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Exhibit 10.1
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MASTER CREDIT FACILITY AGREEMENT
by and among
THE GENERAL PARTNERSHIPS SET FORTH ON EXHIBIT A-1 TO THIS
AGREEMENT,
THE TOWN AND COUNTRY TRUST,
THE TC OPERATING LIMITED PARTNERSHIP,
THE TOWN AND COUNTRY HOLDING CORPORATION,
THE TC PROPERTY COMPANY,
and
THE TOWN AND COUNTRY ORIOLE CORPORATION
collectively, as TC Parties,
and
WASHINGTON MORTGAGE FINANCIAL GROUP, LTD.,
as Lender
Dated as of
September 26, 1997
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS.......................................................................................5
ARTICLE II
THE CREDIT FACILITY..............................................................................30
SECTION 2.01. The Credit Facility..............................................................30
SECTION 2.01(a) Establishment of the Credit Facility.......................................30
SECTION 2.01(b) Establishment of the Base Facility.........................................30
SECTION 2.01(c) Establishment of Revolving Facility........................................31
SECTION 2.02. Limitations on Commitment to Make Advances.......................................31
SECTION 2.02(a) Limitations on Base Facility Credit Commitment.............................31
SECTION 2.02(b) Limitations on Revolving Facility Credit Commitment........................31
SECTION 2.02(c) Limitations on any Advance.................................................33
SECTION 2.03. Determination and Confirmation of Interest Rate and Other Terms
of Each Advance..................................................................33
SECTION 2.03(a) Quote......................................................................33
SECTION 2.03(b) Rate Setting...............................................................34
SECTION 2.03(c) Rate Confirmation..........................................................34
SECTION 2.03(d) Coupon Rate................................................................34
SECTION 2.03(e) Advance Confirmation Instrument ...........................................35
SECTION 2.04. Special Amortization Requirements if Aggregate Debt Service
Coverage Ratio for Advances Outstanding for the Trailing 12
Month Period Is Less than 125%...................................................35
SECTION 2.05. Increase in Maximum Credit Commitment and Revolving Facility
Credit Commitment................................................................36
SECTION 2.06. Cross-Default and Cross-Remedy...................................................37
ARTICLE III
INITIAL ADVANCE..................................................................................38
SECTION 3.01. Request..........................................................................38
SECTION 3.02. Conditions Precedent to Initial Advance..........................................38
ARTICLE IV
FUTURE ADVANCES..................................................................................39
SECTION 4.01. Procedure for Obtaining Future Advances..........................................39
SECTION 4.01(a) Request.....................................................................39
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SECTION 4.01(b) Closing....................................................................39
SECTION 4.02. Conditions Precedent to Future Advances..........................................39
ARTICLE V
CONVERSION OF REVOLVING FACILITY CREDIT COMMITMENT TO BASE FACILITY CREDIT COMMITMENT...........40
SECTION 5.01. Right to Convert................................................................40
SECTION 5.02. Procedure for Obtaining Conversion..............................................40
SECTION 5.02(a) Request....................................................................40
SECTION 5.02(b) Closing....................................................................41
SECTION 5.03. Limitations on Right to Convert.................................................41
SECTION 5.03(a) Closing Date...............................................................41
SECTION 5.03(b) Minimum Request............................................................41
SECTION 5.03(c) Maximum Conversion Right...................................................41
SECTION 5.03(d) Prepayment in Full.........................................................42
SECTION 5.04. Conditions Precedent to Conversion..............................................42
SECTION 5.05. Interest Rate of Base Facility Advances After Conversion. .....................43
ARTICLE VI
ADDITIONS OF COLLATERAL.........................................................................43
SECTION 6.01. Right to Add Collateral.........................................................43
SECTION 6.02. Procedure for Adding Collateral.................................................43
SECTION 6.02(a) Request....................................................................43
SECTION 6.02(b) Additional Information.....................................................44
SECTION 6.02(c) Underwriting...............................................................44
SECTION 6.02(d) Closing....................................................................44
SECTION 6.03. Conditions Precedent to Addition of an Additional Mortgaged
Property to the Collateral Pool ................................................45
SECTION 6.04. Certain Unimproved Land.........................................................46
SECTION 6.05. Increase in Maximum Credit Commitment and
Revolving Facility Credit Commitment Upon Addition................................46
ARTICLE VII
RELEASES OF COLLATERAL..........................................................................47
SECTION 7.01. Right to Obtain Releases of Collateral..........................................47
SECTION 7.02. Procedure for Obtaining Releases of Collateral..................................48
SECTION 7.02(a) Request....................................................................48
SECTION 7.02(b) Closing....................................................................48
SECTION 7.02(c) Definitions................................................................49
SECTION 7.02(d) Payment and Application of Release Price...................................50
SECTION 7.03. Conditions Precedent to Release of Collateral Release Property
from the Collateral Pool .......................................................52
SECTION 7.04. Certain Unimproved Land.........................................................54
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SECTION 7.05. Reduction of Maximum Credit Commitment and Revolving Facility
Credit Commitment Upon Release..................................................54
ARTICLE VIII
EXPANSION OF CREDIT FACILITY....................................................................55
SECTION 8.01. Right to Increase Maximum Credit Commitment.....................................55
SECTION 8.02. Procedure for Obtaining Increases in Maximum Credit Commitment..................55
SECTION 8.02(a) Request....................................................................55
SECTION 8.02(b) Closing....................................................................55
SECTION 8.03. Limitations on Right to Increase Maximum Credit Commitment......................55
SECTION 8.03(a) Maximum Credit Commitment..................................................56
SECTION 8.03(b) Minimum Request............................................................56
SECTION 8.04. Conditions Precedent to Increase in Maximum Credit Commitment...................56
SECTION 8.05. Interest Rate of Advances After Increase in Maximum Credit Commitment...........58
ARTICLE IX
COMPLETE OR PARTIAL TERMINATION OF REVOLVING FACILITY...........................................58
SECTION 9.01. Right to Complete or Partial Termination of Revolving Facility..................58
SECTION 9.02. Procedure for Complete or Partial Termination of Revolving Facility.............58
SECTION 9.02(a) Request....................................................................58
SECTION 9.02(b) Closing....................................................................59
SECTION 9.03. Conditions Precedent to Complete or Partial Termination of Revolving Facility...59
ARTICLE X
TERMINATION OF CREDIT FACILITY..................................................................60
SECTION 10.01. Right to Terminate Credit Facility..............................................60
SECTION 10.02. Procedure for Terminating Credit Facility ......................................60
SECTION 10.02(a) Request....................................................................60
SECTION 10.02(b) Closing....................................................................60
SECTION 10.03. Conditions Precedent to Termination of Credit Facility..........................61
ARTICLE XI
GENERAL CONDITIONS PRECEDENT TO ALL REQUESTS....................................................61
SECTION 11.01. General Conditions..............................................................61
SECTION 11.01(a) Payment of Expenses........................................................61
SECTION 11.01(b) No Default.................................................................61
SECTION 11.01(c) No Insolvency..............................................................61
SECTION 11.01(d) No Untrue Statements.......................................................62
SECTION 11.01(e) Representations and Warranties.............................................62
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SECTION 11.01(f) No Condemnation or Casualty................................................62
SECTION 11.01(g) Delivery of Closing Documents..............................................62
SECTION 11.01(h) Delivery of Closing Documents Relating to Initial Advance
Request, Collateral Addition Request or Credit Facility
Expansion Request..........................................................62
SECTION 11.01(i) Delivery of Property-Related Documents.....................................63
ARTICLE XII
REPRESENTATIONS AND WARRANTIES..................................................................64
SECTION 12.01. Representations and Warranties of the Owners....................................64
SECTION 12.01(a) Due Organization...........................................................64
SECTION 12.01(b) Power and Authority........................................................64
SECTION 12.01(c) Due Authorization..........................................................64
SECTION 12.01(d) No Approvals...............................................................64
SECTION 12.01(e) Non-contravention; No Liens................................................65
SECTION 12.01(f) Pending Litigation or Other Proceedings....................................65
SECTION 12.01(g) Valid and Binding Obligations..............................................65
SECTION 12.01(h) Ownership..................................................................65
SECTION 12.01(i) Solvency...................................................................66
SECTION 12.01(j) Lines of Business..........................................................66
SECTION 12.01(k) Delivery of Information....................................................66
SECTION 12.01(l) No Material Adverse Change.................................................66
SECTION 12.01(m) Title Insurance............................................................66
SECTION 12.02. Representations and Warranties of the REIT .....................................66
SECTION 12.02(a) Due Organization...........................................................66
SECTION 12.02(b) Power and Authority........................................................67
SECTION 12.02(c) Due Authorization..........................................................67
SECTION 12.02(d) No Approvals...............................................................67
SECTION 12.02(e) Non-contravention; No Liens................................................67
SECTION 12.02(f) Pending Litigation or Other Proceedings....................................67
SECTION 12.02(g) Valid and Binding Obligations..............................................68
SECTION 12.02(h) Solvency...................................................................68
SECTION 12.02(i) Lines of Business..........................................................68
SECTION 12.02(j) Status as a Real Estate Investment Trust...................................68
SECTION 12.02(k) Delivery of Information....................................................68
SECTION 12.03. Representations and Warranties of the REIT Sub, the Property
Company, the Operating Partnership and TC-Oriole................................68
SECTION 12.03(a) Due Organization...........................................................69
SECTION 12.03(b) Power and Authority........................................................69
SECTION 12.03(c) Due Authorization..........................................................69
SECTION 12.03(d) No Approvals...............................................................70
SECTION 12.03(e) Non-contravention; No Liens................................................70
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SECTION 12.03(f) Pending Litigation or Other Proceedings....................................70
SECTION 12.03(g) Valid and Binding Obligations..............................................70
SECTION 12.03(h) Solvency...................................................................71
SECTION 12.03(i) Lines of Business..........................................................71
SECTION 12.03(j) Delivery of Information....................................................71
SECTION 12.03(k) Ownership Interests of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇..................71
SECTION 12.04. Representations and Warranties of the Lender....................................71
SECTION 12.04(a) Due Organization...........................................................71
SECTION 12.04(b) Power and Authority........................................................71
SECTION 12.04(c) Due Authorization..........................................................71
ARTICLE XIII
COVENANTS.......................................................................................72
SECTION 13.01. Affirmative Covenants of the Owners.............................................72
SECTION 13.01(a) Maintenance of Existence...................................................72
SECTION 13.01(b) Financial Statements.......................................................72
SECTION 13.01(c) Maintain Licenses..........................................................74
SECTION 13.01(d) Inform the Lender of Material Events.......................................74
SECTION 13.01(e) Ownership..................................................................75
SECTION 13.01(f) Further Assurances.........................................................75
SECTION 13.01(g) Replacement Reserves.......................................................76
SECTION 13.01(h) Single-Purpose Entities....................................................77
SECTION 13.01(i) Date-Down Endorsements.....................................................77
SECTION 13.02. Negative Covenants of the Owners................................................77
SECTION 13.02(a) No Amendments..............................................................77
SECTION 13.02(b) Transfers..................................................................77
SECTION 13.02(c) Change in Property Management..............................................78
SECTION 13.02(d) Lines of Business..........................................................79
SECTION 13.02(e) Limitation on Fundamental Changes .........................................79
SECTION 13.03. Affirmative Covenants of the REIT...............................................79
SECTION 13.03(a) Maintenance of Existence...................................................79
SECTION 13.03(b) Financial Statements.......................................................79
SECTION 13.03(c) Maintain Licenses..........................................................81
SECTION 13.03(d) Inform the Lender of Material Events.......................................81
SECTION 13.03(e) Ownership..................................................................83
SECTION 13.03(f) Status as a Real Estate Investment Trust...................................83
SECTION 13.03(g) Further Assurances.........................................................83
SECTION 13.03(h) Publicly Held REIT.........................................................83
SECTION 13.04. Negative Covenants of the REIT..................................................83
SECTION 13.04(a).............................................................................83
Transfers..................................................................83
SECTION 13.04(b) Status as a Real Estate Investment Trust...................................84
SECTION 13.04(c) Lines of Business..........................................................85
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SECTION 13.04(d) Limitation on Fundamental Changes .........................................85
SECTION 13.05. Affirmative Covenants of the TC Parties (other than the Owners
and the REIT)...................................................................85
SECTION 13.05(a) Maintenance of Existence...................................................85
SECTION 13.05(b) Financial Statements.......................................................86
SECTION 13.05(c) Maintain Licenses..........................................................86
SECTION 13.05(d) Inform the Lender of Material Events.......................................87
SECTION 13.05(e) Ownership..................................................................88
SECTION 13.05(f) No Publicly Traded Partnership.............................................88
SECTION 13.05(g) Further Assurances.........................................................88
SECTION 13.06. Negative Covenants of the TC Parties (other than the Owners and
the REIT).......................................................................88
SECTION 13.06(a) Transfers..................................................................89
SECTION 13.06(b) No Publicly Traded Partnership.............................................90
SECTION 13.06(c) Frequency of Requests......................................................90
SECTION 13.06(d) Lines of Business..........................................................90
SECTION 13.06(e) Limitation on Fundamental Changes..........................................90
SECTION 13.06(f) Transfer by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇..............................91
SECTION 13.07. Affirmative Covenants of the Borrowers. ........................................92
SECTION 13.07(a) Appraisals.................................................................92
SECTION 13.07(b) Expenses...................................................................92
SECTION 13.07(c) Capital Improvements Fund..................................................93
SECTION 13.08. Covenants of the Lender.........................................................95
SECTION 13.08(a) Cap Rates..................................................................95
SECTION 13.08(b) Valuations.................................................................95
SECTION 13.08(c) Notice to Other Institutional
Lenders of the TC Parties................................................96
SECTION 13.08(d) Insurance Claims Settlement................................................96
ARTICLE XIV
FEES............................................................................................96
SECTION 14.01. Fee Definitions.................................................................96
SECTION 14.02. Standby Fee.....................................................................97
SECTION 14.03. Origination Fees................................................................97
SECTION 14.04. Due Diligence Fees..............................................................97
SECTION 14.04(a) Initial Due Diligence Fees.................................................97
SECTION 14.04(b) Additional Due Diligence Fees for Additional Collateral....................98
SECTION 14.05. Document Fees...................................................................98
SECTION 14.06. Legal Fees and Expenses.........................................................98
SECTION 14.06(a) Initial Legal Fees.........................................................98
SECTION 14.06(b) Additional Legal Fees and Expenses for Additional Collateral...............99
SECTION 14.07. MBS-Related Costs...............................................................99
SECTION 14.08. Other Fees......................................................................99
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ARTICLE XV
CASH MANAGEMENT................................................................................100
ARTICLE XVI
EVENTS OF DEFAULT..............................................................................100
SECTION 16.01. Events of Default.............................................................100
ARTICLE XVII
REMEDIES.......................................................................................103
SECTION 17.01. Remedies; Waivers.............................................................103
SECTION 17.02. No Remedy Exclusive...........................................................104
SECTION 17.03. No Waiver.....................................................................104
SECTION 17.04. No Notice.....................................................................104
SECTION 17.05. Application of Payments.......................................................105
ARTICLE XVIII
RIGHTS OF ▇▇▇▇▇▇ MAE...........................................................................105
SECTION 18.01. Special Pool Purchase Contract................................................105
SECTION 18.02. Assignment of Rights..........................................................105
SECTION 18.03. Release of Collateral.........................................................105
SECTION 18.04. Replacement of Lender.........................................................106
SECTION 18.05. ▇▇▇▇▇▇ ▇▇▇ and Lender Fees and Expenses
.....................................................................................106
SECTION 18.06. Third-Party Beneficiary.......................................................106
ARTICLE XIX........................................................................................106
INSURANCE AND REAL ESTATE TAXES................................................................106
SECTION 19.01. Insurance Escrow Fund.........................................................106
SECTION 19.02. Taxes.........................................................................107
SECTION 19.02(a) Escrow....................................................................107
SECTION 19.02(b) Delivery of Letter of Credit..............................................107
SECTION 19.02(c) Letter of Credit as Additional Collateral.................................108
SECTION 19.02(d) Conditions for Providing and Holding Letter of Credit.....................108
SECTION 19.02(e) Renewal or Replacement of Letter of Credit................................109
SECTION 19.02(f) Default Under the Loan Documents..........................................110
SECTION 19.02(g) Proceeds of the Letter of Credit..........................................111
SECTION 19.03. Funds for Taxes, Insurance and Other Charges .................................111
ARTICLE XX.........................................................................................113
INTEREST RATE CAPS.............................................................................113
SECTION 20.01. Cap Requirement................................................................113
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SECTION 20.02. Terms and Conditions..........................................................113
SECTION 20.03. Escrow Provisions.............................................................114
SECTION 20.03(a) Monthly Cap Escrow Payment................................................114
SECTION 20.03(b) Cap Escrow Fund...........................................................114
ARTICLE XXI
NONRECOURSE....................................................................................115
SECTION 21.01. Non-Recourse Liability........................................................115
SECTION 21.02. Special Provisions............................................................116
ARTICLE XXII
MISCELLANEOUS PROVISIONS.......................................................................118
SECTION 22.01. Counterparts..................................................................118
SECTION 22.02. Amendments, Changes and Modifications.........................................119
SECTION 22.03. Payment of Costs, Fees and Expenses...........................................119
SECTION 22.04. Payment Procedure.............................................................119
SECTION 22.05. Payments on Business Days.....................................................119
SECTION 22.06. Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial..................120
SECTION 22.07. Severability..................................................................121
SECTION 22.08. Notices.......................................................................121
SECTION 22.08(a) Manner of Giving Notice...................................................121
SECTION 22.08(b) Change of Notice Address..................................................122
SECTION 22.09. Further Assurances and Corrective Instruments..................................122
SECTION 22.09(a) Further Assurances........................................................122
SECTION 22.09(b) Further Documentation.....................................................122
SECTION 22.09(c) Compliance with Investor Requirements.....................................122
SECTION 22.10. Term of this Agreement........................................................122
SECTION 22.11. Assignments; Third-Party Rights...............................................123
SECTION 22.12. Headings......................................................................123
SECTION 22.13. General Interpretive Principles...............................................123
SECTION 22.14. Interpretation................................................................123
SECTION 22.15. Standards for Decisions, Etc..................................................123
SECTION 22.16. Decisions in Writing..........................................................124
SECTION 22.17. (Intentionally omitted.)......................................................124
SECTION 22.18. Trust Liability...............................................................124
SECTION 22.19. Contribution Agreement........................................................124
SECTION 22.20. Other Purchased Documents.....................................................124
SECTION 22.21. Recordation Tax Indemnity.....................................................124
SECTION 22.22. Sale of Loan Documents in connection with Refinancing.........................125
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EXHIBITS
EXHIBIT A-1 - Schedule of Owners
EXHIBIT A-2 - Schedule of Indebtedness of Owners
EXHIBIT B-1 - Base Facility Notes of Original Owners
EXHIBIT B-2 - Base Facility Note of New Owners
EXHIBIT B-3 - Base Facility Notes of 1993 Owners
EXHIBIT B-4 - Base Facility Notes of the Property Company
EXHIBIT C - Revolving Facility Note
EXHIBIT D - First Security Instrument
EXHIBIT E - Indemnity Security Instrument
EXHIBIT F-1 - Collateral Assignment of Partnership
Interests (the Property Company)
EXHIBIT F-2 - Collateral Assignment of Partnership
Interests (REIT Sub)
EXHIBIT G - Interest Rate Hedge Security, Pledge and
Assignment Agreement
EXHIBIT H - Cash Management, Security, Pledge and
Assignment Agreement
EXHIBIT I - Compliance Certificate
EXHIBIT J-1 - Guaranty of Original Owners and 1993 Owners
EXHIBIT J-2 - Guaranty of New Owners
EXHIBIT K - Organizational Certificate
EXHIBIT L - Replacement Reserve Agreement
EXHIBIT M - Revolving Credit Endorsement
EXHIBIT N - Tie-In Endorsement
EXHIBIT O - Unimproved Land
EXHIBIT P-1 - Rate Setting Form (Base Facility Advance)
EXHIBIT P-2 - Rate Setting Form (Revolving Facility
Advance)
EXHIBIT Q-1 - Rate Confirmation Form (Base Facility
Advance)
EXHIBIT Q-2 - Rate Confirmation Form (Revolving Facility
Advance)
EXHIBIT R - Advance Confirmation Instrument (Revolving
Facility Advance)
EXHIBIT S-1 - Future Advance Request (Base Facility
Advance)
EXHIBIT S-2 - Future Advance Request (Revolving Facility
Advance)
EXHIBIT T - Conversion Request
EXHIBIT U - Conversion Amendment
EXHIBIT V - Collateral Addition Request
EXHIBIT W - Collateral Addition Description Package
EXHIBIT X - Collateral Release Request
EXHIBIT Y - [Intentionally Omitted]
EXHIBIT Z - Defeasance Conditions
EXHIBIT AA - TC Parties' Confirmation of Liability
Certificate
EXHIBIT BB - Credit Facility Expansion Request
EXHIBIT CC - Revolving Facility Termination Request
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EXHIBIT DD - Revolving Facility Termination Amendment
EXHIBIT EE - Credit Facility Termination Request
EXHIBIT FF - [Intentionally Omitted]
EXHIBIT GG - Operations and Maintenance Agreement
EXHIBIT HH - Annual Report for a Mortgaged Property
EXHIBIT II - Quarterly Report for a Mortgaged Property
EXHIBIT JJ - Replacement Reserve Payment Schedules
EXHIBIT KK - Replacement Reserve Report
EXHIBIT LL - Capital Improvements Fund Pledge and Security
Agreement
EXHIBIT MM - Capital Improvements Plan
EXHIBIT NN - Contribution Agreement
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MASTER CREDIT FACILITY AGREEMENT
--------------------------------
THIS MASTER CREDIT FACILITY AGREEMENT is made as of the 26th day of
September, 1997, by and among (i) EACH OF THE GENERAL PARTNERSHIPS SET FORTH ON
EXHIBIT A-1 TO THIS AGREEMENT, each a Maryland general partnership (each,
together with such additional Persons as may agree to be bound by this Agreement
in the future as an Owner, being collectively referred to as the "OWNERS"),
(ii)(a)THE TOWN AND COUNTRY TRUST, a Maryland real estate investment trust (the
"REIT"), (b) THE TC OPERATING LIMITED PARTNERSHIP, a Maryland limited
partnership (the "OPERATING PARTNERSHIP"), (c) THE TOWN AND COUNTRY HOLDING
CORPORATION, a Delaware corporation (the "REIT SUB"), (d) THE TC PROPERTY
COMPANY, a Maryland general partnership (the "PROPERTY COMPANY") and (e) THE
TOWN AND COUNTRY ORIOLE CORPORATION, a Delaware corporation ("TC- ORIOLE") (the
REIT, the Operating Partnership, the REIT Sub, the Property Company, TC-Oriole
and each of the Owners being collectively referred to as the "TC PARTIES" and
individually referred to as a "TC PARTY") and (ii) WASHINGTON MORTGAGE FINANCIAL
GROUP, LTD., a Delaware corporation (the "LENDER").
RECITALS
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A. The REIT and TC-Oriole are the sole general partners of the
Operating Partnership. The REIT Sub is a 1% general partner in, and the
Operating Partnership is a 99% general partner in, the Property Company. The
REIT Sub is a 1% general partner in, and the Property Company is a 99% general
partner in, each of the 35 Owners listed on Exhibit A-1.
B. Each of the Owners is the owner of a certain Multifamily Residential
Property (capitalized terms used but not defined shall have the meanings
ascribed to such terms in Article I of this Agreement), as more particularly
described in EXHIBIT A-1 to this Agreement opposite the name of the Owner.
C. Each of the 26 Owners listed on Exhibit A-1 as Owners of Asset
Numbers M-1 to M-18 and P-1 to P-8 (the "ORIGINAL OWNERS") is the maker of a
separate promissory note (collectively, the "ORIGINAL NOTES") in favor of The
Town and Country Funding Corporation ("FUNDING CORP.") in the amount set forth
opposite its Asset Number in Exhibit A-2 under the heading "Current Debt" (which
amounts aggregate to $232,000,000), and has granted for the benefit of Funding
Corp. a first priority deed of trust or mortgage (an "ORIGINAL OWNER'S FIRST
MORTGAGE") to secure the Original Note it has made. Each of the Original Owners
also executed an Amended and Restated Guaranty (an "ORIGINAL OWNER'S GUARANTY"),
pursuant to which it has guaranteed the Original Notes (other than the Original
Note it has made), and has granted for the benefit of Funding Corp.
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a second priority deed of trust or mortgage to secure such Original Owner's
Guaranty (an "ORIGINAL OWNER'S SECOND INDEMNITY MORTGAGE").
D. Each of the six Owners listed on Exhibit A-1 as Owners of ▇▇▇▇▇ ▇▇▇.
▇-▇▇, ▇-▇ - ▇-▇ and P-9 (the "1993 OWNERS")has executed a guaranty (a "1993
OWNER'S GUARANTY") in favor of Funding Corp., pursuant to which it has
guaranteed the Original Notes, and has granted for the benefit of Funding Corp.
a first priority indemnity deed of trust or mortgage (a "1993 OWNERS' FIRST
INDEMNITY MORTGAGE") to secure such 1993 Owner's Guaranty and a second priority
indemnity deed of trust or mortgage (a "1993 OWNER'S SECOND INDEMNITY
MORTGAGE")to secure the 1993 Owner's Guaranty.
E. Each of the three Owners listed on Exhibit A-1 as Owners of Asset
Nos. M-20, V-5 and D-1 (the "NEW OWNERS") are the co-makers of a promissory note
(the "NEW NOTE") in favor of The First National Bank of Maryland ("FIRST
NATIONAL") in the amount of $35,000,000, and has granted for the benefit of
First National a separate first priority deed of trust or mortgage to secure the
New Note (a "NEW OWNER'S FIRST MORTGAGE").
F. The REIT, the Operating Partnership and the Property Company are the
co-makers of a promissory note in favor of First National in the amount of
$27,000,000 (the "FIRST NATIONAL REVOLVING NOTE"). Each of the New Owners also
granted for the benefit of First National a second priority deed of trust or
mortgage to secure the First National Revolving Note or a guaranty thereof (a
"NEW OWNER'S SECOND INDEMNITY MORTGAGE").
G. The Property Company, the Original Owners, the 1993 Owners and the
New Owners (collectively, the "INITIAL BORROWERS") have requested that the
Lender establish a $375,000,000 Credit Facility in favor of the Initial
Borrowers, comprised of a $300,000,000 Base Facility in favor all of the Initial
Borrowers and a $75,000,000 Revolving Facility in favor of the Property Company.
H. To effect the Credit Facility, the Lender shall, on the Initial
Closing Date:
(1) purchase the Original Notes in the aggregate
original principal amount of $232,000,000;
(2) amend and restate the Original Notes so that each
Original Note is in the form of the Base Facility
Note attached as EXHIBIT B-1 to this Agreement,
and has a principal amount equal to the principal
amount of the Original Note;
(3) purchase the New Note in the aggregate original
principal amount of $35,000,000;
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(4) amend and restate the New Note so that it is in
the form of the Base Facility Note attached as
EXHIBIT B-2 to this Agreement, and has a
principal amount of $35,000,000;
(5) make loans, in the aggregate amount of
$32,000,000, to the 1993 Owners, each in the
amount set forth opposite its Asset Number on
Exhibit A-2 under the heading "New First Debt",
with the proceeds of such loan being applied, to
the extent necessary, to reduce the aggregate
amount of principal outstanding under the First
National Revolving Note to $1,000,000, each such
loan to be evidenced by a Base Facility Note in
the form attached as EXHIBIT B-3 to this
Agreement, in the principal amount equal to the
amount set forth opposite its Asset Number in
Exhibit A-2 under the heading "New First Debt";
(6) purchase the First National Revolving Note and
release the REIT and the Operating Partnership
from their obligations under the First National
Revolving Note;
(7) amend and restate the First National Revolving
Note so that it is in the form of the Base
Facility Note attached as EXHIBIT B-4 to this
Agreement, and has a principal amount equal to
$1,000,000;
(8) make available to the Property Company a
revolving loan facility in the initial maximum
principal amount of $75,000,000 by executing this
Agreement, with such loans thereunder being
evidenced by a promissory note from the Property
Company in the form attached as EXHIBIT C to this
Agreement (the "REVOLVING FACILITY NOTE");
(9) purchase each of the Original Owners' Guaranties,
and the 1993 Owners' Guaranties;
(10) amend and restate the Original Owners' Guaranties
and the 1993 Owners' Guaranties, so that each is
in the form attached as EXHIBIT J-1 to this
Agreement (a "GUARANTY"), as the case may be, and
require each of the New Owners to execute a
Guaranty, in the form attached as EXHIBIT J-2 to
this Agreement, pursuant to which each Owner
guaranties for the benefit of the Lender the Base
Facility Notes (other than any Base Facility Note
made by the Owner executing the Guaranty), the
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Revolving Facility Note and all of the other
obligations of the TC Parties under the Loan
Documents (other than the obligations of the
Owner executing the Guaranty);
(11) purchase each of the Original Owners' First
Mortgages and the New Owners' First Mortgages;
(12) amend and restate the Original Owners' First
Mortgages and the New Owners' First Mortgages so
that each is in the form attached as EXHIBIT D to
this Agreement (with changes, to the extent
applicable, to conform the Exhibit to the form
prescribed from time to time by ▇▇▇▇▇▇ ▇▇▇ for
use in the State in which the Mortgaged Property
is located), and receive from the 1993 Owners who
are Initial Borrowers a first priority deed of
trust or mortgage securing the Base Facility Note
executed by such 1993 Owners in the form attached
as Exhibit D to this Agreement (with changes, to
the extent applicable, to conform the Exhibit to
the form prescribed from time to time by ▇▇▇▇▇▇
Mae for use in the State in which the Mortgaged
Property is located) (collectively, all of the
deeds of trust and mortgages described in this
paragraph (12) being referred to as the "INITIAL
FIRST SECURITY INSTRUMENTS");
(13) purchase each of the Original Owners' Second
Indemnity Mortgages;
(14) purchase each of the 1993 Owners' First Indemnity
Mortgages and each of the 1993 Owners' Second
Indemnity Mortgages, consolidate each Owner's
First Indemnity Mortgage with such Owner's Second
Indemnity Mortgage (as so consolidated, the
"CONSOLIDATED INDEMNITY MORTGAGE"), and
subordinate the Consolidated Indemnity Mortgage
to such Owner's Initial First Security
Instrument;
(15) purchase each of the New Owners' Second Indemnity
Mortgages; and
(16) amend and restate each of the Original Owners'
Second Indemnity Mortgages, the 1993 Owners'
Consolidated Indemnity Mortgages and the New
Owners' Second Indemnity Mortgages so that each
is in the form attached as EXHIBIT E to this
Agreement (with changes, to the extent
applicable, to conform the Exhibit to the form
prescribed from time to time by ▇▇▇▇▇▇ ▇▇▇ for
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use in the State in which the Mortgaged Property
is located)(collectively, all of the deeds of
trust and mortgages described in this Section
being referred to as the "INITIAL SECOND SECURITY
INSTRUMENTS").
I. To secure the obligations of the Owners and the Property Company
under the Notes and the Guaranties, the Owners, the Property Company and the
REIT Sub shall create in favor of the Lender a Collateral Pool in favor of the
Lender. The Collateral Pool shall initially be comprised of the following:
(1) the Initial First Security Instruments;
(2) the Initial Second Security Instruments; and
(3) a first priority assignment of all of the
partnership interests in the Owners owned by the
Property Company and REIT Sub, the sole partners
of each of the Owners (which assignment shall
secure only the obligations of the Property
Company under the Base Facility Note executed by
the Property Company (but not any of the other
Base Facility Notes) and the Revolving Facility
Note.
J. Each of the Security Instruments shall be cross-defaulted (i.e., a
default under any Security Instrument, or under this Agreement, shall constitute
a default under each Security Instrument, and this Agreement), and the Credit
Facility shall be cross-collateralized (i.e., each second priority Security
Instrument shall secure a Guaranty (which Guaranty will guarantee all of the TC
Parties' obligations under this Agreement and the other Loan Documents issued in
connection with the Credit Facility)).
K. Subject to the terms, conditions and limitations of this Agreement,
the Lender has agreed to establish the Credit Facility.
NOW, THEREFORE, the TC Parties and the Lender, in consideration of the
mutual promises and agreements contained in this Agreement, hereby agree as
follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement, the following terms shall have the
respective meanings set forth below:
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"12 MONTH VALUATION" means, for any specified date, with
respect to each of the Mortgaged Properties, (a) if an Appraisal of the
Mortgaged Property was more recently obtained than a Cap Rate for the
Mortgaged Property, the Appraised Value of such Mortgaged Property, or
(b) if a Cap Rate for the Mortgaged Property was more recently obtained
than an Appraisal of the Mortgaged Property, the value derived by
dividing--
(i) the Net Operating Income of such Mortgaged
Property for the Trailing 12 Month Period, by
(ii) the most recent Cap Rate selected by the Lender
pursuant to Section 13.08.
Notwithstanding the foregoing, any 12 Month Valuation for a Mortgaged
Property calculated for a date occurring before the first anniversary
of the date on which the Mortgaged Property becomes a part of the
Collateral Pool shall equal the Appraised Value of such Mortgaged
Property, unless the Lender determines that changed market or property
conditions warrant that the value be determined as set forth in the
preceding sentence.
"ACTUAL KNOWLEDGE" means, with respect to any TC Party, the
actual knowledge of (i) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇, (iii)
each officer of the REIT at or above the level of vice president, (iv)
each officer of the management division of the Operating Partnership at
or above the level of senior vice president and (v) if one of the
persons described in clauses (i) through (iv) above is not the person
to whom the division manager for each Mortgaged Property reports, each
other employee of the REIT or its Subsidiaries to whom the division
manager for each Mortgaged Property reports.
"ADDITIONAL MORTGAGED PROPERTY" means each Multifamily
Residential Property owned by an Owner (either in fee simple or as
tenant under a ground lease meeting all of the requirements of the DUS
Guide) and added to the Collateral Pool after the Initial Closing Date
pursuant to Article VI.
"ADVANCE" means a loan made by the Lender to any of the
Borrowers under the Credit Facility pursuant to this Agreement (or,
with respect to the Initial Advance only, the note purchases described
in Recital H to this Agreement).
"ADVANCE CONFIRMATION INSTRUMENT" shall have the meaning
set forth in Section 2.03(e).
"AFFILIATE" or "AFFILIATED" means, when used with reference to
a specified Person, (i) any Person that, directly or indirectly,
through one or more intermediaries, controls or
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is controlled by, or is under common control with, the specified
Person, (ii) any Person that is an officer of, partner in or trustee
of, or serves in a similar capacity with respect to, the specified
Person or of which the specified Person is an officer, partner or
trustee, or with respect to which the specified Person serves in a
similar capacity, (iii) any Person that, directly or indirectly, is the
beneficial owner of 10% or more of any class of equity securities of
the specified Person or of which the specified Person is, directly or
indirectly, the beneficial owner of 10% or more of any class of equity
securities.
"AGGREGATE DEBT SERVICE COVERAGE RATIO FOR THE ADVANCES
OUTSTANDING FOR THE TRAILING 12 MONTH PERIOD" means, for any specified
date, the ratio (expressed as a percentage) of--
(a) the aggregate of the Net Operating Income for the
Trailing 12 Month Period for all of the Mortgaged
Properties
TO
(b) the Debt Service on the Advances Outstanding on the specified
date.
"AGGREGATE FACILITY DEBT SERVICE COVERAGE RATIO FOR THE
TRAILING 12 MONTH PERIOD" means, for any specified date, the ratio
(expressed as a percentage) of--
(a) the aggregate of the Net Operating Income for the
Trailing 12 Month Period for all of the Mortgaged
Properties
TO
(b) the Facility Debt Service on the specified date.
"AGGREGATE FACILITY DEBT SERVICE COVERAGE RATIO FOR THE
TRAILING THREE MONTH PERIOD" means, for any specified date,
the ratio (expressed as a percentage) of--
(a) the product obtained by multiplying--
(i) the aggregate of the Net Operating Income
for the Trailing Three Month Period for all
of the Mortgaged Properties, by
(ii) four
TO
(b) the Facility Debt Service on the specified date.
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"AGGREGATE FACILITY DEBT SERVICE COVERAGE RATIOS" means the
Aggregate Facility Debt Service Coverage Ratio for the Trailing Three
Month Period and the Aggregate Facility Debt Service Coverage Ratio for
the Trailing 12 Month Period. "AGGREGATE FACILITY DEBT SERVICE COVERAGE
RATIO" means either the Aggregate Facility Debt Service Coverage Ratio
for the Trailing Three Month Period or the Aggregate Facility Debt
Service Coverage Ratio for the Trailing 12 Month Period.
"AGGREGATE LOAN TO VALUE RATIO FOR THE TRAILING 12 MONTH
PERIOD" means, for any specified date, the ratio (expressed as a
percentage) of--
(a) the Maximum Credit Commitment,
TO
(b) the aggregate of the 12 Month Valuations most
recently obtained prior to the specified date for
all of the Mortgaged Properties.
"AGREEMENT" means this Master Credit Facility Agreement, as it
may be amended, supplemented or otherwise modified from time to time,
including all Recitals and Exhibits to this Agreement, each of which is
hereby incorporated into this Agreement by this reference.
"ALLOCABLE FACILITY AMOUNT" shall have the meaning set
forth in Section 7.02(c).
"ANNUAL REPORTS" means the annual reports for the Mortgaged
Properties which the Owners are obligated to deliver to the Lender
under Section 13.01(b)(1).
"APPRAISALS" means appraisals of a Multifamily Residential
Property or Multifamily Residential Properties conforming to the
requirements of Chapter 5 of Part III of the DUS Guide, and accepted by
the Lender (or, if permitted by the Lender, in its sole discretion,
market studies of properties in the geographical area in which the
Multifamily Residential Property is located, performed in accordance
with such criteria as may be required by the Lender, and accepted by
the Lender).
"ASSIGNMENT OF PARTNERSHIP INTERESTS" means a Collateral
Assignment of Partnership Interests executed by the REIT Sub or the
Property Company, in the form attached as EXHIBIT F-1 OR F-2 to this
Agreement.
"BASE FACILITY" means the agreement of the Lender to make
Advances to the Borrowers pursuant to Section 2.01(b)(2).
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20
"BASE FACILITY ADVANCE" shall have the meaning set forth
in Section 2.01(b)(2).
"BASE FACILITY CREDIT COMMITMENT" means, at any time, an
amount equal to $300,000,000, or such greater amount, not to exceed the
Maximum Credit Commitment, as the Borrowers may elect in accordance
with, and subject to, the provisions of Article V or Article VIII or as
otherwise may be adjusted in accordance with the provisions of Sections
2.04, 6.05 or 7.05.
"BASE FACILITY NOTES" means the aggregate of each promissory
note, in the form attached as Exhibit B to this Agreement, which has
been issued by a Borrower to the Lender to evidence the Borrower's
obligation to repay Base Facility Advances.
"BASE FACILITY TERMINATION FEE" means, at any time before
March 31, 2007, the present value of the Fee Portion of all Base
Facility Advances Outstanding on the Closing Date of a Credit Facility
Termination Request which would have accrued from the Closing Date of
the Credit Facility Termination Request to March 31, 2007, as
determined by the Lender. The Base Facility Termination Fee is included
as part of the prepayment premiums due under the Base Facility Notes,
and no payment separate from the payment of such prepayment premiums
shall be due from the Borrowers as a Base Facility Termination Fee. The
Base Facility Termination Fee means, at any time after March 31, 2007,
$0.
"BLENDED RATE" means, with respect to one or more Advances
Outstanding on a specified date, a blended rate reflecting the weighted
average, based on the respective Advances Outstanding on such date, of
the different interest rates per annum of each actual Advance
Outstanding on the specified date.
"BORROWERS" means the Property Company and each Owner that
executes a Base Facility Note. Exhibit A-1 identifies each Owner and
Exhibit A-2 identifies the principal amount of their respective Base
Facility Notes, as of the Initial Closing Date.
"BUSINESS DAY" means a day on which ▇▇▇▇▇▇ Mae is open
for business.
"CAP" means an interest rate cap.
"CAP DOCUMENTS" means the documents evidencing and governing a
Cap, including a Cap Security Agreement.
"CAP RATE" means, for each Mortgaged Property, a
capitalization rate selected by the Lender for use in determining the
12 Month Valuations.
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"CAP SECURITY AGREEMENT" means, with respect to a Cap, the
Interest Rate Hedge Security, Pledge and Assignment Agreement by and
among the Borrowers, the Lender and the applicable servicer, for the
benefit of the Lender, in the form attached as EXHIBIT G to this
Agreement as such agreement may be amended, modified, supplemented or
restated from time to time.
"CAP YEAR" means the 12-month period commencing on the Initial
Closing Date and each anniversary thereof.
"CAPITAL IMPROVEMENTS PLAN" shall have the meaning set
forth in Section 13.07(c).
"CAPITAL IMPROVEMENTS FUND PLEDGE AND SECURITY AGREEMENT"
shall have the meaning set forth in Section 13.07(c).
"CASH MANAGEMENT AGREEMENT" means that certain Cash
Management, Security, Pledge and Assignment Agreement between the
Owners and the Lender in the form attached as EXHIBIT H to
this Agreement.
"CLOSING DATE" means the Initial Closing Date and each date
after the Initial Closing Date on which the funding or other
transaction requested in a Request is required to take place.
"COLLATERAL" means the Mortgaged Properties and other
collateral from time to time or at any time encumbered by the Security
Instruments, the partnership interests in the Owners encumbered by the
Assignments of Partnership Interests, or any other property securing
any of the TC Parties' obligations under the Loan Documents.
"COLLATERAL ADDITION FEE" means, with respect to an
Additional Mortgaged Property, a fee equal to the product
obtained by multiplying--
(i) 37.5 basis points, by
(ii) the amount by which the Maximum
Credit Commitment is increased
pursuant to Section 6.5 upon the
inclusion of such Additional
Mortgaged Property in the Collateral
Pool.
"COLLATERAL ADDITION LOAN DOCUMENTS" means the Security
Instrument covering an Additional Mortgaged Property and securing the
obligations of the Owner under the Loan Documents, and any other
documents, instruments or certificates required by the Lender in
connection with the addition of the Additional Mortgaged Property to
the Collateral Pool pursuant to Article VI.
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"COLLATERAL ADDITION REQUEST" shall have the meaning set
forth in Section 6.02(a).
"COLLATERAL POOL" means the aggregate total of the
Collateral.
"COLLATERAL RELEASE PROPERTY" shall have the meaning set
forth in Section 7.02(a).
"COLLATERAL RELEASE REQUEST" shall have the meaning set
forth in Section 7.02(a).
"COMPLIANCE CERTIFICATE" means a certificate of the TC Parties
in the form attached as EXHIBIT I to this Agreement.
"COUPON RATE" means, with respect an Advance, the interest
rate (or imputed interest rate) determined by the Lender pursuant to
Section 2.03 for the Advance.
"CREDIT FACILITY" means the Base Facility and the
Revolving Facility.
"CREDIT FACILITY EXPANSION LOAN DOCUMENTS" means amendments to
each Note and Security Instrument, duly executed and delivered by the
parties thereto (other than the Lender), increasing the amount secured
to the amount of the Maximum Credit Commitment, as expanded in
accordance with Article VIII.
"CREDIT FACILITY EXPANSION REQUEST" shall have the meaning set
forth in Section 8.02(a).
"CREDIT FACILITY TERMINATION DATE" means April 1, 2008.
"CREDIT FACILITY TERMINATION FEE" means an amount equal
to the sum of--
(i) the Base Facility Termination Fee, if any; and
(ii) the Revolving Facility Termination Fee, if any.
"CREDIT FACILITY TERMINATION REQUEST" shall have the meaning
set forth in Section 10.02.
"DEBT SERVICE ON THE ADVANCES OUTSTANDING" means, as of
any specified date, the sum of
(i) the amount of imputed interest and principal
amortization, during the 12 month period
immediately succeeding the specified date, with
respect to the aggregate of Advances Outstanding
on the specified date, which would be payable if
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such Advances required level monthly payments of principal and
interest at the Blended Rate, in an amount necessary to fully
amortize the original principal amount of the Advances
Outstanding over a 25-year period commencing on the first day of
the 12 month period, and
(ii) the amount of the Monthly Cap Escrow Payments
which are payable during such 12 month period, as
estimated by the Lender, with respect to the
aggregate of Advances Outstanding on the
specified date.
"DISCOUNT" means, with respect to any Advance, an amount
equal to the excess of --
(i) the face amount of the MBS backed by the Advance,
over
(ii) the proceeds of the sale of the MBS backed by the
Advance.
"DUS GUIDE" means the ▇▇▇▇▇▇ ▇▇▇ Multifamily Delegated
Underwriting and Servicing (DUS) Guide, as such Guide may be amended
from time to time, including amendments in the form of Lender Memos,
Guide Updates and Guide Announcements (and, if such Guide is superseded
by a Negotiated Transactions Guide, the term "DUS Guide" as used in
this Agreement means the Negotiated Transactions Guide, as such Guide
may be amended from time to time, including amendments in the form of
Lender Memos, Guide Updates and Guide Announcements). All references to
specific articles and sections of the DUS Guide shall be deemed
references to such articles and sections as they may be amended,
modified, updated, superseded, supplemented or replaced from time to
time.
"DUS UNDERWRITING REQUIREMENTS" means the overall underwriting
requirements for Multifamily Residential Properties as set forth in the
DUS Guide.
"ENVIRONMENTAL ASSESSMENT" means, with respect to a
Multifamily Residential Property, an assessment and report on
environmental conditions performed in accordance with Section 204 of
Part III of the DUS Guide and Part X of the DUS Guide.
"EVENT OF DEFAULT" means any event defined to be an "Event of
Default" under Article XVI.
"EVIDENCE OF COMPLIANCE WITH PROPERTY LAWS" means evidence
satisfactory to the Lender of compliance with Section 205 and 206 of
Part III of the DUS Guide.
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"FACILITY DEBT SERVICE" means, as of any specified date,
the sum of
(i) the amount of imputed interest and principal
amortization, during the 12 month period
immediately succeeding the specified date, with
respect to a hypothetical amount of Advances
Outstanding with the following characteristics:
(1) the aggregate amount of the Advances
Outstanding is equal to the Maximum Credit
Commitment, and
(2) the hypothetical Advances require level
monthly payments of principal and interest (at
the Blended Rate) in an amount necessary to fully
amortize the original principal amount of the
Advances over a 25-year period commencing on the
first day of the 12 month period, and
(ii) the amount of the Monthly Cap Escrow Payments
during such 12 month period, as estimated by the
Lender.
"FAMILY MEMBER" means, when used with reference to a specified
individual, the individual's spouse, issue, parents, siblings and a
trust for the benefit of the individual's spouse or issue, or both.
"▇▇▇▇▇▇ MAE" means the federally-chartered and
stockholder-owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, 12 U.S.C.
Section 1716 ET SEQ.
"FEE PORTION" means,
(a) with respect to a Revolving Facility Advance,
an amount per month equal to the product obtained by
multiplying --
(i) the Fee Spread for the Revolving Facility
Advance, by
(ii) the amount of the Revolving Facility
Advance, by
(iii) 1/12; and
(b) with respect to a Base Facility Advance, an
amount per month equal to the product obtained by multiplying
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(i) the Fee Spread for the Base Facility
Advance, by
(ii) the amount of the Base Facility Advance,
by
(iii) 1/12.
"FEE SPREAD" means the per annum rate of (a) with respect to a
Revolving Facility Advance, 49 basis points or such other number of
basis points determined pursuant to Section 2.03(d)(3), and (b) with
respect to a Base Facility Advance, 34 basis points or such other
number of basis points determined pursuant to Sections 2.03(d)(2) or
2.03(d)(3), as applicable.
"FINANCING LEASE" means any lease of property, real or
personal, the obligations of the lessee in respect of which are
required by GAAP to be capitalized on a balance sheet of the lessee or
to be otherwise disclosed as such in a note to such balance sheet.
"FITCH" means Fitch Investors Service, Inc.
"FUTURE ADVANCE" means an Advance made after the Initial
Closing Date.
"FUTURE ADVANCE REQUEST" shall have the meaning set forth
in Section 4.01(a).
"GAAP" means generally accepted accounting principles in the
United States in effect from time to time, consistently applied.
"GENERAL CONDITIONS" shall have the meaning set forth in
Article XI.
"GOVERNMENTAL AUTHORITY" means any court, board, agency,
commission, office or authority of any nature whatsoever for any
governmental ▇▇▇▇ (▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ or
otherwise) whether now or hereafter in existence.
"GROSS REVENUES" means, for any specified period, with respect
to any Multifamily Residential Property, all income in respect of the
Multifamily Residential Property, as determined by the Lender in
accordance with the method described in paragraph 3 of Section 302.02
of Part V of the DUS Guide, except that for these purposes the
"financial statements" to be used shall be deemed to refer to the
Annual Reports and paragraph (b) of such paragraph 3 shall be taken
into account in the Lender's discretion.
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"GUARANTEE OBLIGATION" means, as to any Person (the
"GUARANTEEING PERSON"), any obligation of (a) the guaranteeing person
or (b) another Person (including any bank under any letter of credit)
to induce the creation of a primary obligation (as defined below) with
respect to which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing, or
in effect guaranteeing, any indebtedness, lease, dividend or other
obligation (the "PRIMARY OBLIGATIONS") of any third person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
including any obligation of the guaranteeing person, whether or not
contingent, to (1) purchase any such primary obligation or any property
constituting direct or indirect security therefor, (2) advance or
supply funds for the purchase or payment of any such primary obligation
or to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary
obligor, (3) purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary
obligation, or (4) otherwise assure or hold harmless the owner of any
such primary obligation against loss in respect of the primary
obligation, provided, however, that the term "Guarantee Obligation"
shall not include endorsements of instruments for deposit or collection
in the ordinary course of business.
"GUARANTY" means an Amended and Restated Guaranty, or a
Guaranty, in the form attached as EXHIBIT J-1 OR J-2 to this Agreement,
from an Owner to the Lender.
"INCREASE CONDITIONS" shall have the meaning set forth in
Section 2.05.
"INDEBTEDNESS" means, with respect to any Person, as of any
specified date, without duplication, all (a) indebtedness of such
Person for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in
the ordinary course of business and payable in accordance with
customary practices), (b) other indebtedness of such Person which is
evidenced by a note, bond, debenture or similar instrument, (c)
obligations of such Person under Financing Leases, (d) obligations of
such Person in respect of acceptances (as defined in Article 3 of the
Uniform Commercial Code of the State of Maryland) issued or created for
the account of such Person, (e) liabilities secured by any Lien on any
property owned by such Person even though such Person has not assumed
or otherwise become liable for the payment of such liabilities and (f)
Guarantee Obligations.
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"INITIAL ADVANCE" means, collectively, the Base Facility
Advances in the aggregate amount of $300,000,000.
"INITIAL ADVANCE REQUEST" shall have the meaning set
forth in Section 3.01.
"INITIAL BORROWERS" shall have the meaning set forth in
Recital G to this Agreement.
"INITIAL CLOSING DATE" means the date of this Agreement.
"INITIAL FIRST SECURITY INSTRUMENTS" shall have the meaning
set forth in Recital H to this Agreement.
"INITIAL MORTGAGED PROPERTIES" means the Multifamily
Residential Properties described on Exhibit A-1 to this Agreement.
"INITIAL SECOND SECURITY INSTRUMENTS" shall have the meaning
set forth in Recital H to this Agreement.
"INITIAL SECURITY INSTRUMENTS" means the Initial First
Security Instruments and the Initial Second Security
Instruments covering the Initial Mortgaged Properties.
"INITIAL 12 MONTH VALUATION" means, when used with reference
to specified Collateral, the 12 Month Valuation initially performed for
the Collateral as of the date on which the Collateral was added to the
Collateral Pool.
"INSTITUTIONAL LENDER" means a commercial or savings bank,
savings and loan association, pension fund, insurance company,
endowment fund or real estate investment trust, government agency or
quasi-government agency or other Person regularly engaged in the
business of making loans secured by first mortgages or deeds of trust
on real property.
"INSURANCE POLICIES" means the insurance coverage and
insurance certificates evidencing such insurance required to be
maintained pursuant to the Security Instruments.
"INSURANCE PREMIUMS" means the aggregate amount of the yearly
premium installments for fire and other hazard insurance, rent loss
insurance and such other insurance covering the Mortgaged Properties as
the Lender may require pursuant to Uniform Covenant 5 of the Security
Instruments.
"INTERNAL REVENUE CODE" means the Internal Revenue Code
of 1986, as amended.
"LENDER" shall have the meaning set forth in the first
paragraph of this Agreement.
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"LIEN" means any mortgage, deed of trust, charge (whether
fixed or floating), pledge, lien, encumbrance, assignment,
hypothecation, security interest, conditional sale, capital lease or
other title retention, preferential right, trust arrangement or any
other encumbrance, security agreement or arrangement securing any
obligation of any Person.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Advance
Confirmation Instruments for the Revolving Facility Advances, the
Security Documents, all documents executed by the TC Parties pursuant
to the General Conditions set forth in Article XI of this Agreement and
any other documents executed by a TC Party from time to time in
connection with this Agreement or the transactions contemplated by this
Agreement.
"MAXIMUM AGGREGATE LOAN TO VALUE RATIO FOR THE TRAILING
12 MONTH PERIOD" means an Aggregate Loan to Value Ratio for
the Trailing 12 Month Period equal to 65%.
"MAXIMUM CREDIT COMMITMENT" means, at any time, $375,000,000,
or such greater amount, not to exceed $450,000,000, as the Borrowers
may elect in accordance with, and subject to, the provisions of Article
VIII, or such lesser amount, not to be below $300,000,000, as the
Borrowers may elect in accordance with, and subject to, the provisions
of Article IX, or as otherwise may be adjusted in accordance with the
provisions of Sections 2.04, 6.05 and 7.05; provided, however, that, in
accordance with Section 2.05, the Maximum Credit Commitment shall be
$5,000,000 less than it would otherwise be in the absence of Section
2.05, until the date on which the Borrowers have satisfied each of the
Increase Conditions.
"MBS" means mortgage-backed securities. An MBS which is
"backed" by an Advance means that it is backed by an interest in the
Notes and the Collateral Pool securing the Notes, which interest
permits the holder of the MBS to participate in the Notes and the
Collateral Pool to the extent of the Advance. An MBS backed by a
Revolving Facility Advance shall provide for payment of the principal
sum due under the MBS not later than the second Business Day after the
due date of the Revolving Facility Advance.
"MINIMUM AGGREGATE FACILITY DEBT SERVICE COVERAGE RATIO
FOR THE TRAILING 12 MONTH PERIOD" means an Aggregate Facility
Debt Service Coverage Ratio for the Trailing 12 Month Period
of 150%.
"MINIMUM AGGREGATE FACILITY DEBT SERVICE COVERAGE RATIO
FOR THE TRAILING THREE MONTH PERIOD" means an Aggregate
Facility Debt Service Coverage Ratio for the Trailing Three
Month Period of 135%.
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"MONTHLY CAP ESCROW PAYMENTS" shall have the meaning set forth
in Section 20.03.
"MOODY'S means ▇▇▇▇▇'▇ Investors Service, Inc.
"MORTGAGED PROPERTIES" means, collectively, the Initial
Mortgaged Properties and the Additional Mortgaged Properties, but
excluding each Collateral Release Property from and after the date of
the release of the Collateral Release Property from the Collateral
Pool.
"MULTIFAMILY RESIDENTIAL PROPERTY" means a residential
property, located in the United States, containing five or more
dwelling units in which not more than twenty percent (20%) of the net
rentable area is or will be rented to non-residential tenants, and
conforming to the requirements of Sections 201 and 203 of Part III of
the DUS Guide.
"NET OPERATING INCOME" means, for any specified period, with
respect to any Multifamily Residential Property, the aggregate net
income during such period equal to Gross Revenues during such period
less the aggregate Operating Expenses during such period. If a
Mortgaged Property is not a part of the Collateral Pool for the entire
specified period, the Net Operating Income for the Mortgaged Property
for the time within the specified period during which the Mortgaged
Property was not part of the Collateral Pool shall be the Mortgaged
Property's pro forma net operating income determined by the Lender in
accordance with the underwriting procedures set forth in Part III of
the DUS Guide.
"NOTE" means a Base Facility Note or the Revolving
Facility Note.
"NOTICE ADDRESS" means
(a) as to the TC Parties:
c/o The Town And Country Management Company
1700 Equitable Bank Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
c/o The Town and Country Trust
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇
▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Berick, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ Co., L.P.A.
1350 ▇▇▇▇▇ Center
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
(b) as to the Lender:
Washington Mortgage Financial Group
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Ms. ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(c) as to ▇▇▇▇▇▇ ▇▇▇:
▇▇▇▇▇▇ Mae
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
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Attention: Vice President for
Multifamily Asset Management
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Arent Fox ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
"OBLIGATIONS" means the aggregate of the obligations of each
of the TC Parties under this Agreement and the other Loan Documents.
"OPERATING EXPENSES" means, for any period, with respect to
any Multifamily Residential Property, all expenses in respect of the
Multifamily Residential Property, as determined by the Lender in
accordance with the method described in paragraph 3 of Section 302.02
of Part V of the DUS Guide, including replacement reserves under
Section 13.01(g) and the Replacement Reserve Agreement.
"OPERATING PARTNERSHIP" shall have the meaning set forth in
the first paragraph of this Agreement.
"ORGANIZATIONAL CERTIFICATE" means a certificate of the TC
Parties in the form attached as EXHIBIT K to this Agreement.
"ORGANIZATIONAL DOCUMENTS" means all certificates, instruments
and other documents pursuant to which an organization is organized or
operates, including, (i) with respect to a corporation, its articles of
incorporation and bylaws, (ii) with respect to a limited partnership,
its limited partnership certificate and partnership agreement, (iii)
with respect to a general partnership or joint venture, its partnership
or joint venture agreement and (iv) with respect to a limited liability
company, its articles of organization and operating agreement.
"OUTSIDE REVIEW DATE" means, with respect to the Lender's
approval of any merger or consolidation pursuant to Sections 13.04(d)
or 13.06(e), the 30th day after the date on which the Lender shall have
received a written notice from the Borrowers requesting the Lender's
consent to the proposed merger or consolidation, except that, if, on or
before such 30th day, the Lender reasonably requests any additional
information concerning the merger or consolidation, the Outside Review
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Date shall be the later of (i) such 30th day or (ii) the fifth day
after the Lender receives such additional information.
"OUTSTANDING" means, when used in connection with promissory
notes, other debt instruments or Advances, for a specified date,
promissory notes or other debt instruments which have been issued, or
Advances which have been made, to the extent such Notes or Advances
have not been repaid or defeased as of the specified date.
"OWNERS" means the 35 general partnerships set forth on
Exhibit A-1 to this Agreement, and each other Person who becomes an
Owner in accordance with the terms of this Agreement.
"OWNERSHIP INTERESTS" means, with respect to any entity, any
ownership interests in the entity and any economic rights (such as a
right to distributions, net cash flow or net income) to which the owner
of such ownership interests is entitled.
"PERMITTED INVESTMENTS" means any of the following
investments:
(a) (i) U.S. Government Securities and (ii) mutual funds
organized under the Investment Company Act of 1940 which have an
Acceptable Credit Rating from at least two of the three Rating
Agencies;
(b) certificates of deposit or other interest-bearing
obligations of a bank or trust company which is a member in good
standing of the Federal Reserve System having a combined capital,
surplus and undivided profits of not less than $100,000,000, provided
that the bank or trust company's short-term unsecured debt and
long-term unsecured debt each has an Acceptable Credit Rating from at
least two of the three Rating Agencies;
(c) bonds or other obligations issued by or by authority of
any State of the United States, any territory or possession of the
United States, including the Commonwealth of Puerto Rico, and agencies
thereof, or any political subdivision of any of the foregoing, whose
short-term unsecured debt and long-term unsecured debt each has an
Acceptable Credit Rating from at least two of the three Rating
Agencies;
(d) repurchase agreements which are secured by U.S. Government
Securities issued by an entity whose long-term unsecured debt has an
Acceptable Credit Rating from at least two of the three Rating
Agencies; or
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33
(e) commercial paper which has an Acceptable Credit Rating
from at least two of the three Rating Agencies;
provided that any of the investments in paragraph (a) through (e) shall
mature or be redeemable upon the option of the holder thereof on or
prior to the earlier of (x) 365 days from the date of their purchase or
(y) the Business Day preceding the day before the date such amounts are
required to be applied under the Loan Documents. For these purposes,
the term "RATING AGENCIES" means Fitch, Moody's and S&P and the term
"ACCEPTABLE CREDIT RATING" means, with respect to each Rating Agency,
(i) with respect to short-term unsecured debt, a rating at least equal
to the following:
Fitch F-1
Moody's P-1
S&P A-1,
and (ii) with respect to all other investments and entities, a rating
at least equal to the following:
Fitch ▇▇
▇▇▇▇▇'▇ Aa2
S&P AA.
"PERMITTED LIENS" means, with respect to a Mortgaged Property,
(i) the exceptions to title to the Mortgaged Property set forth in the
Title Insurance Policy for the Mortgaged Property and approved by the
Lender, (ii) the Security Instrument encumbering the Mortgaged Property
and (iii) any other Liens approved by the Lender.
"PERSON" means an individual, an estate, a trust, a
corporation, a partnership, a limited liability company or any other
organization or entity (whether governmental or private).
"POTENTIAL EVENT OF DEFAULT" means any event which, with the
giving of notice or the passage of time, or both, would constitute an
Event of Default.
"PRINCIPALLY ENGAGED" means, as of any specified date, with
respect to any business in which a Person may be engaged, that the
value of the assets of such business, calculated in accordance with
GAAP, is at least 51% of the value of all of the business assets of the
businesses in which the Person is engaged.
"PROPERTY COMPANY" shall have the meaning set forth in the
first paragraph of this Agreement.
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34
"QUARTERLY REPORTS" means the quarterly reports for the
Mortgaged Properties which the Owners are obligated to deliver to the
Lender under Section 13.01(b)(2).
"RECOURSE LIEN" shall have the meaning set forth in
Section 21.02.
"RECOURSE TRANSFER" shall have the meaning set forth in
Section 21.02.
"REIT" shall have the meaning set forth in the first
paragraph of this Agreement.
"REIT SUB" shall have the meaning set forth in the first
paragraph of this Agreement.
"RELEASE FEE" means, with respect to each Mortgaged Property
released from the Collateral Pool pursuant to Article VII, a fee equal
to $15,000.
"RELEASE PRICE" shall have the meaning set forth in
Section 7.02(c).
"RENT ROLL" means, with respect to any Multifamily Residential
Property, a rent roll prepared and certified by the owner of the
Multifamily Residential Property, on ▇▇▇▇▇▇ Mae Form 4243, as set forth
in Exhibit III-3 of the DUS Guide, or on another form approved by the
Lender and containing substantially the same information as Form 4243
requires.
"REPLACEMENT RESERVE AGREEMENT" means the Replacement Reserve
and Security Agreement, in the form attached as EXHIBIT L to this
Agreement, executed by the Owners in favor of the Lender.
"REPLACEMENTS" means, with respect to the Mortgaged
Properties, the physical items which, as of the Initial Closing Date,
are capitalized by the Owners, as evidenced by reports and other
information furnished by the Owners to the Lender in connection with
the execution of this Agreement.
"REQUEST" means a Collateral Addition Request, a Collateral
Release Request, a Conversion Request, a Credit Facility Expansion
Request, a Credit Facility Termination Request, a Future Advance
Request, an Initial Advance Request or a Revolving Facility Termination
Request.
"REVOLVING CREDIT ENDORSEMENT" means an endorsement to a Title
Insurance Policy which contains substantially the same coverages, and
is subject to substantially the same or fewer exceptions (or such other
exceptions as the Lender may approve), as the form attached as EXHIBIT
M to this Agreement.
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35
"REVOLVING FACILITY" means the agreement of the Lender to make
Advances to the Borrowers pursuant to Section 2.01(c)(2).
"REVOLVING FACILITY ADVANCE" shall have the meaning set
forth in Section 2.01(c)(2).
"REVOLVING FACILITY AVAILABILITY PERIOD" means the period
beginning on the Revolving Facility Commencement Date and ending on
January 1, 2008.
"REVOLVING FACILITY COMMENCEMENT DATE" means the Initial
Closing Date.
"REVOLVING FACILITY CREDIT COMMITMENT" means, at any time, an
amount equal to $75,000,000, or such greater amount, not to exceed
$150,000,000, as the Borrowers may elect in accordance with, and
subject to, the provisions of Article VIII, or such lesser amount as
the Borrowers may elect in accordance with, and subject to, the
provisions of Article IX, or as otherwise may be adjusted in accordance
with the provisions of Sections 2.04, 6.05 or 7.05; provided, however,
that, in accordance with Section 2.05, the Revolving Facility Credit
Commitment shall be $5,000,000 less than it would otherwise be in the
absence of Section 2.05, until the date as on which the Borrowers have
satisfied each of the Increase Conditions.
"REVOLVING FACILITY NOTE" means the promissory note, in the
form attached as Exhibit C to this Agreement, which has been issued by
the Property Company to the Lender to evidence the Property Company's
obligation to repay Revolving Facility Advances.
"REVOLVING FACILITY TERMINATION FEE" means, with respect to a
reduction in the Revolving Facility Credit Commitment pursuant to
Article IX which occurs before March 31, 2004, an amount equal to the
product obtained by multiplying--
(1) the reduction in the Revolving Facility Credit
Commitment, by
(2) 0.19%, by
(3) the present value factor calculated using the
following formula:
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1 - (1 + R)-n
-------------
r
[r = Yield Rate
n = the number of years,
and any fraction thereof,
remaining between the
prepayment date and March 31, 2004]
The "Yield Rate" means the yield rate on the 5.875% U.S. Treasury
Security due on February 15, 2004 (the "Specified U.S. Treasury
Security"), as the Yield Rate is reported in the Wall Street Journal on
the fifth Business Day preceding, as applicable,(x) the date of the
reduction in the Revolving Facility Credit Commitment, (y) the date of
the Complete Revolving Facility Termination or (z) the date of Lender's
acceleration of the unpaid principal balance of the Revolving Facility
Note. In the event that no Yield Rate is published for the Specified
U.S. Treasury Security, then the nearest equivalent U.S. Treasury
Security shall be selected at Lender's reasonable discretion. If the
publication of such Yield Rates in the Wall Street Journal is
discontinued, Lender shall determine such Yield Rates from another
source selected by Lender. If the reduction in the Revolving Facility
Credit Commitment occurs on or after March 31, 2004, the Revolving
Facility Termination Fee shall equal $0.
"ROLLOVER ADVANCES" means a Revolving Facility Advance which
is equal in face amount to an Outstanding Revolving Facility Advance
which is being repaid with the proceeds of the Revolving Facility
Advance. If an Outstanding Revolving Facility Advance is repaid with
both the proceeds of a Revolving Facility Advance and principal
amortization payments under Section 2.04, the Revolving Facility
Advance shall be considered a Rollover Advance only to the extent the
proceeds of the Revolving Facility Advance are applied against the
Outstanding Revolving Facility Advance.
"SECURITY DOCUMENTS" means the Security Instruments, the
Assignments of Partnership Interests, the Cap Security Agreement, the
Capital Improvements Fund Pledge and Security Agreement, the Cash
Management Agreement, the Replacement Reserve Agreement and any other
documents executed by a TC Party from time to time to secure any of the
TC Parties' obligations under the Loan Documents.
"SECURITY INSTRUMENT" means, for each Mortgaged Property, a
separate first priority or second priority Multifamily Mortgage, Deed
of Trust or Deed to Secure Debt, Assignment of Rents and Security
Agreement given by an Owner to or for the benefit of the Lender to
secure the obligations of the Owner under a Base Facility Note or a
Guaranty. With respect to each Security Instrument securing a Base
Facility Note, the
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37
Security Instrument shall be in the form attached as Exhibit D to this
Agreement, with changes, to the extent applicable, to conform the
Exhibit to the form Security Instrument prescribed from time to time by
▇▇▇▇▇▇ Mae for use in the State in which the Mortgaged Property is
located. With respect to each Security Instrument securing a Guaranty,
the Security Instrument shall be in the form attached as Exhibit E to
this Agreement, with changes, to the extent applicable, to conform the
Exhibit to the form Security Instrument prescribed from time to time by
▇▇▇▇▇▇ ▇▇▇ for use in the State in which the Mortgaged Property is
located.
"SINGLE-PURPOSE" means, with respect to an Owner, that, except
with respect to the transactions effected by this Agreement or the Loan
Documents, such Person at all times since its formation:
(i) has been a duly formed and existing
partnership;
(ii) has been duly qualified in each jurisdiction
in which such qualification was at such time
required by the laws of such jurisdiction
for the conduct of its business;
(iii) has complied with the provisions of its
organizational documents and the laws of its
jurisdiction of formation in all respects;
(iv) has observed all customary formalities
regarding its partnership existence;
(v) has accurately maintained its financial
statements, accounting records and other
partnership documents separate from those of
any other Person, other than the other
Owners;
(vi) has not commingled its assets or funds with
those of any other Person, other than the
other Owners;
(vii) has accurately maintained its own bank
accounts, payroll and books and accounts
separate from those of any other Person,
other than the other Owners;
(viii) has paid its own liabilities from its own
separate assets or from assets of the other
Owners;
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(ix) has identified itself in all dealings with
the public under its own name and as a
separate and distinct entity;
(x) has not identified itself as being a
division or a part of any other Person;
(xi) has not identified any other Person as being
a division or a part of itself;
(xii) has been adequately capitalized in light of
its contemplated business operations;
(xiii) has not assumed, guaranteed or become
obligated for the liabilities of any other
Person (except in connection with the Credit
Facility or the endorsement of negotiable
instruments in the ordinary course of
business) or held out its credit as being
available to satisfy the obligations of any
other Person, other than the other Owners;
(xiv) has not acquired obligations or securities
of any other Person, other than the other
Owners;
(xv) has not made loans or advances to any other
Person, other than the other Owners;
(xvi) has not entered into and was not a party to
any transaction with any Affiliate of such
Person, except in the ordinary course of
business and on terms which are no less
favorable to such Person than would be
obtained in a comparable arm's-length
transaction with an unrelated third party;
(xvii) has conducted its own business in its own
name or in the name of its own Mortgaged
Property;
(xviii) has paid the salaries of its own employees,
if any, and maintained a sufficient number
of employees in light of its contemplated
business operations;
(xix) has allocated fairly and reasonably any
overhead for shared office space;
(xx) has not pledged its assets for the benefit
of any other entity;
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(xxi) has not engaged in a non-exempt prohibited
transaction described in Section 406 of
ERISA or Section 4975 of the Internal
Revenue Code;
(xxii) has not acquired obligations or securities
of its partners or Affiliates, other than
the other Owners; and
(xxiii) has corrected any misunderstanding known to
it regarding its separate identity.
"S&P" means Standard & Poor's Ratings Group, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies.
"STANDBY FEE" shall have the meaning set forth in Section
14.01.
"SUBSIDIARY" means, when used with reference to a specified
Person, (i) any Person that, directly or indirectly, through one or
more intermediaries, is controlled by the specified Person, (ii) any
Person of which the specified Person is, directly or indirectly, the
owner of more than 50% of any voting class of Ownership Interests or
(iii) any Person (A) which is a partnership and (B) of which the
specified Person is a general partner and owns more than 50% of the
partnership interests.
"SURVEYS" means the as-built surveys of the Mortgaged
Properties prepared in accordance with the requirements of Section 113
of the DUS Guide.
"TC PARTIES" means the REIT, TC-Oriole, the Operating
Partnership, the Property Company, the REIT Sub and the Owners.
"TERM OF THIS AGREEMENT" shall be determined as provided in
Section 22.10 to this Agreement.
"THREE MONTH LIBOR RATE" means, as of any specified date, a
fluctuating rate per annum equal to the three month London Interbank
Offered Rate of interest as published in THE WALL STREET JOURNAL for
the Business Day which is two Business Days prior to the specified
date, said Three Month Libor Rate to change from time to time as and
when the change is published. If THE WALL STREET JOURNAL ceases to
publish a three month London Interbank Offered Rate, the Lender shall
have the right to substitute the three month London Interbank Offered
Rate published by another financial newspaper.
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40
"TIE-IN ENDORSEMENT" means an endorsement to a Title Insurance
Policy which contains substantially the same coverages, and is subject
to substantially the same or fewer exceptions (or such other exceptions
as the Lender may approve), as the form attached as EXHIBIT N to this
Agreement.
"TITLE COMPANY" means First American Title Insurance Company,
c/o Midland Title Security, Inc., its authorized agent, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
"TITLE INSURANCE POLICIES" means the mortgagee's policies of
title insurance issued by the Title Company from time to time relating
to each of the Security Instruments, conforming to the requirements of
Section 111 of the DUS Guide, together with such endorsements,
coinsurance, reinsurance and direct access agreements with respect to
such policies as the Lender may, from time to time, consider necessary
or appropriate, whether or not required by the DUS Guide, including
Revolving Credit Endorsements, if available, and Tie-In Endorsements,
if available, and with a limit of liability under the policy (subject
to the limitations contained in Sections 6(a)(i) and 6(a)(iii) of the
Stipulations and Conditions of the policy) equal to the Maximum Credit
Commitment.
"TRAILING 12 MONTH PERIOD" means, for any specified date, the
12 month period ending with the last day of the most recent calendar
quarter for which the Quarterly Reports for the Mortgaged Properties
have been delivered by the Owners to the Lender pursuant to Section
13.01(b)(2).
"TRAILING THREE MONTH PERIOD" means, for any specified date,
the three month period ending with the last day of the most recent
calendar quarter for which the Quarterly Reports for the Mortgaged
Properties have been delivered by the Owners to the Lender pursuant to
Section 13.01(b)(2).
"TRANSFER" means a sale, assignment, pledge, transfer or other
disposition (whether voluntary or by operation of law) of, or the
granting or creating of a Lien in, a Mortgaged Property or any
Ownership Interests.
"TRIGGERING EVENT" shall have the meaning set forth in the
Cash Management Agreement.
"U.S. GOVERNMENT SECURITIES" means securities that are direct
obligations of the United States of America for the full and timely
payment of which its full faith and credit is pledged which are not
callable or redeemable at the option of the issuer thereof (including a
depository receipt issued by a bank(as defined in Section 3(a)(2) of
the United States Securities Act) as custodian with respect to any such
U.S.
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41
Government Securities or a specific payment of principal of or interest
on any such U.S. Government Securities held by such custodian for the
account of the holder of such depository receipt, provided that (except
as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the
securities or the specific payment of principal of or interest on the
securities evidenced by such depository receipt).
"UNDERWRITING RATE" means 10.5% per annum.
"UNIMPROVED LAND" means any parcel of unimproved land
described on EXHIBIT O to this Agreement. The Unimproved Land is
included as part of certain of the Initial Mortgaged Properties. Each
parcel of Unimproved Land constitutes unimproved land on which an Owner
could, subject to applicable zoning, land use and similar governmental
restrictions, if any, construct a separate Multifamily Residential
Property.
"UNUSED CAPACITY" shall have the meaning set forth in Section
14.01.
ARTICLE II
THE CREDIT FACILITY
SECTION 2.01. THE CREDIT FACILITY.
SECTION 2.01(a) ESTABLISHMENT OF THE CREDIT FACILITY. The
Lender hereby establishes the Credit Facility, which shall be comprised
of the Base Facility and the Revolving Facility.
SECTION 2.01(b) ESTABLISHMENT OF THE BASE FACILITY.
SECTION 2.01(b)(1) ESTABLISHMENT. The Lender hereby
establishes the Base Facility, upon all of the terms of this
Agreement.
SECTION 2.01(b)(2) BASE FACILITY CREDIT COMMITMENT.
Subject to the terms, conditions and limitations of this
Article, the Lender agrees to make an Advance to the Borrowers
in the amount of the Base Facility Credit Commitment. The
Initial Advance shall be made in the manner set forth in
clauses (1) through (7) of Recital H to this Agreement. Each
Advance made to the Borrowers pursuant to this subsection
(b)(2) shall be referred to as a "BASE FACILITY ADVANCE." The
Borrowers may not re-borrow any part of the Base Facility
Advance which it has previously borrowed and repaid. Each Base
Facility Advance shall be evidenced by a new Base
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Facility Note of one or more Borrowers (or an amendment to one
or more existing Base Facility Notes) as designated in a
Future Advance Request or, if in connection with a Conversion
Request, comprised of the aggregate of separate Advances to
each of the Borrowers, in proportion to the respective
then-outstanding principal amounts of their separate Base
Facility Notes, and any reference to a Base Facility Advance
shall mean the aggregate of such separate Advances.
SECTION 2.01(c) ESTABLISHMENT OF REVOLVING FACILITY.
SECTION 2.01(c)(1) ESTABLISHMENT. The Lender hereby
establishes the Revolving Facility, upon all of the terms of
this Agreement.
SECTION 2.01(c)(2) REVOLVING FACILITY CREDIT
COMMITMENT. Subject to the terms, conditions and limitations
of this Article, the Lender agrees, from time to time during
the Revolving Facility Availability Period, after delivery of
a Request for an Advance from the Property Company, to make
Advances to the Property Company. Each Advance made to the
Property Company pursuant to this subsection (c)(2) shall be
referred to as a "REVOLVING FACILITY ADVANCE." Subject to the
terms, conditions and limitations of this Article, the
Property Company may re-borrow any amounts under the Revolving
Facility which it has previously borrowed and repaid under the
Revolving Facility.
SECTION 2.02. LIMITATIONS ON COMMITMENT TO MAKE ADVANCES.
SECTION 2.02(a) LIMITATIONS ON BASE FACILITY CREDIT
COMMITMENT. The Lender's obligations to make Base Facility Advances
pursuant to Section 2.01(b)(2) are subject to the following
limitations:
SECTION 2.02(a)(1) BASE FACILITY CREDIT COMMITMENT.
The sum of the aggregate unpaid principal balance of Base
Facility Advances Outstanding at any time shall not exceed the
Base Facility Credit Commitment.
SECTION 2.02(a)(2) MATURITY DATE OF BASE FACILITY
ADVANCES. The maturity date of each Base Facility Advance
shall be the Credit Facility Termination Date.
SECTION 2.02(b) LIMITATIONS ON REVOLVING FACILITY CREDIT
COMMITMENT. The Lender's obligations to make Revolving Facility
Advances pursuant to Section 2.01(c)(2) are subject to the following
limitations:
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SECTION 2.02(b)(1) TERM. The Lender shall not be
obligated to make any Revolving Facility Advances at any time
after the expiration of the Revolving Facility Availability
Period. The Lender shall not be obligated to make any
Revolving Facility Advances which are not Rollover Advances at
any time after the 180th day before the Credit Facility
Termination Date.
SECTION 2.02(b)(2) REVOLVING FACILITY CREDIT
COMMITMENT. The aggregate unpaid principal balance of
Revolving Facility Advances Outstanding at any time shall not
exceed the Revolving Facility Credit Commitment.
SECTION 2.02(b)(3) MATURITY DATE OF REVOLVING
FACILITY ADVANCES. Regardless of the date on which a Revolving
Facility Advance is made, the maturity date of each Revolving
Facility Advance shall be a date selected by the Property
Company in its Request for the Revolving Facility Advance,
which date shall occur--
(i) on or after the date which completes three
full months after the Closing Date for the
Revolving Facility Advance;
(ii) on or before the date which completes nine
full months after the Closing Date for the
Revolving Facility Advance; and
(iii) on the last day of a calendar month.
For these purposes, the year shall be deemed to consist of 12
30-day months. For example, the date which completes three
full months after September 15 shall be December 15; the date
which completes three full months after November 30 shall be
February 28, etc.
SECTION 2.02(b)(4) FINAL MATURITY DATE. In no event
shall the maturity date of a Revolving Facility Advance be
later than the Credit Facility Termination Date.
SECTION 2.02(b)(5) PAYMENT OF DISCOUNT AND FEE
PORTION. The Lender shall not be obligated to make any
Revolving Facility Advance unless the Property Company pays to
the Lender, in advance, the Fee Portion for the Revolving
Facility Advance allocable to the first full calendar month of
the MBS backed by the Revolving Facility Advance and the
entire Discount for the Revolving Facility Advance. After the
issuance of the Revolving Facility Advance, the Fee Portion
for the Revolving Facility Advance shall be payable monthly,
in advance, on the first day of the second full calendar
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month of the MBS backed by the Revolving Facility Advance, and
on each month thereafter until the maturity date of the MBS,
in accordance with the terms of the Revolving Facility Note.
SECTION 2.02(c) LIMITATIONS ON ANY ADVANCE. The Lender's
obligations to make any Advance are subject to the following additional
limitations:
SECTION 2.02(c)(1) MAXIMUM CREDIT COMMITMENT. The sum
of the aggregate unpaid principal balance of Base Facility
Advances Outstanding and Revolving Facility Advances
Outstanding at any time shall not exceed the Maximum Credit
Commitment.
SECTION 2.02(c)(2) MINIMUM REQUEST. Each Future
Advance Request shall be in the minimum amount of $3,000,000.
SECTION 2.02(c)(3) SATISFACTION OF CONDITIONS
PRECEDENT. All conditions precedent to the making of the
Advance must be satisfied within seven days after the date on
which the Future Advance Request is made.
SECTION 2.03. DETERMINATION AND CONFIRMATION OF INTEREST RATE AND OTHER
TERMS OF EACH ADVANCE. The interest rate applicable to each Advance (the "COUPON
RATE") and the other terms of the Advance shall be determined in accordance with
the following procedure:
SECTION 2.03(a) QUOTE. From time to time, at the request of
the Borrowers, with respect to a Base Facility Advance, or the Property
Company, with respect to a Revolving Facility Advance, the Lender shall
quote to the Borrowers or the Property Company, as the case may be, an
estimate of the MBS Pass-Through Rate for a ▇▇▇▇▇▇ ▇▇▇ MBS backed by
the proposed Advance. The term "MBS PASS-THROUGH RATE" means, for a
specified ▇▇▇▇▇▇ Mae MBS, the interest rate (or, with respect to
non-interest bearing MBS purchased at a discount from par, the imputed
interest rate), as determined by the Lender, at which the specified
▇▇▇▇▇▇ ▇▇▇ MBS would be purchased by arm's length institutional
investors (i) with respect to each Base Facility Advance, at a price in
a range between 99-1/2 and 100-1/2, and (ii) with respect to each
Revolving Facility Advance, at the price bid by the institutional
investors. The Lender's quote shall be based on (i) a solicitation of
bids from institutional investors selected by the Lender and (ii) the
proposed terms and amount of the Advance selected by the Borrowers or
the Property Company, as the case may be. The quote shall not be
binding upon the Lender.
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SECTION 2.03(b) RATE SETTING. If the Borrowers or the Property
Company, as the case may be, satisfy all of the conditions to the
Lender's obligation to make the Advance requested in the Request for
the Advance delivered to the Lender, then the Borrowers or the Property
Company, as the case may be, may select the MBS Pass-Through Rate by
submitting to the Lender by facsimile transmission a completed and
executed document, in the form attached as EXHIBIT ▇-▇ ▇▇ ▇-▇ to this
Agreement (the "RATE SETTING FORM"), as the case may be, before 1:00
p.m. Washington, D.C. time on any Business Day (the "RATE SETTING
DATE"). The Rate Setting Form (i) contains various factual
certifications required by the Lender and (ii) specifies the amount,
term, MBS Issue Date, MBS Delivery Date, Coupon Rate (the "MAXIMUM
ANNUAL COUPON RATE"), Discount (if the Advance is a Revolving Facility
Advance), Price and Closing Date for the Advance.
SECTION 2.03(c) RATE CONFIRMATION. Within one Business Day
after receipt of the completed and executed Rate Setting Form, the
Lender shall solicit bids from institutional investors selected by the
Lender based on the information in the Rate Setting Form and, provided
the actual Coupon Rate is at or below the Maximum Annual Coupon Rate,
shall obtain a commitment for the purchase of a ▇▇▇▇▇▇ Mae MBS having
the characteristics described in the related Rate Setting Form, and
shall immediately deliver to the Borrowers or the Property Company, as
the case may be, by facsimile transmission a completed document, in the
form attached as EXHIBIT Q-1 OR Q-2 to this Agreement (the "RATE
CONFIRMATION FORM"), as the case may be, confirming the amount, term,
MBS Issue Date, MBS Delivery Date, Coupon Rate, the Discount (if the
Advance is a Revolving Facility Advance), Price and Closing Date for
the Advance.
SECTION 2.03(d) COUPON RATE.
SECTION 2.03(d)(1) GENERAL. Except as otherwise
provided in paragraphs (2), (3) and (4), the Coupon Rate for
the Advance shall be the per annum rate equal to the sum of
(i) the MBS Pass-Through Rate for the Advance selected on the
Rate Setting Date, and (ii) with respect to a Base Facility
Advance, the Fee Spread for the Base Facility Advance, or,
with respect to a Revolving Facility Advance, the Fee Spread
for the Revolving Facility Advance.
SECTION 2.03(d)(2) CONVERSION. In the event the Base
Facility Credit Commitment increases pursuant to a conversion
of the Revolving Facility Credit Commitment under Article V,
the Coupon Rate for any Base Facility Advance which is
allocable to the increase shall equal the sum of (i) the MBS
Pass-Through Rate for the Advance
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selected on the Rate Setting Date, and (ii) a number of basis
points determined by the Lender at the time of the increase in
the Base Facility Credit Commitment, but in no event more than
49 basis points. The number of basis points determined under
clause (ii) of the preceding sentence shall be the Fee Spread
for such Advance.
SECTION 2.03(d)(3) INCREASE IN MAXIMUM CREDIT
COMMITMENT. In the event the Base Facility Credit Commitment
or the Revolving Facility Credit Commitment increases pursuant
to an increase in the Maximum Credit Commitment under Article
VIII, the Coupon Rate for any Base Facility Advance or
Revolving Facility Advance which is allocable to the increase
shall equal the sum of (i) the MBS Pass-Through Rate for the
Advance selected on the Rate Setting Date, and (ii) a number
of basis points determined by the Lender at the time of the
increase in the Maximum Credit Commitment. The number of basis
points determined under clause (ii) of the preceding sentence
shall be the Fee Spread for such Advance.
SECTION 2.03(d)(4) PARTIAL MONTH INTEREST.
Notwithstanding anything to the contrary in this Agreement, if
an Advance is not made on the first day of a calendar month,
the Coupon Rate for the Advance for the partial month period
commencing on the Closing Date for the Advance and ending on
the last day of the calendar month in which the Closing Date
occurs shall be a rate determined by the Lender, based on the
Lender's cost of funds, and approved in advance, in writing,
by the Borrowers, pursuant to procedures mutually agreed upon
by the Borrowers and the Lender.
SECTION 2.03(e) ADVANCE CONFIRMATION INSTRUMENT. On or before
the Closing Date for a Revolving Facility Advance, the Property Company
shall execute and deliver to the Lender an instrument (the "ADVANCE
CONFIRMATION INSTRUMENT"), in the form attached as EXHIBIT R to this
Agreement, confirming the amount, term, MBS Issue Date, MBS Delivery
Date, Coupon Rate, Discount, Price and Closing Date for the Advance,
and the obligation of the Property Company to repay the Revolving
Facility Advance in accordance with the terms of the Revolving Facility
Note and this Agreement.
SECTION 2.04. SPECIAL AMORTIZATION REQUIREMENTS IF AGGREGATE DEBT
SERVICE COVERAGE RATIO FOR ADVANCES OUTSTANDING FOR THE TRAILING 12 MONTH PERIOD
IS LESS THAN 125%. If at any time during the Term of this Agreement the
Aggregate Debt Service Coverage Ratio for the Advances Outstanding is less than
125%, then, until such time as the Aggregate Debt Service Coverage Ratio for the
Advances Outstanding is equal to or greater than 125%, the following provisions
shall apply at the Lender's option:
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(a) the Property Company shall pay principal amortization on
the Revolving Facility Advances, payable on the first day of each
calendar month (commencing with the calendar month following the
calendar month in which the Property Company receives a notice from the
Lender stating that the Aggregate Debt Service Coverage Ratio for the
Advance Outstanding is less than 125%), in an amount equal to $600,000
per month; and
(b) the Maximum Credit Commitment and the Revolving Facility
Credit Commitment shall each be reduced, as of the first day of each
calendar month (commencing with the calendar month following the
calendar month in which the Property Company receives a notice from the
Lender stating that the Aggregate Debt Service Coverage Ratio for the
Advance Outstanding is less than 125%), in an amount equal to $600,000
per month.
If, on the date on which the Property Company pays the principal amortization,
no Revolving Facility Advances are then due and payable, the Lender shall hold
the payments in an interest-bearing account in a financial institution selected
by the Property Company and approved by the Lender, as additional Collateral for
the Credit Facility, until the next date on which Revolving Facility Advances
are due and payable, at which time the Lender shall apply the amounts, including
accrued interest, held by it to the amounts of the Revolving Facility Advances
due and payable. If, at any time during the period in which the Property Company
is paying principal amortization under this Section, there are no Revolving
Facility Advances Outstanding, the principal amortization shall be paid by the
Borrowers and applied against the Base Facility Advances Outstanding, and the
Base Facility Credit Commitment shall be reduced by such amount. If the
Revolving Facility Credit Commitment is reduced pursuant to this Section and,
thereafter, the Aggregate Debt Service Coverage Ratio for the Advances
Outstanding is equal to or greater than 125%, the Revolving Facility Credit
Commitment shall be increased by the amount by which it had previously been
reduced under this Section. If the Base Facility Credit Commitment is reduced
pursuant to this Section, it shall not thereafter be increased except in
accordance with the express terms of Article V, Section 6.05 or Article VIII.
SECTION 2.05. INCREASE IN MAXIMUM CREDIT COMMITMENT AND REVOLVING
FACILITY CREDIT COMMITMENT. Notwithstanding anything to the contrary in this
Agreement, although the Credit Facility that has been established will continue
to be a $375,000,000 Credit Facility, the Maximum Credit Commitment and the
Revolving Facility Credit Commitment shall each be $5,000,000 less than it would
otherwise be in the absence of this Section 2.05, until the date on which the
Borrowers have satisfied each of the following conditions (collectively, the
"INCREASE CONDITIONS"):
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(a) the Capital Improvements Plan is completed;
(b) the Aggregate Facility Debt Service Coverage Ratio for the
Trailing 12 Month Period is not less than 150%;
(c) the Aggregate Loan to Value Ratio for the Trailing 12 Month
Period is not greater than 68%;
(d) the average occupancy rate for the Trailing Three Month Period
for the Mortgaged Property described on Exhibit A- 1 as TC-Fox
Haven (the "FOX HAVEN PROPERTY") is at least 89%;
(e) the product obtained by multiplying--
(i) the aggregate Gross Revenues for the
Trailing Three Month Period for the Fox
Haven Property, by
(ii) four,
is at least $2,408,496;
(f) the average occupancy rate for the Trailing Three Month Period
for the Mortgaged Property described on Exhibit A- 1 as
TC-Woodmoor (the "WOODMOOR PROPERTY") is at least 89%; and
(g) the product obtained by multiplying--
(i) the aggregate Gross Revenues for the
Trailing Three Month Period for the Woodmoor
Property, by
(ii) four,
is at least $2,109,311.
Notwithstanding the foregoing, if any one or more of the conditions set
forth in subsections (d) to (g) are not satisfied, such condition or
conditions shall nevertheless be deemed satisfied if the Borrowers or
Owners grant the Lender additional Collateral in kind and amount
acceptable to the Lender in its sole and absolute discretion.
SECTION 2.06 CROSS-DEFAULT AND CROSS-REMEDY. While each Note represents
a separate and independent obligation of each Borrower, the Borrowers
nevertheless agree that if any Borrower fails to pay fully, when due, any amount
payable under any Note or any other Loan Document, then the Lender may elect to
treat such default with respect to such Note or other Loan Document as being a
default under the Note, Guaranty and Security Instruments of each
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other Borrower. It is a material part of the consideration for the Lender's
execution and delivery of this Agreement that there cannot occur an Event of
Default with respect to one TC Party or one Mortgaged Property or under one Note
or other Loan Document, without the occurrence of such Event of Default
constituting, and resulting in, an Event of Default with respect to all TC
Parties, all Mortgaged Properties, all Notes, this Agreement and the other Loan
Documents. Accordingly, the Borrowers expressly agree that irrespective of the
actual payments made by any of them under the Notes, this Agreement or the other
Loan Documents, if the aggregate amount actually paid is not sufficient to pay
fully and timely all such Obligations, then an Event of Default shall be deemed
to exist as to all of the Loan Documents of all TC Parties, notwithstanding that
the amount paid was sufficient to pay fully some but not all of the amounts then
due and owing with respect to the Notes or other Obligations. Nothing in this
Section shall be construed to prohibit one TC Party from paying or performing
Obligations on behalf of another TC Party or limit in any way the liability of
any TC Party under this Agreement or the other Loan Documents.
ARTICLE III
INITIAL ADVANCE
SECTION 3.01. REQUEST. The Borrowers hereby make a request (the
"INITIAL ADVANCE REQUEST") for the Lender to make the Initial Advance. If all
conditions contained in Section 3.02 are satisfied, on or before the Initial
Closing Date, the Lender shall make the Initial Advance on the Initial Closing
Date, or on another date selected by the Borrowers and approved by the Lender.
SECTION 3.02. CONDITIONS PRECEDENT TO INITIAL ADVANCE. The obligation
of the Lender to make the Initial Advance is subject to the following conditions
precedent:
SECTION 3.02(a) The delivery to the Title Company, and the
filing and/or recording in all applicable jurisdictions, of all
applicable Loan Documents required by the Lender, including duly
executed and delivered original copies of the Initial Security
Instruments and UCC-1 Financing Statements covering the portion of the
Collateral comprised of personal property, and other appropriate
instruments, in form and substance satisfactory to the Lender and in
form proper for recordation, as may be necessary in the opinion of the
Lender to perfect the Liens created by the applicable Initial Security
Instruments and any other Loan Documents creating a Lien in favor of
the Lender, and the payment of all taxes, fees and other charges
payable in connection with such execution, delivery, recording and
filing;
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SECTION 3.02(b) The receipt by the Lender, dated as of the
Initial Closing Date, in form and substance satisfactory to the Lender
in all respects, of a favorable substantive consolidation opinion of
Borrowers' counsel; and
SECTION 3.02(c) The satisfaction of all General Conditions set
forth in Article XI.
ARTICLE IV
FUTURE ADVANCES
SECTION 4.01. PROCEDURE FOR OBTAINING FUTURE ADVANCES.
SECTION 4.01(a) REQUEST. In order to obtain a Future Advance,
the Property Company (if the Future Advance is a Revolving Facility
Advance) or the Borrowers (if the Future Advance is a Base Facility
Advance) may from time to time deliver a written request for a Future
Advance (a "FUTURE ADVANCE REQUEST") to the Lender, in the form
attached as EXHIBIT S-1 OR S-2 to this Agreement, as the case may be.
Each Future Advance Request shall be accompanied by (and no Future
Advance Request shall be effective unless it is accompanied by) the
following:
(i) a designation of the amount of the Future Advance
requested;
(ii) if the Future Advance Request is for a Revolving
Facility Advance, a designation of the maturity date of the
Revolving Facility Advance; and
(iii) all documents, instruments and certificates
required to be delivered pursuant to the conditions contained
in Section 4.02.
SECTION 4.01(b) CLOSING. If all conditions contained in
Section 4.02 are satisfied, and the Lender has delivered the Rate
Confirmation Form to the Borrowers or the Property Company, as the case
may be, the Lender shall make the Future Advance requested in the
Future Advance Request, at a closing to be held at offices designated
by the Lender on a Closing Date selected by the Lender, and occurring
not more than 10 Business Days after the Lender's receipt of the Future
Advance Request, the Borrowers' or the Property Company's receipt of
the Rate Confirmation Form, and the satisfaction of all conditions
contained in Section 4.02.
Section 4.02. CONDITIONS PRECEDENT TO FUTURE ADVANCES. The obligation
of the Lender to make Future Advances is subject to the following conditions
precedent:
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SECTION 4.02(a) With respect to any Future Advances (other
than Rollover Advances), after giving effect to the requested Future
Advance, the Aggregate Debt Service Coverage Ratio for the Advances
Outstanding for the Trailing 12 Month Period is not less than 125%;
SECTION 4.02(b) Receipt by the Lender of a facsimile copy of
the Advance Confirmation Instrument (if a Revolving Facility Advance),
duly executed by the Property Company, with an undertaking on the part
of the Property Company to deliver the original of the Advance
Confirmation Instrument to the Lender on the Closing Date;
SECTION 4.02(c) For any Title Insurance Policy not containing
a Revolving Credit Endorsement, receipt by the Lender of an endorsement
to each Title Insurance Policy, amending the effective date of the
Title Insurance Policy to the Closing Date and showing no additional
exceptions to coverage other than the exceptions shown on the Initial
Closing Date and other exceptions approved by the Lender;
SECTION 4.02(d) With respect to the first Revolving Facility
Advance issued under the Revolving Facility, the delivery to the Lender
of a Cap complying with all of the terms and conditions of Article XX;
and
SECTION 4.02(e) The satisfaction of all General Conditions set
forth in Article XI.
ARTICLE V
CONVERSION OF REVOLVING FACILITY CREDIT COMMITMENT
TO BASE FACILITY CREDIT COMMITMENT
SECTION 5.01. RIGHT TO CONVERT. Subject to the terms, conditions and
limitations set forth in this Article, the Borrowers shall have the right, at
any time or from time to time before March 31, 2005, to convert all or a portion
of a Revolving Facility Credit Commitment to the Base Facility Credit
Commitment, in which event the Revolving Facility Credit Commitment shall be
reduced by, and the Base Facility Credit Commitment shall be increased by, the
amount of the conversion.
SECTION 5.02. PROCEDURE FOR OBTAINING CONVERSION.
SECTION 5.02(a) REQUEST. In order to obtain a conversion of
all or a portion of the Revolving Facility Credit Commitment to the
Base Facility Credit Commitment, the Borrowers may from time to time
deliver a written request for a conversion (a "CONVERSION REQUEST") to
the Lender, in the form attached as EXHIBIT T to this Agreement. Each
Conversion
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Request shall be accompanied by (and no Conversion Request shall be
effective unless it is accompanied by) the following:
(i) A designation of the amount of the conversion;
(ii) A designation of any Revolving Facility Advances
Outstanding which will be prepaid on the Closing Date for the
conversion; and
(iii) All documents, instruments and certificates
required to be delivered pursuant to the conditions contained
in Section 5.04.
SECTION 5.02(b) CLOSING. If none of the limitations contained
in Section 5.03 is violated, and all conditions contained in Section
5.04 are satisfied, the Lender shall permit the requested conversion,
at a closing to be held at offices designated by the Lender on a
Closing Date selected by the Lender, and occurring within 15 Business
Days after the Lender's receipt of the Conversion Request and the
satisfaction of all conditions contained in Section 5.04, by executing
and delivering, all at the sole cost and expense of the Borrowers, an
amendment to this Agreement, in the form attached as EXHIBIT U to this
Agreement, together with all amendments to the Notes and Security
Documents and other applicable Loan Documents, in form and substance
satisfactory to the Lender, reflecting the change in the Base Facility
Credit Commitment and the Revolving Facility Credit Commitment. The
documents and instruments referred to in the preceding sentence are
referred to in this Article as the "CONVERSION DOCUMENTS."
SECTION 5.03. LIMITATIONS ON RIGHT TO CONVERT. The right of the
Borrowers to convert all or a portion of the Revolving Facility Credit
Commitment to the Base Facility Credit Commitment is subject to the following
limitations:
SECTION 5.03(a) CLOSING DATE. The Closing Date shall occur on
or before March 31, 2005.
SECTION 5.03(b) MINIMUM REQUEST. Each Request for a conversion
shall be in the minimum amount of $5,000,000.
SECTION 5.03(c) MAXIMUM CONVERSION RIGHT. If, after the
conversion, the aggregate unpaid principal balance of all Revolving
Facility Advances Outstanding will exceed the Revolving Facility Credit
Commitment, the Borrowers shall be obligated to prepay, on or before
the Closing Date for the conversion, an amount of Revolving Facility
Advances Outstanding which is at least equal to the amount of the
excess.
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SECTION 5.03(d) PREPAYMENT IN FULL. Any Revolving Facility
Advance to be prepaid in accordance with this Article must be prepaid
in full, not in part.
SECTION 5.04. CONDITIONS PRECEDENT TO CONVERSION. The right of the
Borrowers to convert all or a portion of the Revolving Facility Credit
Commitment to the Base Facility Credit Commitment and the obligation of the
Lender to deliver the Conversion Documents on the Closing Date are subject to
the following conditions precedent:
SECTION 5.04(a) Either:
(1) on the date on which the closing of the
Conversion Request occurs:
(i) one or more of the Borrowers shall have
requested and shall have received a Base Facility
Advance which is allocable to the increase in the
Base Facility Credit Commitment requested in the
Conversion Request in an amount as to each such
Borrower requested by the Borrowers and approved by
the Lender in its discretion; and
(ii) the Coupon Rate for such Base Facility
Advance is equal to or less than the Underwriting
Rate;
or
(2) after giving effect to the requested conversion:
(i) the Aggregate Facility Debt Service
Coverage Ratio for the Trailing 12 Month Period is
not less than the Minimum Aggregate Facility Debt
Service Coverage Ratio for the Trailing 12 Month
Period;
(ii) the Aggregate Facility Debt Service
Coverage Ratio for the Trailing Three Month Period is
not less than the Minimum Aggregate Facility Debt
Service Coverage Ratio for the Trailing Three Month
Period; and
(iii) the Aggregate Loan to Value Ratio for
the Trailing 12 Month Period is not greater than the
Maximum Aggregate Loan to Value Ratio for the
Trailing 12 Month Period.
SECTION 5.04(b) Payment by the Property Company in full of any
Revolving Facility Advances Outstanding which the
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Property Company has designated for prepayment, including any
charges under the Revolving Facility Advance;
SECTION 5.04(c) Receipt by the Lender of an endorsement to
each Title Insurance Policy, amending the effective date of the Title
Insurance Policy to the Closing Date and showing no additional
exceptions to coverage other than the exceptions shown on the Initial
Closing Date and other exceptions approved by the Lender;
SECTION 5.04(d) Receipt by the Lender of one or more
counterparts of each Conversion Document, dated as of the Closing Date,
signed by each of the parties (other than the Lender) who is a party to
such Conversion Document; and
SECTION 5.04(e) The satisfaction of all General Conditions set
forth in Article XI.
SECTION 5.05. INTEREST RATE OF BASE FACILITY ADVANCES AFTER CONVERSION.
In the event the Base Facility Credit Commitment increases pursuant to a
conversion of the Revolving Facility Credit Commitment under this Article, the
Coupon Rate for any Base Facility Advance which is allocable to the increase
shall equal the rate set forth in Section 2.03(d)(2).
ARTICLE VI
ADDITIONS OF COLLATERAL
SECTION 6.01. RIGHT TO ADD COLLATERAL. Subject to the terms and
conditions of this Article, the Borrowers shall have the right, from time to
time during the Term of this Agreement, to add Multifamily Residential
Properties to the Collateral Pool in accordance with the provisions of this
Article.
SECTION 6.02. PROCEDURE FOR ADDING COLLATERAL.
SECTION 6.02(a) REQUEST. In order to add a Multifamily
Residential Property to the Collateral Pool, the Borrowers may, not
more than once each calendar quarter, deliver a written request (the
"COLLATERAL ADDITION REQUEST") to the Lender, in the form attached as
EXHIBIT V to this Agreement, to add an Additional Mortgaged Property to
the Collateral Pool. Each Collateral Addition Request shall be
accompanied by (and no Collateral Addition Request shall be effective
unless it is accompanied by) the following:
(1) The information relating to the proposed Additional
Mortgaged Property required by the form attached as EXHIBIT W to this
Agreement (the "COLLATERAL ADDITION DESCRIPTION
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PACKAGE"), as amended from time to time to include information
required under the DUS Guide;
(2) The payment of all Additional Collateral Due
Diligence Fees pursuant to Sections 14.04(b); and
(3) All documents, instruments, and certificates required to
be delivered pursuant to the conditions contained in Section 6.03.
SECTION 6.02(b) ADDITIONAL INFORMATION. The Borrowers
shall promptly deliver to the Lender any additional information
concerning the proposed Additional Mortgaged Property that the Lender
may from time to time reasonably request.
SECTION 6.02(c) UNDERWRITING. The Lender shall evaluate
the proposed Additional Mortgaged Property, and shall make
underwriting determinations as to the Aggregate Facility Debt Service
Coverage Ratios and the Aggregate Loan to Value Ratio for the
Trailing 12 Month Period applicable to the Collateral Pool, on the
basis of 12 Month Valuations made with respect to the proposed
Additional Mortgaged Property, and otherwise in accordance with
▇▇▇▇▇▇ Mae's DUS Underwriting Requirements. Within 25 Business Days
after receipt of (i) the Collateral Addition Request for the proposed
Additional Mortgaged Property and (ii) all reports, certificates and
documents to be prepared by third parties in connection with the
underwriting requirements, the Lender shall notify the Borrowers
whether or not it shall consent to the addition of the proposed
Additional Mortgaged Property to the Collateral Pool and, if it shall
so consent, shall set forth the Aggregate Facility Debt Service
Coverage Ratios and the Aggregate Loan to Value Ratio for the
Trailing 12 Month Period which it estimates shall result from the
addition of the proposed Additional Mortgaged Property to the
Collateral Pool. If the Lender declines to consent to the addition of
the proposed Additional Mortgaged Property to the Collateral Pool,
the Lender shall include, in its notice, a brief statement of the
reasons for doing so. Within five Business Days after receipt of the
Lender's notice that it shall consent to the addition of the proposed
Additional Mortgaged Property to the Collateral Pool, the Borrowers
shall notify the Lender whether or not they elect to cause the
proposed Additional Mortgaged Property to be added to the Collateral
Pool. If the Borrowers fail to respond within the period of five
Business Days, they shall be conclusively deemed to have elected not
to cause the proposed Additional Mortgaged Property to be added to
the Collateral Pool.
SECTION 6.02(d) CLOSING. If, pursuant to subsection (c), the
Lender consents to the addition of the proposed
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Additional Mortgaged Property to the Collateral Pool, the Borrowers
timely elect to cause the proposed Additional Mortgaged Property to
be added to the Collateral Pool and all conditions contained in
Section 6.03 are satisfied, the Lender shall permit the proposed
Additional Mortgaged Property to be added to the Collateral Pool, at
a closing to be held at offices designated by the Lender on a Closing
Date selected by the Lender, and occurring within five Business Days
after the Lender's receipt of the Borrowers' election and the
satisfaction of all conditions contained in Section 6.03.
SECTION 6.03. CONDITIONS PRECEDENT TO ADDITION OF AN ADDITIONAL
MORTGAGED PROPERTY TO THE COLLATERAL POOL. The right of the Borrowers to add an
Additional Mortgaged Property to the Collateral Pool on the Closing Date
applicable to the Additional Mortgaged Property is subject to the following
conditions precedent:
SECTION 6.03(a) On the Closing Date for the addition of the
Additional Mortgaged Property to the Collateral Pool:
(i) the Aggregate Facility Debt Service Coverage
Ratio for the Trailing 12 Month Period is not less than the
Minimum Aggregate Facility Debt Service Coverage Ratio for the
Trailing 12 Month Period;
(ii) the Aggregate Facility Debt Service Coverage
Ratio for the Trailing Three Month Period is not less than the
Minimum Aggregate Facility Debt Service Coverage Ratio for the
Trailing Three Month Period; and
(iii)the Aggregate Loan to Value Ratio for the
Trailing 12 Month Period is not greater than the Maximum
Aggregate Loan to Value Ratio for the Trailing 12 Month
Period.
SECTION 6.03(b) The payment by the Borrowers of the Collateral
Addition Fee;
SECTION 6.03(c) The delivery to the Title Company, with fully
executed instructions directing the Title Company to file and/or record
in all applicable jurisdictions as of the Closing Date, all applicable
Collateral Addition Loan Documents required by the Lender, including
duly executed and delivered original copies of any Security Instruments
and UCC-1 Financing Statements covering the portion of the Additional
Mortgaged Property comprised of personal property, and other
appropriate instruments, in form and substance satisfactory to the
Lender and in form proper for
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recordation, as may be necessary in the opinion of the Lender to
perfect the Lien created by the applicable additional Security
Instrument, and any other Collateral Addition Loan Document creating a
Lien in favor of the Lender, and the payment of all taxes, fees and
other charges payable in connection with such execution, delivery,
recording and filing;
SECTION 6.03(d) If the Title Insurance Policy for the
Additional Mortgaged Property contains a Tie-In Endorsement, an
endorsement to each other Title Insurance Policy containing a Tie-In
Endorsement, adding a reference to the Additional Mortgaged Property;
SECTION 6.03(e) In the event the Additional Mortgaged Property
is owned by a Person who is not an Owner, such Person shall execute a
Guaranty, by which it is added as an Owner and agrees to guarantee all
of the TC Parties' obligations under this Agreement and the other Loan
Documents and such Guaranty shall be secured by a Security Instrument
granted by such Person; and
SECTION 6.03(f) The satisfaction of all General Conditions set
forth in Article XI.
SECTION 6.04. CERTAIN UNIMPROVED LAND. The value of any parcel of
Unimproved Land, and any Net Operating Income allocable to any parcel of
Unimproved Land, shall not be taken into account in the Aggregate Facility Debt
Service Coverage Ratios or Aggregate Loan to Value Ratio for the Trailing 12
Month Period until such time as the Borrowers or Owners construct a Multifamily
Residential Property on the Unimproved Land and add the Unimproved Land as an
Additional Mortgaged Property pursuant to this Article VI. Nothing in the
foregoing shall be construed as the Lender's consent to any such construction.
SECTION 6.05. INCREASE IN MAXIMUM CREDIT COMMITMENT AND REVOLVING
FACILITY CREDIT COMMITMENT UPON ADDITION. If, prior to or concurrently with the
addition of an Additional Mortgaged Property to the Collateral Pool under this
Article VI, the Maximum Credit Commitment and the Revolving Facility Credit
Commitment have been decreased pursuant to Section 7.05, then--
SECTION 6.05(a) the Maximum Credit Commitment shall be increased by
the lesser of (i) the aggregate net amount (that is,
after giving effect to all prior decreases and
increases) by which the Maximum Credit Commitment
theretofore has been reduced pursuant to Section 7.05
or (ii) the product obtained by multiplying the
Maximum Aggregate Loan to Value Ratio for
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the Trailing 12 Month Period by the Initial 12 Month
Valuation of the Additional Mortgaged Property (and,
in such event, the Base Facility Notes bearing the
increase shall be amended, in a manner acceptable to
the Lender, to reflect the increase and the fact that
the interest rate applicable to such Base Facility
Advance shall accrue interest at a different Coupon
Rate from the interest rate for the Base Facility
Notes delivered on the Initial Closing Date);
SECTION 6.05(b) the Revolving Facility Credit Commitment shall be
increased by the lesser of (i) the aggregate net
amount (that is, after giving effect to all prior
decreases and increases) by which the Revolving
Facility Credit Commitment theretofore has been
reduced pursuant to Section 7.05 or (ii) the product
obtained by multiplying the Maximum Aggregate Loan to
Value Ratio for the Trailing 12 Month Period by the
Initial 12 Month Valuation of the Additional
Mortgaged Property; and
SECTION 6.05(c) the Base Facility Credit Commitment shall be
increased by the excess, if any, of the amount by
which the Maximum Credit Commitment has been
increased under paragraph (a) above, over (ii) the
amount by which the Revolving Facility Credit
Commitment has been increased pursuant to paragraph
(b) above.
ARTICLE VII
RELEASES OF COLLATERAL
SECTION 7.01. RIGHT TO OBTAIN RELEASES OF COLLATERAL. Subject to the
terms and conditions of this Article, the Borrowers shall have the right to
obtain a release of a Mortgaged Property from the Collateral Pool (and a
concurrent release of any Owner from its obligations under the Loan Documents
if, after the release of the Mortgaged Property, the Owner will not own any
Mortgaged Property), in accordance with the provisions of this Article.
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SECTION 7.02. PROCEDURE FOR OBTAINING RELEASES OF COLLATERAL.
SECTION 7.02(a) REQUEST. In order to obtain a release of
Collateral from the Collateral Pool, the Borrowers may, not more than
once each calendar quarter, deliver a written request for the release
of the Collateral from the Collateral Pool (the "COLLATERAL RELEASE
REQUEST") to the Lender, in the form attached as EXHIBIT X to this
Agreement. The Collateral Release Request shall not result in a
termination of all or any part of the Credit Facility. The Borrowers
may only terminate all or any part of the Credit Facility by delivering
a Revolving Facility Termination Request or Credit Facility Termination
Request pursuant to Articles IX or X. The Collateral Release Request
shall be accompanied by (and the Collateral Release Request shall not
be effective unless it is accompanied by) the following:
(i) The name, address and location of the Mortgaged
Property to be released from the Collateral Pool (the
"COLLATERAL RELEASE PROPERTY"); and
(ii) All documents, instruments and certificates
required to be delivered pursuant to the conditions contained
in Section 7.03.
SECTION 7.02(b) CLOSING. If all conditions contained in
Section 7.03 are satisfied, the Lender shall cause the Collateral
Release Property to be released from the Collateral Pool, on a Closing
Date selected by the Lender, and occurring within 15 Business Days
after the Lender's receipt of the Collateral Release Request and the
satisfaction of all conditions contained in Section 7.03, by executing
and delivering, and causing all applicable parties to execute and
deliver, all at the sole cost and expense of the Borrowers, (i)
instruments, in the form customarily used by the Lender for releases in
the jurisdiction governing the perfection of the security interest
being released, releasing the applicable Security Instrument as a Lien
on the Collateral Release Property, and UCC-3 Termination Statements
terminating the UCC-1 Financing Statements perfecting a Lien on the
portion of the Collateral Release Property comprised of personal
property and (ii) instruments releasing the Owner who owns the
Collateral Release Property from its obligations under any Base
Facility Note it has executed and the other Loan Documents (if, after
giving effect to the release, the Owner will not own any Mortgaged
Properties). If the Owner is to be released pursuant to the preceding
sentence, then the Property Company shall assume the indebtedness
evidenced by the Base Facility Note made by such Owner by executing an
amendment to the Base Facility Note previously made by the Property
Company, in a form approved
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by the Lender; provided, however, if the Borrowers add an Additional
Mortgaged Property to the Collateral Pool in a transaction which is
substantially contemporaneous with the release, then the Lender shall
have the right to require the new Owner to assume the indebtedness
evidenced by the Base Facility Note made by the Owner being released,
by executing a novation, new Base Facility Note or other document in
form and substance satisfactory to the Lender, and by granting for the
benefit of the Lender a Security Instrument to secure its obligations
with respect to such indebtedness. The documents and instruments
referred to in the preceding two sentences are collectively referred to
in this Article as the "COLLATERAL RELEASE DOCUMENTS."
SECTION 7.02(c) DEFINITIONS. For purposes of this Agreement,
the term "ALLOCABLE FACILITY AMOUNT" means, with respect
to each Mortgaged Property, an amount equal to the product obtained
by multiplying--
(i) the Maximum Aggregate Loan to Value
Ratio, by
(ii) the Initial 12 Month Valuation of the
Mortgaged Property;
the term "MAXIMUM CREDIT COMMITMENT REDUCTION AMOUNT" means an
amount equal to--
(i) 100% of the Allocable Facility Amount for the
Mortgaged Property if, immediately after the release:
(1) the Aggregate Facility Debt Service
Coverage Ratio for the Trailing 12 Month Period is
not less than 155%;
(2) the Aggregate Facility Debt Service
Coverage Ratio for the Trailing Three Month Period is
not less than 140%; and
(3) the Aggregate Loan to Value Ratio for
the Trailing 12 Month Period is not greater than 60%;
OR
(ii) 125% of the Allocable Facility Amount for the
Mortgaged Property, in all other cases; and
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the term "RELEASE PRICE" means the minimum amount, if any, of
Advances Outstanding which are required to be repaid or defeased so
that (after giving effect to the transactions in this Section) the
Revolving Facility Advances Outstanding do not exceed the Revolving
Facility Credit Commitment and the Base Facility Advances Outstanding
do not exceed the Base Facility Credit Commitment.
SECTION 7.02(d) PAYMENT AND APPLICATION OF RELEASE PRICE.
SECTION 7.02(d)(1) The Borrowers shall pay the
Release Price to the Lender, and the Release Price shall be
applied as follows:
(i) first, to the repayment of Revolving
Facility Advances Outstanding, until the
amount of Revolving Facility Advances
Outstanding equals zero; and
(ii) next, at the Borrowers' option, to be
exercised by giving the Lender a notice at
the time of the Borrowers' delivery of the
Collateral Release Request, either--
(A) to the partial prepayment of the
Base Facility Advances Outstanding,
or
(B) to the partial defeasance of the
Base Facility Advances Outstanding,
in accordance with the following
procedure:
(I) the Closing Date for the
defeasance shall occur not
less than 60 days after
the date on which the
Borrowers deliver the
Collateral Release
Request;
(II) the Borrowers shall have
paid all accrued and
unpaid interest on all
Base Facility Advances
being defeased;
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(III) the Borrowers shall have
delivered United States
Government Securities with
terms that will be
sufficient to make
scheduled payments on the
Base Facility Advances
being defeased; and
(IV) the Borrowers shall have
complied with the
additional conditions
described in EXHIBIT Z to
this Agreement.
SECTION 7.02(d)(2) In addition to the Release Price,
the Borrowers shall pay to the Lender all associated
prepayment premiums and other charges due under the Notes and
any Advance Confirmation Instruments evidencing the Advances
being repaid.
SECTION 7.02(d)(3) If, on the date on which the
Borrowers pay the Release Price, no Revolving Facility
Advances are then due and payable, the Lender shall hold the
payments in an interest-bearing account in a financial
institution selected by the Borrowers and approved by the
Lender, as additional Collateral for the Credit Facility,
until the next date on which Revolving Facility Advances are
due and payable, at which time the Lender shall apply the
amounts, including accrued interest, held by it to the amounts
of the Revolving Facility Advances due and payable. For
purposes of applying clause (d)(1)(i) above, the Revolving
Facility Advances Outstanding will be deemed to have been
repaid at the time the Release Price is paid.
SECTION 7.02(d)(4) Nothing in this Section shall be
construed as a waiver of the conditions to a release set forth
in Sections 7.03(a) and (b), and if, upon payment of the
Release Price, either of the conditions set forth in Sections
7.03(a) or (b) will not satisfied, the Lender shall not be
obligated to make the release unless, concurrently with or
prior to the release, the Borrowers repay such additional
Advances Outstanding as may be necessary to satisfy the
conditions set forth in Sections 7.03(a) and (b) and satisfy
each of the other conditions set forth in Section 7.03.
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SECTION 7.03. CONDITIONS PRECEDENT TO RELEASE OF COLLATERAL RELEASE
PROPERTY FROM THE COLLATERAL POOL. The right of the Borrowers to obtain a
release of a Collateral Release Property from the Collateral Pool and the
obligation of the Lender to release a Collateral Release Property from the
Collateral Pool by executing and delivering the Collateral Release Documents on
the Closing Date, are subject to the following conditions precedent:
SECTION 7.03(a) Immediately before giving effect to the
requested release:
(1) the Aggregate Facility Debt Service Coverage
Ratio for the Trailing 12 Month Period is not less than the
Minimum Aggregate Facility Debt Service Coverage Ratio for the
Trailing 12 Month Period;
(2) the Aggregate Facility Debt Service Coverage
Ratio for the Trailing Three Month Period is not less than the
Minimum Aggregate Facility Debt Service Coverage Ratio for the
Trailing Three Month Period; and
(3) the Aggregate Loan to Value Ratio for the
Trailing 12 Month Period is not greater than the Maximum
Aggregate Loan to Value Ratio for the Trailing 12 Month
Period.
SECTION 7.03(b) Immediately after giving effect to the
requested release:
(1) the Aggregate Facility Debt Service Coverage
Ratio for the Trailing 12 Month Period is not less than the
Aggregate Facility Debt Service Coverage Ratio for the
Trailing 12 Month Period in effect immediately before giving
effect to the requested release;
(2) the Aggregate Facility Debt Service Coverage
Ratio for the Trailing Three Month Period is not less than the
Aggregate Facility Debt Service Coverage Ratio for the
Trailing Three Month Period in effect immediately before
giving effect to the requested release; and
(3) the Aggregate Loan to Value Ratio for the
Trailing 12 Month Period is not greater than the Aggregate
Loan to Value Ratio for the Trailing 12 Month Period in effect
immediately before giving effect to the requested release.
SECTION 7.03(c) Payment of the Release Price for the
Collateral Release Property;
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SECTION 7.03(d) Payment of the Release Fee for the Collateral
Release Property;
SECTION 7.03(e) Receipt by the Lender on the Closing Date of
one or more counterparts of each Collateral Release Document, dated as
of the Closing Date, signed by each of the parties (other than the
Lender) who is a party to such Collateral Release Document;
SECTION 7.03(f) If the Lender determines the Collateral
Release Property to be one phase of a project, and one or more other
phases of the project are Mortgaged Properties which will remain in the
Collateral Pool (the "REMAINING MORTGAGED PROPERTIES"), the Lender's
determination that the Remaining Mortgaged Properties can be operated
separately from the Collateral Release Property and any other phases of
the project which are not Mortgaged Properties. In making this
determination, the Lender shall evaluate whether the Remaining
Mortgaged Properties comply with the terms of Section 203 and 208 of
the DUS Guide, which, as of the date of this Agreement, require, among
other things, that a phase which constitutes collateral for a loan made
in accordance with the terms of the DUS Guide (i) have adequate ingress
and egress to existing public roadways, either by location of the phase
on a dedicated, all-weather road or by access to such a road by means
of a satisfactory easement, (ii) have access which is sufficiently
attractive and direct from major thoroughfares to be conducive to
continued good marketing, (iii) have a location which is not (A)
inferior to other phases, (B) such that inadequate maintenance of other
phases would have a significant negative impact on the phase, and (C)
such that the phase is visible only after passing through the other
phases of the project and (iv) comply with such other issues as are
dictated by prudent practice;
SECTION 7.03(g) Endorsements to the Tie-In Endorsements of the
Title Insurance Policies, if deemed necessary by the Lender, in its
reasonable judgment, to reflect the release;
SECTION 7.03(h) Receipt by the Lender of an endorsement to
each Title Insurance Policy, amending the effective date of the Title
Insurance Policy to the Closing Date and showing no additional
exceptions to coverage other than the exceptions shown on the Initial
Closing Date and other exceptions approved by the Lender;
SECTION 7.03(i) Receipt by the Lender on the Closing Date of a
writing, dated as of the Closing Date, signed by the TC Parties, in the
form attached as EXHIBIT AA to this Agreement, pursuant to which the TC
Parties confirm that their obligations under the Loan Documents are not
adversely
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affected by the release of the Collateral Release Property from the
Collateral;
SECTION 7.03(j) Immediately after giving effect to the
release, there shall be at least 25 Mortgaged Properties in the
Collateral Pool and such Mortgaged Properties shall be located in at
least two states (other than Delaware); and
SECTION 7.03(k) The satisfaction of all General Conditions set
forth in Article XI.
SECTION 7.04. CERTAIN UNIMPROVED LAND. Notwithstanding anything to the
contrary in this Agreement or the other Loan Documents, any release of any
parcel of Unimproved Land prior to the date on which any such parcel of
Unimproved Land becomes an Additional Mortgaged Property in accordance with
Article VI may be made for a Release Price of $0 and a Release Fee of $0 and the
sole condition to such release shall be that there shall exist no Event of
Default on the Closing Date for the release.
SECTION 7.05. REDUCTION OF MAXIMUM CREDIT COMMITMENT AND REVOLVING
FACILITY CREDIT COMMITMENT UPON RELEASE. Upon the release of a Collateral
Release Property from the Collateral Pool pursuant to this Article VII:
(a) the Maximum Credit Commitment shall be reduced by the Maximum
Credit Commitment Reduction Amount for the Collateral Release
Property;
(b) the Revolving Facility Credit Commitment shall be reduced by
the lesser of (i) the Maximum Credit Commitment Reduction
Amount or (ii) the Revolving Facility Credit Commitment in
effect immediately preceding the reduction in the Maximum
Credit Commitment pursuant to paragraph (a) above; and
(c) the Base Facility Credit Commitment shall be reduced by the
excess, if any, of--
(1) the amount by which the Maximum Credit
Commitment has been reduced under paragraph
(a) above, over
(2) the amount by which the Revolving Facility
Credit Commitment has been reduced under
paragraph (b) above.
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ARTICLE VIII
EXPANSION OF CREDIT FACILITY
SECTION 8.01. RIGHT TO INCREASE MAXIMUM CREDIT COMMITMENT. Subject to
the terms, conditions and limitations of this Article, the Borrowers shall have
the right, at any time or from time to time before the Credit Facility
Termination Date, to increase the Maximum Credit Commitment. In the event the
Maximum Credit Commitment increases pursuant to this Article, the Base Facility
Credit Commitment or the Revolving Facility Credit Commitment, or both, shall
increase by amounts selected by the Borrowers pursuant to Section 8.02, provided
that the sum of increases, if any, in each shall equal the amount of the
increase in the Maximum Credit Commitment.
SECTION 8.02. PROCEDURE FOR OBTAINING INCREASES IN MAXIMUM CREDIT
COMMITMENT.
SECTION 8.02(a) REQUEST. In order to obtain an increase in the
Maximum Credit Commitment, the Borrowers may from time to time deliver
a written request for an increase (a "CREDIT FACILITY EXPANSION
REQUEST") to the Lender, in the form attached as EXHIBIT BB to this
Agreement. Each Credit Facility Expansion Request shall be accompanied
by (and no Credit Facility Expansion Request shall be effective unless
it is accompanied by) the following:
(1) A designation of the amount of the proposed
increase;
(2) A designation of, as applicable, the increase in
the Base Facility Credit Commitment and the Revolving Facility
Credit Commitment; and
(3) All documents, instruments and certificates
required to be delivered pursuant to the conditions contained
in Section 8.04.
SECTION 8.02(b) CLOSING. If none of the limitations contained
in Section 8.03 is violated, and all conditions contained in Section
8.04 are satisfied, the Lender shall permit the requested increase in
the Maximum Credit Commitment, at a closing to be held at offices
designated by the Lender on a Closing Date selected by the Lender, and
occurring within 15 Business Days after the Lender's receipt of the
Credit Facility Expansion Request and the satisfaction of all
conditions contained in Section 8.04.
SECTION 8.03. LIMITATIONS ON RIGHT TO INCREASE MAXIMUM CREDIT
COMMITMENT. The Borrowers' right to increase the Maximum Credit Commitment is
subject to the following limitations:
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SECTION 8.03(a) MAXIMUM CREDIT COMMITMENT. After giving effect
to the proposed increase, the Maximum Credit Commitment shall not
exceed $450,000,000.
SECTION 8.03(b) MINIMUM REQUEST. Each Request for an increase
in the Maximum Credit Commitment shall be in the minimum amount of
$5,000,000.
SECTION 8.04. CONDITIONS PRECEDENT TO INCREASE IN MAXIMUM CREDIT
COMMITMENT. The right of the Borrowers to increase the Maximum Credit Commitment
is subject to the following conditions precedent:
SECTION 8.04(a) Concurrently with the increase in the Maximum
Credit Commitment:
(1) the Borrowers have added one or more Additional
Mortgaged Properties to the Collateral Pool, subject to
compliance with all of the terms and conditions of Article VI;
(2) the Debt Service Coverage Ratio for the Trailing
12 Month Period for the aggregate of such Additional Mortgaged
Properties is not less than the Minimum Aggregate Facility
Debt Service Coverage Ratio for the Trailing 12 Month Period
and the Debt Service Coverage Ratio for the Trailing Three
Month Period for the aggregate of such Additional Mortgaged
Properties is not less than the Minimum Aggregate Facility
Debt Service Coverage Ratio for the Trailing Three Month
Period; and
(3) the increase in the Maximum Credit Commitment is
not greater than the product obtained by multiplying (A) the
Maximum Aggregate Loan to Value Ratio for the Trailing 12
Month Period by (b) the aggregate of the Initial 12 Month
Valuations of such Additional Mortgaged Properties.
For these purposes, the term "DEBT SERVICE COVERAGE RATIO"
means, with respect to such Additional Mortgaged Properties,
for any specified date, the Aggregate Facility Debt Service
Coverage Ratio, computed with the
following modifications:
(i) Net Operating Income shall be computed
for such Additional Mortgaged Properties only; and
(ii) the Facility Debt Service shall be
deemed, for these purposes only, to be equal to the
product obtained by multiplying the Facility Debt
Service otherwise computed in accordance with
paragraph 8.04(b) below by the percentage which the
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Net Operating Income for such Additional Mortgaged
Properties computed under clause (i) bears to the Net
Operating Income of all of the Mortgaged Properties
in the Collateral Pool and all of such Additional
Mortgaged Properties.
SECTION 8.04(b) After giving effect to (i) the
requested increase, (ii) any increases in the value of the
Collateral in the Collateral Pool, whether resulting from
additions from time to time to the Collateral Pool or
increases from time to time in the 12 Month Valuations of the
Collateral in the Collateral Pool and (iii) any releases from
time to time of the Collateral in the Collateral Pool--
(1) the Aggregate Facility Debt Service Coverage
Ratio for the Trailing 12 Month Period is not less than the
Minimum Aggregate Facility Debt Service Coverage Ratio for the
Trailing 12 Month Period;
(2) the Aggregate Facility Debt Service Coverage
Ratio for the Trailing Three Month Period is not less than the
Minimum Aggregate Facility Debt Service Coverage Ratio for the
Trailing Three Month Period; and
(3) the Aggregate Loan to Value Ratio for the
Trailing 12 Month Period is not greater than the Maximum
Aggregate Loan to Value Ratio for the Trailing 12 Month
Period;
except that, for purposes of determining the foregoing
Aggregate Loan to Value Ratio for the Trailing 12 Month Period
and the Aggregate Facility Debt Service Coverage Ratios, the
Borrowers shall be deemed to have received, on the Closing
Date for the proposed increase, a sufficient amount of Base
Facility Advances Outstanding so that the aggregate of the
Base Facility Advances Outstanding equals the Base Facility
Credit Commitment (as increased by any proposed increase in
the Base Facility Credit Commitment), and Revolving Facility
Advances so that the aggregate of the Revolving Facility
Advances equals the Revolving Facility Credit Commitment (as
increased by any proposed increase in the Revolving Facility
Credit Commitment), with the Advances deemed received bearing
interest at the Coupon Rates that they would have borne had
they actually been issued, as determined by the Lender;
SECTION 8.04(c) An endorsement to each Title Insurance Policy,
amending the effective date of the Title Insurance Policy to the
Closing Date, and showing no additional exceptions to coverage other
than the exceptions
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shown on the Initial Closing Date and other exceptions approved by the
Lender;
SECTION 8.04(d) The receipt by the Lender of fully executed
original copies of all Credit Facility Expansion Loan Documents, each
of which shall be in full force and effect, and in form and substance
satisfactory to the Lender in all respects;
SECTION 8.04(e) If there is an increase in Revolving Facility
Credit Commitment, an increase in the notional principal amount of the
Cap, if any, as may be necessary to have such amount equal or exceed
the Revolving Facility Credit Commitment, as increased; and
SECTION 8.04(f) The satisfaction of all General Conditions set
forth in Article XI.
SECTION 8.05. INTEREST RATE OF ADVANCES AFTER INCREASE IN MAXIMUM
CREDIT COMMITMENT. In the event the Base Facility Credit Commitment or the
Revolving Facility Credit Commitment increases pursuant to an increase in the
Maximum Credit Commitment under this Article, the Coupon Rate for any Base
Facility Advance or Revolving Facility Advance which is allocable to the
increase shall equal the rate set forth in Section 2.03(d)(3).
ARTICLE IX
COMPLETE OR PARTIAL TERMINATION OF REVOLVING FACILITY
SECTION 9.01. RIGHT TO COMPLETE OR PARTIAL TERMINATION OF REVOLVING
FACILITY. Subject to the terms and conditions of this Article, the Property
Company shall have the right to permanently reduce the Revolving Credit Facility
Commitment in accordance with the provisions of this Article.
SECTION 9.02. PROCEDURE FOR COMPLETE OR PARTIAL TERMINATION OF
REVOLVING FACILITY.
SECTION 9.02(a) REQUEST. In order to permanently reduce the
Revolving Facility Credit Commitment, the Property Company may deliver
a written request for the reduction (the "REVOLVING FACILITY
TERMINATION REQUEST") to the Lender, in the form attached as EXHIBIT CC
to this Agreement. A permanent reduction of the Revolving Facility
Credit Commitment to $0 shall be referred to as a "COMPLETE REVOLVING
FACILITY TERMINATION." The Revolving Facility Termination Request shall
be accompanied by (and the Revolving Facility Termination Request shall
not be effective unless it is accompanied by) the following:
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(1) A designation of the proposed amount of the
reduction in the Revolving Facility Credit Commitment;
(2) Unless there is a Complete Revolving Facility
Termination, a designation by the Property Company of any
Revolving Facility Advances which will be prepaid; and
(3) All documents, instruments and certificates
required to be delivered pursuant to the conditions contained
in Section 9.03.
Any release of Collateral, whether or not made in connection with a
Revolving Facility Termination Request, must comply with all conditions
to a release which are set forth in Article VII.
SECTION 9.02(b) CLOSING. If all conditions contained in
Section 9.03 are satisfied, the Lender shall permit the Revolving
Facility Credit Commitment to be reduced to the amount designated by
the Property Company, at a closing to be held at offices designated by
the Lender on a Closing Date selected by the Lender, within 15 Business
Days after the Lender's receipt of the Revolving Facility Termination
Request and the satisfaction of all conditions contained in Section
9.03, by executing and delivering a counterpart of an amendment to this
Agreement, in the form attached as EXHIBIT DD to this Agreement,
evidencing the reduction in the Revolving Facility Credit Commitment.
The document referred to in the preceding sentence is referred to in
this Article as the "REVOLVING FACILITY TERMINATION DOCUMENT."
SECTION 9.03. CONDITIONS PRECEDENT TO COMPLETE OR PARTIAL TERMINATION
OF REVOLVING FACILITY. The right of the Property Company to reduce the Revolving
Facility Credit Commitment and the obligation of the Lender to execute the
Revolving Facility Termination Document, are subject to the following conditions
precedent:
SECTION 9.03(a) Payment by the Property Company in full of all of the
Revolving Facility Advances Outstanding required to be paid in order that the
aggregate unpaid principal balance of all Revolving Facility Advances
Outstanding is not greater than the Revolving Facility Credit Commitment, as
reduced pursuant to this Article, including any associated prepayment premiums
or other charges under the Notes (but if the Property Company is not required to
prepay all of the Revolving Facility Advances, the Property Company shall have
the right to select which of the Revolving Facility Advances shall be repaid);
SECTION 9.03(b) Payment by the Property Company of the Revolving
Facility Termination Fee;
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SECTION 9.03(c) Receipt by the Lender on the Closing Date of one or
more counterparts of the Revolving Facility Termination Document, dated as of
the Closing Date, signed by each of the parties (other than the Lender) who is a
party to such Revolving Facility Termination Document; and
SECTION 9.03(d) The satisfaction of the General Conditions set forth in
Sections 11.01(a), 11.01(b) and 11.01(g).
ARTICLE X
TERMINATION OF CREDIT FACILITY
SECTION 10.01. RIGHT TO TERMINATE CREDIT FACILITY. Subject to the terms
and conditions of this Article, the Borrowers shall have the right to terminate
this Agreement and the Credit Facility and receive a release of all of the
Collateral from the Collateral Pool in accordance with the provisions of this
Article.
SECTION 10.02. PROCEDURE FOR TERMINATING CREDIT FACILITY.
SECTION 10.02(a) REQUEST. In order to terminate this Agreement and the
Credit Facility, the Borrowers may deliver a written request for the termination
(the "CREDIT FACILITY TERMINATION REQUEST") to the Lender, in the form attached
as EXHIBIT EE to this Agreement. The Credit Facility Termination Request shall
be accompanied by (and the Credit Facility Termination Request shall not be
effective unless it is accompanied by) all documents, instruments and
certificates required to be delivered pursuant to the conditions contained in
Section 10.03.
SECTION 10.02(b) CLOSING. If all conditions contained in Section 10.03
are satisfied, this Agreement shall terminate, and the Lender shall cause all of
the Collateral to be released from the Collateral Pool, at a closing to be held
at offices designated by the Lender on a Closing Date selected by the Lender,
within 15 Business Days after the Lender's receipt of the Credit Facility
Termination Request and the satisfaction of all conditions contained in Section
10.03, by executing and delivering, and causing all applicable parties to
execute and deliver, all at the sole cost and expense of the Borrowers,
instruments, in the form customarily used by the Lender for releases in the
jurisdictions in which the Mortgaged Properties are located, releasing all of
the Security Instruments as a Lien on the Mortgaged Properties, and UCC-3
Termination Statements terminating all of the UCC-1 Financing Statements
perfecting a Lien on the personal property located on the Mortgaged Properties,
in the form customarily used in the jurisdiction governing the perfection of the
security interest being released. The instruments referred to in the preceding
sentence are referred to in this Article as the "FACILITY TERMINATION
DOCUMENTS."
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SECTION 10.03. CONDITIONS PRECEDENT TO TERMINATION OF CREDIT FACILITY.
The right of the Borrowers to terminate this Agreement and the Credit Facility
and to receive a release of all of the Collateral from the Collateral Pool and
the Lender's obligation to execute and deliver the Facility Termination
Documents on the Closing Date are subject only to the following conditions
precedent:
Payment by the Borrowers in full of all of the Notes Outstanding on
the Closing Date, including any associated prepayment premiums
(including the component thereof consisting of the Credit Facility
Termination Fee) or other charges under the Notes.
ARTICLE XI
GENERAL CONDITIONS PRECEDENT TO ALL REQUESTS
SECTION 11.01 GENERAL CONDITIONS. Except to the extent expressly
modified in Sections 9.03(d) and 10.03, the obligation of the Lender to close
the transaction requested in a Request shall be subject to the following
conditions precedent (the "GENERAL CONDITIONS") in addition to any other
conditions precedent set forth in this Agreement:
SECTION 11.01(a) PAYMENT OF EXPENSES. The payment by the
Borrowers of the Lender's fees and expenses payable in accordance with
this Agreement for which the Lender has presented an invoice on or
before the Closing Date for the Request;
SECTION 11.01(b) NO DEFAULT. There shall exist no Event of
Default or Potential Event of Default on the Closing Date for the
Request and, after giving effect to the transaction requested in the
Request, no Event of Default or Potential Event of Default shall have
occurred;
SECTION 11.01(c) NO INSOLVENCY. Receipt by the Lender on the
Closing Date for the Request of evidence satisfactory to the Lender
that no TC Party is insolvent (within the meaning of any applicable
federal or state laws relating to bankruptcy or fraudulent transfers)
or will be rendered insolvent by the transactions contemplated by the
Loan Documents, including the making of a Future Advance, or, after
giving effect to such transactions, will be left with an unreasonably
small capital with which to engage in its business or undertakings, or
will have intended to incur, or believe that it has incurred, debts
beyond its ability to pay such debts as they mature or will have
intended to hinder, delay or defraud any existing or future creditor;
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SECTION 11.01(d) NO UNTRUE STATEMENTS. The Loan Documents
shall not contain any untrue or misleading statement of a material
fact and shall not fail to state a material fact necessary in order to
make the information contained therein not misleading;
SECTION 11.01(e) REPRESENTATIONS AND WARRANTIES. All
representations and warranties made by any TC Party in the Loan
Documents shall be true and correct in all material respects on the
Closing Date for the Request with the same force and effect as if such
representations and warranties had been made on and as of the Closing
Date for the Request;
SECTION 11.01(f) NO CONDEMNATION OR CASUALTY. There
shall not have occurred, and there shall not be pending or
threatened, any condemnation or other taking, whether direct
or indirect, against any Mortgaged Property and there shall
not have occurred any casualty to any improvements located on
any Mortgaged Property which, as to any such pending or
threatened condemnation or casualty, is likely to have a
material adverse effect on the value of the Collateral, taken
as a whole, or the Borrowers' ability to perform their
obligations under the Loan Documents;
SECTION 11.01(g) DELIVERY OF CLOSING DOCUMENTS. The receipt
by the Lender of the following, each dated as of the Closing Date for
the Request, in form and substance satisfactory to the Lender in all
respects:
(1) A Compliance Certificate;
(2) An Organizational Certificate; and
(3) Such other documents, instruments, approvals
(and, if requested by the Lender, certified duplicates of
executed copies thereof) and opinions as the Lender may
reasonably request;
SECTION 11.01(h) DELIVERY OF CLOSING DOCUMENTS RELATING TO
INITIAL ADVANCE REQUEST, COLLATERAL ADDITION REQUEST OR CREDIT
FACILITY EXPANSION REQUEST. With respect to the closing of the Initial
Advance Request, a Collateral Addition Request or a Credit Facility
Expansion Request, the receipt by the Lender of the following, each
dated as of the Closing Date for the Request, in form and substance
satisfactory to the Lender in all respects:
(1) Fully executed original copies of each Loan
Document required to be executed in connection with the
Request, duly executed and delivered by the parties thereto
(other than the Lender), each of which shall be in full force
and effect; and
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(2) Favorable opinions of counsel to the TC Parties,
as to the due organization and qualification of the TC
Parties, the due authorization, execution, delivery and
enforceability of each Loan Document executed in connection
with the Request and such other matters as the Lender may
reasonably require.
SECTION 11.01(i) DELIVERY OF PROPERTY-RELATED DOCUMENTS. With
respect to each of the Mortgaged Properties to be made part of the
Collateral Pool on the Closing Date for the Initial Advance Request or
a Collateral Addition Request, the receipt by the Lender of the
following, each dated as of the Closing Date for the Initial Advance
Request or Collateral Addition Request, as the case may be, in form
and substance satisfactory to the Lender in all respects:
(1) A favorable opinion of local counsel to the TC
Parties or the Lender as to the enforceability of the
Security Instrument, and any other Loan Documents, executed
in connection with the Request;
(2) A commitment for the Title Insurance Policy
applicable to the Mortgaged Property and a pro forma Title
Insurance Policy based on the Commitment;
(3) The Insurance Policy applicable to the
Mortgaged Property;
(4) The Survey applicable to the Mortgaged
Property;
(5) Evidence of Compliance with Property Laws
applicable to the Mortgaged Property;
(6) An Appraisal of the Mortgaged Property;
(7) A joinder to the Replacement Reserve Agreement,
providing for the establishment of a replacement reserve
account, to be pledged to the Lender, in which the owner
shall periodically deposit amounts for Replacements at the
Mortgaged Property and as additional security for the TC
Parties' obligations under the Loan Documents;
(8) A Completion/Repair and Security Agreement, on
the standard form required by the DUS Guide, if required
by Lender;
(9) A joinder to the Assignment of Management
Agreement, on the standard form required by the DUS
Guide;
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(10) An Operations and Maintenance Agreement, in the
form attached as EXHIBIT GG to this Agreement, if the Lender
determines one to be necessary or desirable; and
(11) An Assignment of Leases and Rents, if the
Lender determines one to be necessary or desirable, provided
that the provisions of any such assignment shall be
substantively identical to those in the Security Instrument
covering the Collateral, with such modifications as may be
necessitated by applicable state or local law.
ARTICLE XII
REPRESENTATIONS AND WARRANTIES
SECTION 12.01. REPRESENTATIONS AND WARRANTIES OF THE OWNERS. Each
Owner hereby represents and warrants to the Lender, with respect to itself, as
follows:
SECTION 12.01(a) DUE ORGANIZATION. It is a Single-Purpose
general partnership duly organized, validly existing and in good
standing under the laws of the State of Maryland, and (except for
Owners which only own Mortgaged Properties located in the State of
Maryland) is duly qualified as a foreign general partnership to
transact business in the jurisdiction in which the Mortgaged Property
it owns is located, to the extent, if any, that such qualification is
required by the laws of such jurisdiction. It has its principal place
of business, principal office and office in which it keeps its books
and records as to the Collateral at its Notice Address.
SECTION 12.01(b) POWER AND AUTHORITY. It has the requisite
power and authority to own its own properties, to execute and deliver
the Loan Documents to which it is a party and to perform its
obligations contemplated by the Loan Documents to which it is a party.
SECTION 12.01(c) DUE AUTHORIZATION. The execution and
delivery of the Loan Documents to which it is a party, and the
consummation by it of the transactions contemplated thereby, and the
performance by it of its obligations thereunder, have been duly and
validly authorized by all necessary action and proceedings by it or on
its behalf.
SECTION 12.01(d) NO APPROVALS. No authorization, consent,
approval or other action by, or filing with, any federal, state or
local court or Governmental Authority is required in connection with
the execution, delivery and performance by it of the Loan Documents to
which it is a
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party, other than the filing of the Security Instruments and
appropriate UCC-1 Filing Statements in the appropriate public records.
SECTION 12.01(e) NON-CONTRAVENTION; NO LIENS. The execution
and delivery of the Loan Documents to which it is a party, and the
fulfillment of or compliance with the terms and conditions of the Loan
Documents to which it is a party:
(1) will not conflict with, or result in any breach
of, any court judgment, decree or order of any Governmental
Authority to which it is subject;
(2) will not cause it to be in violation of any
provision of any document or agreement pursuant to which it
is organized or pursuant to which it conducts its business;
(3) will not cause it to be in violation of, or
constitute a material default under, the provisions of any
Loan Document to which it is a party or by which it is bound;
and
(4) will not result in the creation of any Lien on
its property or assets, except as contemplated by or
permitted pursuant to the Loan Documents.
SECTION 12.01(f) PENDING LITIGATION OR OTHER PROCEEDINGS.
There is no litigation or other claim pending before any court or
administrative or other Governmental Authority, or threatened against
it, the Collateral it owns or any of its properties which would be
required to be disclosed pursuant to Section 13.01(d) other than those
previously disclosed to the Lender by separate submission.
SECTION 12.01(g) VALID AND BINDING OBLIGATIONS. Each
of the Loan Documents to which it is a party has been duly
executed and delivered by it, and will, when duly executed and
delivered by the other parties thereto, constitute its legal,
valid and binding obligations enforceable against it in
accordance with its terms, provided that such enforceability
is subject to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at
law), and bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and similar laws and applicable
creditors' rights generally.
SECTION 12.01(h) OWNERSHIP. On the Initial Closing Date, it
is the owner of one, and only one, of the Mortgaged Properties in fee
simple or as tenant under a ground lease meeting all of the
requirements of the DUS Guide. There are no Liens upon or with respect
to the Collateral which it owns
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except the Permitted Liens. It owns no other assets other
than constituting Collateral.
SECTION 12.01(i) SOLVENCY. It is not insolvent (within the
meaning of any applicable federal or state law relating to bankruptcy
or fraudulent transfers) and will not be rendered insolvent by the
transactions contemplated by the Loan Documents to which it is a
party, including the making of a Future Advance, and, after giving
effect to such transactions, it will not be left with an unreasonably
small amount of capital with which to engage in its business or
undertakings, nor will it have intended to incur, or believe that it
has incurred, debts beyond its ability to pay such debts as they
mature.
SECTION 12.01(j) LINES OF BUSINESS. It is not engaged in any
businesses other than the acquisition, ownership, development,
construction, leasing, financing or management of Multifamily
Residential Properties, and the conduct of these businesses does not
violate the Organizational Documents pursuant to which it is formed.
SECTION 12.01(k) DELIVERY OF INFORMATION. The financial
statements and projections relating to it delivered to the Lender on
or before the date hereof were prepared on the basis of assumptions it
believed in good faith at the time of preparation to be reasonable and
it is not aware of any fact or information that would lead it to
believe that such assumptions are incorrect or misleading in any
material respect.
SECTION 12.01(l) NO MATERIAL ADVERSE CHANGE. Since the date
of the most recent financial statements delivered to the Lender, there
has occurred no material adverse change in its financial condition,
business or prospects, taken as a whole.
SECTION 12.01(m) TITLE INSURANCE. It will furnish the Title
Insurance Policies in compliance with all of the requirements set
forth in the definition of "Title Insurance Policies."
SECTION 12.02. REPRESENTATIONS AND WARRANTIES OF THE REIT. The REIT
hereby represents and warrants to the Lender as follows:
SECTION 12.02(a) DUE ORGANIZATION. It is a real estate
investment trust duly organized, validly existing and in good standing
under the laws of the State of Maryland and is qualified to transact
business in each other jurisdiction in which it transacts business to
the extent, if any, that it is required to be so qualified by the laws
of such jurisdiction. It has its principal place of business,
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principal office and office in which it keeps its books and
records at its Notice Address.
SECTION 12.02(b) POWER AND AUTHORITY. It has the requisite
power and authority to own its own properties, to execute and deliver
the Loan Documents to which it is a party and to perform its
obligations contemplated by the Loan Documents to which it is a party.
SECTION 12.02(c) DUE AUTHORIZATION. The execution and
delivery of the Loan Documents to which it is a party, and the
consummation by it of the transactions contemplated thereby, and the
performance by it of its obligations thereunder, have been duly and
validly authorized by all necessary action and proceedings by it or on
its behalf.
SECTION 12.02(d) NO APPROVALS. No authorization, consent,
approval or other action by, or filing with, any federal, state or
local court or Governmental Authority is required in connection with
the execution, delivery and performance by it of the Loan Documents to
which it is a party.
SECTION 12.02(e) NON-CONTRAVENTION; NO LIENS. The execution
and delivery of the Loan Documents to which it is a party, and the
fulfillment of or compliance with the terms and conditions of the Loan
Documents to which it is a party:
(1) will not conflict with, or result in any breach
of, any court judgment, decree or order of any Governmental
Authority to which it is subject;
(2) will not cause it to be in violation of any
provision of any document or agreement pursuant to which it
is organized or pursuant to which it conducts its business;
(3) will not cause it to be in violation of, or
constitute a material default under, the provisions of any
Loan Document to which it is a party or by which it is bound;
and
(4) will not result in the creation of any Lien on
its property or assets.
SECTION 12.02(f) PENDING LITIGATION OR OTHER PROCEEDINGS.
There is no litigation or other claim pending before any court or
administrative or other Governmental Authority, or threatened against
it or any of its properties which would be required to be disclosed
pursuant to Section 13.03(d) other than those previously disclosed to
the Lender by separate submission.
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SECTION 12.02(g) VALID AND BINDING OBLIGATIONS. Each of the
Loan Documents to which it is a party has been duly executed and
delivered by it, and will, when duly executed and delivered by the
other parties thereto, constitutes its legal, valid and binding
obligations enforceable against it in accordance with its terms,
provided that such enforceability is subject to general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law), and bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium and similar laws and applicable
creditors' rights generally.
SECTION 12.02(h) SOLVENCY. It is not insolvent (within the
meaning of any applicable federal or state law relating to bankruptcy
or fraudulent transfers) and will not be rendered insolvent by the
transactions contemplated by the Loan Documents to which it is a
party, including the making of a Future Advance, and, after giving
effect to such transactions, it will not be left with an unreasonably
small amount of capital with which to engage in its business or
undertakings, nor will it have intended to incur, or believe that it
has incurred, debts beyond its ability to pay such debts as they
mature.
SECTION 12.02(i) LINES OF BUSINESS. On the Initial Closing
Date, it is not Principally Engaged in any businesses other than the
acquisition, ownership, development, construction, leasing, financing
or management of Multifamily Residential Properties, and the conduct
of these businesses does not violate the Organizational Documents
pursuant to which it is formed.
SECTION 12.02(j) STATUS AS A REAL ESTATE INVESTMENT TRUST. It
currently qualifies, and is taxed as, a real estate investment trust
under Subchapter M of the Internal Revenue Code, and is not engaged in
any activities which would jeopardize such qualification and tax
treatment.
SECTION 12.02(k) DELIVERY OF INFORMATION. The financial
statements and projections relating to it delivered to the Lender on
or before the date hereof were prepared on the basis of assumptions it
believed in good faith at the time of preparation to be reasonable and
it is not aware of any fact or information that would lead it to
believe that such assumptions are incorrect or misleading in any
material respect.
SECTION 12.03. REPRESENTATIONS AND WARRANTIES OF THE REIT SUB, THE
PROPERTY COMPANY, THE OPERATING PARTNERSHIP AND TC-ORIOLE. The REIT Sub, the
Property Company, the Operating Partnership and TC-Oriole each hereby
represents and warrants to the Lender, with respect to itself, as follows:
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SECTION 12.03(a) DUE ORGANIZATION.
(1) The Operating Partnership is a limited
partnership duly organized, validly existing and in good
standing under the laws of the State of Maryland and is
qualified to transact business in each other jurisdiction in
which it transacts business to the extent, if any, that it is
required to be so qualified by the laws of such jurisdiction.
(2) The REIT Sub is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware and is qualified to transact business in
each other jurisdiction in which a Mortgaged Property owned
by an Owner is located and in each other jurisdiction in
which it transacts business, to the extent, if any, that it
is required to be so qualified by the laws of such
jurisdiction.
(3) The Property Company is a general partnership
duly organized and validly existing under the laws of the
State of Maryland and is qualified to transact business in
each other jurisdiction in which a Mortgaged Property owned
by an Owner is located and in each other jurisdiction in
which it transacts business, to the extent, if any, that it
is required to be so qualified by the laws of such
jurisdiction.
(4) TC-Oriole is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware and is qualified to transact business in
each other jurisdiction in which it transacts business, to
the extent, if any, that it is required to be so qualified by
the laws of such jurisdiction.
(5) Each of the REIT Sub, the Property Company, the
Operating Partnership and TC-Oriole has its principal place
of business, principal office and office in which it keeps
its books and records at its Notice Address.
SECTION 12.03(b) POWER AND AUTHORITY. It has the requisite,
partnership or corporate power and authority, as the case may be, to
own its own properties, to execute and deliver the Loan Documents to
which it is a party and to perform its obligations contemplated by the
Loan Documents to which it is a party.
SECTION 12.03(c) DUE AUTHORIZATION. The execution and
delivery of the Loan Documents to which it is a party, and the
consummation by it of the transactions contemplated thereby, and the
performance by it of its obligations thereunder, have
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been duly and validly authorized by all necessary action and
proceedings by it or on its behalf.
SECTION 12.03(d) NO APPROVALS. No authorization, consent,
approval or other action by, or filing with, any federal, state or
local court or Governmental Authority is required in connection with
the execution, delivery and performance by it of the Loan Documents to
which it is a party.
SECTION 12.03(e) NON-CONTRAVENTION; NO LIENS. The execution
and delivery of the Loan Documents to which it is a party, and the
fulfillment of or compliance with the terms and conditions of the Loan
Documents to which it is a party:
(1) will not conflict with, or result in any breach
of, any court judgment, decree or order of any Governmental
Authority to which it is subject;
(2) will not cause it to be in violation of any
provision of any document or agreement pursuant to which it
is organized or pursuant to which it conducts its business;
(3) will not cause it to be in violation of, or
constitute a material default under, the provisions of any
Loan Document to which it is a party or by which it is bound;
and
(4) will not result in the creation of any Lien on
its property or assets.
SECTION 12.03(f) PENDING LITIGATION OR OTHER PROCEEDINGS.
There is no litigation or other claim pending before any court or
administrative or other Governmental Authority, or threatened against
it, the Collateral it owns or any of its properties which would be
required to be disclosed pursuant to Section 13.05(d) other than those
previously disclosed to the Lender by separate submission.
SECTION 12.03(g) VALID AND BINDING OBLIGATIONS. Each of the
Loan Documents to which it is a party has been duly executed and
delivered by it, and will, when duly executed and delivered by the
other parties thereto, constitute its legal, valid and binding
obligations enforceable against it in accordance with its terms,
provided that such enforceability is subject to general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law), and bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium and similar laws and applicable
creditors' rights generally.
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SECTION 12.03(h) SOLVENCY. It is not insolvent (within the
meaning of any applicable federal or state law relating to bankruptcy
or fraudulent transfers) and will not be rendered insolvent by the
transactions contemplated by the Loan Documents to which it is a
party, including the making of a Future Advance, and, after giving
effect to such transactions, it will not be left with an unreasonably
small amount of capital with which to engage in its business or
undertakings, nor will it have intended to incur, or believe that it
has incurred, debts beyond its ability to pay such debts as they
mature.
SECTION 12.03(i) LINES OF BUSINESS. On the Initial Closing
Date, it is not Principally Engaged in any businesses other than the
acquisition, ownership, development, construction, leasing, financing
or management of Multifamily Residential Properties, and the conduct
of these businesses does not violate the Organizational Documents
pursuant to which it is formed.
SECTION 12.03(j) DELIVERY OF INFORMATION. The financial
statements and projections relating to it delivered to the Lender on
or before the date hereof were prepared on the basis of assumptions it
believed in good faith at the time of preparation to be reasonable and
it is not aware of any fact or information that would lead it to
believe that such assumptions are incorrect or misleading in any
material respect.
SECTION 12.03(k) OWNERSHIP INTERESTS OF ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ AND
▇▇▇▇▇▇ ▇▇▇▇▇▇. On the Initial Closing Date, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ owns at
least a 1.20% limited partnership interest in the Operating
Partnership and ▇▇▇▇▇▇ ▇▇▇▇▇▇ owns at least a 12.00% limited
partnership interest in the Operating Partnership.
SECTION 12.04. REPRESENTATIONS AND WARRANTIES OF THE LENDER. The
Lender hereby represents and warrants to the TC Parties as follows:
SECTION 12.04(a) DUE ORGANIZATION. The Lender is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.
SECTION 12.04(b) POWER AND AUTHORITY. The Lender has the
requisite power and authority to execute and deliver this Agreement
and to perform its obligations under this Agreement.
SECTION 12.04(c) DUE AUTHORIZATION. The execution and
delivery by the Lender of this Agreement, and the consummation by it
of the transactions contemplated thereby, and the performance by it of
its obligations thereunder, have been
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duly and validly authorized by all necessary action and
proceedings by it or on its behalf.
ARTICLE XIII
COVENANTS
SECTION 13.01. AFFIRMATIVE COVENANTS OF THE OWNERS. Each Owner agrees
and covenants with the Lender, with respect to itself, that, at all times
during the Term of this Agreement:
SECTION 13.01(a) MAINTENANCE OF EXISTENCE. It shall maintain
its existence and continue to be a general partnership organized under
the laws of the State of Maryland, to be duly qualified to transact
business in each jurisdiction in which the Mortgaged Property which it
owns is located, and be duly qualified to transact business in any
other jurisdiction in which it transacts business, to the extent, if
any, that it is required to be so qualified by the laws of such
jurisdiction, and it shall promptly inform the Lender of any change in
the location of its principal place of business, principal office or
of any change in the location of the office in which it keeps its
books and records.
SECTION 13.01(b) FINANCIAL STATEMENTS. It shall keep and
maintain and, upon the Lender's request, shall make available at its
Notice Address, complete and accurate books of accounts and records in
sufficient detail to correctly reflect the results of its operations
and the operations of each of the Mortgaged Properties and copies of
all written contracts, leases and other instruments which in any
material respect affect the Mortgaged Properties (including all bills,
invoices and contracts for electrical service, gas service, water and
sewer service, waste management service, telephone service and
management services). These books, records, contracts, leases and
other instruments shall be subject to examination and inspection at
any reasonable time by the Lender. It shall deliver to the Lender the
following:
SECTION 13.01(b)(1) ANNUAL REPORTS FOR MORTGAGED
PROPERTIES. Promptly, and in any event within 60 days after
the end of its fiscal year, with respect to each of the
Mortgaged Properties, a report prepared and certified by it
in the form attached to this Agreement as EXHIBIT HH to this
Agreement or in such other form as the Lender may from time
to time may reasonably require which accurately sets forth a
statement of income and expenses for the Mortgaged Property
for the immediately prior fiscal year be accompanied by a
Rent Roll (if a Rent Roll has previously been requested in
writing by the Lender) and a certificate of the Property
Company to the effect
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that such report (and the accompanying Rent Roll, if
required) is true, correct and complete in all respects;
SECTION 13.01(b)(2) QUARTERLY REPORTS FOR MORTGAGED
PROPERTIES. Promptly, and in any event within 60 days, after
the end of each calendar quarter (or, upon the request of the
Lender, within 30 days after the end of each month), with
respect to each of the Mortgaged Properties, a report
prepared and certified by it in the form attached to this
Agreement as EXHIBIT II to this Agreement or in such other
form as the Lender may from time to time require which
accurately sets forth a statement of income and expenses for
the Mortgaged Properties for the immediately prior calendar
quarter or month, as the case may be, which report shall be
accompanied by a Rent Roll (if a Rent Roll has previously
been requested in writing by the Lender) and a certificate of
the Property Company to the effect that such report (and the
accompanying Rent Roll, if required) is true, correct and
complete in all respects;
SECTION 13.01(b)(3) OTHER REPORTS.
(A) Promptly upon the Lender's
request, all schedules, financial
statements or other reports which
are then maintained by it and
which are reasonably requested by
the Lender with respect to its
business affairs or condition
(financial or otherwise) or any of
the Mortgaged Properties.
(B) Promptly after delivered, all
reports, filings, communications
or correspondence which it
delivers to the United States
Securities and Exchange Commission
to the extent the same are matters
of public record when filed.
(C) Promptly after delivered, all
reports, filings, communications
or correspondence which it
delivers to any other Governmental
Authority, or which a Governmental
Authority delivers to it, relating
to a matter which, if decided
adversely to it, would have a
material adverse effect on its
financial condition.
SECTION 13.01(b)(4) ANNUAL BUDGETS. Promptly, and in
any event within 60 days after the start of its fiscal year,
an annual budget for each Mortgaged Property for
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such fiscal year, setting forth an estimate of all of the
costs and expenses, including capital expenses, of
maintaining and operating each Mortgaged Property.
If it shall fail to timely provide the financial statements,
reports and other information required by this subsection, the Lender
shall have the right to have its books and records (and the books and
records of the other TC Parties) audited in order to obtain such
reports or other information and any such costs and expenses incurred
by the Lender which it fails to pay promptly to the Lender shall
become immediately due and payable.
SECTION 13.01(c) MAINTAIN LICENSES. It shall maintain all
licenses, permits, charters and registrations which are material to
the conduct of its business.
SECTION 13.01(d) INFORM THE LENDER OF MATERIAL EVENTS. It
shall promptly inform the Lender of any of the following of which it
has Actual Knowledge:
SECTION 13.01(d)(1) DEFAULTS. The
occurrence of any Event of Default or any Potential
Event of Default;
SECTION 13.01(d)(2) REGULATORY PROCEEDINGS.
The commencement of any rulemaking or disciplinary
proceeding or the promulgation of any proposed or
final rule which would have a material adverse
effect on its financial condition or materially and
adversely affect its present or future ability to
perform its obligations under the Loan Documents to
which it is a party;
SECTION 13.01(d)(3) COMPLAINTS. The receipt
of (A) any complaint filed with a Governmental
Authority against it or the manager of its Mortgaged
Property alleging (I) any violation of fair housing
law, handicap access or the Americans with
Disabilities Act or equal employment law or
regulations, regardless of the effect on the
financial condition of any TC Party, or (II) any
violation of any other law or regulation if an
adverse decision in the proceeding adjudicating the
complaint would have a material adverse effect on
the financial condition of any TC Party or (B) any
final administrative or judicial dispositions of any
complaints specified in clause (A);
SECTION 13.01(d)(4) LEGAL PROCEEDINGS. The
commencement or threat of any proceedings in which
it is the debtor (or equivalent party otherwise
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named) by or against it, in any federal, state or
local court or before any Governmental Authority,
which, if decided adversely to it, would have a
material adverse effect on its financial condition.
SECTION 13.01(d)(5) BANKRUPTCY PROCEEDINGS.
The commencement of any proceedings by or against it
under any applicable bankruptcy, reorganization,
liquidation, insolvency or other similar law now or
hereafter in effect or of any proceeding in which a
receiver, liquidator, trustee or other similar
official is sought to be appointed for it;
SECTION 13.01(d)(6) REGULATORY SUPERVISION
OR PENALTY. The receipt of notice from any agency or
Governmental Authority having authority over the
conduct of its business that (A) it is being placed
under regulatory supervision, (B) any license,
permit, charter, membership or registration material
to the conduct of its business is to be suspended or
revoked or (C) it is to cease and desist any
practice, procedure or policy employed by it in the
conduct of its business, and such cessation would
have a material adverse effect upon its present or
future ability to perform its obligations under the
Loan Documents to which it is a party;
SECTION 13.01(d)(7) CLAIMS. The receipt of
notice from any Governmental Authority or other
Person relating to any claim involving it or any of
its assets, including the Mortgaged Properties
(including notice of any material tax deficiency)
which, if decided adversely to it, would have a
material adverse effect on its financial condition;
and
SECTION 13.01(d)(8) INSURANCE CHANGE. The
receipt of notice from its insurer that there has
occurred a material adverse change in the reserves,
retainages, deposits or deductibles under its
Insurance Policies.
SECTION 13.01(e) OWNERSHIP. It shall be a general partnership
and shall be the sole owner of one or more Mortgaged Properties in fee
simple or as tenant under a ground lease meeting all of the
requirements of the DUS Guide.
SECTION 13.01(f) FURTHER ASSURANCES. At the request of the
Lender, it shall execute and deliver and, if necessary, file, such
further instrument or instruments and take such further action or
actions, not inconsistent with the Loan
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Documents, as may be necessary, in the opinion of the Lender, to
effectuate the provisions of the Loan Documents.
SECTION 13.01(g) REPLACEMENT RESERVES.
(1) The Owners shall execute the Replacement Reserve
Agreement for the Mortgaged Properties. Any inconsistency
between the terms of this Agreement and the terms of the
Replacement Reserve Agreement shall be resolved in favor of
this Agreement. The Owners shall establish and maintain, in
the name of the Lender, at a financial institution selected
by the Owners (unless reasonably disapproved by the Lender),
a separate, central reserve account (the "REPLACEMENT
RESERVE"), for the benefit of all of the Mortgaged
Properties, solely to fund the costs of Replacements (other
than those required by the Capital Improvements Plan) to the
Mortgaged Properties. From the Initial Closing Date to
December 31, 1997, no deposit into the Replacement Reserve
shall be required. On January 1, 1998 and the first day of
each month thereafter during calendar year 1998, the Owners
shall deposit $250,000 into the Replacement Reserve. On
January 1, 1999, and on the first day of each month
thereafter during the Term of this Agreement, the Owners
shall deposit the amount specified for such month in the
table attached as EXHIBIT JJ to this Agreement. By making a
withdrawal from the Replacement Reserve, the Borrowers and
Owners shall be deemed to represent to the Lender that the
amount withdrawn is being withdrawn for the payment of, or
reimbursement of the Owner for amounts applied to, the costs
of Replacements.
(2) The Replacement Reserve shall be (i) segregated
from all other monies of the Owners or other Persons, (ii)
invested in Permitted Investments and (iii) pledged to the
Lender pursuant to the provisions of the Replacement Reserve
Agreement. Prior to an Event of Default, the Owners shall
have the sole dominion and control over the Replacement
Reserve, and, from and after a Triggering Event, the Lender
shall have sole dominion and control over the Replacement
Reserve.
(3) As of January 1, 1998, the Lender, not more than
one time in any 12 month period, may perform an inspection of
the Mortgaged Properties and an assessment of the Replacement
Reserve. If determined necessary by the Lender, after review
of the inspection and assessment, the Owner's monthly deposit
to the Replacement Reserve shall be adjusted, so that the
monthly deposit to the Replacement Reserve will create a
Replacement Reserve that will, in the Lender's
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determination, be sufficient to meet required
Replacements for the Mortgaged Properties.
(3) Promptly, and in any event within 60 days, after
the end of each calendar quarter, the Owners shall deliver to
the Lender a report in the form attached as EXHIBIT KK to
this Agreement which accurately sets forth the disbursements
from the Replacement Reserve for the immediately prior
quarter and the category of expense to which each
disbursement was applied, and a certificate of the Owners to
the effect that such report is true, correct and complete in
all respects.
SECTION 13.01(h) SINGLE-PURPOSE ENTITIES. It shall at all
times maintain and conduct itself as a Single-Purpose entity.
SECTION 13.01(i) DATE-DOWN ENDORSEMENTS. It shall pay for the
cost and expenses incurred by the Lender to the Title Company in
obtaining from time to time an endorsement to each Title Insurance
Policy containing a Revolving Credit Endorsement, amending the
effective date of the Title Insurance Policy to the date of the title
search performed in connection with the endorsement, provided that it
shall not be liable to pay for more than one such endorsement
(including any endorsement given pursuant to Sections 7.03(h) or
8.04(c)) in any consecutive twelve month period.
SECTION 13.02. NEGATIVE COVENANTS OF THE OWNERS. Each Owner agrees and
covenants with the Lender with respect to itself that, at all times during the
Term of this Agreement:
SECTION 13.02(a) NO AMENDMENTS. Unless the Lender shall
otherwise consent, it shall not agree to, or permit, any amendment or
supplement to or modification of, the terms of any Loan Document or
any Organizational Document except for any change to the
Organizational Documents which does not have, in the Lender's
judgment, a material adverse change on the management of its affairs,
on the enforceability or validity of the Loan Documents or on any
other material aspect of the transactions contemplated by this
Agreement.
SECTION 13.02(b) TRANSFERS. No Owner shall permit the
occurrence of a Transfer of all or any part of the Collateral, except
as may be expressly permitted by the Loan Documents. The Lender hereby
agrees that, notwithstanding anything to the contrary in the foregoing
or in any of the Loan Documents, such Owner shall be entitled to
effect the following Transfers without the Lender's consent and
without the Transfer being in breach of the provisions of this Section
or of any other term, covenant or condition of the Loan Documents:
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(1) A Transfer that occurs by inheritance, devise, or
bequest or by operation of law upon the death of a
natural person who is an Owner or the owner of an
Ownership Interest in a TC Party;
(2) The grant of a leasehold interest in individual
dwelling units in a Mortgaged Property for a term of
two years or less and leases for commercial uses as
long as commercial leases do not exceed 20 percent
of the rentable space of the Mortgaged Property
(measured as required by Lender) and provided that
all such leasehold interests do not contain an
option to purchase the Mortgaged Property; provided
that in no event shall the Owner grant a leasehold
interest for a commercial use that permits
pornographic or similarly immoral or inappropriate
uses.
(3) A sale or other disposition of obsolete or worn out
personal property if (i) the personal property is no
longer necessary for the proper operation of the
Mortgaged Property or (ii) the personal property is
contemporaneously replaced by comparable personal
property of equal or greater value which is free and
clear of liens, encumbrances and security interests
other than those created by the Loan Documents.
(4) The creation of a mechanic's or materialmen's lien
or judgment lien against the Mortgaged Property
which is released of record or otherwise remedied to
Lender's satisfaction, within 30 days of the date of
creation.
(5) The grant of an easement, if prior to the granting
of the easement the Owner causes to be submitted to
Lender all information required by Lender to
evaluate the easement, and if Lender determines that
the easement will not materially adversely affect
the operation of the Mortgaged Property or Lender's
interest in the Mortgaged Property and Owner pays to
Lender, on demand, all cost and expenses incurred by
Lender in connection with reviewing Owner's request.
SECTION 13.02(c) CHANGE IN PROPERTY MANAGEMENT. There shall
not be a change in the management agent for any Mortgaged Property
except to a management agent which the Lender determines is qualified
in accordance with the criteria set forth in Section 701 of the DUS
Guide.
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SECTION 13.02(d) LINES OF BUSINESS. It shall not be engaged
in any businesses other than the acquisition, ownership, development,
construction, leasing, financing or management of Multifamily
Residential Properties, and the conduct of these businesses shall not
violate the Organizational Documents pursuant to which it is formed.
SECTION 13.02(e) LIMITATION ON FUNDAMENTAL CHANGES. Without
the consent of the Lender, it shall not enter into any merger or
consolidation, unless the merger or consolidation is with another
Owner and the surviving entity expressly acknowledges in writing that
it assumes all of the obligations and liabilities of the non-surviving
entity under the Loan Documents, whether arising before or after the
date of the merger or consolidation.
SECTION 13.03. AFFIRMATIVE COVENANTS OF THE REIT. The REIT
agrees and covenants with the Lender that, at all times during the
Term of this Agreement:
SECTION 13.03(a) MAINTENANCE OF EXISTENCE. It shall maintain
its existence and continue to be a real estate investment trust
organized under the laws of the State of Maryland and to be duly
qualified to transact business in any other jurisdiction in which it
transacts business, and it shall promptly inform the Lender of any
change in the location of its principal place of business, principal
office or of any change in the location of the office in which it
keeps its books and records.
SECTION 13.03(b) FINANCIAL STATEMENTS. It shall keep and
maintain and, upon the Lender's request, shall make available at its
Notice Address, complete and accurate books of accounts and records in
sufficient detail to correctly reflect the results of its operations.
These books, records, contracts, leases and other instruments shall be
subject to examination and inspection at any reasonable time by the
Lender. It shall deliver to the Lender the following:
SECTION 13.03(b)(1) ANNUAL FINANCIAL STATEMENTS.
Promptly, and in any event within 90 days after the end of
its fiscal year, a statement of income and expenses, a
statement of changes in cash flows, and a balance sheet of it
and its Subsidiaries, on a consolidated basis, each in
reasonable detail, certified by it, audited and certified by
an independent certified public accountant and stating in
comparative form the respective figures for the corresponding
date and period in the prior fiscal year. Each of the
financial statements shall be prepared in accordance with
GAAP, and shall be accompanied by (A) an opinion of its
independent certified public accountant to the effect that
such financial statements have been
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prepared in accordance with GAAP and that such financial
statements fairly present the results of the operations and
financial condition of it and its Subsidiaries, on a
consolidated basis, for the periods and dates indicated, and
(B) a Compliance Certificate; provided, however, that the
REIT shall not be obligated to deliver any of the financial
statements or opinions described in this paragraph (1)
(except for the Compliance Certificate) if the Form 10-K
delivered by the REIT pursuant to Section 13.03(b)(3)
provides substantially identical information;
SECTION 13.03(b)(2) QUARTERLY FINANCIAL STATEMENTS.
Promptly, and in any event within 60 days, after each of the
first three fiscal quarters of its fiscal year, a statement
of income and expenses, a statement of changes in cash flows,
and a balance sheet of it and its Subsidiaries, on a
consolidated basis, each in reasonable detail, certified by
it, for the portion of the fiscal year ended with the last
day of such quarter, all in reasonable detail and stating in
comparative form the respective figures for the corresponding
date and period in the previous fiscal year, accompanied by
(A) a certificate from it, to the effect that such financial
statements have been prepared in accordance with GAAP, and
that such financial statements fairly present the results of
the operations and financial condition of it and its
Subsidiaries, on a consolidated basis, for the periods and
dates indicated, and (B) a Compliance Certificate; provided,
however, that the REIT shall not be obligated to deliver any
of the financial statements described in this paragraph (2)
(except for the Compliance Certificate) if the Form 10-Q
delivered by the REIT pursuant to Section 13.03(b)(4)
provides substantially identical information;
SECTION 13.03(b)(3) ANNUAL FORM 10-K. Promptly, and
in any event within 120 days after the end of its fiscal
year, the REIT's Form 10-K filed with the Securities and
Exchange Commission and its annual report to its
shareholders;
SECTION 13.03(b)(4) QUARTERLY FORM 10-Q. Promptly,
and in any event within 60 days, after the end of each
calendar quarter, the REIT's Form 10-Q filed with the
Securities and Exchange Commission.
SECTION 13.03(b)(5) FORM 8-K. Promptly after it is
filed, any Form 8-K filed by the REIT with the Securities and
Exchange Commission.
SECTION 13.03(b)(6) OTHER REPORTS.
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(A) Promptly after delivered, all
reports, filings, communications or
correspondence which it delivers to
the United States Securities and
Exchange Commission to the extent
the same are matters of public
record when filed.
(B) Promptly after delivered, all
reports, filings, communications or
correspondence which it delivers to
any other Governmental Authority,
relating to a matter which, if
decided adversely to it, would have
a material adverse effect on its
financial condition.
If it shall fail to timely provide the financial statements,
reports and other information required by this subsection, the Lender
shall have the right to have its books and records (and the books and
records of the other TC Parties) audited in order to obtain such
reports or other information and any such costs and expenses incurred
by the Lender which it fails to pay promptly to the Lender shall
become immediately due and payable.
SECTION 13.03(c) MAINTAIN LICENSES. It shall maintain all
licenses, permits, charters and registrations which are material to
the conduct of its business.
SECTION 13.03(d) INFORM THE LENDER OF MATERIAL EVENTS. It
shall promptly inform the Lender of any of the following of which it
has Actual Knowledge:
SECTION 13.03(d)(1) DEFAULTS. The
occurrence of any Event of Default or any Potential
Event of Default which occurred by reason of a
default by the REIT in any representation, warranty
or covenant made by the REIT in this Agreement or
the other Loan Documents;
SECTION 13.03(d)(2) REGULATORY PROCEEDINGS.
The commencement of any rulemaking or disciplinary
proceeding or the promulgation of any proposed or
final rule which would have a material adverse
effect on its financial condition or materially and
adversely affect its present or future ability to
perform its obligations under the Loan Documents to
which it is a party or adversely affect its real
estate investment trust status;
SECTION 13.03(d)(3) COMPLAINTS. The receipt
of (A) any complaint filed with a Governmental
Authority against it or the manager of its
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Mortgaged Property alleging (I) any violation of
fair housing law, handicap access or the Americans
with Disabilities Act or equal employment law or
regulations, regardless of the effect on the
financial condition of any TC Party, or (II) any
violation of any other law or regulation if an
adverse decision in the proceeding adjudicating the
complaint would have a material adverse effect on
the financial condition of any TC Party or (B) any
final administrative or judicial dispositions of any
complaints specified in clause (A);
SECTION 13.03(d)(4) LEGAL PROCEEDINGS. The
commencement or threat of any proceedings by or
against it, in any federal, state or local court or
before any Governmental Authority which, if decided
adversely to it, would have a material adverse
effect on its financial condition.
SECTION 13.03(d)(5) BANKRUPTCY PROCEEDINGS.
The commencement of any proceedings in which it is
the debtor (or equivalent party otherwise named) by
or against it under any applicable bankruptcy,
reorganization, liquidation, insolvency or other
similar law now or hereafter in effect or of any
proceeding in which a receiver, liquidator, trustee
or other similar official is sought to be appointed
for it;
SECTION 13.03(d)(6) REGULATORY SUPERVISION
OR PENALTY. The receipt of notice from any agency or
Governmental Authority having authority over the
conduct of its business that (A) it is being placed
under regulatory supervision, (B) any license,
permit, charter, membership or registration material
to the conduct of its business is to be suspended or
revoked or (C) it is to cease and desist any
practice, procedure or policy employed by it in the
conduct of its business, and such cessation would
have a material adverse effect upon its present or
future ability to perform its obligations under the
Loan Documents to which it is a party or upon its
real estate investment trust status; and
SECTION 13.03(d)(7) CLAIMS. The receipt of
notice from any Governmental Authority or other
Person relating to any claim involving it or any of
its assets (including notice of any material tax
deficiency) which, if decided adversely to it, would
have a material adverse effect on its financial
condition.
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SECTION 13.03(e) OWNERSHIP.
(1) It and TC-Oriole shall be the sole general
partners of the Operating Partnership and it shall own a
general partnership interest in the Operating Partnership of
not less than 1%, except after a merger or consolidation
permitted under Section 13.06(e).
(2) It shall own 100% of the outstanding stock in
the REIT Sub.
SECTION 13.03(f) STATUS AS A REAL ESTATE INVESTMENT TRUST. It
shall take all actions necessary to continue to qualify, and be taxed,
as a real estate investment trust under Subchapter M of the Internal
Revenue Code.
SECTION 13.03(g) FURTHER ASSURANCES. At the request of the
Lender, it shall execute and deliver and, if necessary, file, such
further instrument or instruments and take such further action or
actions, not inconsistent with the Loan Documents, as may be
necessary, in the opinion of the Lender, to effectuate the provisions
of the Loan Documents.
SECTION 13.03(h) PUBLICLY HELD REIT. It shall give the Lender
notice if it no longer is subject to the periodic reporting
requirements of the Securities Exchange Act of 1934, as amended, or
any successor legislation thereto. The Lender shall have the right,
upon such notice, to impose such additional reporting and other
requirements as may be required under the DUS Guide.
SECTION 13.04. NEGATIVE COVENANTS OF THE REIT. The REIT agrees and
covenants with the Lender that, at all times during the Term of this Agreement:
SECTION 13.04(a) TRANSFERS.
(1) Except as otherwise provided in paragraph (2),
(A) it shall not Transfer any Ownership
Interests in the Operating
Partnership or the REIT Sub which
would result in a breach of Section
13.03(e); and
(B) it shall not permit a Lien to
encumber any Ownership Interests in
the Operating Partnership or the
REIT Sub.
(2) Notwithstanding anything to the contrary in
paragraph (1), it may, without the consent of the Lender,
▇▇▇▇▇ ▇ ▇▇▇▇ on any Ownership Interests in the Operating
Partnership to an Institutional Lender to secure an
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Indebtedness to the Institutional Lender, provided that (i)
it gives the Lender at least 15 days' advance written notice
of the Lien and (ii) the Lender has been given at least 15
days to review and approve all documents creating, perfecting
and governing the Lien, which approval shall be given if
there is no provision which, in the Lender's determination,
will conflict with, or cause a breach under, the provisions
of this Agreement or the other Loan Documents. Nothing in the
foregoing shall be deemed to permit, without the Lender's
consent, the sale, assignment, transfer or other disposition
of an Ownership Interest which is subject to a Lien permitted
under this paragraph (2) to the purchaser at a secured party
sale or foreclosure sale (or to a transferee by a conveyance
in lieu of foreclosure) in connection with a foreclosure or
other disposition of the Lien (but such sale, assignment,
transfer or other disposition shall not be considered a
Recourse Transfer under Section 21.02).
(3) With respect to the grant of a Lien which is
permitted under paragraph (2), it shall use reasonable
commercial efforts to obtain from the Institutional Lender a
written undertaking, for the benefit of the Lender, that, in
the event the Institutional Lender gives it a notice, under
the loan documents evidencing or otherwise relating to the
Indebtedness, which is in the nature of a notice of default,
a notice of acceleration of the Indebtedness, a notice of
foreclosure or a notice of the commencement of the exercise
of any other remedy against it or the Ownership Interests,
then the Institutional Lender shall also endeavor to give to
the Lender a simultaneous copy of the notice. The undertaking
may be conditioned on the receipt by the Institutional Lender
of a written confirmation by it and the Lender (which it and
the Lender hereby agree to give) that the failure of the
Institutional Lender to give such notices shall not (i)
constitute a default by the Institutional Lender under the
loan documents evidencing or otherwise relating to the
Indebtedness, (ii) give rise to any claim by it or the Lender
against the Institutional Lender or (iii) invalidate or
otherwise affect the efficacy of any notice given by the
Institutional Lender to it.
SECTION 13.04(b) STATUS AS A REAL ESTATE INVESTMENT TRUST. It
shall not take or permit any actions which will cause it not to
qualify, and be taxed, as a real estate investment trust under
Subchapter M of the Internal Revenue Code, or which will jeopardize
such qualification or tax treatment.
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SECTION 13.04(c) LINES OF BUSINESS. It shall not be
Principally Engaged in any businesses other than the acquisition,
ownership, development, construction, leasing, financing or
management, directly or through Affiliates, of Multifamily Residential
Properties, and the conduct of these businesses shall not violate the
Organizational Documents pursuant to which it is formed.
SECTION 13.04(d) LIMITATION ON FUNDAMENTAL CHANGES. Without
the consent of the Lender, which shall not be unreasonably withheld,
delayed or conditioned, it shall not enter into any merger or
consolidation unless--
(i) either--
(A) it is the surviving entity; or
(B) it is not the surviving entity but either:
(I) the surviving entity has a net
worth, determined by the Lender in
accordance with GAAP, at least
equal to $500,000,000; or
(II) the surviving entity has a market
capitalization, as determined by
the Lender, at least equal to
$650,000,000;
and
(ii) the surviving entity expressly acknowledges in
writing that it assumes all of the obligations and
liabilities of the REIT under the Loan Documents,
whether arising before or after the date of the
merger or consolidation.
If the Lender does not disapprove of a proposed merger or
consolidation on or before the Outside Review Date, the Lender shall
be deemed to have given its consent to the merger or consolidation.
SECTION 13.05. AFFIRMATIVE COVENANTS OF THE TC PARTIES (OTHER
THAN THE OWNERS AND THE REIT). Each TC Party (other than the Owners
and the REIT) agrees and covenants with the Lender, with respect to
itself, that, at all times during the Term of this Agreement:
SECTION 13.05(a) MAINTENANCE OF EXISTENCE. It shall maintain
its existence and continue to be a general partnership, limited
partnership or corporation, as the case may be, organized under the
laws of the state of its organization, to be duly qualified to
transact business in
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each jurisdiction in which it transacts business, to the extent, if
any, that it is required to be so qualified by the laws of such
jurisdiction, and it shall promptly inform the Lender of any change in
the location of its principal place of business, principal office or
of any change in the location of the office in which it keeps its
books and records.
SECTION 13.05(b) FINANCIAL STATEMENTS. It shall keep and
maintain and, upon the Lender's request, shall make available at its
Notice Address, complete and accurate books of accounts and records in
sufficient detail to correctly reflect the results of its operations.
These books, records, contracts, leases and other instruments shall be
subject to examination and inspection at any reasonable time by the
Lender. It shall deliver to the Lender the following:
(1) Promptly after delivered, all reports,
filings, communications or correspondence
which it delivers to the United States
Securities and Exchange Commission to the
extent the same are matters of public
record when filed.
(2) Promptly after delivered, all reports,
filings, communications or correspondence
which it delivers to any other Governmental
Authority, relating to a matter which, if
decided adversely to it, would have a
material adverse effect on its financial
condition.
If it shall fail to timely provide the financial statements,
reports and other information required by this subsection,
the Lender shall have the right to have its books and records
(and the books and records of the other TC Parties) audited
in order to obtain such financial statements, reports or
other information and any such costs and expenses incurred by
the Lender which it fails to pay promptly to the Lender shall
become immediately due and payable.
SECTION 13.05(c) MAINTAIN LICENSES. It shall maintain all
licenses, permits, charters and registrations which are material to
the conduct of its business.
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SECTION 13.05(d) INFORM THE LENDER OF MATERIAL EVENTS. It
shall promptly inform the Lender of any of the following of which it
has Actual Knowledge:
SECTION 13.05(d)(1) DEFAULTS. The
occurrence of any Event of Default or any Potential
Event of Default which occurred by reason of a
default by such TC Party in any representation,
warranty or covenant made by the TC Party in this
Agreement or the other Loan Documents;
SECTION 13.05(d)(2) REGULATORY PROCEEDINGS.
The commencement of any rulemaking or disciplinary
proceeding or the promulgation of any proposed or
final rule which would have a material adverse
effect on its financial condition or materially and
adversely affect its present or future ability to
perform its obligations under the Loan Documents to
which it is a party;
SECTION 13.05(d)(3) COMPLAINTS. The receipt
of (A) any complaint filed with a Governmental
Authority against it or the manager of its Mortgaged
Property alleging (I) any violation of fair housing
law, handicap access or the Americans with
Disabilities Act or equal employment law or
regulations, regardless of the effect on the
financial condition of any TC Party, or (II) any
violation of any other law or regulation if an
adverse decision in the proceeding adjudicating the
complaint would have a material adverse effect on
the financial condition of any TC Party or (B) any
final administrative or judicial dispositions of any
complaints specified in clause (A);
SECTION 13.05(d)(4) LEGAL PROCEEDINGS. The
commencement or threat of any proceedings by or
against it, in any federal, state or local court or
before any Governmental Authority which, if decided
adversely to it, would have a material adverse
effect on its financial condition.
SECTION 13.05(d)(5) BANKRUPTCY PROCEEDINGS.
The commencement of any proceedings in which it is
the debtor (or equivalent party otherwise named) by
or against it under any applicable bankruptcy,
reorganization, liquidation, insolvency or other
similar law now or hereafter in effect or of any
proceeding in which a receiver, liquidator, trustee
or other similar official is sought to be appointed
for it;
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SECTION 13.05(d)(6) REGULATORY SUPERVISION
OR PENALTY. The receipt of notice from any agency or
Governmental Authority having authority over the
conduct of its business that (A) it is being placed
under regulatory supervision, (B) any license,
permit, charter, membership or registration material
to the conduct of its business is to be suspended or
revoked or (C) it is to cease and desist any
practice, procedure or policy employed by it in the
conduct of its business, and such cessation would
have a material adverse effect upon its present or
future ability to perform its obligations under the
Loan Documents to which it is a party; and
SECTION 13.05(d)(7) CLAIMS. The receipt of
notice from any Governmental Authority or other
Person relating to any claim involving it or any of
its assets, including the Mortgaged Properties
(including notice of any material tax deficiency)
which, if decided adversely to it, would have a
material adverse effect on its financial condition.
SECTION 13.05(e) OWNERSHIP.
(1) TC-Oriole and the REIT shall be the sole general
partners of the Operating Partnership.
(2) The REIT Sub and the Operating Partnership shall
be the sole general partners of the Property Company.
(3) The REIT Sub and the Property Company shall be
the sole general partners of each of the 35 Owners listed on
Exhibit A-1 and each other Person who may become an Owner in
the future.
SECTION 13.05(f) NO PUBLICLY TRADED PARTNERSHIP. It shall
take all actions necessary to prevent itself from being taxed as a
publicly traded partnership under Section 7704 of the Internal Revenue
Code.
SECTION 13.05(g) FURTHER ASSURANCES. At the request of the
Lender, it shall execute and deliver and, if necessary, file, such
further instrument or instruments and take such further action or
actions, not inconsistent with the Loan Documents, as may be
necessary, in the opinion of the Lender, to effectuate the provisions
of the Loan Documents.
SECTION 13.06. NEGATIVE COVENANTS OF THE TC PARTIES (OTHER THAN THE
OWNERS AND THE REIT). Each TC Party (other than the Owners and the REIT) agrees
and covenants with the Lender with
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respect to itself that, at all times during the Term of this
Agreement:
SECTION 13.06(a) TRANSFERS.
(1) Except as otherwise provided in paragraph (2),
(i) TC-Oriole shall not Transfer any Ownership Interests in
the Operating Partnership, (ii) neither the Operating
Partnership nor the REIT Sub shall Transfer any Ownership
Interests in the Property Company and (iii) neither the
Property Company nor the REIT Sub shall Transfer any
Ownership Interests in any Owner.
(2) Notwithstanding anything to the contrary in
paragraph (1), TC-Oriole, the Operating Partnership and the
REIT Sub may, without the consent of the Lender, ▇▇▇▇▇ ▇ ▇▇▇▇
on any Ownership Interests (other than the REIT Sub's
Ownership Interests in any Owner, such Ownership Interests
having been previously assigned to the Lender pursuant to the
Assignment of Partnership Interests) to an Institutional
Lender to secure an Indebtedness to the Institutional Lender,
provided that (i) the Person granting the Lien gives the
Lender at least 15 days' advance written notice of the Lien
and (ii) the Lender has been given at least 15 days to review
and approve all documents creating, perfecting and governing
the Lien, which approval shall be given if there is no
provision which, in the Lender's determination, will conflict
with, or cause a breach under, the provisions of this
Agreement or the other Loan Documents. Nothing in the
foregoing shall be deemed to permit, without the Lender's
consent, the sale, assignment, transfer or other disposition
of an Ownership Interest which is subject to a Lien permitted
under this paragraph (2) to the purchaser at a secured party
sale or foreclosure sale (or to a transferee by a conveyance
in lieu of foreclosure) in connection with a foreclosure or
other disposition of the Lien (but such sale, assignment,
transfer or other disposition shall not be considered a
Recourse Transfer under Section 21.02).
(3) With respect to the grant of a Lien which is
permitted under paragraph (2), the TC Party granting the Lien
shall use reasonable commercial efforts to obtain from the
Institutional Lender a written undertaking, for the benefit
of the Lender, that, in the event the Institutional Lender
gives the TC Party a notice, under the loan documents
evidencing or otherwise relating to the Indebtedness, which
is in the nature of a notice of default, a notice of
acceleration of the Indebtedness, a notice of foreclosure or
a notice of the commencement of the exercise of any other
remedy against the TC Party or
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the Ownership Interests, then the Institutional Lender shall
also endeavor to give to the Lender a simultaneous copy of
the notice. The undertaking may be conditioned on the receipt
by the Institutional Lender of a written confirmation by the
TC Parties and the Lender (which the TC Parties and the
Lender hereby agree to give) that the failure of the
Institutional Lender to give such notices shall not (i)
constitute a default by the Institutional Lender under the
loan documents evidencing or otherwise relating to the
Indebtedness, (ii) give rise to any claim by the TC Parties
or the Lender against the Institutional Lender or (iii)
invalidate or otherwise affect the efficacy of any notice
given by the Institutional Lender to any TC Party.
SECTION 13.06(b) NO PUBLICLY TRADED PARTNERSHIP. It shall not
take or permit any actions which will cause any of them, or the
Operating Partnership or the Property Company, to be taxed as a
publicly traded partnership under Section 7704 of the Internal Revenue
Code.
SECTION 13.06(c) FREQUENCY OF REQUESTS. The Borrowers shall
make all Requests (other than a Future Advance Request or a Credit
Facility Termination Request) in any calendar quarter on the same day
in the calendar quarter. Accordingly, once the Borrowers make one or
more Requests (other than a Future Advance Request or a Credit
Facility Termination Request) in a calendar quarter, they shall not
make any further Requests (other than a Future Advance Request or a
Credit Facility Termination Request) in the calendar quarter. The
Property Company shall have the right, subject to the terms,
conditions and limitations of this Agreement, to make a Future Advance
Request for a Revolving Facility Advance on any day until the
expiration of the Revolving Facility Availability Period and the
Borrowers shall have the right, subject to the terms, conditions and
limitations of this Agreement, to make a Credit Facility Termination
Request on any day until the expiration of the Term of this Agreement.
SECTION 13.06(d) LINES OF BUSINESS. It shall not be
Principally Engaged in any businesses other than the acquisition,
ownership, development, construction, leasing, financing or
management, directly or through Affiliates, of Multifamily Residential
Properties, and the conduct of these businesses shall not violate the
Organizational Documents pursuant to which it is formed.
SECTION 13.06(e) LIMITATION ON FUNDAMENTAL CHANGES. Without
the consent of the Lender, neither the REIT Sub nor the Property
Company shall enter into any merger or consolidation. Without the
consent of the Lender, which shall not be unreasonably withheld,
delayed or conditioned, neither
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TC-Oriole nor the Operating Partnership shall enter into any
merger or consolidation unless--
(i) either--
(A) it is the surviving entity; or
(B) it is not the surviving entity but one of
the following conditions is satisfied:
(I) the surviving entity has a net
worth, determined by the Lender in
accordance with GAAP, at least
equal to $500,000,000;
(II) the surviving entity has a market
capitalization, as determined by
the Lender, at least equal to
$650,000,000; or
(III) the merger or consolidation is
part of a concurrent merger or
consolidation permitted under
Section 13.04(d);
and
(ii) the surviving entity expressly acknowledges in
writing that it assumes all of the obligations and
liabilities of TC-Oriole or the Operating
Partnership, as the case may be, under the Loan
Documents, whether arising before or after the date
of the merger or consolidation.
If the Lender does not disapprove of a proposed merger or
consolidation on or before the Outside Review Date, the Lender shall
be deemed to have given its consent to the merger or consolidation.
SECTION 13.06(f) TRANSFER BY ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ OR ▇▇▇▇▇▇
▇▇▇▇▇▇. Without the consent of the Lender, it shall not permit either
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇ to Transfer any of their limited
partnership interests (or any shares of beneficial interest in the
REIT into which such interests may be converted) in the Operating
Partnership. The Lender hereby consents to the following Transfers by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇ of such limited partnership
interests (or converted shares):
(1) A Transfer that occurs by inheritance, devise,
or bequest or by operation of law upon the death of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇;
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(2) A Transfer to immediate family members of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇ or trusts established for the
benefit of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇ and/or their
respective immediate family members; provided, that ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇, as the case may be, gives the
Lender notice of the Transfer concurrently with each
Transfer;
(3) A Transfer subsequent to a merger or
consolidation of the REIT or Operating Partnership in which
the REIT or the Operating Partnership is not the surviving
entity and which is approved, or deemed approved, by the
Lender;
(4) The grant of a Lien on such limited partnership
interests to an Institutional Lender to secure an
Indebtedness of a TC Party to an Institutional Lender, if,
concurrently with the grant, the Operating Partnership has
granted a Lien to the same Institutional Lender in accordance
with Sections 13.06(a)(2); and
(5) A conversion of limited partnership interests
into shares of beneficial interest in the REIT (but such
shares shall be subject to the prohibitions on Transfer set
forth in this Section 13.06(f)).
SECTION 13.07. AFFIRMATIVE COVENANTS OF THE BORROWERS. Each Borrower
agrees and covenants with the Lender, with respect to itself, that, at all
times during the Term of this Agreement:
SECTION 13.07(a) APPRAISALS. At the time of the addition of
a Mortgaged Property to the Collateral Pool, and at any time and from time to
time thereafter, the Lender shall be entitled to obtain an Appraisal of any
Mortgaged Property. The Borrowers shall pay all of the Lender's costs of
obtaining the Appraisal, except that the Borrowers shall not be required to pay
for any Appraisal of a Mortgaged Property if, within the 24 month period
immediately preceding the date of the Appraisal, the Lender had received
another Appraisal of the Mortgaged Property.
SECTION 13.07(b) EXPENSES.
(1) The Borrowers, jointly and severally, shall pay,
or reimburse the Lender for, all costs and expenses incurred
by the Lender, including the legal fees and expenses of the
Lender's outside legal counsel, in connection with the
preparation, review and negotiation of all documents,
instruments and certificates to be executed and delivered in
connection with a Request, the performance by the Lender of
any of its obligations with respect to the Request, the
satisfaction of all conditions precedent to the Borrowers'
rights or the
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Lender's obligations with respect to the Request and all
transactions related to any of the foregoing. The obligations
of the Borrowers under this subsection shall be absolute and
unconditional, regardless of whether the transaction
requested in the Request actually occurs.
(2) The Borrowers, jointly and severally, shall pay,
or reimburse the Lender for, all costs and expenses, other
than those costs and expenses described in paragraph (1), in
connection with a Request, the performance by the Lender of
any of its obligations with respect to the Request, the
satisfaction of all conditions precedent to the Borrowers'
rights or the Lender's obligations with respect to the
Request and all transactions related to any of the foregoing,
including the cost of title insurance premiums and applicable
recordation and transfer taxes and charges. The obligations
of the Borrowers under this subsection shall be absolute and
unconditional, regardless of whether the transaction
requested in the Request actually occurs.
(3) This subsection (b) does not apply to the costs
of due diligence fees (including legal fees relating to due
diligence) and the closing of this Agreement and the Initial
Advance, and the due diligence fee with respect to the
addition of an Additional Mortgaged Property to the
Collateral Pool, the fees for which are set forth in Sections
14.04(a) and (b), respectively.
SECTION 13.07(c) CAPITAL IMPROVEMENTS FUND.
(1) On or before the second anniversary of the
Initial Closing Date, the Property Company shall, at any one
time or from time to time, draw Revolving Facility Advances
in an amount equal to at least $25,000,000 in the aggregate,
and place such amounts in a deposit account in a financial
institution selected by the Property Company and approved by
the Lender. The term "CAPITAL IMPROVEMENTS FUND" means the
funds from time to time in the deposit account. The Capital
Improvements Fund shall be (i) segregated from all other
monies of the Property Company or other Persons, (ii)
invested in Permitted Investments and (iii) pledged to the
Lender pursuant to that certain Capital Improvements Fund
Pledge and Security Agreement attached as EXHIBIT LL to this
Agreement. Prior to an Event of Default, the Property Company
shall have the sole dominion and control over the Capital
Improvements Fund, and, from and after the occurrence of an
Event of Default, the Lender shall have sole dominion and
control over the Capital Improvements Fund.
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(2) The Property Company shall (i) complete and pay
for, or cause the Owners to complete and pay for, the capital
improvements to the Mortgaged Properties specified in the
plan attached as EXHIBIT MM to this Agreement (the "CAPITAL
IMPROVEMENTS PLAN"), (ii) use the funds in the Capital
Improvements Fund for such purposes, (iii) complete, or cause
the Owners to complete, the capital improvements specified in
the Capital Improvements Plan within the time and in the
manner prescribed by the Capital Improvements Plan (subject
to the provisions of paragraph (5) below) and (iv) in any
event, expend, or cause the Owners to expend, at least
$12,500,000 towards capital improvements under the Capital
Improvements Plan on or before September 30, 1998. In the
event that the Capital Improvements Fund is not sufficient to
perform all of the capital improvements specified in the
Capital Improvements Plan, the Property Company shall pay, or
cause the Owners to pay, from their own funds, all amounts
necessary to complete the capital improvements specified in
the Capital Improvements Plan. Changes in the Capital
Improvements Plan may be made with the Lender's prior written
consent (except that no consent shall be required for changes
in the category of the Capital Improvements Plan entitled
"Discretionary Repairs").
(3) The Property Company shall provide quarterly
certificates to the Lender detailing the progress of the
Capital Improvements Plan and the Lender shall have the right
to inspect such progress. The Property Company shall pay, or
cause the Owners to pay, all reasonable expenses of (a) any
engineer retained by the Lender to make such inspections,
provided that the Property Company, or the Owners, shall only
be required to pay such expenses for one such inspection
after the first anniversary of the Initial Closing Date and
one additional such inspection after the completion of the
Capital Improvements Plan and (b) any engineer retained by
the Lender to review the quarterly certificates. The
certificates shall certify to the Lender (i) the aggregate
amount of the Revolving Facility Advances that have been
drawn and placed in the Capital Improvements Fund; (ii) the
amount of the Capital Improvements Fund that has been drawn
by the Property Company to pay for capital improvements in
accordance with the Capital Improvements Plan, and the cost
of each capital improvement to which the draws were applied;
and (iii) the status of the Capital Improvements Plan,
including the portion of the Capital Improvements Plan which
has been completed, the portion that is in progress (and the
stage of such progress) and the portion that has not yet been
commenced. If requested by the Lender in writing,
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the certificates shall be accompanied by copies of all
invoices, receipts and other documentation necessary, in the
Lender's opinion, to verify the statements made in the
certificate. The Property Company shall pay, or cause the
Owners to pay, all reasonable, out-of-pocket expenses
incurred by the Lender in connection with the inspections
(including the expenses of the engineer described above, but
subject to the limitations on the payment of such expenses).
(4) The Capital Improvements Fund shall be in
addition to, and not in replacement of, any replacement
reserves for the Mortgaged Properties established in
accordance with the Replacement Reserve Agreement for the
Mortgaged Properties.
(5) If, as a result of labor disputes, fire, unusual
delay in deliveries, unavoidable casualties or other causes
beyond the Owner's reasonable control, or by other causes
which the Lender, in its reasonable judgment, determines may
justify delay, the Property Company or the Owner, as the case
may be, is delayed in completing the capital improvements
specified in the Capital Improvements Plan, then the period
of time within which the Property Company or the Owner, as
the case may be, shall be obligated to complete such capital
improvements shall be extended by the period of such delay.
SECTION 13.08. COVENANTS OF THE LENDER.
SECTION 13.08(a) CAP RATES. The Lender shall determine Cap
Rates for the Mortgaged Properties of the Owners approximately once
each year. The Lender shall determine the Cap Rates on the basis of
its internal survey and analysis of cap rates for comparable sales in
the vicinity of the Mortgaged Property, with such adjustments as the
Lender deems appropriate in its sole and absolute discretion. In
determining the Cap Rate, the Lender shall not be obligated to rely on
any information provided by the TC Parties. The Lender shall have the
right to select additional Cap Rates during the year at any time the
Lender determines that changed market or property conditions warrant
such action.
SECTION 13.08(b) VALUATIONS. The Lender shall perform a 12
Month Valuation for each of the Mortgaged Properties, and a
determination of Aggregate Facility Debt Service Coverage Ratios and
Aggregate Loan to Value Ratio for the Trailing 12 Month Period (all of
which 12 Month Valuations and determinations shall be binding and
conclusive on the TC Parties) once each calendar quarter, within 20
Business Days after the Owners have delivered to the Lender the
reports
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required in Section 13.01(b)(1) and (2). The Lender shall have the
right to perform additional 12 Month Valuations and determinations at
other times during the year (i) in connection with a Request, or (ii)
at any time the Lender determines that changed market or property
conditions warrant such action.
SECTION 13.08(c) NOTICE TO OTHER INSTITUTIONAL LENDERS OF THE
TC PARTIES. In the event a TC Party grants a Lien on any Ownership
Interests to an Institutional Lender which is permitted under Sections
13.04(a)(2) or 13.06(a)(2), and the TC Party obtains the undertaking
from the Institutional Lender described in Section 13.04(a)(3) or
13.06(a)(3), then, within 30 days after the TC Party's request, the
Lender will make a written undertaking, for the benefit of the
Institutional Lender, that, in the event the Lender gives the TC Party
a notice under the Loan Documents which is in the nature of a notice
of default, a notice of acceleration of the Indebtedness, a notice of
foreclosure or a notice of the commencement of the exercise of any
other remedy against the TC Party or any of the Collateral, then the
Lender shall also endeavor to give to the Institutional Lender a
simultaneous copy of the notice. The undertaking may be conditioned
upon the receipt by the Lender of a written confirmation by the TC
Parties and the Institutional Lender that the failure of the Lender to
give such notices shall not (i) constitute a default under the Loan
Documents, (ii) give rise to any claim whatsoever by the TC Parties or
the Institutional Lender against the Lender or (iii) invalidate or
otherwise affect the efficacy of any notice given by the Lender to any
TC Party.
SECTION 13.08(d) INSURANCE CLAIMS SETTLEMENT. Notwithstanding the
provision of the second sentence of the third paragraph of Paragraph 5 of the
Uniform Provisions of the Security Instruments (as they provide on the Initial
Closing Date) relating to insurance claims, so long as (i) the casualty to a
Mortgaged Property has led to a claim of less than $500,000 and (ii) no Event
of Default then exists, the Lender shall not exercise the power of attorney
granted thereby, and an Owner may make proof of loss, adjust and compromise
claims, oppose and prosecute actions relating to the casualty insurance policy
in question and collect and receive the insurance proceeds in question.
ARTICLE XIV
FEES
SECTION 14.01. FEE DEFINITIONS. For all purposes of this
Agreement, the following terms shall have the respective meanings
set forth below:
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"STANDBY FEE" means, for each calendar month, the product
obtained by multiplying--
(a) 1/12, by
(b) 19 basis points, by
(c) the average daily Unused Capacity during
the month.
"UNUSED CAPACITY" means, for any specified date, the
excess (if any) of--
(a) the sum of (1) Maximum Credit Commitment in
effect on such date and (2) the amount of
any reduction in the Maximum Credit
Commitment under Section 7.05(a), over
(b) the aggregate unpaid principal balance of
the Advances Outstanding on such date.
SECTION 14.02. STANDBY FEE. The Property Company shall pay the Standby
Fee to the Lender for each month during the Term of this Agreement, in arrears,
on the first Business Day following the end of the month, except that the
Standby Fee for the last month during the Term of this Agreement shall be paid
on the last day of the Term of this Agreement. If the Initial Closing Date is
not the first day of a calendar month, the Standby Fee payable for the calendar
month in which the Initial Closing Date occurs shall be prorated as of the
Initial Closing Date.
SECTION 14.03. ORIGINATION FEES. The Borrowers shall pay to
the Lender an origination fee (the "ORIGINATION FEE") equal to
$1,406,250. The Borrowers shall pay the Origination Fee on the
Initial Closing Date.
SECTION 14.04. DUE DILIGENCE FEES.
SECTION 14.04(a) INITIAL DUE DILIGENCE FEES. The Borrowers
shall pay to the Lender due diligence fees (including legal fees and
expenses relating to due diligence and the closing of this Agreement
and the Initial Advance) (the "INITIAL DUE DILIGENCE FEES") with
respect to the Initial Mortgaged Properties equal to the product
obtained by multiplying --
(1) $16,000 per Initial Mortgaged Property, by
(2) the number of Initial Mortgaged Properties.
The Borrowers have previously paid to the Lender a portion of the
Initial Due Diligence Fees and shall pay the remainder of
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the Initial Due Diligence Fees to the Lender on the Initial
Closing Date.
SECTION 14.04(b) ADDITIONAL DUE DILIGENCE FEES FOR ADDITIONAL
COLLATERAL. The Borrowers shall pay to the Lender additional due diligence fees
(the "ADDITIONAL COLLATERAL DUE DILIGENCE FEES") with respect to each
Additional Mortgaged Property equal to the sum of (i) $1,000 and (ii) the
actual out-of-pocket expenses incurred by the Lender in connection with all due
diligence activities which the Lender deems necessary in connection with the
addition of the Additional Mortgaged Property to the Collateral Pool. The
Borrowers shall pay Additional Collateral Due Diligence Fees for the Additional
Mortgaged Property to the Lender on the date on which they submit the
Collateral Addition Request for the addition of the Additional Mortgaged
Property to the Collateral Pool.
SECTION 14.05. DOCUMENT FEES. The Borrowers shall pay no document
certification fees to the Lender for the Loan Documents certified by ▇▇▇▇▇▇ ▇▇▇
in connection with the Initial Advance made on the Initial Closing Date. The
Borrowers shall pay to the Lender document certification fees (the "DOCUMENT
CERTIFICATION FEES") for each Request made after the Initial Closing Date equal
to the product obtained by multiplying--
(a) $25.00, by
(b) the number of Loan Documents certified by ▇▇▇▇▇▇ Mae
in connection with such Request.
The Borrowers shall pay the Document Certification Fees to the Lender on each
Closing Date after the Initial Closing Date (with respect to the Loan
Documents, if any, certified on such Closing Date). The Borrowers shall also
pay to the Lender a monthly document custody fee (the "DOCUMENT CUSTODY FEE")
equal to the product obtained by multiplying--
(a) $2.00, by
(b) the number of Loan Documents held in custody by
▇▇▇▇▇▇ ▇▇▇ during the month.
The Document Custody Fee shall be paid monthly, in arrears, on the day of each
month on which interest payments under the Base Facility Notes are required to
be paid.
SECTION 14.06. LEGAL FEES AND EXPENSES.
SECTION 14.06(a) INITIAL LEGAL FEES. The Borrowers shall pay
to the Lender, for delivery to ▇▇▇▇▇▇ Mae, the actual out-of-pocket
legal fees and expenses incurred by ▇▇▇▇▇▇ ▇▇▇ in connection with the
preparation and negotiation
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of this Agreement, the other Loan Documents executed on the Initial
Closing Date and the closing of the Initial Advance. The Borrowers
shall pay such legal fees and expenses of ▇▇▇▇▇▇ Mae to the Lender on
the Initial Closing Date.
SECTION 14.06(b) ADDITIONAL LEGAL FEES AND EXPENSES FOR
ADDITIONAL COLLATERAL. The Borrowers shall pay to the Lender, with
respect to each Additional Mortgaged Property, the actual
out-of-pocket legal fees and expenses incurred by the Lender and
▇▇▇▇▇▇ ▇▇▇ in connection with the preparation and negotiation of the
Collateral Addition Loan Documents executed on the Closing Date for
the addition of the Additional Mortgaged Property and the closing of
the addition of the Additional Mortgaged Property to the Collateral
Pool. The Borrowers shall pay the legal fees and expenses to the
Lender on the Closing Date for the addition of the Additional
Mortgaged Property to the Collateral Pool.
SECTION 14.07. MBS-RELATED COSTS. The Borrowers shall pay to the
Lender, within 30 days after demand, all fees and expenses incurred by the
Lender or ▇▇▇▇▇▇ Mae in connection with the issuance of any MBS backed by an
Advance, including the fees charged by Depository Trust Company and State
Street Bank or any successor fiscal agent or custodian.
SECTION 14.08. OTHER FEES. The Borrowers shall pay the following
additional fees and payments, if and when required pursuant to the terms of
this Agreement:
(a) The Collateral Addition Fee, pursuant to Section 6.03(b),
in connection with the addition of an Additional Mortgaged Property to
the Collateral Pool pursuant to Article VI;
(b) The Release Price, pursuant to Section 7.03(c), in
connection with the release of a Mortgaged Property from the
Collateral Pool pursuant to Article VII;
(c) The Release Fee, pursuant to Section 7.03(d), in
connection with the release of a Mortgaged Property from the
Collateral Pool pursuant to Article VII;
(d) The Revolving Facility Termination Fee, pursuant to
Section 9.03(b), in connection with a complete or partial termination
of the Revolving Facility pursuant to Article IX; and
(e) As part of any required prepayment premium, the Credit
Facility Termination Fee, pursuant to Section 10.03, in connection
with the termination of the Credit Facility pursuant to Article X.
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ARTICLE XV
CASH MANAGEMENT
The Owners and the Lender shall execute the Cash Management Agreement
on the Initial Closing Date.
ARTICLE XVI
EVENTS OF DEFAULT
SECTION 16.01. EVENTS OF DEFAULT. The occurrence of any one
or more of the following events shall constitute an Event of
Default:
SECTION 16.01(a) Any representation or warranty made by, or
on behalf of, any TC Party in this Agreement or any other Loan
Document shall prove to have been false in any material respect as of
the date on which it was made;
SECTION 16.01(b) The failure of any TC Party to pay, on or
before the date when due, (i) any interest or principal due with
respect to any Advance, (ii) any amount payable into the Tax Escrow
Fund in accordance with Section 19.02(a) and the Security Instruments,
(iii) any amount payable into the Capital Improvements Fund in
accordance with Section 13.07(c), (iv) any monthly deposit payable
into the Replacement Reserve in accordance with Section 13.01(g), and
(v) any Monthly Cap Escrow Payment payable into the Cap Escrow Fund in
accordance with Section 20.03.
SECTION 16.01(c) The failure of any TC Party to pay, on or
before the date when due, any amount (other than as set forth in
paragraph (b) above) due and payable by any TC Party under the Loan
Documents, including fees, costs or expenses, if the failure continues
for a period of 10 days after receipt by the TC Party of a written
notice from the Lender identifying the failure;
SECTION 16.01(d) There shall have been entered against any TC
Party a judgment against any TC Party or any attachment or other levy
against any portion of any TC Party's assets with respect to a claim
in an amount in excess of $1,000,000 individually or in the aggregate,
and the judgment, attachment or levy remains unpaid, unstayed on
appeal, undischarged, unbonded, not fully insured (other than stated
deductibles or retentions) or undismissed for a period of 60 days;
SECTION 16.01(e) With respect to any Indebtedness incurred by
a TC Party in an aggregate amount in excess of
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$1,000,000, the failure of any TC Party (i) to pay all or any portion
of the Indebtedness when it is due and payable, or (ii) to perform and
observe any of the terms, covenants and conditions contained in any
document or instrument relating to the Indebtedness (other than those
described in clause (i) above) when such performance or observation is
due, if
(x) the failure to pay, perform or observe
(I) continues after the expiration of any
applicable notice and cure period and
(II) gives the creditor to whom the Indebtedness
is owed the right to accelerate the
Indebtedness, and
(y) either
(I) the Indebtedness has matured or
(II) the creditor to whom the Indebtedness is
due and payable has accelerated the
maturity of the Indebtedness;
SECTION 16.01(f) With respect to any Indebtedness incurred by
a TC Party in an aggregate amount in excess of $1,000,000 which is
secured by a Lien on the Ownership Interests in an Owner, the REIT
Sub, the Property Company or the Operating Partnership, the failure of
the TC Party to pay all or any portion of the Indebtedness when it is
due and payable, if the failure to pay continues after the expiration
of any applicable notice and cure period;
SECTION 16.01(g) With respect to any Indebtedness incurred by
a TC Party in an aggregate amount in excess of $1,000,000 which is
secured by a Lien on the Ownership Interests in an Owner, the REIT
Sub, the Property Company or the Operating Partnership, the failure of
the TC Party to perform and observe any of the terms, covenants and
conditions contained in any document or instrument relating to such
Indebtedness (other than those described in subsection (f) above) when
such performance or observation is due, if
(x) the failure to perform or observe
(I) continues after the expiration of any
applicable notice and cure period and
(II) gives the creditor to whom the Indebtedness
is owed the right to accelerate the
Indebtedness and
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(y) (I) the Indebtedness has matured,
(II) the creditor to whom the Indebtedness is
due and payable has accelerated the
maturity of the Indebtedness or
(III) the creditor to whom the Indebtedness is
owed has instituted foreclosure or other
comparable proceedings with respect to such
Ownership Interests;
SECTION 16.01(h) Any event under any Loan Document which (i)
is defined to be an "Event of Default," (ii) constitutes a default
(but only after the expiration of any applicable notice and cure
period) or (iii) permits the Lender to accelerate the indebtedness
evidenced by a Note;
SECTION 16.01(i) In the event the Property Company in good
faith has determined that it has performed its obligation to complete,
or to cause the Owners to complete, the capital improvements to the
Mortgaged Properties specified in the Capital Improvements Plan within
the time and in the manner prescribed by the Capital Improvements
Plan, and the Lender determines, upon inspection, that the Property
Company or the Owners, as the case may be, have not so performed, the
failure to have so performed shall constitute an Event of Default, if
the failure continues for a period of 30 days after receipt by the TC
Party of a written notice from the Lender identifying the failure;
provided, however, that if, in the Lender's judgment:
(1) the cure of the failure requires a period
in excess of 30 days, and
(2) corrective action is instituted by any
Owner within the 30-day period and is
pursued diligently and in good faith,
then the failure shall not constitute an Event of Default unless the
failure is not cured by the Owners within a reasonable period of time
after receipt by the TC Party of a written notice from the Lender
identifying the failure.
SECTION 16.01(j) The failure of any TC Party to perform or
observe any term, covenant, condition or agreement under this
Agreement, or any other Loan Document, other than as set forth in
paragraphs (a) through (i) above, if the failure continues for a
period of 30 days after receipt by the TC Party of a written notice
from the Lender identifying the failure; provided, however, that if,
in the Lender's judgment:
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(1) the cure of the failure requires a period
in excess of 30 days,
(2) the failure will not result in a material
adverse effect on:
(i) the financial condition of any TC
Party,
(ii) the validity, priority,
perfection, or enforceability of
this Agreement or any other Loan
Document, or
(iii) the rights and remedies of the
Lender under any Loan Document, or
the value of, or the Lender's
ability to have recourse against,
any Collateral,
(3) the failure is capable of being cured
within a period not in excess of 60 days and
(4) corrective action is instituted by any Owner
within the 30-day period and is pursued
diligently and in good faith,
then the failure shall not constitute an Event of Default unless the
failure is not cured by the Owners within 60 days after receipt by the
TC Party of a written notice from the Lender identifying the failure.
ARTICLE XVII
REMEDIES
SECTION 17.01. REMEDIES; WAIVERS.
SECTION 17.01(a) Upon the occurrence of an Event of Default,
the Lender shall have the right to pursue any remedies available to it
under any of the Loan Documents.
SECTION 17.01(b) Upon the occurrence of an Event of Default,
the Lender shall have the right to pursue all remedies available to it
at law or in equity, including obtaining specific performance and
injunctive relief.
SECTION 17.01(c) The Lender shall have the right, to be
exercised in its complete discretion, to waive any breach hereunder
(including the occurrence of an Event of Default), by a writing
setting forth the terms, conditions, and extent of such waiver signed
by the Lender and delivered to the
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Borrowers. Unless such writing expressly provides to the contrary, any
waiver so granted shall extend only to the specific event or
occurrence which gave rise to the waiver and not to any other similar
event or occurrence which occurs subsequent to the date of such
waiver.
SECTION 17.01(d) If any TC Party fails to perform the
covenants and agreements contained in this Agreement or any of the
other Loan Documents, then the Lender at the Lender's option may make
such appearances, disburse such sums and take such action as the
Lender deems necessary, in its sole discretion, to protect the
Lender's interest, including (i) disbursement of attorney's fees, (ii)
entry upon the Mortgaged Property to make repairs and Replacements,
(iii) procurement of satisfactory insurance as provided in paragraph 5
of the Security Instrument encumbering the Mortgaged Property, and
(iv) if the Security Instrument is on a leasehold, exercise of any
option to renew or extend the ground lease on behalf of the Owner and
the curing of any default of the Owner in the terms and conditions of
the ground lease. Any amounts disbursed by the Lender pursuant to this
paragraph (d), with interest thereon, shall become additional
indebtedness of the Borrowers secured by the Loan Documents. Unless
the Borrowers and the Lender agree to other terms of payment, such
amounts shall be immediately due and payable and shall bear interest
from the date of disbursement at the Blended Rate from time to time
unless collection from the Borrowers of interest at such rate would be
contrary to applicable law, in which event such amounts shall bear
interest at the highest rate which may be collected from the Borrowers
under applicable law. Nothing contained in this paragraph (d) shall
require the Lender to incur any expense or take any action hereunder.
SECTION 17.02. NO REMEDY EXCLUSIVE. Unless otherwise expressly
provided, no remedy herein conferred upon or reserved is intended to be
exclusive of any other available remedy, but each remedy shall be cumulative
and shall be in addition to other remedies given under the Loan Documents or
existing at law or in equity.
SECTION 17.03. NO WAIVER. No delay or omission to exercise any right
or power accruing under any Loan Document upon the happening of any Event of
Default or Potential Event of Default shall impair any such right or power or
shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient.
SECTION 17.04. NO NOTICE. In order to entitle the Lender to exercise
any remedy reserved to the Lender in this Article, it shall not be necessary to
give any notice, other than such notice as may be required by applicable law
(except to the extent such notice may be waived by the TC Parties) or under the
applicable
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provisions of this Agreement or any of the other Loan Documents. The TC Parties
hereby waive any notices which are required by law, to the fullest extent such
waiver is permitted by applicable law.
SECTION 17.05 APPLICATION OF PAYMENTS. Except as otherwise expressly
provided in the Loan Documents, and unless applicable law provides otherwise,
all payments received by the Lender from any of the TC Parties under the Loan
Documents shall be applied by the Lender against any amounts then due and
payable under the Loan Documents by any of the TC Parties, in any order of
priority that the Lender may determine.
ARTICLE XVIII
RIGHTS OF ▇▇▇▇▇▇ ▇▇▇
SECTION 18.01. SPECIAL POOL PURCHASE CONTRACT. The TC Parties
acknowledge that ▇▇▇▇▇▇ Mae is entering into an agreement with the Lender (the
"SPECIAL POOL PURCHASE CONTRACT"), pursuant to which, INTER ALIA, (i) the
Lender shall agree to assign all of its rights under this Agreement to ▇▇▇▇▇▇
▇▇▇, (ii) ▇▇▇▇▇▇ ▇▇▇ shall accept the assignment of the rights, (iii) subject
to the terms, limitations and conditions set forth in the Special Pool Purchase
Contract, ▇▇▇▇▇▇ Mae shall agree to purchase each Advance issued under this
Agreement by issuing to the Lender a ▇▇▇▇▇▇ ▇▇▇ MBS, in the amount and for a
term equal to the Advance purchased and backed by an interest in the Base
Facility Notes or the Revolving Facility Note, as the case may be, and the
Collateral Pool securing the Notes and the Guaranties, (iv) the Lender shall
agree to assign to ▇▇▇▇▇▇ Mae all of the Lender's interest in the Notes and
Collateral Pool securing the Notes and the Guaranties, and (v) the Lender shall
agree to service the loans evidenced by the Notes.
SECTION 18.02. ASSIGNMENT OF RIGHTS. The TC Parties acknowledge and
consent to the assignment to ▇▇▇▇▇▇ ▇▇▇ of all of the rights of the Lender
under this Agreement and all other Loan Documents, including the right and
power to make all decisions on the part of the Lender to be made under this
Agreement and the other Loan Documents, but ▇▇▇▇▇▇ Mae, by virtue of this
assignment, shall not be obligated to perform the obligations of the Lender
under this Agreement or the other Loan Documents. The Lender, however, shall
remain fully liable for all of its obligations under this Agreement,
notwithstanding the assignment of its rights described under this Section.
SECTION 18.03. RELEASE OF COLLATERAL. The TC Parties hereby
acknowledge that, after the assignment of Loan Documents contemplated in
Section 18.02, the Lender shall not have the right or power to effect a release
of any Collateral pursuant to Articles VII or X. The TC Parties acknowledge
that the Security Instruments provide for the release of the Collateral under
Articles VII and X.
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Accordingly, the TC Parties shall not look to the Lender for performance of any
obligations set forth in Articles VII and X, but shall look solely to the party
secured by the Collateral to be released for such performance. The Lender
represents and warrants to the TC Parties that the party secured by the
Collateral shall be subject to the release provisions contained in Articles VII
and X by virtue of the release provisions in each Security Instrument.
SECTION 18.04. REPLACEMENT OF LENDER. At the request of ▇▇▇▇▇▇ ▇▇▇,
the TC Parties and the Lender shall agree to the assumption by another lender
designated by ▇▇▇▇▇▇ Mae, of all of the obligations of the Lender under this
Agreement and the other Loan Documents (and assignment of concomitant rights),
and/or any related servicing obligations, and, at ▇▇▇▇▇▇ Mae's option, the
concurrent release of the Lender from its obligations under this Agreement and
the other Loan Documents and/or any related servicing obligations, and shall
execute all releases, modifications and other documents which ▇▇▇▇▇▇ Mae
determines are necessary or desirable to effect such assumption.
SECTION 18.05. ▇▇▇▇▇▇ ▇▇▇ AND LENDER FEES AND EXPENSES. The TC Parties
agree that any provision providing for the payment by any one or more of the TC
Parties of fees, costs or expenses incurred or charged by the Lender pursuant
to this Agreement shall be deemed to provide for the payment by such TC Party
or Parties of all fees, costs and expenses incurred or charged by the Lender or
▇▇▇▇▇▇ Mae in connection with the matter for which fees, costs or expenses are
payable.
SECTION 18.06. THIRD-PARTY BENEFICIARY. The TC Parties hereby
acknowledge and agree that ▇▇▇▇▇▇ ▇▇▇ is a third party beneficiary of all of
the representations, warranties and covenants made by any TC Parties to, and
all rights under this Agreement conferred upon, the Lender, and, by virtue of
its status as third-party beneficiary and/or assignee of the Lender's rights
under this Agreement, ▇▇▇▇▇▇ Mae shall have the right to enforce all of the
provisions of this Agreement against the TC Parties.
ARTICLE XIX
INSURANCE AND REAL ESTATE TAXES
SECTION 19.01. INSURANCE ESCROW FUND.
Except during the continuance of an Event of Default, no fund for
Insurance Premiums (a "INSURANCE ESCROW FUND") shall be required to be
established with the Lender under the Loan Documents, provided that, in the
event the insurance deductible(s) of, or required in, any Insurance Policy
exceeds $100,000, the Lender reserves the right to require the Owners to
establish with the Lender, as additional security for the Notes, an Insurance
Escrow Fund equal to the aggregate amount of the insurance deductible(s)
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on the Insurance Policy, as reasonably determined by the Lender. If the Lender
shall require an Insurance Escrow Fund, it shall establish the Insurance Escrow
Fund in a deposit account with a financial institution selected by the Owners
and approved by the Lender, which approval shall not be unreasonably withheld,
conditioned or delayed, and the amounts in the Insurance Escrow Fund shall be
invested by the Lender in Permitted Investments selected by the Lender. All
earnings on such Permitted Investments shall be added to, and become a part of,
the Insurance Escrow Fund.
SECTION 19.02. TAXES.
SECTION 19.02(a) ESCROW. A fund (the "TAX ESCROW FUND")for the
aggregate amount of yearly water and sewer rates and taxes and assessments
("REAL ESTATE TAXES") which may be levied on the Mortgaged Properties shall be
required to be established with the Lender pursuant to this Article XIX. The
Lender shall establish the Tax Escrow Fund in a deposit account with a
financial institution selected by the Owners and approved by the Lender, which
approval shall not be unreasonably withheld, conditioned or delayed, and the
amounts in the Tax Escrow Fund shall be invested by the Lender in Permitted
Investments selected by the Lender. All earnings on such Permitted Investments
shall be added to, and become a part of, the Tax Escrow Fund.
SECTION 19.02(b) DELIVERY OF LETTER OF CREDIT. Provided that
no Event of Default has occurred and is then continuing, at any time
during the Term of this Agreement during which the Tax Escrow Fund is
held by the Lender, the Owners may, upon notice to the Lender, elect
to substitute for the Tax Escrow Fund a Letter of Credit (as defined
below) in accordance with this subsection, in which event the Lender
shall return the Tax Escrow Fund to the Owners within 30 days after
the Owners deliver the Letter of Credit to the Lender. Provided that
no Event of Default has occurred and is then continuing, at any time
during the Term of this Agreement during which a Letter of Credit for
Real Estate Taxes is held by the Lender, the Owners may, upon notice
to the Lender, elect to substitute for the Letter of Credit the Tax
Escrow Fund, in which event the Owners shall deliver to the Lender, in
cash, the amount of the Tax Escrow Fund which would have been required
at the time of the substitution if the Owners had not elected to
furnish the Letter of Credit and the Lender shall return the Letter of
Credit to the Owners within 30 days after its receipt of the cash for
the Tax Escrow Fund. Any Letter of Credit delivered to the Lender in
accordance with this subsection shall be a clean, irrevocable Letter
of Credit, naming the Lender as beneficiary, in an amount equal to the
maximum aggregate amount which, at any point in time during the 12
month period immediately succeeding the date on which the Letter of
Credit is delivered, would have been required to have been on deposit
in the Tax Escrow Fund (the
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"MAXIMUM ESCROW AMOUNT"), if one had been maintained, as such amount
is determined by the Lender. The Letter of Credit must be issued by an
issuer (the "ISSUER") that meets the Lender's requirements for ratings
of issuers of acceptable Letters of Credit as set forth in the DUS
Guide, must comply with all other requirements for letters of credit
contained in the DUS Guide and must be a so-called "evergreen" letter
of credit which does not expire unless the Issuer gives the Lender at
least 30 days' advance written notice of the expiration. (The term
"LETTER OF CREDIT" shall mean the letter of credit delivered to the
Lender pursuant to this paragraph (b) in connection with the Lender's
making the loans evidenced by the Notes to the Owners, any replacement
letter of credit, and any amendment or renewal of the letter of credit
or the replacement letter of credit.) If the Owners at any time
provide a confirming letter of credit, a replacement confirming letter
of credit or an amendment or renewal of the confirming letter of
credit or the replacement confirming letter of credit, then the term
"Letter of Credit" shall also mean the confirming letter of credit as
so amended, renewed or replaced.)
SECTION 19.02(c) LETTER OF CREDIT AS ADDITIONAL COLLATERAL.
The TC Parties agree that the Letter of Credit provides collateral for
the Notes in addition to the lien of the Security Instruments on the
Mortgaged Properties and, during the continuance of any Event of
Default, the Lender shall be entitled to take any action permitted
under this Agreement, in addition to pursuing any other remedy the
Lender may have with respect to any other Collateral or secured
property, including the Mortgaged Properties.
SECTION 19.02(d) CONDITIONS FOR PROVIDING AND HOLDING LETTER
OF CREDIT.
SECTION 19.02(d)(1) PERIOD DURING WHICH THE OWNERS MUST
PROVIDE LETTER OF CREDIT. Until the earliest of (i) payment in full of
all sums secured by the Security Instruments and release by the Lender
of the liens of the Security Instruments, or (ii) the date that the
Lender fully draws on the Letter of Credit as permitted by this
Agreement, the Owners shall renew, amend or replace the Letter of
Credit in accordance with the terms of this Agreement, to ensure that
the Letter of Credit remains in effect and does not expire.
SECTION 19.02(d)(2) RETURN OF THE LETTER OF CREDIT OR THE
PROCEEDS THEREOF. The Lender shall return the Letter of Credit, or the
proceeds of any draws on such Letter of Credit (less all amounts which
have been applied by the Lender pursuant to the terms of this Article
XIX) to the Owners 10 days after the date on which the Lender releases
the lien of
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the Security Instruments following payment in full of all
amounts secured by the Security Instruments.
SECTION 19.02(d)(3) APPLICATION FOR PREPAYMENT. If the
proceeds of the Letter of Credit are applied to payment of a portion
of the principal amount of the Notes, a prepayment premium
attributable to such prepaid principal amount shall be due to the
Lender and to the extent, if any, as provided in the Notes.
SECTION 19.02(d)(4) ADJUSTMENT OF THE LETTER OF CREDIT. The
Owners shall deliver to the Lender copies of the bills and notices of
assessments for Real Estate Taxes for the Mortgaged Properties.
Promptly upon the Owners' receipt of each yearly ▇▇▇▇ of Real Estate
Taxes, the Owners shall deliver to the Lender an amendment or
replacement of the Letter of Credit. In addition, not more than two
times each calendar year, the Owners shall, promptly after receipt of
notice from the Lender, deliver to the Lender an amendment or
replacement of the Letter of Credit in the Maximum Escrow Amount for
the then-current calendar year, as such yearly amount is reasonably
estimated by Lender on the basis of assessments and bills and
reasonable estimates thereof.
SECTION 19.02(e) RENEWAL OR REPLACEMENT OF LETTER OF CREDIT.
SECTION 19.02(e)(1) RENEWAL OR REPLACEMENT. At least
30 days prior to the expiration date of the Letter of Credit,
the Owners shall either (i) cause the Letter of Credit to be
amended to extend its expiration date, or (ii) furnish a
replacement Letter of Credit. In either case, the amended
Letter of Credit or the replacement Letter of Credit must (A)
be in compliance with the requirements for letters of credit
under the DUS Guide, and be from an Issuer which meets the
Lender's requirements for ratings of issuers of acceptable
letters of credit as set forth in the DUS Guide, (B) have a
term not less than one (1) year (unless a shorter term is
approved in writing by the Lender), and (C) be in the amount
of the outstanding Letter of Credit, amended to the extent
required pursuant to paragraph (d)(4) above. The foregoing
shall not affect the requirement that, notwithstanding the
expiration date of the Letter of Credit, it will not expire
until the Issuer has given the Lender at least 30 days'
advance written notice.
SECTION 19.02(e)(2) REVIEW OF RATING OF ISSUER;
REPLACEMENT OF LETTER OF CREDIT. From time to time, the
Lender shall review the rating of the Issuer of the then
outstanding Letter of Credit. If the Lender notifies the
Owners that at the time of any such review the issuing
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bank does not meet the Lender's requirements for ratings of
issuers of acceptable letters of credit as set forth in the
DUS Guide, the Owners shall replace the outstanding Letter of
Credit with a Letter of Credit that complies with all of the
requirements set forth in the DUS Guide, no later than 30
days after the Lender's notice to the Owners, unless the
outstanding Letter of Credit would expire prior to such
30-day period, in which case the Owners shall provide the
replacement Letter of Credit no later than five business days
prior to the expiration date of the outstanding Letter of
Credit.
SECTION 19.02(e)(3) DRAW ON LETTER OF CREDIT. If the
Owners do not provide an amendment to, or replacement of, the
Letter of Credit when required pursuant to paragraph (1) or
(2) above, as the case may be, which amended or replacement
Letter of Credit satisfies all of the requirements of
paragraphs (1) and (2) above, the Lender shall draw the full
amount of the Letter of Credit and hold and apply the
proceeds as permitted hereunder and, in such event, no Event
of Default shall be deemed to exist by virtue of the
Borrowers' failure to comply with said paragraphs (1) and
(2).
SECTION 19.02(f) DEFAULT UNDER THE LOAN DOCUMENTS.
SECTION 19.02(f)(1) REMEDIES. During the continuance
of an Event of Default, the Lender shall be entitled, in its
sole discretion, to:
(i) Draw on the Letter of Credit and hold
the proceeds of the Letter of Credit and hold it as
additional cash Collateral;
(ii) Draw on the Letter of Credit and apply
all or any portion of the proceeds of the Letter of
Credit to payment of the unpaid principal amount of
the Notes and the prepayment premium (calculated as
provided in the Notes) on the principal amount
prepaid; provided, however, that such application of
proceeds shall not cure or be deemed to cure any
default;
(iii) Draw on the Letter of Credit and
apply all or any portion of the proceeds of the
Letter of Credit to reimburse the Lender for any
losses or expenses (including legal fees) suffered
or incurred by the Lender as a result of such
default; and/or
(iv) Exercise all rights and remedies
available to the Lender at law or in equity or
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under any of the Loan Documents (including this
Section).
SECTION 19.02(f)(2) NO OBLIGATION TO APPLY PROCEEDS;
NO CURE. Nothing in this Section shall obligate the Lender to
apply all or any portion of the proceeds of the Letter of
Credit to cure any default under the Loan Documents or to
reduce the indebtedness evidenced by the Notes. No
application of proceeds of the Letter of Credit by the Lender
shall be deemed to cure any default.
SECTION 19.02(g) PROCEEDS OF THE LETTER OF CREDIT.
SECTION 19.02(g)(1) PROVIDING REPLACEMENT LETTER OF CREDIT
AFTER A DRAW. Provided that the Owners are not otherwise in default
under any of the Loan Documents (including the Security Instruments),
after the Lender has drawn on the Letter of Credit, but prior to
application of proceeds, the Lender may, but is not obligated to,
permit the Owners to provide a replacement Letter of Credit that
complies with all the requirements set forth in the DUS Guide, in
which case the Lender shall return the proceeds of the draw to the
Owners, less the Lender's costs and expenses (including attorneys'
fees and expenses and allocable costs for time spent by officers,
employees, contractors and agents of the Lender).
SECTION 19.02(g)(2) PROCEEDS HELD IN TAX ESCROW FUND ACCOUNT.
If the Lender draws on the Letter of Credit and holds the proceeds
under the Security Instruments, such funds shall be held by the Lender
in the Tax Escrow Fund account.
SECTION 19.02(g)(3) NO OBLIGATION TO DRAW OR TO APPLY
PROCEEDS. The Lender shall not be obligated to draw on the Letter of
Credit upon any default under any of the Loan Documents or apply the
proceeds of any draw on the Letter of Credit to cure a default under
the Loan Documents. The Lender may hold the Letter of Credit or the
proceeds of any Letter of Credit until the date for return as
determined pursuant to paragraph (d)(2), or apply all or any portion
of the proceeds as permitted by this Agreement or any of the Loan
Documents and hold any remaining proceeds until the date for return
determined under paragraph (d)(2).
SECTION 19.03 FUNDS FOR TAXES, INSURANCE AND OTHER CHARGES.
In the event an Insurance Escrow Fund or a Tax Escrow Fund is required under
the terms of this Article XIX, the following provisions shall apply:
SECTION 19.03(a) Subject to applicable law, the Owners
shall pay to the Lender on the first day of each calendar
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month (or on another day designated in writing by the Lender), until
the Insurance Escrow Fund and Tax Escrow Fund are no longer required
under the Loan Documents, a sum (herein "FUNDS") equal to one-twelfth
of (1) if a Tax Escrow Fund is required, the Real Estate Taxes which
may be levied on the Mortgaged Properties and (2) if an Insurance
Escrow Fund is required, the Insurance Premiums or insurance
deductibles (either, an "INSURANCE PAYMENT"), whichever is required by
the Loan Documents. The Lender may require the Owners to pay to the
Lender, in advance, such other Funds for other taxes, charges,
premiums, assessments and impositions in connection with the Owners or
the Mortgaged Properties to the extent such taxes, charges, premiums,
assessments or impositions constitute an encumbrance on a Mortgaged
Property with priority over the Security Instruments on the Mortgaged
Property (herein "OTHER IMPOSITIONS"). Unless otherwise provided by
applicable law, the Lender may require Funds for Other Impositions to
be paid by the Owners in a lump sum or in periodic installments, at
the Lender's option.
SECTION 19.03(b) The Lender shall apply the Funds to pay the
Real Estate Taxes, Insurance Premiums or Other Impositions, as the
case may be, so long as no Event of Default has occurred. The Lender
shall make no charge for so holding and applying the Funds, analyzing
said account or for verifying and compiling said assessments and
bills, unless the Lender pays the Owners interest, earnings or profits
on the Funds and applicable law permits the Lender to make such a
charge. The Lender shall give to the Owners, without charge, an annual
accounting of the Funds in the Lender's normal format showing credits
and debits to the Funds and the purpose for which each debit to the
Funds was made. The Funds are pledged as additional security for the
sums secured by the Security Instruments.
SECTION 19.03(c) If the amount of the Funds held in the Tax
Escrow Fund and the Insurance Escrow Fund at the time of the annual
accounting thereof shall exceed the amount deemed necessary by the
Lender to provide for the payment of any Insurance Premiums (if an
Insurance Escrow Fund is required), Real Estate Taxes (if a Tax Escrow
Fund is required) and Other Impositions (if either an Insurance Escrow
Fund or a Tax Escrow Fund is required), as they fall due, such excess
shall be credited to the Owners on the next monthly installment or
installments of Funds due. If at any time the amount of the Funds held
in the Tax Escrow Fund and the Insurance Escrow Fund shall be less
than the amount deemed necessary by the Lender to pay such Insurance
Premiums (if an Insurance Escrow Fund is required), Real Estate Taxes
(if a Tax Escrow Fund is required) and Other Impositions (if either an
Insurance Escrow Fund or a Tax Escrow Fund is required) , as they fall
due, the
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Owners shall pay to the Lender any amount necessary to make up the
deficiency within 30 days after notice from the Lender to the Owners
requesting payment thereof.
SECTION 19.03(d) Upon payment in full of all sums secured by
the Loan Documents, the Lender shall promptly refund to the Owners any
Funds held by the Lender.
ARTICLE XX
INTEREST RATE CAPS
SECTION 20.01. CAP REQUIREMENT. The Property Company shall obtain a
Cap as a condition to the issuance of the first Revolving Facility Advance.
Once the Property Company has obtained the Cap, it shall maintain the Cap at
all times thereafter during the Term of this Agreement. The first Cap in effect
under this Agreement shall be for a period commencing not later than the
Closing Date for the first Revolving Facility Advance and ending not earlier
than the fifth anniversary of the Initial Closing Date (the "INITIAL CAP
PERIOD"). Effective not later than the last day of the Initial Cap Period, the
Property Company shall obtain a new Cap (the "FINAL CAP") for a period
commencing on the fifth anniversary of the Initial Closing Date and ending on
the Credit Facility Termination Date.
SECTION 20.02. TERMS AND CONDITIONS. Each Cap shall:
(a) be obtained on terms and conditions approved by the
Lender;
(b) be evidenced and governed by Cap Documents in form and
substance acceptable to the Lender;
(c) be with a Counterparty acceptable to the Lender;
(d) provide for a notional principal amount equal at all times to
the Revolving Facility Credit Commitment;
(e) provide for a notional interest rate equal to the Three Month
Libor Rate in effect from time to time;
(f) require the Counterparty to make interest payments on the
notional principal amount at a rate equal to the amount by
which the notional interest rate payable under the terms of
the Cap Documents exceeds the Underwriting Rate; and
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(g) require the Counterparty to make such interest payments to an
account pledged to the Lender pursuant to the Cap Security
Agreement.
If the Revolving Facility Credit Commitment increases in accordance with the
terms of Article VIII, the Property Company shall obtain, and maintain at all
times during the Term of this Agreement, an additional Cap, meeting all of the
requirements of this Article, with a notional principal amount equal to the
amount of the increase. If the Revolving Facility Credit Commitment decreases
in accordance with the provisions of Articles V, IX or X, the Property Company
may amend the Cap to provide for a decrease in the notional amount to an amount
equal to the Revolving Facility Credit Commitment, provided that the Lender
gives its prior written approval to the documents reflecting the amendment. The
Property Company shall obtain and maintain each Cap or additional Cap under
this Agreement at its sole cost and expense.
SECTION 20.03. ESCROW PROVISIONS.
SECTION 20.03(a) MONTHLY CAP ESCROW PAYMENT. Until the Property
Company obtains the Final Cap, the Property Company shall, on each date that a
payment of interest is due under the Base Facility Notes, deposit with the
Lender the Monthly Cap Escrow Payment. The "MONTHLY CAP ESCROW PAYMENT" means,
with respect to each Cap Year, an amount equal to the quotient obtained by
dividing --
(1) the excess of --
(i) 125% of the cost, as estimated by the
Lender, to obtain the Final Cap, over
(ii) the amount in the Cap Escrow Fund on the
date immediately preceding the commencement
of the Cap Year; by
(2) the number of full months then remaining in the Initial
Cap Period, as of the date immediately preceding the commencement of
such Cap Year.
At least 10 days before the commencement of each Cap Year, the Lender shall
give the Property Company notice of the estimate under Section 20.03(a)(1)(i)
and the amount of the Monthly Cap Escrow Payments for such Cap Year.
SECTION 20.03(b) CAP ESCROW FUND. The Lender shall establish an escrow
fund (the "CAP ESCROW FUND") and shall deposit each Monthly Cap Escrow Payment
into the Cap Escrow Fund. The Cap Escrow Fund shall be placed in a deposit
account with a financial institution selected by the Property Company and
reasonably satisfactory to the Lender and shall be invested by the Lender in
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Permitted Investments selected by the Lender. All earnings on such Permitted
Investments shall be added to, and become a part of, the Cap Escrow Fund. The
Property Company hereby pledges and assigns to the Lender, and grants a lien
and security interest in, and right of setoff against, any right, title and
interest it may have in and to the Cap Escrow Fund. At the Lender's request,
the Property Company shall cause the financial institution holding the Cap
Escrow Fund to execute and deliver a Restricted Account Letter in form and
substance similar to that signed with respect to the pledged account maintained
under the Cap Security Agreement. In lieu of the Cap Escrow Fund, the Property
Company may deliver to the Lender an irrevocable Letter of Credit meeting all
of the terms set forth in Section 19.02(b)-(f), except that the amount of the
Letter of Credit during each Cap Year shall at all times be equal to the amount
which would otherwise have been required to be in the Cap Escrow Fund at the
end of such Cap Year, and the Property Company shall deliver a new Letter of
Credit (or an amendment to the existing Letter of Credit) on or before the
first day of each Cap Year, amending the amount of the Letter of Credit.
Provided no Event of Default or Potential Event of Default has then occurred
and is continuing, the Letter of Credit or Cap Escrow Fund shall be returned to
the Property Company within 30 days after the date on which the Property
Company obtains the Final Cap and delivers the Final Cap to the Lender or its
designee.
ARTICLE XXI
NONRECOURSE OBLIGATIONS
SECTION 21.01 NON-RECOURSE LIABILITY. Subject to the provisions of
Section 21.02 and notwithstanding any other provision in the Notes, the
Security Instruments or any other Loan Documents (including provisions which
are not by their terms expressly subject to the provisions of this Section
21.01), the personal liability (i) of the Borrowers (or any partners thereof)
to pay the principal of and interest on the Notes, and for each to pay and
perform all of their other Obligations and for a breach of any of their
representations or warranties under the Loan Documents, (ii) of the Guarantors
(or any partners thereof) to pay any amounts due under the Guaranties, and
(iii) of each of the TC Parties to pay and perform its respective Obligations
and for a breach of any of its representations or warranties under the Loan
Documents, shall be limited to (a) the real and personal property described as
"Property" in any Security Instrument granted by any Owner, (b) the personal
property described in and pledged under any other Loan Document executed by any
TC Party (including all deposit accounts pledged under the Cap Security
Agreement, the Capital Improvements Fund Pledge and Security Agreement, the
Cash Management Agreement, the Replacement Reserve Agreement and this
Agreement)(the "PLEDGED PROPERTY") and (c) the rents, profits, issues, products
and income of the Mortgaged Property of the Owners received or collected by or
on behalf of the Owners (the "RENTS AND PROFITS") to the extent
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such receipts are necessary, first, to pay the Operating Expenses of the
Owners' Mortgaged Properties then due and payable as of the time of receipt of
such Rents and Profits, and then, to pay principal and interest due under the
applicable Notes, any other sums due under the Security Instruments, this
Agreement or any other Loan Documents and any other Obligations then due and
owing to the Lender, except to the extent that such Owner did not have the
legal right, because of a bankruptcy, receivership or similar judicial
proceeding, to direct the disbursement of such sums.
Except as provided in Section 21.02, the Lender shall not seek (a) any judgment
for a deficiency against any TC Party or any heirs, legal representatives,
successors or assigns of any TC Party, in any action to enforce any right or
remedy under the applicable Notes or Security Instruments, this Agreement or
any of the other Loan Documents, or (b) any judgment on any of the applicable
Notes or the Obligations of any TC Party under the Loan Documents except as may
be necessary in any action brought under any of the Security Instruments to
enforce the Lien against the Mortgaged Property encumbered thereby or to
exercise any other remedies to realize against any of the Collateral under any
other Loan Documents.
SECTION 21.02 SPECIAL PROVISIONS. If, without obtaining the Lender's
prior written consent (a) a Recourse Transfer shall occur (other than a
Recourse Transfer to an Institutional Lender, or to the purchaser at a secured
party sale or foreclosure sale, in connection with a foreclosure or other
disposition of a Lien, the granting of which is permitted under Sections
13.04(a)(2), 13.06(a)(2) or 13.06(f)(4)) or (b) any Owner shall encumber any
Mortgaged Property with a Recourse Lien, then an Event of Default hereunder and
under the other Loan Documents shall be deemed to have occurred, and if any
such event shall continue for thirty (30) days after notice from the Lender,
then, from and after the date that is thirty (30) days after such notice, (1)
Section 21.01 shall not apply and (2) the TC Parties shall be personally liable
on a joint and several basis for full recourse liability under this Agreement
and the other Loan Documents.
For purposes of this Agreement, the term "RECOURSE LIEN" means the grant or
other creation by an Owner of a Lien attaching to the land and buildings
comprising all or a material portion of a Mortgaged Property and which (i) is
otherwise prohibited pursuant to the provisions of this Agreement or the other
Loan Documents and (ii) is effected by such Owner by a writing or other
affirmative act taken by the Owner.
For purposes of this Agreement, the term "RECOURSE TRANSFER" means a sale,
assignment, transfer or other disposition (other than the granting of a Lien)
of title to, or beneficial ownership of:
(1) a Mortgaged Property by an Owner, or
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(2) an Ownership Interest in:
(A) the Operating Partnership by the REIT or by TC-
Oriole,
(B) the REIT Sub by the REIT,
(C) the Property Company by the Operating Partnership
or by the REIT Sub, or
(D) an Owner by the Property Company or by the REIT
Sub,
and which (i) is otherwise prohibited pursuant to the provisions of this
Agreement or the other Loan Documents and (ii) is effected by the transferor by
a writing or other affirmative act taken by the transferor.
Notwithstanding Section 21.01, the TC Parties shall be personally liable on a
joint and several basis in the amount of the Lender's actual loss, damage or
cost (including attorneys' fees and expenses) resulting from (a) fraud or
intentional misrepresentation by any TC Party, or any agent or employee of any
TC Party, in connection with obtaining the Advances evidenced by the Notes, or
in complying with any Obligations of a TC Party, (b) insurance proceeds,
condemnation awards or security deposits from tenants received by or on behalf
of an Owner in respect of its Mortgaged Property and not applied in accordance
with the provisions of the Security Instrument covering the Mortgaged Property
(except to the extent that the Owner did not have the legal right, because of a
bankruptcy, receivership or similar judicial proceeding, to direct disbursement
of such sums or payments), (c) all Rents and Profits (except to the extent that
the Owner did not have the legal right, because of a bankruptcy, receivership
or similar judicial proceeding, to direct the disbursement of such sums), and
not applied (1) to the payment of the Operating Expenses of the applicable
Mortgaged Property then due and payable, and (2) to the payment of principal
and interest due under the applicable Notes, any other sums due under the
applicable Security Instrument or any other Loan Document and any other
Obligations then due and owing to the Lender, (d) any Owner's failure to
deposit all Gross Revenues into the Pledgee Account (as defined in the Cash
Management Agreement) in accordance with the Cash Management Agreement (except
to the extent that the Owner did not have the legal right because of a
bankruptcy, receivership or similar judicial proceeding to deposit such sums),
or (e) any Owner's failure following an Event of Default to deliver to the
Lender on demand all Rents and Profits, and security deposits (except to the
extent that the Owner did not have the legal right because of a bankruptcy,
receivership or similar judicial proceeding to direct disbursement of such
sums).
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No provision of this Section 21.02 shall (a) affect any guaranty or similar
agreement executed in connection with any Advance evidenced by a Note or
otherwise in connection with the Obligations of the TC Parties under the Loan
Documents, (b) release or reduce the Obligations, including the debt evidenced
by any Note, (c) impair the right of the Lender to enforce the provisions of
paragraph 6B of any Security Instrument, (d) impair the lien of any Security
Instrument or (e) impair the right of the Lender to enforce the provisions of
any Loan Document or any other agreement defined as an "Ancillary Collateral
Agreement" in any Security Instrument.
No Transfer by any TC Party of its Ownership Interests in any other TC Party
shall release the TC Party from liability under this Article, this Agreement or
any other Loan Document, unless the Lender shall have approved the Transfer and
shall have expressly released the TC Party in connection with the Transfer.
Notwithstanding anything to the contrary in this Section 21.02 or the other
provisions of the Loan Documents, except as may be permitted as a matter of
law, no Person other than a TC Party shall be liable in any respect for the
payment of any amounts or the performance of any obligations under the Loan
Documents; provided, however, that, whether or not permitted as a matter of
law, no limited partner of the Operating Partnership and no holder of
beneficial interests in the REIT shall be liable in any respect for the payment
of any amounts or the performance of any obligations under the Loan Documents,
but the foregoing limitation on the liability of such limited partner or holder
shall not preclude the Lender from holding such parties liable (A) to the
extent of fraud or other tortious conduct committed by such limited partner or
holder personally, and (B) to the extent of distributions or other amounts
received by such limited partner or holder which, as a matter of federal or
applicable state law, constitute a fraudulent conveyance or fraudulent
transfer.
ARTICLE XXII
MISCELLANEOUS PROVISIONS
SECTION 22.01. COUNTERPARTS. To facilitate execution, this Agreement
may be executed in any number of counterparts. It shall not be necessary that
the signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart, but it shall be
sufficient that the signature of, or on behalf of, each party, appear on one or
more counterparts. All counterparts shall collectively constitute a single
agreement. It shall not be necessary in making proof of this Agreement to
produce or account for more than the number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.
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SECTION 22.02. AMENDMENTS, CHANGES AND MODIFICATIONS. This Agreement
may be amended, changed, modified, altered or terminated only by written
instrument or written instruments signed by all of the parties hereto.
SECTION 22.03. PAYMENT OF COSTS, FEES AND EXPENSES.
(a) The Borrowers shall pay on demand all costs, expenses and
fees of the Lender pursuant to this Agreement and any of the Loan
Documents, including the fees and expenses of counsel to the Lender
with respect to defending or participating in any litigation arising
from the administration or enforcement of this Agreement or any of the
Loan Documents. Any such fees and expenses of counsel incurred in
enforcing a judgment under this Agreement shall be recoverable
separately from and in addition to any other amount included in such
judgment, and such counsels' fees and expenses obligation is intended
to be severable from the other provisions of this Agreement and to
survive and not be merged into any such judgment.
(b) The Borrowers shall pay on demand all expenses incurred
by the Lender in connection with the preparation and review of this
Agreement, the REIT's Registration Statement, or similar disclosure
documents, including fees payable to any rating agencies, any tax or
governmental charge imposed in connection with the issuance of the
Notes and the fees and expenses of the Lender's counsel and
accountants. The foregoing shall also include fees and expenses
relating to any (i) amendments, consents or waivers to this Agreement
or any of the Loan Documents (whether or not any such amendments,
consents or waivers are entered into) or (ii) requests to evaluate any
substitute or additional Collateral or the release of any Collateral.
(c) This Section 22.03 shall not apply to the costs of due
diligence fees (including legal fees relating to due diligence) and
the closing of this Agreement and the Initial Advance, and the due
diligence fees with respect to the addition of an Additional Mortgaged
Property to the Collateral Pool, the fees for which are set forth in
Sections 14.04(a) and (b), respectively.
SECTION 22.04. PAYMENT PROCEDURE. All payments to be made to the
Lender pursuant to this Agreement or any of the Loan Documents shall be made in
lawful currency of the United States of America and in immediately available
funds by wire transfer to an account designated by the Lender before 1:00 p.m.
(Washington, D.C. time) on the date when due.
SECTION 22.05. PAYMENTS ON BUSINESS DAYS. In any case in
which the date of payment to the Lender or the expiration of any
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time period hereunder occurs on a day which is not a Business Day, then such
payment or expiration of such time period need not occur on such date but may
be made on the next succeeding Business Day with the same force and effect as
if made on the day of maturity or expiration of such period, except that
interest shall continue to accrue for the period after such date to the next
Business Day.
SECTION 22.06 CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL. NOTWITHSTANDING ANYTHING IN THE NOTES, THE SECURITY INSTRUMENTS OR ANY
OF THE OTHER LOAN DOCUMENTS TO THE CONTRARY, EACH OF THE TERMS AND PROVISIONS,
AND RIGHTS AND OBLIGATIONS OF EACH BORROWER UNDER THE NOTES, AND EACH TC PARTY
UNDER THE OTHER LOAN DOCUMENTS, SHALL BE GOVERNED BY, INTERPRETED, CONSTRUED
AND ENFORCED PURSUANT TO AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF
MARYLAND (EXCLUDING THE LAW APPLICABLE TO CONFLICTS OR CHOICE OF LAW) EXCEPT TO
THE EXTENT OF PROCEDURAL AND SUBSTANTIVE MATTERS RELATING ONLY TO THE CREATION,
PERFECTION AND FORECLOSURE OF LIENS AND SECURITY INTERESTS, AND ENFORCEMENT OF
THE RIGHTS AND REMEDIES, AGAINST THE MORTGAGED PROPERTIES, WHICH MATTERS SHALL
BE GOVERNED BY THE LAWS OF THE JURISDICTION IN WHICH THE MORTGAGED PROPERTY IS
LOCATED. THE TC PARTIES AGREE THAT ANY CONTROVERSY ARISING UNDER OR IN RELATION
TO THE NOTES, THE SECURITY INSTRUMENTS OR ANY OTHER LOAN DOCUMENT SHALL BE,
EXCEPT AS OTHERWISE PROVIDED HEREIN, LITIGATED IN MARYLAND. THE LOCAL AND
FEDERAL COURTS AND AUTHORITIES WITH JURISDICTION IN MARYLAND SHALL, EXCEPT AS
OTHERWISE PROVIDED HEREIN, HAVE JURISDICTION OVER ALL CONTROVERSIES WHICH MAY
ARISE UNDER OR IN RELATION TO THE LOAN DOCUMENTS, INCLUDING THOSE CONTROVERSIES
RELATING TO THE EXECUTION, JURISDICTION, BREACH, ENFORCEMENT OR COMPLIANCE WITH
THE NOTES, THE SECURITY INSTRUMENTS OR ANY OTHER ISSUE ARISING UNDER, RELATING
TO, OR IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS. EACH TC PARTY IRREVOCABLY
CONSENTS TO SERVICE, JURISDICTION, AND VENUE OF SUCH COURTS FOR ANY LITIGATION
ARISING FROM THE NOTES, THE SECURITY INSTRUMENTS OR ANY OF THE OTHER LOAN
DOCUMENTS, AND WAIVES ANY OTHER VENUE TO WHICH IT MIGHT BE ENTITLED BY VIRTUE
OF DOMICILE, HABITUAL RESIDENCE OR OTHERWISE. NOTHING CONTAINED HEREIN,
HOWEVER, SHALL PREVENT THE LENDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING
OR EXERCISING ANY RIGHTS AGAINST THE TC PARTIES, AND AGAINST THE COLLATERAL IN
ANY OTHER JURISDICTION. INITIATING SUCH SUIT, ACTION OR PROCEEDING OR TAKING
SUCH ACTION IN ANY OTHER JURISDICTION SHALL IN NO EVENT CONSTITUTE A WAIVER OF
THE AGREEMENT CONTAINED HEREIN THAT THE LAWS OF MARYLAND SHALL GOVERN THE
RIGHTS AND OBLIGATIONS OF THE TC PARTIES AND THE LENDER AS PROVIDED HEREIN OR
THE SUBMISSION HEREIN BY THE TC PARTIES TO PERSONAL JURISDICTION WITHIN
MARYLAND. EACH TC PARTY (I) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY
WITH RESPECT TO ANY ISSUE ARISING UNDER ANY OF THE LOAN DOCUMENTS TRIABLE BY A
JURY AND (II) WAIVES ANY RIGHT TO TRIAL BY JURY TO THE EXTENT THAT ANY SUCH
RIGHT SHALL NOW OR HEREAFTER EXIST. THIS WAIVER IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A JURY TRIAL
WOULD OTHERWISE ACCRUE. FURTHER, EACH TC PARTY HEREBY CERTIFIES THAT NO
REPRESENTATIVE OR AGENT OF LENDER (INCLUDING, BUT NOT
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LIMITED TO, LENDER'S COUNSEL) HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO EACH
TC PARTY THAT LENDER WILL NOT SEEK TO ENFORCE THE PROVISIONS OF THIS SECTION.
THE FOREGOING PROVISIONS WERE KNOWINGLY, WILLINGLY AND VOLUNTARILY AGREED TO BY
THE TC PARTIES UPON CONSULTATION WITH INDEPENDENT LEGAL COUNSEL SELECTED BY THE
TC PARTIES' FREE WILL.
SECTION 22.07. SEVERABILITY. In the event any provision of this
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
SECTION 22.08. NOTICES.
SECTION 22.08(a) MANNER OF GIVING NOTICE. Each notice,
direction, certificate or other communication hereunder (hereafter in
this Section referred to collectively as "notices" and referred to
singly as a "notice") which any party is required or permitted to give
to the other party pursuant to this Agreement shall be in writing and
shall be deemed to have been duly and sufficiently given if
(1) personally delivered with proof of delivery
thereof (any notice so delivered shall be deemed to have been
received at the time so delivered),
(2) sent by Federal Express (or other similar
overnight courier) designating morning delivery (any notice
so delivered shall be deemed to have been received on the
Business Day it is delivered by the courier),
(3) sent by United States registered or certified
mail, return receipt requested, postage prepaid, at a post
office regularly maintained by the United States Postal
Service (any notice so sent shall be deemed to have been
received on the Business Day it is delivered), or
(4) sent by telecopier or facsimile machine which
automatically generates a transmission report that states the
date and time of the transmission, the length of the document
transmitted, and the telephone number of the recipient's
telecopier or facsimile machine (to be confirmed with a copy
thereof sent in accordance with paragraphs (1), (2) or (3)
above within two Business Days) (any notice so delivered
shall be deemed to have been received (i) on the date of
transmission, if so transmitted before 5:00 p.m. (local time
of the recipient) on a Business Day, or (ii) on the next
Business Day, if so transmitted on or after 5:00 p.m. (local
time of the recipient) on a Business Day or if transmitted on
a day other than a Business Day),
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addressed to the parties at their respective Notice Addresses.
SECTION 22.08(b) CHANGE OF NOTICE ADDRESS. Any party may, by
notice given pursuant to this Section, change the person or persons
and/or address or addresses, or designate an additional person or
persons or an additional address or addresses, for its notices, but
notice of a change of address shall only be effective upon receipt.
Each party agrees that it shall not refuse or reject delivery of any
notice given hereunder, that it shall acknowledge, in writing, receipt
of the same upon request by the other party and that any notice
rejected or refused by it shall be deemed for all purposes of this
Agreement to have been received by the rejecting party on the date so
refused or rejected, as conclusively established by the records of the
U.S. Postal Service, the courier service or telecopier or facsimile
machine.
SECTION 22.09. FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS.
SECTION 22.09(a) FURTHER ASSURANCES. To the extent permitted
by law, the parties hereto agree that they shall, from time to time,
execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, such supplements hereto and such further
instruments as the Lender or the TC Parties may request and as may be
required in the opinion of the Lender or its counsel to effectuate the
intention of or facilitate the performance of this Agreement or any
Loan Document.
SECTION 22.09(b) FURTHER DOCUMENTATION. Without limiting the
generality of subsection (a), in the event any further documentation
or information is required by the Lender to correct patent mistakes in
the Loan Documents, materials relating to the Title Insurance Policies
or the funding of the Advances, the TC Parties shall provide, or cause
to be provided to the Lender, at their cost and expense, such
documentation or information. The TC Parties shall execute and deliver
to the Lender such documentation, including any amendments,
corrections, deletions or additions to the Notes, the Security
Instruments or the other Loan Documents as is required by the Lender.
SECTION 22.09(c) COMPLIANCE WITH INVESTOR REQUIREMENTS.
Without limiting the generality of subsection (a), the TC Parties
shall use commercially reasonable efforts to comply with the
requirements of the Lender in order to enable the Lender to sell the
MBS backed by an Advance.
SECTION 22.10. TERM OF THIS AGREEMENT. This Agreement shall continue
in effect until the Credit Facility Termination Date.
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SECTION 22.11. ASSIGNMENTS; THIRD-PARTY RIGHTS. No TC Party shall
assign this Agreement, or delegate any of its obligations hereunder, without
the prior written consent of the Lender. The Lender may assign its rights and
obligations under this Agreement separately or together, without the TC
Parties' consent, only to ▇▇▇▇▇▇ ▇▇▇, but may not delegate its obligations
under this Agreement unless required to do so pursuant to Section 18.04.
SECTION 22.12. HEADINGS. Article and Section headings used herein are
for convenience of reference only, are not part of this Agreement and are not
to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
SECTION 22.13. GENERAL INTERPRETIVE PRINCIPLES. For purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires, (i) the terms defined in this Agreement have the meanings
assigned to them in this Agreement and include the plural as well as the
singular, and the use of any gender herein shall be deemed to include the other
genders (and thus, for example, references to the Original Owners' First
Mortgages shall refer to the aggregate of each Original Owner's First
Mortgage); (ii) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP; (iii) references herein to
"Articles," "Sections," "subsections," "paragraphs" and other subdivisions
without reference to a document are to designated Articles, Sections,
subsections, paragraphs and other subdivisions of this Agreement; (iv) a
reference to a subsection without further reference to a Section is a reference
to such subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to paragraphs and other subdivisions;
(v) a reference to an Exhibit or a Schedule without a further reference to the
document to which the Exhibit or Schedule is attached is a reference to an
Exhibit or Schedule to this Agreement; (vi) the words "herein," "hereof,"
"hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular provision; and (vii) the word "including" means
"including, but not limited to."
SECTION 22.14. INTERPRETATION. The parties hereto acknowledge that
each party and their respective counsel have participated in the drafting and
revision of this Agreement and the Loan Documents. Accordingly, the parties
agree that any rule of construction which disfavors the drafting party shall
not apply in the interpretation of this Agreement and the Loan Documents or any
amendment or supplement or exhibit hereto or thereto.
SECTION 22.15. STANDARDS FOR DECISIONS, ETC. If the Lender's approval
is required for any matter hereunder, unless expressly qualified otherwise,
such approval may be granted or withheld in the Lender's sole and absolute
discretion. If the Lender's designation, determination, selection, estimate,
action or decision is required, permitted or contemplated hereunder, unless
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expressly qualified otherwise, such designation, determination, selection,
estimate, action or decision shall be made in the Lender's sole and absolute
discretion.
SECTION 22.16. DECISIONS IN WRITING. Any approval, designation,
determination, selection, action or decision of the Lender must be in writing
to be effective.
SECTION 22.17. (Intentionally omitted.)
SECTION 22.18 TRUST LIABILITY. The First Amended and Restated
Declaration of Trust of the REIT, dated June 24, 1993, a copy of which is duly
filed with the Department of Assessments and Taxation of the State of Maryland,
provides that no trustee, officer, shareholder, employee or agent of the REIT
shall be held to any personal liability, jointly or severally, for any
obligation of or claim against the REIT. All persons dealing with the REIT in
any way shall look only to the assets of the REIT for the payment of any sum or
the performance of any obligation.
SECTION 22.19 CONTRIBUTION AGREEMENT. On the Initial Closing Date, the
Borrowers shall execute a Contribution Agreement in the form attached as
EXHIBIT NN to this Agreement.
SECTION 22.20 OTHER PURCHASED DOCUMENTS. Upon consummation of the
Initial Advance and the amendments and restatements contemplated by Recital H
to this Agreement, all of the notes, security documents, and other loan
documents which are purchased by the Lender from Funding Corp. and First
National shall be superceded by the Loan Documents in their entirety and shall
be of no further force and effect. Without limiting the generality of the
foregoing, to the extent, if any, that any purchased document is not described
in any of Recitals A through H to this Agreement, inclusive, or is not
expressly amended and restated by one or more of the Loan Documents, such
purchased document shall be deemed waived and released by, as the case may be,
the Lender and the TC Party which was a party thereto, of no further force and
effect, and no longer an obligation or liability of the Lender or of the TC
Party which was the obligor thereunder.
SECTION 22.21 RECORDATION TAX INDEMNITY. The TC Parties agree to
indemnify and hold harmless the trustees, if any, named in the second priority
indemnity Security Instruments and their successors in the trusts, and the
Lender, ▇▇▇▇▇▇ Mae and their respective shareholders, directors, officers,
agents, employees and servicers (all hereinafter collectively referred to as
the "Indemnitees") of and from any and all claims, debts, demands, rights,
liabilities, actions and causes of action of whatsoever kind and nature and all
costs and expenses arising out of or relating thereto (including attorneys'
fees and disbursements) which any Governmental Authority or other Person has or
may have against the Indemnitees on account of, or because of, the failure
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to pay in full all recordation, documentary or similar taxes, if any, that may
be due because of the establishment and implementation of the Credit Facility,
the execution, delivery or recordation of the second priority indemnity
Security Instruments or the execution or delivery of the Guaranties or
otherwise arising out of the loan transaction and all interest, penalties and
fines that may be or may become due. The Indemnitees may, at the cost of the TC
Parties, defend all claims made that are or may be covered by this Section
unless the TC Parties retain counsel acceptable to the Indemnitees.
SECTION 22.22 SALE OF LOAN DOCUMENTS IN CONNECTION WITH REFINANCING.
The Lender agrees that upon satisfaction in full of all of the Obligations and
the expiration of the Term of this Agreement or earlier termination of this
Agreement, it shall, upon request by the Borrowers, and pursuant to documents
acceptable to the Lender, transfer all of its right, title and interest in and
to the Collateral and the Loan Documents, without recourse, representation or
warranty, to any party designated by the Borrowers, provided that the Borrowers
pay all out-of-pocket expenses incurred by the Lender in connection with the
transfer, including any attorneys' fees and any applicable recordation or other
taxes or charges.
[Remainder of this page left intentionally blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
TC Parties
----------
Owners
------
THE TC-WEST/GREENSVIEW COMPANY, a
Maryland general partnership
THE TC-EAST COMPANY, a Maryland general
partnership
THE TC-HARFORD COMPANY, a Maryland
general partnership
THE TC-HOLLOWS COMPANY, a Maryland
general partnership
THE TC-▇▇▇▇▇▇▇▇▇▇ COMPANY, a Maryland
general partnership
THE TC-NORTH COMPANY, a Maryland general
partnership
THE TC-WOODMOOR COMPANY, a Maryland
general partnership
THE TC-RIDGE-VIEW COMPANY, a Maryland
general partnership
THE TC-SOUTH COMPANY, a Maryland general
partnership
THE TC-GARDEN WOOD COMPANY, a Maryland
general partnership
THE TC-HALLFIELD MANOR COMPANY, a
Maryland general partnership
THE TC-MONTPELIER COMPANY, a Maryland
general partnership
THE TC-NORTHEAST COMPANY, a Maryland
general partnership
THE ▇▇-▇▇▇▇▇▇ COMPANY, a Maryland
general partnership
THE TC-ROLLING ROAD COMPANY, a Maryland
general partnership
THE TC-VERSAILLES COMPANY, a Maryland
general partnership
THE TC-FOX HAVEN COMPANY, a Maryland
general partnership
THE TC-CHARLESMONT COMPANY, a Maryland
general partnership
THE TC-FOX RUN COMPANY, a Maryland
general partnership
THE TC-STONEGATE COMPANY, a Maryland
general partnership
THE TC-UNIVERSITY HEIGHTS COMPANY, a
Maryland general partnership
THE TC-▇▇▇▇▇▇'▇ CROSSING COMPANY, a
Maryland general partnership
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THE ▇▇-▇▇▇▇ COMPANY, a Maryland general
partnership
THE TC-▇▇▇▇▇▇ FARMS COMPANY, a Maryland
general partnership
THE TC-CARLYLE STATION COMPANY, a
Maryland general partnership
THE TC-ALLENTOWN COMPANY, a Maryland
general partnership
THE TC-EMMAUS COMPANY, a Maryland
general partnership
THE TC-HANOVER COMPANY, a Maryland
general partnership
THE TC-HARRISBURG COMPANY, a Maryland
general partnership
THE TC-HARRISBURG-EAST COMPANY, a
Maryland general partnership
THE TC-LANCASTER WEST COMPANY, a
Maryland general partnership
THE TC-LANCASTER EAST COMPANY, a
Maryland general partnership
THE TC-YORK COMPANY, a Maryland general
partnership
THE TC-ROLLING HILLS COMPANY, a Maryland
general partnership
THE ▇▇-▇▇▇▇▇▇▇▇▇ MILL COMPANY, a
Maryland general partnership
By: The TC Property Company, a Maryland
general partnership, in its
capacity as general partner of, and
on behalf of, each of the foregoing
thirty-five (35) general
partnerships
By: The TC Operating Limited
Partnership, a Maryland
limited partnership,
General Partner
By: The Town and Country
Trust, a Maryland real
estate investment trust,
General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
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REIT
----
THE TOWN AND COUNTRY TRUST, A MARYLAND
REAL ESTATE INVESTMENT TRUST
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
Operating Partnership
---------------------
THE TC OPERATING LIMITED PARTNERSHIP, A
MARYLAND LIMITED PARTNERSHIP, GENERAL
PARTNER
By: The Town and Country Trust, a
Maryland real estate investment
trust
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
REIT Sub
--------
THE TOWN AND COUNTRY HOLDING
CORPORATION, A DELAWARE CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
Property Company
----------------
THE TC PROPERTY COMPANY, A MARYLAND
GENERAL PARTNERSHIP
By: The TC Operating Limited
Partnership, a Maryland limited
partnership, General Partner
By: The Town and Country Trust,
a Maryland real estate
investment trust, General
Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
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TC-Oriole
---------
THE TOWN AND COUNTRY ORIOLE CORPORATION,
A DELAWARE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary
Lender
------
WASHINGTON MORTGAGE FINANCIAL GROUP,
LTD., A DELAWARE CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
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