MASTER CREDIT FACILITY
Exhibit 3(d)
This MASTER CREDIT FACILITY (this
“Agreement”)
is made as of the __ day of ______, 2021, between Megatel Homes,
LLC, a Texas limited liability company; Megatel Holdings, LLC, a Texas limited liability
company; and Megatel Homes III, LLC, a Texas limited liability
company; including any wholly-owned subsidiaries of such entities
and affiliates that may now or hereafter be joined thereunder
pursuant to a joinder agreement (collectively, and any of which may be
referred to herein as,
“Megatel”),
with its principal office located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and MCI Income Fund V, LLC, a Delaware
limited liability company with the
same principal office location (the “Company”).
Capitalized terms used herein and not otherwise defined shall have
the meaning set forth in the Limited Liability Company Agreement of
the Company (as the same may be amended from time to time, the
“Company
Agreement”).
RECITALS
A. Pursuant
to an offering by the Company of up to $50,000,000.00 in senior
secured bonds (the “Bonds”),
sold pursuant to the
Company’s Offering Circular dated [___________], 2021 (as the same
may be supplemented or amended from time to time) describing the
offering of the Bonds, which Bonds may
be redeemed beginning on the Maturity Date, without penalty or fee,
upon proper, prior notice to the Company pursuant to the
[Bond
Indenture]. The Company intends
to loan to Megatel funds for the acquisition of real property and
the development, re-development and/or construction of residential
communities thereon, condominiums for sale to homebuyers,
multi-family residential complexes, storage facilities, retail
and/or other commercial real estate assets or mixed-use properties,
or the purchase of beneficial interests in a special purpose entity
which will hold title to the underlying real estate, each, at the
discretion of the Manager, and dependent, in part, on prevailing
market conditions.
B. Megatel
desires to borrow funds from Company subject to the terms and
conditions set forth herein.
NOW
THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties agree as follows:
1. The
Loans.
a. The
Company agrees to make one or more loans (each a
“Loan”
and collectively, the “Loans”),
pursuant to the following criteria herein.
b. The
Company shall only make Loans to Megatel entities that have entered
into an agreement authorizing the Company to receive certain
management rights that allow the Company to substantially
participate in, or substantially influence the conduct of, the
management or development activities of the Megatel entity
receiving the Loan (a “Management Rights
Letter”), a form of which is attached hereto as
Exhibit
A).
c. Each
Loan by the Company shall be issued on a per-Project basis.
Megatel shall submit to the Company in
writing a request for each Loan describing the Project as set forth
in this Agreement. For purposes herein, a
“Project” includes (i) the acquisition of real property
(whether title is held directly or indirectly via ownership Bonds
in a special purpose entity (“SPE”) holding title to
such real property) and the development, re-development and/or
construction of residential communities (whether single-family,
multi-family, or condominiums), storage facilities, retail and/or
other commercial real estate assets or mixed-use properties and
other improvements incidental thereto, and (ii) the development and/or construction
thereof, as the case may be. A Project may include one or more
parcels of real property.
d. The
proposed amount of each Loan shall be the amount set forth in the
Loan Application and supported by the Budget and/or Appraisal (each
as defined herein), as approved by the Company; provided, however,
the aggregate principal amount of all Loans outstanding, on a
portfolio basis, shall not exceed 90% of the appraised value of the
assets underlying the Loans.
e. Unless
sooner paid in accordance with the applicable Note or in the event
of a default resulting in earlier repayment obligations, all Loans
by the Company then outstanding, shall be due and payable on the
Maturity Date subject to the terms and conditions of the applicable
Note. The Megatel borrowers have the right to request an extension
of any Loan(s) outstanding on or after the Maturity Date, and the
Company shall grant such extension requests for up to two
additional three-year terms, so long as the Company
reasonably believes it can maintain the ability to stay current on
any and all bondholder redemption requests made thereafter.
Similarly, the Megatel borrowers have the right to request a new
Loan after the Maturity Date, and the Company shall approve any
such new Loan so long as the Company reasonably believes it can
maintain the ability to stay current on any and all bondholder
redemption requests made thereafter. The Company may confirm or
memorialize its reasonable belief that it can maintain the ability
to stay current on any and all bondholder redemption by corporate
resolution or other written certification documented in the books
of the Company.
2.
Loan
Application.
a. In
connection with each Loan, Megatel shall submit the following to
the Company:
i. A
completed loan application in the form substantially similar as
that set forth on Exhibit B
(the “Loan
Application”). The Loan
Application shall, among other information requested thereon,
identify the purpose of the Loan as being for the acquisition of
one of the following:
A. Parcels
of real property (including but not limited to raw land, unentitled
land or finished lots) for:
(i)
Development into single-family residential lots,
(ii) Construction
of single-family homes to be marketed and sold to
homebuyers,
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(iii) Construction
of condominiums to be marketed and sold to
homebuyers,
(iv) Development
and/or construction of multi-family residential communities,
and
(v)
Development and/or construction of storage
facilities, retail, and/or other commercial real estate assets or
mixed-use properties;
B. Acquisition
of existing single-family homes to be redeveloped, renovated,
and/or repositioned for marketing and sale;
C. Acquisition
of existing multi-family properties to be redeveloped, renovated,
and/or repositioned for marketing and sale; and/or
D. the
acquisition of existing commercial properties to be redeveloped,
renovated, and/or repositioned for marketing and sale;
E. the
acquisition of ownership interests in an SPE—whether a
Delaware statutory trust or other entity—that will hold title
to an existing commercial property and through which Megatel will
indirectly own the underlying real property via ownership interests
in the SPE.
ii. A
budget for the acquisition, development, and/or construction of the
Project including a disclosure of the material terms of any
financing that may already be encumbering the Project property, if
any (the “Budget”).
iii. An
appraisal of the Project property/properties, as to be built, (the
“Appraisal”),
whether being (i) an appraisal of the
actual subject property to be built or (ii) an appraisal of a
similar property to be built in the same neighborhood as the
subject property and of similar plans that is less than 12 months
old, in any case being prepared by a licensed appraiser with
experience appraising real property of a kind and nature similar
to, and in the same geographic area as, the Project
property.
iv. Such
due diligence items with respect to the Project property as the
Company shall reasonably require including but not limited to,
title reports, ALTA surveys, environmental reports, zoning reports,
geotechnical reports, and evidence of entitlements for the Project.
If additional items are required pursuant to this subsection,
Company will provide a closing checklist substantially in the form
attached hereto as Exhibit C
(the “Closing
Checklist”) and denote
which additional items are so requested prior to approval of any
Loan.
v. Such
other documentation as may be reasonably required by the
Company.
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3.
Company Underwriting
Procedures.
a.
The
Company will perform the following services:
i. The
Company shall review Megatel’s Loan Application, Budget, the
Appraisal, and any due diligence materials submitted by Megatel
with respect to each Loan for compliance with this Agreement, as
well as confirm a Management Rights Letter has been entered into
between Megatel and the Company prior to the issuance of a
Loan.
ii. In
connection with each Loan, have Megatel execute a promissory note
(each a “Note”)
in a form similar to the form attached
hereto as Exhibit D
(or in another form the Company deems
appropriate).
iii. In
connection with each Loan, obtain either (a) a deed of trust (a “Deed of
Trust”), executed by
Megatel, in a form similar to the form attached hereto as
Exhibit
E (or in another form the
Company deems appropriate) and cause the same to be recorded in the
real property records in the county/jurisdiction in which the
Project is located, or (b) in the case of the acquisition of
ownership interests in an SPE holding title to underlying real
estate, a contractual right to receive any and all distributions
payable to Megatel as an interestholder in the respective SPE, in a
form approved by the Company.
iv. If
required by the Company, a construction loan agreement setting
forth the terms and conditions of the Loan (a
“Construction Loan
Agreement”) in a form
similar to the form attached hereto as Exhibit G
(or in another form the Company deems
appropriate).
v. In
connection with each Loan, obtain title insurance
for real property to be held directly
by Megatel (or if real property is indirectly held, ensure title
insurance has been obtained by titleholder) in such amounts and
including such endorsements as the Company may determine in its
discretion, the cost of which shall be paid by
Megatel.
b. In
connection with any Loan that requires multiple draws (e.g., a
construction loan), Megatel shall submit an advance request
substantially in the form set forth on Exhibit F
(an “Advance
Request”) together with
such documentation as may be reasonably requested by the Company in
its discretion, including, when applicable, an inspection report
prepared by an independent third-party inspector certifying to the
Company that the work specified in the Advance Request has been
completed.
c. Megatel
shall advise the Company in writing of any material change in the
information submitted by Megatel in connection with approval of any
Loan, or for purposes of seeking a modification to an existing
Loan. If seeking a modification to an existing Loan, Megatel shall
submit a loan modification request, substantially in the form set
forth on Exhibit I
(a “Loan
Modification”). Approval
of any Loan or any modification of an existing Loan shall be
subject to the Company’s reasonable review and approval of
any such material changes, subject to the terms of this
Agreement.
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d. All
documents described in Section (3)(a)(i) – (v) must be
retained by the Company, in original hard-copy form if applicable
law requires the production of original documents to exercise the
right to foreclose underlying collateral. If otherwise not required
by any applicable law, such documents may be provided and/or stored
in electronic format.
e. The
Company shall be responsible for ensuring compliance with the Loans
in accordance with the Loan Policies and Procedures as set forth in
Exhibit
J.
4.
Joinder of Additional
Parties.
In order for any Person to be added as
a party to this Agreement, such Person shall have executed and
delivered a joinder to the Company substantially in the form
of Exhibit
K attached hereto
and incorporated by reference. For purposes of this section, a
“Person” means any individual, partnership
(whether general or limited), limited liability company,
corporation, trust, estate, association, nominee, or other
entity.
5.
Notice.
Any
required notice under this Agreement shall be effective upon actual
delivery, or receipt of written notice by first class certified
mail, return receipt requested, at the address of the applicable
party as shown on the signature pages hereof, or as may be modified
by any of the parties by written notice to all other parties of
this Agreement.
6.
Legal Fees and
Costs.
A
non-breaching party shall be entitled to reimbursement of all
reasonable attorney fees and costs in connection with the
enforcement of this Agreement from the breaching
party.
7.
Integration Clause and
Jurisdiction.
This
document contains the entire agreement between the parties hereto
and cannot be modified except by written amendment signed by all
parties. The invalidity of any portion of this agreement shall in
no way affect the remaining provisions thereof. This Agreement
shall be interpreted in accordance with the laws of the State of
Texas without growing effect to the principles of conflict of laws
of such State.
8.
Term.
This Agreement shall remain in effect and may not
be terminated until the earlier to occur of (a) no Bonds remain
issued and outstanding, or (b) the filing of a Certificate of
Cancellation of the Company as set forth in Section
[__]
of the Company
Agreement.
11.
Miscellaneous.
Company
and Megatel each represent and warrant that this Agreement has in
all respects been duly authorized, executed, and delivered by and
on behalf of itself. This Agreement may not be modified or amended
or any term or provision hereof waived or discharged, except in
writing, signed by the party against whom such modification,
waiver, or discharge is sought to be enforced. This Agreement may
be executed in multiple counterparts, each of which shall be deemed
an original, but all of which, together, shall constitute one and
the same instrument. The waiver or failure to enforce any provision
of this Agreement shall not operate as a waiver of any future
breach of any such provision or any other provision
hereof.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS
WHEREOF, the parties hereto
being fully authorized have executed this agreement to be effective
as of the day and year first above written.
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COMPANY:
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a
Delaware limited liability company
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By:
Megatel Capital Investment, LLC
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a
Delaware limited liability company
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Its:
Manager
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By:
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Co-President
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Address for
Notices:
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MEGATEL:
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Megatel Homes, L.L.C.,
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a Texas
limited liability company
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By:
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Co-President
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Address for Notices:
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Megatel Homes III, LLC,
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a Texas limited liability company
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By:
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Co-President
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Address for
Notices:
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Megatel Holdings, LLC,
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a Texas
limited liability company
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By:
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Co-President
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Address for
Notices:
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Exhibit A
Form of Management Rights Letter
[Attached.]
Exhibit B
Form of Loan Application
(Budgets and Appraisals are addendums of this
Application)
[Attached.]
Exhibit C
Form of Closing Checklist
[Attached.]
Exhibit D
Form of Note
[Attached.]
Exhibit E
Form of Deed of Trust
[Attached.]
Exhibit F
Form of Advance Request
[Attached.]
Exhibit G
Form of Construction Loan Agreement
[Attached.]
Exhibit H
Form of Loan Modification
[Attached.]
Exhibit I
Loan Policies and Procedures
[Attached.]
Exhibit J
Form of Joinder Agreement
[Attached.]