Form 8-K - CURRENT REPORT
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 14, 2002
SPRINGHILL LAKE INVESTORS LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Maryland 0-14569 04-2848939
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation)
55 Beattie Place
Post Office Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(Registrant's telephone number)
(864) 239-1000
Item 5. Other Events
On November 14, 2002, Springhill Lake Investors Limited Partnership refinanced
the mortgage encumbering Springhill Lake Apartments located in Greenbelt,
Maryland. The new mortgage replaced mortgage indebtedness of approximately
$50,300,000 with a new mortgage of $113,100,000. After repayment of the existing
mortgage and payment of closing costs, prepayment penalties and operating
reserves, the Partnership received net proceeds of approximately $52,550,000.
The Managing General Partner is currently evaluating the amount of net proceeds
to be distributed to the partners.
Item 7. Financial Statements and Exhibits
10 (j) Consolidated, Amended and Restated Multifamily Note dated
November 1, 2002 between Springhill Lake Investors Limited
Partnership and GMAC Commercial Mortgage Corporation.
(k) Guaranty dated November 1, 2002 by AIMCO Properties, L.P., for
the benefit of GMAC Commercial Mortgage Corporation.
(l) Consolidated, Amended and Restated Payment Guaranty dated
November 1, 2002 by the Operating Partnerships for the benefit
of GMAC Commercial Mortgage Corporation.
(m) Completion/Repair and Security Agreement dated November 1,
2002 between the Operating Partnerships and GMAC Commercial
Mortgage Corporation for the benefit of GMAC Commercial
Mortgage Corporation.
(n) Replacement Reserve and Security Agreement dated November 1,
2002 between the Operating Partnerships and GMAC Commercial
Mortgage Corporation.
(o) Promissory Note dated November 1, 2002 between Springhill Lake
Investors Limited Partnership and the Operating Partnerships.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SPRINGHILL LAKE INVESTORS LIMITED PARTNERSHIP
By: Three Winthrop Properties, Inc.
Managing General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Vice President - Residential
Date: November 29, 2002
Exhibit 10(j)
Spring Hill Lake Apartments
CONSOLIDATED, AMENDED AND RESTATED
MULTIFAMILY NOTE
(VARIABLE LOAN)
THIS CONSOLIDATED, AMENDED AND RESTATED MULTIFAMILY NOTE (VARIABLE LOAN)
is made and entered into as of the 1st day of November, 2002, by and between
SPRINGHILL LAKE INVESTORS LIMITED PARTNERSHIP, a Maryland limited partnership
("Borrower") and GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation
("Lender").
PRELIMINARY STATEMENTS
A. Loans were made to Borrower (i) in the original principal amount of
Fifty-Eight Million and 00/100 Dollars ($58,000,000.00), the repayment of which
is evidenced by an Amended and Restated Promissory Note dated as of April 30,
1993, and (ii) in the original principal amount of Five Million and 00/100
Dollars ($5,000,000.00), the repayment of which is evidenced by a Second
Promissory Note dated as of April 30, 1993 (together, the "Original Note").
B. The Original Note is guaranteed by (i) an Amended and Restated Guaranty and
Indemnity Agreement dated as of April 30, 1993, entered into by First Springhill
Lake Limited Partnership, a Maryland limited partnership, Second Springhill Lake
Limited Partnership, a Maryland limited partnership, Third Springhill Lake
Limited Partnership, a Maryland limited partnership, Fourth Springhill Lake
Limited Partnership, a Maryland limited partnership, Fifth Springhill Lake
Limited Partnership, a Maryland limited partnership, Sixth Springhill Lake
Limited Partnership, a Maryland limited partnership, Seventh Springhill Lake
Limited Partnership, a Maryland limited partnership, Eighth Springhill Lake
Limited Partnership, a Maryland limited partnership, Ninth Springhill Lake
Limited Partnership, a Maryland limited partnership, Springhill Commercial
Limited Partnership, a Maryland limited partnership and Springfield Facilities,
Inc., a Maryland corporation (predecessor to Springfield Facilities LLC, a
Maryland limited liability company) (collectively "Guarantors") and (ii) a
Second Guaranty and Indemnity Agreement dated as of April 30, 1993, entered into
by Guarantors (together, the "Original Guaranty"), which Original Guaranty is
secured by (i) an Amended and Restated Deed of Trust and Security Agreement
executed by Guarantors, dated as of April 30, 1993, and recorded among the Land
Records of Prince George's County, Maryland (the "Land Records") in Liber 8749,
folio 499, and (ii) a Second Indemnity Deed of Trust and Security Agreement
executed by Guarantors dated as of April 30, 1993 and recorded in the Land
Records in Liber 8749, folio 552 (together, the "Original Deed of Trust"), on
certain improved real property located in Prince George's County, Maryland.
C. Lender has purchased the Original Note and the Original Guaranty from their
holder.
D. Borrower has requested and Lender has agreed to consolidate and make certain
amendments to the Original Note, including changing the interest rate and the
terms of payment, and increasing the original principal amount of Borrower's
indebtedness from Sixty-Three Million and 00/100 Dollars ($63,000,000.00) to One
Hundred Thirteen Million One Hundred Thousand and 00/100 Dollars
($113,100,000.00). The Original Note and the Original Guaranty are being amended
and restated in its entirety to reflect such amendments.
E. The Original Deed of Trust is concurrently being amended and restated
pursuant to the terms of that certain Consolidated, Amended and Restated
Indemnity Multifamily Deed of Trust, Assignment of Rents and Security Agreement
of even date herewith (as so amended and restated, the "Security Instruments").
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower and Lender agree that the Original Note is hereby
consolidated, amended and restated in its entirety as follows (as consolidated,
amended and restated, the "Note"):
Spring Hill Lake Apartments
MULTIFAMILY NOTE
(VARIABLE LOAN)
US $113,100,000.00 As of November 1, 2002
FOR VALUE RECEIVED, the undersigned ("Borrower") promises to pay to the
order of GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation, the
principal sum of One Hundred Thirteen Million One Hundred Thousand and 00/100
Dollars (US $113,100,000.00), with interest on each Variable Loan at an annual
rate as calculated in Section 3 hereof.
This Note is executed and delivered by Borrower pursuant to one of either
(i) that certain Amended and Restated Loan Agreement, dated as of September 16,
2002, by and among Guarantors, AIMCO Properties, L.P., a Delaware limited
partnership, certain borrowers signatory thereto and Lender or (ii) that certain
Loan Agreement dated as of November 1, 2002, by and among certain borrowers
signatory thereto and Lender. As used herein, the term "Loan Agreement" shall
mean whichever of the loan agreements described in the preceding sentence shall
apply from time to time in accordance with their respective terms, along with
all amendments, supplements, replacements, restatements or other modifications
thereto or thereof from time to time made. The Loan Agreement shall evidence the
obligation of Borrower to repay a Variable Loan made by Lender to Borrower in
accordance with the terms of the Loan Agreement. This Note is entitled to the
benefit and security of the Loan Documents provided for in the Loan Agreement,
to which reference is hereby made for a statement of all of the terms and
conditions under which the Variable Loan evidenced hereby is made. The Loan
Agreement requires certain of the terms of each Variable Loan to be evidenced by
one or a series of Loan Confirmation Instruments, and reference is hereby made
to each such Loan Confirmation Instrument for such terms.
1. Defined Terms. As used in this Note, (i) the term "Lender" means the holder
of this Note, and (ii) the term "Indebtedness" means the principal of, interest
on, or any other amounts due at any time under, this Note, the Security
Instrument or any other Loan Document, including prepayment premiums, late
charges, default interest, and advances to protect the security of the Security
Instrument under Section 12 of the Security Instrument. Event of Default and
other capitalized terms used but not defined in this Note shall have the
meanings given to such terms in the Loan Agreement or, if not defined in the
Loan Agreement, as defined in the Security Instrument (as defined in Paragraph
5).
2. Address for Payment. All payments due under this Note shall be payable at
GMAC Commercial Mortgage Corporation, 200 Witmer Road, Horsham, PA 19044 ,
Attention: Servicing - Account Manager, or such other place as may be designated
by written notice to Borrower from or on behalf of Lender.
3. Payment of Principal and Interest. Principal and interest shall be paid as
follows:
(a) This Note shall evidence a Variable Loan made from time to time under the
Loan Agreement. The Variable Loan shall bear interest at a rate determined in
accordance with Section 2.01 of the Loan Agreement.
(b) Borrower shall pay imputed interest on each Variable Loan in advance in the
form of a Discount in accordance with Section 1.04(b) of the Loan Agreement
(except that Borrower shall pay actual interest on the Variable Loan for the
partial month period, if any, in accordance with Section 1.04(a) of the Loan
Agreement).
(c) Borrower shall make monthly payments of principal each in the amount as set
forth on the attached Amortization Schedule. Lender shall apply each such
principal payment to the outstanding principal amount of the Loan on the
Rollover Date next following receipt of any such payment. If not sooner paid,
the entire principal amount of the Variable Loan shall be due and payable on the
earlier of (i) the termination of the Loan Agreement pursuant to subsection (e)
of Section 1.02 thereof, (ii) the fifth anniversary (unless such date is
extended pursuant to Section 1.07 of the Loan Agreement, in which case, the
tenth anniversary) of the Initial Closing Date or (iii) the maturity date of any
outstanding MBS, unless either (A) not less than five Business Days prior to the
maturity date of the outstanding MBS, a Borrower has requested that the
outstanding MBS be renewed with a new MBS or converted to a Fixed Loan to take
effect on the maturity date of the outstanding MBS and such new MBS has been
issued or conversion has occurred or (B) the MBS is automatically renewed, which
automatic renewal shall occur in the event that a Borrower does not make the
request set forth in subpart (iii)(A) above and does not give Lender notice not
less than five Business days prior to the maturity date of the outstanding MBS
that the Variable Loan related to such outstanding MBS shall be paid on the
maturity date of such outstanding MBS (the "Maturity Date"). Any MBS that is
issued as a result of an automatic renewal of a maturing MBS as contemplated by
subpart (iii)(B) above shall have a maturity date of three (3) months after the
MBS Issue Date.
(d) In addition to payment of principal and the Discount, Borrower shall pay the
Variable Loan Fee due on each Variable Loan in accordance with Section
1.04(b)(ii) of the Loan Agreement.
4. Application of Payments. If at any time Lender receives, from Borrower or
otherwise, any amount applicable to the Indebtedness that is less than all
amounts due and payable at such time, Lender may apply that payment to amounts
then due and payable in any manner and in any order determined by Lender, in
Lender's discretion. Borrower agrees that neither Lender's acceptance of a
payment from Borrower in an amount that is less than all amounts then due and
payable nor Lender's application of such payment shall constitute or be deemed
to constitute either a waiver of the unpaid amounts or an accord and
satisfaction.
5. Security. The Indebtedness is guaranteed by Guarantor whose consolidated,
amended and restated payment guaranty (the "Guaranty") is secured, among other
things, by the Security Instrument and reference is made to the Security
Instrument for other rights of Lender concerning the collateral for the
Guaranty.
6. Acceleration. If an Event of Default has occurred and is continuing, the
entire unpaid principal balance, any accrued interest, the prepayment premium
payable under Paragraph 10, if any, and all other amounts payable under this
Note and any other Loan Document shall at once become due and payable, at the
option of Lender, without any additional notice to Borrower. Lender may exercise
this option to accelerate regardless of any prior forbearance.
7. Late Charge. If any monthly amount payable under this Note or under the
Security Instrument or any other Loan Document is not received by Lender within
10 days after the amount is due, Borrower shall pay to Lender, immediately and
without demand by Lender, a late charge equal to 5 percent of such amount.
Borrower acknowledges that its failure to make timely payments will cause Lender
to incur additional expenses in servicing and processing the loan evidenced by
this Note (the "Loan"), and that it is extremely difficult and impractical to
determine those additional expenses. Borrower agrees that the late charge
payable pursuant to this Paragraph represents a fair and reasonable estimate,
taking into account all circumstances existing on the date of this Note, of the
additional expenses Lender will incur by reason of such late payment. The late
charge is payable in addition to, and not in lieu of, any interest payable at
the Default Rate pursuant to Paragraph 8.
8. Default Rate. So long as any monthly installment or any other payment due
under this Note remains past due for 30 days or more, interest under this Note
shall accrue on the unpaid principal balance from the earlier of the due date of
the first unpaid monthly installment or other payment due, as applicable, at a
rate (the "Default Rate") equal to the lesser of 4 percentage points above the
rate stated in the first paragraph of this Note or the maximum interest rate
which may be collected from Borrower under applicable law. If the unpaid
principal balance and all accrued interest are not paid in full on the Maturity
Date, the unpaid principal balance and all accrued interest shall bear interest
from the Maturity Date at the Default Rate. Borrower also acknowledges that its
failure to make timely payments will cause Lender to incur additional expenses
in servicing and processing the Loan, that, during the time that any monthly
installment or payment under this Note is delinquent for more than 30 days,
Lender will incur additional costs and expenses arising from its loss of the use
of the money due and from the adverse impact on Lender's ability to meet its
other obligations and to take advantage of other investment opportunities, and
that it is extremely difficult and impractical to determine those additional
costs and expenses. Borrower also acknowledges that, during the time that any
monthly installment or payment due under this Note is delinquent for more than
30 days, Lender's risk of nonpayment of this Note will be materially increased
and Lender is entitled to be compensated for such increased risk. Borrower
agrees that the increase in the rate of interest payable under this Note to the
Default Rate represents a fair and reasonable estimate, taking into account all
circumstances existing on the date of this Note, of the additional costs and
expenses Lender will incur by reason of Borrower's delinquent payment and the
additional compensation Lender is entitled to receive for the increased risks of
nonpayment associated with a delinquent loan.
9. Limits on Personal Liability.
(a) Except as otherwise provided in this Paragraph 9, Borrower shall have no
personal liability under this Note, the Security Instrument or any other Loan
Document for the repayment of the Indebtedness or for the performance of any
other obligations of Borrower under the Loan Documents, and Lender's only
recourse for the satisfaction of the Indebtedness and the performance of such
obligations shall be Lender's exercise of its rights and remedies with respect
to the Mortgaged Property and any other collateral held by Lender as security
for the Indebtedness. This limitation on Borrower's liability shall not limit or
impair Lender's enforcement of its rights against any guarantor of the
Indebtedness or any guarantor of any obligations of Borrower.
(b) Borrower shall be personally liable to Lender for the repayment of a portion
of the Indebtedness equal to any loss or damage suffered by Lender as a result
of (1) failure of Guarantor to pay to Lender upon demand after an Event of
Default, all Rents to which Lender is entitled under Section 3(a) of the
Security Instrument and the amount of all security deposits collected by
Guarantor from tenants then in residence; (2) failure of Guarantor to apply all
insurance proceeds and condemnation proceeds as required by the Security
Instrument; (3) failure of Guarantor to comply with Section 14(d) or (e) of the
Security Instrument relating to the delivery of books and records, statements,
schedules and reports; (4) fraud or written material misrepresentation by
Borrower, Guarantor or any officer, director, partner, member or employee of
Borrower or Guarantor in connection with the application for or creation of the
Indebtedness or any request for any action or consent by Lender; or (5) failure
of Guarantor to apply Rents, first, to the payment of reasonable operating
expenses (other than Property management fees that are not currently payable
pursuant to the terms of an Assignment of Management Agreement or any other
agreement with Lender executed in connection with the Loan) and then to amounts
("Debt Service Amounts") payable under this Note, the Security Instrument or any
other Loan Document (except that Borrower will not be personally liable (i) to
the extent that Guarantor lacks the legal right to direct the disbursement of
such sums because of a bankruptcy, receivership or similar judicial proceeding,
or (ii) with respect to Rents that are distributed in any calendar year if
Guarantor has paid all operating expenses and Debt Service Amounts for that
calendar year).
(c) Borrower shall become personally liable to Lender for the repayment of all
of the Indebtedness upon the occurrence of any of the following Events of
Default: (1) Guarantor's acquisition of any property or operation of any
business not permitted by Section 33 of the Security Instrument; (2) a Transfer
that is an Event of Default under Section 21 of the Security Instrument; or (3)
Borrower's acquisition of any property or operation of any business not
permitted by Section 25 of this Note.
(d) To the extent that Borrower has personal liability under this Paragraph 9,
Lender may exercise its rights against Borrower personally without regard to
whether Lender has exercised any rights against the Mortgaged Property or any
other security, or pursued any rights against any guarantor, or pursued any
other rights available to Lender under this Note, the Security Instrument, any
other Loan Document or applicable law. For purposes of this Paragraph 9, the
term "Mortgaged Property" shall not include any funds that (1) have been applied
by Guarantor as required or permitted by the Security Instrument prior to the
occurrence of an Event of Default, or (2) Guarantor was unable to apply as
required or permitted by the Security Instrument because of a bankruptcy,
receivership, or similar judicial proceeding.
10. Voluntary and Involuntary Prepayments. Pursuant to the terms of the Loan
Agreement, Borrower shall pay the entire amount of the Discount on any Variable
Loan in advance. Accordingly, any Variable Loan may be prepaid in whole or in
part and at any time without penalty. Borrower shall give Lender six (6)
Business Days advance notice of any prepayment.
11. Costs and Expenses. Borrower shall pay on demand all reasonable expenses and
costs, including reasonable fees and out-of-pocket expenses of attorneys and
expert witnesses and costs of investigation, incurred by Lender as a result of
any default under this Note or in connection with efforts to collect any amount
due under this Note, or to enforce the provisions of any of the other Loan
Documents, including those incurred in post-judgment collection efforts and in
any bankruptcy proceeding (including any action for relief from the automatic
stay of any bankruptcy proceeding) or judicial or non-judicial foreclosure
proceeding.
12. Forbearance. Any forbearance by Lender in exercising any right or remedy
under this Note, the Security Instrument, or any other Loan Document or
otherwise afforded by applicable law, shall not be a waiver of or preclude the
exercise of that or any other right or remedy. The acceptance by Lender of any
payment after the due date of such payment, or in an amount which is less than
the required payment, shall not be a waiver of Lender's right to require prompt
payment when due of all other payments or to exercise any right or remedy with
respect to any failure to make prompt payment. Enforcement by Lender of any
security for Borrower's obligations under this Note shall not constitute an
election by Lender of remedies so as to preclude the exercise of any other right
or remedy available to Lender.
13. Waivers. Except as expressly provided in the Loan Agreement, presentment,
demand, notice of dishonor, protest, notice of acceleration, notice of intent to
demand or accelerate payment or maturity, presentment for payment, notice of
nonpayment, grace, and diligence in collecting the Indebtedness are waived by
Borrower and all endorsers and guarantors of this Note and all other third party
obligors.
14. Loan Charges. If any applicable law limiting the amount of interest or other
charges permitted to be collected from Borrower in connection with the Loan is
interpreted so that any interest or other charge provided for in any Loan
Document, whether considered separately or together with other charges provided
for in any other Loan Document, violates that law, and Borrower is entitled to
the benefit of that law, that interest or charge is hereby reduced to the extent
necessary to eliminate that violation. Borrower agrees to an effective rate of
interest that is the stated rate of interest plus any additional rate of
interest resulting from any other charges or fees that are to be paid by
Borrower to Lender that may be found by a court of competent jurisdiction to be
interest. The amounts, if any, previously paid to Lender in excess of the
permitted amounts shall be applied by Lender to reduce the unpaid principal
balance of this Note. For the purpose of determining whether any applicable law
limiting the amount of interest or other charges permitted to be collected from
Borrower has been violated, all Indebtedness that constitutes interest, as well
as all other charges made in connection with the Indebtedness that constitute
interest, shall be deemed to be allocated and spread ratably over the stated
term of the Note. Unless otherwise required by applicable law, such allocation
and spreading shall be effected in such a manner that the rate of interest so
computed is uniform throughout the stated term of the Note.
15. Commercial Purpose. Borrower represents that the Indebtedness is being
incurred by Borrower solely for the purpose of carrying on a business or
commercial enterprise, and not for personal, family or household purposes.
16. Counting of Days. Except where otherwise specifically provided, any
reference in this Note to a period of "days" means calendar days, not Business
Days.
17. Governing Law; Consent to Jurisdiction; WAIVER OF JURY TRIAL. The provisions
of Section 11.07 of the Loan Agreement (entitled "Choice of Law; Consent to
Jurisdiction; Waiver of Jury Trial") are hereby incorporated into this Note by
this reference to the fullest extent as if the text of such Section were set
forth in its entirety herein.
18. Captions. The captions of the paragraphs of this Note are for convenience
only and shall be disregarded in construing this Note.
19. Notices. All notices, demands and other communications required or permitted
to be given by Lender to Borrower pursuant to this Note shall be given in
accordance with Section 11.09 of the Loan Agreement and addressed to Borrower at
c/o AIMCO, 2000 S. Colorado Blvd., Tower Two Suite 2-1000, Denver, Colorado
80222.
20. Security for this Note. Reference is made hereby to the Loan Agreement and
the Security Documents for additional rights and remedies of Lender relating to
the indebtedness evidenced by this Note. Each Security Document shall be
released in accordance with the provisions of the Security Documents.
21. Loan May Not Be Reborrowed. Borrower may not re-borrow any amounts under
this Note which it has previously borrowed and repaid under this Note.
22. Default Under Loan Agreement and Other Loan Documents. The occurrence of an
Event of Default under the Loan Agreement or the Security Instrument shall
constitute an "Event of Default" under this Note in accordance with the Loan
Agreement and the Security Instrument. Upon the occurrence of an Event of
Default under the Loan Agreement or the Security Instrument, the entire
principal amount outstanding hereunder and accrued interest thereon shall at
once become due and payable, at the option of the holder hereof.
23. Loan Confirmation Instruments; Accounting for Variable Loans. The terms of
the Loan Agreement and this Note govern the repayment, and all other terms
relating to the Variable Loan. However, Borrower shall execute a Loan
Confirmation Instrument to create a physical instrument evidencing each MBS
issued to fund the Variable Loan. The Loan Confirmation Instrument executed by
Borrower in accordance with Section 2.02 of the Loan Agreement shall set forth
the amount, term, Discount, Closing Date and certain other terms of each MBS
issued to fund the Variable Loan. The Loan Confirmation Instrument shall
conclusively establish each of the terms described in the preceding sentence,
absent manifest error. The MBS evidenced by the Loan Confirmation Instrument
does not represent a separate indebtedness from that evidenced by this Note. In
making proof of this Note, no other documents other than this Note shall be
required. In making proof of the amount and terms of the outstanding Variable
Loans under this Note, this Note, the related Loan Confirmation Instruments, and
Lender's records concerning payments made by Borrower under this Note, shall be
conclusive evidence of the terms and outstanding amounts of the Variable Loan,
absent manifest error.
24. Modifications to Note. There are standard modifications to this Note that
are attached as Exhibit B-1 and Exhibit B-2 hereto. In addition, there may be
special modifications to this Note attached as Exhibit B-3 hereto. All such
exhibits are hereby incorporated into this Note as a part hereof.
25. Single Asset Borrower. Until the Indebtedness is paid in full, Borrower (a)
shall not acquire any real or personal property other than a direct or indirect
interest in the Guarantor and the Promissory Note of even date executed by the
Guarantor in favor of the Borrower in the principal amount of this Note and the
proceeds thereof; (b) shall not operate any business other than management of
the assets permitted to be acquired in (a); and (c) shall not maintain its
assets in a way difficult to segregate and identify.
IN WITNESS WHEREOF, Borrower has signed and delivered this Note under seal
or has caused this Note to be signed and delivered under seal by its duly
authorized representative. Borrower intends that this Note shall be deemed to be
signed and delivered as a sealed instrument.
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SPRINGHILL LAKE INVESTORS LIMITED PARTNERSHIP, a
Maryland limited partnership
By: Three Winthrop Properties, Inc., a Massachusetts
corporation, its managing general partner
By: (SEAL)
Patrick J. Foye
Vice President - Residential
Pay to the order of ________________________________________, without
recourse.
GMAC COMMERCIAL MORTGAGE CORPORATION, a California
corporation
By:
Name:
Title:
B-3
EXHIBIT B-1
GMACCM LOAN AGREEMENT MODIFICATIONS
During any time that the terms, covenants and provisions of that certain Loan
Agreement dated as of November 1, 2002 and more particularly described in the
second paragraph on page 1 of the Note apply to the Variable Loan evidenced by
the Note, paragraphs 3 and 23 of the Note are amended and replaced with the
following substitute paragraphs 3 and 23:
"3. Payment of Principal and Interest. Principal and interest shall be
paid as follows:
(a) This Note shall evidence a Variable Loan made from time to time under the
Loan Agreement. Borrower shall not be required to make monthly principal
payments prior to the Fannie Mae Addition Date, but shall make monthly payments
of principal after the Fannie Mae Reassignment Date, if it occurs, as set forth
in Section 1.04(d) of the Loan Agreement.
(b) Borrower shall pay actual interest on the Variable Loan during the period
described in accordance with Section 1.04(a) of the Loan Agreement. Borrower
shall pay interest on its Variable Rate Loan in arrears at a rate equal to LIBOR
Rate plus a number of basis points determined in accordance with Section 2.01 of
the Loan Agreement. For purposes of the previous sentence, the LIBOR Rate shall
be reset every ninety (90) days commencing on the date that is ninety (90) days
after the Initial Closing Date. On the date the Variable Loan is funded,
Borrower shall pay interest in advance from the date of funding through November
30, 2002. On January 1, 2003 and on the first (1st) day of each calendar month
thereafter, Borrower shall pay interest in arrears calculated for the actual
number of days since the first (1st) day of the previous calendar month.
(c) If not sooner paid, the entire principal amount of the Variable Loan shall
be due and payable in accordance with Section 1.02 of the Loan Agreement.
(d) Borrower shall not pay any Discount.
23. Loan Confirmation Instruments; Accounting for Variable Loans. The
terms of the Loan Agreement and this Note govern the repayment, and all other
terms relating to the Variable Loan. However, Borrower shall execute one or a
series of Loan Confirmation Instruments to create a physical instrument
evidencing the terms of the Variable Loan. The Loan Confirmation Instrument or
series of Loan Confirmation Instruments executed by Borrower in accordance with
Section 2.02 of the Loan Agreement shall set forth the amount, term, the
interest rate spread over the LIBOR Rate Closing Date and certain other terms
related to the funding the Variable Loan. The Loan Confirmation Instrument shall
conclusively establish each of the terms described in the preceding sentence,
absent manifest error. The variable terms evidenced by the Loan Confirmation
Instrument do not represent a separate indebtedness from that evidenced by this
Note. In making proof of this Note, no other documents other than this Note
shall be required. In making proof of the amount and terms of the outstanding
Variable Loans under this Note, this Note, the related Loan Confirmation
Instruments, and Lender's records concerning payments made by Borrower under
this Note, shall be conclusive evidence of the terms and outstanding amounts of
the Variable Loan, absent manifest error."
During any time that the terms, covenants and provisions of that certain Amended
and Restated Loan Agreement dated as of September 16, 2002 and more particularly
described in the second paragraph on page 1 of the Note apply to the Variable
Loan evidenced by the Note, this Exhibit B-1 shall not apply and paragraphs 3
and 23 of the Note shall not be amended or replaced with the provisions set
forth in this Exhibit B-1.
EXHIBIT B-2
AIMCO MODIFICATIONS
The following modifications are made to the text of the Note that precedes this
Exhibit:
1. Section 9(b)(4) is modified by deleting "or" at the end thereof.
2. Section 9(b)(5) is modified to read as follows:
"(5) failure to apply Rents, first, to the payment of reasonable operating
expenses (other than Property management fees that are not currently
payable pursuant to the terms of an Assignment of Management Agreement or
any other agreement with Lender executed in connection with the Loan) and
then to amounts ("Debt Service Amounts") payable under this Note, the
Security Instrument or any other Loan Document (except that Borrower will
not be personally liable (i) to the extent that Guarantor lacks the legal
right to direct the disbursement of such sums because of a bankruptcy,
receivership or similar judicial proceeding, or (ii) with respect to Rents
that are distributed in any calendar quarter if Guarantor has paid all
operating expenses and Debt Service Amounts for such calendar quarter to
date); or"
3. A new Section 9(b)(6) is added following Section 9(b)(5), stating as follows:
"(6) failure to pay when due any water and sewer charges, fire, hazard or
other insurance premiums and ground rents owing from time to time in
connection with the Mortgaged Property."
EXHIBIT B-3
SPECIAL MODIFICATIONS
[INSERT AS APPLICABLE]
Exhibit 10(k)
Spring Hill Lake Apartments
GUARANTY
This Guaranty (the "Guaranty") is made and entered into as of the 1st day
of November, 2002 by AIMCO PROPERTIES, L.P., a Delaware limited partnership (the
"Guarantor"), for the benefit of GMAC COMMERCIAL MORTGAGE CORPORATION, a
California corporation ("Lender").
RECITALS
A. Lender has agreed to execute each of (i) that certain Amended and
Restated Loan Agreement, dated as of September 16, 2002, by and among certain
borrowers signatory thereto and Lender and (ii) that certain Loan Agreement
dated as of November 1, 2002, by and among certain borrowers signatory thereto
and Lender. As used herein, the term "Loan Agreement" shall mean whichever of
the loan agreements described in the preceding sentence shall apply from time to
time in accordance with their respective terms, along with all amendments,
supplements, replacements, restatements or other modifications thereto or
thereof from time to time made (the "Loan Agreement"), pursuant to which, inter
alia, Lender has agreed, subject to the terms, conditions and limitations of the
Loan Agreement, to make a loan to Springhill Lake Investors Limited Partnership,
a Maryland limited partnership (the "Borrower") from time to time loan to be
evidenced by a Consolidated, Amended and Restated Note (the "Loan"). Terms used
herein not defined herein have the definition given them in the Loan Agreement.
The Consolidated Amended and Restated Note (the "Note") evidencing the Loan will
be guaranteed by First Springhill Lake Limited Partnership, a Maryland limited
partnership, Second Springhill Lake Limited Partnership, a Maryland limited
partnership, Third Springhill Lake Limited Partnership, a Maryland limited
partnership, Fourth Springhill Lake Limited Partnership, a Maryland limited
partnership, Fifth Springhill Lake Limited Partnership, a Maryland limited
partnership, Sixth Springhill Lake Limited Partnership, a Maryland limited
partnership, Seventh Springhill Lake Limited Partnership, a Maryland limited
partnership, Eighth Springhill Lake Limited Partnership, a Maryland limited
partnership, Ninth Springhill Lake Limited Partnership, a Maryland limited
partnership, Springhill Commercial Limited Partnership, a Maryland limited
partnership and Springfield Facilities, LLC, a Maryland limited liability
company, successor by merger to Springfield Facilities, Inc., a Maryland
corporation, the grantors of the Security Instrument defined below
(collectively, the "Grantor"), whose Consolidated Amended and Restated Payment
Guaranty is secured by a Consolidated, Amended and Restated Indemnity
Multifamily Deed of Trust, Assignment of Rents and Security Agreement dated of
even date herewith (the "Security Instrument"), encumbering the real property
described in the Security Instrument.
B. The repayment of the Loan and all of the Obligations of the Borrower
and/or Grantor under the Loan Agreement or the other Loan Documents are
guaranteed by this Guaranty to the extent of Borrower's personal liability as
provided in Section 9 of the Note evidencing the Loan, and except for such
obligations described herein, Guarantor shall have no liability in connection
with, or responsibility to perform, under or in accordance with the Loan
Agreement or other Loan Documents.
C. Guarantor owns, directly or indirectly, an ownership interest in the
Borrower and Grantor and will receive a direct and material benefit from the
Loans to the Borrower.
D. Lender is willing to make the Loan to the Borrower only if Guarantor
agrees to enter into this Guaranty.
NOW, THEREFORE, in order to induce Lender to make the Loan to Borrower,
and in consideration thereof, Guarantor hereby agrees as follows:
Section 1. Definitions. All capitalized terms used but not defined in this
Guaranty shall have the meanings ascribed to such terms in the Loan Agreement.
The following terms shall have the meaning set forth below for purposes of this
Guaranty:
"Material Adverse Effect" means, with respect to any circumstance, act,
condition or event of whatever nature (including any adverse determination in
any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, or circumstance or circumstances, whether or not
related, a material adverse change in or a materially adverse effect upon the
present or future ability of the Guarantor, to the extent specifically referred
to in the applicable provision of that Guaranty, to perform the Guaranteed
Obligations.
"Net Worth" means, as of any date of determination and without double
counting any item, the sum of the capital stock or other capital equity
interests and additional paid-in capital plus retained earnings (or minus
accumulated deficits) of the Guarantor, the REIT and their respective
Subsidiaries on a consolidated basis determined in conformity with GAAP.
"REIT" means Apartment Investment and Management Company, a Maryland
corporation.
"Subsidiary" means, with respect to the REIT, the Guarantor or an
Affiliate of either of them, a corporation, partnership, joint venture, limited
liability company or other business entity of which a majority of the shares of
securities or other interests having ordinary voting power for the election of
directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled, directly
or indirectly, through one or more intermediaries, or both, by the REIT, the
Guarantor or an Affiliate of either of them.
Section 2. Guaranty of Payment. Guarantor irrevocably, absolutely and
unconditionally guarantees to Lender all of the following (collectively, the
"Guaranteed Obligations"): the due and punctual payment when due, whether at
maturity or earlier, by reason of acceleration or otherwise, at all times, of
all amounts for which Borrower is personally liable under Section 9 of the Note.
This Guaranty shall be an unconditional guaranty of payment and performance and
not of collection, and is in no way conditioned upon any attempt by Lender to
pursue or exhaust any remedy against Borrower or Grantor. This Guaranty is a
continuing guaranty which shall remain in full force and effect until all of the
Guaranteed Obligations have been paid and performed in full; and Guarantor shall
not be released from any obligations to Lender under this Guaranty as long as
any amount payable by the Borrower or Grantor to Lender, or any obligation by
the Borrower or Grantor under the Loan Documents is not performed, satisfied,
settled or paid in full.
Section 3. Form of Payment. All payments under this Guaranty shall be made
to Lender in immediately available funds, without reduction by any recoupment,
set-off, counterclaim or cross-claim against Lender.
Section 4. Guarantor's Obligations are Absolute. The obligations of
Guarantor under this Guaranty shall be absolute and unconditional, shall not be
subject to any counterclaim, set-off, recoupment, deduction, or defense based
upon any claim Guarantor may have against Lender, Borrower or Grantor and shall
remain in full force and effect without regard to, and shall not be released,
discharged or terminated or in any other way affected by, any circumstance or
condition (whether or not Guarantor shall have any knowledge or notice thereof),
including, without limitation:
(a) any amendment or modification of, or extension of time for payment of
any of the principal of, interest on or other amounts payable under the Loan
Documents;
(b) any exercise or non-exercise by Lender of any right, power or remedy
under or in respect of the Loan Documents, or any waiver, consent, forbearance,
indulgence or other action, inaction or omission by Lender under or in respect
of the Loan Documents;
(c) any assignment, sale or other transfer of Borrower's or Grantor's
interest in all or any part of the real or personal property which at any time
constitutes collateral for the payment of the Guaranteed Obligations, including,
without limitation, a conveyance of such property by Borrower or Grantor to
Lender by deed in lieu of foreclosure;
(d) any bankruptcy, insolvency, reorganization, adjustment, dissolution,
liquidation or other like proceeding involving or affecting Borrower, Lender or
Grantor or their respective properties or creditors, or any action taken with
respect to the Loan Documents by any trustee or receiver of Borrower, Lender, or
Grantor or by any court, in any such proceeding;
(e) any invalidity or unenforceability, in whole or in part, of any term
or provision of the Loan Documents or Borrower's or Grantor's incapacity or lack
of authority to enter into the Loan Documents;
(f) any release, compromise, settlement or discharge with respect to all
or any portion of Borrower's or Grantor's obligations under the Loan Documents;
(g) any acceptance of additional or substituted collateral for payment of
the Guaranteed Obligations or any release or subordination of any collateral
held at any time by Lender as security for the payment of the Guaranteed
Obligations; or
(h) any resort to Guarantor for payment of all or any portion of the
Guaranteed Obligations, whether or not Lender shall have resorted to any
collateral securing the Guaranteed Obligations, if any, or shall have proceeded
to pursue or exhaust its remedies against Borrower, Grantor (or any other
Person) primarily or secondarily liable for the Guaranteed Obligations.
No exercise, delay in exercise or non-exercise by Lender of any right hereby
given it, no dealing by Lender with Borrower, Grantor, Guarantor or any other
Person, no change, impairment or suspension of any right or remedy of Lender,
and no act or thing which, but for this provision, could act as a release or
exoneration of the liabilities of Guarantor hereunder, shall in any way affect,
decrease, diminish or impair any of the obligations of Guarantor hereunder or
give Guarantor or any other Person any recourse or defense against Lender.
Section 5. Waiver. Guarantor unconditionally waives the following:
(a) notice of acceptance of this Guaranty and notice of any of the matters
referred to in Section 4 hereof;
(b) all notices which may be required by statute, rule of law or otherwise
to preserve intact any rights which Lender may have against Guarantor under this
Guaranty, including, without limitation, any demand, proof or notice of
non-payment of any of the principal of, interest on or other amounts payable
under the Loan Documents, and notice of any failure on the part of Borrower or
Grantor to perform and comply with any covenant, agreement, term or condition of
the Loan Documents;
(c) any right to the enforcement, assertion or exercise of any right,
power or remedy conferred upon Lender in the Loan Documents or otherwise;
(d) any requirement that Lender act with diligence in enforcing its rights
under the Loan Documents or this Guaranty;
(e) any right to require Lender to proceed against or exhaust its recourse
against Borrower, Grantor or any security or collateral held by Lender, if any,
at any time for the payment of the Guaranteed Obligations or to pursue any other
remedy in its power before being entitled to payment from Guarantor under this
Guaranty or before proceeding against Guarantor;
(f) any failure by Lender to file or enforce a claim against the estate
(either in administration, bankruptcy or any other proceeding) of Borrower,
Grantor or any other Person;
(g) any defense based upon an election of remedies by Lender which
destroys or otherwise impairs the subrogation rights of Guarantor or the right
of Guarantor (after payment of the Guaranteed Obligations) to proceed against
Borrower or Grantor for reimbursement, or both;
(h) any defense based upon any taking, modification or release of any
collateral for the Guaranteed Obligations, if any, or any failure to perfect any
security interest in, or the taking of, or failure to take any other action with
respect to, any collateral securing payment of the Guaranteed Obligations, if
any;
(i) any defense based upon the addition, substitution or release, in whole
or in part, of any Person(s), including, without limitation, another guarantor,
primarily or secondarily liable for or in respect of the Guaranteed Obligations;
(j) any rights or defenses based upon an offset by Guarantor against any
obligation now or hereafter owed to Guarantor by Borrower or Grantor; and
(k) all other notices which may or might be lawfully waived by Guarantor;
it being the intention hereof that Guarantor shall remain liable as principal,
to the extent set forth in this Guaranty, until the payment and performance in
full of the Guaranteed Obligations, notwithstanding any act, omission or thing
which might otherwise operate as a legal or equitable discharge of Guarantor
other than the payment and performance in full of the Guaranteed Obligations. No
delay by Lender in exercising any rights and/or powers hereunder or in taking
any action to enforce Borrower's, or Grantor's obligations under the Loan
Documents shall operate as a waiver as to such rights or powers or in any manner
prejudice any and all of Lender's rights and powers hereunder against Guarantor.
The intention of Guarantor under this Guaranty is that, so long as any of the
Guaranteed Obligations remains unsatisfied, the obligations of Guarantor
hereunder shall not be discharged except by performance and then only to the
extent of such performance. Guarantor agrees that Guarantor's obligations
hereunder shall not be affected by any circumstances, whether or not referred to
in this Guaranty, which might constitute a legal or equitable discharge of a
surety or guarantor.
Section 6. Election of Remedies. This Guaranty may be enforced from time
to time, as often as occasion therefor may arise, and without any requirement
that Lender must first pursue or exhaust any remedies available to it against
Borrower or Grantor under the Loan Documents or against any other Person or
resort to any collateral at any time held by it for performance of the
Guaranteed Obligations, if any, or any other source or means of obtaining
payment of any of the Guaranteed Obligations.
Section 7. Representations and Warranties of Guarantor. Guarantor hereby
represents and warrants to the Lender as follows:
(a) Due Organization; Qualification. Guarantor is qualified to transact
business and is in good standing in the State in which it is organized and in
each other jurisdiction in which such qualification and/or standing is necessary
to the conduct of its business and where the failure to be so qualified would
adversely affect the validity of, the enforceability of, or the ability of
Guarantor to perform the Guaranteed Obligations.
(b) Power and Authority. Guarantor has the requisite power and authority
(i) to own its properties and to carry on its business as now conducted and as
contemplated to be conducted in connection with the performance of the
Guaranteed Obligations, and (ii) to execute and deliver this Guaranty and to
carry out the transactions contemplated by this Guaranty.
(c) Due Authorization. The execution, delivery and performance of this
Guaranty has been duly authorized by all necessary action and proceedings by or
on behalf of Guarantor, and no further approvals or filings of any kind,
including any approval of or filing with any Governmental Authority, are
required by or on behalf of Guarantor as a condition to the valid execution,
delivery and performance by Guarantor of this Guaranty.
(d) Valid and Binding Obligations. This Guaranty has been duly authorized,
executed and delivered by Guarantor and constitutes the legal, valid and binding
obligations of Guarantor, enforceable against Guarantor in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable principles
affecting the enforcement of creditors' rights generally or by equitable
principles or by the exercise of discretion by any court.
(e) Non-contravention: No Liens. Neither the execution and delivery of
this Guaranty, nor the fulfillment of or compliance with the terms and
conditions of this Guaranty nor the payment or performance of the Guaranteed
Obligations:
(i) does or will conflict with or result in any breach or violation of
any Applicable Law enacted or issued by any Governmental Authority or
other agency having jurisdiction over Guarantor, any of the Mortgaged
Properties or any other portion of the Collateral or assets of Guarantor,
or any judgment or order applicable to Guarantor or to which Guarantor is
subject;
(ii) does or will conflict with or result in any material breach or
violation of, or constitute a default under, any of the terms, conditions
or provisions of Guarantor's Organizational Documents, any indenture,
existing agreement or other instrument to which Guarantor is a party or
to which Guarantor, any of the Mortgaged Properties or any other portion
of the Collateral or other assets of Guarantor is subject; or
(iii)does or will require the consent or approval of any creditor of
Guarantor, any Governmental Authority or any other Person except such
consents or approvals which have already been obtained.
(f) Pending Litigation or Other Proceedings. Since the date of the most
recent financial statements delivered to Lender pursuant to Section 8(b) of this
Guaranty, there is no pending or, to the best knowledge of guarantor, threatened
action, suit, proceeding or investigation, at law or in equity, before any
court, board, body or official of any Governmental Authority or arbitrator
which, if decided adversely to Guarantor, would have, or may reasonably be
expected to have, a Material Adverse Effect on Guarantor. Guarantor is not in
default with respect to any order of any Governmental Authority to any extent
which would have, or may reasonably be expected to have, a Material Adverse
Effect on Guarantor.
(g) Solvency. Guarantor is not insolvent and will not be rendered
insolvent by the transaction contemplated by this Guaranty and after giving
effect to such transaction, Guarantor will not be left with an unreasonably
small amount of capital with which to engage in its business or undertakings,
nor will Guarantor have incurred, have intended to incur, or believe that it has
incurred, debts beyond its ability to pay such debts as they mature. Guarantor
did not receive less than a reasonably equivalent value in exchange for
incurrence of the Guaranteed Obligations. There (i) is no contemplated, pending
or, to the best of Guarantor's knowledge, threatened bankruptcy, reorganization,
receivership, insolvency or like proceeding, whether voluntary or involuntary,
affecting Guarantor and (ii) has been no assertion or exercise of jurisdiction
over Guarantor by any court empowered to exercise bankruptcy powers.
(h) No Contractual Defaults. There are no material defaults by Guarantor
or, to the knowledge of Guarantor, by any other Person under any contract to
which Guarantor is a party other than defaults which do not have, and are not
reasonably be expected to have, a Material Adverse Effect on Guarantor. Neither
Guarantor nor, to the knowledge of Guarantor, any other Person, has received
notice or has any knowledge of any existing circumstances in respect of which it
could receive any notice of default or breach in respect of any contracts, which
default would have, or which may reasonably be expected to have, a Material
Adverse Effect on Guarantor.
(i) Representations True and Correct. The representations and warranties
made by Guarantor in this Guaranty are true, complete and correct in all
material respects as of the Initial Closing Date and do not contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading.
(j) ERISA. Guarantor is in compliance in all material respects with all
applicable provisions of ERISA and has not incurred any liability to the PBGC on
a Plan under Title LV of ERISA. None of the assets of Guarantor constitute plan
assets (within the meaning of Department of Labor Regulation ss. 2510.3-101) of
any employee benefit plan subject to Title I of ERISA.
(k) Financial Information. The financial statements of Guarantor which
have been furnished to the Lender are complete and accurate in all material
respects and present fairly the financial condition of Guarantor, as of its date
in accordance with GAAP, applied on a consistent basis. Since the date of the
most recent of such financial statements no event has occurred which would have,
or may reasonably be expected to have a Material Adverse Effect on Guarantor,
except as disclosed in any filings made by Guarantor or its affiliates with the
United States Securities and Exchange Commission ("SEC"). Guarantor has no
material contingent obligations which are not otherwise disclosed in its most
recent financial statements except as disclosed in any filings made by Guarantor
or its affiliates with the SEC.
(1) Accuracy of Information. No information, statement or report furnished
in writing to the Lender by Guarantor concerning the Guarantor in connection
with this Guaranty or any other Loan Document or in connection with the
consummation of the transactions contemplated hereby and thereby contains any
material misstatement of fact or omits to state a material fact necessary to
make the statements contained therein, in light of the circumstances under which
they were made, not misleading as of the date made, except to the extent that
such misstatements and omissions when considered in the totality of such
information, statements and reports furnished by Guarantor are not materially
misleading in the aggregate; provided, however, the foregoing representation and
warranty shall not apply to any information, statement or report prepared by any
third party.
(m) No Conflicts of Interest. To the best knowledge of Guarantor, no
member, officer, agent or employee of the Lender has been or is in any manner
interested, directly or indirectly, in that Person's own name, or in the name of
any other Person, in the Guarantor (other than through the ownership of publicly
traded shares of common stock of affiliates of the Guarantor or limited
partnership units of Guarantor), the Loan Documents, or any Mortgaged Property,
in any contract for property or materials to be furnished or used in connection
with such Mortgaged Property or in any aspect of the transactions contemplated
by the Loan Documents.
(n) Governmental Approvals. To the best of Guarantor's knowledge, no
Governmental Approval not already obtained or made is required for the execution
and delivery of this Guaranty or the performance of the terms and provisions
hereof by Guarantor.
(o) Governmental Orders. Guarantor is not presently under any cease or
desist order or other orders of a similar nature, temporary or permanent, of any
Governmental Authority which would have the effect of preventing or hindering
performance of its duties hereunder, nor are there any proceedings presently in
progress or to its knowledge contemplated which would, if successful, lead to
the issuance of any such order.
(p) No Reliance. Guarantor acknowledges, represents and warrants that it
understands the nature and structure of the transactions contemplated by this
Guaranty and the other Loan Documents; that it is familiar with the provisions
of all of the documents and instruments relating to such transactions; that it
understands the risks inherent in such transactions, including the risk of loss
of all or any of the Mortgaged Properties; and that it has not relied on the
Lender or Fannie Mae for any guidance or expertise in analyzing the financial or
other consequences of the transactions contemplated by this Guaranty or any
other Loan Document or otherwise relied on the Lender or Fannie Mae in any
manner in connection with interpreting, entering into or otherwise in connection
with this Guaranty, any other Loan Document or any of the matters contemplated
hereby or thereby.
(q) Compliance with Applicable Law. Guarantor is in compliance with
Applicable Law, including all Governmental Approvals, if any, except for such
items of noncompliance that, singly or in the aggregate, have not had and are
not reasonably expected to cause, a Material Adverse Effect on Guarantor.
(r) Contracts with Affiliates. Except for the management agreement
relating to each of the Mortgaged Properties or in the ordinary course of
business and on terms which are no less favorable to the Guarantor than would be
obtained in a corporate arms-length transaction with an unrelated third party,
Guarantor has not entered into and is not a party to any material contract,
lease or other agreement with any Affiliate of Guarantor for the provision of
any service, materials or supplies relating to any Mortgaged Property.
Section 8. Affirmative Covenants of Guarantor. Guarantor agrees and
covenants with the Lender that, at all times during the Term of this Guaranty:
(a) Maintenance of Existence. Guarantor shall maintain its existence and
continue to be a limited partnership organized under the laws of the state of
its organization. Guarantor shall continue to be duly qualified to do business
in each jurisdiction in which such qualification is necessary to the conduct of
its business and where the failure to be so qualified would adversely affect the
validity of, the enforceability of, or the ability to perform, its obligations
under this Guaranty.
(b) Financial Statements; Accountants' Reports: Other Information. The Guarantor
shall keep and maintain at all times complete and accurate books of accounts and
records in sufficient detail to correctly reflect all of the Guarantor's
financial transactions and assets. In addition, the Guarantor shall furnish, or
cause to be furnished, to the Lender the following:
(i) So long as Guarantor is a reporting company under the Securities
and Exchange Act of 1934 (the "`34 Act"), promptly upon their becoming
available, copies of (A) all 10K's, 10Q's, 8K's, annual reports and proxy
statements, and all replacement, substitute or similar filings or reports
required to be filed after the date of this Guaranty by the SEC or other
Governmental Authority exercising similar functions, and (B) all press
releases and other statements made available generally by Guarantor to the
public concerning material developments in the business of Guarantor.
(ii) In the event Guarantor is not a reporting company under the
'34 Act,
(A) Annual Financial Statements. As soon as available, and in
any event within 90 days after the close of its fiscal year during
the Term of this Agreement, the audited balance sheet of Guarantor
as of the end of such fiscal year, the audited statement of income,
equity and retained earnings of Guarantor for such fiscal year and
the audited statement of cash flows of Guarantor for such fiscal
year, all in reasonable detail and stating in comparative form the
respective figures for the corresponding date and period in the
prior fiscal year, prepared in accordance with GAAP, consistently
applied, and accompanied by a certificate of Guarantor's
independent certified public accountants to the effect that such
financial statements have been prepared in accordance with GAAP,
consistently applied, and that such financial statements fairly
present the results of its operations and financial condition for
the periods and dates indicated with such certification to be free
of exceptions and qualifications as to the scope of the audit or as
to the going concern nature of the business.
(B) Quarterly Financial Statements. As soon as available, and
in any event within 45 days after each of the first three fiscal
quarters of each fiscal year during the Term of this Agreement, the
unaudited balance sheet of Guarantor as of the end of such fiscal
quarter, the unaudited statement of income and retained earnings of
Guarantor and the unaudited statement of cash flows of Guarantor
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 certificate of a member of
Senior Management (which certificate shall be without personal
liability to such officer) stating that such financial statements
have been prepared in accordance with GAAP, consistently applied,
and fairly present the results of its operations and financial
condition for the periods and dates indicated subject to year end
adjustments in accordance with GAAP.
(iii) [Left blank intentionally]
(iv) Other Reports. Promptly upon receipt thereof, all schedules,
financial statements or other similar reports delivered by the Guarantor
pursuant to the Loan Documents or reasonably requested by the Lender with
respect to the Guarantor's business affairs or condition (financial or
otherwise) subject to the confidentiality covenant set forth below.
After the providing by Guarantor of any statement, report or other
information on a collective basis to Standard & Poor's, Moody's Investors
Service, Duff & Phelps, Fitch and/or any other rating agency, and/or
after providing any statement, report or other information on a
collective basis to the banks or other institutions providing unsecured
lines of credit and loans to Guarantor, Guarantor shall promptly furnish
such statement, report or other information to Lender.
As used in this Paragraph (iv), the phrase "on a collective basis"
means as provided to a group as a whole as opposed to an individual
basis, e.g.., providing information to a rating agency or to a bank to
respond to a particular request of such rating agency or bank.
The Lender agrees to treat all Information received by it (I) under
this Paragraph (iv) as confidential and (II) which Guarantor requests in
writing to the Persons at the Lender who receive any Information
regarding Guarantor that such information be treated as confidential;
provided, however, that such Information may be disclosed (A) as required
by law, (B) to officers, directors, employees, agents, partners,
attorneys, auditors, accountants, engineers and other consultants of the
Lender, or its successors or assigns, who need to know such Information,
provided such Persons are instructed to treat such Information
confidentially, (C) by the Lender to any successor or assign of such
Person, (D) to any federal or state regulatory authority having
jurisdiction over the Lender, or its successors or assigns, (E) to any
other Person to which such delivery or disclosure may be necessary or
appropriate (w) in compliance with any law, rule, regulation or order
applicable to the Lender, or its successors or assigns, (x) in response
to any subpoena or other legal process or information investigative
demand, or (y) in connection with any litigation to which the Lender, or
its successors or assigns, is a party. Guarantor agrees that Information
subject to this Paragraph (iv) does not include information which (I) was
publicly known, or otherwise known to the Lender, or its successors or
assigns, at the time of disclosure, (II) subsequently becomes publicly
known through no act of or omission by the Lender or its successors or
assigns, other than through disclosure by Guarantor or by any other
Person in violation of this Paragraph (iv) or any other confidentiality
arrangement and the Lender, or its successors or assigns, has knowledge
of such violation; provided, however, that in the event the disclosing
Person shall reasonably endeavor to notify Guarantor thereof as soon as
possible after such disclosure has been made and Guarantor shall be
afford an opportunity to seek protective orders, or such other
confidential treatment of such Information as Guarantor may deem
reasonable.
(v) Certification. All certifications required to be delivered
pursuant to this Section 8(b) shall run directly to and be for the
benefit of Lender and Fannie Mae.
(c) Maintain Licenses. Guarantor shall procure and maintain in full force
and effect all licenses, Permits, charters and registrations which are material
to the conduct of its business and shall abide by and satisfy all terms and
conditions of all such licenses, Permits, charters and registrations.
(d) Access to Records; Discussions With Senior Management. To the extent
permitted by law, Guarantor shall permit the Lender to:
(i) inspect Guarantor's books and records related to the Borrower,
Grantor and the Mortgaged Property;
(ii) discuss Guarantor's affairs, finances and accounts with
Guarantor's Senior Management or, provided that Senior Management of
Guarantor has been given the opportunity by Lender to be a party to such
discussions, property managers and independent public accountants;
(iii) provided that Senior Management of Guarantor has been given
the opportunity by Lender to be a party to such discussions, discuss the
Mortgaged Properties' conditions, operations or maintenance with the
managers of such Mortgaged Properties and the officers and employees of
Guarantor; and
(iv) receive any other information that the Lender deems reasonably
necessary or relevant in connection with the Guaranty, any Loan Document
or the Guaranteed Obligations.
Notwithstanding the foregoing, prior to an Event of Default or Potential Event
of Default, all inspections shall be conducted at reasonable times during normal
business hours and upon reasonable notice to the Guarantor.
(e) Inform the Lender of Material Events. Guarantor shall promptly, but in
any event within five (5) Business Days, inform the Lender in writing of any of
the following (and shall deliver to the Lender copies of any related written
communications, complaints, orders, judgments and other documents relating to
the following) of which Guarantor has actual knowledge:
(i) Defaults. The occurrence of any Event of Default or any
Potential Event of Default under any Loan Document;
(ii) Bankruptcy Proceedings. The commencement of any proceedings by
or against Guarantor 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;
(iii) Accounting Changes. Any material change in Guarantor's
accounting policies or financial reporting practices; and
(iv) Restructuring of Guarantor. Any restructuring or reorganization
of any Guarantor.
(f) ERISA. Guarantor shall at all times remain in compliance in all
material respects with all applicable provisions of ERISA and similar
requirements of the PBGC.
(g) Further Assurances. Provided they do not materially increase the
Guaranteed Obligations of Guarantor, Guarantor, at the request of the Lender,
but without incurring any liability beyond the Guaranteed Obligations, shall
execute and deliver and, if necessary, file or record such statements,
documents, agreements, UCC financing and continuation statements and such other
instruments and take such further action as the Lender from time to time may
request as reasonably necessary, desirable or proper to carry out more
effectively the purposes of this Guaranty or any of the other Loan Documents or
to subject the Collateral to the lien and security interests of the Loan
Documents or to evidence, perfect or otherwise implement, to assure the lien and
security interests intended by the terms of the Loan Documents or in order to
exercise or enforce its rights under the Loan Documents.
(h) Monitoring Compliance. Upon the request of the Lender, but without
incurring any liability beyond the Guaranteed Obligations, from time to time,
Guarantor shall promptly provide to the Lender such documents, certificates and
other information as may be deemed reasonably necessary to enable the Lender to
perform its functions under the Servicing Agreement as the same relates to the
Guarantor.
Section 9. Negative Covenants of Guarantor.
(a) Liquidation. Guarantor shall not dissolve or liquidate in whole or in
part.
(b) Principal Place of Business. Guarantor shall not change its principal
place of business or the location of its books and records without first giving
10 days' prior written notice to the Lender.
Section 10. Financial Covenants. Guarantor agrees and covenants with the
Lender that, at all times during the Term of this Guaranty, the Net Worth of the
REIT, the Guarantor and the Subsidiaries on a consolidated basis shall not be
below $1,500,000,000.
Section 11. Expenses. Guarantor agrees to pay all reasonable costs and
out-of-pocket expenses, including court costs and expenses and the reasonable
fees and disbursements of legal counsel, incurred by or on behalf of Lender in
connection with the enforcement of Guarantor's obligations under this Guaranty
or the protection of Lender's rights under this Guaranty. The covenants
contained in this Section shall survive the payment of the Guaranteed
Obligations.
Section 12. Condition of Borrower and Grantor. Guarantor is fully aware of
the financial condition of Borrower and Grantor and is executing and delivering
this Guaranty based solely upon Guarantor's own independent investigation of all
matters pertinent hereto and is not relying in any manner upon any
representation or statement made by Lender. Guarantor represents and warrants
that Guarantor is in a position to obtain, and Guarantor hereby assumes full
responsibility for obtaining, any additional information concerning Borrower's
or Grantor's financial condition and any other matters pertinent hereto as
Guarantor may desire and Guarantor is not relying upon or expecting Lender to
furnish to Guarantor any information now or hereafter in Lender's possession
concerning the same or any other matter. By executing this Guaranty, Guarantor
knowingly accepts the full range of risks encompassed within a contract of this
type, which risks Guarantor acknowledges.
Section 13. Further Assurances. Guarantor agrees at any time and from time
to time upon request by Lender to take, or cause to be taken, any action and to
execute and deliver any additional documents which, in the reasonable opinion of
Lender, may be necessary in order to assure to Lender the full benefits of this
Guaranty, so long as any such action does not materially increase Guarantor's
Guaranteed Obligations hereunder or materially decrease its rights hereunder.
Section 14. Subordination. Guarantor hereby irrevocably and
unconditionally agrees that any claims, direct or indirect, Guarantor may have
by subrogation or other form of reimbursement, against Borrower, Grantor or to
any security or any interest therein, by virtue of this Guaranty or as a
consequence of any payment made by Guarantor pursuant to this Guaranty, shall be
fully subordinated in time and right of payment to the payment in full of the
Guaranteed Obligations and all other obligations of Guarantor to Lender under
this Guaranty.
Section 15. No Subrogation. Guarantor shall not have any right of
subrogation against Borrower or Grantor by reason of any payment by Guarantor
under this Guaranty until such time as all of the Guaranteed Obligations have
been satisfied in full. Nothing in the foregoing shall affect any claim which
any Guarantor has against Borrower or Grantor under the terms of the
Organizational Documents of the Borrower.
Section 16. Insolvency and Liability of Borrower or Grantor. So long as
any of the Guaranteed Obligations is unpaid and this Guaranty is in effect, and
to the extent not prohibited by the applicable bankruptcy court, Guarantor
agrees to file all claims against Borrower or Grantor in any bankruptcy or other
proceeding in which the filing of claims is required by law in connection with
indebtedness owed by Borrower or Grantor to Guarantor and to assign to Lender
all rights of Guarantor thereunder up to the lesser of (i) the amount of such
indebtedness or (ii) the amount of the Guaranteed Obligations. In all such cases
the Person or Persons authorized to pay such claims shall pay to Lender the full
amount thereof to the full extent necessary to pay the Guaranteed Obligations,
and Guarantor hereby assigns to Lender all of Guarantor's rights to all such
payments to which Guarantor would otherwise be entitled. Notwithstanding the
foregoing, and except to the extent that any sums owed by Borrower or Grantor to
Lender under the Loan Documents shall have been fully satisfied thereby, the
liability of Guarantor hereunder shall in no way be affected by
(a) the release or discharge of Borrower or Grantor in any creditors',
receivership, bankruptcy or other proceedings; or
(b) the impairment, limitation or modification of the liability of
Borrower or the estate of Borrower or Grantor in bankruptcy resulting from the
operation of any present or future provisions of the Bankruptcy Code or other
statute or from the decision in any court.
Section 17. Preferences, Fraudulent Conveyances, Etc. If Lender is
required to refund, or voluntarily refunds, any payment received from Borrower
or Grantor because such payment is or may be avoided, invalidated, declared
fraudulent, set aside or determined to be void or voidable as a preference,
fraudulent conveyance, impermissible setoff or a diversion of trust funds under
the bankruptcy laws or for any similar reason, including, without limitation,
any judgment, order or decree of any court or administrative body having
jurisdiction over Lender or any of its property, or any settlement or compromise
of any claim effected by Lender with Borrower or Grantor or other claimant (a
"Rescinded Payment"), then Guarantor's liability to Lender shall continue in
full force and effect, or Guarantor's liability to Lender shall be reinstated,
as the case may be, with the same effect and to the same extent as if the
Rescinded Payment had not been received by Lender (but only to the extent such
Rescinded Payment was part of the Guaranteed Obligations hereunder),
notwithstanding the cancellation or termination of any Note or any of the other
Loan Documents. In addition, Guarantor shall pay, or reimburse Lender for, all
expenses (including all reasonable attorneys' fees, court costs and related
disbursements) incurred by Lender in the defense of any claim that a payment
received by Lender in respect of all or any part of the Guaranteed Obligations
from Guarantor must be refunded. The provisions of this Section shall survive
the termination of this Guaranty and any satisfaction and discharge of Borrower
by virtue of any payment, court order or any federal or state law.
Section 18. Waiver. Neither this Guaranty nor any term hereof may be
changed, waived, discharged or terminated except by an instrument in writing
signed by Lender and Guarantor expressly referring to this Guaranty and to the
provisions so changed or limited. No such waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of Lender in exercising any
right under this Guaranty shall operate as a waiver thereof or otherwise by
prejudice thereto.
Section 19. Notices. All notices or other communications hereunder shall
be sufficiently given and shall be deemed given when sent in the manner
prescribed by the Loan Agreement addressed to the parties as follows:
As to the Guarantor: AIMCO
2000 S. Colorado Blvd., Tower Two
Suite 2-1000
Denver, Colorado 80222
Attn: Senior Vice President-Debt & Securities
with a copy to: Bryan Cave, LLP
Attention: Stephen S. Sparks
3500 One Kansas City Place
1200 Main Street
Kansas City, Missouri 64105-2100
If to Lender or Fannie Mae: As provided in the Loan Agreement.
Section 20. Assignability by Lender. Lender may, without notice to
Guarantor, assign or transfer the Loans and the Loan Documents, in whole or in
part. In such event, each and every immediate and successive assignee,
transferee or holder of all or any part of the Loans and the Loan Documents
shall have the right to enforce this Guaranty, by legal action or otherwise, as
fully as if such assignee, transferee, or holder were by name specifically given
such right and power in this Guaranty. Lender shall have an unimpaired right to
enforce this Guaranty for its benefit as to so much of the Loans and the Loan
Documents as Lender has not sold, assigned or transferred.
Section 21. Guarantor Bound by Judgment Against Borrower. Guarantor shall
be conclusively bound, in any jurisdiction, by the judgment in any action by
Lender against Borrower or Grantor in connection with the Loan Documents
(wherever instituted) as if Guarantor were a party to such action even if not so
joined as a party.
Section 22. Governing Law. The provisions of Section 11.06 of the Loan
Agreement (entitled Choice of Law; Consent to Jurisdiction; Waiver of Jury
Trial) are hereby incorporated into this Agreement by this reference to the
fullest extent as if the text of such Section were set forth in its entirety
herein.
Section 23. Invalid Provisions. If any provision of this Guaranty or the
application thereof to Guarantor or any circumstance in any jurisdiction whose
laws govern this Guaranty shall, to any extent, be invalid or unenforceable
under any applicable statute, regulation or rule of law, then such provision
shall be deemed inoperative to the extent of such invalidity or unenforceability
and shall be deemed modified to conform to such statute, regulation or rule or
law. The remainder of this Guaranty and the application of any such invalid or
unenforceable provision to parties, jurisdictions or circumstances other than
those to whom or to which it is held invalid or unenforceable, shall not be
affected by such invalidity or unenforceability nor shall such invalidity or
unenforceability affect the validity or enforceability of any other provision of
this Guaranty.
Section 24. General Provisions. This Guaranty shall be binding upon the
respective successors and assigns of Guarantor, and shall inure to the benefit
of Lender and its successors and assigns, including, without limitation, each
successive holder of the Note. The descriptive headings of the Sections of the
Guaranty have been inserted herein for convenience of reference only and shall
not define or limit the provisions hereof.
IN WITNESS WHEREOF, Guarantor has signed this Guaranty under seal as of
the day and year first above written.
AIMCO PROPERTIES, L.P., a Delaware limited partnership
By: AIMCO-GP, Inc., a Delaware corporation, its
general partner
By: Patti K. Fielding
Senior Vice President
Exhibit 10(l)
Spring Hill Lake Apartments
CONSOLIDATED, AMENDED AND RESTATED PAYMENT GUARANTY
(To Be Secured by Consolidated, Amended and Restated Indemnity Multifamily
Deed of Trust)
This Consolidated, Amended and Restated Payment Guaranty ("Guaranty") is
entered into as of November 1, 2002, by the undersigned (the "Guarantor" whether
one or more), for the benefit of GMAC COMMERCIAL MORTGAGE CORPORATION, a
California corporation, and/or any subsequent holder of the Note (the "Lender").
RECITALS
A. SPRINGHILL LAKE INVESTORS LIMITED PARTNERSHIP, a Maryland limited
partnership (the "Borrower") has requested that Lender make a loan to Borrower
in the amount of $113,100,000.00 (the "Loan"). The Loan will be evidenced by a
Consolidated, Amended and Restated Multifamily Note from Borrower to Lender
dated as of the date of this Guaranty (the "Note"), executed by Borrower. The
Note and this Guaranty are executed and delivered pursuant to one of either (i)
that certain Amended and Restated Loan Agreement, dated as of September 16,
2002, by and among certain borrowers signatory thereto and Lender or (ii) that
certain Loan Agreement dated as of November 1, 2002, by and among certain
borrowers signatory thereto and Lender. As used herein, the term "Loan
Agreement" shall mean whichever of the loan agreements described in the
preceding sentence shall apply from time to time in accordance with their
respective terms, along with all amendments, supplements, replacements,
restatements or other modifications thereto or thereof from time to time made
(the "Loan Agreement"). This Guaranty will be secured by a Consolidated, Amended
and Restated Indemnity Multifamily Deed of Trust, dated the same date as this
Guaranty (the "Security Instrument"), encumbering the real property described in
the Security Instrument (the "Property").
B. Guarantor has an economic interest in Borrower or will otherwise obtain
a material financial benefit from the Loan.
C. As a condition to making the Loan to Borrower, Lender requires that the
Guarantor execute this Guaranty.
D. This Guaranty consolidates, amends and restates in their entirety (i)
that certain Amended and Restated Guaranty and Indemnity Agreement dated as of
April 30, 1993, entered into by Guarantor for the benefit of Marvin M. Franklin,
Mark P. Snyderman and J. Grant Monohan, as Trustees of AEW #207 Trust (the
"Prior Lender") and (ii) that certain Second Guaranty and Indemnity Agreement
dated as of April 30, 1993, entered into by Guarantor for the benefit of Prior
Lender (together, the "Prior Guaranty"), which Prior Guaranty has been assigned
to Lender.
NOW, THEREFORE, in order to induce Lender to make the Loan to Borrower,
and in consideration thereof, Guarantor agrees as follows:
1. "Indebtedness" and other capitalized terms used but not defined in
this Guaranty shall have the meanings assigned to them in the Loan
Agreement and/or the Security Instrument.
2. Guarantor hereby absolutely, unconditionally and irrevocably
guarantees to Lender the full and prompt payment when due, whether
at maturity or earlier, by reason of acceleration or otherwise, and
at all times thereafter, and the full and prompt performance when
due, of all of the following:
(a) The entire Indebtedness.
(b) The payment and performance of all of Borrower's obligations under
any Loan Document.
(c) All costs and expenses, including reasonable fees and out of pocket
expenses of attorneys and expert witnesses, incurred by Lender in
enforcing its rights under this Guaranty, the Security Instrument,
and any Loan Document.
3. The obligations of Guarantor under this Guaranty shall survive any
foreclosure proceeding, any foreclosure sale, any delivery of any
deed in lieu of foreclosure, and any release of record of the
Security Instrument.
4. Guarantor's obligations under this Guaranty constitute an
unconditional guaranty of payment and not merely a guaranty of
collection.
5. The obligations of Guarantor under this Guaranty shall be performed
without demand by Lender and shall be unconditional irrespective of
the genuineness, validity, regularity or enforceability of the Note,
the Security Instrument, or any other Loan Document, and without
regard to any other circumstance which might otherwise constitute a
legal or equitable discharge of a surety or a guarantor. Guarantor
hereby waives the benefit of all principles or provisions of law,
statutory or otherwise, which are or might be in conflict with the
terms of this Guaranty and agrees that Guarantor's obligations shall
not be affected by any circumstances, whether or not referred to in
this Guaranty, which might otherwise constitute a legal or equitable
discharge of a surety or a guarantor. Guarantor hereby waives the
benefits of any right of discharge under any and all statutes or
other laws relating to guarantors or sureties and any other rights
of sureties and guarantors thereunder. Without limiting the
generality of the foregoing, Guarantor hereby waives, to the fullest
extent permitted by law, diligence in collecting the Indebtedness,
presentment, demand for payment, protest, all notices with respect
to the Note and this Guaranty which may be required by statute, rule
of law or otherwise to preserve Lender's rights against Guarantor
under this Guaranty, including notice of acceptance, notice of any
amendment of the Loan Documents, notice of the occurrence of any
default or Event of Default, notice of intent to accelerate, notice
of acceleration, notice of dishonor, notice of foreclosure, notice
of protest, and notice of the incurring by Borrower of any
obligation or indebtedness. Guarantor also waives, to the fullest
extent permitted by law, all rights to require Lender to (a) proceed
against Borrower or any other guarantor of Borrower's payment or
performance with respect to the Indebtedness (an "Other Guarantor"),
(b) if Borrower or any guarantor is a partnership, proceed against
any general partner of Borrower or the guarantor, (c) proceed
against or exhaust any collateral held by Lender to secure the
repayment of the Indebtedness, or (d) pursue any other remedy it may
now or hereafter have against Borrower, or, if Borrower is a
partnership, any general partner of Borrower.
6. At any time or from time to time and any number of times, without
notice to Guarantor and without affecting the liability of
Guarantor, (a) the time for payment of the principal of or interest
on the Indebtedness may be extended or the Indebtedness may be
renewed in whole or in part; (b) the time for Borrower's performance
of or compliance with any covenant or agreement contained in the
Note, or any other Loan Document, whether presently existing or
hereinafter entered into, may be extended or such performance or
compliance may be waived; (c) the maturity of the Indebtedness may
be accelerated as provided in the Note, the Security Instrument, or
any other Loan Document; (d) the Note, or any other Loan Document
may be modified or amended by Lender and Borrower in any respect,
including an increase in the principal amount; and (e) any security
for the Indebtedness may be modified, exchanged, surrendered or
otherwise dealt with or additional security may be pledged or
mortgaged for the Indebtedness.
7. If more than one person executes this Guaranty, the obligations of
those persons under this Guaranty shall be joint and several.
Lender, in its discretion, may (a) bring suit against Guarantor, or
any one or more of the Persons constituting Guarantor, and any Other
Guarantor, jointly and severally, or against any one or more of
them; (b) compromise or settle with any one or more of the Persons
constituting Guarantor, or any Other Guarantor, for such
consideration as Lender may deem proper; (c) release one or more of
the Persons constituting Guarantor, or any Other Guarantor, from
liability; and (d) otherwise deal with Guarantor and any Other
Guarantor, or any one or more of them, in any manner, and no such
action shall impair the rights of Lender to collect from Guarantor
any amount guaranteed by Guarantor under this Guaranty. Nothing
contained in this paragraph shall in any way affect or impair the
rights or obligations of Guarantor with respect to any Other
Guarantor.
8. Any indebtedness of Borrower held by Guarantor now or in the future
is and shall be subordinated to the Indebtedness and any such
indebtedness of Borrower shall be collected, enforced and received
by Guarantor, as trustee for Lender, but without reducing or
affecting in any manner the liability of Guarantor under the other
provisions of this Guaranty.
9. Guarantor shall have no right of, and hereby waives any claim for,
subrogation or reimbursement against Borrower or any general partner
of Borrower by reason of any payment by Guarantor under this
Guaranty, whether such right or claim arises at law or in equity or
under any contract or statute, until the Indebtedness has been paid
in full and there has expired the maximum possible period thereafter
during which any payment made by Borrower to Lender with respect to
the Indebtedness could be deemed a preference under the United
States Bankruptcy Code.
10. If any payment by Borrower is held to constitute a preference under
any applicable bankruptcy, insolvency, or similar laws, or if for
any other reason Lender is required to refund any sums to Borrower,
such refund shall not constitute a release of any liability of
Guarantor under this Guaranty. It is the intention of Lender and
Guarantor that Guarantor's obligations under this Guaranty shall not
be discharged except by Guarantor's performance of such obligations
and then only to the extent of such performance.
11. Guarantor shall from time to time, upon request by Lender, deliver
to Lender such financial statements as Lender may reasonably
require.
12. Lender may assign its rights under this Guaranty in whole or in part
and, upon any such assignment, all the terms and provisions of this
Guaranty shall inure to the benefit of such assignee to the extent
so assigned. The terms used to designate any of the parties herein
shall be deemed to include the heirs, legal representatives,
successors and assigns of such parties.
13. This Guaranty and the other Loan Documents represent the final
agreement between the parties and may not be contradicted by
evidence of prior, contemporaneous or subsequent oral agreements.
There are no unwritten oral agreements between the parties. All
prior or contemporaneous agreements, understandings,
representations, and statements, oral or written, are merged into
this Guaranty and the other Loan Documents. Guarantor acknowledges
that it has received a copy of the Note and all other Loan
Documents. Neither this Guaranty nor any of its provisions may be
waived, modified, amended, discharged, or terminated except by an
agreement in writing signed by the party against which the
enforcement of the waiver, modification, amendment, discharge, or
termination is sought, and then only to the extent set forth in that
agreement.
14. Guarantor agrees that any controversy arising under or in relation
to this Guaranty shall be litigated exclusively in the jurisdiction
where the Land is located (the "Property Jurisdiction"). The state
and federal courts and authorities with jurisdiction in the Property
Jurisdiction shall have exclusive jurisdiction over all
controversies which shall arise under or in relation to this
Guaranty, the Note, the Security Instrument or any other Loan
Document. Guarantor irrevocably consents to service, jurisdiction,
and venue of such courts for any such litigation and waives any
other venue to which it might be entitled by virtue of domicile,
habitual residence or otherwise.
15. Guarantor (or each Guarantor, if more than one) agrees to notify
Lender (in the manner for giving notices provided in Section 31 of
the Security Instrument) of any change in Guarantor's address within
10 Business Days after such change of address occurs.
16. GUARANTOR AND LENDER EACH (A) AGREES NOT TO ELECT A TRIAL BY JURY
WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS GUARANTY OR THE
RELATIONSHIP BETWEEN THE PARTIES AS GUARANTOR AND LENDER THAT IS
TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY
WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS
NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE
BENEFIT OF COMPETENT LEGAL COUNSEL.
17. Limits on Personal Liability.
(a) Except as otherwise provided in this Paragraph 17, Guarantor shall
have no personal liability under this Guaranty, the Security
Instrument or any other Loan Document for the repayment of the
Indebtedness or for the performance of any other obligations of
Borrower and/or Guarantor under the Loan Documents, and Lender's
only recourse for the satisfaction of the Indebtedness and the
performance of such obligations shall be Lender's exercise of its
rights and remedies with respect to the Property and any other
collateral held by Lender as security for the Indebtedness. This
limitation on Guarantor's liability shall not limit or impair
Lender's enforcement of its rights against any Other Guarantor of
the Indebtedness or any guarantor of any obligations of Borrower.
(b) Guarantor shall be personally liable to Lender for the repayment of
a portion of the Indebtedness equal to any loss or damage suffered
by Lender as a result of (1) failure of Guarantor to pay to Lender
upon demand after an Event of Default, all Rents to which Lender is
entitled under Section 3(a) of the Security Instrument and the
amount of all security deposits collected by Guarantor from tenants
then in residence; (2) failure of Guarantor to apply all insurance
proceeds and condemnation proceeds as required by the Security
Instrument; (3) failure of Guarantor to comply with Section 14(d) or
(e) of the Security Instrument relating to the delivery of books and
records, statements, schedules and reports; (4) fraud or written
material misrepresentation by Borrower, Guarantor, Key Principal or
any officer, director, partner, member or employee of Borrower or
Guarantor in connection with the application for or creation of the
Indebtedness or any request for any action or consent by Lender; or
(5) failure of Guarantor to apply Rents, first, to the payment of
reasonable operating expenses (other than Property management fees
that are not currently payable pursuant to the terms of an
Assignment of Management Agreement or any other agreement with
Lender executed in connection with the Loan) and then to amounts
("Debt Service Amounts") payable under the Note, this Guaranty, the
Security Instrument or any other Loan Document (except that
Guarantor will not be personally liable (i) to the extent that
Guarantor lacks the legal right to direct the disbursement of such
sums because of a bankruptcy, receivership or similar judicial
proceeding, or (ii) with respect to Rents that are distributed in
any calendar year if Guarantor has paid all operating expenses and
Debt Service Amounts for that calendar year).
(c) Guarantor shall become personally liable to Lender for the repayment
of all of the Indebtedness upon the occurrence of any of the
following Events of Default: (1) Guarantor's acquisition of any
property or operation of any business not permitted by Section 33 of
the Security Instrument; or (2) a Transfer that is an Event of
Default under Section 21 of the Security Instrument; or (3)
Borrower's acquisition of any property or operation of any business
not permitted by Section 22 of the Note.
(d) To the extent that Guarantor has personal liability under this
Paragraph 17, Lender may exercise its rights against Guarantor
personally without regard to whether Lender has exercised any rights
against the Property or any other security, or pursued any rights
against any guarantor, or pursued any other rights available to
Lender under the Note, this Guaranty, the Security Instrument, any
other Loan Document or applicable law. For purposes of this
Paragraph 17, the term "Property" shall not include any funds that
(1) have been applied by Guarantor as required or permitted by the
Security Instrument prior to the occurrence of an Event of Default,
or (2) Guarantor was unable to apply as required or permitted by the
Security Instrument because of a bankruptcy, receivership, or
similar judicial proceeding.
IN WITNESS WHEREOF, Guarantor has signed and delivered this Guaranty under
seal or has caused this Guaranty to be signed and delivered by its duly
authorized representative under seal.
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X Exhibit A Modifications
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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
GUARANTOR:
FIRST SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
Social Security/Employer ID No.:
04-2852803
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SECOND SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
Social Security/Employer ID No.:
04-2852804
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
THIRD SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
Social Security/Employer ID No.:
04-2852818
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
FOURTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
Social Security/Employer ID No.:
04-2852819
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
FIFTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
Social Security/Employer ID No.:
04-2852820
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SIXTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
Social Security/Employer ID No.:
04-2852821
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SEVENTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
Social Security/Employer ID No.:
04-2852823
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
EIGHTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
Social Security/Employer ID No.:
04-2852825
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
NINTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
Social Security/Employer ID No.:
04-2852827
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SPRINGHILL COMMERCIAL LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
Social Security/Employer ID No.:
04-2926871
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SPRINGFIELD FACILITIES, LLC, a Maryland
limited liability company (successor
by merger to Springfield Facilities,
Inc., Maryland corporation)
By: Springhill Commercial Limited
Partnership, a Maryland limited
partnership, its sole member
By: Springhill Lake Investors
Limited Partnership, a Maryland
limited partnership, its sole
general partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
Social Security/Employer ID No.:
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
EXHIBIT A
MODIFICATIONS TO PAYMENT GUARANTY
The following modifications are made to the text of the Note:
1. Section 17(b)(4) is modified by deleting "or" at the end thereof.
2. Section 17(b)(5) is modified to read as follows:
"(5) failure to apply Rents, first, to the payment of reasonable operating
expenses (other than Property management fees that are not currently
payable pursuant to the terms of an Assignment of Management Agreement or
any other agreement with Lender executed in connection with the Loan) and
then to amounts ("Debt Service Amounts") payable under this Note, this
Guaranty, the Security Instrument or any other Loan Document (except that
Guarantor will not be personally liable (i) to the extent that Guarantor
lacks the legal right to direct the disbursement of such sums because of a
bankruptcy, receivership or similar judicial proceeding, or (ii) with
respect to Rents that are distributed in any calendar quarter if Guarantor
has paid all operating expenses and Debt Service Amounts for such calendar
quarter to date); or"
3. A new Section 17(b)(6) is added following Section 17(b)(5), stating as
follows:
"(6) failure to pay when due any water and sewer charges, fire, hazard or
other insurance premiums and ground rents owing from time to time in
connection with the Mortgaged Property."
Exhibit 10(m)
Spring Hill Lake Apartments
COMPLETION/REPAIR AND SECURITY AGREEMENT
THIS COMPLETION/REPAIR AND SECURITY AGREEMENT (this "Agreement") is made
this 1st day of November, 2002 by FIRST SPRINGHILL LAKE LIMITED PARTNERSHIP, a
Maryland limited partnership, SECOND SPRINGHILL LAKE LIMITED PARTNERSHIP, a
Maryland limited partnership, THIRD SPRINGHILL LAKE LIMITED PARTNERSHIP, a
Maryland limited partnership, FOURTH SPRINGHILL LAKE LIMITED PARTNERSHIP, a
Maryland limited partnership, FIFTH SPRINGHILL LAKE LIMITED PARTNERSHIP, a
Maryland limited partnership, SIXTH SPRINGHILL LAKE LIMITED PARTNERSHIP, a
Maryland limited partnership, SEVENTH SPRINGHILL LAKE LIMITED PARTNERSHIP, a
Maryland limited partnership, EIGHTH SPRINGHILL LAKE LIMITED PARTNERSHIP, a
Maryland limited partnership, NINTH SPRINGHILL LAKE LIMITED PARTNERSHIP, a
Maryland limited partnership, SPRINGHILL COMMERCIAL LIMITED PARTNERSHIP, a
Maryland limited partnership and SPRINGFIELD FACILITIES, LLC, a Maryland limited
liability company, successor by merger to Springfield Facilities, Inc., a
Maryland corporation (collectively, "Guarantor"), and GMAC COMMERCIAL MORTGAGE
CORPORATION, a California corporation its successors, transferees and assigns
("Lender").
RECITALS:
A. This Agreement is being executed in connection with Lender's making a
mortgage loan to SPRINGHILL LAKE INVESTORS LIMITED PARTNERSHIP, a Maryland
limited partnership ("Borrower") in the original principal amount of
$113,100,000.00 (the "Loan"). The proceeds of the Loan will be loaned to
Guarantor to finance a multifamily project known as Spring Hill Lake Apartments,
and located in Prince George's County, Maryland (the "Property").
B. The Loan is evidenced by a Consolidated, Amended and Restated
Multifamily Note (the "Note"), dated the date of this Agreement, made by
Borrower and is guaranteed by Guarantor pursuant to a Consolidated Amended and
Restated Payment Guaranty secured by, among other things, a Consolidated,
Amended and Restated Indemnity Multifamily Deed of Trust, Assignment of Rents
and Security Agreement (the "Security Instrument"), dated the date of this
Agreement, granting a first lien on the Property. The Note, Security Instrument,
this Agreement and all other documents executed in connection with the Loan are
collectively referred to as the "Loan Documents".
C. Lender requires as a condition of making the Loan that Guarantor
deposit with Lender the Deposit (as defined below) as additional security for
all of the Guarantor's obligations under the Loan Documents to which it is a
party.
NOW, THEREFORE, in consideration of the above and the mutual promises
contained in this Agreement, the receipt and sufficiency of which are
acknowledged, Guarantor and Lender agree as follows:
1. Deposits to the Completion/Repair
(a) Guarantor agrees to deposit with Lender the sum of $7,847,500.00 (the
"Deposit") upon execution of this Agreement. The Deposit represents 125 percent
of the estimated cost to complete the "Repairs" (defined in Section 2 below).
(b) Lender shall deposit the Deposit in an account (the "Collateral
Account") which meets the standards for custodial accounts as required by Lender
from time to time. Lender shall not be responsible for any losses resulting from
investment of the Collateral Account or for obtaining any specific level or
percentage of earnings on such investment. (The Deposit, and all other funds
from time to time in the Collateral Account are collectively referred to as the
"Collateral Account Funds".) All investment earnings on funds in the Collateral
Account shall be added to and become part of the Collateral Account Funds.
2. Additional Security. Guarantor assigns to Lender all of Guarantor's
interest in the Deposit, the Collateral Account Funds and the Collateral Account
as additional security for all of Guarantor's and Borrower's obligations under
the Loan Documents; provided, however Lender shall make disbursements from the
Collateral Account in accordance with the terms of this Agreement. Except as
otherwise provided in Sections 4(h) and 6.2 of this Agreement, Lender shall make
disbursements from the Collateral Account to reimburse Guarantor for the costs
of those repairs and improvements to the Property described on Exhibit A to this
Agreement (the "Repairs") in accordance with the terms of this Agreement.
3. Agreement to Complete Repairs. Guarantor shall commence the Repairs
immediately following the execution of this Agreement (or as soon thereafter as
weather reasonably shall permit) and shall at all times thereafter diligently
pursue the completion of all Repairs. Guarantor shall complete all Repairs no
later than [SEE EXHIBIT A] months after the date of this Agreement (the
"Completion Period"), unless another date for completion of such Repair is set
forth on Exhibit A, in which case Guarantor shall complete such Repair no later
than the date specified on Exhibit A. All Repairs shall be made in a good and
workmanlike manner and shall be completed free and clear of any mechanic's or
materialman's liens and encumbrances. Guarantor shall pay all costs necessary
for completion of the Repairs without regard to the sufficiency of the funds in
the Collateral Account.
4. Disbursements from the Collateral Account.
(a) Upon written request from Guarantor and satisfaction of the
requirements set forth in Sections 4 and 5 of this Agreement, Lender shall
disburse to Guarantor amounts from the Collateral Account to reimburse Guarantor
for the actual cost of each Repair (but not exceeding 125 percent of the
original estimated cost of such Repair as set forth on Exhibit A, unless Lender
has agreed to reimburse Guarantor for such excess cost pursuant to Section 4(g))
upon completion of such Repairs (or, upon the partial completion of any Repairs
made pursuant to Section 4(e) below). Notwithstanding the preceding, Lender
shall not be required to disburse any amounts which would cause the amount of
funds remaining in the Collateral Account after any disbursement (other than
with respect to the final disbursement) to be less than 125 percent of the then
current estimated cost of completing all remaining Repairs. In no event shall
Lender be obligated to disburse Collateral Account Funds if a default exists
under this Agreement or if an event shall have occurred and then be existing
that with notice and/or the lapse of time would constitute a default or an Event
of Default under any of the Loan Documents.
(b) Each request for disbursement from the Collateral Account shall be
made on a form provided or approved by Lender and shall specify (i) the specific
Repairs for which payment is requested, (ii) the quantity and price of each item
purchased, if the Repair includes the purchase or replacement of specific items
(such as appliances), (iii) the price of all materials (grouped by type or
category) used in any Repair other than the purchase or replacement of specific
items, and (iv) the cost of all contracted labor or other services involved in
the Repairs for which such request for disbursement is made. Guarantor shall
certify that the Repairs covered by the requisition have been completed in a
good and workmanlike manner and in accordance with any plans and specifications
previously approved by Lender and that all such Repairs are in compliance with
all applicable laws, ordinances, rules and regulations of any governmental
authority, agency or instrumentality having jurisdiction over the Property. Each
request for reimbursement shall include copies of invoices for all items or
materials purchased and all labor or services provided and, unless Lender has
agreed to issue joint checks as described below in connection with a particular
Repair, shall include evidence of payment satisfactory to Lender.
(c) Unless Lender has agreed to issue joint checks in connection with a
particular Repair, Guarantor shall pay all invoices prior to submitting a
request for disbursement from the Collateral Account. Lender, at its option, may
issue joint checks, payable to Guarantor and the supplier, materialman,
mechanic, subcontractor or other party to whom payment is due in connection with
a Repair described in Section 4(e).
(d) Except as provided in Section 4(e), each request for disbursement
shall be made only after completion of the Repair for which disbursement is
requested. Guarantor shall provide Lender evidence satisfactory to Lender in its
reasonable judgment, of completion, as provided in Sections 5.1 and 5.2 below.
(e) If the cost of a Repair exceeds $2,500.00 and the contractor
performing a Repair requires periodic payments pursuant to the terms of a
written contract, Lender at its discretion may approve in writing periodic
payments for work performed under such contract. A request for disbursement from
the Collateral Account may be made after completion of a portion of the work
under such contract, provided (i) the contract requires payment upon completion
of such portion of the work, (ii) all other conditions for disbursement under
this Agreement have been met, (iii) the materials for which the request for
disbursement has been made are on site at the Property and are properly secured
or have been installed in the Property, (iv) the remaining funds in the
Collateral Account designated for such Repair are, in Lender's judgment,
sufficient to complete that Repair and (v) if required by Lender, each
contractor or subcontractor receiving payments under such Contract shall have
provided a waiver of liens with respect to amounts which have been previously
paid to that contractor or subcontractor.
(f) Guarantor shall not make a request for disbursement from the
Collateral Account more frequently than once in any month. Other than in
connection with the final request for disbursement, Guarantor shall not request
disbursements from the Collateral Account in an amount of less than $10,000.00.
(g) Lender shall disburse to Guarantor all remaining Collateral Account
Funds (less all amounts which may have been applied by Lender as permitted by
this Agreement) upon Guarantor's completion of all Repairs to the satisfaction
of Lender on or before the expiration of the Completion Period, provided that
(i) there is no default or Event of Default under any of the Loan Documents
which has not been cured to Lender's satisfaction, (ii) Lender has received
evidence required by Section 5.3 below that there are no mechanic's or
materialmen's liens, and (iii) Lender has received all cost and architectural
information required by Lender.
(h) In the event Guarantor requests a disbursement from the Collateral
Account to reimburse Guarantor for labor or materials other than Repairs
specified on Exhibit A, or for a Repair to the extent the cost of such Repair
exceeds 125 percent of the estimated cost of such Repair as set forth on Exhibit
A (in either case, an "Additional Cost Item"), Guarantor shall disclose in
writing to Lender why Lender should make a disbursement from the Collateral
Account to reimburse Guarantor for such Additional Cost Item. If Lender
determines that (i) such Additional Cost Item is of the type intended to be
covered by this Agreement, (ii) the costs for such Additional Cost Item are
reasonable, (iii) the amount of funds in the Collateral Account is sufficient to
pay the Additional Cost Item and 125 percent of the then current estimated cost
of completing all remaining Repairs and (iv) all other conditions for
disbursement under this Agreement have been met, Lender shall disburse
Collateral Account Funds for such Additional Cost Item; provided, however, that
Lender, in its discretion, may refuse to disburse Collateral Account Funds for
any item other than a Repair described on Exhibit A or for costs of a Repair in
excess of 125 percent of the original estimated cost of such Repair as set forth
on Exhibit A. Even if Lender determines that the payment of an Additional Cost
Item may be appropriate, Lender may withhold disbursing Collateral Account Funds
for such Additional Cost Item until all of the conditions have been satisfied
for the disbursement of Collateral Account Funds pursuant to Sections 4 and 5.
5. Performance of Repairs.
5.1 Workmanlike Completion
(a) Lender shall have the right to approve all contracts or work orders
with materialmen, mechanics, suppliers, subcontractors, contractors or other
parties providing labor or materials in connection with the Repairs. Upon
Lender's request, Guarantor shall assign any contract or subcontract to Lender.
(b) In the event Lender determines in its sole discretion that any Repair
has not been begun as agreed in Section 3 above, is not being performed in a
workmanlike or timely manner, or has not been completed in a workmanlike manner
within the Completion Period (or such other completion date as may be set forth
on Exhibit A), Lender shall have the option to withhold disbursements for such
nonsatisfactory Repair, proceed under existing contracts or contract with third
parties to make or complete such Repair and to apply the funds in the Collateral
Account toward the labor and materials necessary to make or complete such Repair
without providing any prior notice to Guarantor and to exercise any and all
other remedies available to Lender upon a default pursuant to Section 6.1
hereof.
(c) In order to facilitate Lender's completion or making of the Repairs
under Section 5.1 (b) above, Lender shall have the right to enter onto the
Property and perform any and all work and labor necessary to make or complete
the Repairs and employ watchmen to protect the Property from damage. All sums so
expended by Lender pursuant to this Section 5 or pursuant to any other provision
of this Agreement, shall be deemed to have been advanced to Guarantor and shall
be secured by the Security Instrument. Guarantor hereby constitutes and appoints
Lender its true and lawful attorney-in-fact with full power of substitution to
complete or undertake the Repairs in the name of Guarantor. Guarantor empowers
said attorney-in-fact as follows: (i) to use any of the funds in the Collateral
Account which have not been disbursed for the purpose of making or completing
the Repairs; (ii) to make such additions, changes and corrections to the Repairs
as shall be necessary or desirable to complete the Repairs; (iii) to employ such
contractors, subcontractors, agents, architects and inspectors as shall be
required for such purposes; (iv) to pay, settle or compromise all bills and
claims for materials and work performed in connection with the Repairs or as may
be necessary or desirable for the completion of the Repairs, or for clearance of
title; (v) to execute all applications and certificates in the name of Guarantor
which may be required by any of the contract documents; (vi) to prosecute and
defend all actions or proceedings in connection with the Property or the
rehabilitation and repair of the Property; and (vii) to do any and every act
which Guarantor might do in its own behalf to fulfill the terms of this
Agreement.
It is further understood and agreed that this power of attorney, which
shall be deemed to be a power coupled with an interest, cannot be revoked.
Guarantor specifically agrees that all power granted to Lender under this
Agreement may be assigned by Lender to Lender's successors or assigns as holder
of the Note.
(d) Nothing in this Section 5.1 shall: (i) make Lender responsible for
making or completing the Repairs; (ii) require Lender to expend funds to make or
complete any Repair; (iii) obligate Lender to proceed with the Repairs; or (iv)
obligate Lender to demand from Guarantor additional sums to make or complete any
Repair.
5.2 Entry onto Property; Inspections
(a) Guarantor shall permit Lender or Lender's representatives (including
an independent person such as an engineer, architect or inspector) or third
parties making Repairs pursuant to Section 5. 1 (b) of this Agreement, to enter
onto the Property during normal business hours (subject to the rights of tenants
under their leases) to inspect the progress of any Repairs and all materials
being used in connection with such Repairs, to examine all plans and shop
drawings relating to such Repairs which are or may be kept at the Property, to
inspect all books, contracts, subcontracts and records of Guarantor with respect
to the Property, and to complete the Repairs pursuant to Section 5. 1 (b).
Guarantor agrees to cause all contractors and subcontractors to cooperate with
Lender, Lender's representatives, and such other persons described above in
connection with inspections and Repairs made pursuant to this Section 5.2 and
Section 5.1 (b).
(b) Lender may inspect the Property in connection with any Repair prior to
disbursing Collateral Account Funds for such Repair. If the cost of a Repair
equals or exceeds $10,000.00, Lender shall inspect the Property prior to
disbursing Collateral Account Funds for such Repair. Guarantor shall pay Lender
a reasonable inspection fee not exceeding $300.00 for each such inspection.
Prior to disbursing any amounts from the Collateral Account for a Repair, Lender
may require an inspection and/or certificate of completion by an appropriate
independent qualified professional (such as an architect, engineer, or
inspector, depending on the nature of the Repair) selected by Lender. Guarantor
shall pay all reasonable fees and expenses charged by such engineer, architect,
inspector or other person inspecting the Property, and all other reasonable
fees, costs and expenses relating to such inspections.
5.3 Lien-Free Completion
(a) Guarantor covenants and agrees that each of the Repairs and all
materials, equipment, fixtures, or any other item comprising a part of any
Repair shall be constructed, installed or completed, as applicable, free and
clear of any mechanic's, materialman's or other liens (except for liens existing
on the date of this Agreement which have been previously approved in writing by
Lender).
(b) Prior to each disbursement of amounts from the Collateral Account,
Lender may require Guarantor to provide Lender with either (i) a search of title
to the Property effective to the date of the release, or (ii) an endorsement to
the title insurance policy insuring Lender's interest in the Property which
updates the effective date of the policy to the date of the disbursement from
the Collateral Account, which search or title endorsement shows that no
mechanic's or materialmen's liens or other liens (that have not been bonded off
to Lender's satisfaction) have been placed against the Property since the date
of recordation of the Security Instrument and that title to the Property is free
and clear of all liens (other than the lien of the Security Instrument and any
other liens previously approved in writing by the Lender, if any).
(c) In addition, Lender may require Guarantor to obtain from any
contractor, subcontractor, or materialman an acknowledgment of payment and
release of lien for work performed and/or materials supplied. Any such
acknowledgment and release shall conform to the requirements of applicable law
and shall cover all work performed and materials (including equipment and
fixtures) supplied for the Property (except for any hold back amounts) through
the date covered by the current request for disbursement from the Collateral
Account (or the date covered by the previous request for disbursement in the
event such contractor, subcontractor or materialman is to be paid by a joint
check).
5.4 Compliance with Laws and Insurance Requirements.
(a) All Repairs shall comply with all applicable laws, ordinances, rules
and regulations of all governmental authorities having jurisdiction over the
Property and applicable insurance requirements including, without limitation,
applicable building codes, special use permits, environmental regulations, and
requirements of insurance underwriters.
(b) Guarantor represents and warrants that to the best of its knowledge,
no permits or approvals from any agency or authority, other than those
previously obtained and furnished to Lender, are necessary for the commencement
and completion of the Repairs. Guarantor shall pay all applicable fees and
charges of such agencies or authorities.
(c) In addition to any insurance required under the other Loan Documents,
Guarantor shall provide or cause to be provided workmen's compensation
insurance, builder's risk, and public liability insurance and other insurance
required by applicable law in connection with completing the Repairs. All such
policies shall be issued by companies approved by Lender and shall be in form
and amount satisfactory to Lender. All such policies which can be endorsed with
standard mortgagee clauses making loss payable to Lender or its assigns shall be
so endorsed. The originals of such policies shall be delivered to Lender.
6. Default.
6.1 Default Under This Agreement. If (i) Guarantor at any time prior to
the completion of the Repairs abandons or ceases work on any Repair for a period
of more than 20 days, unless such cessation results from causes beyond the
control of Guarantor and Guarantor is diligently pursuing the reinstitution of
work, (ii) Guarantor fails to complete each Repair in a good and workmanlike
manner within the Completion Period (or such other date as may be set forth on
Exhibit A), (iii) a mechanic's or materialman's lien is filed against the
Property (unless such mechanic's or materialman's lien is promptly contested in
good faith by Guarantor and is bonded off to the satisfaction of Lender), (iv)
Guarantor fails to comply with any provision of this Agreement not specifically
addressed by clauses (i), (ii), or (iii) above, and such failure is not cured
within 10 days of notice of such non-performance or non-compliance, or (v) an
Event of Default occurs under any of the other Loan Documents, such event shall
be deemed a default hereunder and Lender may at its option hold and apply the
funds in the Collateral Account as provided in Section 6.2 of this Agreement.
Guarantor understands that a default under this Agreement shall be deemed to be
an Event of Default under the Security Instrument, and that in addition to the
remedies specified in this Agreement, the Lender will be able to exercise all of
its rights and remedies under the Security Instrument.
6.2 Default Under the Other Loan Documents.
(a) If any default or Event of Default shall occur under this Agreement or
under the Security Instrument, Guarantor shall immediately lose all of its
rights to receive disbursements of the Collateral Account Funds while such
default or Event of Default shall continue. Upon any such default or Event of
Default, Lender, in its sole and absolute discretion, may use the Collateral
Account Funds (or any portion thereof) for any purpose, including but not
limited to (i) repayment of any indebtedness secured by the Security Instrument
and the prepayment premium applicable upon a full or partial prepayment (as
applicable); provided, however, that such application of funds shall not cure or
be deemed to cure any default or Event of Default; (ii) reimbursement of Lender
for any losses or expenses (including, without limitation, legal fees) suffered
or incurred by Lender as a result of such default or Event of Default; (iii)
making or completing the Repairs as provided in Section 5, or (iv) applying the
funds in connection with exercising any and all rights and remedies available to
Lender at law or in equity or under this Agreement or pursuant to any of the
other Loan Documents.
(b) Nothing in this Agreement or the Security Instrument shall obligate
Lender to apply all or any portion of the Collateral Account Funds on account of
any default or Event of Default by Guarantor or to repayment of the indebtedness
evidenced by the Note or in any specific order of priority.
6.3 Guarantor's Other Obligations. Nothing contained in this Agreement
shall in any manner whatsoever alter, impair or affect the obligations of
Guarantor, or relieve Guarantor of any of its obligations to make payments and
perform all of its other obligations required under the Loan Documents.
7. Remedies Cumulative. None of the rights and remedies conferred upon or
reserved to Lender under this Agreement are intended to be exclusive of any
other rights, and each and every such right shall be cumulative and concurrent,
and may be enforced separately, successively or together, and may be exercised
from time to time as often as may be deemed necessary by Lender.
8. Additional Documents. Upon completion of all or any portion of the Repairs
and upon Lender's request, Guarantor shall execute and deliver to Lender an
amendment to the security agreement provisions of the Security Instrument and
the original financing statement necessary or desirable to perfect Lender's lien
upon any property for which Collateral Account Funds were expended.
9. Assignment of Collateral Account Funds and this Agreement. Guarantor
understands and agrees that, in connection with the anticipated sale or
assignment and delivery of the Loan to Fannie Mae, all of the Lender's interest
in the Collateral Account Funds and this Agreement will be assigned to Fannie
Mae.
10. Indemnification. Guarantor agrees to indemnify and hold Lender
harmless from and against any and all actions, suits, claims, demands,
liabilities, losses, damages, obligations and costs or expenses, including
litigation costs and reasonable attorneys' fees, arising from or in any way
connected with the performance of the Repairs or investment of the Collateral
Account Funds. Guarantor hereby assigns to Lender all rights and claims
Guarantor may have against all persons or entities supplying labor or materials
in connection with Repairs; provided, however, that Lender may not pursue any
such right or claim unless Guarantor is in default under this Agreement or an
Event of Default shall have occurred under the Security Instrument.
11. Determinations by Lender. In any instance where the consent or
approval of Lender may be given or is required, or where any determination,
judgment or decision is to be rendered by Lender under this Agreement, the
granting, withholding or denial of such consent or approval and the rendering of
such determination, judgment or decision shall be made or exercised by Lender
(or its designated representative) at its discretion.
12. Guarantor's Records. Guarantor shall furnish such financial
statements, invoices, records, papers and documents relating to the Property as
Lender may reasonably require from time to time to make the determinations
permitted or required to be made by Lender under this Agreement.
13. Fees and Costs.
(a) Guarantor shall pay Lender a one time administrative fee of $50.00 for
its services in administering the Collateral Account and investing the
Collateral Account Funds. Guarantor shall pay such fee no later than the date
specified in a bill sent to Guarantor.
(b) Guarantor shall reimburse Lender within 10 days after demand, all
reasonable fees, charges, costs and expenses incurred by Lender in connection
with collecting, holding and disbursing the funds in the Collateral Account
pursuant to this Agreement and in connection with all inspections made by Lender
or Lender's representatives in carrying out Lender's responsibility to make
certain determinations under this Agreement.
14. Successors and Assigns Bound. This Agreement shall be binding upon
Guarantor and Lender and their respective successors and assigns, and shall
inure to the benefit of and may be enforced by the Lender and its successors,
transferee and assigns. Guarantor shall not assign any of its rights and
obligations under this Agreement without the prior written consent of Lender.
15. No Third Party Beneficiary. This Agreement is intended solely for the
benefit of Guarantor, Borrower and Lender and their respective successors and
assigns, and no third party shall have any rights or interest in the Collateral
Account Funds, the Collateral Account, this Agreement or any of the other Loan
Documents. Nothing contained in this Agreement shall be deemed or construed to
create an obligation on the part of Lender to any third party nor shall any
third party have a right to enforce against Lender any right that Guarantor or
Borrower may have under this Agreement.
16. Completion of Repairs. Lender's disbursement of Collateral Account
Funds or other acknowledgment of completion of any Repair in a manner
satisfactory to Lender shall not be deemed a certification by Lender that the
Repair has been completed in accordance with applicable building, zoning or
other codes, ordinances, statutes, laws, regulations or requirements of any
governmental authority agency. Guarantor shall at all times have the sole
responsibility for insuring that all Repairs are completed in accordance with
all such governmental requirements.
17. No Agency or Partnership. Nothing contained in this Agreement shall
constitute Lender as a joint venturer, partner or agent of Guarantor, or render
Lender liable for any debts, obligations, acts, omissions, representations, or
contracts of Guarantor.
18. Termination of Completion/Repair Agreement. Upon the earlier of (i)
Guarantor's completion of all Repairs to the satisfaction of Lender (provided
Guarantor has supplied Lender with evidence satisfactory to Lender of payment of
all Repairs and if requested by Lender, waivers of liens and a title search of
the Property or an endorsement to the mortgagee's title insurance policy), or
(ii) the payment in full of all sums secured by the Security Instrument and
release of the lien of the Security Instrument by Lender (and payment in full of
all Repairs completed or contracted to be performed prior to the date of the
payment described in clause (ii)), Lender shall disburse to Guarantor all
remaining Collateral Account Funds.
19. Entire Agreement; Amendment and Waiver. This Agreement contains the
complete and entire understanding of the parties with respect to the matters
covered and no change or amendment shall be valid unless it is made in writing
and executed by the parties to this Agreement. No specific waiver of any of the
terms of this Agreement shall be considered as a general waiver. If any
provision of this Agreement is in conflict with any provision of the Security
Instrument regarding the Collateral Account, the provision contained in this
Agreement shall control.
20. Notices. All notices given under this Agreement shall be in writing to
the other party, at the address and in the manner set forth in the Security
Instrument.
21. Severability. The invalidity, illegality, or unenforceability of any
provision of this Agreement pursuant to judicial decree shall not affect the
validity or enforceability of any other provision of this Agreement, all of
which shall remain in full force and effect.
22. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the jurisdiction in which the Property is located.
23. Non-Recourse. This Agreement is being executed in connection with the
making of the Loan pursuant to the terms of the Note. Guarantor's liability
hereunder shall be limited to the extent provided in the Guaranty.
24. Capitalized Terms. Any capitalized terms used in this Agreement and
not specifically defined herein, shall have the meanings set forth in the
Security Instrument.
ATTACHED EXHIBITS. The following Exhibits are attached to this
Agreement:
-----
X Exhibit A Repairs
-----
-----
X Exhibit B Modifications
-----
Guarantor and Lender have executed this Agreement on the date and year
first written above.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
GUARANTOR:
FIRST SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SECOND SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
THIRD SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
FOURTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
FIFTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SIXTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SEVENTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
EIGHTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
NINTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SPRINGHILL COMMERCIAL LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SPRINGFIELD FACILITIES, LLC, a Maryland
limited liability company (successor
by merger to Springfield Facilities,
Inc., Maryland corporation)
By: Springhill Commercial Limited
Partnership, a Maryland limited
partnership, its sole member
By: Springhill Lake Investors
Limited Partnership, a Maryland
limited partnership, its sole
general partner
By: Three Winthrop
Properties, Inc., a
Massachusetts corporation,
its managing general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
LENDER:
GMAC COMMERCIAL MORTGAGE CORPORATION, a
California corporation
By:
Name:
Title:
Fannie Mae Completion/Repair and Security Agreement
Form 4505-IDOT 10/98 (Page A-1)
Maryland IDOT
EXHIBIT A
TO THE COMPLETION/REPAIR AND SECURITY AGREEMENT
(Spring Hill Lake Apartments, Prince George's County, Maryland)
REPAIR ESTIMATED COST COMPLETION DATE
[Detail To Follow] __________ ______
1. [?]
2. Obtain ALTA survey ("Survey") of the Property. Note: Failure to obtain such
Survey 30 days within the time specified shall constitute an Event of Default.
Lender shall release amounts held in the Collateral Account upon its receipt of
the Survey and the completion by the surveyor of any revisions necessary to
comply with Lender's survey requirements. If an acceptable Survey is not
received within the time specified, Lender has the right to use amounts in the
Collateral Account to commission a survey from a surveyor of Lender's choice.
TOTAL $65,000.00 30 days
$7,847,500.00
@125%
Fannie Mae Completion/Repair and Security Agreement
Form 4505-IDOT 10/98 (Page B-1)
Maryland IDOT
EXHIBIT B
MODIFICATIONS
The following phrase is inserted at the end of Section 5.3:
"or as otherwise provided in Section 21(b)(6) of the Security
Instrument."
Exhibit 10(n)
REPLACEMENT RESERVE AND SECURITY AGREEMENT
This REPLACEMENT RESERVE AND SECURITY AGREEMENT (this "Agreement") is made
this 1st day of November, 2002, by FIRST SPRINGHILL LAKE LIMITED PARTNERSHIP, a
Maryland limited partnership, SECOND SPRINGHILL LAKE LIMITED PARTNERSHIP, a
Maryland limited partnership, THIRD SPRINGHILL LAKE LIMITED PARTNERSHIP, a
Maryland limited partnership, FOURTH SPRINGHILL LAKE LIMITED PARTNERSHIP, a
Maryland limited partnership, FIFTH SPRINGHILL LAKE LIMITED PARTNERSHIP, a
Maryland limited partnership, SIXTH SPRINGHILL LAKE LIMITED PARTNERSHIP, a
Maryland limited partnership, SEVENTH SPRINGHILL LAKE LIMITED PARTNERSHIP, a
Maryland limited partnership, EIGHTH SPRINGHILL LAKE LIMITED PARTNERSHIP, a
Maryland limited partnership, NINTH SPRINGHILL LAKE LIMITED PARTNERSHIP, a
Maryland limited partnership, SPRINGHILL COMMERCIAL LIMITED PARTNERSHIP, a
Maryland limited partnership and SPRINGFIELD FACILITIES, LLC, a Maryland limited
liability company, successor by merger to Springfield Facilities, Inc., a
Maryland corporation (collectively, "Guarantor"), and GMAC COMMERCIAL MORTGAGE
CORPORATION, a California corporation its successors, transferees and assigns
("Lender").
RECITALS:
A This Agreement is being executed in connection with Lender's making a mortgage
loan to Springhill Lake Investors Limited Partnership, a Maryland limited
partnership ("Borrower") in the original principal amount of $113,100,000.00
(the "Loan"). The proceeds of the Loan will be loaned to Guarantor to finance a
2899 unit multifamily project known as Spring Hill Lake Apartments, and located
in Prince George's County, Maryland (the "Property").
B The Loan is evidenced by a Consolidated, Amended and Restated Multifamily Note
(the "Note"), and is guaranteed by Guarantor pursuant to a Consolidated, Amended
and Restated Payment Guaranty secured by a Consolidated, Amended and Restated
Indemnity Multifamily Deed of Trust, Assignment of Rents and Security Agreement
(the "Security Instrument") granting a lien on the Property. The Note, Security
Instrument, this Agreement and all other documents executed in connection with
the Loan are collectively referred to as the "Loan Documents."
C Lender requires as a condition to the making of the Loan that Guarantor enter
into this Agreement. Lender has initially agreed to either partially or fully
waive its standard requirements that Guarantor fund a replacement reserve on the
condition that Guarantor agrees that Lender may later impose upon Guarantor the
requirement to fund such replacement reserve in accordance with the terms of
this Agreement. All deposits to Lender required by this Agreement shall be
additional security for all of Guarantor's obligations under the Loan Documents
to which it is a party.
D Lender intends to sell, transfer and deliver the Note and assign the Security
Instrument and other Loan Documents to Fannie Mae.
AGREEMENT:
NOW, THEREFORE, in consideration of the above and the mutual promises
contained in this Agreement, the receipt and sufficiency of which are
acknowledged, Guarantor and Lender agree as follows:
1. Deposits to the Replacement Reserve
(a) Concurrently with the execution of this Agreement, Guarantor shall deposit
with Lender the sum of $0.00 (the "Initial Deposit").
(b) Subject to the provisions of Sections 1(e), 2, 10 and 16 of this Agreement,
on each date that a regularly scheduled payment of principal or interest is due
under the Note, Guarantor shall deposit with Lender the applicable Monthly
Deposit (as defined in Section 1(c) of this Agreement).
(c) The "Monthly Deposit" required to be made each month during the term of the
Loan is set forth below:
Amount of Monthly Deposit Period $71,267.00 January 1, 2003 through the date
that all amounts due and payable under the Note and Security Instrument have
been paid in full.
(d) Lender shall deposit any Initial Deposit and each Monthly Deposit, as
received, in an interest-bearing account (the "Replacement Reserve") which meets
the standards for custodial accounts as required by Lender from time to time.
(The Initial Deposit, if any, the Monthly Deposits and all other funds in the
Replacement Reserve are referred to collectively as the "Replacement Reserve".)
Lender or a designated representative of Lender shall have the sole right to
make withdrawals from such account. All interest earned on funds in the
Replacement Reserve shall be added to and become part of the Replacement
Reserve. Lender shall not be responsible for any losses resulting from the
investment of the Replacement Reserve or for obtaining any specific level or
percentage of earnings on such investment. If applicable law requires and
provided that no default or Event of Default exists under any of the Loan
Documents, Lender shall pay to Guarantor the interest earned on the Replacement
Reserve once each year.
(e) On the date of this Agreement Lender has agreed to partially reduce, defer
or fully waive Guarantor's obligation to make full Monthly Deposits to the
Replacement Reserve specified in Section 1(c) and (d) above. Notwithstanding
Sections 1(c) and (d) above, Guarantor shall be required to deposit the "Reduced
Monthly Deposit" each month during the term of the Loan as set forth below:
Amount of Monthly Deposit Period $0.00 January 1, 2003 through the date that all
amounts due and payable under the Note and Security Instrument have been paid in
full.
In the event that (i) at any time during the Loan term Lender shall determine
that the Property is not being maintained in accordance with the requirements
set forth in the Security Instrument, or (ii) a default or Event of Default
otherwise occurs under this Agreement or any of the other Loan Documents, then,
upon the earlier of the (x) the date specified by Lender in written notice given
to Guarantor by Lender or a designated representative of Lender, or (y) the
first day of the first calendar month after a default or Event of Default under
this Agreement or any of the Loan Documents, Guarantor shall commence making the
full Monthly Deposits specified in Section 1(c) of this Agreement or in such
written notice, beginning on such date and continuing on the first day of each
calendar month thereafter during the remaining term of the Loan.
2. Loans with Terms Over 10 Years. If the Loan term exceeds 10 years, then, no
earlier than the 6th month and no later than the 9th month of the year which
commences on the 10th anniversary of the date of this Agreement (and the 20th
anniversary of the date of this Agreement if the Loan term exceeds 20 years), a
physical needs assessment shall be performed on the Property by Lender at the
expense of Guarantor, which expense may be paid of out of the Replacement
Reserve. If determined necessary by Lender, after review of the physical needs
assessment, Guarantor's required Monthly Deposits to the Replacement Reserve set
forth above shall be adjusted for the remaining Loan term so that the Monthly
Deposits will create a Replacement Reserve that will in Lender's determination,
be sufficient to meet required Replacements (defined below).
3. Replacement Reserve is Additional Security.
(a) Guarantor assigns to Lender the Replacement Reserve as additional security
for all of Guarantor's and Borrower's obligations under the Loan Documents;
provided, however, Lender shall make disbursements from the Replacement Reserve
in accordance with the terms of this Agreement.
(b) Except as otherwise provided in Sections 4(f) and 6.1 of this Agreement,
Lender shall make disbursements from the Replacement Reserve to reimburse
Guarantor for the costs of those items listed on Exhibit A (the "Replacements")
in accordance with the provisions of Section 4. Lender shall not be obligated to
make disbursements from the Replacement Reserve to reimburse Guarantor for the
costs of routine maintenance to the Property or for costs which are to be
reimbursed from funds deposited with Lender pursuant to a Completion/Repair and
Security Agreement or any similar agreement.
4. Disbursements from Replacement Reserve.
(a) Upon written request from Guarantor and satisfaction of the requirements set
forth in Sections 4 and 5 of this Agreement, Lender shall disburse to Guarantor
amounts from the Replacement Reserve necessary to reimburse Guarantor for the
actual approved costs of the Replacements. Lender shall not be obligated to make
disbursements from the Replacement Reserve to reimburse Guarantor for the costs
of routine maintenance to the Property or for costs which are to be reimbursed
from funds deposited with Lender pursuant to a Completion/Repair and Security
Agreement or any similar agreement. In no event shall Lender be obligated to
disburse funds from the Replacement Reserve if a default or Event of Default
exists under this Agreement or any of the other Loan Documents.
(b) Each request for disbursement from the Replacement Reserve shall be in a
form specified or approved by Lender and shall include (i) the specific
Replacements for which the disbursement is requested, (ii) the quantity and
price of each item purchased, if the Replacement includes the purchase or
replacement of specific items, (iii) the price of all materials (grouped by type
or category) used in any Replacement other than the purchase or replacement of
specific items, and (iv) the cost of all contracted labor or other services
applicable to each Replacement for which such request for disbursement is made.
With each request, Guarantor shall certify that all Replacements have been made
in accordance with all applicable laws, ordinances, and regulations of any
governmental office or authority having jurisdiction over the Property. Each
request for disbursement shall include copies of invoices for all items or
materials purchased and all contracted labor or services provided and, unless
Lender has agreed to issue joint checks pursuant to Section 4(d) in connection
with a particular Replacement, each request shall include evidence satisfactory
to Lender of payment of all such amounts.
(c) Each request for disbursement from the Replacement Reserve shall be made
only after completion of the Replacement for which disbursement is requested.
Guarantor shall provide Lender evidence satisfactory to Lender in its reasonable
judgment, of completion.
(d) If the cost of a Replacement exceeds $2,500.00 and the contractor performing
the Replacement requires periodic payments pursuant to the terms of a written
contract, Lender at its discretion may approve in writing periodic payments for
work performed under such contract. A request for reimbursement from the
Replacement Reserve may be made after completion of a portion of the work under
such contract, provided (i) such contract requires payment upon completion of
such portion of work, (ii) the materials for which the request is made are on
site at the Property and are properly secured or have been installed in the
Property, (iii) all other conditions in this Agreement for disbursement have
been satisfied, (iv) funds remaining in the Replacement Reserve are, in Lender's
judgment, sufficient to complete such Replacement and the other Replacements
when required and (v) if required by Lender, each contractor or subcontractor
receiving payments under such contract shall provide a waiver of lien with
respect to amounts which have been paid to that contractor or subcontractor.
(e) Guarantor shall not make a request for disbursement from the Replacement
Reserve more frequently than once in any quarter and (except in connection with
the final disbursement) the total cost of all Replacements in any request shall
not be less than $5,000.00.
(f) In the event Guarantor requests a disbursement from the Replacement Reserve
to reimburse Guarantor for labor or materials for replacements other than the
Replacements specified on Exhibit A, Guarantor shall disclose in writing to
Lender why funds in the Replacement Reserve should be used to pay for such
replacements. If Lender determines that such replacements are of the type
intended to be covered by this Agreement, the costs for such replacements are
reasonable, and all other conditions for disbursement under this Agreement have
been met, Lender may at its discretion disburse funds from the Replacement
Reserve.
5. Performance of Replacements.
5.1 Workmanlike Completion
(a) Guarantor shall make each Replacement when required in order to keep the
Property in good order and repair and in a good marketable condition and to keep
the Property or any portion thereof from deteriorating. Guarantor shall complete
all Replacements in a good and workmanlike manner as soon as practicable
following the commencement of making each such Replacement.
(b) Lender shall have the right to approve all contracts or work orders with
materialmen, mechanics, suppliers, subcontractors, contractors or other parties
providing labor or materials in connection with the Replacements. Upon Lender's
request, Guarantor shall assign any contract or subcontract to Lender.
(c) In the event Lender determines in its sole discretion that any Replacement
is not being performed or completed in a workmanlike or timely manner. Lender
shall have the option to withhold disbursement for such unsatisfactory
Replacement, and may proceed under existing contracts or contract with third
parties to complete such Replacement and to apply the Replacement Reserve toward
the labor and materials necessary to complete such Replacement, without
providing any prior notice to Guarantor and to exercise any and all other
remedies available to Lender upon a default or Event of Default.
(d) If at any time during the term of the Loan, Lender determines that
replacements not listed on Exhibit A are advisable to keep the Property in good
order and repair and in a good marketable condition, or to prevent deterioration
of the Property (the "Additional Replacements") Lender may send Guarantor
written notice of the need for making such Additional Replacements. Guarantor
shall promptly commence making such Additional Replacements in accordance with
all the requirements of the Security Instrument. Reimbursement from the
Replacement Reserve for such Additional Replacements shall not be made unless
Lender has determined to do so pursuant to Section 4(f). Except for Section 4,
all references in this Agreement to "Replacements" shall include the "Additional
Replacements."
(e) In order to facilitate Lender's completion or making the Replacements
pursuant to Sections 5(c) and (d) above, Lender is granted the right to enter
onto the Property and perform any and all work and labor necessary to complete
or make the Replacements and employ watchmen to protect the Property from
damage. All sums so expended by Lender shall be deemed to have been advanced to
Guarantor and secured by the Security Instrument. For this purpose Guarantor
constitutes and appoints Lender its true and lawful attorney-in-fact with full
power of substitution to complete or undertake the Replacements in the name of
Guarantor. Guarantor empowers said attorney-in-fact as follows: (i) to use any
funds in the Replacement Reserve for the purpose of making or completing the
Replacements; (ii) to make such additions, changes and corrections to the
Replacements as shall be necessary or desirable to complete the Replacements;
(iii) to employ such contractors, subcontractors, agents, architects and
inspectors as shall be required for such purposes; (iv) to pay, settle or
compromise all existing bills and claims which are or may become liens against
the Property, or as may be necessary or desirable for the completion of the
Replacements, or for the clearance of title; (v) to execute all applications and
certificates in the name of Guarantor which may be required by any of the
contract documents; (vi) to prosecute and defend all actions or proceedings in
connection with the Property or the rehabilitation and repair of the Property;
and (vii) to do any and every act which Guarantor might do in its own behalf to
fulfill the terms of this Agreement. It is further understood and agreed that
this power of attorney, which shall be deemed to be a power coupled with an
interest, cannot be revoked. Guarantor specifically agrees that all power
granted to Lender under this Agreement may be assigned by it to its successors
or assigns as holder of the Note.
(f) Nothing in this Section 5 shall make Lender responsible for making or
completing the Replacements, require Lender to expend funds in addition to the
Replacement Reserve to make or complete any Replacement, obligate Lender to
proceed with the Replacements, or obligate Lender to demand from Guarantor
additional sums to make or complete any Replacement.
5.2 Entry Onto Property; Inspections.
(a) Guarantor shall permit Lender or Lender's representatives (including an
independent person such as an engineer, architect, or inspector) or third
parties making Replacements pursuant to Section 5.1 of this Agreement, to enter
onto the Mortgaged Property during normal business hours (subject to the rights
of tenants under their leases) to inspect the progress of any Replacements and
all materials being used in connection therewith, to examine all plans and shop
drawings relating to such Replacements which are or may be kept at the Property,
and to complete any replacements made pursuant to Section 5.1. Guarantor agrees
to cause all contractors and subcontractors reasonably to cooperate with Lender
or Lender's representatives or such other persons described above in connection
with inspections described in this Section 5.2 or the completion of Replacements
pursuant to Section 5.1.
(b) Lender may inspect the Property in connection with any Replacement prior to
disbursing funds from the Replacement Reserve. Lender, at Guarantor's expense,
also may require an inspection by an appropriate independent qualified
professional selected by Lender and a copy of a certificate of completion by an
independent qualified professional acceptable to Lender prior to the
disbursement of any amounts from the Replacement Reserve. Guarantor shall pay
Lender a reasonable inspection fee not exceeding $300.00 for each such
inspection.
5.3 Lien-Free Completion.
(a) Guarantor covenants and agrees that each of the Replacements and all
materials, equipment, fixtures, or any other item comprising a part of any
Replacement shall be constructed, installed or completed, as applicable, free
and clear of all mechanic's, materialman's or other liens (except for those
liens existing on the date of this Agreement which have been approved in writing
by Lender).
(b) Prior to each disbursement from the Replacement Reserve, Lender may require
Guarantor to provide Lender with a search of title to the Property effective to
the date of the release, which search shows that no mechanic's or materialmen's
liens or other liens of any nature have been placed against the Property since
the date this Agreement (other than liens which Guarantor is diligently
contesting in good faith and which have been bonded off to the satisfaction of
Lender) and that title to the Property is free and clear of all liens (other
than the lien of the Security Instrument and any other liens previously approved
in writing by the Lender, if any).
(c) In addition, as a condition to any disbursement, Lender may require
Guarantor to obtain from each contractor, subcontractor, or materialman an
acknowledgement of payment and release of lien for work performed and materials
supplied. Any such acknowledgement and release shall conform to the requirements
of applicable law and shall cover all work performed and materials supplied
(including equipment and fixtures) for the Property by that contractor,
subcontractor or materialman through the date covered by the current
reimbursement request (or, in the event that payment to such contractor,
subcontractor or materialmen is to be made by a joint check, the release of lien
shall be effective through the date covered by the previous release of funds
request.)
5.4 Compliance with Laws and Insurance Requirements.
(a) All Replacements shall comply with all applicable laws, ordinances, rules
and regulations of all governmental authorities having jurisdiction over the
Property and applicable insurance requirements including, without limitation,
applicable building codes, special use permits, environmental regulations, and
requirements of insurance underwriters.
(b) In addition to any insurance required under the Security Instrument,
Guarantor shall provide or cause to be provided worker's compensation insurance,
builder's risk, and public liability insurance and other insurance to the extent
required under applicable law in connection with a particular Replacement. All
such policies shall be in form and amount satisfactory to Lender. All such
policies which can be endorsed with standard mortgagee clauses making loss
payable to Lender or its assigns shall be so endorsed. The originals of such
policies shall be delivered to Lender.
6. Default.
6.1 Default Under This Agreement. Guarantor shall be in default under this
Agreement if it fails to comply with any provision of this Agreement and such
failure is not cured within 10 days after notice from Lender. Guarantor
understands that a default under this Agreement shall be deemed to be an Event
of Default under the Security Instrument, and that in addition to the remedies
specified in this Agreement, Lender shall be able to exercise all of its rights
and remedies under the Security Instrument upon an Event of Default.
6.2 Application of Replacement Reserve Upon Default.
(a) Upon the occurrence of a default under this Agreement or an Event of Default
under the Security Instrument, Guarantor shall immediately lose all of its
rights to receive disbursements from the Replacement Reserve unless and until
all amounts secured by the Security Instrument have been paid and the lien of
the Security Instrument has been released by Lender. Upon any such default or
Event of Default, Lender may in its sole and absolute discretion, use the
Replacement Reserve (or any portion thereof) for any purpose, including but not
limited to (i) repayment of any indebtedness secured by the Security Instrument,
including but not limited to principal prepayments and the prepayment premium
applicable to such full or partial prepayment (as applicable); provided,
however, that such application of funds shall not cure or be deemed to cure any
default or Event of Default; (ii) reimbursement of Lender for all losses and
expenses (including, without limitation, reasonable legal fees) suffered or
incurred by Lender as a result of such default or Event of Default; (iii)
completion of the Replacement as provided in Section 5.1, or for any other
repair or replacement to the Property; or (iv) payment of any amount expended in
exercising (and exercise) all rights and remedies available to Lender at law or
in equity or under this Agreement or under any of the other Loan Documents.
(b) Nothing in this Agreement shall obligate Lender to apply all or any portion
of the Replacement Reserve on account of any default or Event of Default by
Guarantor or to repayment of the indebtedness secured by the Security Instrument
or in any specific order of priority.
7. Guarantor's Other Obligations. Nothing contained in this Agreement shall
alter, impair or affect the obligations of Guarantor, or relieve Guarantor of
any of its obligations to make payments and perform all of its other obligations
required under the Loan Documents.
8. Remedies Cumulative. None of the rights and remedies conferred upon or
reserved to Lender under this Agreement is intended to be exclusive of any other
rights, and each and every right shall be cumulative and concurrent, and may be
enforced separately, successively or together, and may be exercised from time to
time as often as may be deemed necessary Lender.
9. Enforcement of Agreement. This Agreement is executed by Guarantor and Lender
for the benefit of Lender. Guarantor understands and agrees that in connection
with the anticipated sale or assignment and delivery of the Loan to Fannie Mae,
this Agreement may be assigned to Fannie Mae.
10. Balance in the Replacement Reserve. The insufficiency of any balance in the
Replacement Reserve shall not abrogate the Guarantor's agreement to fulfill all
preservation and maintenance covenants in the Loan Documents. In the event that
the balance of the Replacement Reserve is less than the current estimated cost
to make the Replacements required by the Lender, Guarantor shall deposit the
shortage within 10 days of request by Lender. In the event Lender determines
from time to time based on Lender's inspections, that the amount of the Monthly
Deposit is insufficient to fund the cost of likely Replacements and related
contingencies that may arise during the remaining term of the Loan, Lender may
require an increase in the amount of the Monthly Deposits upon 30 days prior
written notice to Guarantor.
11. Indemnification. Guarantor agrees to indemnify Lender and to hold Lender
harmless from and against any and all actions, suits, claims, demands,
liabilities, losses, damages, obligations and costs and expenses (including
litigation costs and reasonable attorneys' fees and expenses) arising from or in
any way connected with the performance of the Replacements or the holding or
investment of the Replacement Reserve. Guarantor assigns to Lender all rights
and claims Guarantor may have against all persons or entities supplying labor or
materials in connection with the Replacements; provided, however, that Lender
may not pursue any such right or claim unless a default or Event of Default
exists under this Agreement or the Security Instrument.
12. Determinations by Lender. In any instance in this Agreement where the
consent or approval of Lender may be given or is required, or where any
determination, judgment or decision is to be rendered by Lender under this
Agreement, the granting, withholding or denial of such consent or approval and
the rendering of such determination, judgment or decision shall be made or
exercised by Lender (or its designated representative) at its discretion.
13. Guarantor's Records. Guarantor shall furnish such financial statements,
invoices, records, papers and documents relating to the Property as Lender may
reasonably require from time to time to make the determinations permitted or
required to be made by Lender under this Agreement.
14. Fees and Expenses.
(a) In addition to any other fees payable by Guarantor to Lender in connection
with the Loan, Guarantor shall pay Lender an annual fee of $50.00 for its
services in administering the Replacement Reserve and investing the Replacement
Reserve. The annual fee shall be due and payable by Guarantor on the date
specified in a statement to Guarantor regarding such fee.
(b) Guarantor shall pay within 10 days of request from Lender (i) all reasonable
costs and expenses incurred by Lender in connection with collecting, holding and
disbursing the Replacement Reserve pursuant to this Agreement, and (ii) all
reasonable fees, charges, costs and expenses incurred by Lender in connection
with inspections made by Lender or Lender's representatives in carrying out
Lender's responsibility to make certain determinations under this Agreement.
15. Completion of Replacements. Lender's approval of any plans for any
Replacement, release of funds from the Replacement Reserve, inspection of the
Property by Lender or Lender's agents, or other acknowledgment of completion of
any Replacement in a manner satisfactory to Lender shall not be deemed an
acknowledgment or warranty to any person that the Replacement has been completed
in accordance with applicable building, zoning or other codes, ordinances,
statutes, laws, regulations or requirements of any governmental agency.
16. Transfer of Property/Transfer of Interests in Guarantor and Borrower. If a
Transfer shall occur or be contemplated, which Transfer requires the prior
written consent of Lender pursuant to the terms of the Security Instrument,
Lender may review the amount of the Replacement Reserve, the amount of the
Monthly Deposits and the likely repairs and replacements required by the
Property and the related contingencies which may arise during the remaining term
of the Loan. Based upon that review, Lender may require an additional deposit to
the Replacement Reserve, and/or an increase in the amount of the Monthly
Deposits as a condition to Lender's consent to such Transfer. In all events, the
transferee shall be required to assume Guarantor's duties and obligations under
this Agreement.
17. Termination of Replacement Reserve. After payment in full of all sums
secured by the Security Instrument and release by Lender of the lien of the
Security Instrument, Lender shall disburse to Guarantor all amounts remaining in
the Replacement Reserve.
18. Entire Agreement; Amendment and Waiver. This Agreement contains the complete
and entire understanding of the parties with respect to the matters covered and
no change or amendment shall be valid unless it is made in writing and executed
by the parties to this Agreement. No specific waiver or forbearance for any
breach of any of the terms of this Agreement shall be considered as a general
waiver of that or any other term of this Agreement. If any provision of this
Agreement is in conflict with any provision of the Security Instrument regarding
the Replacement Reserve, the provision contained in this Agreement shall
control.
19. Notices. All notices under this Agreement shall be given in writing to the
other party at the address, and in the manner, provided in the Security
Instrument.
20. Severability. The invalidity, illegality, or unenforceability of any
provision of this Agreement pursuant to judicial decree shall not affect the
validity or enforceability of any other provision of this Agreement, all of
which shall remain in full force and effect.
21. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the jurisdiction in which the Property is located.
22. Non-Recourse. This Agreement is being executed in connection with the making
of the Loan pursuant to the terms of the Note. Guarantor's liability hereunder
shall be limited to the extent provided in the Guaranty.
23. Capitalized Terms. Any capitalized terms used in this Agreement and not
specifically defined herein, shall have the meanings set forth in the Security
Instrument.
ATTACHED EXHIBITS. The following Exhibits are attached to this
Agreement:
-----
X Exhibit A Schedule of Work
-----
-----
X Exhibit B Modifications
-----
Guarantor and Lender have executed this Agreement on the date and year
first above written.
GUARANTOR:
FIRST SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SECOND SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
THIRD SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
FOURTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
FIFTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SIXTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SEVENTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
EIGHTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
NINTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SPRINGHILL COMMERCIAL LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SPRINGFIELD FACILITIES, LLC, a Maryland
limited liability company (successor
by merger to Springfield Facilities,
Inc., Maryland corporation)
By: Springhill Commercial Limited
Partnership, a Maryland limited
partnership, its sole member
By: Springhill Lake Investors
Limited Partnership, a Maryland
limited partnership, its sole
general partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
LENDER:
GMAC COMMERCIAL MORTGAGE CORPORATION, a
California corporation
By:
Name:
Title:
Fannie Mae Replacement and Reserve and Security Agreement- Form
4506A-IDOT 10/98 (Page A-1)
Deposits Partially or Fully Waived
EXHIBIT A
REPLACEMENTS
[Attach and label as Exhibit A a copy of the completed Evaluator's
Summary: Physical Needs Over the Term or a comparable listing prepared by
Lender]
Fannie Mae Replacement and Reserve and Security Agreement- Form
4506A-IDOT 10/98 (Page B-1)
Deposits Partially or Fully Waived
EXHIBIT B
MODIFICATIONS
1. Section 1(e) is amended by adding the following subparagraph (iii):
"(iii) at any time during the Loan term Lender shall determine that the
loan to value ratio of the Property is greater than 65%."
2. The following phrase is inserted at the end of Section 5.3:
"or as otherwise provided in Section 21(b)(6) of the Security Instrument."
Exhibit 10(o)
Spring Hill Lake Apartments
PROMISSORY NOTE
(VARIABLE LOAN)
US $113,100,000.00 As of November 1, 2002
FOR VALUE RECEIVED, the undersigned ("Guarantor") promises to pay to the
order of SPRINGHILL LAKE INVESTORS LIMITED PARTNERSHIP, a Maryland limited
partnership ("Borrower"), the principal sum of One Hundred Thirteen Million One
Hundred Thousand and 00/100 Dollars (US $113,100,000.00), with interest on each
Variable Loan at an annual rate as calculated in Section 3 hereof.
This Note is executed and delivered by Guarantor pursuant to one of either
(i) that certain Amended and Restated Loan Agreement, dated as of September 16,
2002, by and among certain borrowers signatory thereto and Lender, or (ii) that
certain Loan Agreement dated as of November 1, 2002, by and among certain
borrowers signatory thereto and GMAC Commercial Mortgage Corporation, a
California corporation ("DUS Lender"). As used herein, the term Loan Agreement
shall mean whichever of the loan agreements described in the preceding sentence
shall apply from time to time in accordance with their respective terms, along
with all amendments, supplements, replacements, restatements or other
modifications thereto or thereof from time to time made. The Loan Agreement
shall evidence the obligation of Borrower to repay a Variable Loan made by DUS
Lender to Borrower in accordance with the terms of the Loan Agreement. The Loan
Agreement requires certain of the terms of each Variable Loan to be evidenced by
one or a series of Loan Confirmation Instruments, and reference is hereby made
to each such Loan Confirmation Instrument for such terms.
1. Defined Terms. As used in this Note, (i) the term "Lender" means the holder
of this Note, and (ii) the term "Indebtedness" means the principal of, interest
on, or any other amounts due at any time under, this Note, or any amount for
which Borrower is liable to DUS Lender under any Loan Document, which Guarantor
by its execution of this Note agrees to reimburse to Borrower, including
prepayment premiums, late charges, default interest, and advances to protect the
security of the Security Instrument under Section 12 of the Security
Instruments. Event of Default and other capitalized terms used but not defined
in this Note shall have the meanings given to such terms in the Loan Agreement
or, if not defined in the Loan Agreement, as defined in the Consolidated,
Amended and Restated Indemnity Multifamily Deed of Trust, dated as of the date
of this Note, given by Guarantor for the benefit of DUS Lender (the "Security
Instrument").
2. Address for Payment. All payments due under this Note shall be payable at c/o
AIMCO, 2000 S. Colorado Blvd., Tower Two, Suite 2-1000, Denver, Colorado 80222,
or such other place as may be designated by written notice to Guarantor from or
on behalf of Lender.
3. Payment of Principal and Interest. Principal and interest shall be paid as
follows:
(a) This Note shall evidence a Variable Loan made from time to time by Borrower
to Guarantor under the terms and conditions of the Variable Loan made to
Borrower by DUS, Lender from time to time (the "DUS Loan") under the Loan
Agreement. The Variable Loan shall bear interest at a rate determined in
accordance with Section 2.01 of the Loan Agreement.
(b) Guarantor shall pay imputed interest on each Variable Loan in advance in the
form of a Discount in accordance with Section 1.04(b) of the Loan Agreement
(except that Guarantor shall pay actual interest on the Variable Loan for the
partial month period, if any, in accordance with Section 1.04(a) of the Loan
Agreement).
(c) Guarantor shall make monthly payments of principal each in the amount as set
forth on the attached Amortization Schedule. Lender shall apply each such
principal payment to the outstanding principal amount of the Loan on the
Rollover Date next following receipt of any such payment. If not sooner paid,
the entire principal amount of the Variable Loan shall be due and payable on the
earlier of (i) the termination of the Loan Agreement pursuant to subsection (e)
of Section 1.02 thereof, (ii) the fifth anniversary (unless such date is
extended pursuant to Section 1.07 of the Loan Agreement, in which case, the
tenth anniversary) of the Initial Closing Date or (iii) the maturity date of any
outstanding MBS with respect to the DUS Loan, unless either (A) not less than
five Business Days prior to the maturity date of the outstanding MBS, Borrower
has requested with respect to the DUS Loan that the outstanding MBS be renewed
with a new MBS or converted to a Fixed Loan to take effect on the maturity date
of the outstanding MBS and such new MBS has been issued or conversion has
occurred or (B) the MBS is automatically renewed with respect to the DUS Loan,
which automatic renewal shall occur in the event that a Borrower does not make
the request set forth in subpart (iii)(A) above and does not give DUS Lender
notice not less than five Business days prior to the maturity date of the
outstanding MBS that the Variable Loan related to such outstanding MBS shall be
paid on the maturity date of such outstanding MBS (the "Maturity Date"). Any MBS
that is issued with respect to the DUS Loan as a result of an automatic renewal
of a maturing MBS as contemplated by subpart (iii)(B) above shall have a
maturity date of three (3) months after the MBS Issue Date.
(d) In addition to payment of principal and the Discount, Guarantor shall pay to
Borrower the Variable Loan Fee due on the DUS Loan in accordance with Section
1.04(b)(ii) of the Loan Agreement.
4. Application of Payments. If at any time Lender receives, from Guarantor or
otherwise, any amount applicable to the Indebtedness that is less than all
amounts due and payable at such time, Lender may apply that payment to amounts
then due and payable in any manner and in any order determined by Lender, in
Lender's discretion. Guarantor agrees that neither Lender's acceptance of a
payment from Guarantor in an amount that is less than all amounts then due and
payable nor Lender's application of such payment shall constitute or be deemed
to constitute either a waiver of the unpaid amounts or an accord and
satisfaction.
5. Security. INTENTIONALLY OMITTED.
6. Acceleration. If an Event of Default has occurred and is continuing, the
entire unpaid principal balance, any accrued interest, the prepayment premium
payable under Paragraph 10, if any, and all other amounts payable under this
Note shall at once become due and payable, at the option of Lender, without any
additional notice to Guarantor. Lender may exercise this option to accelerate
regardless of any prior forbearance.
7. Late Charge. If any monthly amount payable under this Note is not received by
Lender within 10 days after the amount is due, Guarantor shall pay to Lender,
immediately and without demand by Lender, a late charge equal to 5 percent of
such amount. Guarantor acknowledges that its failure to make timely payments
will cause Lender to incur additional expenses in servicing and processing the
loan evidenced by this Note (the "Loan"), and that it is extremely difficult and
impractical to determine those additional expenses. Guarantor agrees that the
late charge payable pursuant to this Paragraph represents a fair and reasonable
estimate, taking into account all circumstances existing on the date of this
Note, of the additional expenses Lender will incur by reason of such late
payment. The late charge is payable in addition to, and not in lieu of, any
interest payable at the Default Rate pursuant to Paragraph 8.
8. Default Rate. So long as any monthly installment or any other payment due
under this Note remains past due for 30 days or more, interest under this Note
shall accrue on the unpaid principal balance from the earlier of the due date of
the first unpaid monthly installment or other payment due, as applicable, at a
rate (the "Default Rate") equal to the lesser of 4 percentage points above the
rate stated in the first paragraph of this Note or the maximum interest rate
which may be collected from Guarantor under applicable law. If the unpaid
principal balance and all accrued interest are not paid in full on the Maturity
Date, the unpaid principal balance and all accrued interest shall bear interest
from the Maturity Date at the Default Rate. Guarantor also acknowledges that its
failure to make timely payments will cause Lender to incur additional expenses
in servicing and processing the Loan, that, during the time that any monthly
installment or payment under this Note is delinquent for more than 30 days,
Lender will incur additional costs and expenses arising from its loss of the use
of the money due and from the adverse impact on Lender's ability to meet its
other obligations and to take advantage of other investment opportunities, and
that it is extremely difficult and impractical to determine those additional
costs and expenses. Guarantor also acknowledges that, during the time that any
monthly installment or payment due under this Note is delinquent for more than
30 days, Lender's risk of nonpayment of this Note will be materially increased
and Lender is entitled to be compensated for such increased risk. Guarantor
agrees that the increase in the rate of interest payable under this Note to the
Default Rate represents a fair and reasonable estimate, taking into account all
circumstances existing on the date of this Note, of the additional costs and
expenses Lender will incur by reason of Guarantor's delinquent payment and the
additional compensation Lender is entitled to receive for the increased risks of
nonpayment associated with a delinquent loan.
9. Limits on Personal Liability.
(a) Except as otherwise provided in this Paragraph 9, Guarantor shall have no
personal liability under this Note, for the repayment of the Indebtedness or for
the performance of any other obligations of Guarantor under the Note, and
Lender's only recourse for the satisfaction of the Indebtedness and the
performance of such obligations shall be Lender's exercise of its rights and
remedies with respect to the real and personal property held by Lender as
security for the Indebtedness (the "Property"). This limitation on Guarantor's
liability shall not limit or impair Lender's enforcement of its rights against
any guarantor of the Indebtedness or any guarantor of any obligations of
Guarantor.
(b) Guarantor shall be personally liable to Lender for the repayment of a
portion of the Indebtedness equal to any loss or damage suffered by Lender as a
result of (1) failure of Guarantor to pay to DUS Lender upon demand after an
Event of Default, all Rents to which DUS Lender is entitled under Section 3(a)
of the Security Instrument and the amount of all security deposits collected by
Guarantor from tenants then in residence; (2) failure of Guarantor to apply all
insurance proceeds and condemnation proceeds as required by the Security
Instrument; (3) failure of Guarantor to comply with Section 14(d) or (e) of the
Security Instrument relating to the delivery of books and records, statements,
schedules and reports; (4) fraud or written material misrepresentation by
Guarantor or any officer, director, partner, member or employee of Guarantor in
connection with the application for or creation of the DUS Loan or any request
for any action or consent by DUS Lender; or (5) failure to apply Rents, first,
to the payment of reasonable operating expenses (other than Property management
fees that are not currently payable pursuant to the terms of an Assignment of
Management Agreement or any other agreement with DUS Lender executed in
connection with the Loan) and then to amounts ("Debt Service Amounts") payable
under this Note, the Security Instrument or any other Loan Document (except that
Guarantor will not be personally liable (i) to the extent that Guarantor lacks
the legal right to direct the disbursement of such sums because of a bankruptcy,
receivership or similar judicial proceeding, or (ii) with respect to Rents that
are distributed in any calendar year if Guarantor has paid all operating
expenses and Debt Service Amounts for that calendar year). (c) Guarantor shall
become personally liable to Lender for the repayment of all of the Indebtedness
upon the occurrence of any of the following Events of Default: (1) Guarantor's
acquisition of any property or operation of any business not permitted by
Section 33 of the Security Instrument; or (2) a Transfer that is an Event of
Default under Section 21 of the Security Instrument.
(d) To the extent that Guarantor has personal liability under this Paragraph 9,
Lender may exercise its rights against Guarantor personally without regard to
whether Lender has exercised any rights against the collateral, or pursued any
rights against any guarantor, or pursued any other rights available to Lender
under this Note, or applicable law. For purposes of this Paragraph 9, the term
"Property" shall not include any funds that (1) have been applied by Guarantor
as required or permitted by the Security Instrument prior to the occurrence of
an Event of Default, or (2) Guarantor was unable to apply as required or
permitted by the Security Instrument because of a bankruptcy, receivership, or
similar judicial proceeding.
10. Voluntary and Involuntary Prepayments. Pursuant to the terms of the Loan
Agreement, Guarantor shall pay the entire amount of the Discount on any Variable
Loan in advance. Accordingly, any Variable Loan may be prepaid in whole or in
part and at any time without penalty. Guarantor shall give Lender six (6)
Business Days advance notice of any prepayment.
11. Costs and Expenses. Guarantor shall pay on demand all reasonable expenses
and costs, including reasonable fees and out-of-pocket expenses of attorneys and
expert witnesses and costs of investigation, incurred by Lender as a result of
any default under this Note or in connection with efforts to collect any amount
due under this Note, or DUS Lender's enforcement of the provisions of any of the
other Loan Documents, including those incurred in post-judgment collection
efforts and in any bankruptcy proceeding (including any action for relief from
the automatic stay of any bankruptcy proceeding) or judicial or non-judicial
foreclosure proceeding.
12. Forbearance. Any forbearance by Lender in exercising any right or remedy
under this Note, or otherwise afforded by applicable law, shall not be a waiver
of or preclude the exercise of that or any other right or remedy. The acceptance
by Lender of any payment after the due date of such payment, or in an amount
which is less than the required payment, shall not be a waiver of Lender's right
to require prompt payment when due of all other payments or to exercise any
right or remedy with respect to any failure to make prompt payment. Enforcement
by Lender of any security for Guarantor's obligations under this Note shall not
constitute an election by Lender of remedies so as to preclude the exercise of
any other right or remedy available to Lender.
13. Waivers. Except as expressly provided in the Loan Agreement, presentment,
demand, notice of dishonor, protest, notice of acceleration, notice of intent to
demand or accelerate payment or maturity, presentment for payment, notice of
nonpayment, grace, and diligence in collecting the Indebtedness are waived by
Guarantor and all endorsers and guarantors of this Note and all other third
party obligors.
14. Loan Charges. If any applicable law limiting the amount of interest or other
charges permitted to be collected from Guarantor in connection with the Loan is
interpreted so that any interest or other charge, whether considered separately
or together with other charges, violates that law, and Guarantor is entitled to
the benefit of that law, that interest or charge is hereby reduced to the extent
necessary to eliminate that violation. Guarantor agrees to an effective rate of
interest that is the stated rate of interest plus any additional rate of
interest resulting from any other charges or fees that are to be paid by
Guarantor to Lender that may be found by a court of competent jurisdiction to be
interest. The amounts, if any, previously paid to Lender in excess of the
permitted amounts shall be applied by Lender to reduce the unpaid principal
balance of this Note. For the purpose of determining whether any applicable law
limiting the amount of interest or other charges permitted to be collected from
Guarantor has been violated, all Indebtedness that constitutes interest, as well
as all other charges made in connection with the Indebtedness that constitute
interest, shall be deemed to be allocated and spread ratably over the stated
term of the Note. Unless otherwise required by applicable law, such allocation
and spreading shall be effected in such a manner that the rate of interest so
computed is uniform throughout the stated term of the Note.
15. Commercial Purpose. Guarantor represents that the Indebtedness is being
incurred by Guarantor solely for the purpose of carrying on a business or
commercial enterprise, and not for personal, family or household purposes.
16. Counting of Days. Except where otherwise specifically provided, any
reference in this Note to a period of "days" means calendar days, not Business
Days.
17. Governing Law; Consent to Jurisdiction; WAIVER OF JURY TRIAL. The provisions
of Section 11.07 of the Loan Agreement (entitled "Choice of Law; Consent to
Jurisdiction; Waiver of Jury Trial") are hereby incorporated into this Note by
this reference to the fullest extent as if the text of such Section were set
forth in its entirety herein.
18. Captions. The captions of the paragraphs of this Note are for convenience
only and shall be disregarded in construing this Note.
19. Notices. All notices, demands and other communications required or permitted
to be given by Lender to Guarantor pursuant to this Note shall be given in
accordance with Section 11.09 of the Loan Agreement and addressed to Guarantor
at the c/o AIMCO, 2000 S. Colorado Blvd., Tower Two, Suite 2-1000, Denver,
Colorado 80222.
20. Security for this Note. INTENTIONALLY OMITTED.
21. Loan May Not Be Reborrowed. Guarantor may not re-borrow any amounts under
this Note which it has previously borrowed and repaid under this Note.
22. Default Under Loan Agreement and Other Loan Documents. The occurrence of an
Event of Default under the Loan Agreement or the Security Instrument shall
constitute an "Event of Default" under this Note in accordance with the Loan
Agreement and the Security Instrument. Upon the occurrence of an Event of
Default under the Loan Agreement or the Security Instrument, the entire
principal amount outstanding hereunder and accrued interest thereon shall at
once become due and payable, at the option of the holder hereof.
23. Loan Confirmation Instruments; Accounting for Variable Loans. The terms of
the Loan Agreement and this Note govern the repayment, and all other terms
relating to the Variable Loan. However, Borrower shall execute a Loan
Confirmation Instrument with respect to the DUS Loan to create a physical
instrument evidencing each MBS issued to fund the DUS Loan. The Loan
Confirmation Instrument executed by Borrower in accordance with Section 2.02 of
the Loan Agreement shall set forth the amount, term, Discount, Closing Date and
certain other terms of each MBS issued to fund the DUS Loan. The Loan
Confirmation Instrument shall conclusively establish each of the terms described
in the preceding sentence, absent manifest error. The MBS evidenced by the Loan
Confirmation Instrument does not represent a separate indebtedness from that
evidenced by the DUS Loan or this Note. In making proof of this Note, no other
documents other than this Note shall be required. In making proof of the amount
and terms of the outstanding Variable Loans under this Note, this Note, the
related Loan Confirmation Instruments with respect to the DUS Loan, and Lender's
records concerning payments made by Guarantor under this Note, shall be
conclusive evidence of the terms and outstanding amounts of the Variable Loan,
absent manifest error.
24. Modifications to Note. There are standard modifications to this Note that
are attached as Exhibit B-1 and Exhibit B-2 hereto. In addition, there may be
special modifications to this Note attached as Exhibit B-3 hereto. All such
exhibits are hereby incorporated into this Note as a part hereof.
IN WITNESS WHEREOF, Guarantor has signed and delivered this Note under
seal or has caused this Note to be signed and delivered under seal by its duly
authorized representative. Guarantor intends that this Note shall be deemed to
be signed and delivered as a sealed instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
FIRST SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SECOND SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
THIRD SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
FOURTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
FIFTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SIXTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SEVENTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
EIGHTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
NINTH SPRINGHILL LAKE LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SPRINGHILL COMMERCIAL LIMITED
PARTNERSHIP, a Maryland limited
partnership
By: Springhill Lake Investors Limited
Partnership, a Maryland limited
partnership, its sole general
partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
SPRINGFIELD FACILITIES, LLC, a Maryland
limited liability company (successor
by merger to Springfield Facilities,
Inc., Maryland corporation)
By: Springhill Commercial Limited
Partnership, a Maryland limited
partnership, its sole member
By: Springhill Lake Investors
Limited Partnership, a Maryland
limited partnership, its sole
general partner
By: Three Winthrop Properties,
Inc., a Massachusetts
corporation, its managing
general partner
By: (SEAL)
Patrick J. Foye
Vice President -
Residential
Pay to the order of ________________________________________, without
recourse.
GMAC COMMERCIAL MORTGAGE CORPORATION, a
California corporation
By:
Robert D. Falese, III
Vice President
EXHIBIT B-1
GMACCM LOAN AGREEMENT MODIFICATIONS
During any time that the terms, covenants and provisions of that certain Loan
Agreement dated as of November 1, 2002 and more particularly described in the
second paragraph on page 1 of the Note apply to the Variable Loan evidenced by
the Note, paragraphs 3 and 23 of the Note are amended and replaced with the
following substitute paragraphs 3 and 23:
"3. Payment of Principal and Interest. Principal and interest shall be
paid as follows:
(a) This Note shall evidence a Variable Loan made from time to time by Borrower
to Guarantor under the terms and conditions of the Variable Loan made to
Borrower by DUS Lender from time to time (the "DUS Loan") under the Loan
Agreement. Guarantor shall not be required to make monthly principal payments
prior to the Fannie Mae Addition Date, but shall make monthly payments of
principal after the Fannie Mae Reassignment Date, if it occurs, as set forth in
Section 1.04(d) of the Loan Agreement.
(b) Guarantor shall pay actual interest on the Variable Loan during the period
described in accordance with Section 1.04(a) of the Loan Agreement. Guarantor
shall pay interest on its Variable Rate Loan in arrears at a rate equal to LIBOR
Rate plus a number of basis points determined in accordance with Section 2.01 of
the Loan Agreement. For purposes of the previous sentence, the LIBOR Rate shall
be reset every ninety (90) days commencing on the date that is ninety (90) days
after the Initial Closing Date. On the date the Variable Loan is funded,
Guarantor shall pay interest in advance from the date of funding through
November 30, 2002. On January 1, 2003 and on the first (1st) day of each
calendar month thereafter, Guarantor shall pay interest in arrears calculated
for the actual number of days since the first (1st) day of the previous calendar
month.
(c) If not sooner paid, the entire principal amount of the Variable Loan shall
be due and payable in accordance with Section 1.02 of the Loan Agreement.
(d) Guarantor shall not pay any Discount.
23. Loan Confirmation Instruments; Accounting for Variable Loans. The
terms of the Loan Agreement and this Note govern the repayment, and all other
terms relating to the Variable Loan. However, Borrower shall execute one or a
series of Loan Confirmation Instruments with respect to the DUS Loan to create a
physical instrument evidencing the terms of the Variable Loan. The Loan
Confirmation Instrument or series of Loan Confirmation Instruments executed by
Borrower in accordance with Section 2.02 of the Loan Agreement shall set forth
the amount, term, the interest rate spread over the LIBOR Rate Closing Date and
certain other terms related to the funding the Variable Loan. The Loan
Confirmation Instrument shall conclusively establish each of the terms described
in the preceding sentence, absent manifest error. The variable terms evidenced
by the Loan Confirmation Instrument do not represent a separate indebtedness
from that evidenced by this Note. In making proof of this Note, no other
documents other than this Note shall be required. In making proof of the amount
and terms of the outstanding Variable Loans under this Note, this Note, the
related Loan Confirmation Instruments, and Lender's records concerning payments
made by Borrower under this Note, shall be conclusive evidence of the terms and
outstanding amounts of the Variable Loan, absent manifest error." During any
time that the terms, covenants and provisions of that certain Amended and
Restated Loan Agreement dated as of September 16, 2002 and more particularly
described in the second paragraph on page 1 of the Note apply to the Variable
Loan evidenced by the Note, this Exhibit B-1 shall not apply and paragraphs 3
and 23 of the Note shall not be amended or replaced with the provisions set
forth in this Exhibit B-1.
EXHIBIT B-2
AIMCO MODIFICATIONS
The following modifications are made to the text of the Note that precedes this
Exhibit:
1. Section 9(b)(4) is modified by deleting "or" at the end thereof.
2. Section 9(b)(5) is modified to read as follows:
"(5) failure to apply Rents, first, to the payment of reasonable operating
expenses (other than Property management fees that are not currently
payable pursuant to the terms of an Assignment of Management Agreement or
any other agreement with Lender executed in connection with the Loan) and
then to amounts ("Debt Service Amounts") payable under this Note, the
Security Instrument or any other Loan Document (except that Guarantor will
not be personally liable (i) to the extent that Guarantor lacks the legal
right to direct the disbursement of such sums because of a bankruptcy,
receivership or similar judicial proceeding, or (ii) with respect to Rents
that are distributed in any calendar quarter if Guarantor has paid all
operating expenses and Debt Service Amounts for such calendar quarter to
date); or"
3. A new Section 9(b)(6) is added following Section 9(b)(5), stating as
follows:
"(6) failure to pay when due any water and sewer charges, fire, hazard or
other insurance premiums and ground rents owing from time to time in
connection with the Mortgaged Property."
EXHIBIT B-3
SPECIAL MODIFICATIONS
[INSERT AS APPLICABLE]