EXHIBIT 16(b)
April 20, 2001
Vinings Communities, LP
▇▇. ▇▇▇▇▇ ▇▇▇▇
C/O The Vinings Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Proposed loan to be secured by Windrush Apartments, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; 202 Units (the "Property")
Loan Program: ▇▇▇▇▇▇ ▇▇▇ MBS/DUS, Actual/360
Borrower: Vinings Communities, LP
Key Principal(s): ▇▇. ▇▇▇▇▇ ▇▇▇▇
Principal Amount of Loan: $8,080,000
Loan Term: 10
Amortization Period: 30
Underwritten Interest Rate: 7.50% (Maximum interest rate
without reducing loan proceeds)
Estimated Spread: 189 bps above the 10 year U.S.
Treasury Rate
Yield Maintenance Period: 9.5 years
Underwriting Tier: 2++
Commitment Expiration Date: 05/04/2001
Rate Lock Expiration Date: 05/18/2001
Loan Closing Date: No later than 5 Business Days
after the Rate Lock
Prepaid Application Fee: $12,000
Prepaid Third Party Reports: Included Above
Completion/Repair Deposit: $100,425
Initial Deposit to Replacement
Reserve: $0
Monthly Deposit to Replacement
Reserve: $4,343 (initial amount, see
Exhibit E)
Commitment Deposit: $40,400 (.5% of the loan amount)
Rate Lock Deposit: $161,600 (2% of the loan amount)
Financing Fee: $80,800 (1% of the loan amount)
Closing Officer: ▇▇▇ ▇▇▇▇▇▇▇
Correspondent: N/A
Ladies and Gentlemen:
This letter (together with all exhibits and attachments hereto, the
"Commitment") constitutes the commitment of Berkshire Mortgage Finance Limited
Partnership, a Massachusetts limited partnership (which, together with its
successors and assigns are referred to as the "Lender"), to make a first
mortgage loan (the "Loan") to the Borrower described above under the Loan
Program described above.
This Commitment is subject to and conditioned upon the satisfaction of all
of the terms, conditions and requirements set forth or referred to in this
Commitment, which are as follows:
1. BORROWER: The Borrower shall be the Borrower identified above. If there is
any change in the organizational structure of the Borrower, including a
change in the ownership of the Borrower, from that previously disclosed to
the Lender, then, at the Lender's option, this Commitment shall terminate
and the Lender shall have no obligation under this Commitment, including
the obligation to make the Loan.
2. KEY PRINCIPAL(S): The Key Principal(s) and Key Individual(s) shall be as
identified above. Prior to the Closing (as defined below) none of the Key
Principals shall (a) transfer their ownership interest in or otherwise
withdraw from the Borrower (if the Borrower Principal is a natural person),
or (b) alter its affiliation with the Borrower (if the Borrower Principal
is not a natural person).
3. PRINCIPAL AMOUNT OF LOAN: The Loan shall be in an amount equal to the Loan
Amount identified above. The Loan Amount is subject to change in accordance
with the terms and conditions of this Commitment.
4. LOAN TERM: The Loan shall have a term equal to the Loan Term identified
above. The Loan Term shall commence on the first day of the month
immediately following the date on which the Loan closes (the "Closing"). If
the Closing occurs on the first day of the month, then the Loan Term shall
commence on the date of the Closing.
5. CLOSING: The Closing shall occur no later than the Loan Closing Date
identified above. The Lender, at its election, may require up to two (2)
Business Days advance notice of the Closing in order to make available
funds for the Closing of the Loan. As used in this Commitment, "Business
Day" shall mean any day other than a Saturday, Sunday, a legal holiday in
Bethesda, Maryland, or a day on which banking institutions located in
Bethesda, Maryland are not authorized by law or other governmental action
to close.
6. INTEREST RATE:
6.1 Note Rate. The interest rate on the Loan (the "Note Rate") will be
calculated on the Rate Lock Date (as defined below). The Borrower is
advised that this Commitment was approved by the Lender using the
Underwritten Interest Rate identified above as the projected interest
rate on the Loan. Depending upon the market conditions at the time of
Rate Lock, the Note Rate may be different than the Underwritten
Interest Rate. If the Note Rate is higher than the Underwritten
Interest Rate, the Lender reserves the right to requalify the
Borrower's ability to pay the Loan at the Note Rate. Such a
requalification may cause the Lender to reduce the Loan Amount.
6.2 Rate Lock. The Borrower may request that the Note Rate be established
("Rate Lock") at any time prior to the Rate Lock Expiration Date
identified above; provided that the Lender may, at its sole
discretion, require up to two (2) Business Days between the Rate Lock
Date and the Closing. A "Rate Lock" shall not be possible until (a)
all terms of this Commitment, including all Conditions to Rate Lock
set forth in Exhibit B to this Commitment, have been fully satisfied,
(b) the Lender has received payment from the Borrower and/or the Key
Principals for the Rate Lock Deposit, which is equal to two percent
(2%) of the Loan Amount, in immediately available funds, (c) the
Borrower has executed and delivered to the Lender, via telecopy, a
completed Authorization to Obtain Rate Lock in the form attached to
this Commitment as Exhibit B. A portion of the Rate Lock Deposit will
be refunded to the Borrower within 24 hours of Closing, less any
amounts required to be held by the Investor. The remaining portion of
the Rate Lock Deposit shall be refunded to Borrower upon the
Investor's purchase of the Loan. If the Closing does not occur or the
Investor does not purchase the Loan for any reason (other than the
failure of the Lender to comply with the terms, conditions and
requirements contained in or referred to in this Commitment), then the
Rate Lock Deposit will be deemed earned by the Lender and will not be
refundable to the Borrower. The Rate Lock Deposit must be wire
transferred to the Lender. The Lender's wiring instructions are
attached to this Commitment as Exhibit C.
6.3 Recording. Please be advised that, at the time of Rate Lock, telephone
conversations with the Borrower, or his/her representative, regarding
the mortgage terms, acceptance of the preliminary rate and then of the
final rate will be recorded and retained.
7. PAYMENT OF INTEREST UPON DISBURSEMENT: The proceeds to fund the Loan will
be provided by the Lender's warehouse lender. The Borrower acknowledges and
agrees that interest shall accrue on the Loan Amount at the Note Rate from
the time such proceeds are received by the escrow agent or other disbursing
agent for the Loan. The Borrower further acknowledges and agrees that the
Borrower shall be liable for the payment of all such accrued interest.
8. PAYMENTS:
8.1 PREPAID INTEREST: The Borrower shall make an initial payment to the
Lender on the date of the Closing in an amount equal to the amount of
interest that will accrue on the Loan Amount, based on a 365 day year,
at the Note Rate from and including the date of the Closing to and
including the last day of the month in which the Closing occurs.
8.2 MONTHLY PAYMENTS: The Borrower shall make monthly principal and
interest payments on the Loan on the first day of each month during
the Loan Term according to an amortization schedule for a loan having
(a) an original principal amount equal to the Loan Amount, (b) a term
equal to the Amortization Period identified above, and (c) an annual
interest rate equal to the Note Rate, computed on the basis of a 360
day year consisting of twelve (12) months of thirty (30) days each.
All outstanding principal and interest on the Loan shall be due and
payable in full on the last day of the Loan Term.
8.3 ACCRUAL OF MONTHLY INTEREST. The Borrower expressly understands and
agrees that the computation of interest based on such 360 day year
consisting of twelve (12) monthsof thirty (30) days each is solely for
purposes of determining the monthly principal and interest payment
amount, and, notwithstanding such computation, the amount of each
monthly payment made by the Borrower that is allocated to interest
will be based on the actual number of calendar days during such month.
The Borrower understands that the amount allocated to interest for
each month will vary depending on the actual number of calendar days
during such month. As a result, loans using an Actual/360 payment
schedule amortize more slowly and generate more interest than a loan
at the same note rate using a 30/360 payment schedule.
9. LATE CHARGES: In the event any payment of principal and interest on the
Loan is not received by the Lender prior to the fifth (5th) day after such
payment is due (or such greater period, if any, required by applicable
law), the Borrower will pay to the Lender a late charge of five percent
(5%) of the amount of the overdue payment. In the event any payment of
principal and interest on the Loan is not received by the Lender prior to
the thirtieth (30th) day after such payment is due, the outstanding
principal balance of the Loan shall bear interest during the period the
payment remains past due at the rate of four (4) percentage points above
the Note Rate (the "Default Rate"). If the unpaid principal balance of the
Loan and all accrued interest are not paid in full on the final day of the
Loan Term, the unpaid principal balance and all accrued interest shall bear
interest at the Default Rate. This provision for a late charge and the
Default Rate shall not be deemed to extend the time for payment or be a
"grace period" or "cure period" that gives the Borrower a right to cure an
Event of Default (as defined below). The imposition of late charges or
charging interest at the Default Rate is not contingent upon the giving of
any notice or the lapse of any cure period provided for in the Loan
Documents (as defined below).
10. MAXIMUM RATE OF INTEREST: The Loan is subject to the express condition that
at no time shall the Borrower be obligated or required to pay interest on
the principal balance of the Loan or late charges at a rate which could
subject the Lender to either civil or criminal liability as a result of
being in excess of the maximum interest rate which the Borrower is
permitted by applicable law to contract or agree to pay. If by the terms of
the Loan Documents (as defined herein), the Borrower is at any time
required or obligated to pay interest on the principal balance of the Loan
or late charges at a rate in excess of such maximum rate, the Note Rate
shall be deemed to be immediately reduced to such maximum rate and all
previous payments in excess of the maximum rate shall be deemed to have
been payments in reduction of principal and not on account of the interest
due hereunder.
11. TITLE INSURANCE, SURVEY, ETC.: In addition to satisfying all other terms
and conditions of this Commitment, the following requirements must be
satisfied prior to Rate Lock:
(a) The Lender shall receive and approve a current title insurance
commitment and proforma policy of title insurance that satisfies the
requirements of the Program;
(b) The Lender shall receive and approve a current survey of the
Property, including a Surveyor's Certificate, that satisfies the
requirements of the Program;
(c) The Lender shall receive a draft opinion of ▇▇▇▇▇▇▇▇'s counsel in
the form provided by ▇▇▇▇▇▇'s counsel; and
(d) The Lender shall receive evidence satisfactory to the Lender that
the Borrower has in place all insurance with respect to the Property
that satisfy the requirements of the Program.
12. LOAN FEES:
12.1 APPLICATION FEE. The Borrower has paid to the Lender an Application
Fee (the "Application Fee") identified above. The Application Fee has
been earned and is not refundable, whether or not the Loan described
herein is closed.
12.2 COMMITMENT DEPOSIT. Upon the Borrower's acceptance of this Commitment,
the Borrower and/or the Key Principals shall pay to the Lender the
Commitment Deposit identified above. The Commitment Deposit shall be
applied against the Financing Fee described in paragraph 12.5 of the
Commitment. The Commitment Deposit is earned and shall only be
refunded by the Lender to the Borrower in the event that the Borrower
complies with each of the terms, conditions and requirements contained
or referred to in this Commitment and the Lender fails to complete the
transaction contemplated by this Commitment. Except as set forth in
the preceding sentence, the Commitment Deposit is non-refundable.
12.3 THIRD-PARTY REPORTS. The Borrower has previously paid to the Lender
the Application Fee identified above in order to offset the cost of
such third-party reports.
12.4 RATE LOCK DEPOSIT. Prior to Rate Lock, the Borrower and/or the Key
Principals shall pay to the Lender the Rate Lock Deposit described in
paragraph 6.2 of this Commitment.
12.5 FINANCING FEE. At Closing, the Borrower and/or the Key Principals
shall pay to the Lender the Financing Fee identified above. The amount
also includes compensation to ▇▇▇▇▇▇'s Correspondent identified above.
13. SECURITY PROPERTY: The Loan will be secured by, among other things, the
Security Instrument (as defined below) (a) creating a first lien on the
Property, all buildings and other improvements now or hereafter located on
the Property, (the "Improvements"), and all fixtures, equipment,
furnishings, inventory, machinery and other articles of personal property
now or hereafter owned by the Borrower and attached to or contained in
and/or used in connection with the Property and the Improvements (the
"Tangible Personalty") (the Property, the Improvements and the Tangible
Personalty being referred to herein collectively as the "Premises") and (b)
an assignment of and security interest in all present and future accounts,
general intangibles, instruments, documents and chattel paper now or
hereafter affecting or relating to the Premises (the "Intangible
Personalty") and all leases and other occupancy or use agreements now or
hereafter made or affecting the Premises and all security deposits, rents,
issues, profits, revenues and other income of the Premises from time to
time accruing therefrom (the "Rents and Profits"), all as more particularly
described in the Security Instrument.
14. INSURANCE: The Borrower must provide proof of acceptable hazard and
liability insurance coverage in the form of policies and paid receipt prior
to Closing. Until the Mortgage Loan is paid in full, insurance coverage
must at all times meet the Lender's requirements.
15. FUNDS, RESERVES AND ESCROWS: The Borrower shall establish the following
funds, reserves and escrows ( collectively, the "Reserve Accounts"):
15.1 REPAIR ESCROW ACCOUNT. At the Closing, the Borrower shall deposit with
the Lender the Completion/Repair Deposit identified above (the "Repair
Deposit"), which (unless the Repair Deposit is $0) is an amount equal
to the percentage of the cost of completion of all immediate repairs
to the Premises as set forth in Exhibit D to this Commitment (the
"Immediate Repairs"). The Repair Deposit shall be deposited in an
interest bearing account administered by the Lender (the "Repair
Escrow Account"). The Immediate Repairs, as detailed in Exhibit D to
this Commitment, must be completed within twelve (12) months of
Closing. The Repair Escrow Account shall be established and
administered in accordance with the terms and conditions of the Loan
Documents (as defined below).
15.2 REPLACEMENT RESERVE ACCOUNT. At the Closing, an interest bearing
deposit account (the "Replacement Reserve Account") shall be
established for replacements to the Premises set forth in Exhibit E to
this Commitment. The Borrower shall make (a) an initial deposit at
Closing in the amount equal to the Initial Deposit to Replacement
Reserve identified above, and (b) monthly deposits in cash on the
first day of each month in the amounts of the Monthly Deposit to
Replacement Reserve set forth above. Monthly payments to the
Replacement Reserve shall automatically be increased by Five Percent
(5%) on each anniversary of the first payment of the loan. The Lender
may, in its reasonable discretion, adjust such monthly amount from
time to time to an amount sufficient, to maintain adequate balances
necessary for replacement costs as they may arise. The terms and
conditions regarding the establishment and administration of the
Replacement Reserve Account are more particularly described in the
Loan Documents (as defined below).
15.3 TAX AND INSURANCE RESERVE ACCOUNT. At the Closing, a non-interest
bearing escrow account for payment of taxes, assessments, insurance
premiums and other charges shall be established. The Borrower shall
pay to the Lender on the first day of each month during the Loan Term
an amount equal to (a) the sum of (i) the aggregate anticipated annual
premiums for all insurance policies required to be maintained by the
Lender due in the coming year, (ii) the sum of the anticipated annual
real property taxes, personal property taxes, intangibles taxes and
assessments for the Premises due in the coming year, and (iii) the sum
of all other anticipated assessments and charges against the Premises
due in the coming year, divided by (b) twelve (12); all as reasonably
estimated initially and from time to time by the Lender on the basis
of assessments and bills and reasonable estimates thereof, with the
administration and application thereof all as more fully described in
the Loan Documents. At the Closing, the Borrower shall make an initial
deposit to such escrow account in an amount sufficient, in the sole
judgment of the Lender, to pay all taxes, assessments, insurance
premiums and other charges of the types described above applicable to
the period through and including the month following the month of the
Closing, plus such additional amounts as may be required by the
Lender.
Each of the Reserve Accounts will be held, applied and adjusted
pursuant to the terms of the Loan Documents. Except as expressly set
forth in this Commitment and in the Loan Documents, the Lender shall
not be required to pay any interest, earnings or profits on any of the
Reserve Accounts. As additional collateral for the Loan, the Borrower
shall assign the Reserve Accounts to the Lender and grant the Lender a
security interest in the Reserve Accounts.
16. LOAN DOCUMENTS: The Loan shall be evidenced and secured by such documents
(the "Loan Documents") as the Lender or its counsel may require. The Loan
Documents shall be on the Lender's standard forms (with such changes as the
Lender or its counsel may require). The Loan Documents shall be delivered
to the Lender fully executed and in final form at the Closing. All of the
Loan Documents shall be executed by properly authorized principals and/or
officers of the Borrower and the Key Principals, as applicable. All
agreements, documents and similar instruments shall be issued or executed
by parties and institutions acceptable to the Lender. In the event of any
conflict between the terms of this Commitment and the terms of the Loan
Documents, the terms of the Loan Documents shall prevail.
17. FORM OF NOTE AND SECURITY INSTRUMENT: The form of the Note and Security
Instrument have previously been provided to Borrower. By execution of this
Commitment, the Borrower and the Key Principals expressly agree to and
accept the terms and provisions of the Note, including without limitation,
(a) the provisions relating to late charges and interest upon acceleration,
(b) the provisions relating to prepayments and prepayment premiums, and (c)
the exceptions to non-recourse liability.
18. EVENTS OF DEFAULT UNDER LOAN DOCUMENTS: The Loan Documents shall provide
for the acceleration of the entire unpaid principal balance of the Loan and
all accrued interest thereon, at the option of the Lender and without
advance notice to the Borrower, upon the occurrence of certain events of
default specified in the Loan Documents (each of which is an "Event of
Default"). As of the Closing, there shall exist no Event of Default nor any
event or condition which with the passage of time or the giving of notice
or both could constitute an Event of Default.
19. EVENTS OF DEFAULT UNDER COMMITMENT: If any one of the following events
occur prior to Closing, the Lender may, at its option, terminate this
Commitment and have no further obligations to Borrower or any other party
under this Commitment:
(a) Failure of the Borrower to comply with any of the terms and
conditions of this Commitment;
(b) Destruction or damage to the Property deemed substantial by the
Lender in its sole discretion;
(c) A change in the Borrower's financial or the Property's operating
condition which the Lender deems, in its sole discretion, to be
material or adverse;
(d) Any material misrepresentation in the Borrower's Loan application,
or in any submission or representation made in connection with the
Loan application; or
(e) Any other circumstances or state of facts related to the Borrower
or the Property not previously disclosed or discovered which could, in
the Lender's sole discretion, make the Loan unacceptable to the
Investor.
A termination of this Commitment due to any of the above events shall not
affect the Lender's right to retain fees and expenses collected or collect
fees and expenses owed to the Lender, or seek damages incurred by the
Lender, in relation to this Commitment.
20. ENVIRONMENTAL: The Loan Documents shall contain certain representations,
warranties, covenants, agreements and indemnities relating to environmental
conditions and hazards.
21. EXPENSES: The Borrower and the Key Principals agree to promptly pay all
expenses in connection with the underwriting, negotiation and Closing of
the Loan, whether or not the Loan closes, including title insurance
premiums and other title company charges; recording, registration, filing
and similar fees, taxes and charges; transfer, mortgage, deed, stamp or
documentary taxes or similar fees or charges; costs of third-party reports,
including without limitation, environmental studies, engineer's reports,
appraisals and surveys; and all legal fees and expenses charged by counsel
to the Lender.
22. ASSIGNMENT OF COMMITMENT: This Commitment shall not be assignable or
assigned by the Borrower to any individual, corporation, partnership,
limited liability company, trust or other entity (each of which being a
"Person") without the express written consent of the Lender and any
attempted assignment of this Commitment shall automatically terminate this
Commitment. The Lender may assign this Commitment without the Borrower's
consent. If requested by the Lender, the Borrower agrees to execute and
deliver all documents necessary to effectuate such assignment.
23. THE LENDER'S COUNSEL: The Lender shall be represented by its transactional
counsel ("▇▇▇▇▇▇'s Counsel") in connection with all matters relating to the
Loan. Upon acceptance of this Commitment, please contact the Closing
Officer identified above to obtain the name of ▇▇▇▇▇▇'s Counsel. On the
Loan Closing Date, the Borrower shall pay the fees of ▇▇▇▇▇▇'s Counsel (or
an amount equal to the fees of ▇▇▇▇▇▇'s Counsel shall be deducted from the
Loan proceeds). The sufficiency and form of all submissions and documents
related to this Commitment and the Loan are subject to review by and
approval of ▇▇▇▇▇▇'s Counsel.
24. MATERIAL ADVERSE CHANGE: No material adverse change shall occur with
respect to the Borrower, the Key Principals or the Borrower's general
partners, if any, the Premises or any party contributing to the operating
income for the Premises (including, without limitation, tenants) between
the date of application for the Loan and the Closing. In the event of any
such material adverse change, the Lender may in its sole discretion
terminate this Commitment, whether or not such proceedings or circumstances
shall be existing at the date of Closing. This Commitment is further
conditioned upon certification from the Borrower that there has been no
change in the ownership structure of the Borrower or any of the Key
Principals and that there has been no material adverse change in the
financial statements, operating statements or rent rolls previously
submitted to the Lender for the Borrower, the general partners or members,
if any, of the Borrower and the Key Principals.
25. SECONDARY FINANCING: Secondary financing with respect to the Premises, the
imposition of junior liens on the Premises or the pledge of any partnership
interest in the Borrower shall be permitted only with the prior written
approval of the Lender in its sole discretion.
26. BROKERAGE FEES: Payment to ▇▇▇▇▇▇'s correspondent shall be as provided in
Section 12.5. By acceptance of this Commitment, the Borrower agrees to pay
any and all fees imposed or charged by any other brokers hired or
contracted by the Borrower who brought about the issuance of this
Commitment or the making of the Loan pursuant hereto, and agrees to
indemnify and hold the Lender harmless from and against any and all claims,
demands and liability for brokerage commissions, assignment fees, finders
fees or other compensation whatsoever arising from this Commitment or the
Lender's making of the Loan which may be asserted against the Lender by any
Person. The Lender hereby agrees to pay any and all fees imposed or charged
by any other brokers hired solely by the Lender, pursuant to paragraph 12.5
of this Commitment.
27. ASSUMPTION: The Lender shall consent, without any adjustment to the rate at
which the Loan bears interest or to any other economic terms of the Loan,
to an assumption of the Loan if, prior to the sale of the Property, the
Borrower has satisfied each of the following requirements:
1. The submission to Lender of all information required by ▇▇▇▇▇▇ to
consent to the assumption;
2. The absence of any Event of Default;
3. The transferee meets all of the eligibility, credit, management and
other standards (including any standards with respect to previous
relationships between the Lender and the transferee and the
organization of the transferee) customarily applied by ▇▇▇▇▇▇ at the
time of the proposed sale of the Property to the approval of borrowers
in connection with the origination or purchase of similar mortgages,
deeds of trust or deeds to secure debt on multifamily properties;
4. The Property, at the time of the proposed sale of the Property, meets
all standards as to its physical condition that are customarily
applied by the Lender at the time of the proposed sale of the Property
to the approval of properties in connection with the origination or
purchase of similar mortgages on multifamily properties;
5. In the case of a sale of the Property of all or any part of the
Property, (A) the execution by the transferee of an assumption
agreement that is acceptable to Lender and that, among other things,
requires the transferee to perform all obligations of Borrower set
forth in the Note, this Instrument and any other Loan Documents, and
may require that the transferee comply with any provisions of this
instrument or any other Loan Document which may have been waived by
Lender, and (B) if an Acknowledgement and Agreement of Key Principal
to Personal Liability for Exceptions to Non-Recourse Liability has
been executed with the Note, the transferee causes one or more
individuals or entities acceptable to Lender to execute and deliver to
Lender an Acknowledgement and Agreement of Key Principal to Personal
Liability for Exceptions to Non-Recourse Liability in a form
acceptable to Lender;
6. If a guaranty has been executed and delivered in connection with the
Note, this Instrument or any of the other Loan Documents, the Borrower
causes one or more individuals or entities acceptable to Lender to
execute and deliver to Lender a guaranty in a form acceptable to
Lender; and
7. ▇▇▇▇▇▇'s receipt of all of the following:
(a) A non-refundable review fee in the amount of $3,000.00 and a
transfer fee equal to 1 percent of the outstanding Indebtedness
immediately prior to the Transfer.
(b) In addition, Borrower shall be required to reimburse Lender for
all of ▇▇▇▇▇▇'s out-of-pocket costs (including reasonable
attorney's fees) incurred in reviewing the Transfer request, to
the extent such expenses exceed $3,000.00
28. GENERAL CONDITIONS: To the extent not already provided to, and approved by,
the Lender, at or prior to Rate Lock, Closing, the Borrower shall furnish
to the Lender or satisfy the general conditions set forth below. The
provisions of the Loan Agreement and the Loan Documents shall prevail if
there is any conflict between such provisions and the General Conditions
set forth below.
1. ENGINEER'S REPORT. The Lender shall have obtained, at ▇▇▇▇▇▇▇▇'s
expense, an engineer's report for the Premises, dated within one
hundred twenty (120) days of the Closing in form and substance
acceptable to the Lender.
2. ENVIRONMENTAL ASSESSMENT; OPERATIONS AND MAINTENANCE PROGRAM. The
Lender shall have obtained, at Borrowers' expense an environmental
assessment of the Premises (including but not limited to the taking of
soil borings and air and ground water samples and other above and
below ground testing) by a consulting firm acceptable to the Lender,
dated within one hundred twenty (120) days of the Closing in form and
substance acceptable to the Lender. Such environmental assessment
shall conform to (i) the current minimum standards for the American
Society of Testing and Materials, and (ii) all requirements set forth
in the Loan Documents. The Borrower shall furnish to the Lender and
adopt a written operations and maintenance program (in form and
substance satisfactory to the Lender) with respect to the use,
handling, disposal and/or abatement of all hazardous materials, if
any, identified in such environmental assessment or as otherwise
required by the Lender.
3. CERTIFICATES OF OCCUPANCY; LICENSES. The Borrower shall have submitted
to the Lender (i) certificates of occupancy and/or other evidence
acceptable to the Lender that the Premises is suitable for occupancy
and has been inspected, accepted and approved by all governmental
boards, or bureaus or departments having jurisdiction over the same;
and (ii) that all licenses, permits, certifications, privileges and
the like necessary for the ownership, operation and/or occupancy of
the Premises for its current use and as currently constructed have
been issued to the Borrower.
4. ZONING; SUBDIVISION. The Borrower shall have furnished evidence
acceptable to the Lender that the Premises and its use comply with all
zoning requirements and that the Premises is a conforming use, which
evidence may be in the form of one or more letters acceptable to the
Lender from applicable governmental authorities having jurisdiction
over the Premises, a written opinion of local counsel acceptable to
the Lender, or by a proper zoning endorsement to the title insurance
policy. The Borrower shall furnish the Lender a copy of an approved
and currently valid subdivision plat for the Premises, if applicable,
or an opinion of local counsel acceptable to the Lender, that the
Lender may foreclose on and resell the Premises to a third party
without subdivision approval.
5. REQUISITE AUTHORITY AND STRUCTURE OF BORROWER. The Borrower must
possess all power and authority necessary for owning and operating the
Premises and must meet all requirements of the Lender for the Loan. It
is a condition of this Commitment that any changes in the form of the
Borrower must be approved in writing by the Lender prior to Closing.
The Borrower shall furnish the Lender (i) satisfactory proof that it
is legally constituted and in good standing under the laws of the
State in which the Premises is located and under the laws of the State
in which it was organized, and has full power and authority to enter
into the financing contemplated under this Commitment; (ii) certified
copies of all organizational documents (as amended and currently in
effect) of the Borrower and the Key Principals (if not individuals)
and their general partners or members, if any, and of authorizing
resolutions, as appropriate, with respect to the financing
contemplated by this Commitment; and (iii) any other documentation
reasonably requested by the Lender or its counsel. The Lender may, at
its election, require all organizational documents of the Borrower and
its general partners or members, if any, to contain such provisions as
the Lender may deem necessary or appropriate to evidence that the
Borrower is a Special Purpose Entity.
6. UTILITY SERVICES. The Borrower shall have furnished evidence
satisfactory to the Lender that utility services, including gas,
electrical, telephone, sewer, water and storm drainage, are available,
adequate and fully operational for the Premises.
7. UCC SEARCHES. The Lender shall have obtained copies of such UCC
searches (dated no more than thirty (30) days prior to Closing) as the
Lender may require, including without limitation, in the county and
State where the Premises is located and in the State of Borrower's
principal place of business if other than the State where the Premises
is located.
8. NO CONDEMNATION PROCEEDINGS. As of Closing no proceedings shall have
been threatened or commenced by any governmental authority having the
power of eminent domain to condemn any part of the Premises, which the
Lender in its sole judgment deems substantial.
9. FINANCIAL STATEMENTS AND OPERATING STATEMENTS. The Borrower shall have
submitted to the Lender (a) such certified financial statements of the
Borrower for the most recent fiscal year ended, and (b) certified
operating statements for the period beginning with the first day of
the current fiscal year and ending on a date not more than thirty (30)
days prior to the Closing, all in form and substance acceptable to the
Lender.
10. TAXES. The Borrower shall provide the Lender evidence that the
Premises is a separate and single tax parcel and tax identification
numbers, tax rates, estimated tax values and identities of the taxing
authorities relating thereto.
11. LEGAL OPINION. The Borrower shall deliver one or more current written
legal opinions from counsel acceptable to the Lender and in form and
substance acceptable to the Lender and its counsel.
12. MANAGEMENT AGREEMENT. The Borrower shall have furnished the Lender a
certified copy of each property management agreement affecting all or
any portion of the Premises, each of which shall be in form and
substance satisfactory to the Lender.
13. PUBLICITY. The Borrower hereby gives permission to the Lender to
release publicity articles concerning the financing of the Premises.
14. OTHER REQUIREMENTS. The Borrower shall satisfy such other and further
requirements of the Lender for transactions of similar type and amount
as the Loan.
29. PROPERTY MANAGEMENT: The property manager for the Premises and the property
management agreement relating to the Premises shall be subject to the
approval of the Lender, in its sole discretion. The Borrower, the Lender
and the property manager for the Premises shall execute at Closing an
assignment of the property management agreement.
30. GOVERNING LAW; JURISDICTION: This Commitment and all matters relating
thereto shall be governed by and construed and interpreted in accordance
with the laws of the State of Maryland. The Borrower and all of its general
partners or members and the Key Principals hereby submit to the
jurisdiction of the State and Federal courts located in the State of
Maryland and agree that the Lender may, at its option, enforce its rights
under this Commitment in such courts. Upon consummation of the Closing, all
matters relating to the Loan and the Loan Documents shall be governed by
and construed and interpreted in accordance with the law of the State in
which the Premises is located.
31. WAIVER OF JURY TRIAL: The Lender, the Borrower and the Key Principals
hereby waive, to the fullest extent permitted by applicable law, the right
to a trial by jury in any action or proceeding based upon, or related to,
the subject matter of this Commitment. This waiver is knowingly,
intentionally, and voluntarily made by the Lender, the Borrower and all of
its General Partners or Members, if any, and the Key Principals, and the
Lender, the borrower and the Key Principals acknowledge that no person
acting on behalf of another party to this Commitment has made any
representations of fact to induce this waiver of trial by jury or in any
way to modify or nullify its effect. The Lender, the Borrower and the Key
Principals further acknowledge that they have been represented (or have had
the opportunity to be represented) in connection with this Commitment and
in the making of this waiver by independent legal counsel, selected of
their own free will, and that they have had the opportunity to discuss this
waiver with counsel.
32. COMPLETE AGREEMENT: This Commitment, when executed by the parties hereto
contains the complete and entire understanding of the parties with respect
to the subject hereof and no changes or waivers will be recognized as valid
unless they are made in writing and similarly executed. No specific waiver
of any of the terms hereof shall be considered as a general waiver.
33. COUNTERPARTS: This Commitment may be executed in any number of
counterparts, all of which when taken together shall constitute one and the
same instrument.
34. ACCEPTANCE; TERMINATION: Please indicate your acceptance of the terms and
conditions set forth in this Commitment by signing in the space provided
below and returning a signed copy of this Commitment with your original
signature, together with the balance owing, if any, of the Commitment
Deposit, to the Lender before the close of business on the Commitment
Expiration Date identified above. The Lender will acknowledge receipt of
the Borrower's acceptance of this Commitment and return one (1) copy of
this Commitment to Borrower. This Commitment is not effective until the
Lender acknowledges receipt of the Borrower's acceptance. Without limiting
any other provisions of this Commitment, this Commitment shall expire if
not accepted by the Borrower by the Commitment Expiration Date. After
acceptance, this Commitment shall expire on the Rate Lock Expiration Date
unless all terms and conditions of this Commitment are satisfied and Rate
Lock occurs in accordance with paragraph 6.2 of this Commitment.
Notwithstanding the expiration of this Commitment, the agreements by the
Borrower and the Key Principals contained in this Commitment to pay fees,
costs and expenses shall survive such expiration of the other provisions of
this Commitment. In the event this Commitment shall expire for any reason
pursuant to this paragraph or any other provision of this Commitment, the
Borrower and the Key Principals acknowledge that the Lender shall suffer
damages, costs, expenses and losses which are difficult to ascertain and
agree that the Lender may (without in any way limiting any other rights or
remedies which may be available to the Lender) retain all amounts
previously paid by or on behalf of the Borrower or the Key Principals
(including without limitation, the Application Fee, the Commitment Deposit,
any Rate Lock Fee and the Financing Fee) as liquidated damages, the same
being reasonable compensation to the Lender for such expiration.
Very truly yours,
BERKSHIRE MORTGAGE FINANCE LIMITED PARTNERSHIP,
a Massachusetts limited partnership
By: BRF Corporation, a Massachusetts corporation, its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Senior Vice President, Bethesda Division
Accepted and Agreed To:
BORROWER:
Vinings Communities, L.P.
a Delaware limited partnership
By: Vinings Investment Properties Trust
a Massachusetts business trust
General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇
CEO and President
Person(s) authorized by Borrower to Rate Lock:
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
LIST OF EXHIBITS
EXHIBIT A - Legal Description of the Property
EXHIBIT B - Conditions to Rate Lock/Authorization to Obtain Rate Lock
EXHIBIT C - Lender's Wiring Instructions
EXHIBIT D - List of Immediate Repairs
EXHIBIT E - List of Replacements
EXHIBIT F - Conditions to Closing
Revised 05/08/2001
AUTHORIZATION TO OBTAIN A RATE LOCK
In compliance with a Commitment (the "Commitment") issued by Berkshire Mortgage
Finance Limited Partnership, a Massachusetts limited partnership ("Lender")
April 20, 2001 to make a loan (the "Loan") to the undersigned ("Borrower"),
Borrower authorizes Lender to obtain a secondary market rate lock on the
following items:
1. Loan Amount: $8,080,000
2. Term: 10 years
3. Amortization: 30 years
4. Interest Rate: 6.99%
Comprised of a pass-through rate of 6.64% and a Lender
servicing fee of .35%.
5. Monthly Payments of Principal and Interest: $53,702.19
6. Closing to be held no later than June 1, 2001
▇▇▇▇▇▇▇▇ understands and agrees that if bank security documents satisfactory to
Lender are not executed by the closing date, Borrower will post a $350,000
additional collateral escrow with Lender until such time as the HAP Contract is
renewed through the remaining term of the loan or terminated or acceptable bank
documentation is delivered post closing.
CERTIFICATION
Borrower certifies that there has occurred no "Event of Default" under the
Commitment.
THIS AUTHORIZATION IS PROVIDED AND CERTIFICATION MADE THIS 8th DAY OF May, 2001.
Vinings Communities, L.P.
a Delaware limited partnership
By: Vinings Investment Properties Trust
a Massachusetts business trust
General Partner
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President
