including in connection with a
substitution under Section 2.1(f)) shall be subject to the satisfaction of each
of the following conditions precedent, unless specifically waived in writing by
Agent:
(a) Representations True; No Event of Default. Each of the
representations and warranties and covenants of the Account Party contained in
this Agreement and/or the other Credit Documents shall be true as of the date as
of which they were made and shall also be true at and as of the time of the
issuance of the L/C Schedule including such additional Covered Eligible Bonds,
with the same effect as if made at and as of that time (except to the extent of
changes resulting from transactions contemplated and permitted by this Agreement
and the other Credit Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse, and except
to the extent that such representations and warranties relate expressly to an
earlier date) and no Event of Default shall have occurred and be continuing. The
Issuing Bank and the Agent shall have received a certificate of the Account
Party signed by an authorized officer of the Account Party to such effect (to be
included in the applicable Bond Eligibility Determination Request).
(b) No Legal Impediment. No change shall have occurred in any
Legal Requirement or interpretations thereof that in the reasonable opinion of
the Issuing Bank would make it illegal for the Issuing Bank to issue the L/C
Schedule with such additional Eligible Covered Bonds.
(c) Governmental Regulation. The Agent and the Issuing Bank shall
have received such statements in substance and form reasonably satisfactory to
the Agent and the
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Issuing Bank as they shall require for the purpose of compliance with any
applicable regulations of the Comptroller of the Currency or the Board of
Governors of the Federal Reserve System.
(d) Proceedings and Documents. All proceedings in connection with
the transactions contemplated by this Agreement, the other Credit Documents and
all other documents incident thereto shall be reasonably satisfactory in
substance and in form to the Issuing Bank and the Agent, and the Issuing Bank
and the Agent shall have received all information and such counterpart originals
or certified or other copies of such documents as they may reasonably request.
(e) No Adverse Changes. There shall not have been any material
adverse change in the financial condition, business, or affairs of the Account
Party since the Agreement Date which in the Agent's or the Issuing Bank's good
faith judgment may jeopardize in a material manner the ability of Account Party
to perform fully its obligations under each applicable Credit Document.
(f) Other Certificates. The Agent shall have received and
approved such other documents and certificates as the Agent may reasonably
request, in form and substance reasonably satisfactory to the Agent, including
from the Administrative Agent.
ARTICLE 7.
AUTHORIZED REPRESENTATIVES.
---------------------------
SECTION 1.30 Continuing Authority of Authorized Representatives. The
Agent and the Issuing Bank are authorized to rely upon the continuing authority
of the Persons hereafter designated by the Account Party ("Authorized
Representatives") to bind Account Party with respect to all matters pertaining
to the Letter of Credit (including any L/C Schedule) and the other Credit
Documents including, but not limited to, the submission of requests to add or
withdraw Eligible Lease-Up Bonds to or from the Letter of Credit Facility and
certificates with regard thereto. Such authorization may be changed only upon
written notice to Agent accompanied by evidence, reasonably satisfactory to
Agent, of the authority of the person giving such notice and such notice shall
be effective not sooner than five (5) Business Days following receipt thereof by
Agent. The Authorized Representatives as of the Agreement Date are listed on
Schedule 7. The Agent shall have a right of approval, not to be unreasonably
withheld or delayed, over the identity of the Authorized Representatives so as
to assure the Agent and the Issuing Bank that each Authorized Representative is
a responsible and senior official of Account Party.
ARTICLE 8.
OBLIGATIONS ABSOLUTE.
---------------------
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SECTION 1.31 Obligations Absolute. The Obligations of the Account
Party under this Agreement and the other Credit Documents are absolute,
unconditional, and irrevocable, and shall be performed strictly in accordance
with the terms hereof under all circumstances whatsoever, including, without
limitation, the following:
(a) any lack of validity or enforceability, or restriction,
restraint, or stay of the enforcement of this Agreement, the Letter of Credit,
or any other Credit Document, or any Transaction Document;
(b) any amendment or waiver of, or any consent to departure from,
all or the Letter of Credit or any of the other Credit Documents;
(c) the existence of any claim, set-off, defense, or other right
which the Account Party may have at any time against any beneficiary (including
either Beneficiary) of the Letter of Credit, the Issuing Bank, the Agent, any
Participant or any other Person, whether in connection with the Credit Documents
or the transactions contemplated by this Agreement;
(d) payment by the Issuing Bank of the Letter of Credit against
presentation of a demand, draft or certificate or other document which does not
strictly comply with the terms of such Letter of Credit, including, without
limitation, any good faith honoring of a Drawing under the Letter of Credit,
which Drawing possibly could have been dishonored based upon a strict
construction of the terms of the Letter of Credit;
(e) any draft, demand, certificate or other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(f) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of, or provide a right of
setoff against, the Account Party's obligations hereunder; and/or
(g) the fact that any Event of Default shall have occurred and be
continuing.
SECTION 1.32 No Liability on Account of Issuance or Transfer of
Letter of Credit. Unless caused by the gross negligence or willful misconduct of
the Issuing Bank, the Agent or any Participant, as determined by a final order
of a court of competent jurisdiction in a proceeding to which such Person is a
party which is not subject to further appeal, none of the Agent, the
Participants, or the Issuing Bank shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of the Letter of
Credit, the issuance of any participations thereunder, or any payment or failure
to make any payment thereunder (irrespective of any of the circumstances
referred to above), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to the Letter of Credit (including any document required to make a
Drawing thereunder),
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any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank. The parties hereto expressly
agree that, in the absence of gross negligence or willful misconduct on the part
of the Issuing Bank (as finally determined by a court of competent jurisdiction
in a proceeding to which the Issuing Bank is a party), the Issuing Bank shall
have no liability for its acts or omissions hereunder.
SECTION 1.33 Other Persons Not Liable. All parties to this Agreement
are looking solely to the Account Party and its assets for the satisfaction of
the Obligations. The Board of Trustees, the Manager, and the Shareholders of the
Account Party (each as defined in the Equity Issuer Trust Agreement, as amended
from time to time) shall not have any liability for the obligations of the
Account Party under this Agreement.
ARTICLE 9.
WARRANTIES AND REPRESENTATIONS.
-------------------------------
The Account Party warrants and represents to the Agent and the Issuing
Bank for the express purpose of inducing the Agent and the Issuing Bank to enter
into this Agreement, to cause the issuance of the Letter of Credit by the
Issuing Bank, and to otherwise complete all of the transactions contemplated
hereby, that, as of the Agreement Date as follows:
SECTION 1.34 Transaction Documents. The representations and
warranties made by the Account Party and, to the extent relating to any Covered
Eligible Bond, by either of the Beneficiaries, in any of the Transaction
Documents to which they respectively are a party were true and correct when
made, and are true and correct as of the Agreement Date (except to the extent of
changes resulting from transactions contemplated and permitted by the
Transaction Documents and changes occurring in the ordinary course of business
that singly or in the aggregate are not materially adverse, and except to the
extent that such representations and warranties relate expressly to an earlier
date), and are hereby incorporated by reference for the benefit of the Agent and
the Issuing Bank as if fully set forth herein.
SECTION 1.35 No Event of Default. No event of default under any of
the Insurance Agreement, the Liquidity Facility or any other Transaction
Document has occurred and is continuing, and the Account Party has not received
any notice under any of the foregoing that an event has occurred which will
constitute such an event of default upon the expiration of any applicable grace
or cure period.
SECTION 1.36 Financial Information. True and complete copies of
financial statements of the Account Party and Charter Mac have been delivered to
the Agent and the Issuing Bank and the same fairly present the financial
condition of such Person as of the date thereof and no material and adverse
change has occurred in such financial condition since the date thereof. All
financial statements of such Persons hereafter furnished to the Agent or the
Issuing Bank shall be true and complete copies thereof and shall fairly present
the financial condition of such Person as of the date thereof.
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SECTION 1.37 No Violations. The establishment of the Letter of
Credit Facility, the issuance of the Letter of Credit, and the subsequent
payment and performance of the Obligations evidenced and secured by the Credit
Documents did not and shall not constitute a violation of, or conflict with, any
Legal Requirement, Contractual Obligations (including with respect to the
Transaction Documents), or organizational document to which Account Party and/or
Charter Mac is a party or by which it or its property is or may be bound.
SECTION 1.38 No Litigation.
(a) Account Party and Charter Mac. There are no actions, suits,
proceedings or investigations of any kind pending or, to the knowledge of the
Account Party, threatened, against the Account Party and/or Charter Mac before
any court, tribunal or administrative agency or board that, if adversely
determined, would reasonably be expected to, either in any case or in the
aggregate, materially adversely affect the properties, assets, financial
condition or business of such Person or materially impair the right of such
Person or, as to the Account Party, its Subsidiaries, to carry on business
substantially as now conducted by it, or result in any substantial liability not
adequately covered by insurance, or for which adequate reserves are not
maintained on the balance sheet of such Person, or which question the validity
of this Agreement or any of the other Credit Documents, or any action taken or
to be taken pursuant hereto or thereto.
(b) Other Charter Entities. There are no actions, suits,
proceedings or investigations of any kind pending or, to the knowledge of the
Account Party, threatened, against any other Charter Entity before any court,
tribunal or administrative agency or board with respect to any Covered Eligible
Bond that, if adversely determined, would reasonably be expected to, either in
any case or in the aggregate, materially adversely affect such Covered Eligible
Bond and/or the ability of the Account Party and/or Charter Mac to perform their
respective obligations and liabilities under this Agreement, the Joinder to this
Agreement, and the Credit Documents to which they respectively are a party.
SECTION 1.39 Franchises, Patents, Copyrights, Etc. The Account Party
and Charter Mac each possess all franchises, patents, copyrights, trademarks,
trade names, Licenses and Permits, and rights in respect of the foregoing,
adequate for the conduct of its business substantially as now conducted, without
known conflict with any rights of others.
SECTION 1.40 Good Title and No Liens. The Account Party and Charter
Mac, respectively, are the lawful owners of their respective assets and are and
will be the lawful owner of such assets, free and clear of all liens and
encumbrances of any nature whatsoever other than those permitted in conjunction
with the Liquidity Facility, the Insurance Agreement, similarly structured
securitization vehicles, or otherwise in connection with the conduct of business
by the Account Party and Charter Mac in the ordinary course of their respective
businesses.
SECTION 1.41 Entity Matters.
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(a) Organization.
(i) The Account Party is a duly organized validly existing
statutory trust in good standing under the laws of the State of Delaware
and is duly qualified in the jurisdiction where the nature of its
business is such that qualification is required or where failure to be
so qualified would not materially adversely affect its business or
assets, and has all requisite power and authority to conduct its
business and to own its property, as now conducted or owned, and as
contemplated by this Agreement.
(ii) Charter Mac is a duly organized validly existing
statutory trust in good standing under the laws of the State of Delaware
and is duly qualified in the jurisdiction where the nature of its
business is such that qualification is required or where failure to be
so qualified would not materially adversely affect its business or
assets, and has all requisite power and authority to conduct its
business and to own its property, as now conducted or owned, and as
contemplated by this Agreement.
(b) Ownership, Subsidiaries and Taxpayer Identification Numbers.
(i) The Account Party, indirectly, is a wholly-owned
Subsidiary of Charter Mac, and, other than outstanding Preferred Shares,
no additional ownership interests, or rights or instruments convertible
into such ownership interests, exist. True and complete copies of each
of the agreements listed on Schedule 9.8(b)(i) have been furnished to
the Agent by the Account Party.
(ii) The taxpayer identification numbers and state
organizational numbers (if applicable) of the Account Party are
accurately stated in Schedule 9.8(b)(ii).
(iii) The Account Party and Charter Mac are each the
owner, free and clear of all liens and encumbrances, of the Equity
Interests which they purport to own of each of their respective
Subsidiaries. All shares of such Equity Interests have been validly
issued and are fully paid and nonassessable, and no rights to subscribe
to any additional shares have been granted, and no options, warrants, or
similar rights are outstanding except as set forth in Schedule
9.8(b)(iii).
(c) Authorization. The execution, delivery and performance of
this Agreement (and the Joinder by Charter Mac) and the other Credit Documents
to which the Account Party is to become a party and the transactions
contemplated hereby and thereby (i) are within the authority of the Account
Party and Charter Mac, as applicable, (ii) have been duly authorized by all
necessary statutory trust proceedings, (iii) do not conflict with or result in
any breach or contravention of any Legal Requirement to which the Account Party
or Charter Mac, as applicable, is subject or any judgment, order, writ,
injunction, license or permit applicable to such Person, and (iv) do not
conflict with any provision of such the Account Party's or Charter Mac's, as
applicable, organization documents or other charter documents or bylaws of, or
any
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Contractual Obligation of, the Account Party or Charter Mac, as applicable,
except where such conflict would not have a materially adverse effect on the
business, assets or financial condition of such Person.
SECTION 1.42 Valid and Binding. Each of the Credit Documents
constitutes the legal, valid and binding obligations of the Account Party under
the respective Credit Documents to which it is a party, in accordance with the
respective terms thereof, subject to bankruptcy, insolvency and similar laws of
general application affecting the rights and remedies of creditors and, with
respect to the availability of the remedies of specific enforcement, subject to
the discretion of the court before which any proceeding therefor may be brought.
SECTION 1.43 Deferred Compensation and ERISA. Neither the Account
Party nor any ERISA Affiliate has any pension, profit sharing, stock option,
insurance or other arrangement or plan for employees covered by Title IV of the
Employment Retirement Security Act of 1974, as now or hereafter amended
("ERISA") except as may be designated to Agent in writing by Account Party from
time to time ("ERISA Plan") and no "Reportable Event" as defined in ERISA has
occurred and is now continuing with respect to any such ERISA Plan. The issuance
of Letter of Credit, the performance by Account Party of its obligations under
the Credit Documents, and Account Party's conducting of its operations do not
and will not violate any provisions of ERISA.
SECTION 1.44 No Materially Adverse Contracts, Etc. None of the
Account Party, Charter Mac, or any of their respective Subsidiaries is subject
to any charter, corporate or other legal restriction, or any judgment, decree,
order, rule or regulation that has or is expected in the future to have a
materially adverse effect on the business, assets or financial condition of such
Person. None of the Account Party, Charter Mac, or any of their respective
Subsidiaries is a party to any contract or agreement that has or is expected, in
the judgment of the such Person's officers, to have any materially adverse
effect on the business of such Person or such Person's Subsidiaries.
SECTION 1.45 Compliance With Other Instruments, Laws, Etc. None of
the Account Party, Charter Mac, or any of their respective Subsidiaries is in
violation of any provision of its charter or other organization documents,
by-laws, or any Contractual Obligations (including with respect to the
Transaction Documents) or Legal Requirements, in any of the foregoing cases in a
manner that could result in the imposition of substantial penalties or
materially and adversely affect the financial condition, properties or business
of such Person or such Person's Subsidiaries.
SECTION 1.46 Tax Status. The Account Party and Charter Mac (a) have
made or filed all federal and state income and all other tax returns, reports
and declarations required by any jurisdiction to which such Person is subject,
and (b) has paid all taxes and other governmental assessments and charges shown
or determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings for which adequate
reserves have been established. Except for taxes being contested as provided in
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clause (b), above, there are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
foregoing Persons know of no basis for any such claim.
SECTION 1.47 Holding Company and Investment Company Acts. Neither
the Account Party nor any of its Subsidiaries is a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act of
1935; nor is it an "investment company", or an "affiliated company" or a
"principal underwriter" of an "investment company", as such terms are defined in
the Investment Company Act of 1940.
SECTION 1.48 Certain Transactions. Except as set forth in Schedule
9.15 hereof, as of the date of this Agreement, none of the officers, trustees,
directors, or employees of the Account Party or any of its Subsidiaries is a
party to any transaction with the Account Party or any of its Subsidiaries
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer, trustee, director or
such employee or any corporation, partnership, trust or other entity in which
any officer, trustee, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.
SECTION 1.49 Credit Documents. All of the representations and
warranties of the Account Party made in the Credit Documents are true and
correct in all material respects.
SECTION 1.50 No Material Change. There has been no material adverse
change in the financial condition, business, affairs of Account Party and/or
Charter Mac since the date of its last financial statement most recently
delivered to the Agent.
SECTION 1.51 No Broker or Finder. Neither the Account Party, nor
anyone on behalf thereof has dealt with any broker, finder or other person or
entity who or which may be entitled to a broker's or finder's fee, or other
compensation, payable by the Agent, the Issuing Bank, or any of the Participants
in connection with this Letter of Credit Facility.
SECTION 1.52 Background Information and Certificates. All of the
factual information contained or referred to in this Agreement and in the
Exhibits and Schedules to this Agreement, and in the certificates furnished to
the Agent by or on behalf of Account Party in connection with this Agreement or
any other Credit Document is true and complete in all material respects, and
omits no material fact necessary to make the same not misleading.
SECTION 1.53 Reaffirmation. Each request by the Account Party to add
an Eligible Lease-Up Bond to the Letter of Credit Facility: (i) shall constitute
an affirmation by Account Party that the foregoing representations and
warranties are true and correct as of the date of such request (except as to
matters specifically disclosed in writing to the Agent and the Issuing Bank
prior to or simultaneously with such written request, and except to the extent
of
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changes resulting from transactions contemplated and permitted by this Agreement
and the other Credit Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse, and except
to the extent that such representations and warranties relate expressly to an
earlier date) and, unless Agent and the Issuing Bank are notified to the
contrary prior to the date of the addition of such Eligible Lease-Up Bond to the
Letter of Credit Facility, will be so on the date of such addition, and (ii)
shall constitute the representation and warranty of Account Party that the
information set forth in each such request is true and complete in all material
respects, and omits no material fact necessary to make the same not misleading.
SECTION 1.54 Existing Reimbursement Agreement. All of the
representations and warranties made by or on behalf of the Account Party in the
Existing Reimbursement Agreement were, when made, true, correct, and complete,
and are, as of the Agreement Date, and will be, as of the Restatement Effective
Date, true, correct and complete, except as to matters specifically disclosed in
writing to the Agent and the Issuing Bank prior to the Agreement Date, and
except to the extent of changes resulting from transactions contemplated and
permitted by the Existing Reimbursement Agreement and the Credit Documents and
changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and except to the extent that such
representations and warranties relate expressly to an earlier date.
ARTICLE 10.
COVENANTS.
----------
SECTION 1.55 Affirmative Covenants. The Account Party covenants and
agrees that from the date hereof and so long as the Letter of Credit or other
Obligations remain outstanding, as follows:
(a) Punctual Payment. The Account Party will duly and punctually
pay or cause to be paid the principal and interest on Drawings and all interest,
fees and other Obligations provided for in this Agreement, all in accordance
with the terms of this Agreement and the Letter of Credit, as well as all other
sums owing pursuant to the Credit Documents.
(b) Maintenance of Office. The Account Party will maintain its
chief executive office in New York, New York, or at such other place in the
United States of America as the Account Party shall designate upon not less than
forty five (45) days prior written notice to the Agent.
(c) Records and Accounts. The Account Party will keep, and cause
each of its Subsidiaries to keep, true and accurate records and books of account
in which full, true and correct entries will be made in accordance with GAAP.
(d) Compliance with Transaction Documents. The Account Party
shall comply, and shall cause its Subsidiaries to comply, fully with all of the
terms and conditions of
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the Transaction Documents to which each is party and otherwise to remain in good
standing with MBIA.
(e) Bond Documents. The Account Party shall, at the request of
the Agent, provide the Agent with copies of all Bond Documents and any other
requested information relating to Covered Eligible Bonds and the related Bond
Collateral, all of which shall be true, correct and complete.
(f) Notices.
(i) Ineligible Bond Status. The Account Party will
immediately notify the Agent in writing if and when either Beneficiary
determines that any Covered Eligible Bond has been deemed an Ineligible Bond
under the Insurance Agreement.
(ii) Defaults.
(a) The Account Party will promptly notify the Agent
in writing of the occurrence of any Event of Default known to
the Account Party.
(b) If any Person shall give any notice to the Account
Party (or to any Subsidiary of the Account Party, if the
Account Party has, or, if in the exercise of appropriate
diligence as the parent of such Subsidiary, reasonably should
have had, actual knowledge thereof) or take any other action
involving the Account Party (or involving any Subsidiary of
the Account Party, if the Account Party has, or, if, in the
exercise of appropriate diligence as the parent of such
Subsidiary, reasonably should have had, actual knowledge
thereof) in respect of a claimed default (whether or not
constituting an event of default) under any note, evidence of
indebtedness, indenture or other obligation, including,
without limitation, the Insurance Agreement, the Liquidity
Facility or any other Transaction Document, to which or with
respect to which the Account Party or any of its Subsidiaries
is a party or obligor, whether as principal or surety, and
such default would permit the holder of such note or
obligation or other evidence of indebtedness to accelerate
the maturity thereof, which acceleration would have a
material adverse effect on the Account Party, the Account
Party shall forthwith give written notice thereof to the
Agent describing the notice or action and the nature of the
claimed default.
(c) The Account Party will provide the Agent with
copies of any notices required to be provided by any Charter
Entity to MBIA pursuant to Section 3.4(d) of the Insurance
Agreement.
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(d) The Account Party will promptly notify the Agent
in writing of the occurrence of any event of default under
any of the Bond Documents relating to a Covered Eligible
Bond.
(iii) Notification of Claims against Covered Eligible Bonds.
The Account Party will, promptly upon (but in any event not later than ten (10)
days after) becoming aware thereof, notify the Agent in writing of any events
relating to any Covered Eligible Bond that would reasonably be expected to
materially adversely affect the rights of the Agent or the Issuing Bank with
respect thereto.
(iv) Notice of Litigation and Judgments. The Account Party
will, and will cause each of its Subsidiaries, Charter Mac, and any Subsidiaries
of Charter Mac to, give notice to the Agent and the Issuing Bank in writing
(within ten (10) days of the date on which any such Person shall become aware
thereof) of any litigation or proceedings threatened or any pending litigation
and proceedings affecting such Person or to which such Person is or is to become
a party involving an amount in controversy exceeding $5,000,000.00 or that could
reasonably be expected to have a materially adverse effect on such Person and
stating the nature and status of such litigation or proceedings. The Account
Party will, and will cause each of its Subsidiaries, Charter Mac, any
Subsidiaries of Charter Mac to, give notice to the Agent and the Issuing Bank in
writing in form and detail satisfactory to the Agent and the Issuing Bank
(within ten (10) days of the date on which any such Person shall become aware
thereof) of any judgment in excess of $5,000,000.00 not covered by insurance,
final or otherwise, against such Persons.
(g) Financial Statements and Reports. The Account Party shall
furnish or cause to be furnished to the Agent from time to time, the following
financial statements and reports and other information, all in form, manner of
presentation and substance reasonably acceptable to Agent:
(i) Monthly Statements. As soon as practicable, but in any
event not later than forty- five days (45) days after the end of each month, the
Servicer's Report for each Covered Eligible Bond (including any Covered Eligible
Bond that is secured by a Property which has become a Stabilized Property during
the period covered by such Servicer's Report). The Agent and the Issuing Bank
shall be entitled to conclusively rely on each Servicer's Report as being
accurate and complete, absent manifest error.
(ii) Quarterly Statements. To the extent not included in the
Servicer's Report, as soon as practicable, but in any event not later than
forty-five (45) days after the end of each fiscal quarter of the Account Party,
a report providing detailed operating statements and occupancy reports
respecting each Property securing a Covered Eligible Bond, all in form and
substance satisfactory to the Agent and the Issuing Bank.
(iii) Compliance Certificate. Concurrently with the delivery
of the financial statements referred to in Section 10.1(g)(ii) above, a
certificate of an Authorized
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Representative stating that, to the best of such Authorized Representative's
knowledge, the Account Party during such period observed or performed in all
material respects all of its covenants and other agreements, and satisfied in
all material respects every material condition, contained in this Agreement to
be observed, performed or satisfied by it, and that such Authorized
Representative has obtained no knowledge of any Event of Default. With each such
quarterly compliance certificate, the Account Party shall include worksheets
showing the calculation of the estimated fair value of its investments in
revenue bonds, using the methodology described in Annex M-2 to Exhibit M.
(iv) Additional Financial Information. From time to time,
within a reasonable time after the request, such other financial data and
information as the Agent or the Issuing Bank may reasonably request.
(h) Existence; Conduct of Business. (i) the Account Party will
do or cause to be done all things necessary to preserve and keep in full force
and effect its existence as a Delaware statutory trust, (ii) the Account Party
will do or cause to be done all things necessary to preserve and keep in full
force all of its rights and franchises, except where such failure would not have
a material adverse effect on the business, assets or financial condition of the
Account Party, and (iii) the Account Party will only engage in business now
engaged in by it and contemplated by the Transaction Documents.
(i) Insurance. Schedule10.1(i) sets forth all presently existing
insurance maintained by the Account Party. The Account Party will maintain
insurance with respect to its properties, and will cause each of its
Subsidiaries to maintain with financially sound and reputable insurers,
insurance with respect to such properties and its business against such
casualties and contingencies as shall be in accordance with the general
practices of businesses engaged in similar activities in similar geographic
areas and in amounts, containing such terms, in such forms and for such periods
as may be reasonable and prudent and as otherwise required by the Transaction
Documents.
(j) Taxes and Trade Debt. The Account Party will, and will cause
each of its Subsidiaries to, duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all taxes, assessments and
other governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, except
for those taxes, assessments or charges which any such Person is contesting in
good faith by appropriate proceedings and with respect to which appropriate
reserves have been established and are being maintained in accordance with
Generally Accepted Accounting Principles.
(k) Compliance with Laws, Contracts, Licenses, and Permits.
(i) The Account Party will comply with (x) all applicable
Legal Requirements now or hereafter in effect wherever its business is
conducted, (y) the provisions of its Constituent Documents, and (z) all of its
Contractual Obligations (including with respect to the Transaction Documents).
If at any time while any
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Obligation is outstanding, any Governmental Authorization or other third party
consents, approvals, or notifications shall become necessary or required in
order that the Account Party may fulfill any of its obligations hereunder, the
Account Party will promptly take or cause to be taken all reasonable steps
within the power of the Account Party to obtain such Governmental Authorization
or other third party consents and to provide such notifications, and furnish the
Agent with evidence thereof.
(ii) Without limiting the generality of subclause (i) above,
the Account Party shall at all times comply with the Preferred Shares Covenants
in effect as of the Existing Reimbursement Agreement Date and set forth on
Exhibit F hereto, which is incorporated by reference herein and made a part of
this Agreement, whether or not such Preferred Shares Covenants (or any of them)
hereafter are in any way modified or waived by the holders of the Preferred
Shares.
(l) Indemnification Against Payment of Brokers' Fees. The Account
Party agrees to defend, indemnify and hold harmless the Agent, the Issuing Bank,
and each of the Participants from and against any and all liabilities, damages,
penalties, costs, and expenses, relating in any manner to any brokerage or
finder's fees in respect of the Letter of Credit Facility (except as resulting
from any arrangements or agreements made with any broker or finder by the Agent,
the Issuing Bank, or any Participant).
(m) Fiscal Year. The fiscal year of the Account Party presently
ends on December 31 of each year. If the Account Party or its Subsidiaries shall
change their fiscal year end, such Person shall promptly furnish the Agent with
written notice thereof.
(n) Place for Records; Inspection. The Account Party and Charter
Mac shall maintain all of its business records at the address specified in
Section 14.1 of this Agreement with respect to the Account Party. Upon
reasonable notice and at reasonable times during normal business hours the
Agent, the Issuing Bank and each Participant shall have the right (through such
agents or consultants as the Agent, the Issuing Bank or any Participant may
designate) to examine the Account Party's and Charter Mac's property and make
copies of and abstracts from the Account Party's and Charter Mac's books of
account, correspondence and other records and to discuss its financial and other
affairs with any of its senior officers and any accountants hired by the Account
Party, it being agreed that the Agent, the Issuing Bank and each Participant
shall not divulge information obtained from such examination to others except to
any Participant, transferee or proposed transferee, holder or prospective
holder, participant or prospective participant, or if required to do so by Legal
Requirements or in connection with administering the Letter of Credit Facility,
enforcing their rights and remedies under the Credit Documents and in the
conduct, operation and regulation of their respective banking and lending
businesses (which may include, without limitation, the transfer of the Issuing
Bank's interest in the Letter of Credit or the issuance of participation
interests therein). Any transferee of the Issuing Bank's interest in the Letter
of Credit or any holder of a participation interest in the Letter of Credit, or
any participant in or assignee of any Participant's Commitment, shall be
entitled to deal with such information in the same manner and in connection with
any subsequent
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transfer by the Issuing Bank of its interest in the Letter of Credit or of
further participation interests therein, or by a Participant of its interest in
or a participation in its interest in such Participant's Commitment; provided,
however, any such Participant, transferee, holder or participant shall be bound
by the confidentiality provisions of this Section 10.1(n).
(o) Costs and Expenses. Whether or not the transactions
contemplated hereby shall be consummated, the Account Party agrees to pay
promptly, but no later than ten (10) days of the Agent's demand: (i) all the
actual and reasonable out-of-pocket costs and expenses of preparation of the
Credit Documents and any consents, amendments, waivers, or other modifications
thereto incurred by the Agent and/or the Issuing Bank; (ii) the reasonable fees,
expenses, and disbursements of counsel to the Agent and the Issuing Bank in
connection with the negotiation, preparation, execution, and administration of
the Credit Documents and any consents, amendments, waivers, or other
modifications thereto and any other documents or matters requested by the
Account Party; (iii) all other actual and reasonable out-of-pocket costs and
expenses incurred by the Agent and the Issuing Bank in connection with the
establishment of the Letter of Credit Facility, the syndication of the
Commitments and the negotiation, preparation, and execution of the Letter of
Credit and the other Credit Documents and any consents, amendments, waivers, or
other modifications thereto and the transactions contemplated thereby; and (iv)
all reasonable out-of-pocket expenses (including reasonable attorneys' fees and
costs, which attorneys may be employees of the Agent, the Issuing Bank or any
Participant and the fees and costs of appraisers, brokers, investment bankers or
other experts retained by the Agent, the Issuing Bank or any Participant)
incurred by the Agent, the Issuing Bank or any Participant in connection with
(x) the enforcement of or preservation of rights under any of the Credit
Documents against the Account Party or any other Person, or the administration
thereof, (y) any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings, and (z) any litigation, proceeding or
dispute whether arising hereunder or otherwise, in any way related to the
Agent's, the Issuing Bank's, or any Participant's relationship with the Account
Party, except to the extent arising out of the Agent's, the Issuing Bank's, or
any Participant's bad faith, gross negligence, willful misconduct or material
breach of this Agreement, the Letter of Credit, or any other Credit Document, as
finally determined by a court of competent jurisdiction. The covenants of this
Section shall survive payment or satisfaction of payment of amounts owing with
respect to the Letter of Credit. The amount of all such expenses shall, until
paid, bear interest at the rate applicable to principal hereunder (including the
Default Rate) and be an Obligation secured by any Collateral.
(p) Indemnification. The Account Party shall indemnify and hold
harmless the Agent, the Issuing Bank, and the Participants and all those
claiming by, through or under the Agent, the Issuing Bank, and each of the
Participants (singly and collectively, the "Indemnified Party") from and against
any and all claims, actions and suits whether groundless or otherwise, and from
and against any and all liabilities, losses, damages and expenses of every
nature and character arising out of this Agreement or any of the other Credit
Documents or the transactions contemplated hereby ("Damages") including, without
limitation (i) any actual or proposed use by
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the Account Party or any of its Subsidiaries of the Letter of Credit, (ii) the
Account Party's or any of its Subsidiaries' entering into or performing this
Agreement or any of the other Credit Documents, and/or (iii) with respect to the
Account Party and its Subsidiaries and their respective properties and assets,
the violation of any Legal Requirement, in each case including, without
limitation, the reasonable fees and disbursements of counsel and allocated costs
of internal counsel incurred in connection with any such investigation,
litigation or other proceeding; provided, however, that no Indemnified Party
shall be entitled to indemnification if a court of competent jurisdiction
finally determines (all appeals having been exhausted or waived) that such
Indemnified Party acted in bad faith, with willful misconduct, gross negligence,
or material breach of this Agreement, the Letter of Credit, or any other Credit
Document. No Indemnified Party shall be entitled to settle or enter into any
accommodation in respect of any such claim, action or suit without the prior
written consent of the Account Party (and any Indemnified Party so settling or
accommodating without the Account Party's consent shall not be entitled to
indemnification therefor), provided, however, if the Account Party shall refuse
to provide its written consent to a requested settlement, the Account Party
shall, as collateral for potential payment of the full amount of the claimed
Damages, provide either a letter of credit in favor of the Indemnified Party, on
terms and conditions satisfactory to the Agent, in its sole discretion, or, as
cash collateral, cash or cash equivalents, any of which shall be in the full
amount of the claimed Damages, together with all anticipated costs and expenses
(including reasonable attorneys' fees and expenses) anticipated by the Agent, in
its sole discretion, to accrue in connection with the defense and possible
payment of the claimed Damages. If the Account Party fails to provide such
required collateral, or fails to respond to a request for a consent to a
settlement, within five (5) Business Days of when first requested by the Agent,
the Indemnified Party shall be entitled to settle the claim as it proposed, and
the Account Party shall be liable for the full amount thereof together with all
related Damages. In litigation, or the preparation therefor, the Issuing Bank
and the Agent (including for the benefit of the Participants) shall be entitled
to select their own counsel and, in addition to the foregoing indemnity, the
Account Party agrees to pay promptly the reasonable fees and expenses of such
counsel. If, and to the extent that the obligations of the Account Party under
this Section 10.1(p) are unenforceable for any reason, the Account Party hereby
agrees to make the maximum contribution to the payment in satisfaction of such
obligations which is permissible under applicable law. The provisions of this
Section 10.1(p) shall survive the expiry or other termination of the Letter of
Credit and the termination of the obligations of the Issuing Bank hereunder.
(q) Amendments to Credit Documents. The Account Party shall
provide the Beneficiaries, MBIA, and the Administrative Agent with copies of all
amendments to this Agreement and any other Credit Document.
(r) Account Party Financial Covenants. For so long as the Letter of
Credit or other Obligations remain outstanding:
(i) Adjusted Tangible Net Worth. The Account Party shall at
all times maintain (to be tested as of the last day of each fiscal quarter,
commencing with the Account
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Party's fiscal quarter ending March 31, 2003) a minimum Adjusted Tangible Net
Worth of not less than the sum of (i) $375,000,000, plus (ii) seventy-five
percent (75%) of the offering proceeds of any issuances of Equity Interests
after January 1, 2003 (net of the costs and expenses actually incurred by the
Account Party in connection with such equity issuances).
(ii) Fixed Charges. The Account Party shall not permit the
ratio of its consolidated (i) Adjusted EBITDA, divided by (ii) Fixed Charges, to
be less than 2.5 to 1.0, for any fiscal quarter (to be tested as of the last day
of each fiscal quarter, commencing with the Account Party's fiscal quarter
ending March 31, 2003).
(iii) Leverage. The Account Party shall not, and shall not
permit any of its Subsidiaries to, breach the leverage covenant (which is to be
determined on a consolidated basis as between the Account Party and its
Subsidiaries) included as a Preferred Shares Covenant (Paragraph 2 of Exhibit
F), or fail to observe each and every other Preferred Shares Covenant.
(s) Further Assurances. The Account Party will cooperate with,
and will cause each of its Subsidiaries, to cooperate with the Agent and the
Issuing Bank and execute such further instruments and documents as the Issuing
Bank or the Agent shall reasonably request to carry out to their satisfaction
the transactions contemplated by this Agreement, the Letter of Credit, and the
other Credit Documents.
(t) Revenue Bond Valuation. For the purpose of financial
statement presentation, the Account Party will estimate the fair value of its
investments in revenue bonds using the methodology described in Annex M-2 to
Exhibit M or as may be required to be modified by changes in GAAP, and will not
materially deviate from such methodology. The Account Party shall notify the
Agent of any changes in GAAP which would require a change in the methodology
described in Annex M-2 to Exhibit M..
SECTION 1.56 Negative Covenants. The Account Party covenants and
agrees, from the date hereof and so long as the Letter of Credit or other
Obligations remain outstanding, as follows:
(a) Liens. The Account Party will not, and will not permit any of
its Subsidiaries to, create, incur or assume any Lien upon or with respect to
any Covered Eligible Bond other than pursuant to any of the Transaction
Documents.
(b) Merger; Sale of Assets. The Account Party shall not be a
party to any merger or consolidation, or purchase or otherwise acquire all or
substantially all of the assets or any stock of any class of, or any
partnership, joint venture or other equity interest in, any other Person, or
sell, transfer, convey, or lease (in one transaction or a series of
transactions) all or substantially all of its assets.
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(c) Loans and Advances. The Account Party will not and will not
permit any of its Subsidiaries to, make any loans or advances to any Person
other than in connection with the funding of Bonds in the ordinary course and
advances to the Account Party's or its Subsidiaries' employees in the ordinary
course of business for reasonable expenses to be incurred by such employees for
the benefit of the Account Party or such Subsidiaries.
(d) No Material Modifications. The Account Party shall not permit
any Material Change to Transaction Documents, or any material modification of or
waiver with respect to, any Covered Eligible Bond and/or the Bond Documents or
Bond Collateral relating to the Property securing such Covered Eligible Bond
unless any such modification shall have first been approved in writing by the
Agent. The Account Party shall timely provide the Agent with copies any and all
modifications and amendments to any of the foregoing.
(e) Distributions. So long as a Default or an Event of Default
has occurred and is continuing, the Account Party will not make any payments or
distributions to any Person on account of the Account Party's Equity Interests.
(f) Effect of Amendment. If, as a result of any amendment or
modification to the Transaction Documents, the Agent determines that it is
necessary or desirable to modify the terms, conditions, and definitions set
forth in this Agreement, then the Account Party shall execute and deliver such
other and further instruments, documents, and agreements as may be reasonably
requested by the Agent.
ARTICLE 11.
EVENTS OF DEFAULT.
------------------
The following provisions deal with Events of Default and certain rights
of the Agent and the Issuing Bank following an Event of Default.
SECTION 1.57 Events of Default. Each of the following events, unless
cured within any applicable grace period set forth or referred to below in this
Section 11.1, shall constitute an "Event of Default."
(a) Failure to Pay. The Account Party shall fail to pay any
principal and interest of the Drawings or any other Obligation as and when the
same shall become due and payable;
(b) Failure to Perform. The Account Party shall fail to comply
with any of its other agreements and covenants contained herein or any of the
agreements and covenants contained in any other Credit Documents and which are
not referenced herein;
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(c) Breach of Representation or Warranty. Any representation or
warranty of the Account Party in this Agreement or any of the other Credit
Documents shall have been false in any material respect upon the date when made
or deemed to have been made or repeated;
(d) Failure to Pay other Indebtedness. The Account Party or any
of its Subsidiaries shall fail to pay at maturity, or within any applicable
period of grace, or otherwise default under, any obligation for borrowed money
or credit received, as a result of which the holder of such Indebtedness could
accelerate the time for payment of such Indebtedness, notwithstanding that such
acceleration has not occurred (unless such Person is contesting the existence of
any such alleged default and has fully reserved, in cash or cash equivalents,
the full amount of the subject Indebtedness);
(e) Insolvency. The Account Party or any of its Subsidiaries
shall make an assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or become
due, or shall petition or apply for the appointment of a trustee or other
custodian, liquidator or receiver of the Account Party or any of its
Subsidiaries or of any substantial part of the assets of the Account Party or
any of its Subsidiaries or shall commence any case or other proceeding relating
to the Account Party or any of its Subsidiaries under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction, now or hereafter in effect, or
shall take any action to authorize or in furtherance of any of the foregoing, or
if any such petition or application shall be filed or any such case or other
proceeding shall be commenced against the Account Party or any of its
Subsidiaries and the Account Party or any of its Subsidiaries shall indicate its
approval thereof, consent thereto or acquiescence therein;
(f) Involuntary Proceedings. The filing of any case or other
proceeding against the Account Party or any of the Subsidiaries under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or hereafter
in effect and such case or proceeding is not controverted within ten (10) days
or dismissed within sixty (60) days of its commencement; a decree or order is
entered appointing any such trustee, custodian, liquidator or receiver or
adjudicating the Account Party or any of its Subsidiaries bankrupt or insolvent,
or approving a petition in any such case or other proceeding, or a decree or
order for relief is entered in respect of the Account Party or any Subsidiary of
the Account Party, in an involuntary case under federal bankruptcy laws as now
or hereafter constituted;
(g) Judgments. There shall remain in force, undischarged,
unsatisfied and unstayed, for more than forty-five (45) days, whether or not
consecutive, any uninsured final judgment against the Account Party or any of
its Subsidiaries that, with other outstanding uninsured final judgments,
undischarged, against the Account Party or any of its Subsidiaries exceeds in
the aggregate $500,000;
(h) Cancellation of Credit Documents. If any of the Credit
Documents shall be canceled, terminated, revoked or rescinded or any action at
law, suit or in equity or other legal
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proceeding to cancel, revoke or rescind any of the Credit Documents shall be
commenced by or on behalf of the Account Party or any of its Subsidiaries, or
any court or any other governmental or regulatory authority or agency of
competent jurisdiction shall make a determination that, or issue a judgment,
order, decree or ruling to the effect that, any one or more of the Credit
Documents is illegal, invalid or unenforceable in accordance with the terms
thereof;
(i) ERISA. With respect to any ERISA Plan, an ERISA Reportable
Event shall have occurred and (i) a trustee shall have been appointed by the
United States District Court to administer such Plan; or (ii) the PBGC shall
have instituted proceedings to terminate such Guaranteed Pension Plan (which
termination proceedings could result in liability of the Account Party or any of
its Subsidiaries to the PBGC in excess of $250,000;
(j) Indictment. The Account Party, Charter Mac, or any of their
respective Subsidiaries shall be indicted for a federal crime, a punishment for
which could include the forfeiture of any assets of the Account Party, Charter
Mac, or such Subsidiaries;
(k) Material Adverse Change. There shall have occurred any change
in or to the assets, liabilities, financial condition, business operations, or
prospects of the Account Party and its Subsidiaries, taken as a whole, which
change materially adversely affects the Account Party's ability to perform its
obligations under this Agreement or the other Credit Documents;
(l) Change in Control. The occurrence of a Change in Control of
either the Account Party or Charter Mac;
(m) Regarding Charter Mac. The occurrence of any of the foregoing
Events of Default described in subsections (c), (d), (e), (f), (g), (i), and (k)
above, with respect to Charter Mac, as if Charter Mac were the "Account Party"
described therein;
(n) Mortgage Warehousing Facility. The occurrence of an event of
default (however defined or described) under the Mortgage Warehousing Facility;
(o) Acquisition Line Facility. The occurrence of an event of
default (however defined or described) under the Acquisition Line Facility;
(p) Bond Warehousing Facility. The occurrence of an event of
default (however defined or described) under the Bond Warehousing Facility;
(q) Transaction Documents. The occurrence of an event of default
caused by a Charter Entity under the Transaction Documents, or the occurrence of
any other event of default under the Transaction Documents if the occurrence of
such event of default materially adversely affects any Covered Eligible Bond
and/or materially adversely affects the ability of the Account Party to perform
its obligations and liabilities pursuant to this Agreement and any other Credit
Document; or
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(r) Failure to Pay Dividends. Subject to the provisions of
Section 10.2(e), the Account Party shall fail to pay, as and when the same
become due, any dividends required to be paid to the holders of the Preferred
Shares in accordance with the terms and conditions of the Account Party's
Constituent Documents.
SECTION 1.58 Certain Remedies. If an Event of Default shall occur
and be continuing:
(a) Establishment of Funded Reserve. The Account Party shall fund
the Cash Collateral Account with an amount equal to the aggregate Allocable
Share of the Maximum Credit Amount of all then Covered Eligible Bonds. Such
funds shall either be (i) returned to the Account Party (x) if the Account Party
cures such Event of Default to the complete satisfaction of the Agent and the
Issuing Bank, (y) upon the occurrence of the Expiration Date with no Drawing
having been made at such time and no Unpaid Drawings or other Obligations then
outstanding, or (z) with respect to the Allocable Share of the Maximum Credit
Amount relating to any particular Covered Eligible Bond, such Bond is
voluntarily withdrawn pursuant to a Bond Withdrawal Notice, or (ii) applied by
the Agent to the Obligations upon the funding by the Issuing Bank of any Drawing
(the Issuing Bank hereby acknowledging that it is unconditionally obligated to
fund any conforming Drawing whether or not such cash Collateral may be so
applied at such time).
(b) Accelerate Debt. Agent may, and with the direction of the
Requisite Participants shall, declare the Obligations evidenced by this
Agreement and the other Credit Documents immediately due and payable (provided
that in the case of the occurrence of an event set forth in Sections 11.1 (e)
and 11.1(f) such acceleration shall be automatic).
(c) Pursue Remedies. Agent may pursue any and all remedies
provided for hereunder, or under any one or more of the other Credit Documents.
No failure on the part of the Agent or the Issuing Bank to exercise, and no
delay in exercising, any right hereunder or under any other Credit Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder or under any other Credit Document preclude any other
further exercise thereof of any remedies provided by law.
(d) Power of Attorney. For the purpose of exercising the rights
granted by this Article 11, as well as any and all other rights and remedies of
Agent, Account Party hereby irrevocably constitutes and appoints Agent (or any
agent designated by the Agent) its true and lawful attorney-in-fact, with full
power of substitution, exercisable upon and following any Event of Default, to
execute, acknowledge and deliver any instruments and to do and perform any acts
in the name and on behalf of Account Party.
SECTION 1.59 Written Waivers. If an Event of Default is waived in
accordance with applicable provisions of this Agreement, as evidenced by a
specific written instrument
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executed by an authorized officer of Agent, the Event of Default so waived shall
be deemed to have never occurred.
ARTICLE 12.
SET-OFF.
--------
SECTION 1.60 Set-Off. If an Event of Default occurs and is
continuing, any deposits, balances or other sums credited by or due from the
Agent or the Issuing Bank, or from any Affiliate of the Agent or the Issuing
Bank, to the Account Party may, to the fullest extent not prohibited by
applicable law, at any time or from time to time, without regard to the
existence, sufficiency or adequacy of any other collateral, and without notice
or compliance with any other condition precedent now or hereafter imposed by
statute, rule of law or otherwise, all of which are hereby waived, be set off,
appropriated and applied by the Agent, the Issuing Bank, or such Affiliate
against any or all of Account Party's Obligations irrespective of whether demand
shall have been made and although such obligations may be unmatured, in such
manner as the Agent or the Issuing Bank or such Affiliate in its sole and
absolute discretion may determine. Within five (5) Business Days of making any
such set off, appropriation or application, the Agent agrees to notify Account
Party thereof, provided the failure to give such notice shall not affect the
validity of such set off or appropriation or application. ANY AND ALL RIGHTS TO
REQUIRE AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE LETTER OF CREDIT, PRIOR TO EXERCISING ITS RIGHT OF
SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE ACCOUNT
PARTY, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. The Issuing
Bank agrees with each other Person that (a) if an amount to be set off is to be
applied to indebtedness of the Account Party to such Person, such amount shall
be applied ratably to such other indebtedness and to the Obligations, and (b) if
such Person shall receive from the Account Party, whether by voluntary payment,
exercise of the right of setoff, counterclaim, cross action, enforcement of any
claim by proceedings against the Account Party at law or in equity or by proof
thereof in bankruptcy, reorganization, liquidation, receivership or similar
proceedings, or otherwise, and shall retain and apply to the payment of the
amounts to be paid to such Person any amount in excess of its ratable portion of
the payments received by the Issuing Bank and all of the Participants with
respect to Unpaid Drawings or other Obligations, such Person will make such
disposition and arrangements with the others with respect to such excess, either
by way of distribution, participation, pro tanto assignment of claims,
subrogation or otherwise as shall result in each Person receiving in respect of
the Unpaid Drawings or other Obligations, its proportionate payment as
contemplated by this Agreement; provided that if all or any part of such excess
payment is thereafter recovered from such Person, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest.
SECTION 1.61 Right to Freeze. The Issuing Bank and the Agent shall
also have the right, at their respective option, upon the occurrence of any
event which would entitle the Issuing Bank or the Agent to set off or debit as
set forth in Section 12.1, to freeze, block or
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segregate any such deposits, balances and other sums so that Account Party may
not access, control or draw upon the same.
SECTION 1.62 Additional Rights. The rights of the Agent and the
Issuing Bank, and each Affiliate of the Agent and the Issuing Bank under this
Article 12 are in addition to, and not in limitation of, other rights and
remedies, including other rights of set off, which the Agent or the Issuing Bank
may have.
ARTICLE 13.
THE AGENT AND THE PARTICIPANTS
------------------------------
SECTION 1.63 Rights, Duties and Immunities of the Agent.
(a) Appointment of Agent. Each Participant and the Issuing Bank
hereby irrevocably designates and appoints Fleet as Agent of such Participant
and the Issuing Bank to act as specified herein and in the other Credit
Documents, and each such Participant and the Issuing Bank hereby irrevocably
authorizes the Agent to take such actions, exercise such powers and perform such
duties as are expressly delegated to or conferred upon the Agent by the terms of
this Agreement and the other Credit Documents, together with such other powers
as are reasonably incidental thereto. The Agent agrees to act as such upon the
express conditions contained in this Article 13. The Agent shall not have any
duties or responsibilities except those expressly set forth herein or in the
other Credit Documents, nor shall it have any fiduciary relationship with any
Participant or the Issuing Bank, and no implied covenants, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or
otherwise exist against the Agent. The provisions of this Article 13 are solely
for the benefit of the Agent, the Participants, and the Issuing Bank, and the
Account Party shall not have any rights as a third party beneficiary of any of
the provisions hereof, nor, in the absence of any specific written agreement to
the contrary, shall the Account Party be directly obligated to any Participant
under this Agreement or any other Credit Document.
(b) Administration of Letter of Credit Facility by Agent. The
Agent shall be responsible for administering the Letter of Credit Facility on a
day-to-day basis. In the exercise of such administrative duties, the Agent shall
use the same diligence and standard of care that is customarily used by the
Agent with respect to the issuance of similar letter of credit facilities by the
Agent solely for its own account. The Issuing Bank and each Participant, as
applicable, delegates to the Agent the full right and authority on their
respective behalf to take the following specific actions in connection with its
administration of the Letter of Credit Facility:
(i) to receive all payments of principal, interest, fees and
other charges paid by, or on behalf of, the Account Party and, except
for fees to which the Agent or the Issuing Bank are entitled for their
own respective accounts pursuant to the Credit Documents or otherwise,
to distribute all such funds to the Agent, the Issuing Bank and the
respective Participants as provided for hereunder;
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(iii) to keep and maintain complete and accurate files and
records of all material matters pertaining to the Letter of Credit
Facility, and make such files and records available for inspection and
copying by each Participant and its respective employees and agents
during normal business hours upon reasonable prior notice to the Agent;
and
(iv) to do or omit doing all such other actions as may be
reasonably necessary or incident to the implementation, administration
and servicing of the Letter of Credit Facility and the rights and duties
delegated hereinabove.
(c) Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Credit Document by or through its agents or
attorneys-in-fact, and shall be entitled to the advice of counsel concerning all
matters pertaining to its rights and duties hereunder or under the other Credit
Documents. The Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care.
(d) Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
liable for any action lawfully taken or omitted to be taken by it or them under
or in connection with this Agreement or the other Credit Documents, except for
its or their gross negligence or willful misconduct. Neither the Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be responsible for or have any duty to ascertain, inquire into, or verify
(i) any recital, statement, representation or warranty made by the Account
Party, Charter Mac, or any of their respective officers or agents contained in
this Agreement or the other Credit Documents or in any certificate or other
document delivered in connection therewith; (ii) the performance or observance
of any of the covenants or agreements contained in, or the conditions of, this
Agreement or the other Credit Documents; (iii) the state or condition of any
properties of the Account Party or any other obligor hereunder, or any
information contained in the books or records of the Account Party; (iv) the
validity, enforceability, collectibility, effectiveness or genuineness of this
Agreement, the Letter of Credit, or any other Credit Document or any other
certificate, document or instrument furnished in connection therewith; or (v)
the validity, priority or perfection of any lien securing or purporting to
secure the Obligations or the value or sufficiency of any of the Collateral.
(e) Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any notice, consent, certificate,
affidavit, or other document or writing believed by it to be genuine and correct
and to have been signed, sent or made by the proper person or persons, and upon
the advice and statements of legal counsel (including, without limitation,
counsel to the Account Party), independent accountants and other experts
selected by the Agent. The Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Credit Document unless it
shall first receive such advice or concurrence as it deems appropriate from the
Requisite Participants or all of the Participants, as may be applicable, or it
shall first be indemnified to its satisfaction by the Participants against any
and all liability and expense which may be incurred by it by reason of the
taking or failing to take any
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such action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Credit Documents in
accordance with any written request of the Requisite Participants or all of the
Participants, as may be applicable, and each such request of the Requisite
Participants or all of the Participants, as may be applicable, and any action
taken or failure to act by the Agent pursuant thereto shall be binding upon all
of the Participants; provided, however, that the Agent shall not be required in
any event to act, or to refrain from acting, in any manner which is contrary to
the Credit Documents or to applicable law.
(f) Notice of Event of Default. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Event of Default unless the
Agent has actual knowledge of the same or has received notice from a
Participant, the Issuing Bank, or the Account Party referring to this Agreement,
describing such Event of Default and stating that such notice is a "notice of
default." In the event that the Agent obtains such actual knowledge or receives
such a notice, the Agent shall give prompt notice thereof to each of the
Participants. The Agent shall take such action with respect to such Event of
Default as shall be reasonably directed by the Requisite Participants or all of
the Participants, as may be applicable. Unless and until the Agent shall have
received such direction, the Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to any such Event of
Default as it shall deem advisable in the best interest of the Participants.
(g) Participants' Credit Decisions. Each Participant acknowledges
that it has, independently and without reliance upon the Agent, the Issuing
Bank, or any other Participant, and based on the financial statements prepared
by the Account Party and such other documents and information as it has deemed
appropriate, made its own credit analysis and investigation into the business,
assets, operations, property, and financial and other condition of the Account
Party and has made its own decision to enter into this Agreement and the other
Credit Documents. Each Participant also acknowledges that it will, independently
and without reliance upon the Agent or any other Participant, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in determining whether or not conditions precedent
to the issuance of the Letter of Credit hereunder have been satisfied and in
taking or not taking any action under this Agreement and the other Credit
Documents.
(h) Agent's Reimbursement and Indemnification. The Participants
agree to reimburse and indemnify the Agent, ratably in proportion to their
respective Commitments, for (i) any amounts not reimbursed by the Account Party
for which the Agent is entitled to reimbursement by the Account Party under this
Agreement or the other Credit Documents, (ii) any other expenses incurred by the
Agent on behalf of the Participants in connection with the preparation,
execution, delivery, administration, amendment, waiver and/or enforcement of
this Agreement and the other Credit Documents, and (iii) any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may imposed
on, incurred by or asserted against the Agent in any way relating to or arising
out of this Agreement or the other Credit Documents or any other document
delivered in connection therewith or any transaction contemplated thereby, or
the enforcement of
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any of the terms hereof or thereof, provided that no Participant shall be liable
for any of the foregoing to the extent that they arise from the gross negligence
or willful misconduct of the Agent. If any indemnity furnished to the Agent for
any purpose shall, in the opinion of the Agent, be insufficient or become
impaired, the Agent may call for additional indemnity and cease, or not
commence, to do the action indemnified against until such additional indemnity
is furnished.
(i) Agent in its Individual Capacity. With respect to its
Commitment as a Participant, and the respective advances made by it, the Agent
shall have the same rights and powers hereunder and under any other Credit
Document as any Participant and may exercise the same as though it were not the
Agent and/or the Issuing Bank, and the term "Participant" or "Participants"
shall, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent and its subsidiaries and affiliates may accept
deposits from, lend money to, and generally engage in any kind of commercial or
investment banking, trust, advisory or other business with the Account Party,
Charter Mac, or any Subsidiary or Affiliate of the Account Party or Charter Mac
as if it were not the Agent and/or the Issuing Bank hereunder.
(j) Successor Agent. The Agent may resign at any time by giving
thirty (30) days' prior written notice to the Participants, the Issuing Bank,
and Account Party. The Requisite Participants, for good cause, may remove Agent
at any time by giving thirty (30) days' prior written notice to the Agent, the
Issuing Bank, the Account Party and the other Participants. Upon any such
resignation or removal, the Requisite Participants shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed by
the Requisite Participants and accepted such appointment within thirty (30) days
after the retiring Agent's giving notice of resignation or the Requisite
Participants' giving notice of removal, as the case may be, then the retiring
Agent may appoint, on behalf of the Account Party and the Participants, a
successor Agent. Each such successor Agent shall be a financial institution
which meets the requirements of an Eligible Assignee. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder and under the other Credit Documents.
After any retiring Agent's resignation hereunder, the provisions of this Article
13 shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder.
(k) Duties in the Case of Enforcement. In case one or more Events
of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Agent may, and shall,
at the request, or upon the consent, of the Requisite Participants or all of the
Participants, as may be applicable, and provided that the Participants have
given to the Agent such additional indemnities and assurances against expenses
and liabilities as the Agent may reasonably request, proceed to enforce the
provisions of this Agreement and the other Credit Documents respecting the
disposition of all or any part of the Collateral and the exercise of any legal
or equitable rights or remedies as it may have hereunder or under any other
Credit Document or otherwise by virtue of applicable law, or to refrain from
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so acting if similarly requested by the Requisite Participants. The Agent shall
be fully protected in so acting or refraining from acting upon the instruction
of the Requisite Participants or all of the Participants, as maybe applicable,
and such instruction shall be binding upon all the Participants. The Requisite
Participants or all of the Participants, as may be applicable, may direct the
Agent in writing as to the method and the extent of any such disposition or the
exercise of any other right or remedy, the Participants hereby agreeing to
indemnify and hold the Agent harmless from all costs and liabilities incurred in
respect of all actions taken or omitted in accordance with such direction,
provided that the Agent need not comply with any such direction to the extent
that the Agent reasonably believes the Agent's compliance with such direction to
be unlawful or commercially unreasonable in any applicable jurisdiction. The
Agent may, in its discretion but without obligation, in the absence of direction
from the Requisite Participants or all of the Participants, as may be
applicable, take such interim actions as it believes necessary to preserve the
rights of the Issuing Bank and the Participants hereunder and in and to the
Letter of Credit and/or any Collateral securing the Obligations, including, but
not limited to, petitioning a court for injunctive relief, appointment of a
receiver or preservation of the proceeds of any Collateral. Each of the
Participants acknowledges and agrees that no individual Participant (other than
the Issuing Bank in its capacity as such) may separately enforce or exercise any
of the provisions of any of the Credit Documents other than through the Agent.
SECTION 1.64 Respecting Issuance of Letter of Credit and Payments.
(a) Participations in Letter of Credit. On and as of the
Agreement Date, and on each date hereafter as of which a Person becomes a
Participant hereunder, the Issuing Bank shall be deemed to have sold and
transferred to each Participant, and each Participant then becoming such shall
be deemed irrevocably and unconditionally to have purchased from the Issuing
Bank, without recourse or warranty, an undivided interest and participation
effective as of such date, in a percentage equal to such Participant's
Commitment Percentage, in the Letter of Credit (including each L/C Schedule from
time to time issued hereunder), the Letter of Credit Fee and the Unused Facility
Fee, each Drawing disbursed thereunder and the obligations of the Account Party
under, and the rights and benefits of the Issuing Bank hereunder and under the
other Credit Documents (including the benefit of all representations, warranties
and covenants of the Account Party), this Agreement with respect thereto
(although all direct funding obligations under the Letter of Credit Agreement
shall continue to be the sole responsibility of the Issuing Bank). Upon any
change in the Participants' Commitment Percentages there shall be an automatic
adjustment to the participations pursuant to this Section 13.2 to reflect the
new Commitment Percentages. In determining whether to pay under the Letter of
Credit, the Issuing Bank shall have no obligation relative to the Participants,
other than to confirm that any documents required to be delivered under the
Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of the Letter of
Credit. Any action taken or omitted to be taken by the Issuing Bank under or in
connection with the Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct (as finally determined by a court of
competent jurisdiction), shall not create for the Issuing Bank any resulting
liability to the Account Party, any Participant or any other Person. If the
Issuing Bank makes any payment under the Letter of Credit and the Account Party
shall not have
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reimbursed such amount in full to the Issuing Bank within two (2) Business Days
pursuant to Section 3.1, the Issuing Bank shall promptly notify the Agent, and
the Agent shall promptly notify each Participant of such failure, and each
Participant shall promptly and unconditionally pay to the Agent for the benefit
of such Issuing Bank the amount of such Participant's Commitment Percentage of
such unreimbursed payment in Dollars and in same day funds. If the Agent so
notifies a Participant prior to 11:00 A.M. (Boston time) on any Business Day,
such Participant shall make available to the Agent for the benefit of the
Issuing Bank, in Dollars, such Participant's Commitment Percentage of the amount
of such payment on such Business Day in same day funds; provided, however, that
no Participant shall be obligated to pay to the Agent for the benefit of the
Issuing Bank its Commitment Percentage of such unreimbursed amount for any
wrongful payment made by the Issuing Bank under the Letter of Credit as a result
of acts or omissions constituting willful misconduct or gross negligence on the
part of the Issuing Bank (as finally determined by a court of competent
jurisdiction). If and to the extent such Participant shall not have so made its
Commitment Percentage of the amount of such payment available to the Agent for
the benefit of the Issuing Bank, such Participant agrees to pay to the Agent for
the benefit of the Issuing Bank, forthwith on demand, such amount, together with
interest thereon, for each day from such date until the date such amount is paid
to the Agent for the benefit of the Issuing Bank at the overnight Federal Funds
Rate for the first three days and at the Default Rate for each day thereafter.
(b) Nature of Obligations of Participants. The obligations of the
Participants hereunder are several and not joint. Failure of any Participant to
fulfill its obligations hereunder shall not result in any other Participant
becoming obligated to pay to the Issuing Bank more than its Commitment
Percentage of any Drawing, nor shall such failure release or diminish the
obligations of any other Participant to fund its Commitment Percentage provided
herein. The obligation of the Issuing Bank to honor any conforming Drawing under
the Letter of Credit shall not be affected by any such failure by any
Participant to fulfill its obligations hereunder. Further, the obligations of
the Participants to make payments to the Agent for the benefit of the Issuing
Bank with respect to the Letter of Credit shall be irrevocable and not subject
to any qualification or exception whatsoever (except for any wrongful payment
made by the Issuing Bank under the Letter of Credit as a result of acts or
omissions constituting willful misconduct or gross negligence on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction)) and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or
other right which any the Account Party or any of its Subsidiaries or
Affiliates may have at any time against either Beneficiary, any
transferee of the Letter of Credit (or any Person for whom any such
transferee may be acting), the Agent, the Issuing Bank, any Participant,
or any other Person, whether in connection with this Agreement, the
Letter of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction
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between or among the Account Party, or any Subsidiary or Affiliate of the
Account Party and the Beneficiaries);
(iii) any draft, certificate or any other document
presented under the Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect; or
(iv) the occurrence of any Event of Default.
(c) Payments to Agent. All payments of principal of and interest
respecting any Unpaid Drawing shall be made to the Agent by the Account Party or
any other obligor or guarantor for the account of the Issuing Bank in
immediately available funds as provided in this Agreement. Except as otherwise
expressly provided herein, the Agent agrees to use its reasonable best efforts
to promptly to distribute to the Issuing Bank and to each Participant which has
funded its Commitment Percentage of any Unpaid Drawing, on the same Business Day
upon which each such payment is made (if received prior to 2:00 p.m. on such
Business Day), such Person's proportionate share of each such payment in
immediately available funds, excluding Liquidation Proceeds which shall be
distributed in accordance with Section 13.2(d) below. The Agent shall upon each
distribution promptly notify the Issuing Bank and each Participant of the
amounts distributed to it applicable to principal of, and interest on, the
proportionate share held by the applicable Person. Each payment to the Agent
under the first sentence of this Section shall constitute a payment by the
Account Party to the Issuing Bank, and any such payment to the Agent shall not
be considered outstanding for any purpose after the date of such payment by the
Account Party to the Agent without regard to whether or when the Agent makes
distribution thereof as provided above. If any payment received by the Agent
from the Account Party is insufficient to pay both all accrued interest and all
principal then due and owing, the Agent shall first apply such payment to all
outstanding interest until paid in full and shall then apply the remainder of
such payment to all principal then due and owing, and shall distribute the
payment to each Participant accordingly. As between the Issuing Bank and each
Participant, all interest in respect of any Unpaid Drawing shall be solely for
the account of the Issuing Bank up to the time that the Agent has received such
Participant's payment of its Commitment Percentage of such Unpaid Drawing.
(d) Distribution of Liquidation Proceeds. Subject to the terms
and conditions hereof, the Agent shall distribute all Liquidation Proceeds in
the order and manner set forth below:
First: To the Agent, towards any expenses for which the Agent is
entitled to reimbursement under this Agreement or the
other Credit Documents not theretofore paid to the Agent.
Second: To the Issuing Bank, towards any expenses for which the
Issuing Bank is entitled to reimbursement under this
Agreement or the other Credit Documents not theretofore
paid to the Issuing Bank.
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Third: To the Issuing Bank and the Participants in accordance
with their proportional share based upon their respective
Commitment Percentages until the Issuing Bank and all
Participants have been paid in full all principal and
interest respectively due to the Issuing Bank and such
Participants respecting their respective participation
interests in the Unpaid Drawings, with the Issuing Bank
and each Participant applying such proceeds for purposes
of this Agreement first against the outstanding principal
balance due to the Issuing Bank and such Participant in
respect of their respective participation interests in the
Unpaid Drawings and then to accrued and unpaid interest
due to the Issuing Bank and such Participant in respect of
their respective participation interests in the Unpaid
Drawings.
Fourth:To all applicable Participants in accordance with their
proportional share based upon their respective Commitment
Percentages until all Participants have been paid in full
all other amounts due to such Participants under the
Letter of Credit Facility.
Fifth: To the Account Party or such other Persons as may be
entitled to claim Liquidation Proceeds.
(e) Adjustments. If, after the Agent has paid each Participant's
proportionate share of any payment received or applied by the Agent in respect
of Unpaid Drawings, fees or any other amounts, that payment is rescinded or must
otherwise be returned or paid over by the Agent or the Issuing Bank, whether
pursuant to any bankruptcy or insolvency law, sharing of payments clause of any
agreement or otherwise, such Participant shall, at the Agent's request, promptly
return its proportionate share of such payment or application to the Agent (for
the benefit of the Issuing Bank, as the case may be), together with the
Participant's proportionate share of any interest, fees, or other amount
required to be paid by the Agent with respect to such payment or application.
(f) Setoff. If the Issuing Bank shall exercise any right of
setoff against a deposit balance or other account of the Account Party held by
the Issuing Bank on account of the obligations of the Account Party under this
Agreement, the Issuing Bank shall remit to the Agent all such sums received
pursuant to the exercise of such right of setoff, and the Agent shall apply all
such sums for the benefit of the Issuing Bank and the Participants hereunder in
accordance with the terms of this Agreement.
(g) Distribution by Agent. If, in the opinion of the Agent,
distribution of any amount received by it in such capacity hereunder or under
any of the other Credit Documents might involve any liability, it may refrain
from making distribution until its right to make distribution shall have been
adjudicated by a court of competent jurisdiction or has been resolved by the
mutual consent of the Issuing Bank and all Participants. In addition, the Agent
may
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request full and complete indemnity, in form and substance satisfactory to it,
prior to making any such distribution. If a court of competent jurisdiction
shall adjudge that any amount received and distributed by the Agent is to be
repaid, each person to whom any such distribution shall have been made shall
either repay to the Agent its proportionate share of the amount so adjudged to
be repaid or shall pay over to the same in such manner and to such persons as
shall be determined by such court.
(h) Delinquent Participant. If for any reason any Participant
shall fail or refuse to abide by its obligations under this Agreement, including
without limitation its obligation to make available to Agent its pro rata share
respecting any Unpaid Drawings, funding requirements, expenses or setoff (a
"Delinquent Participant") and such failure is not cured within ten (10) days of
receipt from the Agent of written notice thereof, then, in addition to the
rights and remedies that may be available to Agent, the Issuing Bank and the
other Participants, at law or in equity, and not in limitation thereof, (i) such
Delinquent Participant's right to participate in the administration of, or
decision-making rights related to, the Letter of Credit Facility, this Agreement
or the other Credit Documents shall be suspended during the pendency of such
failure or refusal, and without limiting the generality of the foregoing, at
such time as a Participant becomes a Delinquent Participant, such Delinquent
Participant's right to vote on matters which are subject to the consent or
approval of the Requisite Participants or all the Participants shall be
immediately suspended until such time as the Participant is no longer a
Delinquent Participant, and during the period of such suspension, the
calculation of Required Participants shall be made without reference to such
Delinquent Participant's Commitment Percentage, and (ii) a Delinquent
Participant shall be deemed to have assigned any and all payments due to it in
respect of its participation interest in the Letter of Credit, this Agreement
and the other Credit Documents, whether on account of outstanding Unpaid
Drawings, interest, fees or otherwise, to the remaining non-Delinquent
Participants for application to, and reduction of, their proportionate shares of
all outstanding Unpaid Drawings until, as a result of application of such
assigned payments, the Participants' respective pro rata shares of all
outstanding Unpaid Drawings shall have returned to those in effect immediately
prior to such delinquency and without giving effect to the nonpayment causing
such delinquency. The Delinquent Participant's decision-making and participation
rights and rights to payments as set forth in clauses (i) and (ii) hereinabove
shall be restored only upon the payment by the Delinquent Participant of its pro
rata share of any Unpaid Drawings, funding requirements, or expenses as to which
it is delinquent, together with interest thereon at the Default Rate from the
date when originally due until the date upon which any such amounts are actually
paid. The Delinquent Participant also shall pay to the Agent, within two (2)
Business Days of demand, all costs and expenses, including without limitation,
attorneys' fees and expenses, incurred by the Agent or the Issuing Bank in
connection with such delinquency.
The non-Delinquent Participants shall also have the right, but not the
obligation, in their respective, sole and absolute discretion, to acquire for no
cash consideration (pro rata, based on the respective Commitments of those
Participants electing to exercise such right) the Delinquent Participant's
Commitment to reimburse the Issuing Bank for future Unpaid Drawings under the
Letter of Credit (the "Future Commitment"). Upon any such purchase of the pro
rata share of
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any Delinquent Participant's Future Commitment, the Delinquent Participant's
share in future Unpaid Drawings and its rights under the Credit Documents with
respect thereto shall terminate on the date of purchase, and the Delinquent
Participant shall promptly execute all documents reasonably requested to
surrender and transfer such interest, including, if so requested, an Assignment
and Acceptance. Each Delinquent Participant shall indemnify Agent and each
non-delinquent Participant from and against any and all loss, damage or
expenses, including but not limited to reasonable attorneys' fees and funds
advanced by Agent or by any non-delinquent Participant, on account of a
Delinquent Participant's failure to timely fund its pro rata share respecting an
Unpaid Drawing or to otherwise perform its obligations under the Credit
Documents.
SECTION 1.65 Assignment and Participation.
(a) Conditions to Assignment by Participants and Issuing Bank.
Except as provided herein, each Participant may assign to one or more Eligible
Assignees all or a portion of its interests, rights and obligations as a
Participant under this Agreement (including all or a portion of its Commitment
Percentage and Commitment and the same portion of Unpaid Drawings), upon
satisfaction of the following conditions: (i) the Agent and the Issuing Bank
shall have given its prior written consent to such assignment, and provided no
Event of Default has occurred and is continuing, the Account Party shall have
given its prior written consent to such assignment, which consent shall not be
unreasonably withheld or delayed; (ii) each such assignment shall be of a
constant, and not a varying, percentage of all the assigning Participant's
rights and obligations under this Agreement, (iii) each assignment shall be in
an amount that is at least $5,000,000.00 and is a whole multiple of $250,000.00,
and (iv) the parties to such assignment shall execute and deliver to the Agent,
for recording in the Register (as hereinafter defined), an Assignment and
Acceptance, substantially in the form of Exhibit G hereto (an "Assignment and
Acceptance"). Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the execution
thereof, (x) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of a
Participant hereunder, and (y) the assigning Participant shall, to the extent
provided in such assignment and upon payment to the Agent of the registration
fee referred to in Section 13.3(c), be released from its obligations under this
Agreement. The Issuing Bank (in its capacity as such) may assign its interests,
rights, and obligations hereunder as the Issuing Bank only with the prior
written consent of the Agent and the Account Party (but may assign its
interests, rights, and obligations hereunder as a Participant as provided
above).
(b) Certain Representations and Warranties; Limitations;
Covenants. By executing and delivering an Assignment and Acceptance, the parties
to the assignment thereunder confirm to and agree with each other and the other
parties hereto as follows:
(i) other than the representation and warranty that it is
the legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim, the assigning Participant makes no
representation or warranty, express or implied,
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and assumes no responsibility with respect to any statements, warranties
or representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement, the Letter of Credit, the other Credit
Documents or any other instrument or document furnished pursuant hereto
or the attachment, perfection or priority of any security interest or
mortgage;
(ii) the assigning Participant makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Account Party and its affiliates, related entities or
subsidiaries or any other person primarily or secondarily liable in
respect of any of the Obligations, or the performance or observance by
the Account Party or any other person primarily or secondarily liable in
respect of any of the Obligations of any of their obligations under this
Agreement or any of the other Credit Documents or any other instrument
or document furnished pursuant hereto or thereto;
(iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the most recent financial
statements provided by the Account Party as required by the terms of
this Agreement, together with such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance
upon the assigning Participant, the Agent or any other Participant and
based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not
taking action under this Agreement;
(v) such assignee represents and warrants that it is an
Eligible Assignee;
(vi) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under
this Agreement and the other Credit Documents as are delegated to the
Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto;
(vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of
this Agreement are required to be performed by it as a Participant; and
(viii) such assignee represents and warrants that it is
legally authorized to enter into such Assignment and Acceptance.
(c) Register. The Agent shall maintain a copy of each Assignment
and Acceptance delivered to it and a register or similar list (the "Register")
for the recordation of the names and addresses of the Participants and the
Commitment Percentage of, and principal
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amount of Unpaid Drawings owing to the Participants from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Account Party, the Agent and the Participants may treat each person
whose name is recorded in the Register as a Participant hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Account Party and the Participants at any reasonable time and from time to
time upon reasonable prior notice. Upon each such recordation, the assigning
Participant agrees to pay to the Agent a registration fee in the sum of
$5,000.00.
(d) Participations. Each Participant may sell participations to
one or more banks or other financial institutions in all or a portion of such
Participant's rights and obligations under this Agreement and the other Credit
Documents; provided that (i) each such participation shall be in a minimum
amount of $5,000,000.00, (ii) each participant shall meet the requirements of an
Eligible Assignee, (iii) any such sale or participation shall not affect the
rights and duties of the selling Participant hereunder to the Account Party, and
(iv) the only rights granted to the participant pursuant to such participation
arrangements with respect to waivers, amendments or modifications of the Credit
Documents shall be the rights to approve waivers, amendments or modifications
that would reduce the principal of or the interest rate on any Unpaid Drawings,
extend the term or increase the amount of the Commitment of such Participant as
it relates to such participant, reduce the amount of any commitment fees to
which such participant is entitled or extend any regularly scheduled payment
date for principal or interest. The Issuing Bank may from time to time admit
additional Participants hereunder, in which event Schedule A shall be
appropriately amended to reflect each such additional Participant's Commitment
and Commitment Percentage, and each such additional Participant shall (x) become
a party to this Agreement by signing an appropriate joinder agreement, and (y)
pay to each then existing Participant a portion of any amounts which they have
funded to the Issuing Bank hereunder and which have not been paid or reimbursed
by the Account Party so that the aggregate of such amounts outstanding shall be
in proportion to the Commitment Percentages of all Participants after giving
effect to the admission of the new Participant(s).
(e) Disclosure. The Account Party agrees that in addition to
disclosures made in accordance with standard and customary banking practices any
Participant may disclose information obtained by such Participant pursuant to
this Agreement to assignees or participants and potential assignees or
participants hereunder; provided that such assignees or participants or
potential assignees or participants shall agree (i) to treat in confidence such
information unless such information otherwise becomes public knowledge, (ii) not
to disclose such information to a third party, except as required by law or
legal process and (iii) not to make use of such information for purposes of
transactions unrelated to such contemplated assignment or participation.
(f) Miscellaneous Assignment Provisions. Any assigning
Participant shall retain its rights to be indemnified pursuant to Section
10.1(p) with respect to any claims or actions arising prior to the date of such
assignment. If any assignee Participant is not incorporated under the laws of
the United States of America or any state thereof, it shall, prior to the date
on which any interest or fees are payable hereunder or under any of the other
Credit
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Documents for its account, deliver to the Account Party and the Agent
certification as to its exemption from deduction or withholding of any United
States federal income taxes. Anything contained in this Section 13.3(f) to the
contrary notwithstanding, any Participant may at any time pledge all or any
portion of its interest and rights under this Agreement to any of the twelve
Federal Reserve Banks organized under Section 4 of the Federal Reserve Act, 12
U.S.C. Section 341. No such pledge or the enforcement thereof shall release the
pledgor Participant from its obligations hereunder or under any of the other
Credit Documents.
(g) No Assignment by Account Party. The Account Party shall not
assign or transfer any of its rights or obligations under any of the Credit
Documents without the prior written consent of each of the Participants.
SECTION 1.66 Administrative Matters.
(a) Amendment, Waiver, Consent, Etc. Except as otherwise provided
herein or as to any term or provision hereof which provides for the consent or
approval of the Agent and/or the Issuing Bank, no term or provision of this
Agreement or any other Credit Document may be changed, waived, discharged or
terminated, nor may any consent required or permitted by this Agreement or any
other Credit Document be given, unless such change, waiver, discharge,
termination or consent receives the written approval of the Requisite
Participants. The agreement of the Account Party shall not be necessary for any
amendment or modification of the agreements herein among the Agent, the Issuing
Banks and the Participants which does not adversely affect the Account Party.
Notwithstanding the foregoing, the unanimous written approval of the Issuing
Bank and of all the Participants (other than a Delinquent Participant) shall be
required with respect to any proposed amendment, waiver, discharge, termination,
or consent which:
(i) has the effect of (v) extending the final date as of which
additional Eligible Lease-Up Bonds may be added to (including by
substitution) the Letter of Credit Facility, or the due date of any
principal payment of any Unpaid Drawing, (w) extending the expiry of the
Letter of Credit beyond the applicable Expiration Date, (x) reducing the
rate or extending the time of payment of interest or fees, (y)
increasing or reducing the principal amount thereof, or (z) otherwise
postponing or forgiving any indebtedness thereunder,
(ii) releases or discharges any material portion of any
Collateral other than in accordance with the express provisions of the
Credit Documents,
(iii) amends, modifies or waives any provisions of this paragraph
13.4(a),
(iv) amends, modifies or waives any provisions of Section 2.1 or
the definition of Maximum Credit Amount;
(v) reduces the percentage specified in the definition of
Requisite Participants,
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(vi) except as otherwise provided in the Agreement (including due
to the admission of any one or more additional Participants), changes
the amount of any Participant's Commitment or Commitment Percentage, or
(vii) releases or waives any guaranty of the Obligations or
indemnifications provided in the Credit Documents;
and provided, further, that, without the consent of the Agent or the Issuing
Bank, as applicable, no such action shall amend, modify or waive any provision
of this Article 13 or any other provision of any Credit Document which relates
to the rights or obligations of the Agent or the Issuing Bank, as applicable.
(b) Deemed Consent or Approval. With respect to any requested
amendment, waiver, consent or other action which requires the approval of the
Requisite Participants or all of the Participants, as the case may be, in
accordance with the terms of this Agreement, or if the Agent is required
hereunder to seek, or desires to seek, the approval of the Requisite
Participants or all of the Participants, as the case may be, prior to
undertaking a particular action or course of conduct, the Agent in each such
case shall provide each Participant with written notice of any such request for
amendment, waiver or consent or any other requested or proposed action or course
of conduct, accompanied by such detailed background information and explanations
as may be reasonably necessary to determine whether to approve or disapprove
such amendment, waiver, consent or other action or course of conduct. The Agent
may (but shall not be required to) include in any such notice, printed in
capital letters or boldface type, a legend substantially to the following
effect:
"THIS COMMUNICATION REQUIRES IMMEDIATE RESPONSE. FAILURE TO RESPOND
WITHIN TEN (10) CALENDAR DAYS FROM THE RECEIPT OF THIS COMMUNICATION
SHALL CONSTITUTE A DEEMED APPROVAL BY THE ADDRESSEE OF THE ACTION
REQUESTED BY THE ACCOUNT PARTY OR THE COURSE OF CONDUCT PROPOSED BY THE
AGENT AND RECITED ABOVE,"
and if the foregoing legend is included by the Agent in its communication, a
Participant shall be deemed to have approved or consented to such action or
course of conduct for all purposes hereunder if such Participant fails to object
to such action or course of conduct by written notice to the Agent within ten
(10) calendar days of such Participant's receipt of such notice.
ARTICLE 14.
GENERAL PROVISIONS.
-------------------
SECTION 1.67 Notices. Except for the presentment of a Drawing under
the Letter of Credit for Drawings by the Beneficiary, the notice provisions for
which are governed by Section 2.1(c) above and the Letter of Credit, any other
notice or other communication in
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connection with this Agreement, the Letter of Credit, or any of the other Credit
Documents, shall be in writing, and (i) deposited in the United States Mail,
postage prepaid, by registered or certified mail, or (ii) hand delivered by any
commercial courier service or overnight delivery service such as Federal
Express, or (iii) sent by facsimile transmission if a fax number is designated
below, addressed:
If to Account Party:
Charter MAC Equity Issuer
c/o Charter Mac Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies by regular mail or such hand delivery or facsimile
transmission to (which shall not constitute notice):
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇, Esquire
If to the Agent or the Issuing Bank:
Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Mail Stop: ▇▇ ▇▇ ▇▇▇▇▇▇
with copies by regular mail or such hand delivery or facsimile
transmission to (which shall not constitute notice):
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esquire
If to a Participant: To such address for such Participant as
appears on
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Schedule A.
If to the Administrative Agent:
Deutsche Bank National Trust Company
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Any such addressee may change its address for such notices to such other
address in the United States as such addressee shall have specified by written
notice given as set forth above. All periods of notice shall be measured from
the deemed date of delivery.
A notice shall be deemed to have been given, delivered and received for
the purposes of all Credit Documents upon the earliest of: (i) if sent by such
certified or registered mail, on the third Business Day following the date of
postmark, or (ii) if hand delivered at the specified address by such courier or
overnight delivery service, when so delivered or tendered for delivery during
customary business hours on a Business Day, or (iii) if so mailed, on the date
of actual receipt as evidenced by the return receipt, or (iv) if so delivered,
upon actual receipt, or (v) if facsimile transmission is a permitted means of
giving notice, upon receipt as evidenced by confirmation.
SECTION 1.68 Parties Bound; Integration. The provisions of this
Agreement and of each of the other Credit Documents shall be binding upon and
inure to the benefit of Account Party, the Agent, the Issuing Bank, and each of
the Participants and their respective successors and assigns, except as
otherwise prohibited by this Agreement, the Letter of Credit, or any of the
other Credit Documents.
This Agreement is a contract by and among Account Party, Agent, the
Issuing Bank, and each of the Participants for their mutual benefit, and no
third person including the Beneficiary or any Person to whom any Draw may be
paid hereunder for the account of the Account Party or Subsidiary of the Account
Party) shall have any right, claim or interest against either Agent, any of the
Participants, or Account Party by virtue of any provision hereof.
This Agreement is intended by the Account Party, the Agent and the
Participants as the final, complete and exclusive statement of the transactions
evidenced by this Agreement. Except with respect to the Existing Reimbursement
Agreement to the extent provided herein and as set forth in the other Credit
Documents, all prior or contemporaneous promises, agreements and understandings,
whether oral or written, are deemed to be superseded by this Agreement, and no
party is relying on any promise, agreement or understanding not set forth in
this Agreement.
SECTION 1.69 Waivers, Extensions and Releases. Any waiver, extension
or release at any time granted by the Agent hereunder (with the approval of the
Requisite
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Participants or all of the Participants, as may be applicable), shall be deemed
to be made in pursuance and not in modification hereof, and any such waiver in
any instance, or under any particular circumstance shall not be considered a
waiver of such condition in any other instance or any other circumstance.
SECTION 1.70 Governing Law; Severability.
(a) Substantial Relationship. It is understood and agreed that
all of the Credit Documents were negotiated, executed and delivered in The
Commonwealth of Massachusetts, which Commonwealth the parties agree has a
substantial relationship to the parties and to the underlying transactions
embodied by the Credit Documents.
(b) Place of Delivery. The Account Party agrees to furnish to the
Agent at the Agent's office in Boston, Massachusetts, all further instruments,
certifications and documents to be furnished hereunder.
(c) Governing Law; Sealed Instruments. This Agreement and each of
the other Credit Documents shall in all respects be governed, construed, applied
and enforced in accordance with the internal laws of The Commonwealth of
Massachusetts without regard to principles of conflicts of law and each shall
take effect as a sealed instrument.
(d) Severability. Any determination that any provision of this
Agreement or any application thereof is invalid, illegal, or unenforceable in
any respect in any instance shall not affect the validity, legality, or
enforceability of such provision in any other instance, or the validity,
legality, or enforceability of any other provision of this Agreement.
SECTION 1.71 Consent to Jurisdiction. THE ACCOUNT PARTY AGREES THAT
ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER CREDIT
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR
ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION
OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
ACCOUNT BY MAIL AT THE ADDRESS SPECIFIED IN SECTION 14.1. THE ACCOUNT PARTY
HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF
ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT
COURT.
SECTION 1.72 JURY TRIAL WAIVER. THE ACCOUNT PARTY, THE AGENT, THE
ISSUING BANK, AND THE PARTICIPANTS (BY ACCEPTANCE OF THIS AGREEMENT) MUTUALLY
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENTS CONTEMPLATED TO BE
EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE
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OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY,
INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS OR ACTIONS OF THE AGENT OR ANY PARTICIPANT RELATING TO THE
ADMINISTRATION OF THE LETTER OF CREDIT FACILITY OR ENFORCEMENT OF THE CREDIT
DOCUMENTS, AND AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
EXCEPT AS PROHIBITED BY LAW, ACCOUNT PARTY HEREBY WAIVES ANY RIGHT IT MAY HAVE
TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. THE ACCOUNT PARTY CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF THE AGENT, THE ISSUING BANK, OR ANY PARTICIPANT HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE AGENT, THE ISSUING BANK, OR ANY PARTICIPANT WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR PARTICIPANTS TO ACCEPT THIS AGREEMENT AND
ESTABLISH THE LETTER OF CREDIT FACILITY.
SECTION 1.73 Survival. All representations, warranties, covenants
and agreements of Account Party herein or in any other Credit Document, or in
any notice, certificate, or other paper delivered by or on behalf of the Account
Party pursuant hereto are significant and shall be deemed to have been relied
upon by the Agent and the Issuing Bank notwithstanding any investigation made by
the Agent or the Issuing Bank or on their behalf and shall survive the delivery
of the Credit Documents and the issuance of the Letter of Credit pursuant
thereto. No review or approval by the Agent, a Participant, or the Issuing Bank,
or by any of their consultants or representatives, of any opinion letters,
certificates by professionals or other item of any nature shall relieve Account
Party or anyone else of any of the obligations, warranties or representations
made by or on behalf of Account Party under any one or more of the Credit
Documents.
SECTION 1.74 Cumulative Rights. All of the rights of the Agent, the
Issuing Bank and the Participants hereunder and under each of the other Credit
Documents and any other agreement now or hereafter executed in connection
herewith or therewith, shall be cumulative and may be exercised singly,
together, or in such combination as the Agent may determine in its sole good
faith judgment.
SECTION 1.75 Claims Against Agent, Issuing Bank, or Participants.
(a) Account Party Must Notify. The Agent and the Issuing Bank
shall not be in default under this Agreement, or under any other Credit
Document, unless a written notice specifically setting forth the claim of
Account Party shall have been given to the Agent and the Issuing Bank (except
that Account Party shall have no obligation to provide such Persons with written
notice that a Drawing has been dishonored by the Issuing Bank) within thirty
(30) days
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after Account Party first had actual knowledge or actual notice of the
occurrence of the event which Account Party alleges gave rise to such claim and
the Agent and the Issuing Bank does not remedy or cure the default, if any there
be, with reasonable promptness thereafter. Such actual knowledge or actual
notice shall refer to what was actually known by, or expressed in a written
notification furnished to, any Authorized Representative.
(b) Remedies. If it is determined by the final order of a court
of competent jurisdiction, which is not subject to further appeal, that the
Agent or the Issuing Bank has breached any of its obligations to the Account
Party under the Credit Documents and has not remedied or cured the same with
reasonable promptness following notice thereof, the Agent's and the Issuing
Bank's responsibilities shall be limited to: (i) where the breach consists of
the failure to grant consent or give approval in violation of the terms and
requirements of a Credit Document, the obligation to grant such consent or give
such approval and to pay the Account Party's reasonable costs and expenses
including, without limitation, reasonable attorneys' fees and disbursements in
connection with such court proceedings; and (ii) in the case of any such failure
to grant such consent or give such approval, or in the case of any other such
default by the Agent or the Issuing Bank, where it is also so determined that
Agent or the Issuing Bank acted in bad faith, the payment of any actual, direct,
compensatory damages sustained by the Account Party as a result thereof plus the
Account Party's reasonable costs and expenses, including, without limitation,
reasonable attorneys' fees and disbursements in connection with such court
proceedings.
(c) Limitations. In no event, however, shall Agent, Issuing Bank,
or any of the Participants be liable to Account Party or anyone else for other
damages such as, but not limited to, indirect, speculative or punitive damages
whatever the nature of the breach by Agent, Issuing Bank, or any of the
Participants of its obligations under this Agreement or under any of the other
Credit Documents. In no event shall Agent, Issuing Bank, or any of the
Participants be liable to Account Party or anyone else unless a written notice
specifically setting forth the claim of Account Party shall have been given to
Agent, Issuing Bank, and each of the Participants within the time period
specified above.
SECTION 1.76 Counterparts. This Agreement and each other Credit
Document may be executed in several counterparts, each of which when executed
and delivered is an original, but all of which together shall constitute one
instrument. In making proof of this agreement, it shall not be necessary to
produce or account for more than one such counterpart which is executed by the
party against whom enforcement of such Agreement is sought.
SECTION 1.77 Time Of the Essence. Time is of the essence of each
provision of this Agreement and each other Credit Document.
SECTION 1.78 No Oral Change. This Agreement and each of the other
Credit Documents may only be amended, terminated, extended or otherwise modified
by a writing signed by the party against which enforcement is sought (except no
such writing shall be required for any party which, pursuant to a specific
provision of any Credit Document, is
-59-
required to be bound by changes without such party's assent). In no event shall
any oral agreements, promises, actions, inactions, knowledge, course of conduct,
course of dealings or the like be effective to amend, terminate, extend or
otherwise modify this Agreement or any of the other Credit Documents.
SECTION 1.79 Monthly Statements. While Agent may issue invoices or
other statements on a monthly or periodic basis (a "Statement"), it is expressly
acknowledged and agreed that: (i) the failure of the Agent to issue any
Statement on one or more occasions shall not affect the Account Party's
obligations to make payments under the Credit Documents as and when due; (ii)
the inaccuracy of any Statement shall not be binding upon the Agent, the Issuing
Bank, or the Participants and so the Account Party shall always remain obligated
to pay the full amount(s) required under the Credit Documents as and when due
notwithstanding any provision to the contrary contained in any Statement;
provided, however, no Event of Default shall be deemed to have occurred as a
result of the Account Party's failure to have paid the full amount(s) required
under the Credit Documents, if (x) such failure is a result of the Account
Party's good faith reliance on an inaccurate Statement, which Statement on its
face was not patently erroneous or contradicted in the books and records of the
Account Party with respect to the Credit Documents, and (y) the Account Party
pays to the Agent the correct amount owed under the Credit Documents within two
(2) Business Days from the date that the Agent provides the Account Party with
notice that the Statement on which the Account Party relied was inaccurate and
provides the Account Party with a corrected Statement; (iii) all Statements are
issued for information purposes only and shall never constitute any type of
offer, acceptance, modification, or waiver of the Credit Documents or any of the
Agent's or the Issuing Bank's rights or remedies thereunder; and (iv) in no
event shall any Statement serve as the basis for, or a component of, any course
of dealing, course of conduct, or trade practice which would modify, alter, or
otherwise affect the express written terms of the Credit Documents.
SECTION 1.80 Acknowledgment of Joinder. The Account Party
acknowledges and consents to the terms and conditions of the Joinder to this
Agreement which has been executed by Charter Mac and further acknowledges and
agrees that the terms and conditions of the Joinder are hereby incorporated
herein by reference.
[Remainder of page intentionally blank. Signature page follows.]
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[Signature page to Amended and Restated Reimbursement Agreement dated as of
March 31, 2003]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as an agreement under seal by their respective
officers thereunto duly authorized as of the date first written.
CHARTER MAC EQUITY ISSUER TRUST
(As Account Party)
By: Charter MAC Corporation, its Manager
By_______________________________
Name:____________________________
Title:___________________________
FLEET NATIONAL BANK
(As Agent, Issuing Bank, and a
Participant)
By______________________________________
Name:___________________________________
Title:__________________________________
CITICORP USA, INC.
(As a Participant)
By______________________________________
Name:___________________________________
Title:__________________________________
S-1
Joinder of
Charter Municipal Mortgage Acceptance Company
Reference is made to that certain Amended and Restated Reimbursement
Agreement dated as of March 31, 2003 (the "Agreement") by and among Charter Mac
Equity Issuer Trust as Account Party, Fleet National Bank as Agent (in such
capacity, the "Agent") for itself, the Issuing Bank, and the Participants, and
as the Issuing Bank (in such capacity, the "Issuing Bank"), and the
Participants. Unless otherwise defined herein, all capitalized terms used herein
shall have the meaning set forth in the Agreement.
Charter Mac acknowledges that CM Holding Trust, a Delaware statutory
trust ("Holding Trust"), is a direct wholly owned Subsidiary of Charter Mac, and
that the Account Party is a direct wholly owned Subsidiary of Holding Trust, and
that, although, pursuant to the provisions of the Account Party's Constituent
Documents, Charter Mac is prohibited from becoming obligated for the debts of
the Account Party or holding out its credit as being available to satisfy the
obligations of the Account Party to any Person, the Agent, the Issuing Bank and
the Participants are relying on certain representations, warranties and
covenants of Charter Mac, but not the credit of Charter Mac, as an inducement
for the Agent, the Issuing Bank and the Participants to enter into the Agreement
for the benefit of the Account Party in accordance with the terms and conditions
thereof. Accordingly, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Charter Mac hereby joins in the
Agreement for the following purposes (the "Joinder"):
15. Charter Mac agrees to comply with the Charter Mac Covenants set
forth on Exhibit M to the Agreement. Charter Mac shall provide the Agent with a
quarterly compliance certificate in form satisfactory to the Agent demonstrating
compliance, or non-compliance, as the case may be, with the Charter Mac
Covenants;
16. Charter Mac acknowledges and confirms the warranties and
representations made specifically on its behalf by the Account Party pursuant to
the Agreement;
17. Charter Mac agrees to comply with the affirmative and negative
covenants set forth in Article 10 of the Agreement which specifically make
reference to an obligation of Charter Mac;
18. Charter Mac acknowledges and agrees that an Event of Default shall
occur if (x) Charter Mac fails to comply with the Charter Mac Covenants, (y)
Charter Mac fails to comply with the affirmative and negative covenants set
forth in Article 10 of the Agreement which specifically make reference to an
obligation of Charter Mac, or (z) any of the events described in Section 11.1 of
the Agreement which make specific reference to Charter Mac shall have occurred;
19. Charter Mac further covenants and agrees from the date hereof and so
long as the Letter of Credit or other Obligations remain outstanding, that
Charter Mac shall not, so long as a
J/S-1
Default or an Event of Default has occurred and is continuing, permit the
Account Party to make any payments or distributions to any Person on account of
the Account Party's Equity Interests nor shall Charter Mac accept any payments
or distributions on account of the Account Party's Equity Interests; and
20. By executing and delivering this Agreement, which incorporates this
Joinder by reference, the Agent, the Issuing Bank and the Participants
acknowledge and agree that Charter Mac does not have any, and that Charter Mac
shall never have any, personal liability to the Agent, the Issuing Bank or the
Participants on account of a Default or Event of Default under this Agreement, a
breach by Charter Mac of any of the Charter Mac Covenants, or a breach by
Charter Mac of any of the provisions of the Agreement which are incorporated
into this Joinder by reference, and that the Agent's, the Issuing Bank's and the
Participants' sole recourse on account of the occurrence of any of the foregoing
events shall be to exercise their rights and remedies against the Account Party
and the Collateral as provided for in the Agreement.
Executed as a sealed instrument as of March 31, 2003.
CHARTER MUNICIPAL MORTGAGE
ACCEPTANCE COMPANY
By: Charter Mac Corporation,
Its Manager
By___________________________
Name:________________________
Title:_______________________
J/S-2
EXHIBIT A TO REIMBURSEMENT AGREEMENT
------------------------------------
DEFINITIONS
-----------
"Account Party" has the meaning defined in the Preamble.
"Actual Annual Debt Service" means, with respect to any Covered Eligible
Bond, or portion thereof, for any consecutive twelve (12) month period, the
aggregate amount of interest on and principal of such Covered Eligible Bonds, or
portion thereof required to be paid for such period.
"Acquisition Line Facility" means that certain Acquisition Loan
Agreement dated as of December 24, 2001 by and among Fleet National Bank, as
Agent for a syndicate of Lenders, such Lenders, and Charter Mac Corporation, as
amended and in effect.
"Adjusted Debt Service" means, with respect to any Eligible Lease-Up
Bond, the quotient of (x) the Annualized NOI for such Eligible Lease-Up Bond,
divided by (y) 1.1.
"Adjusted EBITDA" means, measured as of the last day of each calendar
quarter, without duplication, and in accordance with GAAP, the amount derived
from (A) for such quarter then ended, the Account Party's consolidated net
income (before deduction of Preferred Dividend payments and minority interest in
income of Subsidiaries (as so characterized on the Account Party's income
statement from time to time)), plus (B) Interest Expense (including under the
Letter of Credit Facility and the Bond Warehousing Facility) for such period,
(C) plus the amount of income tax expense deducted in calculating net income for
that period, minus (D) the amount of income taxes actually paid during that
period, plus (E) depreciation, amortization and other non-cash items deducted in
calculating net income for that period, minus (F) non-cash revenue included in
calculating net income for that period, minus (G) to the extent included in
determining net income, any unrealized gain or loss in respect of revenue bonds
or hedging transactions, all of the foregoing as determined in accordance with
GAAP for such period, plus (H) all program fees associated with the TOPS Program
in respect of such period, minus (I) any and all special distributions to its
Affiliate management company in respect of such period, plus (J) extraordinary
losses for such period as determined in accordance with GAAP, minus (K)
extraordinary gains for such period as determined in accordance with GAAP, plus
(L) non-recurring litigation expenses and expenses related to transactions
outside of the Account Party's normal business activities which were terminated
prior to consummation, minus (M) non-recurring income or loss.
"Adjusted Tangible Net Worth" means, at the time of determination, Total
Assets, minus (a) Intangible Assets, minus (b) Total Liabilities, minus (c) net
interest receivables in respect of defaulted bonds or other impaired assets ,
minus (d) to the extent not included in "Total Liabilities," minority interests
in Subsidiaries subject to mandatory redemption, plus (e) to the extent included
in "Total Liabilities," dividends payable on Subsidiaries' preferred shares.
A-3
"Adjusted Principal Amount" means, with respect to any Covered Eligible
Bond, at any time of determination, the quotient of (x) the Adjusted Debt
Service for such Covered Eligible Bond, divided by (y) the Constant for such
Covered Eligible Bond.
"Administration and Custody Agreement" means the amended and restated
administration and custody agreement, dated as of December 1, 2000, by and among
the Origination Trust, the Administrative Agent, the Owner Trust, acting for
itself and by, for and on behalf of each Owner Trust Series, the Liquidity
Collateral Agent, the Liquidity Collateral Subagent and the Servicer, as such
agreement may be amended, restated, modified or supplemented from time to time.
"Administrative Agent" means the Administrative Agent and Custodian
pursuant to the Administration and Custody Agreement, presently Deutsche Bank
National Trust Company.
"Affiliate" means, for any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling," "controlled by," and "under
common control with"), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person, whether through the ownership of, voting
securities, by contract. or otherwise.
"Agent" means Fleet National Bank, acting as agent for the Participants
and, as may be applicable from time to time, the Issuing Bank.
"Agreement" means this Amended and Restated Reimbursement Agreement,
including the Schedules and Exhibits hereto as the same may hereafter be
amended, modified, extended, severed, assigned, substituted, renewed or restated
from time to time.
"Agreement Date" means the date as of which this Agreement is dated.
"Allocable Share Calculation Certificate" means the certificate in the
form of Exhibit I, delivered by the Account Party to the Agent pursuant to
Section 2.1(e)(ii)(a) reflecting the Account Party's calculation of the
Allocable Share of the Maximum Credit Amount for each Covered Eligible Bond to
be covered by the L/C Schedule to be issued on the then next Quarterly L/C
Re-Schedule Date.
"Allocable Share of the Maximum Credit Amount" means, as of the time of
determination as to a Covered Eligible Bond, the amount of the Maximum Credit
Amount allocated to such Covered Eligible Bond on the Applicable L/C Schedule,
which amount, as of the date of, initially, the Initial Issuance Date, and the
Quarterly L/C Re-Schedule Date thereafter, is the difference between (x) the
then outstanding principal amount of such Covered Eligible Bond, less (y) the
Adjusted Principal Amount of such Covered Eligible Bond.
A-4
"Alternate Liquidity Facility" means any instrument delivered pursuant
to Section 9.2 of the Certificate Trust Agreement in lieu of the Liquidity
Agreement.
"Annualized NOI" means, with respect to any Covered Eligible Bond, as of
the date of calculation, the annualized Net Operating Income generated by the
Property securing such Covered Eligible Bond, based upon the actual Net
Operating Income generated by the subject Property for the previous three (3)
consecutive calendar months.
"Applicable L/C Schedule" means, at any time, the then most recently
issued L/C Schedule.
"Applicable Unused Facility Fee Percentage" means the applicable
percentage set forth below determined by reference to the applicable Unused
Facility Percentage:
-----------------------------------------------------------------------------------------------
Unused Facility Percentage Applicable Unused Facility Fee Percentage
-----------------------------------------------------------------------------------------------
If Unused Facility Percentage is greater than 0.20% per annum
or equal to 50%
-----------------------------------------------------------------------------------------------
If Unused Facility Percentage is less than 50% 0.10% per annum
-----------------------------------------------------------------------------------------------
"Assignment and Acceptance" is defined in Section 13.3(a).
"Authorized Representatives" is defined in Section 7 and listed on
Schedule 7 .
"Beneficiary(ies)" is defined in Section 2.1(a)(i).
"Bond" means each issue of mortgage revenue bonds identified by Charter
Mac and Charter Equity from time to time on the Bond Schedule, including each
Supplemental Bond, Seasoned Bond, Nonseasoned Bond and each Eligible Bond so
identified.
"Bond Collateral" means with respect to each Bond, all property and
interests in property now or hereafter securing such Bond, and the obligations
of the Bond Issuer and/or any Bond Obligor in respect of such Bond, including,
without limitation, all contract rights, accounts receivable, accounts,
documents, instruments, general intangibles, escrows and Bond Documents.
"Bond Documents" means with respect to each Bond, those instruments,
mortgages, indentures, agreements, guaranties, certificates or other writings,
now or hereafter evidencing or securing the obligations of the Bond Issuer
and/or any Bond Obligor in respect of such Bond.
"Bond Eligibility Determination Request" means a request in the form of
Exhibit J delivered by the Account Party to the Agent in connection with a
request that one or more
A-5
Eligible Lease-Up Bonds be included as Covered Eligible Bonds pursuant to
Section 2.1(e)(ii)(c) or 2.1(f)(ii).
"Bond Issuer" means with respect to each Bond, the state or local
government unit, authority or instrumentality that is the issuer of such Bond.
"Bond Obligor" means with respect to each Bond, each Person directly or
indirectly obligated to repay the indebtedness evidenced by such Bond (including
any guarantor of any such Person).
"Bond Schedule" means the schedule attached to the Charter Contribution
Agreement, the Charter Equity Contribution Agreement and the Origination Trust
Contribution Agreement as Exhibit A, and the schedule attached to the Insurance
Agreement as Exhibit B, as the same may be supplemented from time to time.
"Bond Warehousing Facility" means that certain Tax-Exempt Bond Line of
Credit and Security Agreement dated as of March 26, 2003 by and among the
Account Party, Fleet National Bank, in its capacity as Administrative Agent,
Wachovia Bank, National Association, as Syndication Agent, Fleet Securities,
Inc. and Wachovia Securities, Inc., as Co-Lead Arrangers, and the Lenders party
thereto, as amended and in effect.
"Bond Withdrawal Notice" means a notice from the Account Party to the
Agent in the form of Exhibit K, pursuant to Sections 2.1(e)(ii)(b), 2.1(f)(i),
or 2.1(g), indicating that the Account Party wishes to eliminate or withdraw one
or more identified Covered Eligible Bonds from the Applicable L/C Schedule as of
the date specified therein, with the written consent of the applicable Owner
Beneficiary, confirming that no Drawing is then pending, or thereafter may be
made, in respect of such Bond (unless such Bond thereafter is again accepted as
a Covered Eligible Bond by the Agent pursuant to the applicable provisions of
this Agreement).
"Business Day" means any day of the year on which offices of Fleet
National Bank in Boston, Massachusetts, or of the Issuing Bank in the
jurisdiction in which the Drawing Office is located, are not required or
authorized by law to be closed for business. If any day on which a payment is
due is not a Business Day, then the payment shall be due on the next day
following which is a Business Day. Further, if there is no corresponding day for
a payment in the given calendar month (e.g., there is no "February 30th"), the
payment shall be due on the last Business Day of the calendar month.
"Cash Collateral Account" means any one or more checking, deposit
account, or other demand daily depository account established with the Agent and
maintained by the Account Party, upon which the Agent, for the benefit of the
Issuing Bank and the Participants, shall at all times be granted a first
priority, perfected security interest to and in all funds at any time on deposit
therein pursuant to a Cash Collateral Pledge Agreement.
A-6
"Cash Collateral Pledge Agreement" means any pledge and security
agreement required to be executed and delivered by the Account Party, each in
form and substance satisfactory to the Agent, pursuant to which the Agent, for
the benefit of the Issuing Bank and the Participants, shall at all times be
granted a first priority, perfected security interest to and in all funds at any
time on deposit in the Cash Collateral Account, as the same may be amended,
modified, extended, severed, assigned, substituted, renewed or restated from
time to time.
"Certificate Trust" means Charter MAC Floater Certificate Trust I, a
Delaware business trust, its successors and assigns.
"Certificate Trust Agent" means Deutsche Bank National Trust Company, as
Certificate Trust Agent, pursuant to the Certificate Trust Agreement, for the
Certificate Trust.
"Certificate Trust Agreement" means the second amended and restated
trust agreement, dated as of December 1, 2000, by and among the Owner Trust, the
Tender Agent and Certificate Trust Agent, and Wilmington Trust Company, as
Certificate Trustee, as the same may be amended, modified, supplemented or
assigned from time to time.
"Certificate Trust Series" means a separate series established from time
to time by the Certificate Trust for each series of Low Floater Certificates
pursuant to a Certificate Trust Series Supplement.
"Certificate Trust Series Supplement" means for each Certificate Trust
Series, the Supplement to Second Amended and Restated Trust Agreement of the
Certificate Trust Agreement pursuant to which such series is established, with
deletions and modifications as are necessary to reflect the terms of the
applicable Certificate Trust Series.
"Certificate Trustee" means, with respect to the Certificate Trust,
Wilmington Trust Company, not in its individual capacity, but solely as trustee
of the Certificate Trust.
"Change in Control"means the occurrence of any of the following with
respect to the Account Party and Charter Mac, as applicable:
(a) as to the Account Party:
(i) any Person or group of Persons (within the meaning of Section
13 or 14 of the Securities Exchange Act) is or becomes the beneficial owner
(within the meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act) of the common shares (and not the
Preferred Shares) representing a majority of total voting power of the aggregate
outstanding common shares of the Account Party normally entitled to vote in the
election of directors of the Account Party, or
(ii) during any period of twelve (12) consecutive calendar
months, individuals who were directors of the Account Party on the first day of
such period (together
A-7
with any new directors whose election by the board of directors of the Account
Party or whose nomination for election by the shareholders of the Account Party
was approved by a vote of a majority of the directors then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the board of directors of the Account Party.
(b) as to Charter Mac: (i) any merger or consolidation of Charter Mac
with or into any Person or any sale, transfer or other conveyance, whether
direct or indirect, of all or substantially all of the assets of Charter Mac, on
a consolidated basis, in one transaction or a series of related transactions,
if, immediately after giving effect to such transaction, any Person or group of
Persons (within the meaning of Section 13 or 14 of the Securities Exchange Act)
is or becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under the Securities Exchange Act) of
the common shares representing a majority of the total voting power of the
aggregate outstanding securities of the transferee or surviving entity normally
entitled to vote in the election of directors, managers, or trustees, as
applicable, of the transferee or surviving entity, (ii) any Person or group of
Persons (within the meaning of Section 13 or 14 of the Securities Exchange Act)
is or becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under the Securities Exchange Act) of
the common shares representing a majority of total voting power of the aggregate
outstanding common shares of Charter Mac normally entitled to vote in the
election of directors of Charter Mac, (iii) during any period of 12 consecutive
calendar months, individuals who were directors of Charter Mac on the first day
of such period (together with any new directors whose election by the board of
directors of Charter Mac or whose nomination for election by the stockholders of
Charter Mac was approved by a vote of a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the board of directors of Charter Mac, or
(iv) the sale or disposition, whether directly or indirectly, by Charter Mac
and/or its Subsidiaries (whether pursuant to a single transaction or series of
related transaction) of tangible assets representing more than 25% of Charter
Mac's Tangible Assets (as defined in the Charter Mac Covenants), as of the date
of such sale or disposition.
"Charter Contribution Agreement" means the amended and restated
contribution agreement, dated as of December 1, 2000, by and between Charter Mac
and the Origination Trust, as such agreement may be amended, restated, modified
or supplemented from time to time.
"Charter Entity" means each of Charter Mac, Charter Equity, the
Origination Trust, the Owner Trust, any Owner Trust Series, the Certificate
Trust and any Certificate Trust Series.
"Charter Equity" means Charter MAC Equity Issuer Trust, a Delaware
business trust.
"Charter Equity Contribution Agreement" means the amended and restated
contribution agreement, dated as of December 1, 2000, by and between Charter
Equity and the Origination
A-8
Trust, as such agreement may be amended, restated, modified or supplemented from
time to time.
"Charter Equity Ineligible Bond" has the meaning given to such term in
Section 5 of the Charter Equity Contribution Agreement.
"Charter Ineligible Bond" has the meaning given to such term in Section
5 of the Charter Contribution Agreement.
"Charter Mac" means Charter Municipal Mortgage Acceptance Company, a
Delaware statutory trust, of which the Account Party is a wholly-owned
Subsidiary (with Charter Mac being the indirect owner of 100% of the common
equity interests of the Account Party).
"Charter Mac Covenants" are set forth on Exhibit M attached hereto.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or
corresponding provisions of subsequent revenue laws.
"Collateral" means all of the property, rights and interests of the
Account Party, that are subject to any security interests and liens heretofore
or hereafter created by any of the Credit Documents.
"Commitment" means, with respect to each Participant, the amount set
forth as such Participant's "Commitment" on Schedule A hereto, as may be amended
from time to time by the Agent as provided in Section 13.3 in connection with a
Participant's assignment of its Commitment or the admission of a new
Participant.
"Commitment Percentage" means, with respect to each Participant, the
percentage set forth on Schedule A hereto as such Participant's percentage of
the aggregate Commitments of all of the Participants, as may be amended from
time to time by the Agent as provided in Section 13.3.
"Consolidated" or "consolidated" means with reference to any term used
herein, for any Person at any date, any Subsidiary or other Person which is
consolidated with such first Person in accordance with GAAP, including, without
limitation with respect to the accounts of the Account Party and all
Subsidiaries and/or Affiliates thereof.
"Constant" means, with respect to any Covered Eligible Bond at the time
such Bond first becomes a Covered Eligible Bond, the quotient of (x) Actual
Annual Debt Service for such Covered Eligible Bond, divided by (y) the then
outstanding principal amount of such Covered Eligible Bond.
"Constituent Documents" means, with respect to any Person, its articles
or certificate of incorporation, governing instrument, trust agreement, charter,
resolutions, constitution, by-laws,
A-9
partnership agreements, organizational documents, limited liability company
agreements, or such other document as may govern such entity's formation or
organization.
"Contractual Obligation" means, for any Person, any provision of any
security issued by that Person or of any material indenture, mortgage, deed of
trust, contract, undertaking, agreement, or other instrument to which such
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject.
"Covered Eligible Bond" means, at any time of determination, an Eligible
Lease-Up Bond which is included on the then Applicable L/C Schedule as amended,
or to be amended.
"Covered Eligible Bond Report" means a report prepared by the Account
Party in the form of Exhibit B hereto, to be included as a part of each
Servicer's Report, which report shall contain, without limitation, with respect
to (i) Covered Eligible Bonds, such information as shall be necessary to
calculate the respective Allocable Share of Maximum Credit Amount of each such
Covered Eligible Bond and the Projected Stabilization Date of each such Covered
Eligible Bonds, and (ii) Eligible Lease-Up Bonds which the Account Party
proposes to include as a Covered Eligible Bond on the next L/C Schedule, such
information as shall be necessary to calculate the proposed Allocable Share of
Maximum Credit Amount for such Eligible Lease-Up Bond, and the Projected
Stabilization Date of such Eligible Lease-Up Bond.
"Credit Documents" means singly and collectively, this Agreement, the
Letter of Credit, the Cash Collateral Pledge Agreement, and such other and
further instruments, documents, and agreements, whether now existing or
hereafter arising, between the Account Party and the Agent, the Participants,
and/or the Issuing Bank in any way relating to the foregoing, all as may
hereafter be amended, modified, extended, severed, assigned, substituted,
renewed or restated from time to time, and including, as the context requires,
the Existing Reimbursement Agreement.
"Credit Rating" means the rating assigned by a Rating Agency to the
Issuing Bank's long-term obligations (bank deposits, bank notes, letters of
credit, etc.).
"Damages" is defined in Section 10.1(p).
"Debt Service" means, for any period, determined on a consolidated basis
(A) the Account Party's Interest Expense for such period, plus (B) the aggregate
amount of regularly scheduled or mandatory principal payments of Indebtedness
(excluding optional prepayments and balloon principal payments due on maturity
in respect of any Indebtedness) required to be made during such period by the
Account Party or any of its Subsidiaries (and, if such period is less than a
full twelve month period, annualized by taking the sum of all of the payments
required to be made during such period and during any immediately subsequent
periods required to create a full twelve month test period).
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"Default Rate" means that interest rate which is four percent (4%) per
annum above the Prime Rate.
"Delinquent Participant" is defined in Section 13.2(h).
"Dollars" or" $" means dollars in lawful currency of the United States
of America.
"Drawing" means each drawing under the Letter of Credit in accordance
with the terms hereof.
"Drawing Event" means (a) there has occurred, and is continuing at the
time of reference, a Stabilization Failure with respect to a Covered Eligible
Bond, or (b) the Expiration Date has occurred and at such time there remain any
Covered Eligible Bonds that are secured by Properties which are not Stabilized
Properties.
"Drawing Notice" means, as applicable, an Expiry Draw Notice or a
Stabilization Failure Draw Notice.
"Drawing Office" means the office for presentation of Drawings under the
Letter of Credit located at Fleet Services, ▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇, Attn: Global Trade Operations Department - Standby Unit, Fax
Number:(▇▇▇) ▇▇▇-▇▇▇▇ or such other location as the Issuing Bank may announce as
its Drawing Office from time to time by notice to the Beneficiaries and the
Administrative Agent.
"Eligible Assignee" means (a) a Participant, (b) an Affiliate of any
Participant, or (c) a bank, an insurance company, a fund, or other financial
institution.
"Eligible Bond" means, at any time of determination, any Bond which is
identified as an Eligible Bond on the Bond Schedule (whether held by the
Origination Trust or the Owner Trust at such time of determination) and as to
which all of the representations and warranties of Charter Mac and the Account
Party contained in Section 4 of the Charter Equity Contribution Agreement and
Charter Contribution Agreement, respectively, are true, and are not, in any
material and adverse respect, false, incorrect or misleading.
"Eligible Lease-Up Bond" means, at any time of determination, a Lease-Up
Bond which meets the following criteria, as determined by the Agent:
(a) the Property benefits from the federal low income housing tax
credit and 100% of the residential units are set aside to be rented to
qualifying low income tenants;
(b) the equity owner of the Property securing such Bond has fully
syndicated or sold the low income housing tax credits, and the return on the low
income housing tax credit equity shall not be enhanced in any way by Charter Mac
and/or any of Charter Mac's Affiliates; and
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(c) at such time, the Projected Stabilization Date has not yet
occurred with respect to the Property securing such Bond.
"Eligible Lease-Up Bond Supporting Documentation" means, with respect to
any Eligible Lease-Up Bond, (i) operating statements for the Property securing
such Bond for the most recently ended three (3) consecutive month period for
which such information is available to the Account Party (the third month of
which shall have ended no later than two (2) calendar months before the subject
Quarterly L/C Re-Schedule Date (e.g., for the Quarterly L/C Re-Schedule Date
occurring on March 31 in any year, the last month covered by the operating
statements can be no earlier than January 31 of such year), (ii) the Bond
Documents for such Bond, together with copies of schedules and exhibits thereto,
(iii) the Account Party's investment committee book relating to such Bond, (iv)
a Covered Eligible Bond Report including such Bond, and (v) such other
information as the Agent may reasonably require.
"Eligible Lease-Up Bond Termination Date" means the date on which the
Agent determines that an Eligible Lease-Up Bond has become an Ineligible Project
Bond.
"Equity Interests" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participation or other equivalents of or
interest in (however designated) corporate stock or other equity participation
of such Person, including, without limitation, any preferred interests, any
limited or general partnership interest, and any limited liability company
membership interests.
"Equity Issuer Trust Agreement" means the Amended and Restated Trust
Agreement dated as of June 29, 2000, by and among the Managing Trustees, Charter
Municipal Mortgage Acceptance Company, Wilmington Trust Company, as Registered
Trustee, and Related Charter, L.P., as Manager relating to the Account Party.
"ERISA" and "ERISA Plan" are each defined in Section 9.10.
"ERISA Affiliate" means any corporation which is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Code) as the Account Party, or any trade or business which is under common
control (within the meaning of Section 414(c) of the Code) with the Account
Party, or any organization which is required to be treated as a single employer
with the Account Party under Section 414(m) or 414(o) of the Code.
"Event of Default" is defined in Section 11.1.
"Existing Reimbursement Agreement" is defined in the Recitals to this
Agreement.
"Existing Reimbursement Agreement Date" means December 10, 2002.
"Expiration Date" means, initially, 5:00 p.m. (local time at the Drawing
Office) on December 9, 2003. Such date is subject to extension pursuant to
Section 2.2.
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"Expiry Draw Notice" means a certificate of the Administrative Agent
directed to the Issuing Bank under the Letter of Credit (including the
Applicable L/C Schedule) and complying with the requirements thereof certifying
that the Expiration Date has occurred or will occur not later than five (5)
Business Days from the date of such notice, and the Administrative Agent desires
to draw on the Letter of Credit.
"Expiry Drawing" means a Drawing under and in accordance with the terms
and conditions of the Letter of Credit made by the Administrative Agent on the
Expiration Date, or on a date that is no more than five (5) Business Days before
the Expiration Date, with respect to then Covered Eligible Bonds that are
secured by Properties which are not as of such time Stabilized Properties.
"Extension Period" is defined in Section 2.2.
"Federal Funds Rate" means for any period, a fluctuating interest rate
equal for each day during such period to the weighted average of the rates on
overnight Federal Funds transactions with members of the Federal Reserve System
arranged by Federal Funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Agent from three Federal Funds brokers of recognized standing
selected by the Agent.
"Financial Statements" means balance sheets and statements of earnings,
and statements of cash flows and accompanying footnotes (as may be applicable),
of the Account Party or Charter Mac, as the case may be, prepared in accordance
with GAAP.
"Fixed Charges" means, measured as of the last day of each calendar
quarter, without duplication, an amount for the then ending quarter equal to the
sum for such period of the Account Party's consolidated (A) Debt Service, plus
(B) Preferred Dividends, plus (C) program fees associated with the TOPS Program,
▇▇▇▇▇▇▇ ▇▇▇▇▇ P-Floats, and other similar securitization programs.
"Funding Instructions" means the wire transfer of the proceeds of a
conforming Drawing in accordance with the following instructions:
Deutsche Bank
ABA # ▇▇▇-▇▇▇-▇▇▇
for credit to account # ▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles as in effect from time to time set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants
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and the statements and pronouncements of the Financial Accounting Standards
Board, or in such other statements by such other entity as may be in general use
by significant segments of the accounting profession, determined on the basis of
such principles in effect on the date hereof and consistent with those used in
the preparation of the audited financial statements of the Account Party and
Charter Mac for the fiscal year ended December 31, 2001, provided to the Agent.
"Governmental Authority" means any nation or government, any federal,
state, city, town, municipality, county, local or other political subdivision
thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, regulatory or administrative functions.
"Governmental Authorization" means any permit, license, authorization,
plan, directive, consent order, or consent decree of or from any Governmental
Authority.
"Indebtedness" means all obligations, contingent and otherwise, that in
accordance with Generally Accepted Accounting Principles should be classified
upon the consolidated balance sheet of a Account Party and the Account Party's
Subsidiaries as liabilities, or to which reference should be made by footnotes
thereto, including in any event and whether or not so classified: (a) all
obligations for borrowed money or other extensions of credit whether or not
secured or unsecured, absolute or contingent, including, without limitation,
unmatured reimbursement obligations with respect to letters of credit or
guarantees issued for the account of or on behalf of the Account Party and its
Subsidiaries and all obligations representing the deferred purchase price of
property; (b) all obligations evidenced by bonds, notes, debentures or other
similar instruments; (c) all liabilities secured by any mortgage, pledge,
security interest, lien, charge, or other encumbrance existing on property owned
or acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; (d) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others or
otherwise, including any obligations with respect to puts, swaps, and other
similar undertakings, any obligation to supply funds to or in any manner to
invest in, directly or indirectly, the debtor, to purchase indebtedness, or to
assure the owner of indebtedness against loss, through an agreement to purchase
goods, supplies, or services for the purpose of enabling the debtor to make
payment of the indebtedness held by such owner or otherwise, and the obligations
to reimburse the issuer in respect of any letters of credit; and (e) that
portion of all obligations arising under capital leases that is required to be
capitalized on the consolidated balance sheet of the Account Party and its
Subsidiaries; but excluding, in all events obligations arising under operating
leases and accounts payable arising in the ordinary course of business.
"Indemnified Party" is defined in Section 10.1(p).
"Ineligible Bonds" means all Charter Ineligible Bonds, Charter Equity
Ineligible Bonds and Owner Trust Ineligible Bonds.
"Ineligible Project Bond" means a Bond which had been an Eligible
Lease-Up Bond, the Property securing which fails to become a Stabilized
Property, as determined solely and
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exclusively by the Agent, within ninety (90) days after the Projected
Stabilization Date for such Property.
"Initial Issuance Date" means December 11, 2002, being the date on which
all conditions for the issuance of the Letter of Credit under the Existing
Reimbursement Agreement were satisfied or waived in writing by the Agent and the
Letter of Credit was first issued.
"Initial L/C Schedule" means the L/C Schedule issued by the Issuing Bank
upon the issuance of the Letter of Credit on the Initial Issuance Date in
accordance with the applicable provisions of the Existing Reimbursement
Agreement, which L/C Schedule was superseded by L/C Schedule No. 2, which, in
turn will be superseded by L/C Schedule No. 3 on the Agreement Date.
"Insurance Agreement" means the amended and restated insurance
agreement, dated as of December 1, 2000, by and among Charter Mac, Charter
Equity, MBIA, the Origination Trust, the Owner Trust, acting for itself and by,
for and on behalf of each Owner Trust Series, the Certificate Trust, acting for
itself and by, for and on behalf of each Certificate Trust Series, the
Administrative Agent, the Servicer and the Liquidity Agent, as such agreement
may be amended, restated, modified or supplemented from time to time.
"Intangible Assets" means, at the time of determination, those assets of
the Account Party and its Subsidiaries on a consolidated basis that, in
accordance with GAAP, are properly classifiable as intangible assets, including,
but not limited to, goodwill, franchises, licenses, patents, trademarks, trade
names and copyrights.
"Interest Expense means, for any period, the sum (calculated on an
annualized basis), on a consolidated basis of (A) all consolidated interest
expense of the Account Party determined in accordance with GAAP, plus (B)
capitalized interest not covered by an interest reserve from a loan facility,
plus (C) the allocable portion (based on liability) of any accrued or paid
interest incurred on any obligation for which any entity in the Account Party's
consolidated group is wholly or partially liable under repayment, interest
carry, or performance guarantees, or other relevant liabilities (including,
without limitation, accrued or paid interest characterized on the Account
Party's balance sheet from time to time as "minority interest in income of
subsidiary"), provided that no expense shall be included more than once in such
calculation even if it falls within more than one of the foregoing categories.
"Investment" means the acquisition of any real or tangible personal
property or of any stock or other security, any loan, advance, bank deposit,
money market fund, contribution to capital, extension of credit (except for
accounts receivable arising in the ordinary course of business and payable in
accordance with customary terms) , or purchase or commitment or option to
purchase or otherwise acquire real estate or tangible personal property or stock
or other securities of any party or any part of the business or assets
comprising such business, or any part thereof.
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"IS98" is defined in Section 5.5(a).
"Issuing Bank" is defined in the Preamble.
"Joinder" means the joinder to this Agreement executed by Charter Mac.
"L/C Schedule" means the schedule of Covered Eligible Bonds issued by
the Issuing Bank in accordance with the provisions of this Agreement on the
Initial Issuance Date and on each Quarterly L/C Re-Schedule Date, constituting
an integral part of the Letter of Credit, and to be in the form of Exhibit D
hereto, and specifying for each Covered Eligible Bond the Allocable Share of the
Maximum Credit Amount therefor, the Owner Beneficiary thereof, and the Projected
Stabilization Date for the Project securing such Bond.
"L/C Schedule No. 3" means the L/C Schedule to be issued on the
Agreement Date (to supersede L/C Schedule No. 2), in the form of Exhibit C
hereto.
"L/C Schedule Request Certificate" means the certificate in the form of
Exhibit H to be delivered by the Account Party to the Agent pursuant to Section
2.1(e)(ii) prior to each Quarterly L/C Re-Schedule Date.
"Late Charges" is defined in Section 3.3.
"Lease-Up Bond" means an Eligible Bond that is secured by an affordable
multifamily project which is not a Stabilized Property and, as determined by the
Agent: (a) the construction of such project has been substantially completed
(including all phases of such project), except solely for the completion of
minor "punch list" items, such that all residential units thereof are habitable
and rentable, and permanent certificates of occupancy (or temporary certificates
of occupancy if approved by the Agent, in the Agent's sole and absolute
discretion) for such projects (for all phases) have been issued by the
appropriate Governmental Authority having jurisdiction to issue such
certificates, (b) the letter of credit supporting the construction financing for
the Project has terminated, and (c) the project is in the lease-up phase.
"Legal Requirements" means all applicable statutes, laws, treaties,
ordinances, licenses, rules, regulations, orders, writs, injunctions, decrees,
judgments, opinions, and interpretations of any Governmental Authority.
"Letter of Credit" means that certain Standing Letter of Credit dated
December 11, 2002, (and including L/C Schedule No. 2 dated December 31, 2002), a
copy of which as in effect immediately prior to the Agreement Date is annexed
hereto as Exhibit E , issued by the Issuing Bank in accordance with and upon the
terms and conditions of the Existing Reimbursement Agreement, and to be
maintained in accordance with and upon the terms and conditions of this
Agreement, for the account of the Account Party and for the benefit of the
Beneficiary (the Administrative Agent from and after the Permitted L/C
Transfer), with a face amount equal to the aggregate Allocable Shares of the
Maximum Credit Amount of all Covered Eligible Bonds
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from time to time, but in no event to exceed the Maximum Credit Amount, as the
same may hereafter be amended, modified, extended, severed, assigned,
substituted, renewed or restated from time to time. There shall be incorporated
into the Letter of Credit from time to time the then Applicable L/C Schedule,
which shall constitute an integral part of the Letter of Credit.
"Letter of Credit Facility" is defined in Section 2.1(a).
"Letter of Credit Fee" is defined in Section 4.1.
"Licenses and Permits" means all licenses, permits, authorizations and
agreements issued by or agreed to by any Governmental Authority, or by any other
Person, as may be required pursuant to any Legal Requirement.
"Lien" means any interest in property securing an obligation owed to, or
a claim by, a Person other than the owner of the property, whether such interest
is based on common law, statute or contract. The term "Lien" shall also include
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
affecting the property.
"Liquidation Proceeds" means amounts received by the Agent, for the
benefit of the Issuing Bank and the Participants, in the exercise of the rights
and remedies under the Credit Documents.
"Liquidity Agent" means the agent for the Liquidity Banks pursuant to
the Liquidity Agreement, initially Bayerische Landesbank Girozentrale, New York
Branch, its successor and assigns.
"Liquidity Agreement" means the amended and restated liquidity
agreement, dated as of December 1, 2000, by and among the Owner Trust, acting
for itself and by, for and on behalf of each Owner Trust Series, the Certificate
Trust, acting for itself and by, for and on behalf of each Certificate Trust
Series, the Tender Agent, the Certificate Trust Agent, the Liquidity Agent, the
Liquidity Banks named therein and MBIA, as such agreement may be amended,
restated, modified or supplemented from time to time.
"Liquidity Bank" and "Liquidity Banks" have the meanings given to such
terms in the first paragraph of the Liquidity Agreement.
"Liquidity Collateral Agent" means the Liquidity Collateral Agent
pursuant to the Liquidity Pledge and Security Agreement, initially the Liquidity
Agent.
"Liquidity Collateral Subagent" means the Liquidity Collateral Subagent
pursuant to the Liquidity Pledge and Security Agreement, initially Deutche Bank
National Trust Company.
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"Liquidity Facility" means the revolving line of credit described in the
Liquidity Agreement, and any Alternate Liquidity Facility, as the same shall be
modified, supplemented, amended or extended in accordance with the terms thereof
and of the Certificate Trust Agreement.
"Liquidity Pledge and Security Agreement" means the amended and restated
liquidity pledge and security agreement, dated as of December 1, 2000, by and
among the Origination Trust, the Owner Trust, acting for itself and by, for and
on behalf of each Owner Trust Series, the Certificate Trust, acting for itself
and by, for and on behalf of each Certificate Trust Series, MBIA, the
Administrative Agent, the Liquidity Agent, the Liquidity Collateral Agent and
the Liquidity Collateral Subagent, as such agreement may be amended, restated,
modified or supplemented from time to time.
"Liquidity Provider" means the Liquidity Banks named in the Liquidity
Agreement and the issuer of any Alternate Liquidity Facility, together with
their respective successors and assigns.
"London Banking Day" means any day on which dealings in deposits in
Dollars are transacted in the London interbank market.
"Low Floater Certificates" means the Low Floater Certificates issued
from time to time by all of the Certificate Trust Series pursuant to Section 6.1
of the Certificate Trust Agreement and the Certificate Trust Series Supplements.
"Material Change to Transaction Documents" means any modification,
amendment or waiver to any Transaction Document which materially adversely
affects any Covered Eligible Bond (including, without limitation, any
modification, amendment or waiver which modifies any definitions of any terms
which have the same meaning herein) and/or materially adversely affects the
Agent, the Issuing Bank or the ability of the Account Party or Charter Mac (as
to the Joinder) to perform their respective obligations pursuant to this
Agreement and the other Credit Documents to which such Person is a party.
"Maximum Credit Amount" means Thirty-Five Million Dollars
($35,000,000.00).
"MBIA" means MBIA Insurance Corporation, a New York stock insurance
company and any successor thereto.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage Warehousing Facility" means that certain Mortgage Warehousing
Credit and Security Agreement dated as of December 24, 2001 by and among Fleet
National Bank, as Agent for a syndicate of Lenders, such Lenders, and PW
Funding, Inc., Cambridge Healthcare Funding, Inc., and ▇▇▇▇▇▇ Financial
Resources, Inc., as amended and in effect.
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"Net Operating Income" means, for any period, as to any Property (a) all
gross revenues received from the operation of such Property during such period
(including, without limitation, payments received from insurance on account of
business or rental interruption and condemnation proceeds from any temporary use
or occupancy, in each case to the extent attributable to the period for which
such Net Operating Income is being determined, but excluding any proceeds from
the sale or other disposition of any part or all of such Property; or from any
financing or refinancing of such Property; or from any condemnation of any part
or all of such Property (except for temporary use or occupancy); or on account
of a casualty to the property (other than payments from insurance on account of
business or rental interruption); or any security deposits paid under leases of
all or a part of such Property, unless forfeited by tenants; and similar items
or transactions the proceeds of which under GAAP are deemed attributable to
capital), minus (b) all reasonable and customary property operating, maintenance
and repair costs, leasing and administrative costs, management fees and, without
double counting, real estate taxes and insurance premiums paid or accrued on
account of such Property (whether by direct payment or by deposit into reserves
for future payment), exclusive of capital expenditures. When calculating Net
Operating Income, there shall be no deduction for any non cash items, such as
depreciation. The calculation of Net Operating Income shall be in accordance
with the Account Party's historical method for calculating Net Operating Income,
including for reporting to MBIA or the Liquidity Banks, and otherwise in
accordance with accepted, customary industry practice.
"Nonapproved Bond" has the meaning given to such term in Section 4.3 of
the Insurance Agreement.
"Nonseasoned Bond" means a Bond, which may be an Eligible Bond or a
Supplemental Bond, that has been approved or pre-approved by MBIA as a
Nonseasoned Bond in accordance with Section 4.3 of the Insurance Agreement.
"Notice for Payment" has the meaning given to such term in each of the
Surety Bonds.
"Obligations" means all indebtedness, obligations and liabilities of the
Account Party to the Agent and/or the Issuing Bank from time to time, direct or
indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract, operation
of law, or otherwise, arising or incurred under this Agreement or any of the
other Credit Documents or otherwise in respect of a Drawing under the Letter of
Credit.
"Origination Trust" means Charter MAC Origination Trust I, a Delaware
business trust, its successors and assigns.
"Origination Trust Agreement" means the Second Amended and Restated
Trust Agreement, dated as of December 1, 2000, by and between the Managing
Trustees, and Wilmington Trust Company, as Registered Trustee, as such agreement
may be amended, modified, supplemented or assigned from time to time.
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"Origination Trust Certificate" means a certificate issued by the
Origination Trust evidencing a 100% beneficial ownership interest in and to the
Origination Trust.
"Origination Trust Contribution Agreement" means the amended and
restated contribution agreement, dated as of December 1, 2000, by and between
the Origination Trust and the Owner Trust, acting for itself and by, for and on
behalf of each Owner Trust Series, as such agreement may be amended, restated,
modified or supplemented from time to time.
"Origination Trust Management Agreement" means the amended and restated
management agreement, dated as of December 1, 2000, by and between the
Origination Trust and the Manager, as amended from time to time, pursuant to
which the Manager will be engaged by the Origination Trust to conduct the
business and affairs of the Origination Trust upon the terms and conditions
therein.
"Owner Beneficiary" means, as to any Covered Eligible Bond, the
Beneficiary which owns such Bond.
"Owner Trust" means Charter MAC Owner Trust I, a Delaware business
trust, its successors and assigns.
"Owner Trust Agreement" means the second amended and restated trust
agreement, dated as of December 1, 2000, by and among Charter MAC Origination
Trust I, the Managing Trustees, and Wilmington Trust Company, as Registered
Trustee, as such agreement may be amended, modified, supplemented or assigned
from time to time.
"Owner Trust Ineligible Bond" has the meaning given to such term in
Section 5 of the Origination Trust Contribution Agreement.
"Owner Trust Management Agreement" means the amended and restated
management agreement dated as of December 1, 2000, by and between the Owner
Trust and the Manager, as amended from time to time, pursuant to which the
Manager will be engaged by the Owner Trust to conduct the business and affairs
of the Owner Trust upon the terms and conditions therein.
"Owner Trust Series" means a separate series established from time to
time by the Owner Trust for each Certificate Trust Series pursuant to an Owner
Trust Series Supplement.
"Owner Trust Series Supplement" means, for each Owner Trust Series, the
Supplement to Second Amended and Restated Trust Agreement of the Owner Trust
Agreement pursuant to which such series is established, with deletions and
modifications as are necessary to reflect the terms of the applicable Owner
Trust Series.
"Participant" or "Participants" means, singly and collectively, on any
date of determination, the financial institutions named as such on Schedule A,
and, subject to the terms and conditions of this Agreement, their respective
successors and assigns, provided, however, no
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Person shall be admitted to the Letter of Credit Facility as a Participant
unless (x) the Agent and the Issuing Bank shall have first consented in writing
to such admission, and (y) provided no Event of Default has occurred and is
continuing, the Account Party shall have also consented to such admission in
writing, which consent shall not be unreasonably withheld or delayed.
"Permitted L/C Transfer" is defined in Section 5.7.
"Person" means any legal person, including any individual, corporation,
limited liability company, partnership, joint venture, association, joint stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Dividends" means, for any period, without duplication of such
amounts as constitute intercompany debts or distributions, the sum of (A)
dividends or distributions due and payable or accrued during such period on the
Preferred Shares issued by Account Party, and (B) distributions which are the
functional equivalent of preferred dividends (i.e., which the issuer is required
to make prior to distributions on another class or other classes of equity
interests) and which are due and payable or accrued during such period on
preferred equity interests issued by Account Party or a Subsidiary.
"Preferred Shares" means Series A, Series A-1, Series A-2, Series A-3,
Series B, Series B-1, and Series B-2 preferred shares issued by the Account
Party, and any other "preferred shares" issued by the Account Party after the
date hereof in accordance with, and as defined in, the Equity Issuer Trust
Agreement.
"Preferred Shares Covenants" means the covenants set forth in Article 8
of the Equity Issuer Trust Agreement, as in effect on the Existing Reimbursement
Agreement Date and set forth in Exhibit F hereto.
"Prime Rate" means the variable per annum rate of interest so designated
from time to time by Fleet National Bank as its prime rate. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate being
charged to any customer.
"Projected Stabilization Date" means, as to any Property securing a
Bond, the date as of which the Account Party anticipates that such Property will
become a Stabilized Property, as agreed to in writing by the Beneficiaries and
the Account Party and is the date which is set forth on the first Applicable L/C
Schedule to include such Property as such Property's Projected Stabilization
Date.
"Property" means with respect to each Bond, all real property which is
subject to any lien securing the obligations of the Bond Issuer and/or any Bond
Obligor in respect of such Bond.
"Quarterly L/C Re-Schedule Date" means each March 31, June 30, September
30 and December 31 occurring on and after the Agreement Date and prior to the
Expiration Date,
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provided, however, if such day is not a Business Day, then the applicable
Quarterly L/C Re-Schedule Date shall be the next Business Day thereafter.
"Rating Agency" means either Moody's or S&P.
"Register" is defined in Section 13.3(c).
"Registered Trustee" means, with respect to the Origination Trust and
the Owner Trust, Wilmington Trust Company, not in its individual capacity, but
solely as trustee of the Origination Trust or the Owner Trust, as the case may
be.
"Reportable Event" is defined in Section 9.10.
"Requisite Participants" means as of any date (i) if there are two (2)
or fewer Participants holding Commitments, "Requisite Participants" shall mean
all of such Participants, or (ii) if there are more than two (2) Participants
holding Commitments, "Requisite Participants" shall mean the Participants
holding at least sixty-five percent (65%) of the outstanding principal amount of
the Unpaid Drawing on such date; and if no such principal is outstanding, the
Participants whose aggregate Commitments constitute at least sixty-five percent
(65%) of the Total Available Commitments.
"Restatement Effective Date" means the date as of which this Agreement
becomes effective.
"S&P" means Standard & Poor's Ratings Services.
"Seasoned Bond" means a Bond, which may be an Eligible Bond or a
Supplemental Bond, that (i) is secured by a Stabilized Property and (ii) has
been approved or pre-approved in writing by MBIA as a Seasoned Bond in
accordance with Section 4.3 of the Insurance Agreement.
"Servicer" means the party acting as Servicer pursuant to the Servicing
Agreement, currently Charter MAC Corporation, a Delaware corporation.
"Servicer's Report" has the meaning given to such term in the Servicing
Agreement, and shall include, without limitation, the Covered Eligible Bond
Report.
"Servicing Agreement" means the Second Amended and Restated Servicing
Agreement, dated as of December 1, 2000, by and among the Servicer, the
Origination Trust, the Owner Trust, acting for itself and by, for and on behalf
of each Owner Trust Series, and acknowledged by the Administrative Agent and
MBIA, as such agreement may be amended, restated, modified or supplemented from
time to time.
A-22
"Stabilization Confirmation" means, as to any Property securing an
Eligible Lease-Up Bond, written certification from the applicable Owner
Beneficiary and the Account Party in the form of Exhibit L that such Property
has become a Stabilized Property.
"Stabilization Failure" means , as to any Covered Eligible Bond, that
the Property securing such Covered Eligible Bond did not become a Stabilized
Property as of the date which is six (6) months after the Projected
Stabilization Date for such Property.
"Stabilization Failure Drawing" means a Drawing under and in accordance
with the terms and conditions of the Letter of Credit pursuant to Section
2.1(c)(i) of this Agreement made with the presentation of a conforming
Stabilization Failure Draw Notice.
"Stabilization Failure Draw Notice" means a certificate of the
Administrative Agent directed to the Issuing Bank under the Letter of Credit
(including the Applicable L/C Schedule) and complying with the requirements
thereof certifying that, as to a Covered Eligible Bond, a Stabilization Failure
has occurred and is continuing.
"Stabilized Property" means a Property that, at any time of
determination, (i) maintains and has maintained occupancy of no less than 85%
for each of the immediately preceding three (3) months, and (ii) produces and
has produced revenues available to pay debt service over principal and interest
expenses of the related Bond in a ratio of at least 1.10:1 for each of the
immediately preceding three (3) months, as evidenced by a Stabilization
Confirmation respecting such Property.
"Statement" is defined in Section 14.13.
"Subsidiary" means any corporation, association, partnership, trust, or
other business entity of which the designated parent shall at any time own
directly or indirectly through a Subsidiary or Subsidiaries at least a majority
(by number of votes or controlling interests) of the outstanding Voting
Interests of such entity.
"Supplemental Bonds" means all Bonds owned by the Origination Trust that
(i) are not Eligible Bonds and as a result have not been assigned to an Owner
Trust Series, (ii) have been repurchased from an Owner Trust Series as a result
of becoming Owner Trust Ineligible Bonds, but are eligible to be held by the
Origination Trust or (iii) are Bonds owned by the Origination Trust for any
reason other than those listed in (i) and (ii) above.
"Tender Agent" means Deutsche Bank National Trust Company, its permitted
successors and assigns.
"TOPS Program" means the Account Party's MBIA Private Label Tender
Option Program.
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"Total Assets" means, at the time of determination all assets of the
Account Party and its Subsidiaries on a consolidated basis determined in
accordance with GAAP.
"Total Available Commitments" means, at the time of determination, the
sum of the Commitments of the Participants at such time.
"Total Liabilities" means, at the time of determination, all liabilities
of the Account Party and its Subsidiaries on a consolidated basis determined in
accordance with GAAP and all indebtedness and contingent obligations of the
Account Party and its Subsidiaries on a consolidated basis, whether or not so
classified, including all redemption obligations, hedging and swap liabilities,
and off-balance sheet financial transactions as to which there is recourse to
the Account Party or a Subsidiary provided, however, for purposes of valuing
liabilities incurred in the ordinary course of business pursuant to any hedging
agreement and not for speculation which are included under GAAP, such
liabilities shall be valued on the basis of the net hedging liability
thereunder.
"Transaction Document" means each of the Insurance Agreement, the
Administration and Custody Agreement, the Charter Contribution Agreement, the
Charter Equity Contribution Agreement, the Origination Trust Contribution
Agreement, the Origination Trust Agreement, the Owner Trust Agreement, the Owner
Trust Series Supplements, the Certificate Trust Agreement, the Certificate Trust
Series Supplements, the Liquidity Agreement, the Certificate Surety Bond, the
Liquidity Surety Bond, and the Liquidity Pledge and Security Agreement.
"Transaction Party" means each of MBIA, Charter Mac, Charter Equity, the
Origination Trust, the Owner Trust, each Owner Trust Series, the Certificate
Trust, each Certificate Trust Series, the Administrative Agent, the Certificate
Trust Agent, the Servicer, the Manager, the Liquidity Agent (in its capacity as
agent for the Liquidity Banks), the Liquidity Collateral Agent and the Liquidity
Collateral Subagent.
"UCC" means the Uniform Commercial Code in effect from time to time in
The Commonwealth of Massachusetts or any other applicable jurisdiction.
"Unpaid Drawing" means the amount of any Drawing disbursed by the
Issuing Bank from the time of such disbursement until the Account Party has
reimbursed the Issuing Bank for such Drawing.
"Unused Commitment" means, at any time, an amount equal to the remainder
of (a) the Maximum Commitment Amount, less (b) the aggregate Allocable Share of
the Maximum Commitment Amount of all Covered Eligible Bonds at such time.
"Unused Facility Fee" is defined in Section 4.2.
"Unused Facility Percentage" means, for any period, an amount equal to
the remainder of (a) 100% minus (b) that percentage (expressed as a decimal)
obtained by dividing (i) the average
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daily amount of the Allocable Share of the Maximum Credit Amount for all Covered
Eligible Bonds during such period, by (ii) the Maximum Credit Amount of the
Letter of Credit Facility.
"Voting Interest" means stock or similar interests, of any class or
classes (however designated), the holders of which are at the time entitled, as
such holders, (a) to vote for the election of a majority of the directors (or
persons performing similar functions) of the corporation, partnership,
association, trust or other business entity involved, or (b) to control, manage
or conduct the business of the corporation, partnership, association, trust or
other business entity involved.
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EXHIBIT M
CHARTER MAC COVENANTS
---------------------
1. Taxes and Trade Debt. Charter Mac will, and will cause each of its
Subsidiaries to, duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, except
for those taxes, assessments or charges which any such Person is contesting in
good faith by appropriate proceedings and with respect to which appropriate
reserves have been established and are being maintained in accordance with GAAP.
2. Adjusted Tangible Net Worth. For so long as the Letter of Credit remains
outstanding and any Obligation or any portion thereof remains unpaid, or other
obligations under any of the Credit Documents are outstanding , Charter Mac
shall at all times maintain (to be tested as of the last day of each fiscal
quarter) a minimum Adjusted Tangible Net Worth of not less than the sum of (i)
$475,000,000, plus (ii) seventy-five percent (75%) of the offering proceeds of
any issuances of Equity Interests after January 1, 2003 (net of the costs and
expenses actually incurred by Charter Mac in connection with such equity
issuances). As used herein:
a. "Adjusted Tangible Net Worth" means, at the time of determination,
Total Assets, minus (a) Intangible Assets, minus (b) Total Liabilities, minus
(c) net interest receivables in respect of defaulted bonds or other impaired
assets, minus (d) to the extent not included in "Total Liabilities," minority
interests in Subsidiaries subject to mandatory redemption, plus (e) to the
extent included in "Total Liabilities," dividends payable on Subsidiaries'
preferred shares, minus (f) the Taxable Tail Amount; plus (g) the Taxable Tail
Adjustment Amount.
b. "Total Assets" means, at the time of determination (a) all assets of
Charter Mac and its Subsidiaries on a consolidated basis determined in
accordance with GAAP, plus (b) to the extent not otherwise included in
determining "Total Assets," Charter Mac's proportionate share of the tangible
assets of its Minority Holdings determined in accordance with GAAP.
c. "Total Liabilities" means, at the time of determination (a) all
liabilities of Charter Mac and its Subsidiaries on a consolidated basis
determined in accordance with GAAP and all indebtedness and contingent
obligations of Charter Mac and its Subsidiaries on a consolidated basis, whether
or not so classified, including all redemption obligations, hedging and swap
liabilities, and off-balance sheet financial transactions as to which there is
recourse to Charter Mac or a Subsidiary, plus (b) to the extent not otherwise
included in "Total Liabilities," Charter Mac's proportionate share of the total
liabilities of its Minority Holdings as determined in accordance with GAAP;
provided, however, for purposes of valuing the following liabilities referred to
in this subsection (iii) which are not included under GAAP, the following shall
apply:
(i) No amount shall be included for exposure derived from PWF's
contingent loss sharing liability to ▇▇▇▇▇▇ ▇▇▇ under the DUS Product Line
(until the loss has occurred and has been recognized on Charter Mac's books in
accordance with GAAP).
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(ii) With respect to any tax credit investment fund sponsored by
Charter Mac or an Affiliate of Charter Mac, as to which Charter Mac provides a
specified yield guaranty to the investors in such fund ("Yield Guarantees"),
"Total Liabilities" shall include an amount equal to (A) 10% of the total fund
size (based on total investment commitments) until such time as each property
within the fund has received its IRS Form 8609 (or applicable comparable
replacement form) and has commenced delivering tax credits to the fund, and (B)
5% of the total fund size thereafter. If any asset within a fund pool becomes
impaired during the period while the Yield Guaranty applicable to such fund is
outstanding, then, in addition to the foregoing, 100% of the present value of
the liability attributable to such impairment amount shall be included within
"Total Liabilities" (without duplication of any amount otherwise attributable to
such impairment in determining "Total Liabilities")).
(iii) With respect to letter of credit reimbursement commitments
issued by ventures in which Charter Mac or an Affiliate of Charter Mac holds an
interest, supporting letters of credit enhancing tax exempt bonds financing
multi-family housing projects ("Enhancement Programs"), "Total Liabilities"
shall include an amount equal to (x) with respect to programs other than the
Credit Re Mortgage Capital, L.L.C. Credit Enhancement Program Agreement dated as
of January 27, 1998 (the "Credit Re Program"), 15% of Charter Mac's maximum
contractual indemnification obligation to the venture (100% of any actual
indemnification obligation arising upon the occurrence of a loss event), and (y)
with respect to the Credit Re Program, 5% with respect to any portfolio of
properties in respect of which such commitments have been issued as of December
24, 2002, and 15% with respect to any other properties, of Charter Mac's maximum
contractual indemnification obligation to the venture (100% of any actual
indemnification obligation arising upon the occurrence of a loss event).
(iv) Liabilities incurred in the ordinary course of business
pursuant to any Interest Rate Protection Agreement and not for speculation,
shall be valued on the basis of the net hedging liability thereunder.
d. "Intangible Assets" means, at the time of determination, those assets
of Charter Mac and its Subsidiaries on a consolidated basis that, in accordance
with GAAP, are properly classifiable as intangible assets, including, but not
limited to, goodwill, franchises, licenses, patents, trademarks, trade names and
copyrights.
e. "Minority Holdings" means any Person in which Charter Mac or any of
its Subsidiaries, directly or indirectly, has an ownership interest, but which
is not required under GAAP to be consolidated with Charter Mac for financial
reporting purposes.
f. "Taxable Tail Amount" means, at the time of determination, the amount
of so-called "taxable tails" then included in "Total Assets."
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h. "Taxable Tail Adjustment Amount" means, at the time of determination,
an amount equal to 80% of the then Taxable Tail Amount, but in no event to
exceed four percent (4%) of the amount of Total Assets at such time.
i. "PWF" means PWF Funding Inc., a Delaware corporation.
j. "PWF Subsidiaries" means any Subsidiaries created by PWF in
accordance with the provisions of Section 7.17 of the loan agreement evidencing
the Mortgage Warehousing Facility.
3. Liquidity. Charter Mac shall at all times maintain unrestricted cash and
Cash Equivalents of not less than $5,000,000.00.
As used herein and, as the case may be, elsewhere in this Guaranty, the
term "Cash Equivalents" shall mean (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition ("Government Obligations"), (ii)
U.S. dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of
deposit of (y) any domestic commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or (z) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from ▇▇▇▇▇'▇ is at least P-1 or the equivalent thereof (any such bank being an
"Approved Bank"), in each case with maturities of not more than 364 days from
the date of acquisition, (iii) commercial paper and variable or fixed rate notes
rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent
thereof) or better by Moody's and maturing within twelve months of the date of
acquisition, (iv) repurchase agreements with a bank or trust company (including
the Agent, Issuing Bank and the Participants) or a recognized securities dealer
having capital and surplus in excess of $500,000,000 for direct obligations
issued by or fully guaranteed by the United States of America, (v) obligations
of any state of the United States or any political subdivision thereof for the
payment of the principal and redemption price of and interest on which there
shall have been irrevocably deposited Government Obligations maturing as to
principal and interest at times and in amounts sufficient to provide such
payment, (vi) auction preferred stock rated in the highest short-term credit
rating category by S&P or Moody's and (vii) U.S. dollar denominated time and
demand deposit accounts or money market accounts with those domestic banks
meeting the requirements of item (y) or (z) of clause (ii) above and any other
domestic commercial banks insured by the FDIC with an aggregate balance not to
exceed $100,000 in the aggregate at any time at any such bank.
4. Fixed Charges. Charter Mac shall not permit the ratio of its
consolidated (i) Adjusted EBITDA, divided by (ii) Fixed Charges, to be less than
1.75 to 1.0, for any fiscal quarter, commencing with Charter Mac's fiscal
quarter ending March 31, 2003. As used herein:
M-28
a. "Adjusted EBITDA" means, measured as of the last day of each calendar
quarter, without duplication, and in accordance with GAAP, the amount derived
from (A) for such quarter then ended, Charter Mac's consolidated net income
(before deduction of preferred stock dividend payments and minority interest in
income of subsidiaries (as so characterized on Charter Mac's balance sheet from
time to time)), plus (B) Interest Expense (including under the Loan) for such
period, (C) plus the amount of income tax expense deducted in calculating net
income for that period, minus (D) the amount of income taxes actually paid
during that period, plus (E) depreciation, amortization and other non-cash items
deducted in calculating net income for that period, minus (F) non-cash revenue
included in calculating net income for that period, minus (G) to the extent
included in determining net income, any unrealized gain in respect of revenue
bonds or hedging transactions, all of the foregoing as determined in accordance
with GAAP for such period, plus (H) all program fees associated with the TOPS
Program in respect of such period, minus (I) any and all special distributions
to its Affiliate management company in respect of such period, plus (J)
extraordinary losses for such period as determined in accordance with GAAP,
minus (K) extraordinary gains for such period as determined in accordance with
GAAP, plus (L) to the extent not otherwise included in "Adjusted EBITDA,"
Charter Mac's proportionate share of Adjusted EBITDA of its Minority Holdings
for such period (determined in a manner consistent with this definition of
"Adjusted EBITDA," but without regard to item (L)), plus (M) non-recurring
litigation expenses and expenses related to transactions outside of Charter
Mac's normal business activities which were terminated prior to consummation,
minus (N) non-recurring income.
b. "Fixed Charges" means, measured as of the last day of each calendar
quarter, without duplication, an amount for the then ending quarter equal to the
sum for such period of Charter Mac's consolidated (A) Debt Service, plus (B)
Preferred Dividends, plus (C) program fees associated with the TOPS Program.
c. "Debt Service" means, for any period, determined on a consolidated
basis (A) Charter Mac's Interest Expense for such period, plus (B) the aggregate
amount of regularly scheduled or mandatory principal payments of Indebtedness
(excluding optional prepayments and balloon principal payments due on maturity
in respect of any Indebtedness) required to be made during such period by
Charter Mac or any Person in Charter Mac's consolidated group (and, if such
period is less than a full twelve month period, annualized by taking the sum of
all of the payments required to be made during such period and during any
immediately subsequent periods required to create a full twelve month test
period).
d. "Interest Expense" means, for any period, the sum (calculated on an
annualized basis), on a consolidated basis of (A) all consolidated interest
expense of Charter Mac determined in accordance with GAAP, plus (B) capitalized
interest not covered by an interest reserve from a loan facility, plus (C) the
allocable portion (based on liability) of any accrued or paid interest incurred
on any obligation for which any entity in Charter Mac's consolidated group is
wholly or partially liable under repayment, interest carry, or performance
guarantees, or other relevant liabilities (including, without limitation,
accrued or paid interest characterized on Charter Mac's balance sheet from time
to time as "minority interest in income of subsidiary"),
M-29
provided that no expense shall be included more than once in such calculation
even if it falls within more than one of the foregoing categories.
e. "Preferred Dividends" means, for any period, without duplication of
such amounts as constitute intercompany debts or distributions, the sum of (A)
dividends or distributions due and payable or accrued during such period on
preferred stock issued by a Subsidiary, and (B) distributions which are the
functional equivalent of preferred dividends (i.e., which the issuer is required
to make prior to distributions on another class or other classes of equity
interests) and which are due and payable or accrued during such period on
preferred equity interests issued by a Subsidiary.
i. "TOPS Program" means Charter Mac's Private Label Tender Option
Program.
5. Total Liabilities. Charter Mac shall not permit at any time its
consolidated Total Liabilities to exceed sixty percent (60%) of the fair market
value of its consolidated Total Assets as reflected on Charter Mac's balance
sheet from time to time.
6. Indebtedness. Charter Mac itself will not create, incur, assume,
guarantee or be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than any of the following:
a. Under its guaranty of obligations of its Subsidiaries to Fleet
National Bank, as Agent and the lenders under each of (x) the Acquisition Line
Facility and (y) the Mortgage Warehousing Facility, or a replacement mortgage
warehousing facility in favor of PWF and the PWF Subsidiaries, to the extent the
establishment of such replacement facility would not (A) result in the
acceleration of the loans under the Acquisition Line Facility, or (B) constitute
an Event of Default under the Mortgage Warehousing Facility;
b. Under its guaranty of obligations of Charter Mac Corporation under
that certain Stock Purchase Agreement dated as of October 24, 2001, as amended,
by and among the Charter Mac Corporation and the former stockholders of PWF;
c. Current liabilities of Charter Mac incurred in the ordinary course of
business (including all liabilities under the TOPS Program and Charter Mac's
P-FLOATS/RITES Program or similar secured financing program) but not incurred
through (A) the borrowing of money, or (B) the obtaining of credit except for
credit on an open account basis customarily extended and in fact extended in
connection with normal purchases of goods and services;
d. Indebtedness existing on the date of this Agreement and listed and
described on Annex M-1 hereto;
e. Secured purchase money debt or capitalized lease obligations;
M-30
f. Indebtedness to ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac, GNMA, FHA or other parties
with whom Charter Mac or its Subsidiaries originate, sell, repurchase or service
Mortgage Loans, to the extent directly relating to or arising out of such
origination, sale, repurchase, or servicing in the ordinary course of business;
g. Indebtedness secured by real property acquired upon foreclosure of
mortgages, to the extent directly related to such real property, not in excess
of the fair market value thereof, and reasonably expected by Charter Mac to be
recovered from the sale or the disposition of the subject real property;
h. Unsecured Indebtedness for borrowed money incurred in the ordinary
course of business and not exceeding $750,000, plus intercompany liabilities
which have a maturity date which is later than the Expiration Date and which are
subordinated to the Obligations pursuant to subordination agreements reasonably
satisfactory to the Agent which shall permit repayment as long as (A) no Event
of Default then exists, and (B) no Event of Default would thereupon occur
(including on a pro forma basis as if applicable financial covenants were tested
as of the date of such repayment);
i. Indebtedness incurred in the ordinary course of business secured by
one or more specific assets, in each instance the principal amount of which
shall not exceed the GAAP book value of the subject asset(s);
j. Liabilities in the ordinary course of business under Charter Mac's
(A) credit enhancement products supporting multi-family housing project bonds or
other financing of multi-family housing projects, and (B) Yield Guarantees;
k. Guaranties provided for the benefit of Subsidiaries in the ordinary
course of business;
l. Liabilities incurred pursuant to Hedging Agreements in the ordinary
course of business and not for speculation; and
m. As to PWF and the PWF Subsidiaries, indebtedness permitted according
to the terms of the PWF Covenants (but without duplication of any of the
applicable foregoing exceptions in clause (a) through (l)).
7. Financial Information. Charter Mac shall deliver or cause to be
delivered to Agent (and the Agent shall promptly deliver copies to the Issuing
Bank and each of the Participants) quarterly and annual financial statements for
Charter Mac in form and substance reasonably satisfactory to the Agent, Issuing
Bank and the Participants as soon as available and in all events no later than
ninety (90) days after the close of each fiscal year for annual statements and
forty-five (45) days after the close of each quarter for quarterly statements
(including for the fourth fiscal quarter, which shall be subject to normal year
end audit adjustments). The quarterly financial statements shall include a
consolidated and consolidating (as relating to Charter Mac
M-31
Corporation and PWF (and the PWF Subsidiaries)) balance sheet and the related
consolidated and consolidating (as relating to Charter Mac Corporation and PWF
(and the PWF Subsidiaries)) statements of income and retained earnings and of
cash flows for such period and the portion of the applicable fiscal year through
the end of such period. The annual statements shall include a consolidated and
consolidating (as relating to Charter Mac Corporation and PWF (and the PWF
Subsidiaries)) balance sheets and the related consolidated and consolidating (as
relating to Charter Mac Corporation and PWF (and the PWF Subsidiaries))
statements of income and retained earnings and of cash flows, setting forth in
each case in comparative form the figures for the previous year, without a
"going concern" or like qualification or exception, or qualification arising out
of the scope of the audit, and shall be audited by independent certified public
accountants of nationally recognized standing reasonably acceptable to the
Agent. Both the annual and quarterly statements shall be certified as true and
correct by an authorized financial officer of Charter Mac. Additionally, Charter
Mac will:
a. promptly supply the Agent (and the Agent promptly shall provide
copies to the Issuing Bank and the Participants) with such information
concerning its affairs and property as the Agent, Issuing Bank or a Participant
(through the Agent) may hereafter reasonably request from time to time.
b. promptly notify the Agent of any condition or event of which it has
knowledge which constitutes (or which upon the giving of notice or lapse of time
or both would constitute) (A) an Event of Default under the Agreement, including
any event or circumstance which results in the information which has been
provided by it to Agent, Issuing Bank or the Participants including an untrue
statement of material fact or omitting to state any material fact or any fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not materially misleading and in such event Charter
Mac shall promptly furnish to the Agent (and the Agent promptly shall forward
copies to the Issuing Bank and each Participant) updated or revised information
which will correct such untrue statement or include such omitted fact; or (B) an
event of default by Charter Mac or any Subsidiary under any indebtedness or
other Contractual Obligation of such Person, where such event of default would
reasonably be expected to have a material adverse effect on the business,
operation, or properties of such Person, or as to the Account Party, its ability
to perform its obligations to the Agent, Issuing Bank or the Participants under
any Credit Document.
c. deliver to the Agent, together with the quarterly and annual
financial statements, a Compliance Certificate signed by its treasurer, chief
financial officer or chief accounting officer showing the calculations and
computations necessary to determine compliance by Charter Mac with its covenants
hereunder and stating that, to such officer's knowledge, no Default or Event of
Default exists hereunder or under the Credit Documents, or if, to such officer's
knowledge, any such Default or Event of Default exists, stating the nature and
status thereof. With each such quarterly Compliance Certificate Charter Mac
shall include (A) summary information, calculations, information, and a
description of occurrences relevant to the applicable financial covenants herein
concerning the applicable Taxable Tail Amount, Yield Guarantees, and
M-32
Enhancement Programs, and (B) worksheets showing the calculation of the
estimated fair value of its investments in revenue bonds, using the methodology
described in Annex M-2 .
d. at any time during regular business hours after reasonable notice to
Charter Mac permit the Agent, Issuing Bank and any Participant, or any of their
representatives to have access to and examine all of its books and records.
e. permit the Agent, Issuing Bank and any Participant or their
respective representatives to copy, at Charter Mac's sole cost, and to make
abstracts from any and all of such books and records.
f. promptly furnish to the Agent copies (with sufficient copies for each
Participant, which the Agent promptly shall furnish to each Participant) of all
(A) filings by it with the Securities and Exchange Commission or any national
securities exchange, including reports on forms 10K and 10Q, (B) financial
statements, reports and proxy statements furnished by it to its shareholders,
and (C) other information concerning Charter Mac as is reasonably requested from
time to time by the Agent, Issuing Bank or any of the Participants (through the
Agent).
g. within sixty (60) days prior to each fiscal year end, provide the
Agent with detailed operating projections for Charter Mac and its Subsidiaries,
in form reasonably satisfactory to the Agent.
h. promptly (and in any event within ten (10) Business Days) notify the
Agent of all new Yield Guarantees and Enhancement Programs, and provide the
Agent with copies of all relevant documents related thereto, it being agreed
that the Agent shall not divulge information obtained from such examination to
others except in connection with Legal Requirements and in connection with
administering the Letter of Credit Facility (including providing copies to
Participants), enforcing its rights and remedies under the Credit Documents and
in the conduct, operation and regulation of their banking and lending business
(which may include, without limitation, the transfer of the Letter of Credit or
of participation interests therein).
8. Material Adverse Change. There shall not occur any material adverse
change in the financial condition of Charter Mac.
9. Liens. Other than in favor of the Fleet National Bank, as Agent (on
behalf of the Lenders) pursuant to the Acquisition Line Facility, in no event
will Charter Mac pledge or grant a security interest in any of its shares from
time to time of Charter Mac Corporation in favor of any Person, or grant a
negative pledge therein in favor of any Person.
10. Revenue Bond Valuation. For the purpose of financial statement
presentation, Charter Mac will estimate the fair value of its investments in
revenue bonds using the methodology described in Annex M-2 hereto or as may be
required to be modified by changes in GAAP, and will not materially deviate from
such methodology. Charter Mac shall notify the Agent of any changes in GAAP
which would require a change in the methodology described in Annex M-2.
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11. Mergers, Etc. Charter Mac shall not be a party to any merger or
consolidation, or purchase or otherwise acquire all or substantially all of the
assets or any stock of any class of, or any partnership, joint venture or other
equity interest in, any other Person, or sell, transfer, convey, or lease (in
one transaction or a series of transactions) all or substantially all of its
assets (x) if, after giving effect to the occurrence of any of one (1) of the
foregoing events, a Change of Control with respect to Charter Mac shall occur,
(y) if the aggregate value of the assets of Charter Mac which are to be sold,
transferred, conveyed or leased (after giving effect to the value of any assets
which were the subject of any sale, transfer, conveyance or lease which may have
previously permitted pursuant to the terms and conditions hereof) exceeds
twenty-five percent (25%) of total value of all the assets (calculated in
accordance with GAAP) of Charter Mac prior to giving effect to such sale,
transfer, conveyance or lease transaction, and (z) if, in the case of any
acquisition of the assets or any stock of any class of, or any partnership,
joint venture or other equity interest in, any other Person which is engaged in
(x) a business which is not a business in which Charter Mac is currently
engaged, or (y) a business which is not a business contemplated by the
Constituent Documents of Charter Mac (the "Acquired Assets"), the aggregate
value of such Acquired Assets shall not exceed five percent (5%) of value of the
total assets (calculated in accordance with GAAP) of Charter Mac prior to giving
effect to the acquisition of the Acquired Assets.
M-34