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 1, 2004
ANGELES INCOME PROPERTIES, LTD. II
(Exact name of Registrant as specified in its charter)
California 0-11767 95-3793526
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
55 Beattie Place
Post Office Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.03 Creation of a Direct Financial Obligation
On November 1, 2004, the Registrant obtained a mortgage in the principal amount
of $7,000,000 on one of its investment properties, Landmark Apartments, located
in Raleigh, North Carolina. The existing mortgage with an outstanding principal
amount of approximately $5,950,000 matured on November 1, 2004 and was repaid
with proceeds from the new mortgage. The new mortgage requires monthly payments
of interest beginning on December 1, 2004 until the loan matures November 1,
2006, with interest being equal to the average of the one month LIBOR plus 235
basis points (minimum rate of 4.3662%, no maximum rate). In addition, the new
mortgage requires monthly escrow deposits for taxes, insurance and replacement
reserves and a $500,000 repair reserve that was established with the lender at
closing. As a condition of making the new mortgage, the lender required AIMCO
Properties, L.P., an affiliate of the Registrant, to guarantee the obligations
and liabilities of the Registrant with respect to the new mortgage.
In accordance with the terms of the loan agreement for the new mortgage, payment
of the note may be accelerated at the option of the lender if an Event of
Default, as defined in the loan agreement, occurs. Events of Default include,
but are not limited to: nonpayment of monthly interest and escrows within 5 days
after the due date; any representations or warranties made in connection with
obtaining the loan that are considered by the lender to be misleading in any
material respect at the time such representations or warranties were made; any
judgment or lien placed on the Registrant, which in the lender's sole judgment
has a material adverse effect on the Registrant or is not covered by collectible
insurance proceeds.
The foregoing description is qualified in its entirety by reference to form of
Loan Agreement, Promissory Note, and Guaranty, copies of which are filed as
exhibits 10.28, 10. 29, and 10.30 to this report.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
The following exhibits are filed with this report:
10.28 Form of Loan Agreement dated November 1, 2004 between Angeles
Income Properties, Ltd. II, a California limited partnership and
GMAC Commercial Mortgage Bank.*
10.29 Promissory Note dated November 1, 2004 between Angeles Income
Properties, Ltd. II, a California limited partnership and GMAC
Commercial Mortgage Bank.
10.30 Guaranty dated November 1, 2004 by AIMCO Properties, L.P., for
the benefit of GMAC Commercial Mortgage Bank.*
*Schedules and supplemental materials to the exhibit have been omitted but will
be provided to the Securities and Exchange Commission upon request.
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.
ANGELES INCOME PROPERTIES, LTD. II
By: Angeles Realty Corporation II
Managing General Partner
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
Date: November 5, 2004
Exhibit 10.28
LOAN AGREEMENT
LIBOR
Between
ANGELES INCOME PROPERTIES, LTD. II, A CALIFORNIA LIMITED PARTNERSHIP, DOING
BUSINESS IN NORTH CAROLINA AS ANGELES INCOME PROPERTIES, LTD. II, A
CALIFORNIA LIMITED PARTNERSHIP
as Borrower
and
GMAC COMMERCIAL MORTGAGE bank, a utah industrial bank
as Lender
Dated as of november 1, 2004
Loan Number: 46774
==============================================================================
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINED TERMS AND CONSTRUCTION GUIDELINES..........................1
1.01. Defined Terms........................................................1
1.02. General Construction.................................................1
1.03. Intentionally Omitted................................................1
1.04. Intentionally Omitted................................................1
ARTICLE 2 MAXIMUM LOAN AMOUNT; PAYMENT TERMS; ADVANCES.......................2
2.01. Commitment to Lend...................................................2
2.02. Calculation of Interest..............................................2
2.03. Payment of Principal and Interest....................................4
2.04. Payments Generally...................................................6
2.05. Prepayment Rights....................................................7
2.06. Exit Fee.............................................................8
2.07. Interest Rate Cap/Hedge..............................................9
ARTICLE 3 CASH MANAGEMENT...................................................10
3.01. Lockbox.............................................................10
ARTICLE 4 ESCROW AND RESERVE REQUIREMENTS...................................10
4.01. Creation and Maintenance of Escrows and Reserves....................10
4.02. Tax Escrow..........................................................11
4.03. Insurance Premium Escrow............................................12
4.04. Immediate Repair Escrow Account.....................................13
4.05. Replacement Reserve Account.........................................14
4.06. Intentionally Omitted...............................................14
4.07. Intentionally Omitted...............................................14
4.08. Intentionally Omitted...............................................14
ARTICLE 5 COMPLETION OF REPAIRS RELATED TO RESERVE ACCOUNTS; CONDITIONS TO
RELEASE OF FUNDS................................................15
5.01. Conditions Precedent to Disbursements from Certain Reserve Accounts.15
5.02. Waiver of Conditions to Disbursement................................16
5.03. Direct Payments to Suppliers and Contractors........................17
5.04. Performance of Reserve Items........................................17
ARTICLE 6 LOAN SECURITY AND RELATED OBLIGATIONS.............................18
6.01. Security Instrument and Assignment of Rents and Leases..............18
6.02. Assignment of Property Management Contract..........................18
6.03. Assignment of Rate Cap Agreement....................................18
6.04. Assignment of Operating Agreements..................................18
6.05. Pledge of Property; Grant of Security Interest......................18
6.06. Environmental Indemnity Agreement...................................19
6.07. Guaranty of Borrower Sponsor........................................19
6.08. Intentionally Omitted...............................................19
ARTICLE 7 SINGLE PURPOSE SEPARATENESS REQUIREMENTS..........................19
7.01. Commitment to Separate Assets.......................................19
7.02. Separateness Provisions.............................................20
ARTICLE 8 REPRESENTATIONS AND WARRANTIES....................................22
8.01. Organization; Legal Status..........................................22
8.02. Power; Authorization; Enforceable Obligations.......................22
8.03. No Legal Conflicts..................................................22
8.04. No Litigation.......................................................23
8.05. Business Purpose of Loan............................................23
8.06. Warranty of Title...................................................23
8.07. Condition of the Property...........................................23
8.08. No Condemnation.....................................................24
8.09. Requirements of Law.................................................24
8.10. Operating Permits...................................................24
8.11. Separate Tax Lot....................................................24
8.12. Flood Zone..........................................................24
8.13. Adequate Utilities..................................................24
8.14. Public Access.......................................................24
8.15. Boundaries..........................................................24
8.16. Mechanic Liens......................................................25
8.17. Assessments.........................................................25
8.18. Insurance...........................................................25
8.19. Leases..............................................................25
8.20. Management Agreement................................................25
8.21. Financial Condition.................................................26
8.22. Taxes.................................................................
26
8.23. No Foreign Person...................................................26
8.24. Federal Regulations.................................................26
8.25. Investment Company Act; Other Regulations...........................26
8.26. ERISA...............................................................26
8.27. No Illegal Activity as Source of Funds..............................26
8.28. Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money
Laundering Laws.................................................26
8.29. Brokers and Financial Advisors......................................27
8.30. Equity Contribution.................................................27
8.31. Complete Disclosure; No Change in Facts or Circumstances............27
8.32. Survival............................................................27
8.33. Additional Assets/Contingent Liabilities............................27
ARTICLE 9 BORROWER COVENANTS................................................27
9.01. Payment of Debt and Performance of Obligations......................27
9.02. Payment of Taxes and Other Lienable Charges.........................27
9.03. Insurance...........................................................28
9.04. Obligations upon Condemnation or Casualty...........................32
9.05. Inspections and Right of Entry......................................36
9.06. Leases and Rents....................................................37
9.07. Use of Property.....................................................38
9.08. Maintenance of Property.............................................38
9.09.
Waste.............................................................38
9.10. Compliance with Laws................................................39
9.11. Financial Reports, Books and Records................................39
9.12. Performance of Other Agreements.....................................41
9.13. Existence; Change of Name; Location as a Registered Organization....41
9.14. Property Management.................................................42
9.15. ERISA...............................................................42
9.16. Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money
Laundering Laws.................................................42
9.17. Equity Contribution.................................................43
9.18. Intentionally Omitted...............................................43
9.19. Intentionally Omitted...............................................43
9.20. Intentionally Omitted...............................................43
ARTICLE 10 NO TRANSFERS OR ENCUMBRANCES; DUE ON SALE........................43
10.01. Prohibition Against Transfers......................................43
10.02. Lender Approval....................................................43
10.03. Intentionally Omitted..............................................44
10.04. Releases of the Mortgaged Property.................................44
10.05. OFAC Compliance; Substantive Consolidation Opinion. ..............44
ARTICLE 11 EVENTS OF DEFAULT; REMEDIES......................................44
11.01. Events of Default..................................................44
11.02. Remedies...........................................................47
11.03. Cumulative Remedies; No Waiver; Other Security.....................49
11.04. Enforcement Costs..................................................49
11.05. Application of Proceeds............................................50
11.06. Intentionally Omitted..............................................50
ARTICLE 12 NONRECOURSE - LIMITATIONS ON PERSONAL LIABILITY..................50
12.01. Nonrecourse Obligation.............................................50
12.02. Full Personal Liability............................................50
12.03. Personal Liability for Certain Losses..............................50
12.04. No Impairment......................................................51
12.05. No Waiver of Certain Rights........................................52
ARTICLE 13 INDEMNIFICATION..................................................52
13.01. Indemnification Against Claims.....................................52
13.02. Duty to Defend.....................................................53
ARTICLE 14 SUBROGATION; NO USURY VIOLATIONS.................................53
14.01. Subrogation........................................................53
14.02. No Usury...........................................................53
ARTICLE 15 SALE OR SECURITIZATION OF LOAN...................................54
15.01. Splitting the Note.................................................54
15.02. Lender's Rights to Sell or Securitize..............................54
15.03. Dissemination of Information.......................................55
15.04. Reserves Accounts..................................................55
15.05. Securitization Indemnification.....................................55
15.06. Intentionally Omitted..............................................56
ARTICLE 16 BORROWER FURTHER ACTS AND ASSURANCES PAYMENT OF SECURITY RECORDING
CHARGES.........................................................56
16.01. Further Acts.......................................................56
16.02. Replacement Documents..............................................56
16.03. Borrower Estoppel Certificates.....................................56
16.04. Recording Costs....................................................57
16.05. Publicity..........................................................58
ARTICLE 17 LENDER CONSENT...................................................58
17.01. No Joint Venture; No Third Party Beneficiaries.....................58
17.02. Lender Approval....................................................58
17.03. Performance at Borrower's Expense..................................58
17.04. Non-Reliance.......................................................59
ARTICLE 18 MISCELLANEOUS PROVISIONS.........................................59
18.01. Notices............................................................59
18.02. Entire Agreement; Modifications; Time of Essence...................60
18.03. Binding Effect; Joint and Several Obligations......................60
18.04. Duplicate Originals; Counterparts..................................60
18.05. Unenforceable Provisions...........................................60
18.06. Governing Law......................................................61
18.07. Consent to Jurisdiction. .........................................61
18.08. WAIVER OF TRIAL BY JURY............................................61
ARTICLE 19 LIST OF DEFINED TERMS............................................61
19.01. Definitions........................................................61
LOAN AGREEMENT
(Libor Rate Loan)
THIS LOAN AGREEMENT is made as of this 1st day of November, 2004 by
ANGELES INCOME PROPERTIES, LTD., II, a California limited partnership, doing
business in North Carolina as Angeles Income Properties, Ltd. II, A California
Limited Partnership ("Borrower"), as borrower, and GMAC COMMERCIAL MORTGAGE
BANK, a Utah industrial bank (together with its successors and assigns
"Lender"), as lender.
Background
Borrower desires to obtain a commercial mortgage loan from Lender in the
original principal amount of $7,000,000.00 in lawful money of the United States
of America. Lender is willing to make such loan to Borrower on the terms and
conditions set forth in this Loan Agreement.
Agreement
NOW, THEREFORE, in consideration of such loan and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, Borrower and Lender
agree as follows:
ARTICLE 1...
DEFINED TERMS AND CONSTRUCTION GUIDELINES
1.01. ......Defined Terms. Each defined term used in this Loan Agreement has the
meaning given to that term in Article 19 of this Loan Agreement.
1.02. ......General Construction. Defined terms used in this Loan Agreement may
be used interchangeably in singular or plural form, and pronouns are to be
construed to cover all genders. All references to this Loan Agreement or any
agreement or instrument referred to in this Loan Agreement shall mean such
agreement or instrument as originally executed and as hereafter amended,
supplemented, extended, consolidated or restated from time to time. The words
"herein," "hereof" and "hereunder" and other words of similar import refer to
this Loan Agreement as a whole and not to any particular subdivision; and the
words "Article" and "section" refer to the entire article or section, as
applicable and not to any particular subsection or other subdivision. Reference
to days for performance means calendar days unless business days are expressly
indicated.
1.03. ......Intentionally Omitted.
1.04. ......Intentionally Omitted.
ARTICLE 2...
MAXIMUM LOAN AMOUNT; PAYMENT TERMS; ADVANCES
2.01. ......Commitment to Lend.
(a) ......Maximum Loan Amount Approved. Subject to the terms and conditions set
forth herein, and in reliance on Borrower's representations, warranties and
covenants set forth herein, Lender agrees to loan the Maximum Loan Amount to
Borrower. The Loan shall be evidenced by this Loan Agreement and by the Note
made by Borrower to the order of Lender and shall bear interest and be paid upon
the terms and conditions provided herein.
(b) ......Advance of Maximum Loan Amount. On the Closing Date, Lender shall
advance the entire Maximum Loan Amount to Borrower.
2.02. ......Calculation of Interest.
(a) ......Calculation Basis. Interest due on the Loan shall be paid in arrears,
calculated based on a 360-day year and paid for the actual number of days
elapsed for any whole or partial month in which interest is being calculated.
(b) ......Initial Applicable Interest Rate and Interest Rate Adjustment Date.
Interest shall accrue on outstanding principal at the rate ("Applicable Interest
Rate") which is the LIBOR Rate plus two and thirty-five hundredths percent
(2.35%) ("Margin"); provided that in no event shall the Applicable Interest Rate
be less than four and three thousand six hundred sixty-two thousandths percent
(4.3662%) ("Minimum Interest Rate"). Adjustments to the Applicable Interest Rate
in connection with changes in the LIBOR Rate shall be made on the Interest Rate
Adjustment Date, except that the initial Applicable Interest Rate shall be
determined two business days prior to the Closing Date.
(c) ......LIBOR Unascertainable. Lender's obligation to maintain interest based
on the LIBOR Rate shall be suspended and the Applicable Interest Rate shall be
based on the Interest Rate Index (plus Margin) upon Lender's determination, in
good faith, that adequate and reasonable means do not exist for ascertaining the
LIBOR Rate or that a contingency has occurred which materially and adversely
affects the London Interbank Eurodollar Market at which Lender prices loans
(which determination by Lender shall be conclusive and binding on Borrower in
the absence of manifest error). Computation of the Applicable Interest Rate
based on the Interest Rate Index shall continue until Lender determines that the
circumstances giving rise to Lender's substitution of the Interest Rate Index
for the LIBOR Rate no longer exist. Lender shall promptly notify Borrower of
each such determination.
(d) ......Adjustment Due to Calculation Errors. If, at any time, Lender
determines that it has miscalculated the Applicable Interest Rate (whether
because of a miscalculation of the LIBOR Rate or otherwise), Lender shall notify
Borrower of the necessary correction. If the corrected Applicable Interest Rate
represents an increase in the applicable monthly payment, Borrower shall, within
ten (10) days thereafter, pay to Lender the corrected amount. If the corrected
Applicable Interest Rate represents an overpayment by Borrower to Lender and no
Event of Default then exists, Lender shall refund the overpayment to Borrower
or, at Lender's option, credit such amounts against Borrower's payment next due
hereunder.
(e) ......Adjustment for Impositions on Loan Payment. All payments made by
Borrower hereunder shall be made free and clear of, and without reduction for,
or on account of, any income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings hereafter imposed, levied, collected,
withheld or assessed by any government or taxing authority (other than taxes on
the overall net income or overall gross receipts of Lender imposed as a result
of a present or former connection between Lender and the jurisdiction of the
government or taxing authority imposing same provided, that this exclusion shall
not apply to a connection arising solely from Lender's having executed,
delivered, performed its obligations under, received a payment under, or
enforced this Loan Agreement or any other Loan Document). If any such amounts
are required to be withheld from amounts payable to Lender, the amounts payable
to Lender under the Loan Documents shall be increased to the extent necessary to
yield to Lender, after payment of such amounts, interest or any such other
amounts payable at the rates or in the amounts specified herein. If any such
amounts are payable by Borrower, Borrower shall pay all such amounts by their
due date and promptly send Lender a certified copy of an original official
receipt showing payment thereof. If Borrower fails to pay such amounts when due
or to deliver the required receipt to Lender, Borrower shall indemnify Lender
for any incremental taxes, interest or penalties that may become payable by
Lender as a result of any such failure.
(f) ......Increased Costs of Maintaining Interest. If Lender reasonably
determines that the adoption of any law, regulation, rule or guideline
(including, without limitation, any change regarding the imposition or increase
in reserve requirements), whether or not having the force of law, does or will
have the effect of reducing Lender's rate of return on the Loan, then, from time
to time, within five (5) business days after written demand by Lender, Borrower
shall pay Lender such additional amount as will compensate Lender for its
reduction. In addition, if any law, regulation, rule or guideline hereafter is
enacted or modified, whether or not having the force of law, and compliance
therewith results in an increase in the cost to Lender (including, without
limitation, a reduction in the income received by Lender) in making, funding or
maintaining interest on the Loan at the rate herein provided, then, within five
(5) business days after written demand by Lender, Borrower shall pay Lender the
additional amounts necessary to compensate Lender for such increased costs.
(g) ......Acceleration. Notwithstanding anything to the contrary contained
herein, if Borrower is prohibited by law from paying any amount due to Lender
under Section 2.02(e) or (f), Lender may elect to declare the unpaid principal
balance of the Loan, together with all unpaid interest accrued thereon and any
other amounts due hereunder, due and payable within ninety (90) days of Lender's
written notice to Borrower. No Exit Fee shall be due in such event. Lender's
delay or failure in accelerating the Loan upon the discovery or occurrence of an
event under Section 2.02(e) or (f) shall not be deemed a waiver or estoppel
against the exercise of such right.
2.03. ......Payment of Principal and Interest.
(a) ......Payment at Closing. If the Loan is funded on a date other than the
first (1st) day of a calendar month, Borrower shall pay to Lender at the time of
funding an interest payment calculated by multiplying (i) the number of days
from and including the date of funding to (but excluding) the first (1st) day of
the next calendar month by (ii) a daily rate based on the Applicable Interest
Rate effective on the Closing Date and calculated for a 360-day year.
(b) ......Payment Dates. Commencing on the first (1st) day of December, 2004 and
continuing on the first (1st) day of each and every successive month thereafter
(each, a "Payment Due Date"), through and including the Payment Due Date
immediately prior to the Maturity Date, Borrower shall pay consecutive monthly
payments of interest only, at the Applicable Interest Rate (determined as of the
immediately preceding Interest Rate Adjustment Date), based on principal
advanced and outstanding during the prior calendar month and any amounts due
pursuant to Section 2.02 of this Loan Agreement; and
(c) ......Maturity Date. On the first (1st) day of November, 2006 ("Maturity
Date"), Borrower shall pay the entire outstanding principal balance of the Loan,
together with all accrued but unpaid interest thereon and all other amounts due
under this Loan Agreement, the Note or any other Loan Document.
(d) ......Extension of Maturity Date.
(i) ......Extension Option. Borrower has the right to extend the Maturity Date
of the Loan for two (2) additional terms (each an "Extension Term"), with the
first additional term having six (6) months ("First Extension Term") and
extending the Maturity Date to May 1, 2007 ("First Extended Maturity Date"), and
the second additional term having six (6) months ("Second Extension Term") and
extending the First Extended Maturity Date to November 1, 2007 ("Second Extended
Maturity Date"). Upon Borrower's proper and timely exercise of its rights under
this Section 2.03(d), the term "Maturity Date" shall be deemed to be the First
Extended Maturity Date and, as applicable, the Second Extended Maturity Date.
(ii) ......Conditions Precedent to Maturity Date Extension. Each of the
following conditions must be satisfied in a manner acceptable to Lender (or
waived in writing by Lender) as a condition precedent to extension of the
Maturity Date:
(A) ......Borrower delivers written notice to Lender not more than sixty (60)
days and not less than thirty (30) days prior to the expiring Maturity Date
advising that Borrower is exercising its extension option, together with all
materials needed by Lender to confirm that the Property satisfies the
performance criteria identified in subsection (D) below.
(B) ......Borrower pays to Lender the Extension Fee with Borrower's notice
exercising its extension option.
(C) ......No Event of Default exists and no event or condition has occurred and
is continuing that would be an Event of Default if notice had been given or
applicable grace/cure periods had expired (or both), as of the date Borrower
exercises such extension option and as of the commencement date of the relevant
Extension Term.
(D) ......Borrower demonstrates to Lender's satisfaction that the Property
achieved and maintained, for the period of three (3) consecutive months prior to
the date Borrower exercises such extension option, and prior to the commencement
date of the relevant Extension Term the following performance criteria: (1) a
Debt Service Coverage Ratio of at least 1.20:1.00, based upon the greater of (a)
an 8:31 constant or (b) the constant resulting from one and twenty-five
hundredths percent (1.25%) over the then-prevailing 10-year US Treasury yield
and a thirty (30) year amortization schedule, or (c) the then-current Applicable
Interest Rate; and (2) a maximum Loan to Value Ratio of 55%. Notwithstanding the
foregoing, Lender reserves the right to reconfirm that the Property continues to
achieve the foregoing performance criteria, based upon financial statements for
a period determined by Lender prior to the commencement date of the Extension
Term, and to condition the extension on such performance criteria being
sustained until the commencement of the Extension Term. If such performance
criteria have not been achieved as of the date Borrower exercises its extension
option or any subsequent verification thereof made by Lender prior to
commencement of the Extension Term, Lender may, in its sole discretion, permit
the extension of the Maturity Date provided that Borrower pays principal in the
amount necessary for the Property to achieve the foregoing performance criteria
as of the commencement date of the Extension Term.
(E) ......Commencing on the first Payment Due Date occurring during the
Extension Term and continuing on each Payment Due Date thereafter, through and
including the Payment Due Date immediately prior to the Maturity Date, Borrower
shall make monthly payments consisting of (1) principal in an amount that would
be necessary to fully amortize principal based on a thirty (30) year
amortization schedule and (2) accrued interest at the Applicable Interest Rate
based on principal outstanding during the prior calendar month.
(F) ......Borrower obtains, and assigns to the benefit of Lender, a Rate Cap
which (1) will be effective for the Extension Term and provide for payments
whenever the LIBOR Rate exceeds a strike price determined by Lender for the
Extension Term such that a minimum Debt Service Coverage Ratio of 1.05:1.00 is
maintained, (2) with a notional amount equal to the Maximum Loan Amount and (3)
otherwise satisfies all requirements of Section 2.07 of this Loan Agreement.
(G) ......Borrower executes and delivers to Lender an amendment to this Loan
Agreement, acceptable to Lender in all respects, which confirms the date to
which the Maturity Date has been extended, the principal and interest amounts
payable during the Extension Term and such other matters as Lender may require.
(H) ......Borrower reimburses Lender for all costs reasonably incurred by Lender
in processing the extension request, including, without limitation, reasonable
legal fees and expenses and, if the Loan has been included in a Securitization,
a Rating Confirmation.
2.04. ......Payments Generally.
(a) ......Delivery of Payments. All payments due to Lender under this Loan
Agreement and the other Loan Documents are to be paid in immediately available
funds to Lender at Lender's office located at 200 Witmer Road, P.O. Box 809,
Horsham, Pennsylvania 19044, Attn: Servicing - Accounting Manager, or at such
other place as Lender may designate to Borrower in writing from time to time.
All amounts due under this Loan Agreement and the other Loan Documents shall be
paid without setoff, counterclaim or any other deduction whatsoever.
(b) ......Credit for Payment Receipt. No payment due under this Loan Agreement
or any of the other Loan Documents shall be deemed paid to Lender until received
by Lender at its designated office on a business day prior to 2:00 p.m. Eastern
Standard Time. Any payment received after the time established by the preceding
sentence shall be deemed to have been paid on the immediately following business
day. Each payment that is paid to Lender in the calendar month in which it is
due, but prior to its scheduled Payment Due Date, shall not be deemed a
prepayment and shall be deemed to have been received on the Payment Due Date
solely for the purpose of calculating interest due. Where a Payment Due Date
falls on a date other than a business day, the Payment Due Date shall be deemed
the first business day immediately thereafter.
(c) ......Invalidated Payments. If any payment received by Lender is deemed by a
court of competent jurisdiction to be a voidable preference or fraudulent
conveyance under any bankruptcy, insolvency or other debtor relief law, and is
required to be returned by Lender, then the obligation to make such payment
shall be reinstated, notwithstanding that the Note may have been marked
satisfied and returned to Borrower or otherwise canceled, and such payment shall
be immediately due and payable upon demand.
(d) ......Late Charges. If any payment due on a Payment Due Date is not received
by Lender in full on or before the fifteenth (15th) day after the Payment Due
Date on which such payment is due (e.g., if the Payment Due Date is the 1st day
of month, a late charge would accrue if the full payment is not received on or
before the 15th day of the month); Borrower shall pay to Lender, immediately and
without demand, a late fee equal to four percent (4%) of such delinquent amount.
(e) ......Default Interest Rate. If the Loan is not paid in full on or before
the Maturity Date (subject to any extension thereto properly exercised by
Borrower in accordance with this Loan Agreement) or if the Loan is accelerated
following an Event of Default and during the continuance thereof, the interest
rate then payable on the Loan shall immediately increase to the Applicable
Interest Rate plus five hundred (500) basis points ("Default Rate") and continue
to accrue at the Default Rate until full payment is received. At Lender's
option, payments due on a Payment Due Date which remain unpaid for more than
thirty (30) days shall accrue interest at the Default Rate commencing as of the
expiration of such 30 day period. In addition, upon the expiration of any notice
and cure period provided in Section 11.01, Lender shall have the right, without
acceleration of the Loan, to collect interest at the Default Rate on any payment
due hereunder (including, without limitation, late charges and fees for legal
counsel) which is not received by Lender on or before the date on which such
payment originally was due. Interest at the Default Rate also shall accrue on
any judgment obtained by Lender in connection with collection of the Loan or
enforcement of any obligations due under the other Loan Documents until such
judgment amount is paid in full.
(f) ......Application of Payments. Payments of principal and interest due from
Borrower shall be applied first to the payment of late fees, then to Lender
advances made to protect the Property or to perform obligations which Borrower
failed to perform, then to the payment of accrued but unpaid interest, and then
to reduction of the outstanding principal. If at any time Lender receives less
than the full amount due and payable on a Payment Due Date, Lender may apply the
amounts received to amounts then due and payable in any manner and in any order
determined by Lender, in its sole discretion. Following an Event of Default,
Lender may apply all payments to amounts then due in any manner and in any order
determined by Lender, in its sole discretion. Lender's acceptance of a payment
from Borrower in an amount that is less than the full amount then due and
Lender's application of such payments to amounts then due from Borrower shall
not constitute or be deemed to constitute a waiver of the unpaid amounts or an
accord and satisfaction. No principal amount repaid may be reborrowed.
2.05. ......Prepayment Rights.
(a) ......Open Date. Borrower acknowledges that Lender is making the Loan to it
at the interest rate and upon the other terms herein set forth in reliance upon
Borrower's promise to pay the Loan over the full stated term of this Loan
Agreement and that Lender may suffer loss or other detriment if Borrower were to
prepay all or any portion of the Note prior to its stated Maturity Date. Except
as provided in this Section 2.05, Borrower agrees that Borrower has no right to
prepay all or any part of the Loan prior to the Maturity Date. Borrower may not
prepay the Loan in whole or in part at any time until after the 13th Payment Due
Date ("Open Date").
(b) ......Prepayment After the Open Date. After the Open Date, Borrower may
prepay principal in whole, but not in part, as long as each of the following
conditions are satisfied:
(i) ......Borrower provides written notice to Lender of its intent to prepay not
more than sixty (60) days and not less than thirty (30) days prior to the
intended prepayment date.
(ii) ......No Event of Default exists as of the date Borrower delivers notice of
intent to prepay and as of the date such prepayment is made.
(iii) ......Intentionally Omitted.
(iv) ......Borrower pays with such prepayment all accrued interest and all other
outstanding amounts then due and unpaid under this Loan Agreement and the other
Loan Documents.
(v) ......Borrower pays with such prepayment the Exit Fee unless otherwise set
forth in Section 2.06.
(vi) ......If prepayment is not made on a Payment Due Date, Borrower pays with
such prepayment (in addition to all other amounts due under this Section
2.05(b)) an amount equal to the unearned interest computed on the principal
amount being prepaid which would accrue for the period from the date of
prepayment through the forthcoming Payment Due Date.
(c) ......Prohibited Prepayment Prior to Open Date. Except as otherwise set
forth in Section 2.05(d), if payment of all or any part of the principal balance
of the Loan is tendered by Borrower, a purchaser at foreclosure, a Guarantor, or
any other Person prior to the Open Date, whether by reason of acceleration of
the Loan or otherwise (a "Prohibited Prepayment"), such tender shall be deemed
an attempt to circumvent the prohibition against prepayment set forth in Section
2.05(a) and, at Lender's option, shall be an Event of Default. If a Prohibited
Prepayment occurs and is accepted voluntarily or otherwise by Lender, then, in
addition to all other rights and remedies available to Lender upon an Event of
Default, a prepayment premium equal to five percent (5%) of the Maximum Loan
Amount ("Prohibited Prepayment Fee") shall be due to compensate Lender for
damages suffered as a result of the Prohibited Prepayment, such amount shall be
due in addition to the outstanding principal balance, all accrued and unpaid
interest, the Exit Fee and other outstanding amounts due under the Loan
Documents.
(d) ......Prepayment as a Result of a Casualty or Condemnation or charges on
Lender. Prepayments arising from Lender's application of insurance proceeds upon
the occurrence of a Casualty, the application of a condemnation award upon the
occurrence of a Condemnation, or as set forth in Section 2.02(g) may be made
without payment of an Exit Fee.
(e) ......Intentionally Omitted.
2.06. ......Exit Fee. As consideration for Lender's making of the Loan to
Borrower, Borrower agrees to pay a deferred financing fee ("Exit Fee") to Lender
in an amount equal to one percent (1%) of the Maximum Loan Amount. Although the
Exit Fee is earned in full on the date hereof, Lender hereby agrees to defer
payment of the Exit Fee until the earlier of (a) the date when full prepayment
of the Loan occurs, (b) the Maturity Date (or any extension thereto properly
exercised by Borrower in accordance with this Loan Agreement), or (c) the date
on which the Loan has been accelerated following an Event of Default. The Exit
Fee shall be paid notwithstanding the sale or transfer of the Loan by GMAC
Commercial Mortgage Bank, in whole or in part, to a successor lender unless GMAC
Commercial Mortgage Bank has transferred its interest in the Exit Fee to its
successors and assigns as Lender. No Exit Fee shall be due, however, if (i)
Borrower refinances this Loan with the proceeds of a permanent loan funded by,
or arranged for Borrower by, GMAC Commercial Mortgage Corporation, or an
Affiliate thereof, or (ii) the Property is sold to an unaffiliated third party
purchaser (a "Purchaser") and Borrower provides Purchaser with a written
introduction to Lender or a Lender Affiliate, as directed by Lender, in form and
content reasonably acceptable to Lender. Borrower acknowledges that GMAC
Commercial Mortgage Corporation has no obligation to make or arrange such loan.
2.07. ......Interest Rate Cap/Hedge.
(a) ......Initial Interest Rate Cap. On or before the date hereof, Borrower
shall obtain a Rate Cap with a notional amount equal to the Maximum Loan Amount
for the benefit of Lender which provides for payments to be made by the Rate Cap
Provider if, at any time during the term of the Loan, the LIBOR Rate exceeds the
Strike Rate. Each Rate Cap required hereunder must: (i) be issued by a Rate Cap
Provider that satisfies the credit criteria set forth below in Section 2.07(c);
(ii) be fully effective as of the Closing Date; (iii) permit Borrower's interest
in the Rate Cap to be assigned to Lender without the payment of fees or costs
and without the Rate Cap Provider's consent; (iv) contain no cross-defaults to
any other agreements among any Borrower, Rate Cap Provider and Lender, or any of
their respective Affiliates; (v) contain no performance obligations of Borrower
or Lender beyond Borrower's payment of a one-time fee at the effective date of
the Rate Cap Agreement; (vi) be evidenced by a Rate Cap Agreement acceptable to
Lender in all respects and delivered to Lender on the Closing Date, fully
executed, together with, if required by Lender, a legal opinion from Rate Cap
Provider's counsel (which maybe in-house counsel) as to the authorization,
execution and delivery by Rate Cap Provider and enforceability in accordance
with its terms (provided, however, that Borrower shall have 5 days from and
including the Closing Date to deliver the foregoing documents as long as Lender
receives confirmation satisfactory to Lender that the Rate Cap has been
purchased and fully paid for by Borrower as of the Closing Date); (vii) comply
with criteria issued by any of the Rating Agencies regarding interest rate cap
agreements including, without limitation, any requirement for legal opinions
from Rate Cap Provider's counsel; (viii) otherwise be satisfactory to Lender in
all respects; and (ix) have a notional amount equal to the Maximum Loan Amount.
(b) ......Assignment to Lender as Collateral. The Rate Cap and each replacement
of a Rate Cap and each Rate Cap Borrower is required to provide in connection
with the extension of the Maturity Date shall be assigned to Lender as
collateral. Borrower acknowledges that Borrower's assignment of the Rate Cap to
Lender shall not be deemed completed until such time as Borrower has delivered
to Lender a written acknowledgement from the Rate Cap Provider of Borrower's
assignment of the Rate Cap to Lender that is acceptable to Lender in all
respects. All payments made by the Cap Provider shall be made directly to the
Lockbox Account if a Lockbox Trigger Event has occurred. Failure by the Cap
Provider to make any payment under the Rate Cap shall not relieve Borrower of
any of its obligations to make any payments hereunder or any other Loan
Documents.
(c) ......Credit Rating of Cap Provider; Replacement Upon Adverse Change in
Rating. The Rate Cap must be issued by a Rate Cap Provider having (i) a long
term unsecured debt rating of at least "A+" from S&P; (ii) a short-term
unsecured debt rating of at least "A-1" from S&P; or (iii) an equivalent rating
by a Rating Agency approved by Lender. If, at any time during the term of the
Loan, the Rate Cap Provider's credit rating falls below that required in the
previous sentence, Lender shall have the right to require that Borrower, at
Borrower's expense, provide a replacement Rate Cap from a different Rate Cap
Provider which satisfies the required credit rating. Each replacement Rate Cap
shall satisfy all requirements of this Section 2.07 and, unless otherwise agreed
by Lender, shall be substantially in the form of the Rate Cap Agreement assigned
to Lender as of the Closing Date. Each replacement Rate Cap and all required
documents must be delivered to Lender within ten (10) business days of Lender's
notification that a replacement Rate Cap is required.
(d) ......Borrower's Payment of Lender Review Expenses. Borrower shall pay all
expenses incurred by Lender in connection with Lender's review and approval of
the initial Rate Cap and Rate Cap Provider, each Rate Cap due in connection with
an extension of the Maturity Date, and each replacement of a Rate Cap that is
required under the terms of this Loan Agreement, including, without limitation,
reasonable legal fees and expenses.
ARTICLE 3...
CASH MANAGEMENT
3.01. ...... Lockbox. Borrower shall cause all Rents due to Borrower under the
Leases to be deposited as and when set forth in the Lockbox Agreement.
ARTICLE 4...
ESCROW AND RESERVE REQUIREMENTS
4.01. ......Creation and Maintenance of Escrows and Reserves.
(a) ......Control of Reserve Accounts. On the Closing Date, each of the Reserve
Accounts shall be established by Lender. Each Reserve Account required under
this Loan Agreement shall be a custodial account established by Lender, and, at
Lender's option, funds deposited into a Reserve Account may be commingled with
other money held by Lender. Each Reserve Account shall be under the sole
dominion and control of Lender, and Borrower shall not have any right to
withdraw funds from a Reserve Account. Unless required by the laws of the state
which govern this Loan Agreement or otherwise expressly provided in this Loan
Agreement, Borrower shall not be entitled to any earnings or interest on funds
deposited in any Reserve Account. Upon the occurrence of an Event of Default,
Lender may, in addition to any and all other rights and remedies available to
Lender, apply any sums then present in any or all of the Reserve Accounts to the
payment of the Debt in any order as determined by Lender in its sole discretion.
(b) ......Funds Dedicated to Particular Purpose. Funds held in a Reserve Account
are not to be used to fund Reserve Items contemplated by a different Reserve
Account, and Borrower may not use and Lender shall have no obligation to apply
funds from one Reserve Account to pay for Reserve Items contemplated by another
Reserve Account.
(c) ......Release of Reserves Upon Payment of Debt. Upon payment in full of the
Loan, Lender shall disburse to Borrower all unapplied funds held by Lender in
the Reserve Accounts pursuant to this Loan Agreement.
(d) ......Release of Individual Reserve Account after Full Performance of
Reserve Items. Lender shall disburse to Borrower all unapplied funds remaining
in the Immediate Repair Escrow Account upon receipt of evidence satisfactory to
Lender that (i) Borrower has completed, in the manner required by this Loan
Agreement, all Reserve Items to be funded by such Reserve Account, and (ii) no
Liens exist against the Property with respect to such Reserve Items. Lender
shall not be obligated to make any such disbursement when an Event of Default
exists, and Lender may deduct from such final disbursement all outstanding
amounts then due and unpaid to Lender under the Loan Documents.
(e) ......No Obligation of Lender. Nothing in this Loan Agreement shall: (i)
make Lender responsible for making or completing any Reserve Item; (ii) require
Lender to advance, disburse or expend funds in addition to funds then on deposit
in the related Reserve Account to make or complete any Reserve Item; or (iii)
obligate Lender to demand from Borrower additional sums to make or complete any
Reserve Item.
(f) ......No Waiver of Default. No disbursements made from a Reserve Account at
the time when a Borrower default or Event of Default has occurred and is then
continuing shall be deemed a waiver or cure by Lender of that default or Event
of Default, nor shall Lender's rights and remedies by prejudiced in any manner
thereby.
(g) ......Insufficient Amounts in a Reserve Account. Notwithstanding that Lender
has the right to require Borrower to pay any deficiency in a Reserve Account if
Lender determines that amounts in a Reserve Account are insufficient, the
insufficiency of funds in a Reserve Account, or Lender's application of funds in
a Reserve Account following an Event of Default other than for funding of the
Reserve Items, shall not relieve Borrower from its obligation to perform in full
each of its: (i) obligations and covenants under this Loan Agreement; (ii)
agreements or covenants with tenants under the Leases; and (iii) agreements with
leasing agents.
4.02. ......Tax Escrow.
(a) ......Deposits to the Tax Escrow Account. On the Closing Date, Borrower has
deposited such amount as is noted on the closing statement relating to the
closing of the Loan, to the Tax Escrow Account which is the amount determined by
Lender that is necessary to pay when due Borrower's obligation for Taxes upon
the due dates established by the appropriate tax or assessing authorities during
the next ensuing twelve (12) months, taking into consideration the Monthly Tax
Deposits to be collected from the first Payment Due Date to the due date for
payment of Taxes. Thereafter, beginning on the first Payment Due Date and on
each Payment Due Date thereafter, Borrower shall deliver to Lender the Monthly
Tax Deposit.
(b) ......Disbursement from Tax Escrow Account. Provided amounts in the Tax
Reserve Account are sufficient to pay the Taxes then due and no Event of Default
exists, Lender shall pay the Taxes as they become due on their respective due
dates on behalf of Borrower by applying the funds held in the Tax Escrow Account
to the payments of Taxes then due. In making any payment of Taxes, Lender may do
so according to any bill, statement or estimate obtained from the appropriate
public office with respect to Taxes without inquiry into the accuracy of such
bill, statement or estimate or into the validity of any tax, assessment, sale,
forfeiture, tax lien or title or claim thereof.
(c) ......Surplus or Deficiency in Tax Escrow Account. If amounts on deposit in
the Tax Escrow Account collected for an annual tax period exceed the Taxes
actually paid during such tax period, Lender shall, in its discretion, return
the excess to Borrower or credit the excess against the payments Borrower is to
make to the Tax Escrow Account for the next tax period. If amounts on deposit in
the Tax Escrow Account collected for an annual tax period are insufficient to
pay the Taxes actually due during such tax period, Lender shall notify Borrower
of the deficiency and, within ten (10) days thereafter, Borrower shall deliver
to Lender such deficiency amount. If, however, Borrower receives notice of any
such deficiency on a date that is within ten (10) days prior to the date that
Taxes are due, Borrower will deposit the deficiency amount within one (1)
business day after its receipt of such deficiency notice.
(d) ......Changes in Amount of Taxes Due; Changes in the Monthly Tax Deposit.
Borrower shall notify Lender immediately of any changes to the amounts,
schedules and instructions for payment of any Taxes of which it has or obtains
knowledge and authorizes Lender or its agent to obtain the bills for Taxes
directly from the appropriate taxing authority. If the amount due for Taxes
shall increase and Lender reasonably determines that amounts on deposit in the
Tax Escrow Account will not be sufficient to pay Taxes due for an annual tax
period, Lender shall notify Borrower of such determination and of the increase
needed to the Monthly Tax Deposit. Commencing with the Payment Due Date
specified in such notice from Lender, Borrower shall make deposits at the
increased amount of the Monthly Tax Deposit.
4.03. ......Insurance Premium Escrow.
(a) ......Deposits to Insurance Premium Escrow Account. On the Closing Date,
Borrower has deposited such amount as is noted on the closing statement relating
to the closing of the Loan to the Insurance Premium Escrow Account which is the
amount determined by Lender that is necessary to pay when due Borrower's
obligation for Insurance Premiums during the next ensuing twelve (12) months,
taking into consideration the Monthly Insurance Deposits to be collected from
the first Payment Due Date to the due date for payment of such Insurance
Premiums. Thereafter, beginning on the first Payment Due Date and on each
Payment Due Date thereafter, Borrower shall deliver to Lender the Monthly
Insurance Deposit.
(b) ......Disbursement from Insurance Premium Escrow Account. Provided amounts
in the Insurance Premium Escrow Account are sufficient to pay the Insurance
Premiums then due and no Event of Default exists, Lender shall pay the Insurance
Premiums as they become due on their respective due dates on behalf of Borrower
by applying funds held in the Insurance Premium Escrow Account to the payments
of Insurance Premiums then due. In making any payment relating to Insurance
Premiums, Lender may do so according to any bill, statement or estimate procured
from the insurer without inquiry into the accuracy of such bill, statement or
estimate.
(c) ......Surplus or Deficiency in Insurance Premium Escrow Account. If amounts
on deposit in the Insurance Premium Escrow Account collected for an annual
period exceed the Insurance Premiums actually paid during such period, Lender
shall, in its discretion, return such excess to Borrower or credit such excess
against the payments Borrower is to make to the Insurance Premium Escrow Account
for the next annual period. If amounts on deposit in the Insurance Premium
Escrow Account collected for an annual premium period are insufficient to pay
the Insurance Premiums actually due during such annual period Lender shall
notify Borrower of the deficiency and, within ten (10) days thereafter, Borrower
shall deliver to Lender such deficiency amount. If, however, Borrower receives
notice of any such deficiency on a date that is within ten (10) days prior to
the date that Insurance Premiums are due, Borrower will deposit the deficiency
amount within one (1) business day after its receipt of such deficiency notice.
(d) ......Changes in Insurance Premium Amounts; Change in Monthly Deposit
Amount. Borrower shall notify Lender immediately of any changes to the amounts,
schedules and instructions for payment of any Insurance Premiums of which it has
or obtains knowledge and authorizes Lender or its agent to obtain the bills for
the Insurance Premiums directly from the insurance provider or its agent. If the
amount due for Insurance Premiums shall increase and Lender reasonably
determines that amounts on deposit in the Insurance Premium Escrow Account will
not be sufficient to pay the Insurance Premiums, Lender shall notify Borrower of
such determination and of the increase needed to the Monthly Insurance Deposit.
Commencing with the Payment Due Date specified in such notice from Lender,
Borrower shall make deposits at the increased amount of the Monthly Insurance
Deposit.
4.04. ......Immediate Repair Escrow Account.
(a) ......Immediate Repair Escrow Generally. Amounts in the Immediate Repair
Escrow Account are to be used for the purpose of funding the Immediate Repairs,
which Borrower covenants and agrees to perform in accordance with the terms of
this Loan Agreement on or before the dates specified on Exhibit C but not later
than 12 months (excepting life/safety items, which must be completed within the
times specified) from the date hereof.
(b) ......Deposit to the Immediate Repair Escrow Account. On the Closing Date,
Borrower shall deposit $500,000.00 with Lender as the reserve for completion of
the Immediate Repairs ("Immediate Repair Deposit").
(c) ......Disbursements from the Immediate Repair Escrow Account. Lender shall
make disbursements from the Immediate Repair Escrow Account upon Borrower's
performance, to Lender's satisfaction, of all conditions to disbursement set
forth in Article 5 of this Loan Agreement.
(d) ......Reassessment of Required Deposit. If at any time Lender reasonably
determines that the Immediate Repair Deposit will not be sufficient to pay the
cost of the Immediate Repairs, Lender may notify Borrower of such determination
and of the amount estimated by Lender to make-up such deficiency as reasonably
determined by Lender based upon changes in circumstances. Within ten (10) days
after such notice from Lender, Borrower shall deliver the deficiency amount to
Lender, and Lender shall deposit in the Immediate Repair Escrow Account and hold
and administer same in accordance with this Loan Agreement.
4.05. ......Replacement Reserve Account.
(a) ......Replacement Reserve Generally. Amounts in the Replacement Reserve
Account are to be used for the purpose of funding the Replacements, which
Borrower covenants and agrees to perform in accordance with the terms of this
Loan Agreement.
(b) ......Deposits to the Replacement Reserve Account. Beginning on the first
Payment Due Date and on each Payment Due Date thereafter, Borrower shall pay
$7,543.33 ("Monthly Replacement Reserve Deposit") to Lender as a deposit to the
Replacement Reserve Account.
(c) ......Disbursements from the Replacement Reserve Account. Lender shall make
disbursements from the Replacement Reserve Account upon Borrower's performance,
to Lender's satisfaction, of all conditions to disbursement set forth in Article
5 hereof.
(d) ......Reassessment of Required Monthly Deposits. Lender may, from time to
time based on Lender's inspections of the Property, reassess its estimate of the
Monthly Replacement Reserve Deposit and may increase such amount on not less
than thirty (30) days written notice to Borrower if Lender determines that an
increase is necessary (i) to fund replacements not listed as part of the
Replacements (and not intended to be covered by the Immediate Repair Escrow
Account) which are advisable to keep the Property in good order, repair and
marketable condition, or (ii) to fund the replacement of any major building
systems or components (e.g., roof, HVAC system) not listed as part of the
Replacements (and not intended to be covered by the Immediate Repair Escrow
Account) which will reach the end of its useful life within two (2) years of the
date of Lender's inspection.
4.06. ......Intentionally Omitted.
4.07. ......Intentionally Omitted.
4.08. ......Intentionally Omitted.
ARTICLE 5...
COMPLETION OF REPAIRS RELATED TO RESERVE ACCOUNTS;
CONDITIONS TO RELEASE OF FUNDS
5.01. ......Conditions Precedent to Disbursements from Certain Reserve Accounts.
The following provisions apply to each request for disbursement from the
Immediate Repair Escrow Account and the Replacement Reserve Account:
(a) ......Disbursement only for Completed Repairs. Disbursements shall be
limited to Reserve Items that are fully completed and paid for in full by
Borrower except to the extent permitted under Section 5.01(b) of this Loan
Agreement. At no time shall Lender be obligated to pay amounts to Borrower in
excess of the current balance in the applicable Reserve Account at the time of
disbursement.
(b) ......Partial Completion. Lender may agree to disburse funds for Reserve
Items prior to completion thereof where (i) the contractor performing such work
requires periodic payments pursuant to the terms of its written contract with
Borrower and Lender has given its prior written approval to such contract, and
(ii) the cost of the portion of the Reserve Item to be completed under such
contract exceeds $10,000.
(c) ......Disbursement Request; Maximum Frequency and Amount. Borrower shall
submit to Lender a Disbursement Request together with such additional
information as Lender may reasonably request in connection with the Disbursement
Request at least ten (10) business days prior to the date on which Borrower
requests Lender to make a disbursement from a Reserve Account. Unless otherwise
agreed to by Lender, Borrower may not submit, and Lender shall not be required
to make, more than one (1) disbursement from each Reserve Account during any
calendar month. No Disbursement Request shall be made for less than $2,500 or
the total cost of the Reserve Items, if less.
(d) ......No Existing Event of Default. Lender may refuse to make any
disbursement if an Event of Default exists as of the date on which Borrower
submits the Disbursement Request or on the date the disbursement is actually to
be made.
(e) ......Responsible Officer Certificate. Lender must receive a certificate,
signed by a Responsible Officer of Borrower (and, at Lender's option, also
signed by Borrower's project architect or engineer if the cost of a single
Reserve Item or the aggregate amount of the Disbursement Request exceeds
$10,000), which certifies that:
(i) ......All information stated in the Disbursement Request is true and correct
in all material respects, each attachment to the Disbursement Request is correct
and complete, and if the attachment is a copy of the original, that it is a true
and an accurate reproduction of the original;
(ii) ......Each of the Reserve Items to be funded in connection with the
Disbursement Request was performed in a good and workmanlike manner and in
accordance with all Requirements of Law; and has been paid in full by Borrower;
(iii) ......Intentionally Omitted;
(iv) ......Subject to Section 5.03, each party that supplied materials, labor or
services has been paid in full (for the portion for which disbursement is sought
in the case of disbursements authorized in accordance with Section 5.01(b)
hereof); and
(v) ......In the case of disbursements authorized in accordance with Section
5.01(b) hereof, the materials for which the request are made are on-site at the
Property and properly secured or have been installed in the Property.
(f) ......Inspection to Confirm Completion. Prior to making any disbursement
which exceeds $25,000.00 in the aggregate or for a single Reserve Item, Lender
may require an inspection of the Property, performed at Borrower's expense, to
verify completion thereof.
(g) ......Absence of Liens. Lender may require that Borrower provide Lender with
any or all of the following: (i) a written lien waiver acceptable to Lender from
each party to be paid who is to receive payment of $10,000.00 or more in
connection with the Disbursement Request; (ii) a search of title to the Property
effective to the date of the disbursement which shows no Liens other than the
Permitted Encumbrances; or (iii) an endorsement to the Title Insurance Policy
which updates the effective date of such policy to the date of the disbursement
and shows no Liens other than the Permitted Encumbrances (provided, however,
that an endorsement shall be required only (a) with respect to Disbursement
Requests of $25,000.00 or greater, (b) for the final Disbursement Request for
any Reserve Item, or (c) if Lender otherwise reasonably deems an endorsement
necessary or advisable).
(h) ......Payment of Lender's Expenses. Borrower shall pay all reasonable
expenses incurred by Lender in processing Borrower's Disbursement Request
including, without limitation, any inspection costs (whether performed by Lender
or an independent inspector selected by Lender) and reasonable legal fees and
expenses.
(i) ......Other Items Lender Deems Necessary. Lender shall have received such
other evidence as Lender reasonably requests in connection with its confirmation
that each Reserve Item to be paid in connection with the Disbursement Request
has been completed or performed in accordance with the terms of this Loan
Agreement.
5.02. ......Waiver of Conditions to Disbursement. No waiver given by Lender of
any condition precedent to disbursement from a Reserve Account shall preclude
Lender from requiring that such condition be satisfied prior to making any other
disbursement from a Reserve Account.
5.03. ......Direct Payments to Suppliers and Contractors. Subject to Borrower's
right to contest, as set forth in Section 9.02, Lender, at its option, may make
disbursements directly to the supplier or contractor to be paid in connection
with the Disbursement Request. Borrower's execution of this Loan Agreement
constitutes an irrevocable direction and authorization for Lender to make
requested payments directly to the supplier or contractor. Each disbursement so
made by Lender shall satisfy Lender's obligation under this Loan Agreement.
5.04. ......Performance of Reserve Items.
(a) ......Performance of Reserve Items. Borrower agrees to commence each Reserve
Item by its required commencement date stated on the applicable Exhibit to this
Loan Agreement identifying such Reserve Item and to pursue completion diligently
of each Reserve Item on or before its completion date stated on such Exhibit
and, in the absence of a commencement date or completion date being specified,
when necessary in order to keep the Property in good order and repair and in a
good and marketable condition. Borrower shall complete each Reserve Item in a
good and workmanlike manner, using only new materials of the same or better
quality than that being replaced. All Reserve Items shall be performed in
accordance with, and upon completion shall comply with, all Requirements of Law
(including without limitation obtaining and maintaining in effect all necessary
permits and governmental approvals) and all applicable insurance requirements.
(b) ......Contracts. Lender shall have the right, at its option, to approve all
contracts or work orders with materialmen, mechanics, suppliers, subcontractors,
contractors or other parties providing labor or materials in connection with the
Reserve Items.
(c) ......Entry onto Property. In order to perform inspections or, following an
Event of Default, to complete Reserve Items which Borrower has failed to
perform, Borrower hereby grants Lender and its agents the right (subject to the
rights of tenants in possession), from time to time, to enter onto the Property.
(d) ......Lender Remedy for Failure to Perform. In addition to Lender's remedies
following an Event of Default, Borrower acknowledges that Lender shall have the
right (but not the obligation) to complete or perform the Reserve Items for
which amounts have been reserved under this Loan Agreement and for such purpose,
Borrower hereby appoints Lender its attorney-in-fact with full power of
substitution (and which shall be deemed to be coupled with an interest and
irrevocable until the Loan is paid in full and the Security Instrument is
discharged of record, with Borrower hereby ratifying all that its said attorney
shall do by virtue thereof): (i) to complete or undertake such work in the name
of Borrower; (ii) to proceed under existing contracts or to terminate existing
contracts (even where a termination penalty may be incurred) and employ such
contractors, subcontractors, watchmen, agents, architects and inspectors as
Lender determines necessary or desirable for completion of such work; (iii) to
make any additions, changes and corrections to the scope of the work as Lender
deems necessary or desirable for timely completion; (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 completion of such work;
(v) to execute all applications and certificates in the name of Borrower which
may be required to obtain permits and approvals for such work or completion of
such work; (vi) to prosecute and defend all actions or proceedings in connection
with the repair or improvements to the Property; and (vii) to do any and every
act which Borrower might do in its own behalf to fulfill the terms of Borrower's
obligations under this Loan Agreement. Amounts expended by Lender which exceed
amounts held in the Reserve Accounts shall be added to the Maximum Loan Amount,
shall be immediately due and payable, and shall bear interest at the Default
Rate from the date of disbursement until paid in full.
ARTICLE 6...
LOAN SECURITY AND RELATED OBLIGATIONS
6.01. ......Security Instrument and Assignment of Rents and Leases. Payment of
the Loan and performance of the Obligations shall be secured, inter alia, by the
Security Instrument and the Assignment of Leases and Rents. Borrower shall
execute at closing the Security Instrument and the Assignment of Leases and
Rents and abide by its obligations thereunder.
6.02. ......Assignment of Property Management Contract. Borrower and the
Property Manager shall execute at closing the Assignment of the Property
Management Contract and Subordination of Management Fees and to abide by their
respective obligations thereunder.
6.03. ......Assignment of Rate Cap Agreement. Borrower shall execute and deliver
on the Closing Date the assignment and consent with respect to the Rate Cap as
are contemplated by Section 2.07 of this Loan Agreement and abide by its
obligations thereunder.
6.04. ......Assignment of Operating Agreements. As security for payment of the
Loan and performance by Borrower of all Obligations, Borrower hereby transfers,
sets over and assigns to Lender all of Borrower's right, title and interest in
and to the Operating Agreements to Lender for security purposes.
6.05. ......Pledge of Property; Grant of Security Interest. As security for
payment of the Loan and performance by Borrower of all Obligations, Borrower
hereby pledges, assigns, sets over and transfers to Lender, and grants to Lender
a continuing security interest in and to: (a) each of the Reserve Accounts and
the Operating Account, (b) all funds and monies from time to time deposited or
held in each of the Reserve Accounts and the Operating Account, and (c) all
interest accrued, if any, with respect to the Reserve Accounts and the Operating
Account; provided that Lender shall make disbursements from each of the Reserve
Accounts when, as and to the extent required by this Loan Agreement and Borrower
may make withdrawals from the Operating Account in accordance with this Loan
Agreement. The parties agree that each of the Reserve Accounts and the Operating
Account is a "deposit account" within the meaning of Article 9 of the UCC and
that this Loan Agreement also constitutes a "security agreement" within the
meaning of Article 9 of the UCC. Borrower shall not, without Lender's prior
written consent, further pledge, assign, transfer or grant any security interest
in any of the Reserve Accounts or in the Operating Account nor permit any Lien
to attach thereto, except as may be created in favor of Lender in connection
with the Loan.
6.06. ......Environmental Indemnity Agreement. Borrower and Guarantor will be
required to execute at closing the Environmental Indemnity and to abide by their
obligations thereunder.
6.07. ......Guaranty of Borrower Sponsor. Guarantor will be required to execute
at closing the Guaranty of Exceptions to Nonrecourse Liability and to abide by
its obligations thereunder.
6.08. ......Intentionally Omitted.
ARTICLE 7...
SEPARATENESS REQUIREMENTS
7.01. ......Commitment to Separate Assets. Borrower represents, warrants and
covenants to Lender as follows:
(a) ......Borrower shall agree, by resolution dated of even date with this Loan
Agreement, to comply with the Separateness Provisions set forth in Section
7.02(a) below, and will continue to comply with such Separateness Provisions in
accordance with such resolution at all times until the Loan has been paid in
full.
(b) ......General Partners shall agree, by resolution dated of even date with
this Loan Agreement, to comply with the Separateness Provisions set forth in
Section 7.02(b) below, and will continue to comply with such Separateness
Provisions in accordance with such resolution at all times until the Loan has
been paid in full.
(c) ......The Organizational Chart attached to this Loan Agreement is true,
complete and correct.
(d) ......Intentionally Omitted.
(e) ......The Separateness Provisions included in the resolutions of Borrower
[and General Partners] shall not, without Lender's prior written consent, be
amended, rescinded or otherwise revoked until the Loan has been paid in full.
(f) ......Prior to the withdrawal or the disassociation of either of the General
Partners from Borrower, Borrower shall immediately appoint a new general partner
or general partners whose organizational documents shall contain, or who shall
adopt, the Separateness Provisions of Section 7.02(b).
7.02. ......Separateness Provisions.
(a) ......Borrower Criteria. With respect to Borrower, "Separateness Provisions"
shall mean a corporation, limited partnership or limited liability company
which, at all times since its formation and thereafter:
(i) ......shall not engage in any business or activity, other than with respect
to Borrower, the ownership, operation and maintenance of (i) Deer Park
Apartments, Plainsboro, New Jersey, and (ii) the Property and activities
incidental thereto;
(ii) ......shall not, acquire or own any assets other than with respect to
Borrower, the Deer Park Property, the Property and such incidental Personal
Property as may be necessary for the operation of the Deer Park Property and the
Property;
(iii) ......if such entity is a limited partnership, all of its general partners
have satisfied and shall satisfy the requirements of Section 7.02(b) below;
(iv) ......Intentionally Omitted;
(v) ......Intentionally Omitted;
(vi) ......has and shall preserve its existence as an entity duly organized,
validly existing and in good standing (if applicable) under the laws of the
jurisdiction of its formation or organization;
(vii) ......has not and shall not merge or consolidate with any other Person;
(viii)...... has not taken, and shall not take, any action to dissolve, wind-up,
terminate or liquidate in whole or in part; to sell, transfer or otherwise
dispose of all or substantially all of its assets; to change its legal
structure; transfer or permit the direct or indirect transfer of any
partnership, membership or other Equity Interests, as applicable, other than
Permitted Transfers; issue additional partnership, membership or other Equity
Interests, as applicable; or seek to accomplish any of the foregoing;
(ix) ......shall not, without the unanimous written consent of all partners,
members or shareholders: (A) file or consent to the filing of any petition,
either voluntary or involuntary, to take advantage of any applicable insolvency,
bankruptcy, liquidation or reorganization statute; (B) seek or consent to the
appointment of a receiver, liquidator or any similar official; or (C) make an
assignment for the benefit of creditors;
(x) ......shall not amend or restate its organizational documents if such change
would adversely impact the requirements set forth in this Section 7.02;
(xi) ......shall not own any subsidiary or make any investment in, any other
Person;
(xii) ......shall not commingle its assets with the assets of any other Person;
(xiii)...... shall not incur any debt, secured or unsecured, direct or
contingent (including, without limitation, guaranteeing any obligation), other
than (i) the Loan, and (ii) the existing indebtedness in favor of Federal Home
Loan Mortgage Corporation and secured by a lien on the Deer Park Property (the
"Deer Park Loan"), and customary unsecured trade payables incurred in the
ordinary course of owning and operating the Property and the Deer Park Property;
provided the same are not evidenced by a promissory note, do not exceed, in the
aggregate, at any time a maximum amount of six percent (6%) of the outstanding
principal amount of the Loan and the Deer Park Loan (excluding, however, the
amount of any unsecured trade payable which Borrower is contesting pursuant to
Section 9.02 (b)) and are paid within ninety (90) days of the date incurred;
(xiv) ......shall maintain its records, books of account, bank accounts,
financial statements, accounting records and other entity documents separate and
apart from those of any other Person;
(xv) ......excepting any Property Management Agreement for the Property or any
management agreement for the Deer Park Property with a Borrower Affiliate
approved by Lender, shall only enter into any contract or agreement with any
general partner, member, shareholder, principal or Affiliate of Borrower or
Guarantor, or any general partner, member, principal or Affiliate thereof, upon
terms and conditions that are intrinsically fair and substantially similar to
those that would be available on an arms-length basis with third parties;
(xvi) ......shall not maintain its assets in such a manner that it will be
costly or difficult to segregate, ascertain or identify its individual assets
from those of any other Person;
(xvii)...... shall not assume or guaranty the debts of any other Person, hold
itself out to be responsible for the debts of another Person, or otherwise
pledge its assets for the benefit of any other Person or hold out its credit as
being available to satisfy the obligations of any other Person;
(xviii)..... shall not make any loans or advances to any other Person;
(xix) ...... shall file its own tax returns as required under federal and state
law;
(xx) ......shall hold itself out to the public as a legal entity separate and
distinct from any other Person and conduct its business solely in its own name
and shall correct any known misunderstanding regarding its separate identity;
(xxi) ......shall maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations;
(xxii)...... shall allocate shared expenses (including, without
limitation, shared office space);
(xxiii)..... shall pay (or cause the Property Manager of the Property and/or the
property manager of the Deer Park Property to pay on behalf of Borrower from
Borrower's funds) its own liabilities (including, without limitation, salaries
of its own employees) from its own funds; and
(xxiv)...... shall not acquire obligations or securities of its partners,
members or shareholders, as applicable.
(b) ......General Partners' Criteria. With respect to General Partners, the
"Separateness Provisions" mean a corporation or limited liability company which,
at all times complies in its own right with each of the requirements contained
in Section 7.02(a)(vi)-(x), (xii), (xiv) - (xvi) and (xvii)-(xxiv).
ARTICLE 8...
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that, as of the Closing Date:
8.01. ......Organization; Legal Status. Borrower and the General Partners are
each duly organized, validly existing and in good standing under the laws of its
state of formation and Borrower; (a) is duly qualified to transact business and
is in good standing in the state where the Property is located; and (b) has all
necessary approvals, governmental and otherwise, and full power and authority to
own, operate and lease the Property and otherwise carry on its business as now
conducted and proposed to be conducted. Borrower's correct legal name is set
forth on the first page of this Loan Agreement. Borrower is a "registered
organization" within the meaning of the UCC and Borrower's organization
identification number issued by its state of organization is correctly stated on
the signature page to this Loan Agreement.
8.02. ......Power; Authorization; Enforceable Obligations. Borrower has full
power, authority and legal right to execute, deliver and perform its obligations
under the Loan Documents. Borrower has taken all necessary action to authorize
the borrowing of the Loan on the terms and conditions of this Loan Agreement and
the other Loan Documents, and Borrower has taken all necessary action to
authorize the execution and delivery of its performance under the Loan
Documents. The officer or representative of Borrower signing the Loan Documents
has been duly authorized and empowered to do so. The Loan Documents constitute
legal, valid and binding obligations of Borrower, enforceable against Borrower
in accordance with their terms.
8.03. ......No Legal Conflicts. The borrowing of the Loan and Borrower's
execution, delivery and performance of its obligations under the Loan Documents
will not: (a) violate, conflict with, result in a default (following notice
and/or expiration of the related grace/cure period without cure or both, as
applicable) under any agreement or other instrument to which Borrower is a party
or by which the Property may be bound or affected, or any Requirements of Law
(including, without limitation, usury laws); (b) result in the creation or
imposition of any Lien whatsoever upon any of its assets, except the Liens
created by the Loan Documents; nor (c) to the best of Borrower's knowledge,
require any authorization or consent from, or any filing with, any Governmental
Authority (except for the recordation of the Security Instrument in the
appropriate land records in the state where the Property is located and UCC
filings relating to the security interest created hereby and by the Security
Instrument which are necessary to perfect Lender's security interest in the
Property).
8.04. ......No Litigation. No action, suit, or proceeding or investigation,
judicial, administrative or otherwise (including, without limitation, any
reorganization, bankruptcy, insolvency or similar proceeding) currently is
pending or, to the best of Borrower's knowledge, threatened or contemplated
against or affecting Borrower, General Partners, any Guarantor or the Property
that has not been disclosed by Borrower in writing to Lender and which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.
8.05. ......Business Purpose of Loan. Borrower will use the proceeds of the Loan
solely for the purpose of carrying on a business or commercial enterprise and
not for personal, family or household purposes.
8.06. ......Warranty of Title. Borrower has good, marketable and insurable fee
simple title of record to the Property, free and clear of all Liens whatsoever
except for the Permitted Encumbrances. The Security Instrument and Assignment of
Leases and Rents, when properly recorded in the appropriate recording office,
together with the UCC financing statements required to be filed in connection
therewith, will create (a) a valid, first priority, perfected lien on the
Property subject only to Permitted Encumbrances; and (b) perfected security
interests in and to, and perfected assignments as collateral of, all Personal
Property (including, without limitation, the Leases), all in accordance with the
terms thereof, in each case subject only to any Permitted Encumbrances. None of
the Permitted Encumbrances, individually or in the aggregate: (a) materially
interfere with the benefits of the security intended to be provided by the
Security Instrument, (b) materially and adversely affect the value of the
Property, or (c) materially and adversely impair the use and operations of the
Property. Borrower owns or has rights in all collateral given as security for
the Loan, free and clear of any and all Liens except for the Liens created in
favor of Lender in connection with the Loan. Borrower shall forever warrant,
defend and preserve the title and the validity and priority of the Liens created
in favor of Lender in connection with the Loan and shall forever warrant and
defend the same to Lender against the claims of all persons whomsoever.
8.07. ......Condition of the Property. With the exception of the items listed as
Immediate Repairs, the Improvements are structurally sound, in good repair and
free of defects in materials and workmanship and have been constructed and
installed in substantial compliance with the plans and specifications relating
thereto. All major building systems located within the Improvements (including,
without limitation, the heating and air conditioning systems, the electrical
systems, plumbing systems, and all liquid and solid waste disposal, septic and
sewer systems) are in good working order and condition and in compliance with
all Requirements of Law. The Property is free from damage caused by fire or
other casualty.
8.08. ......No Condemnation. No Condemnation proceeding has been commenced or,
to the best of Borrower's knowledge, is contemplated with respect to all or any
portion of the Property or for the relocation of roadways providing access to
the Property.
8.09. ......Requirements of Law. Except as previously disclosed to Lender with
respect to items listed as Immediate Repairs, The Property and its present and
contemplated use and occupancy are in full compliance with all Requirements of
Law.
8.10. ......Operating Permits. Borrower has obtained all licenses, permits,
registrations, certificates and other approvals, governmental and otherwise
(including, without limitation, zoning, building code, land use and
environmental), necessary for the use, occupancy and operation of the Property
and the conduct of its business thereat, all of which are in full force and
effect as of the date hereof. No event or condition currently exists which could
result in the revocation, suspension, or forfeiture thereof.
8.11. ......Separate Tax Lot. The Property is assessed for real estate tax
purposes as one or more wholly independent tax lot or lots, separate from any
adjoining land or improvements not constituting a part of the Property.
8.12. ......Flood Zone. Except as otherwise disclosed on the survey of the
Property provided to Lender in connection with the Loan, no portion of the
Improvements is located in an area identified by the Federal Emergency
Management Agency or any successor thereto, as an area having special flood
hazards.
8.13. ......Adequate Utilities. The Property is adequately served by all
utilities required for the current or contemplated use thereof. All water and
sewer systems are provided to the Property by public utilities, and the Property
has accepted or is equipped to accept such utility services.
8.14. ......Public Access. All public roads and streets necessary for access to
the Property for the current or contemplated use thereof have been completed,
are serviceable and all-weather, and are physically and legally open for use by
the public.
8.15. ......Boundaries. Except as may be otherwise disclosed on the survey of
the Property delivered to Lender, all of the Improvements lie wholly within the
boundaries and building restriction lines of the Property, and no easements or
other encumbrances affecting the Property (including, without limitation, the
Permitted Encumbrances) encroach upon any of the Improvements. Except as shown
on the survey of the Property, no improvements on adjacent properties encroach
upon the Property.
8.16. ......Mechanic Liens. No mechanics', materialmen's or similar liens or
claims have been, or may be, filed for work, labor or materials affecting the
Property which are or may be Liens prior, equal or subordinate to the Security
Instrument. Borrower shall have the right to contest any such lien or claim as,
and to the extent, set forth in Section 9.02(b).
8.17. ......Assessments. No unpaid assessments for public improvements or
assessments otherwise affecting the Property currently exist or, to the best of
Borrower's knowledge, are pending, nor, to the best of Borrower's knowledge,
will the Immediate Repairs or any other improvements contemplated to the
Property result in any such assessments.
8.18. ......Insurance. Borrower has obtained and delivered to Lender all
insurance policies Lender has required pursuant to Section 9.03 of this Loan
Agreement, with all Insurance Premiums prepaid thereunder, reflecting the
insurance coverage, amounts and other requirements set forth in this Loan
Agreement. No claims have been made under any of such insurance policies, and no
party, including Borrower, has done, by act or omission, anything which would
impair the coverage of any of such insurance policies.
8.19. ......Leases. With respect to the Leases: (a) the Rent Roll certified by
Borrower dated as of the Closing Date is true, complete and correct and the
Property is not subject to Leases other than the Leases identified on such Rent
Roll; (b) Borrower has delivered to Lender the standard form of lease used with
respect to the Property; (c) Borrower is the sole owner of the entire lessor's
interest in the Leases and has not assigned, pledged or otherwise transferred
the Rents reserved in the Leases (except to Lender); (d) all of the Leases are
bona fide, arms-length agreements with tenants unrelated to Borrower; (e) none
of the Rents have been collected for more than one (1) month in advance (and for
such purpose, a security deposit or last month's rent shall not be deemed rent
collected in advance); (f) all security deposits reflected on the Rent Roll have
been collected and are being held by Borrower in the full amount reported on the
Rent Roll; (g) all work to be performed by Borrower under each Lease has been
performed as required and has been accepted unconditionally by the applicable
tenant; (h) no offsets or defenses exist in favor of any tenant to the payment
of any portion of the Rents and Borrower has no monetary obligation to any
tenant under any Lease; (i) Borrower has not received notice from any tenant
challenging the validity or enforceability of any Lease; (j) all payments due
from tenants under the Leases are current, except as disclosed on the Rent Roll;
(k) to Borrower's knowledge, no tenant under any Lease is in default thereunder,
except with respect to any past due rents disclosed on the Rent Roll, or is a
debtor in any bankruptcy, reorganization, insolvency or similar proceeding, or
has demonstrated a history of payment problems which suggest financial
difficulty; (l) no Lease contains an option to purchase, right of first refusal
to purchase, or any other similar provision; and (m) no brokerage commissions,
finders fees or similar payment obligations are due and unpaid by Borrower or
any Affiliate of Borrower regarding any Lease which have not been disclosed in
writing to Lender.
8.20. ......Management Agreement. No change in the Property Manager or Property
Management Contract has occurred since the date of the most recent information
submitted to Lender with respect thereto, other than has been disclosed in
writing to Lender.
8.21. ......Financial Condition. Borrower currently is solvent and has received
reasonably equivalent value for its granting of the Liens in favor of Lender in
connection with the Loan. No change has occurred in the financial condition of
Borrower, General Partners, Guarantor, or any of their respective constituent
equity owners, general partners or managing members which would have a Material
Adverse Effect, since the date of the most recent financial statements submitted
to Lender with respect to each such party, other than has been disclosed in
writing to Lender.
8.22. ......Taxes. Borrower and General Partners have each filed all federal,
state, county, municipal, and city income tax returns required to have been
filed by them and have paid all taxes and related liabilities which have become
due pursuant to such returns or pursuant to any assessments received by them.
Borrower does not know of any basis for any additional assessment in respect of
any such taxes and related liabilities for prior years.
8.23. ......No Foreign Person. Borrower is not a "foreign person" within the
meaning of ss.1445(f)(3) of the Tax Code.
8.24. ......Federal Regulations. Borrower is not engaged nor will it engage,
principally, or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" within
the respective meanings of each of the quoted terms under Regulation U or
Regulation G.
8.25. ......Investment Company Act; Other Regulations. Borrower is not an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940 and the regulations issued
thereunder, each as amended. Borrower is not subject to regulations under any
federal or state statute or regulation which limits its ability to incur
indebtedness.
8.26. ......ERISA. (a) Borrower is not and will not be an "employee benefit
plan," as defined in ss.3(3) of ERISA, subject to Title I of ERISA, (b) none of
the assets of Borrower constitute or will constitute "plan assets" of one or
more such plans within the meaning of 29 C.F.R. ss.2510.3-101, (c) Borrower is
not and will not be a "governmental plan" within the meaning of ss.3(3) of
ERISA, and (d) transactions by or with Borrower are not and will not be subject
to state statutes regulating investment of, and fiduciary obligations with
respect to, governmental plans.
8.27. ......No Illegal Activity as Source of Funds. No portion of the Property
has been or will be purchased, improved, equipped or furnished with proceeds of
any illegal activity.
8.28. ......Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money
Laundering Laws. Borrower, each General Partner, each Guarantor, the Property
Manager, and to the best of Borrower's knowledge, after having made reasonable
inquiry (a) each Person owning an interest of 20% or more in Borrower, each
General Partner, a Guarantor, or the Property Manager (if the Property Manager
is an Affiliate of Borrower) and (b) each commercial tenant at the Property, if
any: (i) is not currently identified on OFAC List, and (ii) is not a Person with
whom a citizen of the United States is prohibited to engage in transactions by
any trade embargo, economic sanction, or other prohibition of United States law,
regulation, or Executive Order of the President of the United States. Borrower
agrees to confirm this representation and warranty in writing on an annual basis
if requested by Lender to do so.
8.29. ......Brokers and Financial Advisors. Borrower has not dealt with any
financial advisor, broker, underwriter, placement agent or finder in connection
with the transaction contemplated by this Loan Agreement who may be owed a
commission or other compensation which Borrower will not have paid in full as of
the Closing Date.
8.30. ......Equity Contribution. As of the Closing Date , the aggregate cash
equity investment in Borrower is not less than $2,398,667.00. Lender's funding
of the Loan shall be deemed evidence of approval of such amount.
8.31. ......Complete Disclosure; No Change in Facts or Circumstances. Borrower
has disclosed to Lender all material facts and has not failed to disclose any
material fact that could cause any representation or warranty made herein to be
materially inaccurate, incomplete or misleading. All information provided in or
supplied with the application for Loan, or in satisfaction of the terms thereof,
remains true, complete and correct in all material respects, and no adverse
change in any condition or fact has occurred that would make any of such
information materially inaccurate, incomplete or misleading.
8.32. ......Survival. The representations and warranties contained in this
Article 8 survive for so long as the Loan remains payable and any Obligation
remains to be performed.
8.33..Additional Assets/Contingent Liabilities. To the best of Borrower's
knowledge, there are no material contingent liabilities that would be likely to
interfere with Borrower's ability to repay the Loan or with its operation of the
Property.
ARTICLE 9...
BORROWER COVENANTS
9.01. ......Payment of Debt and Performance of Obligations. Borrower shall fully
and punctually pay the Loan and perform the Obligations when and as required by
the Loan Documents. Borrower may not prepay the Loan except in strict accordance
with this Loan Agreement.
9.02. ......Payment of Taxes and Other Lienable Charges.
(a) ......Payment Obligation. Except to the extent sums sufficient to pay Taxes
or Other Charges are deposited with Lender in accordance with this Loan
Agreement and Lender pays the same, Borrower shall promptly and fully pay by
their due date all Taxes and Other Charges now or hereafter assessed or charged
against the Property as they become due and payable. Borrower shall promptly
cause to be paid and discharged any Lien which may be or become a Lien against
the Property (including, without limitation, mechanic's or materialman's liens).
Except to the extent sums sufficient to pay Taxes or Other Charges have been
deposited with Lender in accordance with this Loan Agreement, Borrower shall
furnish to Lender, upon request, evidence satisfactory to Lender that all Taxes
and Other Charges have been paid and are not delinquent.
(b) ......Right to Contest. After prior written notice to Lender, Borrower, at
its own expense, may contest by appropriate legal proceeding, promptly initiated
and conducted in good faith with due diligence, the amount or validity or
application in whole or in part of any of the Taxes or Other Charges (for
purposes of this Section 9.02(b), "Other Charges" shall be deemed to include
mechanics' and materialman's liens and trade payables), provided that: (i) no
Event of Default exists; (ii) such proceeding suspends the collection of such
Taxes or Other Charges and the Property will not be in danger of being sold for
such unpaid Taxes or Other Charges, or Borrower has paid all of such Taxes or
Other Charges under protest; (iii) such proceeding is permitted under and is
conducted in accordance with the provisions of any other instrument to which
Borrower or the Property is subject and does not constitute a default
thereunder; (iv) if Borrower has not paid the disputed amounts in full under
protest, Borrower shall deposit with Lender (or a court or other Governmental
Authority as/if applicable) cash (or other security as may be approved, in
writing, by Lender) in an amount Lender deems sufficient to insure the payment
of any such Taxes or Other Charges together with interest and penalties thereon,
if any, provided that after a Securitization, one hundred twenty-five percent
(125%) of the contested amount (plus anticipated penalty and interest) shall be
deposited with Lender; (v) Borrower furnishes to Lender all other items
reasonably requested by Lender; and (vi) upon a final determination thereof,
Borrower promptly pays the amount of any such Taxes or Other Charges, together
with all costs, interest and penalties which may be payable in connection
therewith. Lender may pay over any security held by Lender pursuant to this
Section to the claimant entitled thereto at any time when, in Lender's judgment,
the entitlement of such claimant is established, and, to the extent the security
posted by Borrower with Lender is insufficient to pay the full amount due
(including, without limitation, any penalties or interest thereon), Borrower
shall be liable for the deficiency. If Lender pays the deficiency (which Lender
shall not be obligated to do), the amount paid by Lender shall be added to
principal, shall bear interest at the Default Rate until paid in full and
payment of such amounts shall be secured by the Security Instrument and other
collateral given to secure the Loan.
9.03. ......Insurance.
(a) ......Insurance Required During the Loan Term. Borrower, at Borrower's
expense, shall obtain and maintain during the term of the Loan such insurance
coverage (including, without limitation, type, minimum coverage amount, maximum
deductible and acceptable exclusions) for Borrower and the Property as Lender
deems reasonably necessary considering, among other things, the location and
occupancy of the Property and all uses of the Property. Lender reserves the
right to periodically review the insurance coverage Lender has required (types,
minimum coverage amounts and maximum deductibles) and to increase or otherwise
change the required coverage should Lender deem an increase or change to be
reasonably necessary under then existing circumstances. Without limiting
Lender's rights hereunder in any respect, it shall be deemed reasonable for
Lender to require no less coverage than the coverage Lender required to be in
place on the Closing Date. Subject to the foregoing, Lender shall require the
following insurance coverage to be effective during the term of the Loan,
coverage amounts and deductibles to be acceptable to Lender:
(i) ......Property Insurance. Casualty insurance must be maintained for the
Improvements and all Personal Property insuring against any peril now or
hereafter included within the classification "all risks of physical loss" and in
an amount at all times sufficient to prevent Borrower or Lender from becoming a
co-insurer within the terms of the applicable policies but in any event at all
times equal to the full replacement cost (as reasonably determined and adjusted
from time to time by Lender) of the Improvements and Personal Property (without
taking into account any depreciation and exclusive of excavations, footings and
foundations, landscaping and paving), without any exclusions for windstorms.
Where any part of the Improvements constitutes a legal non-conforming use under
the Requirements of Law, such insurance must include "Ordinance of Law
Coverage," with "Time Element," "Loss to the Undamaged Portion of the Building,"
"Demolition Cost" and "Increased Cost of Construction" endorsements, in the
amount of coverage requested by Lender. The policy must name Lender as an
insured mortgagee under a standard mortgagee clause. The deductible shall not
exceed $10,000.00.
(ii) ......Insurance against Acts of Terrorism. The insurance coverage provided
under Section 9.03(a) in effect as of the Closing Date and during the Loan term
must also insure against loss or damage resulting from acts of terrorism or
comparable coverage acceptable to Lender in its discretion. The deductible shall
not exceed $10,000.00.
(iii) ......Boiler and Machinery Insurance. Broad form boiler and machinery
insurance (without exclusion for explosion) and systems breakdown coverage must
be maintained, covering all steam boilers, pipes, turbines, engines or other
pressure vessels, electrical machinery, HVAC equipment, refrigeration equipment
and other similar mechanical equipment located in, on or about the Property in
such amount per accident equal to the full replacement cost thereof (as
reasonably determined and adjusted from time to time by Lender) and also
providing coverage against loss of occupancy or use arising from any breakdown
thereof. The policy must name Lender as an insured under a standard joint loss
clause and provide that all proceeds are to be paid to Lender.
(iv) ......Flood Insurance. Flood insurance must be maintained if any portion of
the Improvements is located in an area identified by the Federal Emergency
Management Agency or any successor thereto as a 100-year flood zone or special
hazard area. The required coverage amount shall be the maximum allowable per
building under the then-current guidelines published by the Federal Emergency
Management Agency or any successor thereto. Such coverage may need to be
purchased through excess carriers if the required coverage exceeds the maximum
insurance available for the Property under the then-current guidelines published
by the Federal Emergency Management Agency or any successor thereto. The policy
must name Lender as an insured mortgagee under a standard mortgagee clause.
(v) ......Business Interruption. Business interruption insurance must be
maintained in an amount sufficient to provide the lost rental income for the
Property for a period of not less than 1 year from the date of Casualty, with a
6 month extended period of indemnity. For purposes of this coverage, "rental
income" means the sum of (A) the total, then ascertainable Rents payable under
the Leases and (B) the total ascertainable amount of all other payments to be
received by Borrower from third parties which are the legal obligation of the
tenants, reduced to the extent such amounts would not be received because of
operating expenses not incurred during the period that any portion of the
Property cannot be occupied as a result of the Casualty. The policy must name
Lender as a loss payee and provide that all proceeds are to be paid to Lender.
(vi) ......Liability Insurance. Commercial general liability insurance coverage
must be maintained, covering bodily injury or death and property damage,
including all legal liability to the extent insurable and all court costs, legal
fees and expenses, arising out of, or connected with, the possession, use,
leasing, operation, maintenance or condition of the Property in such amounts
generally required by institutional lenders for properties comparable to the
Property but in no event for a combined single limit of less than $2 million and
$1 million per occurrence. The required coverage must provide for claims to be
made on an occurrence basis. The policy must name Lender as an additional
insured. The insurance coverage required under this subsection (vi) may be
satisfied by a layering of Commercial General Liability, Umbrella and Excess
Liability Policies, but in no event will the Commercial General Liability policy
be written for an amount less than $1,000,000 per occurrences and $2,000,000
aggregate for bodily injury and property damage liability. Lender may require
umbrella coverage which will be evaluated on a case by case basis.
(vii) ......Workers' Compensation Insurance. Workers' compensation insurance
must be maintained with respect to all employees employed at the Property, in
compliance with the laws of the state in which the Property is located.
(viii)...... Earthquake Insurance. If the Property is located in a high
earthquake hazard area, earthquake must be maintained in form, amount and with
deductibles satisfactory to Lender.
(ix) ......Other Coverage. Without limiting Lender's rights under this Section
9.03(a), Lender may also require Borrower to maintain builder's risk insurance
during any period of construction, renovation or alteration of the Improvements,
motor vehicles liability insurance in connection with all owned or non-owned
motor vehicles used in connection with the management or maintenance of the
Property, "dram shop" or similar coverage if alcoholic beverages are sold at the
Property, fidelity bond coverage for employees handling Rents and other income
from the Property, environmental insurance, sinkhole coverage and other
insurance with respect to the Property or on any replacements or substitutions
thereof or additions thereto against other insurable hazards or casualties which
at the time are commonly insured against in the case of property similarly
situated, due regard being given to the height and type of buildings, their
construction, location, use and occupancy.
(b) ......Qualified Insurers; Lender's Consent. All insurance must be issued
under valid and enforceable policies of insurance acceptable to Lender and
issued by one or more domestic primary insurers authorized to issue insurance in
the state in which the Property is located. Each insurer must have a minimum
investment grade rating of "A" or better from S & P and/or equivalent ratings
from one or more comparable credit rating agencies acceptable to Lender.
Lender's approval of insurance coverage at any time is not a representation or
warranty concerning the sufficiency of any coverage or the solvency of any
insurer, and Lender shall not be responsible for, nor incur any liability for,
the insolvency of the insurer or other failure of the insurer to perform.
(c) ......Policy Requirements. All policies must be for a term of not less than
a year and name Lender as a beneficiary of such coverage as provided in this
Section 9.03 or otherwise identified by Lender. Each policy must also contain:
(i) an endorsement or provision that permits recovery by Lender notwithstanding
the negligent or willful acts or omission of Borrower; (ii) a waiver of
subrogation endorsement as to Lender to the extent available at commercially
reasonable rates; (iii) a provision that prohibits cancellation or termination
before the expiration date, denial of coverage upon renewal, or material
modification without at least thirty (30) days prior written notice to Lender in
each instance; and (iv) effective waivers by the insurer of all claims for
Insurance Premiums against Lender. If the required insurance coverage is to be
provided under a blanket policy covering the Property and other properties and
assets not part of the Property, such blanket policy must specify the portion of
the total coverage that is allocated to the Property and any sublimit in such
blanket policy which is applicable to the Property and shall otherwise comply in
all respects with the requirements of this Section 9.03.
(d) ......Evidence of Insurance. Borrower must deliver to Lender on or before
the Closing Date either (i) the original of each insurance policy required
hereunder, (ii) a copy of each original policy certified by the insurance agent
to be a true, correct and complete copy of the original; (iii) the insurance
binder (Acord Form 25S provided by the insurance carrier) (as well as proof of
payment of the premium for the first year); (iv) a certificate of insurance
(Acord Form 28 provided by the insurance agent or, where form Acord Form 28 is
not available, a certificate of insurance confirms the same rights as are
confirmed by form Acord Form 28), (v) an original letter from the insurance
carrier on the primary layer, signed by an officer of such carrier, attaching
the form of insurance policy pursuant to which coverage will be provided (and,
if applicable, an original letter from each insurance carrier on the excess
layers, signed by an officer of each such carrier, agreeing that it is bound to
the form of insurance policy delivered by the primary carrier (i.e., agreeing to
"follow form" to the primary carrier); and (A) each such letter must set forth
the date by which the policy will be delivered to the Lender, which must not be
more than sixty (60) days following closing and (B) include as attachments all
mortgagee/loss payee/additional insured endorsements. Evidence of the required
coverage for the first year of the Loan (as well as proof of payment of the
first year's premium) must be delivered to Lender on or before the Closing Date
and thereafter not less than thirty (30) days prior to the expiration date of
each policy.
(e) ......Lender's Right to Obtain Insurance for Borrower. If Borrower fails to
deliver to Lender the evidence of insurance coverage required by this Loan
Agreement and does not cure such deficiency within ten (10) days after Lender's
notice of nondelivery, an Event of Default shall be deemed to have occurred
(without further cure period or notice) and Lender may procure such insurance at
Borrower's expense, without prejudice to Lender's rights upon an Event of
Default. All amounts advanced by Lender to procure the required insurance shall
be added to principal, secured by the Security Instrument and bear interest at
the Default Rate. Lender shall not be responsible for, nor incur any liability
for the insolvency of the insurer or other failure of the insurer to perform,
even though Lender has caused the insurance to be placed with the insurer after
Borrower's failure to furnish such insurance.
(f) ......Additional Insurance. Borrower shall not obtain insurance for the
Property in addition to that required by Lender without Lender's prior written
consent, which consent will not be unreasonably withheld provided that (i)
Lender is named insured on such insurance, (ii) Lender receives evidence of such
insurance as required by subsection (d) above, and (iii) such insurance complies
with all of the applicable requirements set forth in this Loan Agreement.
9.04. ......Obligations upon Condemnation or Casualty. If the Property, or any
portion thereof, shall be damaged or destroyed by a Casualty or become subject
to any Condemnation, the following shall apply:
(a) ......Generally. Borrower shall promptly notify Lender, in writing, of any
actual or threatened Condemnation or of any Casualty that damages or renders
unusable the Property or any part thereof and, except as otherwise provided
below, shall promptly and diligently pursue Borrower's claim for a Condemnation
award or insurance proceeds, as applicable. Borrower shall not make any
agreement in lieu of Condemnation or accept any Condemnation award without
Lender's prior written consent. Borrower shall not accept any settlement of
insurance proceeds with respect to a Casualty without Lender's prior written
consent. If requested by Lender, Borrower agrees to provide copies to Lender of
all notices or filings made or received by Borrower in connection with the
Casualty or Condemnation or with respect to collection of the insurance proceeds
or Condemnation award, as applicable. Notwithstanding that a Casualty or
Condemnation has occurred, or that rights to a Condemnation award or insurance
proceeds are pending, Borrower shall continue to pay the Loan at the time and in
the manner provided in this Loan Agreement.
(b) ......Lender Right to Pursue Claim. Borrower hereby grants Lender the
authority, at Lender's option, either: (i) to settle and adjust any claim
arising with respect to the Casualty or Condemnation without Borrower's consent,
or (ii) to allow Borrower to settle and adjust such claim; provided that, in
either case, the insurance proceeds or Condemnation award, as applicable, is
paid directly to Lender. Borrower hereby appoints Lender its attorney-in-fact
with full power of substitution (and which shall be deemed to be coupled with an
interest and irrevocable until the Loan is paid and the Security Instrument is
discharged of record, with Borrower hereby ratifying all that its said attorney
shall do by virtue thereof) to endorse any agreements, instruments or drafts
received in connection with a Casualty or Condemnation. If any portion of the
insurance proceeds or Condemnation award, as applicable, should be paid directly
to Borrower, Borrower shall be deemed to hold such amounts in trust for Lender
and shall promptly remit such amounts to Lender. If the Property is sold,
through foreclosure or otherwise, prior to the receipt of the Condemnation
award, Lender shall have the right, whether or not a deficiency judgment on the
Note shall have been sought, recovered or denied, to receive the proceeds of
such sale in an amount sufficient to pay the Loan in full. All expenses incurred
by Lender in the settlement and collection of amounts paid with respect to a
Casualty or Condemnation (including, without limitation, reasonable legal fees
and expenses) shall be deducted and reimbursed to Lender from the insurance
proceeds or Condemnation award, as applicable, prior to any other application
thereof. The insurance proceeds or Condemnation award paid or payable on account
of a Casualty or Condemnation, as applicable (including all business
interruption insurance proceeds paid as a result of such Casualty or
Condemnation), less expenses to be reimbursed to Lender hereunder, is referred
to herein as the "Restoration Proceeds."
(c) ......Application of Restoration Proceeds; Restoration Obligations. Except
as specifically hereafter provided in subsection (d) below, Lender may, in its
sole discretion, either (i) apply the Restoration Proceeds to payment of the
Loan, whether or not then due and payable, or (ii) hold and release the
Restoration Proceeds to Borrower (A) for the costs of Restoration undertaken by
Borrower in accordance with this Loan Agreement and (B) to cover any shortfall
in Operating Income as a result of such Casualty or Condemnation that is
necessary to pay in full the debt service payments due from Borrower on each
Payment Due Date and other Operating Expenses falling due during the period
until Restoration is completed; provided, however, that Lender shall have no
obligation to release Restoration Proceeds to fund amounts contemplated by
clause (B) unless (1) Lender is satisfied that Restoration Proceeds are
sufficient to pay in full the estimated cost to complete Restoration and (2) all
Operating Expenses to be funded with Restoration Proceeds are approved by
Lender. If Lender applies Restoration Proceeds to payment of the Loan and the
Loan is still outstanding, interest will continue to accrue and be due on the
unpaid principal at the Applicable Interest Rate. If Lender makes the
Restoration Proceeds available to Borrower for Restoration, Borrower shall
diligently pursue Restoration so as to restore the Property to at least equal
value and substantially the same character as existed immediately prior to such
Casualty or Condemnation. All plans and specifications for the Restoration and
all contractors, subcontractors and materialmen to be engaged in the
Restoration, as well as the contracts under which they have been engaged, shall
be subject to Lender's prior review and approval. Lender may engage, at
Borrower's expense, an independent engineer or inspector to assist Lender in its
review of the approvals requested of Lender in connection with the Restoration
and to periodically inspect the Restoration in progress and upon substantial
completion.
(d) ......Condition to Release of Restoration Proceeds for Restoration. Lender
agrees to make the Restoration Proceeds available to Borrower for Restoration as
long as:
(i) ......The Restoration Proceeds recovered are less than the outstanding
principal balance of the Loan.
(ii) ......No Event of Default exists.
(iii) ......Borrower demonstrates to Lender's satisfaction that the Restoration
Proceeds are sufficient to pay in full the estimated cost to complete
Restoration and any shortfalls in Operating Income as a result of such Casualty
or Condemnation that are anticipated until Restoration is substantially
completed, or, if the Restoration Proceeds are determined by Lender to be
insufficient to pay such costs in full, Borrower deposits with Lender, in cash
or by a cash equivalent acceptable to Lender, the additional amount estimated by
Lender to be necessary to pay the full cost of Restoration ("Restoration
Deficiency Deposit").
(iv) ......The Casualty or Condemnation has not occurred in the twelve (12)
months prior to the Maturity Date (without taking into consideration any
unexercised extension).
(v) ......Restoration can be completed not later than the earlier of (A) six (6)
months prior to the Maturity Date (without taking into consideration any
unexercised extension), (B) the earliest date by which completion is required
under the Requirements of Law to preserve the right to rebuild the Improvements
as they existed prior to the Casualty or Condemnation or (C) the expiration of
Borrower's business interruption insurance.
(vi) ......If a Condemnation has occurred, less than 10% of the Land is taken
and the land taken is along the perimeter or periphery of the Land, and no
portion of the Improvements are taken.
(vii) ......If a Casualty has occurred, less than 25% of the total floor area of
the Improvements is damaged or rendered unusable by the Casualty and Borrower
demonstrates to Lender's satisfaction that a reasonable means of access exists
to the Property and within the Improvements unaffected by the Casualty.
(viii)...... Borrower demonstrates to Lender's satisfaction that, upon
completion of Restoration, the net cash flow of the Property will be restored to
a level sufficient to cover all Operating Expenses of the Property, including,
without limitation, supporting a Debt Service Coverage Ratio at least equal to,
or greater than, the greater of (A) the Debt Service Coverage Ratio existing as
of the Closing Date, or (B) the Debt Service Coverage Ratio which existed as of
the date immediately preceding such Casualty or Condemnation.
(ix) ......The Property and its use after completion of Restoration will be in
compliance with, and permitted under, all Requirements of Law.
(e) ......Disbursement Procedure; Holdback. If the Restoration Proceeds will be
made available by Lender to Borrower for Restoration and the estimated cost of
Restoration approved by Lender (together with all other amounts then held by
Borrower pursuant to this Subsection (e)) is less than $250,000, Lender shall
disburse the entire amount of the Restoration Proceeds to Borrower, and Borrower
hereby covenants and agrees to use the Restoration Proceeds solely for
Restoration performed in accordance with this Loan Agreement. If, however, the
estimated cost of Restoration approved by Lender (together with all other
amounts then held by Borrower pursuant to this Subsection (e)) is more than
$250,000, Lender may retain the Restoration Proceeds in an interest bearing
escrow account and make periodic disbursements to Borrower as follows:
(i) ......Disbursements for Restoration.
(A) ......Lender will disburse Restoration Proceeds for the costs of Restoration
to, or as directed by, Borrower from time to time during the course of the
Restoration, upon receipt of evidence reasonably satisfactory to Lender that (1)
all materials installed and work and labor performed in connection with the
Restoration have been paid in full (except to the extent that they are to be
paid out of the requested disbursement), and (2) there exist no notices of
pendency, stop orders, mechanic's or materialman's liens or notices of intention
to file same, or any other Liens of any nature whatsoever on the Property
arising out of the Restoration which have not either been fully bonded and
discharged of record or, in the alternative, fully insured to Lender's
reasonable satisfaction by the title company insuring the Lien of the Security
Instrument.
(B) ......Lender may limit disbursements to not more than one (1) per month.
(C) ......Lender may hold-back from each requested disbursement an amount equal
to the amount which Borrower is permitted to withhold under its contract with
the contractor or supplier to be paid with the proceeds of such disbursement
(either, a "Restoration Holdback"). Amounts held as the Restoration Holdback
shall be disbursed once: (1) Lender receives satisfactory evidence that
Restoration has been fully completed in accordance with all Requirements of Law;
(2) Lender receives satisfactory evidence that all Restoration costs have been
paid in full or will be fully paid from the remaining Restoration Proceeds and
the Restoration Holdback; and (3) Lender receives, at Lender's option, a search
of title to the Property, effective as of the date on which the Restoration
Holdback is to be disbursed, showing no Liens other than the Permitted
Encumbrances or an endorsement to its Title Insurance Policy which updates the
effective date of such policy to the date on which the Restoration Holdback is
to be disbursed and which shows no Liens since the date of recordation of the
Security Instrument (other than the Permitted Encumbrances).
(D) ......Notwithstanding subsection (C) above, Lender may release from the
Restoration Holdback payments to a contractor or supplier if: (1) Lender
receives satisfactory evidence that such contractor has satisfactorily completed
its contract with Borrower; (2) such contractor or supplier delivers to Lender
an acceptable written waiver of its mechanic's lien, in recordable form; and (3)
Borrower provides written consent from the surety company, if any, which has
issued a payment or performance bond with respect to such contractor or
supplier.
(ii) ......Disbursements for Shortfalls in Operating Income. Provided that
Lender determines that the Restoration Proceeds are sufficient to pay in full
the estimated cost to complete Restoration, Lender will disburse Restoration
Proceeds not reserved for Restoration to pay the shortfall in Operating Income
necessary to pay (A) first, the debt service payments due from Borrower on each
Payment Due Date falling due from the date of the Casualty or Condemnation
through the date on which Restoration is substantially completed and (B) then,
any Operating Expenses approved by Lender. Lender may require satisfactory
evidence that Operating Expenses to be paid have been incurred and may issue
payments directly to the Person entitled to the payment claimed as an Operating
Expense.
(iii) ......Restoration Proceeds Deemed Insufficient. If, in Lender's judgment,
at any time during Restoration, the undisbursed portion of the Restoration
Proceeds shall not be sufficient to pay the costs remaining for Restoration to
be completed or to pay any shortfall in Operating Income needed to pay in full
Borrower's debt service payments on the Loan and Operating Expenses anticipated
to be incurred during the period of Restoration, Borrower shall deposit the
deficiency with Lender, in cash or by a cash equivalent acceptable to Lender
(also called a "Restoration Deficiency Deposit"), within ten (10) days after
Lender's notice of such deficiency, and no further disbursement of the
Restoration Proceeds will be made until such funds are deposited. Amounts held
by Lender as the Restoration Deficiency Deposit shall be disbursed in accordance
with this Section 9.04.
(iv) ......Consequence of Event of Default. Lender shall not be obligated to
disburse Restoration Proceeds or amounts from the Restoration Holdback when an
Event of Default exists, and upon the occurrence of an Event of Default, any
undisbursed portion of the Restoration Proceeds (including the Restoration
Deficiency Deposit and the Restoration Holdback) may, at Lender's option, be
applied against the Loan, whether or not then due or accelerated, in such order
and manner as Lender determines.
(v) ......Surplus Restoration Proceeds After Restoration Completion. Any
Restoration Proceeds remaining after full payment of Restoration costs and
unpaid expenses due to Lender for which Lender is permitted reimbursement under
this Section 9.04 shall be released to Borrower provided no Event of Default
exists, and Borrower delivers evidence satisfactory to Lender that (i)
Restoration has been fully completed in accordance with all Requirements of Law
and (ii) the Property is free and clear of all Liens which may be asserted with
respect to the Restoration.
9.05. ......Inspections and Right of Entry. Subject to the rights of tenants in
possession, Lender and its agents may enter the Property upon prior notice to
Borrower (notice to be given unless an Event of Default or an emergency exists,
as determined by Lender in good faith) to inspect the Property and Borrower's
books and records relating to the Property. In making such entry and inspection,
Lender agrees to use reasonable efforts to minimize disturbance to Borrower and
tenants of the Property. Lender and its agents shall have access (subject to the
rights of tenants in possession), at all reasonable times, to the Property,
including, without limitation, all contracts, plans and specifications, permits,
licenses and approvals required or obtained in connection with the Property.
9.06. ......Leases and Rents.
(a) ......Right to Enter into New Leases. Borrower may enter into new Leases for
space at the Property and renew or extend existing Leases without Lender's prior
written consent provided that each such Lease: (i) is documented using, and does
not materially deviate from, the Standard Lease Form; (ii) provides for rental
rates and terms comparable to existing local market rates and terms (taking into
account the type and quality of the tenant) as of the date such Lease is
executed (unless in the case of a renewal or extension, the rent payable during
such renewal term, or a formula or other method to compute such rent, has been
specified in the original Lease); (iii) is an arms-length transaction with a
tenant that is not an Affiliate of Borrower; (iv) will not have a Material
Adverse Effect on the value of the Property taken as a whole; and (v) is
subordinate to the Security Instrument (other than with respect to residential
leases). All proposed Leases that do not satisfy the requirements set forth in
this Section require Lender's prior written approval at Borrower's expense
(including reasonable legal fees and expenses). Borrower shall promptly deliver
to Lender a copy of each Lease (other than a residential lease) entered into
after the Closing Date, together with written certification from a Responsible
Officer which confirms that (x) the copy delivered is a true, complete and
correct copy of such Lease and (y) Borrower has satisfied all conditions of this
Section. Lender's acceptance of Borrower's certification or a copy of any Lease
shall not be deemed a waiver of the requirements of this Section if the Lease is
not in compliance herewith.
(b) ......Leasing Decisions. Provided no Event of Default exists and except as
otherwise provided in this Subsection, Borrower may, without Lender's prior
written consent: (i) amend or supplement any Lease or waive any term thereof
(including, without limitation, shortening the lease term, reducing rents,
granting rent abatements, or accepting a surrender of all or any portion of the
leased space); (ii) cancel or terminate any Lease; or (iii) consent to a
tenant's assignment of its Lease or subleasing of space; provided that none of
the foregoing actions (taking into account the planned alternative use of the
affected space in the case of termination, rent reduction, surrender of space or
shortening of term) will have a Material Adverse Effect on the value of the
Property taken as a whole and such Lease, as amended, supplemented or waived, is
otherwise in compliance with the requirements of this Loan Agreement.
Termination of a Lease with a tenant who is in default beyond applicable notice
and grace/cure periods shall not be considered an action which has a Material
Adverse Effect on the value of the Property taken as a whole. Any action with
respect to any Lease that does not satisfy the requirements set forth in this
Section requires Lender's prior written approval at Borrower's expense
(including reasonable legal fees). Borrower shall promptly deliver to Lender a
copy of all instruments documenting the action taken, together with written
certification from a Responsible Officer that (x) the copies delivered are true,
complete and correct copies of the materials represented thereby and (y)
Borrower has satisfied all conditions of this Section. Lender's acceptance of
Borrower's certification or a copy of such Lease materials shall not be deemed a
waiver of the requirements of this Section if the action taken is not in
compliance herewith.
(c) ......Observance of Lessor Obligations. Borrower (i) shall observe and
perform all obligations imposed upon the lessor under the Leases and shall not
do or permit to be done anything to impair the value of any of the Leases as
security for the Loan; (ii) upon Lender's request, shall promptly send copies to
Lender of all notices of default which Borrower shall send or receive (or may
have sent or received) under any non-residential Lease; (iii) shall enforce in a
commercially reasonable manner all of the material terms, covenants and
conditions contained in the Leases to be observed or performed by the tenant;
(iv) shall not collect any Rents more than one (1) month in advance (and for
this purpose a security deposit or last month's rent shall not be deemed rent
collected in advance); and (v) shall not execute any assignment or pledge of the
lessor's interest in any of the Leases or the Rents (other than in connection
with the Loan).
9.07. ......Use of Property. Borrower shall not allow changes in the use of the
Property without Lender's prior written consent. Borrower shall not initiate,
join in, or consent to any change in any private restrictive covenant or zoning
or land use ordinance limiting or defining the uses which may be made of the
Property. If use of all or any portion of the Property is or shall become a
nonconforming use, Borrower will not cause or permit the nonconforming use to be
discontinued or the nonconforming portion of the Property to be abandoned
without Lender's prior written consent.
9.08. ......Maintenance of Property. Borrower shall maintain the Property in a
good and safe condition and repair. No portion of the Property shall be removed,
demolished or materially altered (except for normal repair or replacement)
without Lender's prior written consent. Borrower shall promptly repair or
replace any portion of the Property which may become damaged, worn or
dilapidated.
9.09. ......Waste. Borrower shall not commit or suffer any waste of the Property
or do or permit to be done thereon anything that may in any way impair the value
of the Property or invalidate the insurance coverage required hereunder to be
maintained by Borrower. Borrower will not, without Lender's prior written
consent, permit any drilling or exploration for or extraction, removal, or
production of any minerals from the surface or the subsurface of the Property,
regardless of the depth thereof or the method of mining or extraction thereof.
9.10. ......Compliance with Laws.
(a) ......Obligation to Perform. Borrower shall promptly and fully comply with
all Requirements of Law now or hereafter affecting the Property. Borrower shall
notify Lender promptly of Borrower's knowledge or receipt of any notice related
to a violation of any Requirements of Law or of the commencement of any
proceedings or investigations which relate to compliance with Requirements of
Law. At Lender's request, Borrower shall provide Lender with copies of all
notices, reports or other documents relating to any litigation or governmental
investigation relating to Borrower or the Property.
(b) ......Right to Contest. After prior written notice to Lender, Borrower, at
its own expense, may contest by appropriate legal proceeding, promptly initiated
and conducted in good faith and with due diligence, the Requirements of Law
affecting the Property or alleged violation thereof, provided that: (i) no Event
of Default exists; (ii) such proceedings shall be permitted under and be
conducted in accordance with the Requirements of Law; (iii) the Property will
not be in danger of being sold, forfeited, terminated, cancelled or lost; (iv)
non-compliance with such Requirement of Law shall not impose any civil, criminal
or environmental liability on Lender or Borrower; (v) Borrower deposits with
Lender cash (or other security acceptable to Lender) in such amount as Lender
deems sufficient to cover loss or damage that may result from Borrower's failure
to prevail in such contest, provided that after a Securitization, one hundred
twenty-five percent (125%) of the amount estimated by Lender is deposited; (vi)
Borrower furnishes to Lender all other items reasonably requested by Lender; and
(vii) upon a final determination thereof, Borrower promptly complies with the
obligations determined to be applicable.
9.11. ......Financial Reports, Books and Records.
(a) ......Delivery of Financial Statements. Borrower shall keep adequate books
and records of account with respect to its financial condition and the operation
of the Property, in accordance with GAAP consistently applied (or such other
method which is reasonably acceptable to Lender), and shall furnish the
following to Lender, each prepared in such detail as reasonably required by
Lender and certified by a Responsible Officer to be true, complete and correct:
(i) ......as soon as available, but in any event within thirty (30) days after
the end of each fiscal quarter, a quarterly Rent Roll providing the required
information as of the end of such fiscal quarter;
(ii) ......as soon as available, but in any event within thirty (30) days after
the end of each fiscal quarter, a quarterly operating statement for the Property
detailing the operating income received, operating expenses incurred, the cost
of all Immediate Repairs, Replacements performed or paid during such quarter,
and the Debt Service Coverage Ratio as of the end of such fiscal quarter;
(iii) ......within thirty (30) days after the end of each fiscal quarter, a
quarterly Compliance Certificate;
(iv) ......as soon as available, but in any event within ninety (90) days after
the close of Borrower's fiscal year, (A) an annual Rent Roll, presented on an
annual basis consistent with the quarterly Rent Rolls described above; (B) an
annual operating statement for the Property presented on an annual basis
consistent with the quarterly operating statements described above; (C) an
annual balance sheet and profit and loss statement for Borrower; and (D) a
statement of change of financial position of Borrower, setting forth in
comparative form the figures for the previous fiscal year;
(v) ......as soon as available, but in any event at least thirty (30) days prior
to the start of each calendar year, an annual operating budget for the Property
presented on a monthly basis consistent with the information required in the
quarterly operating statement described above which budget shall be subject to
Lender's approval (notice of approval or disapproval not to be unreasonably
delayed). Each such budget as approved shall be the "Approved Budget";
(vi) ......Upon Lender's request, monthly Rent Roll and operating statements for
the Property; and
(vii) ......such other financial information or property management information
(including, without limitation, copies of Borrower's state and federal tax
returns, information on tenants under Leases to the extent such information is
available to Borrower, copies of bank account statements from financial
institutions where funds owned or controlled by Borrower are maintained, and an
accounting of security deposits) as may reasonably be required by Lender from
time to time.
(b) ......Lender Audit Rights. Lender and its agents have the right, upon prior
written notice to Borrower (notice to be given unless an Event of Default
exists), to examine the records, books and other papers which reflect upon
Borrower's financial condition or pertain to the income, expense and management
of the Property and to make copies and abstracts from such materials. Lender
also shall have the right, from time to time (but, in the absence of an Event of
Default existing, not more than annually) and upon prior notice to Borrower
(notice to be given unless an Event of Default exists), to have an independent
audit conducted of any of Borrower's financial information. Lender shall pay the
cost of such audit unless Lender performed the audit following the occurrence of
an Event of Default or if the results of Lender's audit disclose an error by
more than ten percent (10%), in which case (and in addition to Lender's other
remedies) Borrower shall pay the cost incurred by Lender with respect to such
audit upon Lender's demand. Upon Borrower's failure to pay such amounts, and in
addition to Lender's remedies for Borrower's failure to perform, the unpaid
amounts shall be added to principal, shall bear interest at the Default Rate
until paid in full, and payment of such amounts shall be secured by the Security
Instrument and other collateral given to secure the Loan.
(c) ......Financial Reports from Guarantors and General Partners. Borrower shall
cause each Guarantor and, at Lender's request, each General Partner, to provide
to Lender (i) within ninety (90) days after the close of such party's fiscal
year, such party's balance sheet and profit and loss statement (or if such party
is an individual, within ninety (90) days after the close of each calendar year,
such party's personal financial statements) in form reasonably satisfactory to
Lender and certified by such party to be accurate and complete; and (ii) such
additional financial information (including, without limitation, copies of state
and federal tax returns) as Lender may reasonably require from time to time (but
no more frequently than annually, unless an Event of Default exists) and in such
detail as reasonably required by Lender.
(d) ......Data Delivery Failure. If a Data Delivery Failure occurs, Borrower
shall pay Lender, without demand, the applicable Data Delivery Failure Fee on
the first Business Day following each occurrence of a Data Delivery Failure. If
a Data Delivery Failure occurs on more than two (2) separate occasions while the
Loan is outstanding, it shall be an immediate Event of Default. The collection
of the Data Delivery Failure Fee shall be in addition to Lender's other rights
and remedies under the Loan Documents and, until paid, shall be deemed added to
the Debt, secured by the Security Instrument and shall bear interest at the
Default Rate.
9.12. ......Performance of Other Agreements. Borrower shall observe and perform
in a timely manner each and every obligation to be observed or performed by
Borrower pursuant to the terms of any agreement or recorded instrument affecting
or pertaining to the Property or used in connection with the operation of the
Property (including, without limitation, the Operating Agreements). Without
limiting the foregoing, Borrower shall (a) give prompt notice to Lender of any
notice received by Borrower with respect to any of the Operating Agreements
which alleges a default or nonperformance by Borrower thereunder, together with
a complete copy of any such notice; (b) enforce, short of termination,
performance of the Operating Agreements to be performed or observed, and (c) not
terminate or amend, or waive compliance with, any of the Operating Agreements
without Lender's prior written consent, except as may be (i) permitted pursuant
to the respective terms thereof or (ii) absent the existence of an Event of
Default, done in the ordinary course of business. If the absence of an Operating
Agreement that has terminated will have a Material Adverse Effect on the value
of the Property, Borrower agrees to enter into a new Operating Agreement in
replacement of the terminated Operating Agreement, containing terms and
conditions no less favorable to Borrower than the terminated Operating
Agreement. Borrower shall notify Lender if Borrower does not replace the
terminated Operating Agreement.
9.13. ......Existence; Change of Name; Location as a Registered Organization.
Borrower shall continuously maintain (a) its existence and shall not dissolve or
permit its dissolution, and (b) its rights and franchises to do business in the
state where the Property is located. Borrower shall not change Borrower's name,
legal entity, or its location as a registered organization within the meaning of
the UCC, without notifying Lender of such change in writing at least thirty (30)
days prior to its effective date. The notification requirements set forth in
this Section are in addition to, and not in limitation of, the requirements of
Article 7. Borrower shall pay all costs and expenses incurred by Lender
(including, without limitation, reasonable legal fees) in connection with any
change described herein.
9.14. ......Property Management.
(a) ......Borrower shall cause the Property Manager to manage the Property in a
manner equivalent to other Class B apartment complexes in the Raleigh, North
Carolina metropolitan area. Borrower shall not remove or replace the Property
Manager (which, with respect to a Property Manager which is an Affiliate of
Borrower, shall be deemed to occur upon a change of Control of the Property
Manager) or modify or waive any material terms of the Property Management
Contract without Lender's prior written consent and, if requested by Lender, a
Rating Confirmation. Upon replacement of the Property Manager, Borrower shall,
and shall cause the new manager of the Property to, execute an Assignment of
Property Management Contract in form and substance similar to the Assignment of
Property Management Contract executed by the Property Manager. Borrower shall
comply with all obligations of Borrower under the Assignment of Property
Management Contract. The property management fee and all other fees payable
under the Property Management Contract shall not exceed [5%] of gross revenues.
(b) ......Termination of Property Manager. Irrespective of whether an Event of
Default has occurred, Borrower agrees, that, if (a) Lender, in its reasonable
discretion, determines that the Property is not being properly managed in
accordance with management practices customarily employed for properties similar
to the Property, or (b) Property Manager becomes insolvent, Lender may deliver
written notice to Borrower and Property Manager, which notice shall specify in
reasonable detail the grounds for Lender's determination. If Lender reasonably
determines that the conditions specified in Lender's notice are not remedied to
Lender's reasonable satisfaction by Borrower or Property Manager within thirty
(30) days from receipt of such notice or if Borrower or Property Manager have
failed to diligently undertake correcting such conditions within such thirty
(30) day period. Lender may direct Borrower to terminate the Property Management
Contract and to replace Property Manager with a management company acceptable to
Lender.
9.15. ......ERISA. Borrower shall not engage in any transaction which would
cause any obligation or action taken or to be taken hereunder by Borrower (or
the exercise by Lender of any of its rights under any of the Loan Documents) to
be a non-exempt (under a statutory or administrative class exemption) prohibited
transaction under ERISA. Borrower agrees to deliver to Lender such
certifications or other evidence throughout the term of the Loan as requested by
Lender in its sole discretion to confirm compliance with Borrower's obligations
under this Section 9.15 or to confirm that Borrower's representations and
warranties regarding ERISA remain true.
9.16. ......Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money
Laundering Laws. Borrower shall comply with all Requirements of Law relating to
money laundering, anti-terrorism, trade embargoes and economic sanctions, now or
hereafter in effect. Without limiting the foregoing, Borrower shall not take any
action, or permit any action to be taken, that would cause Borrower's
representations and warranties in Section 8.28 of this Loan Agreement to become
untrue or inaccurate at any time during the term of the Loan. Borrower shall
notify Lender promptly of Borrower's actual knowledge that the representations
and warranties in Section 8.28 of this Loan Agreement may no longer be accurate
or that any other violation of the foregoing Requirements of Law has occurred or
is being investigated by Governmental Authorities. In connection with such an
event, Borrower shall comply with all Requirements of Law and directives of
Governmental Authorities and, at Lender's request, provide to Lender copies of
all notices, reports and other communications exchanged with, or received from,
Governmental Authorities relating to such event. Borrower shall also reimburse
Lender for any expense incurred by Lender in evaluating the effect of such an
event on the Loan and Lender's interest in the collateral for the Loan, in
obtaining any necessary license from Governmental Authorities as may be
necessary for Lender to enforce its rights under the Loan Documents, and in
complying with all Requirements of Law applicable to Lender as the result of the
existence of such an event and for any penalties or fines imposed upon Lender as
a result thereof.
9.17. ......Equity Contribution. Until the Loan is paid in full, the equity
owners of Borrower shall maintain at all times an aggregate cash equity
investment in Borrower in an amount not less than $2,398,667.00 and, within ten
(10) business days of Lender's request, Borrower shall demonstrate in writing
and to Lender's reasonable satisfaction, compliance with this Section.
9.18. ......Intentionally Omitted.
9.19. ......Intentionally Omitted.
9.20. ......Intentionally Omitted.
ARTICLE 10..
NO TRANSFERS OR ENCUMBRANCES; DUE ON SALE
10.01....... Prohibition Against Transfers. Borrower shall not permit any
Transfer to be undertaken or cause any Transfer to occur other than a Permitted
Transfer. Any Transfer made in violation of this Loan Agreement shall be void.
10.02....... Lender Approval. Lender's decision to approve any Transfer proposed
by Borrower shall be made in Lender's sole discretion and Lender shall not be
obligated to approve any Transfer. Borrower agrees to supply all information
Lender may request to evaluate a Transfer, including, without limitation,
information regarding the proposed transferee's ownership structure, financial
condition and management experience for comparable properties. Borrower
acknowledges that Lender may impose conditions to its approval of a Transfer,
including, without limitation, (i) no Event of Default, or an event which with
the giving of notice or lapse of time or both could become an Event of Default,
has occurred and is continuing, (ii) approval of the proposed transferee's
ownership structure, financial condition and management experience for
comparable properties, (iii) payment of an assumption fee equal to one percent
(1%) of the outstanding principal balance of the Loan, (iv) adding guarantors or
changing the scope of the Guaranty, (v) assumption in writing (acceptable to
Lender in its sole discretion) by the transferee and a guarantor (which
guarantor must be acceptable to Lender in its sole discretion) of all
obligations of the transferor and Guarantor under the Loan Documents and
execution and delivery of such other documentation as may be required by Lender
and the Rating Agencies, (vi) delivery of a new substantive consolidation
opinion, a tax opinion and other applicable opinions if required by Lender and
the Rating Agencies, (vii) adjusting amounts required for the Reserve Accounts,
and (viii) obtaining Rating Confirmations if a Securitization has occurred.
Borrower agrees to pay all of Lender's expenses incurred in connection with
reviewing and documenting a Transfer (including, without limitation, the costs
of obtaining Rating Confirmations if required), which amounts must be paid by
Borrower whether or not the proposed Transfer is approved. Upon Borrower's
failure to pay such amounts, and in addition to Lender's remedies for Borrower's
failure to perform, the unpaid amounts shall be added to principal, shall bear
interest at the Default Rate until paid in full, and payment of such amounts
shall be secured by the Security Instrument and other collateral given to secure
the Loan.
10.03....... Intentionally Omitted.
10.04....... Releases of the Mortgaged Property. Lender may release portions of
the Property for such consideration and upon such conditions as Lender may
require without, as to the remainder of the Property, in any way impairing or
affecting the Lien or priority of the Security Instrument or improving the
position of any subordinate lienholder with respect thereto, except to the
extent that the obligations hereunder shall have been reduced by the actual
monetary consideration, if any, received by Lender for such release, and Lender
may accept by assignment, pledge or otherwise any other property in place
thereof as Lender may require without being accountable for so doing to any
other lienholder. Notwithstanding anything to the contrary herein, Borrower
shall have no right to request and Lender shall have no obligation to grant its
consent to any release pursuant this Section 10.04.
10.05....... OFAC Compliance; Substantive Consolidation Opinion. Notwithstanding
anything to the contrary contained in this Section 10, (a) no transfer (whether
or not such transfer shall constitute a Transfer) shall be made to any Person on
the OFAC list and (b) in the event any transfer (whether or not such transfer
shall constitute a Transfer) results in any Person owning in excess of
forty-nine percent (49%) of the ownership interest in Borrower or either General
Partner, Borrower shall, if required by Lender due to Rating Agency
requirements, prior to such transfer, deliver a substantive consolidation
opinion letter with respect to the new equity owners which is acceptable in all
respects to Lender and to the Rating Agencies if a Securitization has occurred.
ARTICLE 11..
EVENTS OF DEFAULT; REMEDIES
11.01....... Events of Default. The occurrence of any one or more of the
following events shall, at Lender's option, constitute an "Event of Default"
hereunder:
(a) ......If any payment of principal and interest (or interest if the Loan is
interest-only) is not paid in full on or before the fifth (5th) day after the
Payment Due Date on which such payment is due (e.g., if the Payment Due Date is
the 1st day of month, an Event of Default occurs if the payment is not received
on or before the fifth (5th) day of the month);
(b) ......If any monthly payment required to be made to a Reserve Account is not
paid in full on or before the fifth (5th) day after the Payment Due Date on
which such payment is due;
(c) ......If unpaid principal, accrued but unpaid interest and all other amounts
outstanding under the Loan Documents are not paid in full on or before the
Maturity Date;
(d) ......If an "Event of Default" as that term is defined under any other Loan
Document has occurred;
(e) ......If the Exit Fee is not paid in full when required;
(f) ......If any representation or warranty made by Borrower, either General
Partner or any Guarantor herein, in the Guaranty, in the Environmental Indemnity
or in any other Loan Document, or in any certificate, report, financial
statement or other instrument or document furnished to Lender in connection
herewith or hereafter, or in connection with any request for consent by Lender
made during the term of the Loan shall have been false or misleading in any
material respect as of the date made;
(g) ......If an Event of Default has occurred under any of the other Loan
Documents;
(h) ......If Borrower, either General Partner or any Guarantor shall (i) make an
assignment for the benefit of creditors; (ii) generally not be paying its debts
as they become due; or (iii) admit in writing its inability to pay its debts as
they become due;
(i) ......If (i) Borrower, either General Partner or any Guarantor shall
commence any case, proceeding or other action under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, conservatorship or relief of debtors (A) seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets; or (ii) there shall be commenced against
Borrower, either General Partner or any Guarantor any case, proceeding or other
action of a nature referred to in clause (i) above by any party other than
Lender which (A) results in the entry of an order for relief or any such
adjudication or appointment, or (B) remains undismissed, undischarged or
unbonded for a period of ninety (90) days; or (iii) there shall be commenced
against Borrower, either General Partner or any Guarantor any case, proceeding
or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets
which results in the entry of any order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within ninety (90)
days from the entry thereof; or (iv) Borrower, either General Partner or any
Guarantor shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i), (ii),
or (iii) above;
(j) ......If any Guarantor repudiates or revokes the Guaranty or
Environmental Indemnity;
(k) ......Any judgment for monetary damages is entered against Borrower, either
General Partner or any Guarantor which, in Lender's sole judgment, has a
Material Adverse Effect or is not covered to Lender's satisfaction by
collectible insurance proceeds;
(l) ......If Borrower or either General Partner violates or fails to comply with
any provision of Article 7 of this Loan Agreement (captioned: Separateness
Requirements);
(m) ......If Borrower violates or fails to comply with any of the provisions of
Section 9.03 (captioned: Insurance), Section 9.06 (captioned: Leases and Rents),
or Section 9.13 (captioned: Existence, Change of Name or Location as a
Registered Organization);
(n) ......If a Transfer (other than a Permitted Transfer) shall occur without
Lender's prior written consent or in violation of the terms of Lender's consent;
(o) ......If Borrower abandons or ceases work on any Immediate Repair or
Replacement for a period of more than twenty (20) days, unless such cessation
results from causes beyond the reasonable control of Borrower and Borrower is
diligently pursuing reinstitution of such work;
(p) ......If a Lien other than a Permitted Encumbrance is filed against the
Property, unless such Lien is promptly contested in good faith by Borrower as
permitted in accordance with Section 9.02 (b);
(q) ......If a Data Delivery Failure occurs (i) more than two (2) times in any
twelve (12) month period or (ii) more than five (5) times in total;
(r) ......Intentionally Omitted.
(s) ......Intentionally Omitted.
(t) ......if (i) any Rate Cap is terminated for any reason by Borrower or the
Rate Cap Provider, or (ii) the Rate Cap Provider defaults in the performance of
its monetary obligations under the Rate Cap or (iii) the rating of the Rate Cap
Provider is subject to any downgrade, withdrawal or qualification by a Rating
Agency, and Borrower does not within ten (10) days (A) replace such Rate Cap
with a replacement Rate Cap which satisfies all of the requirements of Section
2.07 of this Loan Agreement, and is otherwise in the same notional amount and
Strike Rate as the Rate Cap it is replacing and (b) deliver to Lender, in form
and substance reasonably satisfactory to Lender (x) an assignment of such Rate
Cap from the replacement Rate Cap Provider, (y) an acknowledgment and consent
from such replacement Rate Cap Provider in substantially the same form as the
Rate Cap Provider Consent delivered to Lender as of the Closing Date and (z) any
other opinions or documents required pursuant to Section 2.07 of this Loan
Agreement.
(u) ......Intentionally Omitted.
(v) ......Except for the specific defaults set forth in this Section 11.01, if
any other default occurs hereunder or under any other Loan Document which is not
cured (i) in the case of any default which can be cured by the payment of a sum
of money, within five (5) days after written notice from Lender to Borrower, or
(ii) in the case of any other default, within thirty (30) days after written
notice from Lender to Borrower; provided that if a default under clause (ii)
cannot reasonably be cured within such thirty (30) day period and Borrower has
responsibly commenced to cure such default promptly upon notice thereof from
Lender and thereafter diligently proceeds to cure same, such thirty (30) day
period shall be extended for so long as it shall require Borrower, in the
exercise of due diligence, to cure such default, but in no event shall the
entire cure period be more than sixty (60) days. 11.02....... Remedies. If an
Event of Default occurs, Lender may, at its option, and without prior notice or
demand, do and hereby is authorized and empowered by Borrower so to do, any or
all of the following:
(a) ......Acceleration. Lender may declare the entire unpaid principal balance
of the Loan to be immediately due and payable. If such acceleration takes place
prior to the Open Date, an amount equal to the Prohibited Prepayment Fee shall
be added to the balance of the Debt.
(b) ......Recovery of Unpaid Sums. Lender may, from time to time, take legal
action to recover any sums as the same become due, without regard to whether or
not the Loan shall be accelerated and without prejudice to Lender's right
thereafter to accelerate the Loan or exercise any other remedy, if such sums
remain uncollected.
(c) ......Foreclosure. Lender may institute proceedings, judicial or otherwise,
for the complete or partial foreclosure of the Security Instrument or the
complete or partial sale of the Property under power of sale or under any
applicable provision of law. In connection with any such proceeding, Lender may
sell the Property as an entirety or in parcels or units and at such times and
place (at one or more sales) and upon such terms as it may deem expedient unless
prohibited by law from so acting.
(d) ......Receiver. Lender may apply for the appointment of a receiver, trustee,
liquidator or conservator of the Property, without regard for the adequacy of
the security for the Debt or a showing of insolvency, fraud or mismanagement on
the part of Borrower. Any receiver or other party so appointed has all powers
permitted by law which may be necessary or usual in such cases for the
protection, possession, control, management and operation of the Property.
Borrower hereby consents, to the extent permitted under applicable law, to the
appointment of a receiver or trustee of the Property upon Lender's request if an
Event of Default has occurred. At Lender's option, such receiver or trustee
shall serve without any requirement of posting a bond.
(e) ......Recovery of Possession. Lender may enter into or upon the Property,
either personally or by its agents, and dispossess and exclude Borrower and its
agents and servants therefrom (without liability for trespass, damages or
otherwise), and take possession of all books, records and accounts relating to
the Property, and Borrower agrees to surrender possession of the Property and
all other Property, including without limitation, all documents, books, records
and accounts relating to the Property, to Lender upon demand. As a
mortgagee-in-possession of the Property, Lender shall have all rights and
remedies permitted by law or in equity to a mortgagee-in-possession, including,
without limitation, the right to charge Borrower the fair and reasonable rental
value for Borrower's use and occupation of any part of the Property that may be
occupied or used by Borrower and the right to exercise all rights and powers of
Borrower with respect to the Property, whether in the name of Borrower or
otherwise (including, without limitation, the right to make, cancel, enforce or
modify Leases, obtain and evict tenants, and demand, sue for, collect and
receive all Rents of the Property).
(f) ......UCC Remedies. Lender may exercise with respect to the Property, each
right, power or remedy granted to a secured party under the UCC, including,
without limitation, (i) the right to take possession of the Property and to take
such other measures as Lender deems necessary for the care, protection and
preservation of the Property, and (ii) the right to require that Borrower, at
its expense, assemble the Property and make it available to Lender at a
convenient place acceptable to Lender. Any notice of sale, disposition or other
intended action by Lender with respect to the Property sent to Borrower in
accordance with the provisions hereof at least ten (10) days prior to such
action, shall constitute reasonable notice to Borrower. Lender shall not have
any obligation to clean-up or otherwise prepare the Property for sale.
(g) ......Apply Funds in Reserve Accounts. Lender may apply any funds then
deposited in any or all of the Reserve Accounts and or otherwise held in escrow
or reserve by Lender under the Loan Documents (including without limitation
Restoration Proceeds) as a credit to the Loan, in such priority and proportion
as Lender deems appropriate.
(h) ......Insurance Policies. Lender may surrender any or all insurance policies
maintained as required by this Loan Agreement, collect the unearned Insurance
Premiums and apply such sums as a credit on the Loan, in such priority and
proportion as Lender deems appropriate. Borrower hereby appoints Lender its
attorney-in-fact with full power of substitution (and which shall be deemed to
be coupled with an interest and irrevocable until the Loan is paid and the
Security Instrument is discharged of record, with Borrower hereby ratifying all
that its said attorney shall do by virtue thereof) to surrender such insurance
policies and collect such Insurance Premiums.
(i) ......Intentionally Omitted.
(j) ......Protection of Lender's Security and Right to Cure. Lender may, without
releasing Borrower from any obligation hereunder or waiving the Event of
Default, perform the obligation which Borrower failed to perform in such manner
and to such extent as Lender deems necessary to protect and preserve the
Property and Lender's interest therein, including without limitation (i)
appearing in, defending or bringing any action or proceeding with respect to the
Property, in Borrower's name or otherwise; (ii) making repairs to the Property
or completing improvements or repairs in progress; (iii) hiring and paying legal
counsel, accountants, inspectors or consultants; and (iv) paying amounts which
Borrower failed to pay. Amounts disbursed by Lender shall be added to the Loan,
shall be immediately due and payable, and shall bear interest at the Default
Rate from the date of disbursement until paid in full.
(k) ......Violation of Laws. If the Property is not in compliance with all
Requirements of Laws, Lender may impose additional requirements upon Borrower in
connection with such Event of Default including, without limitation, monetary
reserves or financial equivalents.
(l) ......Purchase of Rate Cap by Lender. If the Loan has been accelerated
following an Event of Default and the Rate Cap obtained by Borrower expires
prior to Lender's receipt of full payment of the Loan or completion of a
foreclosure action (or acceptance of a deed-in-lieu of foreclosure), Lender may
purchase, at Borrower's expense, a Rate Cap upon such terms as Lender deems
necessary to guard against fluctuations of the interest rate of the Loan until
the Loan is paid in full or a foreclosure action (or acceptance of a
deed-in-lieu of foreclosure) is completed.
11.03....... Cumulative Remedies; No Waiver; Other Security. Lender's remedies
under this Loan Agreement are cumulative (whether set forth in this Article 11
or in any other section of this Loan Agreement) with those in the other Loan
Documents and otherwise permitted by law or in equity and may be exercised
independently, concurrently or successively in Lender's sole discretion and as
often as occasion therefor shall arise. Lender's delay or failure to accelerate
the Loan or exercise any other remedy upon the occurrence of an Event of Default
shall not be deemed a waiver of such right as remedy. No partial exercise by
Lender of any right or remedy will preclude further exercise thereof. Notice or
demand given to Borrower in any instance will not entitle Borrower to notice or
demand in similar or other circumstances (except where notice is expressly
required by this Loan Agreement to be given) nor constitute Lender's waiver of
its right to take any future action in any circumstance without notice or
demand. Lender may release security for the Loan, may release any party liable
therefor, may grant extensions, renewals or forbearances with respect thereto,
may accept a partial or past due payment or grant other indulgences, or may
apply any other security held by it to payment of the Loan, in each case without
prejudice to its rights under the Loan Documents and without such action being
deemed an accord and satisfaction or a reinstatement of the Loan. Lender will
not be deemed as a consequence of its delay or failure to act, or any
forbearance granted, to have waived or be estopped from exercising any of its
rights or remedies.
11.04....... Enforcement Costs. Borrower shall pay, on written demand by Lender
all costs incurred by Lender in (a) collecting any amount payable under the Loan
Documents, or (b) enforcing its rights under the Loan Documents, in each case
whether or not legal proceedings are commenced or whether legal action is
pursued to final judgment. Such fees and expenses include, without limitation,
reasonable fees for attorneys, paralegals, law clerks and other hired
professionals, a reasonable assessment of the cost of services performed by
Lender's default management staff, court fees, costs incurred in connection with
pre-trial, trial and appellate level proceedings, including discovery, and costs
incurred in post-judgment collection efforts or in any bankruptcy proceeding.
Amounts incurred by Lender shall be added to principal, shall be immediately due
and payable, shall bear interest at the Default Rate from the date of
disbursement until paid in full, if not paid in full within five (5) days after
Lender's written demand for payment, and such amounts shall be secured by the
Security Instrument and other collateral given to secure the Loan.
11.05....... Application of Proceeds. The proceeds from disposition of the
Property shall be applied by Lender as a credit to the Loan and to recovery or
reimbursement of the costs of enforcement (contemplated by Section 11.04 above)
in such priority and proportion as Lender determines appropriate.
11.06....... Intentionally Omitted.
ARTICLE 12..
NONRECOURSE - LIMITATIONS ON PERSONAL LIABILITY
12.01....... Nonrecourse Obligation. Except as otherwise provided in this
Article 12, Section 15.05 or expressly stated in any of the other Loan
Documents, Lender shall enforce the liability of Borrower to perform and observe
the obligations contained in this Loan Agreement and in each other Loan Document
only against the Property and other collateral given by Borrower as security for
payment of the Loan and performance of Borrower's obligations under the Loan
Documents and not against Borrower or any of Borrower's principals, directors,
officers or employees. Notwithstanding the foregoing, this Article 12 is not
applicable to the Environmental Indemnity or to any Guaranty executed in
connection herewith.
12.02....... Full Personal Liability. Section 12.01 above shall BECOME NULL AND
VOID and the Loan FULLY RECOURSE to Borrower if: (a) the Property or any part
thereof becomes an asset in a voluntary bankruptcy or other insolvency
proceeding; (b) Borrower or either General Partner commences a bankruptcy or
other insolvency proceeding; (c) an involuntary bankruptcy or other insolvency
proceeding is commenced against Borrower or either General Partner (by a party
other than Lender) but only if Borrower or such General Partner has failed to
use best efforts to dismiss such proceeding or has consented to such proceeding
or (d) if Borrower, either General Partner, Guarantor or any Affiliate or agent
of (x) Borrower, (y) either General Partner or (z) any Guarantor has acted in
concert with, colluded or conspired with any party to cause the filing of any
involuntary bankruptcy or other insolvency proceeding; or (e) Intentionally
Omitted.
12.03....... Personal Liability for Certain Losses. Section 12.01 above SHALL
NOT APPLY and Borrower shall be PERSONALLY LIABLE for all losses, claims,
expenses or other liabilities incurred by Lender arising out of, or attributable
to, any of the following:
(a) ......Fraud or material misrepresentation or failure to disclose a material
fact by Borrower or any other party in connection with (i) the application for
the Loan or the execution and delivery of the Loan Documents or making of the
Loan, (ii) any financial statement or any other material certificate, report or
document required to be furnished by Borrower to Lender herewith or hereafter,
or (iii) any request for Lender's consent made during the term of the Loan;
(b) ......A violation of any provision of Article 10 (captioned: No Transfers or
Encumbrances; Due On Sale);
(c) ......Failure by Borrower or General Partners to comply with any provision
of Article 7 (captioned: Separateness Requirements) or Section 9.13 (captioned:
Existence, Change of Name or Location as a Registered Organization) of the Loan
Agreement;
(d) ......Misapplication or misappropriation of (i) insurance proceeds or
condemnation awards payable to Lender in accordance with the Loan Agreement;
(ii) Rent received by Borrower after the occurrence and during the continuance
of an Event of Default, (iii) Rent paid in advance by tenants under the Leases;
and (iv) tenant security deposits or other refundable deposits held by or on
behalf of Borrower in connection with Leases;
(e) ......Fees or commissions paid by Borrower, after the occurrence and during
the continuance of an Event of Default, to any Guarantor, any Affiliate, or any
principal of Borrower, any Guarantor or Affiliate, in violation of the Loan
Documents;
(f) ......Damage to or loss of all or any part of the Property as a result of
waste, gross negligence or willful misconduct by Borrower or its agents;
(g) ......Criminal acts of Borrower, any principal of Borrower, or any Affiliate
resulting in the seizure, forfeiture or loss of all or any part of the Property;
(h) ......Removal of all or any portion of the Personal Property in violation of
the Loan Agreement;
(i) ......All amounts contemplated under Section 11.04 and any real estate or
other transfer tax incurred to transfer title to the Property in connection with
any foreclosure, deed in lieu of foreclosure or non-judicial sale of the
Property following the occurrence of an Event of Default;
(j) ......Payment of the deductible amount of any casualty insurance maintained
in respect of the Property; and
(k) ......Intentionally Omitted.
12.04....... No Impairment. Nothing contained in this Article 12 shall impair,
release or otherwise adversely affect: (a) any lien, assignment or security
interest created by the Loan Documents; (b) any indemnity, personal guaranty,
master lease or similar instrument now or hereafter made in connection with the
Loan (including, without limitation, the Environmental Indemnity and Guaranty);
(c) Lender's right to have a receiver or trustee appointed for the Property; (d)
Lender's right to name Borrower as a defendant in any foreclosure action or
judicial sale under the Security Instrument or other Loan Documents or in any
action for specific performance or otherwise to enable Lender to enforce
obligations under the Loan Documents or to realize upon Lender's interest in any
collateral given to Lender as security for the Loan; or (e) Lender's right to a
judgment on the Note against Borrower if and to the extent necessary to enforce
any guaranty or indemnity provided in connection with the Note to obtain any
insurance proceeds or condemnation awards to which Lender would otherwise be
entitled under this Loan Agreement; provided, however, that any judgment
obtained against Borrower shall, except to the extent otherwise expressly
provided in this Article 12, be enforceable against Borrower only to the extent
of Borrower's interest in the Property and other collateral securing payment of
the Loan and performance of Borrower's obligations under the Loan Documents.
12.05....... No Waiver of Certain Rights. Nothing contained in this Article 12
shall be deemed a waiver of any right which Lender may have under the Bankruptcy
Code or applicable law to protect and pursue its rights under the Loan Documents
including, without limitation, its rights under Sections 506(a) or any other
provision of the Bankruptcy Code to file a claim for the full amount of the Loan
or to require that the collateral continues to secure all of the indebtedness
owing to Lender under Loan Documents.
ARTICLE 13..
INDEMNIFICATION
13.01....... Indemnification Against Claims. Borrower shall indemnify, defend,
release and hold harmless Lender and each of the other Indemnified Parties from
and against any and all Losses directly or indirectly arising out of, or in any
way relating to, or as a result of (a) accident, injury to or death of Persons,
or loss of, or damage to, property occurring in, on or with respect to the
Property or on the adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways or otherwise arising with respect to the use of
the Property; (b) failure of the Property to be in compliance with any
Requirements of Law; (c) breach or default of Borrower's representations or
obligations under Sections 8.27, 8.28 or 9.16 of this Loan Agreement; (d) any
and all claims and demands whatsoever which may be asserted against Lender by
reason of any alleged obligations or undertakings on its part to perform or
discharge the lessor's agreements contained in any Lease; (e) breach or default
under the ERISA obligations set forth in Sections 8.26 and 9.15 of this Loan
Agreement (including, without limitation, legal fees and costs incurred in the
investigations, defense and settlement of Losses incurred in correcting any
prohibited transaction or in the sale of a prohibited loan, and in obtaining any
individual prohibited transaction exemption under ERISA that may be required, in
Lender's sole discretion); (f) or (f) any claim, litigation, investigation or
proceeding commenced or threatened relating to any of the foregoing, whether or
not Indemnified Party is a party thereto; provided, however, any such indemnity
shall not apply to any Indemnified Party to the extent any such Losses arise
from Indemnified Party's gross negligence or willful misconduct (collectively,
"Indemnified Claims").
13.02....... Duty to Defend. If an Indemnified Party claims indemnification
under this Loan Agreement, the Indemnified Party shall promptly notify Borrower
of the Indemnified Claim. After notice by any Indemnified Party, Borrower shall
defend such Indemnified Party against such Indemnified Claim (if requested by
any Indemnified Party, in the name of the Indemnified Party) by attorneys and
other professionals reasonably approved, in writing, by the Indemnified Party.
Notwithstanding the foregoing, any Indemnified Party may, in its sole discretion
and at the expense of Borrower, engage its own attorneys and other professionals
to defend or assist it if such Indemnified Party determines that the defense as
conducted by Borrower is not proceeding or being conducted in a satisfactory
manner or that a conflict of interest exists between any of the parties
represented by Borrower's counsel in such action or proceeding. Within five (5)
business days of Indemnified Party's demand, Borrower shall pay or, in the sole
discretion of the Indemnified Party, reimburse, the Indemnified Party for the
payment of Indemnified Party's costs and expenses (including, without
limitation, reasonable attorney fees, engineer fees, environmental consultant
fees, laboratory fees and the fees of other professionals in connection
therewith) in connection with the Indemnified Claim. Payment not made timely
shall bear interest at the Default Rate until paid in full and payment of such
amounts shall be secured by the Security Instrument and other collateral given
to secure the Loan.
ARTICLE 14..
SUBROGATION; NO USURY VIOLATIONS
14.01....... Subrogation. If the Loan is used to pay, satisfy, discharge, extend
or renew any indebtedness secured by a pre-existing mortgage, deed of trust or
other Lien encumbering the Property, then to the extent of funds so used, Lender
shall automatically, and without further action on its part, be subrogated to
all rights, including lien priority, held by the holder of the indebtedness
secured by such prior Lien, whether or not the prior Lien is released, and such
former rights are not waived but rather are continued in full force and effect
in favor of Lender and are merged with the Liens created in favor of Lender as
security for payment of the Loan and performance of the Obligations.
14.02....... No Usury. At no time is Borrower required to pay interest on the
Loan or on any other payment due hereunder or under any of the other Loan
Documents (or to make any other payment deemed by law or by a court of competent
jurisdiction to be interest) at a rate which would subject Lender either to
civil or criminal liability as a result of being in excess of the maximum
interest rate which Borrower is permitted by applicable law to pay. If interest
(or such other amount deemed to be interest) paid or payable by Borrower is
deemed to exceed such maximum rate, then the amount to be paid immediately shall
be reduced to such maximum rate and thereafter computed at such maximum rate.
All previous payments in excess of such maximum rate shall be deemed to have
been payments of principal (in inverse order of maturity) and not on account of
interest due hereunder. For purposes of determining whether any applicable usury
law has been violated, all payments deemed by law or a court of competent
jurisdiction to be interest shall, to the extent permitted by applicable law, be
deemed to be amortized, prorated, allocated and spread over the full term of the
Loan in such manner so that interest is computed at a rate throughout the full
term of the Loan which does not exceed the maximum lawful rate of interest.
ARTICLE 15..
SALE OR SECURITIZATION OF LOAN
15.01....... Splitting the Note. Lender has the right from time to time to sever
the Note into one or more separate promissory notes in such denominations as
Lender determines in its sole discretion (including the creation of a mezzanine
loan secured by a collateral assignment of the Equity Interests in Borrower),
which promissory notes may be included in separate sales or securitizations
undertaken by Lender. In conjunction with any such action, Lender may redefine
the interest rate and amortization schedule; provided, however: (a) if Lender
redefines the interest rate, the initial weighted average of the interest rates
contained in the severed promissory notes taken in the aggregate shall equal the
Applicable Interest Rate, and (b) if Lender redefines the amortization schedule,
the amortization of the severed promissory notes taken in the aggregate shall,
require no more amortization to be paid under the Loan than as required under
this Loan Agreement and the Note at the time such action was taken by Lender.
Subject to the foregoing, each severed promissory note, and the Loan evidenced
thereby, shall be upon all of the terms and provisions contained in this Loan
Agreement and the Loan Documents which continue in full force and effect, except
that Lender may allocate specific collateral given for the Loan as security for
performance of specific promissory notes, in each case with or without cross
default provisions. Borrower, at Borrower's expense, agrees to cooperate with
all reasonable requests of Lender to accomplish the foregoing, including,
without limitation, execution and prompt delivery to Lender of a severance
agreement and such other documents as Lender shall reasonably require (provided,
however, that Borrower shall not be obligated to pay Lender's legal or
administrative review costs incurred in connection with the same). Borrower
hereby appoints Lender its attorney-in-fact with full power of substitution (and
which shall be deemed to be coupled with an interest and irrevocable until the
Loan is paid and the Security Instrument is discharged of record, with Borrower
hereby ratifying all that its said attorney shall do by virtue thereof) to make
and execute all documents necessary or desirable to effect the aforesaid
severance; provided, however, Lender shall not make or execute any such
documents under such power until five (5) days after written notice has been
given to Borrower by Lender of Lender's intent to exercise its rights under such
power. Borrower's failure to deliver any of the documents requested by Lender
hereunder for a period of ten (10) business days after such notice by Lender
shall, at Lender's option, constitute an Event of Default hereunder.
15.02....... Lender's Rights to Sell or Securitize. Borrower acknowledges that
Lender, and each successor to Lender's interest, may (without prior notice to
Borrower or Borrower's prior consent), sell or grant participations in the Loan
(or any part thereof), sell or subcontract the servicing rights related to the
Loan, Securitize the Loan or include the Loan as part of a Securitization and,
in connection therewith, assign Lender's rights hereunder to a securitization
trustee. Borrower, at its expense, agrees to cooperate with all reasonable
requests of Lender in connection with any of the foregoing including, without
limitation, executing any financing statements or other documents deemed
necessary by Lender or its transferee to create, perfect or preserve the rights
and interest to be acquired by such transferee, provide any updated financial
information with appropriate verification through auditors letters, revised
organizational documents and counsel opinions satisfactory to the Rating
Agencies, executed amendments to the Loan Documents, and review information
contained in a preliminary or final private placement memorandum, prospectus,
prospectus supplements or other disclosure document, providing a mortgagor
estoppel certificate and such other information about Borrower, General
Partners, any Guarantor or the Property as Lender may require for Lender's
offering materials.
15.03....... Dissemination of Information. Borrower acknowledges that Lender may
provide to third parties with an existing or prospective interest in the
servicing, enforcement, evaluation, performance, ownership, purchase,
participation or Securitization of the Loan, including, without limitation, any
Rating Agency and any entity maintaining databases on the underwriting and
performance of commercial mortgage loans, any and all information which Lender
now has or may hereafter acquire relating to the Loan, the Property, Borrower,
General Partners or any Guarantor, as Lender determines necessary or desirable
and that such information may be included in disclosure documents in connection
with a Securitization or syndication of participation interests, including,
without limitation, a prospectus, prospectus supplement, offering memorandum,
private placement memorandum or similar document (each, a "Disclosure Document")
and also may be included in any filing with the Securities and Exchange
Commission pursuant to the Securities Act or the Securities Exchange Act. To the
fullest extent permitted under applicable law, Borrower irrevocably waives all
rights, if any, to prohibit such disclosure, including, without limitation, any
right of privacy.
15.04....... Reserves Accounts. If the Loan is made a part of a Securitization,
Borrower acknowledges that all funds held by Lender in the Reserve Accounts in
accordance with this Loan Agreement or the other Loan Documents shall be
deposited in "eligible accounts" at "eligible institutions" or invested in
"permitted investments" as then defined and required by the Rating Agencies, and
this Loan Agreement will automatically be amended to so provide.
15.05....... Securitization Indemnification. Borrower and each Guarantor agree
to provide in connection with each Disclosure Document, an indemnification
certificate: (a) certifying that such Disclosure Document has carefully been
examined, including, without limitation, the sections entitled "Special
Considerations," and/or "Risk Factors," and "Certain Legal Aspects of the
Mortgage Loan," or similar sections, and all sections relating to Borrower,
General Partners, Guarantors, Property Manager, their respective Affiliates, the
Loan, the Loan Documents and the Property, and any risks or special
considerations relating thereto, and that, to the best of such indemnitor's
knowledge, such sections (and any other sections reasonably requested) do not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading; (b) indemnifying
Lender (and for purposes of this Section 15.05, Lender shall include its
officers and directors) for any Losses to which Lender may become subject
insofar as the Losses arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in such section or arise
out of are based upon the omission or alleged omission to state therein a
material fact required to be stated in such sections necessary in order to make
the statements in such sections or in light of the circumstances under which
they were made, not misleading (collectively, "Securities Liabilities"); and (c)
agreeing to reimburse Lender, for any legal or other expenses reasonably
incurred by Lender in investigating or defending the Securities Liabilities;
provided, however, that indemnitor will be liable under clauses (b) or (c) above
only to the extent that such Securities Liabilities arise out of, or are based
upon, any such untrue statement or omission made therein in reliance upon, and
in conformity with, information furnished to Lender by or on behalf of Borrower
or a Guarantor in connection with the preparation of the Disclosure Documents or
in connection with the underwriting of the Loan, including, without limitation,
financial statements of Borrower, General Partners or any Guarantor, and
operating statements, rent rolls, environmental site assessment reports and
property condition reports with respect to the Property. This indemnity is in
addition to any liability which Borrower may otherwise have and shall be
effective whether or not an indemnification certificate described in (a) above
is provided and shall be applicable based on information previously provided by
or on behalf of Borrower or a Guarantor if the indemnification certificate is
not provided.
15.06....... Intentionally Omitted.
ARTICLE 16..
BORROWER FURTHER ACTS AND ASSURANCES
PAYMENT OF SECURITY RECORDING CHARGES
16.01....... Further Acts. Borrower, at Borrower's expense, agrees to take such
further actions and execute such further documents as Lender reasonably may
request to carry out the intent of the Loan Documents or to establish and
protect the rights and remedies created or intended to be created in favor of
Lender under the Loan Documents or to protect the value of the Property and
Lender's security interest or liens therein. Borrower agrees to pay all filing,
registration or recording fees or taxes, and all expenses incident to the
preparation, execution, acknowledgement, or filing/recording of the Security
Instrument, the Assignment of Leases and Rents, financing statements or any such
instrument of further assurance, except where prohibited by law so to do.
16.02....... Replacement Documents. Upon receipt of an affidavit from an officer
of Lender as to the loss, theft, destruction or mutilation of the Note or any
other Loan Document which is not of public record, and, in the case of any such
mutilation, upon surrender and cancellation of such document, Borrower will
issue a replacement original in lieu thereof in the same original principal
amount and otherwise on the same terms and conditions as the original; provided,
however, that Lender shall indemnify Borrower against any actual loss or damage
to Borrower resulting from the existence of duplicate originals of any such
documents provided by Borrower.
16.03....... Borrower Estoppel Certificates.
(a) ......Borrower Information. Borrower, within ten (10) days of Lender's
written request, shall furnish to Lender or Lender's designee a statement, duly
acknowledged and certified by a Responsible Officer, setting forth: (i) the
Maximum Loan Amount and the amount of principal advanced as of the certificate
date; (ii) the unpaid principal amount of the Loan; (iii) the calculation of the
rate of interest accruing on the Loan, including the then Applicable Interest
Rate; (iv) the Payment Due Date, the Maturity Date, any unexercised rights to
extend the Maturity Date and any exercised extension of the Maturity Date, if
any; (v) the date installments of interest and/or principal were last paid; (vi)
that, except as provided in such statement, no defaults or events exists which
would be an Event of Default with the giving of any applicable notice or the
expiration of any applicable grace or cure period or both; (vii) that the Loan
Documents are valid, legal and binding obligations and have not been modified
or, if modified, giving the particulars of such modification; (viii) whether any
offsets or defenses exist against Borrower's obligation to pay the Loan and
perform the Obligations and, if any are alleged to exist, a detailed description
thereof; (ix) that all Leases are in full force and effect, and for Leases other
than residential Leases, have not been modified or if modified, setting forth
all modifications; (x) a current Rent Roll for the Property, (xi) the date to
which Rents under the Leases have been paid; (xii) if not included on the Rent
Roll, a rental delinquency report; and (xiii) such other matters reasonably
requested by Lender and reasonably related to the Leases or the Property.
(b) ......Tenant Estoppels. Borrower shall deliver to Lender, promptly upon
Lender's written request (but in any event no later than fifteen (15) business
days following Lender's request), duly executed estoppel certificates from any
commercial tenants identified by Lender attesting to such facts regarding a
tenant's non-residential Lease as Lender may require, including, without
limitation: (i) that the Lease is in full force and effect with no defaults
thereunder on the part of any party, and no event exists that would be an event
of default thereunder with giving of any applicable notice or the expiration of
any applicable grace or cure period or both; (ii), that none of the Rents have
been paid more than one month in advance, except as a security deposit; and
(iii) that the tenant claims no defense or offset against the full and timely
performance of its obligations under the Lease.
(c) ......Lender Statement of Loan Information. After written request by
Borrower not more than twice annually, Lender shall furnish Borrower a statement
setting forth: (i) the original Maximum Loan Amount and the amount of principal
advanced by Lender as of the certificate date; (ii) the unpaid principal amount
of the Loan; (iii) the rate of interest accruing on the Loan, including the then
Applicable Interest Rate; and (iv) the balance of amounts held in the Reserve
Accounts, if any.
16.04....... Recording Costs. Borrower will pay all transfer taxes, filing,
registration, recording or similar fees, and all expenses incident to the
preparation, execution, acknowledgment, recording, filing and/or release or
discharge of the Note, the Security Instrument and each of the other Loan
Documents, and all modifications, extensions, consolidations, or restatements of
the same, except where prohibited by law so to do.
16.05....... Publicity. Borrower acknowledges and agrees that Lender may use
basic transaction information (including, without limitation, the name of the
Borrower and the address of the Property) publicly in press releases or other
marketing material.
ARTICLE 17..
LENDER CONSENT
17.01....... No Joint Venture; No Third Party Beneficiaries. Borrower and Lender
intend that the relationships created hereunder and under each of the other Loan
Documents are solely those of borrower and lender. Nothing herein or in any of
the other Loan Documents is intended to create, nor shall it be construed as
creating anything but a debtor-creditor relationship between Borrower and Lender
nor shall they be deemed to confer on anyone other than Lender, and its
successors and assigns, any right to insist upon or to enforce the performance
or observance of any of the obligations contained herein or therein.
17.02....... Lender Approval. Wherever pursuant to a Loan Document (a) Lender
exercises any right to approve or disapprove or to grant or withhold consent;
(b) any arrangement or term is to be satisfactory to Lender; (c) a waiver is
requested from Lender, or (d) any other decision is to be made by Lender, all
shall be made in Lender's sole discretion, unless expressly provided otherwise
in such Loan Document. By approving or granting consent, accepting performance
from Borrower, or releasing funds from a Reserve Account, Lender shall not be
deemed to have warranted or affirmed the sufficiency, completeness, legality or
effectiveness of the subject matter or of Borrower's compliance with
Requirements of Laws. Notwithstanding any provision under the Loan Documents
which provide Lender the opportunity to approve or disapprove any action or
decision by Borrower, Lender is not undertaking the performance of any
obligation of Borrower under any of the Loan Documents or any of the other
documents and agreements in connection with this transaction (including, without
limitation, the Leases).
17.03....... Performance at Borrower's Expense. Borrower acknowledges and agrees
that in connection with each request by Borrower to: (a) modify or waive any
provision of the Loan Documents; (b) release or substitute Property; (c) obtain
Lender's approval or consent whenever required by the Loan Documents including,
without limitation, review of a Transfer request, improvements or alterations to
the Property, and easements or other additions to Permitted Encumbrances; or (d)
provide a subordination, non-disturbance and attornment agreement, Lender
reserves the right to collect a review or processing fee from Borrower based on
a reasonable estimate of the administrative costs which Lender will incur to
connection therewith. Borrower agrees to pay such fee along with all reasonable
legal fees and expenses incurred by Lender and the fees required for a Rating
Confirmation or approval from the trustee if the Loan has been Securitized, as
applicable, irrespective of whether the matter is approved, denied or withdrawn.
Any amounts payable by Borrower hereunder, shall be deemed a part of the Loan,
shall be secured by this Loan Agreement and shall bear interest at the Default
Rate if not fully paid within ten (10) days of written demand for payment.
17.04....... Non-Reliance. Borrower agrees that any diligence or investigation
performed by or on behalf of Lender in underwriting or servicing the Loan
(including, without limitation, information obtained about the Property the
Borrower or its equity investors or affiliates), except as expressly stated
herein or in the other Loan Documents, does not in any respect limit or excuse
any of Borrower's representations, warranties, covenants or agreements set forth
in this Loan Agreement or any of the other Loan Documents. The fact that Lender
has performed diligence does not affect Lender's ability or right to rely fully
upon the representations, warranties, covenants and agreements made by Borrower
in the Loan Documents or to pursue any available remedy for a breach thereof. If
Lender delivers or has delivered to Borrower (or to Borrower's agents, equity
investors or representatives) any information obtained or developed by Lender
relating to the Loan, the Property or Borrower, Borrower acknowledges and agrees
that such information has been delivered for informational purposes only and
Lender has no liability of responsibility to Borrower with respect to such
information, including, without limitation, the completeness or accuracy of any
such information. No due diligence consultant engaged by Lender is or shall be
deemed an agent of Lender.
ARTICLE 18..
MISCELLANEOUS PROVISIONS
18.01....... Notices. All notices and other communications under this Loan
Agreement are to be in writing and addressed to each party as set forth below.
Default or demand notices shall be deemed to have been duly given upon the
earlier of: (a) actual receipt; (b) one (1) business day after having been
timely deposited for overnight delivery, fee prepaid, with a reputable overnight
courier service, having a reliable tracking system; or (c) three (3) business
days after having been deposited in any post office or mail depository regularly
maintained by the U.S. Postal Service and sent by certified mail, postage
prepaid, return receipt requested, and in the case of clause (b) and (c)
irrespective of whether delivery is accepted. A new address for notice may be
established by written notice to the other; provided, however, that no change of
address will be effective until written notice thereof actually is received by
the party to whom such address change is sent. Notice to outside counsel or
parties other than the named Borrower and Lender, now or hereafter designated by
a party as entitled to notice, are for convenience only and are not required for
notice to a party to be effective in accordance with this section. Notice
addresses are as follows:
Address for Lender: GMAC Commercial Mortgage Bank
6955 Union Park Center, Suite 330
Midvale, Utah 84047
Attn: President
With a required copy to:
GMAC Commercial Mortgage Corporation
200 Witmer Road
Horsham, PA 19044
Attn.: Servicing Accounting - Manager
Fax: 215-328-3478
With a required copy to:
GMAC Commercial Mortgage Corporation
200 Witmer Road
Horsham, PA 19044
Attn.: PLG Asset Manager
Fax: 215-328-1190
Address for Borrower: c/o AIMCO
Stanford Place 3
4582 S. Ulster Street Parkway, Suite 1100
Denver, Colorado 80237
Attn.: Patti K. Fielding
Fax: 303-300-3241
18.02. Entire Agreement; Modifications; Time of Essence. This Loan Agreement,
together with the other Loan Documents, contain the entire agreement between
Borrower and Lender relating to the Loan and supersede and replace all prior
discussions, representations, communications and agreements (oral or written).
If the terms of any of the Loan Documents are in conflict, this Loan Agreement
shall control over all of the other Loan Documents unless otherwise expressly
provided in such other Loan Document. No Loan Document shall be modified,
supplemented or terminated, nor any provision thereof waived, except by a
written instrument signed by the party against whom enforcement thereof is
sought, and then only to the extent expressly set forth in such writing. Time is
of the essence with respect to all of Borrower's obligations under the Loan
Documents.
18.03. Binding Effect; Joint and Several Obligations. This Loan Agreement and
each of the other Loan Documents shall be binding upon and inure to the benefit
of Borrower and Lender and their respective successors and assigns, whether by
voluntary action of the parties or by operation of law. (The foregoing does not
modify any conditions regulating Transfers.) If Borrower consists of more than
one party, each shall be jointly and severally liable to perform the obligations
of Borrower under the Loan Documents.
18.04. Duplicate Originals; Counterparts. This Loan Agreement and each of the
other Loan Documents may be executed in any number of duplicate originals, and
each duplicate original shall be deemed to be an original. This Loan Agreement
and each of the other Loan Documents (and each duplicate original) also may be
executed in any number of counterparts, each of which shall be deemed an
original and all of which together constitute a fully executed agreement even
though all signatures do not appear on the same document.
18.05. Unenforceable Provisions. Any provision of this Loan Agreement or any
other Loan Documents which is determined by a court of competent jurisdiction or
government body to be invalid, unenforceable or illegal shall be ineffective
only to the extent of such holding and shall not affect the validity,
enforceability or legality of any other provision, nor shall such determination
apply in any circumstance or to any party not controlled by such determination.
18.06. Governing Law. This Loan Agreement and each of the other Loan Documents
shall be interpreted and enforced according to the laws of the state where the
Property is located (without giving effect to rules regarding conflict of laws).
18.07. Consent to Jurisdiction. Borrower hereby consents and submits to the
exclusive jurisdiction and venue of any state or federal court sitting in the
county and state where the Property encumbered hereby is located with respect to
any legal action or proceeding arising with respect to the Loan Documents and
waives all objections which it may have to such jurisdiction and venue. Nothing
herein shall, however, preclude or prevent Lender from bringing actions against
Borrower in any other jurisdiction as may be necessary to enforce or realize
upon the security for the Loan provided in any of the Loan Documents.
18.08. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH WAIVE THEIR RESPECTIVE
RIGHT, TO THE FULLEST EXTENT PERMITTED BY LAW, AND AGREE NOT TO ELECT A TRIAL BY
JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS LOAN AGREEMENT, ANY OTHER
LOAN DOCUMENT, OR THE RELATIONSHIP BETWEEN THE PARTIES AS BORROWER AND LENDER.
ARTICLE 19
LIST OF DEFINED TERMS
19.01. Definitions. The following words and phrases shall have the meaning
specified below.
"Affiliate" of any Person means (a) any other Person which, directly
or indirectly, is in Control of, is Controlled by or is under common Control
with, such Person; (b) any other Person who is a director or officer of (i) such
Person, (ii) any subsidiary of such Person, or (iii) any Person described in
clause (a) above; or (c) any corporation, limited liability company or
partnership which has as a director any Person described in clause (b) above.
"Applicable Interest Rate" has the meaning set forth in Section
2.02(b) of this Loan Agreement. It is the interest rate from time to time
accruing on the Loan.
"Approved Budget" has the meaning set forth in Section 9.11(a)(v) of
this Loan Agreement.
"Assignment of Interest Rate Cap" means the Assignment of Interest
Rate Cap Agreement dated as of the Closing Date from Borrower, as assignor, to
Lender, as assignee, assigning to Lender all of Borrower's rights, title and
interest in and to the Rate Cap Agreement.
"Assignment of Leases and Rents" means the Assignment of Leases and
Rents dated as of the Closing Date from Borrower, as assignor, to Lender, as
assignee, assigning to Lender all of Borrower's right, title and interest in and
to the Leases and the Rents with respect to the Property.
"Assignment of Property Management Contract" means an Assignment of
Property Management Contract and Subordination of Management Fees dated as of
the Closing Date from Borrower, as assignor, to Lender, as assignee, and
acknowledged by Property Manager or as applicable, any other Assignment of
Property Management Contract executed pursuant to Section 9.14.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978 codified
as 11 U.S.C. ss.101 et. seq., and the regulations issued thereunder, both as
hereafter modified from time to time.
"Borrower" has the meaning set forth in the introductory paragraph
of this Loan Agreement.
"Business Day" or "business day" means any day other than a
Saturday, a Sunday, or days when Federal Banks located in the State of New York
or Commonwealth of Pennsylvania are closed for a legal holiday or by government
directive. When used with respect to the Interest Rate Adjustment Date,
"Business Day" shall mean a day on which the banks are open for dealing in
foreign currency and exchange in New York City and London.
"Capital Expenditures" means any hard or soft costs spent to add,
improve or expand property, plant and equipment assets (including, without
limitation, the Replacements contemplated under the Loan) and/or amounts
budgeted for the future for the same purposes.
"Cash Flow Available for Debt Service" means, for a specified
period, (a) the Operating Income less (b) Operating Expenses as determined by
Lender.
"Casualty" means the occurrence of damage or destruction to the
Property, or any part thereof, by fire, flood, vandalism, windstorm, hurricane,
earthquake, acts of terrorism or any other casualty.
"Closing Date" means the date the Maximum Loan Amount is deposited
by Lender with the closing agent.
"Compliance Certificate" means a compliance certificate
substantially in the form of Exhibit A hereto, signed by a Responsible Officer
of Borrower.
"Condemnation" means the taking by any Governmental Authority of the
Property or any part thereof through eminent domain or otherwise (including,
without limitation, any transfer made in lieu of or in anticipation of the
exercise of such taking).
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person
whether through ownership of voting securities, beneficial interests, by
contract or otherwise. The definition is to be construed to apply equally to
variations of the word "Control" including "Controlled," "Controlling" or
"Controlled by."
"Data Delivery Failure" means, without reference to any cure period
under Article 11, each instance that any of the following occur: (a) failure to
deliver any of the reports, information, statements or other materials required
under Section 9.11 within fifteen (15) business days after written notice from
Lender, (b) failure to provide the Compliance Certificate within fifteen (15)
business days after written notice from Lender, or (c) failure to permit Lender
or its representatives to inspect or copy books and records within two (2)
business days of Lender's written request.
"Data Delivery Failure Fee" means an amount of Five Thousand and
00/100 Dollars ($5,000.00) for the first failure, Ten Thousand and 00/100
Dollars ($10,000.00) for the second failure, and Twenty-Five Thousand and 00/100
Dollars ($25,000.00) for the third failure and each failure thereafter.
"Debt" means the aggregate of all principal and interest payments
that accrue or are due and payable in accordance with the Loan Agreement,
together with any other amounts due under the Loan Documents. The terms "Debt"
and "Loan" have the same meaning whenever used in the Loan Documents.
"Debt Service Coverage Ratio" means, as to a specific period, the
ratio of (a) the Cash Flow Available for Debt Service, to (b) the principal and
interest that would be due and payable under the Note based on the then current
Applicable Interest Rate
"Default Rate" has the meaning set forth in Section 2.04(e) of this
Loan Agreement.
"Disbursement Request" means a written request substantially in the
form of Exhibit B from Borrower delivered to Lender, signed by a Responsible
Officer of Borrower and requesting Lender to disburse funds from a Reserve
Account. Each Disbursement Request shall describe in reasonable detail the use
of the funds requested by the Disbursement Request and shall have attached to
it, as applicable: (a) the original invoices for all items or materials
purchased or services performed which are to be funded by the Disbursement
Request, and (b) copies of all permits, licenses and approvals, if any, by any
Governmental Authority confirming completion of the Reserve Items. If an
original invoice is not available, Borrower shall be required to evidence, to
Lender's satisfaction, the amounts expended for which reimbursement is
requested.
"Disclosure Documents" has the meaning set forth in Section 15.03 of
this Loan Agreement.
"Environmental Indemnity" means the Environmental Indemnity
Agreement dated as of the Closing Date from Borrower and the other Environmental
Indemnitors named therein to Lender.
"Equity Interests" means (a) partnership interests (whether general
or limited) in an entity which is a partnership; (b) membership interests in an
entity which is a limited liability company; or (c) the shares or stock
interests in an entity which is a corporation.
"ERISA" means the Employee Retirement Income Security Act of 1974,
and the regulations issued thereunder, all as amended or restated from time to
time.
"Event of Default" means any of the events specified in Section
11.01 of this Loan Agreement.
"Exit Fee" has the meaning set forth in Section 2.06 of this Loan
Agreement.
"Extension Fee" means an amount equal to one quarter percent (.25%)
of the outstanding principal amount of the Loan as of the Maturity Date.
"Extension Term" has the meaning set forth in Section 2.03(d) of
this Loan Agreement.
"First Extended Maturity Date" has the meaning set forth in Section
2.03(d) of this Loan Agreement.
"First Extension Term" has the meaning set forth in Section 2.03(d)
of this Loan Agreement.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time.
"General Partners" means, together, Angeles Realty Corporation II, a
California corporation, and AIMCO Angeles GP, L.L.C., a Delaware limited
liability company.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof, and any Person exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to such government.
"Guarantor" means AIMCO Properties, L.P., and any subsequent
guarantors, individually or collectively as the context requires, who are
executing the Guaranty as guarantors and the Environmental Indemnity as
indemnitors. Guarantors are jointly and severally liable for their obligations
under such agreements.
"Guaranty" means the Guaranty of Exceptions to Nonrecourse
Liability, dated as of the Closing Date, from Guarantor to Lender.
"Immediate Repairs" means the repairs or improvements to the
Property identified on Exhibit C hereto.
"Immediate Repair Deposit" has the meaning set forth in Section
4.04(b) of this Loan Agreement, subject to adjustment as set forth in Section
4.04(d).
"Immediate Repair Escrow Account" means an account held by Lender,
or Lender's designee, in which the Immediate Repair Deposit will be held, which
shall not constitute a trust fund.
"Improvements" has the meaning set forth in the Security Instrument.
"Indemnified Claim" means the basis for the Indemnified Party's
claim for indemnification under Article 13 hereof.
"Indemnified Parties" means Lender, together with its successors and
assigns, which shall include, without limitation, any owner or prior owner or
holder of the Note, any servicer of the Loan, any investor, or holder of a full
or partial interest in the Loan, any receiver or other fiduciary appointed in a
foreclosure or other proceeding under any Requirements of Law regarding
creditors' rights, any officers, directors, shareholders, partners, members,
employees, agents, servants, representatives, contractors, subcontractors,
Affiliates of any and all of the foregoing, in all cases whether during the term
of the Loan or as part of, or following, a foreclosure of the Security
Instrument.
"Insurance Premiums" means the premiums for the insurance Borrower
is required to provide pursuant to Section 9.03 of this Loan Agreement.
"Insurance Premium Escrow Account" means an account held by Lender,
or Lender's designee, in which Borrower's initial deposit for Insurance Premiums
paid on the Closing Date and the Monthly Insurance Deposits will be held.
"Interest Rate Adjustment Date" means the first (1st) day of each
calendar month.
"Interest Rate Index" means the weekly average yield on United
States Treasury Securities adjusted to a constant maturity of one year, as made
available by the Federal Reserve Board forty-five (45) days prior to each
Interest Rate Adjustment Date.
"Land" has the meaning set forth in the Security Instrument.
"Lease" has the meaning set forth in the Security Instrument.
"Lender" has the meaning in the introductory paragraph of this Loan
Agreement.
"LIBOR Business Day" means a day upon which United States dollar
deposits may be dealt in on the London and the New York City interbank markets
and commercial banks and foreign exchange markets are open in London and New
York City.
"LIBOR Rate" means the average of London Interbank Offered Rates (in
U.S. dollar deposits) for a term of one month determined solely by Lender as of
each Interest Rate Adjustment Date. On each Interest Rate Adjustment Date,
Lender will obtain the close-of-business LIBOR Rate from "Page 3750" on the
Telerate Service (or such other page as may replace Page 3750 on that service)
on the last business day of the month immediately preceding the Interest Rate
Adjustment Date. If Telerate Service ceases publication or ceases to publish the
LIBOR Rate, Lender shall select a comparable publication to determine the LIBOR
Rate and provide notice thereof to Borrower. The LIBOR Rate may or may not be
the lowest rate based upon the market for U.S. dollar deposits in the London
Interbank Eurodollar Market at which Lender prices loans on the date on which
the LIBOR Rate is determined by Lender as set forth above.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or otherwise), preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any conditional sale or other
title retention agreement, the filing of any financing statement under the UCC
or comparable law of any jurisdiction in respect of any of the foregoing and a
mechanics' or materialman's lien).
"Liquidity" means cash and unencumbered, marketable securities.
"Loan" means the aggregate of all principal and interest payments
that accrue or are due and payable in accordance with the Loan Agreement,
together with any other amounts due under the Loan Documents. The terms "Loan"
and "Debt" have the same meaning whenever used in the Loan Documents.
"Loan Agreement" means this Loan Agreement.
"Loan Documents" means, collectively, this Loan Agreement, the Note,
the Security Instrument, the Assignment of Leases and Rents, the Assignment of
Property Management Contract, the Environmental Indemnity, the Guaranty, the
Lockbox Agreement, the Assignment of Interest Rate Cap Agreement, the Rate Cap
Provider Consent and any and all other documents and agreements executed in
connection with the Loan, as each such agreement may be modified, supplemented,
consolidated, extended or reinstated from time to time.
"Loan to Value Ratio" means with respect to the specified period,
the ratio obtained by dividing (a) the Maximum Loan Amount, by (b) either, as
selected in Lender's discretion, the "as-is" or "as-stabilized" value of the
Property as set forth in the appraisal obtained by Lender in connection with its
underwriting of the Loan or any update thereto, whichever is most recent;
provided however, that should the Operating Income or market rents for the
Property as underwritten by Lender change by ten percent (10%) or more during
the period in question, Lender may obtain a new appraisal at Borrower's expense.
"Lockbox Account" means the Deposit Account and Lockbox as such
terms are defined in the Lockbox Agreement.
"Lockbox Agreement" means the Lockbox - Deposit Account and Control
Agreement dated as of the Closing Date between Borrower, [PNC Bank, National
Association] and Lender.
"Lockbox Trigger Event" has the meaning set forth in the Lockbox
Agreement.
"Losses" means any and all claims, suits, liabilities (including,
without limitation, strict liabilities and liabilities under federal and state
securities laws), actions, proceedings, obligations, debts, damages, losses,
costs, expenses, fines, penalties, charges, fees, judgments, awards, and amounts
paid in settlement of whatever kind or nature (including without limitation
reasonable legal fees and other costs of defense).
"Margin" has the meaning set forth in Section 2.02(b) of this Loan
Agreement.
"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, act, condition
circumstances, whether or not related, in Lender's reasonable judgment, a
material adverse change in, or a materially adverse effect upon (a) the
business, operations, prospects or financial condition of Borrower or Guarantor;
(b) the ability of Borrower or Guarantor to perform its obligations under any
Loan Document to which it is a party; (c) the value or condition of the
Property; (d) compliance of the Property with any Requirements of Law; (e) the
validity, priority or enforceability of any Loan Document or the liens, rights
(including, without limitation, recourse against the Property) or remedies of
Lender hereunder or thereunder; or (f) the occupancy rate of the Property.
"Maturity Date" has the meaning set forth in Section 2.03(c) of this
Loan Agreement. If Borrower has extended the Maturity Date in accordance with
this Loan Agreement, references thereafter in this Loan Agreement shall mean the
Maturity Date as so extended, unless the context otherwise requires.
"Maximum Loan Amount" means the maximum principal amount of
$7,000,000.00, in lawful money of the United States of America, to be advanced
to Borrower pursuant to this Loan Agreement. Reference in the Loan Agreement to
"Maximum Loan Amount" mean the maximum principal amount, irrespective of actual
principal amount outstanding or actually advanced to Borrower during the term of
the Loan.
"Minimum Interest Rate" has the meaning set forth in Section 2.02(b)
of this Loan Agreement.
"Monthly Insurance Deposit" means, with respect to the specified
period, an amount equal to one-twelfth (1/12) of the Insurance Premiums that
Lender estimates will be payable during the next ensuing twelve (12) months,
subject to adjustment as set forth in Section 4.03(d) of this Loan Agreement.
"Monthly Replacement Reserve Deposit" has the meaning set forth in
Section 4.05(b) of this Loan Agreement, subject to adjustment as set forth in
Section 4.05(d).
"Monthly Tax Deposit" means, with respect to the specified period,
an amount equal to one-twelfth (1/12) of the Taxes that Lender estimates will be
payable during the next ensuing twelve (12) months, subject to adjustment as set
forth in Section 4.02(d) of this Loan Agreement.
"Moody's" means Moody's Investors Service, Inc. and any successor
thereto.
"Net Worth" means, as of a given date, a Person's equity calculated
in conformance with GAAP by subtracting total liabilities from total tangible
assets.
"Note" means the Promissory Note dated as of the Closing Date from
Borrower to the order of Lender in the original principal amount equal to the
Maximum Loan Amount.
"Obligations" means the Loan, and all other obligations and
liabilities of the Borrower to Lender, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with the Loan the Loan Documents,
whether on account of principal, interest, fees, indemnities, costs, expenses
(including, without limitation, all reasonable fees and disbursements of legal
counsel) or otherwise.
"OFAC List" means the list of specially designated nationals and
blocked persons subject to financial sanctions that is maintained by the U.S.
Treasury Department, Office of Foreign Assets Control and any other similar list
maintained by the U.S. Treasury Department, Office of Foreign Assets Control
pursuant to any Requirements of Law, including, without limitation, trade
embargo, economic sanctions, or other prohibitions imposed by Executive Order of
the President of the United States. The OFAC List is accessible through the
internet website www.treas.gov/ofac/t11sdn.pdf.
"Open Date" has the meaning set forth in Section 2.05(a) of this
Loan Agreement.
"Operating Account" means the bank account in the name of Borrower
established with Wachovia Bank, NA given account number 200 001 0968907.
"Operating Agreements" has the meaning set forth in the Security
Instrument.
"Operating Expenses" means all cash expenses actually incurred by or
charged to Borrower (appropriately pro-rated for any expenses that, although
actually incurred in a particular period, also relate to other periods), with
respect to the ownership, operation, leasing and management of the Property in
the ordinary course of business, determined in accordance with GAAP, and
adjusted by Lender in accordance with Lender's customary underwriting procedures
and policies then in effect which Operating Expenses are also adjusted to
include any underwritten reserves for Replacements and any other underwritten
reserves as determined by Lender whether or not required to be reserved.
Operating Expenses shall specifically exclude (1) capital expenditures, (2)
depreciation, (3) payments made in connection with the payment of the
outstanding principal balance of the Loan, (4) costs of Restoration following a
Casualty or Condemnation, (5) funds disbursed from any Reserve Account, and (6)
any other non-cash items.
"Operating Income" means all gross cash income, revenues and
consideration received or paid to or for the account or benefit of Borrower
resulting from or attributable to the operation or leasing of the Property
determined in accordance with GAAP and adjusted by Lender in accordance with
Lender's customary underwriting procedures and policies then in effect but
excluding any income or revenues from a sale, refinancing, Casualty or
Condemnation, payment of rents more than one (1) month in advance, lease
termination payments, or payments from any other events not related to the
ordinary course of operations of the Property.
"Organizational Chart" means the chart attached hereto as Exhibit D
which shows all persons or entities having an ownership interest in Borrower and
in the General Partners.
"Other Charges" means all ground rents, maintenance charges,
impositions (other than Taxes) and similar charges (including, without
limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Property), now or hereafter assessed or imposed
against the Property, or any part thereof, together with any penalties thereon.
"Payment Due Date" has the meaning set forth in Section 2.03(b) of
this Loan Agreement. It is the date that a regularly scheduled payment of
principal and interest (or interest if the loan payments are interest-only) is
due.
"Permitted Encumbrances" means only those exceptions shown in the
Title Insurance Policy and each other Lien which has been approved in writing by
Lender.
"Permitted Transfer" means each of the following:
(a) Transfers of Equity Interests which, in the aggregate over the term of the
Loan (i) do not exceed forty-nine percent (49%) of the total interests in
Borrower or in either General Partner, as applicable; (ii) do not result in any
Person holding an Equity Interest in Borrower or either General Partner, as
applicable, which exceeds forty-nine percent (49%) of the total Equity Interests
in Borrower or in either General Partner, as applicable; and (iii) do not result
in a change of Control.
(b) Transfers with respect to any Person whose stocks or certificates are traded
on a nationally recognized stock exchange.
(c) Transfers which have been approved by Lender in accordance with Section
10.02 of this Loan Agreement.
(d) Permitted Encumbrances.
(e) All Transfers of worn out or obsolete furnishings, fixtures or equipment
that are promptly replaced with property of equivalent value and functionality.
(f) Intentionally Omitted.
(g) All Leases which have been approved by the Lender pursuant to Section 9.06
or that not require Lender's approval pursuant to Section 9.06.
(h) Transfers of Equity Interests in Borrower or General Partners to AIMCO
Properties, L.P., a Delaware limited partnership ("AIMCO OP") or to an Affiliate
of AIMCO OP, provided that such Transfers do not result in a change in Control.
"Person" means an individual, partnership, limited partnership,
corporation, limited liability company, business trust, joint stock company,
trust, unincorporated association, joint venture, governmental authority or
other entity of whatever nature.
"Personal Property" has the meaning set forth in the Security
Instrument.
"Prohibited Prepayment" has the meaning set forth in Section 2.05(c)
of this Loan Agreement.
"Prohibited Prepayment Fee" has the meaning set forth in Section
2.05(c) of this Loan Agreement.
"Property" has the meaning set forth in the Security Instrument.
"Property Management Contract" means the agreement dated January 1,
2003 between Borrower and Property Manager which provides for the management of
the Property for Borrower by Property Manager.
"Property Manager" means OP Property Management, LP, a Delaware
limited partnership.
"Rate Cap" means each interest rate cap obtained by Borrower as
protection against interest rate fluctuations under the Loan.
"Rate Cap Agreement" means the written agreement evidencing the
financial and performance terms of the Rate Cap purchased by Borrower from Rate
Cap Provider which satisfies all requirements of Section 2.07 of this Loan
Agreement.
"Rate Cap Provider" means the counterparty issuing a rate cap to
Borrower.
"Rate Cap Provider Consent" means the Rate Cap Provider Consent and
Acknowledgement to Assignment of Rate Cap with respect to the assignment of the
Rate Cap from Borrower to Lender, executed by the Rate Cap Provider in favor of
Lender.
"Rating Agencies" means Fitch, Inc., Moody's and S&P, or any
successor entity of the foregoing, or any other nationally recognized
statistical rating organization to the extent that any of the foregoing have
been or will be engaged by Lender or its designees in connection with or in
anticipation of Securitization or any other sale or grant of participation
interest in the Loan (or any part thereof).
"Rating Confirmation" means a written confirmation from each of the
Rating Agencies (unless otherwise agreed by Lender) that an action shall not
result in a downgrade, withdrawal or qualification of any securities issued in
connection with a Securitization.
"Rent Roll" means a written statement from Borrower, substantially
in the form attached hereto as Exhibit E, detailing the names of all tenants of
the Property, the portion of Property occupied by each tenant, the base rent and
any other charges payable under each Lease, the term of each Lease, the
beginning date and expiration date of each Lease, whether any tenant is in
default under its Lease (and detailing the nature of such default), and any
other information as is reasonably required by Lender, all certified by a
Responsible Officer to be true, correct and complete.
"Rents" has the meaning set forth in the Security Instrument.
"Replacement Reserve Account" means an account held by Lender, or
Lender's designee, in which the Monthly Replacement Reserve Deposits will be
held, which shall not constitute a trust fund.
"Replacements" means the scheduled repairs and replacements to the
Property identified on Exhibit D hereto.
"Requirements of Law" means (a) the organizational documents of an
entity, and (b) any law, regulation, ordinance, code, decree, treaty, ruling or
determination of an arbitrator, court or other Governmental Authority, or any
Executive Order issued by the President of the United States, in each case
applicable to or binding upon such Person or to which such Person, any of its
property or the conduct of its business is subject including, without
limitation, laws, ordinances and regulations pertaining to the zoning, occupancy
and subdivision of real property.
"Reserve Accounts" means, individually and collectively, as the
context requires, the Tax Escrow Account, the Insurance Premiums Escrow Account,
the Immediate Repair Escrow Account and the Replacement Reserve Account.
"Reserve Item" means, individually and collectively, as the context
requires, the Immediate Repairs and the Replacements.
"Responsible Officers" means, as to any Person, an individual who is
a managing member, a general partner, the chief executive officer, the president
or any vice president of such Person or, with respect to financial matters, the
chief financial officer or treasurer of such Person or any other officer
authorized by such Person to deliver documents with respect to financial matters
pursuant to this Loan Agreement.
"Restoration" means the repairs, replacements, improvements, or
rebuilding of or to the Property following a Casualty or Condemnation.
"Restoration Deficiency Deposit" has the meaning set forth in
Section 9.04(d) of this Loan Agreement. All amounts deposited by Borrower with
Lender as the Restoration Deficiency Deposit shall become a part of the
Restoration Proceeds and disbursed by Lender for Restoration on the same
conditions applicable to disbursement of Restoration Proceeds and, until so
disbursed, are pledged to Lender as security for the Loan and Obligations.
"Restoration Holdback" has the meaning set forth in Section 9.04(e)
of this Loan Agreement.
"Restoration Proceeds" has the meaning set forth in Section 9.04(b)
of this Loan Agreement.
"S & P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., and any successor thereto.
"Second Extended Maturity Date" has meaning set forth in Section
2.03(d) of this Loan Agreement.
"Second Extension Term" has meaning set forth in Section 2.03(d) of
this Loan Agreement.
"Securities Act" means the Securities Act of 1933 and any successor
statute thereto and the related regulations issued thereunder, all as amended
from time to time.
"Securities Liabilities" has the meaning provided in Section 15.05
of this Loan Agreement.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
and any successor statute thereto and the related regulations issued thereunder,
all as amended from time to time.
"Securitization" or "Securitize" means the sale of the Loan, by
itself or as part of pool with other loans, in a transaction whereby mortgage
pass-through certificates or other securities evidencing a beneficial interest,
backed by the Loan or such pool of loans, will be sold as a rated or unrated
public offering or private placement.
"Security Instrument" means the Mortgage, Assignment of Rents and
Leases, Security Agreement and Fixture Filing, or the Deed of Trust, Assignment
of Rents and Leases, Security Agreement and Fixture Filing, or the Deed to
Secure Debt, Assignment of Rents and Leases, Security Agreement and Fixture
Filing as applicable, encumbering the Property and executed by Borrower to
Lender or to a trustee for the benefit of Lender, as the case may be, to secure
Borrower's payment of the Loan and performance of the Obligations.
"Separateness Provisions" has the meaning provided in Article 7.
"Standard Lease Form" means, as applicable, the standard form of
lease agreement used by Borrower for the rental of residential units at the
Property in the form certified to Lender as of the Closing Date or subsequently
approved by Lender in writing.
"Strike Rate" means (a) with respect to the period from and
including the Closing Date through November 1, 2006, 5.5%.
"Tax Code" means the Internal Revenue Code of 1986 and the related
Treasury Department regulations issued thereunder, including temporary
regulations, all as amended from time to time.
"Tax Escrow Account" means an account held by Lender, or Lender's
designee, in which Borrower's initial deposit for Taxes made on the Closing Date
and the Monthly Tax Deposits will be held, which shall not constitute a trust
fund.
"Taxes" means all real estate taxes, government assessments or
impositions, lienable water charges, lienable sewer rents, assessments due under
owner association documents, and all other charges (other than the Other
Charges), now or hereafter levied or assessed against the Land and Improvements.
"Title Insurance Policy" means the mortgagee title insurance policy
obtained by Lender in connection with the Loan, and, until the issuance of such
policy, the commitment for title insurance as marked-up as of the Closing Date,
in either case in form and substance (with such endorsements and affirmative
coverages) as is satisfactory to Lender, insuring that the Security Instrument
constitutes a perfected first Lien against the Property in the Maximum Loan
Amount, subject only to Permitted Encumbrances.
"Transfer" means any action other than a Permitted Transfer by which
either (a) the legal or beneficial ownership of the Equity Interests in Borrower
or in either General Partner or in the Guarantor or (b) the legal or equitable
title to the Property, or any part thereof, or (c) the cash flow from the
Property or any portion thereof, are sold, assigned, transferred, hypothecated,
pledged or otherwise encumbered or disposed of, in each case (a), (b) or (c)
whether undertaken, directly or indirectly, or occurring by operation of law or
otherwise, including, without limitation, each of the following actions:
(i) the sale, conveyance, assignment, grant of an option with respect
to, mortgage, deed in trust, pledge, grant of a security interest
in, or any other transfer, as security or otherwise, of the Property
or with respect to the Leases or Rents (or any thereof);
(ii) the grant of an easement across the Property (other than minor
easements not having a Material Adverse Effect) or any other
agreement granting rights in or restricting the use or development
of the Property (including, without limitation, air rights);
(iii) an installment sale wherein Borrower agrees to sell the Property for
a price to be paid in installments;
(iv) an agreement by Borrower leasing all or a substantial part of the
Property for other than actual occupancy by a space tenant
thereunder; or
(v) the issuance of additional partnership, membership or other equity
interests, as applicable.
"UCC" means the Uniform Commercial Code in effect in the State where
the Property is located, as from time to time amended or restated. For purposes
of the UCC's application to the Reserve Accounts, the parties agree that the
Reserve Accounts shall be deemed located in the state where the Property is
located.
"Underwriter Group" has the meaning provided in Section 15.05 of
this Loan Agreement.
IN WITNESS WHEREOF, Lender and Borrower hereby sign, seal and deliver this
Loan Agreement. By signing below, General Partners also consent, in their
individual capacity, to the obligations of General Partners set forth in
Sections 7.02(b), 9.11(c) and Article 15 of this Loan Agreement.
LENDER:
GMAC COMMERCIAL MORTGAGE BANK, a Utah
industrial bank
By:
Name:
Title:
BORROWER:
ANGELES INCOME PROPERTIES, LTD. II, a
California limited partnership, doing
business in North Carolina as Angeles
Income Properties, Ltd. II, A
California Limited Partnership
By: Angeles Realty Corporation II, a
California corporation, its
Managing General Partner
By: /s/ Harry Alcock
Harry Alcock
Executive Vice President
Borrower's State Identification
Number:
198422000070
Borrower's Tax Identification
Number:
95-3793526____________________
ACKNOWLEDGED AND AGREED:
AIMCO ANGELES GP, L.L.C., a Delaware
limited liability company
By:/s/ Harry Alcock
Name: Harry Alcock
Title: Executive Vice President
ANGELES REALTY CORPORATION II, a
California corporation
By:/s/ Harry Alcock
Name: Harry Alcock
Title: Executive Vice President
Attachments (available upon request):
Exhibit A Compliance Certificate Form Exhibit B Disbursement Request Form
Exhibit C Immediate Repairs Exhibit D Organizational Chart Exhibit E Rent Roll
Exhibit F Replacements Exhibit G Intentionally Omitted
Number: 46774
Landmark Apartments
Exhibit 10.29
PROMISSORY NOTE
$7,000,000.00 As of November 1, 2004
FOR VALUE RECEIVED, and upon the terms and conditions set forth herein,
ANGELES INCOME PROPERTIES, LTD. II, a California limited partnership doing
business in North Carolina as Angeles Income Properties, Ltd. II, A California
Limited Partnership ("Borrower"), promises to pay to the order of GMAC
COMMERCIAL MORTGAGE BANK, a Utah industrial bank (together with its successors
and assigns, "Lender"), at Lender's office located at 200 Witmer Road, P.O. Box
809, Horsham, Pennsylvania 19044-0809, Attn: Servicing - Accounting Manager, or
at such other place as Lender may designate to Borrower in writing from time to
time, the principal amount of Seven Million and 00/100 Dollars ($7,000,000.00),
together with interest thereon, in the amounts, at the times and otherwise in
accordance with the terms set forth in that certain Loan Agreement of even date
herewith ("Loan Agreement") between Borrower and Lender, which terms are
incorporated herein by this reference.
ARTICLE 1
TERMS OF NOTE
1.01 Loan Agreement. This Note is the promissory note referred to in the Loan
Agreement. All capitalized terms used herein and not defined herein have the
meaning provided in the Loan Agreement. All of the terms, conditions and
provisions of the Loan Agreement applicable to this Note and the debt evidenced
hereby are incorporated herein by this reference.
1.02 Negotiable Instrument. Borrower agrees that this Note is a negotiable
instrument, even though this Note, absent this paragraph, may not otherwise
qualify as a negotiable instrument under applicable law.
1.03 Exculpation. NOTWITHSTANDING ANY PROVISION HEREOF TO THE CONTRARY,
BORROWER'S PERSONAL LIABILITY FOR PAYMENT OF THIS NOTE AND PERFORMANCE OF THE
OBLIGATIONS UNDER THIS NOTE IS LIMITED IN THE SAME MANNER AND TO THE SAME EXTENT
AS EXPRESSLY PROVIDED IN THE LOAN AGREEMENT.
1.04 Borrower's Waivers. Borrower, for itself and all others who may become
liable for payment of all or any portion of this Note, hereby waives presentment
for payment, demand, protest, and notice of dishonor, protest, nonpayment,
demand, intent to accelerate, and acceleration. Borrower, for itself and all
others who may become liable for payment of all or any portion of this Note,
hereby further waives and renounces, to the fullest extent permitted by law, all
rights to the benefits of any moratorium, reinstatement, marshalling,
forbearance, valuation, stay, extension, redemption, appraisement, exemption and
homestead now or hereafter provided, both as to party and property (real and
personal), against the enforcement and collection of the obligations evidenced
by this Note or any of the other Loan Documents.
1.05 Unconditional Payment. Any payment received by Lender hereunder that is
required to be refunded or recovered from Lender as a voidable preference or a
fraudulent transfer or is otherwise set-aside pursuant to the Bankruptcy Code or
any insolvency or other debtor relief law shall not be considered as a payment
made on the Loan or under this Note. Borrower's liability under this Note to
make such payment shall be reinstated, notwithstanding that this Note may have
been marked satisfied and returned to Borrower or otherwise canceled, and such
payment shall be immediately due and payable upon demand.
ARTICLE 2
DEFAULT AND REMEDIES
2.01 Event of Default. The occurrence of an "Event of Default" as that term is
defined under the Loan Agreement shall constitute an "Event of Default" under
this Note.
2.02 Cumulative and Independent Remedies. Following an Event of Default (which
has not been waived in writing by Lender), Lender, without notice or consent
from Borrower, shall be entitled to exercise all rights and remedies as have
been provided to Lender hereunder, under the Loan Agreement and other Loan
Documents, by law or in equity. Such rights and remedies are cumulative and may
be exercised independently, concurrently or successively in Lender's sole
discretion and as often as occasion therefor shall arise. No partial exercise by
Lender of any right or remedy will preclude further exercise thereof. Notice or
demand given to Borrower in any instance will not entitle Borrower to notice or
demand in similar or other circumstances or constitute Lender's waiver of its
right to take any future action in any circumstance without notice or demand
(except where expressly required by this Note to be given). Lender may release
security for the Loan, may release any party liable for the Loan, may grant
extensions, renewals or forbearances with respect thereto, and may apply any
security held by it to payment of the Loan, in each case without prejudice to
its rights under this Note. Lender will not be deemed as a consequence of its
delay or failure to act, or any forbearances granted, to have waived or be
estopped from exercising any of its rights or remedies.
ARTICLE 3
MISCELLANEOUS PROVISIONS
3.01 Incorporation from Loan Agreement. All provisions of Articles 17
and 18, inclusive, of the Loan Agreement are incorporated into this Note by
this reference, as if fully reproduced herein.
3.02 WAIVER OF JURY TRIAL. BORROWER HEREBY WAIVES ITS RIGHT, TO THE FULL EXTENT
PERMITTED BY LAW, AND AGREES NOT TO ELECT, A TRIAL BY JURY WITH RESPECT TO ANY
ISSUE ARISING OUT OF THIS NOTE OR THE RELATIONSHIP BETWEEN THE PARTIES AS
BORROWER AND LENDER.
[Remainder of page is blank; signatures appear on next page.]
IN WITNESS WHEREOF, the undersigned hereby signs, seals and delivers this
Note, intending to be legally bound hereby.
ANGELES INCOME PROPERTIES, LTD. II, a
California limited partnership, doing
business in North Carolina as Angeles
Income Properties, Ltd. II, A
California Limited Partnership
By: Angeles Realty Corporation II, a
California corporation, its
Managing General Partner
By: /s/ Harry Alcock
Harry Alcock
Executive Vice President
Number: 46774
Landmark Apartments
Exhibit 10.30
GUARANTY
(Exceptions to Nonrecourse Liability)
THIS GUARANTY ("Guaranty") is made as of this 1st day of November, 2004 in
favor of GMAC COMMERCIAL MORTGAGE BANK, a Utah industrial bank (together with
its successors and assigns, "Lender") by AIMCO PROPERTIES, L.P., a Delaware
limited partnership (who, whether one or more, together are referred to as
"Guarantors" and each individually as "Guarantor").
BACKGROUND
A. ANGELES INCOME PROPERTIES, LTD. II, a California limited partnership doing
business in North Carolina as Angeles Income Properties, Ltd. II, A California
Limited Partnership ("Borrower") and Lender are entering into a certain Loan
Agreement of even date herewith ("Loan Agreement") pursuant to which Lender will
make a loan ("Loan") to Borrower in the maximum principal amount of
$7,000,000.00. The Loan also will be evidenced by Borrower's promissory note to
Lender of even date herewith ("Note") and secured by, among other things, a
mortgage, deed of trust, deed to secure debt or similar security instrument made
by Borrower to Lender also of even date herewith ("Security Instrument") which
grants to Lender, among other things, a first lien on the property described
therein.
B. Each Guarantor owns a direct or indirect interest in Borrower and will derive
substantial benefit from Lender's making of the Loan to Borrower.
C. Lender requires as a condition to making the Loan that Guarantors agree,
jointly and severally, to guaranty for the benefit of Lender, and its successors
and assigns, all obligations and liabilities of Borrower with respect to the
Loan for which Borrower is personally liable.
NOW, THEREFORE, to induce Lender to make the Loan to Borrower, and in
consideration of the substantial benefit each Guarantor will derive from the
Loan, and other good and valuable consideration, the receipt and sufficiency of
which is acknowledged, and intending to be legally bound hereby, each Guarantor
hereby agrees as follows:
ARTICLE 1
DEFINED TERMS
1.01 Defined Terms. Capitalized terms used in this Guaranty and not
specifically defined in this Guaranty have the meaning provided in the Loan
Agreement.
ARTICLE 2
OBLIGATION GUARANTEED
2.01 Guaranty of Loan Obligations. Each Guarantor, jointly and severally,
irrevocably and unconditionally, guarantees to Lender the prompt payment when
due, whether at stated maturity, by acceleration or otherwise, of all
obligations and liabilities of Borrower for which Borrower is, or shall become,
personally liable pursuant to the Loan Agreement and other Loan Documents, as
and to the extent provided in Article 12 of the Loan Agreement ("Guaranteed
Obligations").
2.02 Continuing Obligation. This Guaranty is a continuing guaranty and in full
force and effect and will be discharged only if and when the Loan has been paid
in full, and all obligations under the Loan Agreement and other Loan Documents
have been fully performed; provided, however, that notwithstanding any of the
foregoing to the contrary, this Guaranty shall remain in full force and effect
for so long as any payment hereunder may be voided in bankruptcy proceedings as
a preference or for any other reason.
2.03 Direct Action Against Guarantor. Each Guarantor's liability under this
Guaranty is a guaranty of payment and performance and not of collection. Lender
has the right to require each Guarantor to pay, comply with and satisfy its
obligations and liabilities under this Guaranty, and shall have the right to
proceed immediately against each Guarantor with respect thereto, without being
required to attempt recovery first from Borrower or any other party, without
first suing on the Note or any other Loan Document and without demonstrating
that the collateral for the Loan is inadequate security or that Lender has
exercised (to any degree) or exhausted any of Lender's other rights and remedies
with respect to Borrower or any collateral for the Loan.
ARTICLE 3
GENERAL TERMS AND CONDITIONS
3.01 Payments; Interest on Amounts Payable Hereunder. Amounts payable to Lender
under this Guaranty shall be immediately due and payable on Lender's written
demand and shall be paid without reduction by set-off, defense, counterclaim or
cross-claim. Interest at the Default Rate (or the maximum interest rate
permitted by applicable law) shall accrue on any judgment obtained by Lender in
connection with the enforcement or collection of amounts due under this Guaranty
until such judgment is paid in full. Lender may apply all money received by
Lender to payment or reduction of the Loan or reimbursement of Lender's
expenses, in such priority and proportions, and at such time or times as Lender
may elect.
3.02 Cumulative Remedies. Guarantors acknowledge that, following an Event of
Default with respect to the Loan, Lender is entitled to accelerate the Loan and
exercise all other rights and remedies as have been provided to Lender under the
other Loan Documents, by law or in equity, including, without limitation
enforcement of this Guaranty. All rights and remedies of Lender are cumulative
and may be exercised independently, concurrently or successively in Lender's
sole discretion and as often as occasion therefor shall arise. Lender's delay or
failure to accelerate the Loan or exercise any other remedy upon the occurrence
of an Event of Default with respect to the Loan shall not be deemed a waiver of
such right as remedy. No partial exercise by Lender of any right or remedy will
preclude further exercise thereof. Notice or demand given to Guarantor in any
instance will not entitle Guarantor to notice or demand in similar or other
circumstances nor constitute Lender's waiver of its right to take any future
action in any circumstance without notice or demand (except where expressly
required by this Guaranty to be given). Lender may release other security for
the Loan, may release any party liable for the Loan, may grant extensions,
renewals or forbearances with respect thereto, may accept a partial or past due
payment or grant other indulgences, or may apply any other security held by it
to payment of the Loan, in each case without prejudice to its rights under this
Guaranty and without such action being deemed an accord and satisfaction or a
reinstatement of the Loan. Lender will not be deemed as a consequence of its
delay or failure to act, or any forbearances granted, to have waived or be
estopped from exercising any of its rights or remedies.
3.03 Enforcement Costs. Guarantors hereby agree to pay, on written demand by
Lender, all costs incurred by Lender in collecting any amount payable under this
Guaranty or enforcing or protecting its rights under the Guaranty, in each case
whether or not legal proceedings are commenced. Such fees and expenses include,
without limitation, reasonable fees for attorneys, paralegals and other hired
professionals, a reasonable assessment of the cost of services performed by
Lender's default management staff, court fees, costs incurred in connection with
pre-trial, trial and appellate level proceedings (including discovery and expert
witnesses), costs incurred in post-judgment collection efforts or in any
bankruptcy proceeding. Amounts incurred by Lender shall be immediately due and
payable, and shall bear interest at the Default Rate from the date of
disbursement until paid in full, if not paid in full within ten (10) business
days after Lender's written demand for payment.
3.04 Unimpaired Liability. Each Guarantor acknowledges and agrees that all
obligations hereunder are and shall be absolute and unconditional under any and
all circumstances without regard to the validity, regularity or enforceability
of any or all of the Loan Documents or the existence of any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor or surety. Without limiting the foregoing, each Guarantor acknowledges
and agrees that its respective liability hereunder shall in no way be released,
terminated, discharged, limited or impaired by reason of any of the following
(whether or not Guarantor has any knowledge or notice thereof): (a) Borrower's
lack of authority or lawful right to enter into any of the Loan Documents; (b)
any modification, supplement, extension, consolidation, restatement, waiver or
consent provided by Lender with respect to any of the Loan Documents including,
without limitation, approval to a Transfer or the grant of extensions of time
for payment or performance; (c) failure to record any Loan Document or to
perfect any security interest intended to be provided thereby or otherwise to
protect, secure or insure any collateral for the Loan; (d) Lender's failure to
exercise, or delay in exercising, any rights or remedies Lender may have under
the Loan Documents or under this Guaranty; (e) the release or substitution, in
whole or in part, of any collateral for the Loan or acceptance of additional
collateral for the Loan; (f) the release of any Guarantor from performance, in
whole or in part, under this Guaranty or the release of Borrower from
performance, in whole or in part, under any of the Loan Documents, in each case
whether by operation of law, Lender's voluntary act, or otherwise; (g) any
bankruptcy, insolvency, reorganization, adjustment, dissolution, liquidation or
other like proceeding involving or affecting Borrower, SPE Equity Owner, any
other Guarantor or Lender; (h) the termination or discharge of the Security
Instrument or the exercise of any power of sale or any foreclosure (judicial or
otherwise) or delivery or acceptance of a deed-in-lieu of foreclosure; (i) the
existence of any claim, setoff, counterclaim, defense or other rights which
Guarantor may have against Borrower, SPE Equity Owner, any other Guarantor or
Lender, whether in connection with the Loan or any other transaction; or (j) the
accuracy or inaccuracy of the representations and warranties made by Borrower in
any of the Loan Documents.
3.05 Waivers. Each Guarantor hereby waives and relinquishes, to the fullest
extent permitted by law: (a) all rights or claims of right to cause a
marshalling of assets or to cause Lender to proceed against any of the
collateral for the Loan before proceeding under this Guaranty against it or any
other Guarantor; (b) all rights and remedies accorded by applicable law to
sureties or guarantors, except any rights of subrogation and contribution (the
exercise of which are subject to the terms of this Guaranty); (c) the right to
assert a counterclaim, other than a mandatory or compulsory counterclaim, in any
action or proceeding brought by or against it; (d) notice of acceptance of this
Guaranty and of any action taken or omitted in reliance hereon; (e) presentment
for payment, demand, protest, notice of nonpayment or failure to perform or
observe, or any other proof, notice or demand to which it might otherwise be
entitled with respect to its obligations hereunder; and (f) all homestead or
exemption rights against the obligations hereunder and the benefits of any
statutes of limitation or repose.
3.06 Guarantor Bound by Judgment Against Borrower. Each Guarantor agrees that it
shall be bound conclusively, in any jurisdiction, by the judgment in any action
by Lender against Borrower in connection with the Loan Documents (wherever
instituted) as if such Guarantor were a party to such action even if not so
joined as a party.
3.07 Certain Consequences of Borrower's Bankruptcy.
(a) If Borrower shall be subject to the protection of the Bankruptcy Code or any
insolvency law the effect of which is to prevent or delay Lender from taking any
remedial action against Borrower, including the exercise of any option Lender
has to accelerate and declare the Loan immediately due and payable, Lender may,
as against each Guarantor, nevertheless declare the Loan due and payable and
enforce any or all of its rights and remedies against any Guarantor as provided
herein.
(b) Any payment made on the Loan, whether made by Borrower or any Guarantor or
any other Person, that is required to be refunded or recovered from Lender as a
preference or a fraudulent transfer or is otherwise set-aside pursuant to the
Bankruptcy Code or any insolvency or other debtor relief law shall not be
considered as a payment made on the Loan or under this Guaranty. Each
Guarantor's liability under this Guaranty shall continue with respect to any
such payment, or be deemed reinstated, with the same effect as if such payment
had not been received by Lender, notwithstanding any notice of revocation of
this Guaranty prior to such avoidance or recovery or payment in full of the
Loan, until such time as all periods have expired within which Lender could be
required to return any amount paid at any time on account of the Guaranteed
Obligations.
(c) Until payment in full of the Loan (including interest accruing on the Note
after the commencement of a proceeding by or against Borrower under the
Bankruptcy Code, which interest the parties agree remains a claim that is prior
and superior to any claim of Guarantor notwithstanding any contrary practice,
custom or ruling in cases under the Bankruptcy Code generally), Guarantors agree
not to accept any payment or satisfaction of any kind of indebtedness of
Borrower to Guarantors and hereby assign such indebtedness to Lender, including
the right (but not the obligation) to file proof of claim and to vote in any
other bankruptcy or insolvency action, including the right to vote on any plan
of reorganization, liquidation or other proposal for debt adjustment under
Federal or state law.
3.08 Subrogation and Contribution. Each Guarantor agrees that no payment by it
under this Guaranty shall give rise to (a) any rights of subrogation against
Borrower or the collateral for the Loan, or (b) any rights of contribution
against any other Guarantor, in each case unless and until Lender has received
full and indefeasible payment of the Loan. If the deferral of such rights shall
be unenforceable for any reason, each Guarantor agrees that (a) its rights of
subrogation shall be junior and subordinate to Lender's rights against Borrower
and the collateral for the Loan, and (b) its rights of contribution against any
other Guarantor shall be junior and subordinate to Lender's rights against each
other Guarantor.
3.09 Subordination of Borrower's Obligations to Guarantor. Any indebtedness of
Borrower to any Guarantor, now or hereafter existing, together with any interest
thereon, shall be and hereby is deferred, postponed and subordinated to the
prior payment in full of the Loan. Further, each Guarantor agrees that should
such Guarantor receive any payment, satisfaction or security for any
indebtedness owed by Borrower to it, the same shall be delivered to Lender in
the form received (endorsed or assigned as may be appropriate) for application
on account of, or as security for, the Loan and until so delivered to Lender,
shall be held in trust for Lender as security for the Loan.
3.10 Lender Transferees; Secondary Market Activities. Each Guarantor
acknowledges and agrees that Lender, without notice to any Guarantor or any
Guarantor's prior consent, may assign all or any portion of its rights hereunder
in connection with any sale or assignment of the Loan or servicing rights
related to the Loan, each grant of participations in the Loan, a transfer of the
Loan as part of a Securitization in which Lender assigns its rights to a
securitization trustee, or a contract for the servicing of the Loan, and that
each such assignee, participant or servicer shall be entitled to exercise all of
Lender's rights and remedies hereunder. Each Guarantor further acknowledges that
Lender may provide to third parties with an existing or prospective interest in
the servicing, enforcement, ownership, purchase, participation or Securitization
of the Loan, including, without limitation, any Rating Agency rating the
securities issued in respect of a Securitization or participation of the Loan,
and any entity maintaining databases on the underwriting and performance of
commercial mortgage loans, any and all information which Lender now has or may
hereafter acquire relating to the Loan, the Property or with respect to Borrower
or any Guarantor, as Lender determines necessary or desirable. Each Guarantor
irrevocably waives all rights it may have under applicable law, if any, to
prohibit such disclosure, including, without limitation, any right of privacy.
3.11 Financial Reports, Inspection of Records. Each Guarantor agrees to furnish
to Lender (a) an annual personal financial statement if Guarantor is an
individual or an annual balance sheet and statement of changes in Guarantor's
financial position if Guarantor is not an individual, each to be delivered
within ninety (90) days after the end of the calendar year or close of the
Guarantor's fiscal year, as applicable; and (b) such additional financial
information (including, without limitation, copies of state and Federal income
tax returns) as Lender may reasonably require from time to time (but no more
frequently than annually unless an Event of Default exists with respect to the
Loan). Each financial report provided by a Guarantor shall be certified by such
Guarantor to be complete and accurate and shall be prepared in reasonable detail
in accordance with consistently applied accounting methods reasonably acceptable
to Lender. Lender and its agents have the right, upon prior written notice to
Guarantor (notice to be given unless an Event of Default exists with respect to
the Loan), to examine the records, books and other papers which reflect upon
such Guarantor's financial condition and to make copies and abstracts from such
materials.
3.12 Intentionally Omitted.
3.13 Intentionally Omitted.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.01 Guarantor Due Diligence and Benefit. Each Guarantor represents and warrants
to Lender that (a) the Loan and this Guaranty are for commercial purposes, (b)
it has had adequate opportunity to review the Loan Documents, (c) it is fully
aware of obligations of Borrower thereunder and of the financial condition,
assets and prospects of Borrower, and (d) it is executing and delivering this
Guaranty based solely upon Guarantor's own independent investigation of the
matters contemplated by clauses (a)-(c) above and in no part upon any
representation, warranty or statement of Lender with respect thereto.
4.02 General. Each Guarantor individually, as to such Guarantor, represents and
warrants that:
(a) Authority. Guarantor has the full power and authority to execute and deliver
this Guaranty and to perform its obligations hereunder. If Guarantor is not an
individual: (i) Guarantor is duly organized, validly existing and in good
standing under the laws of the state of its formation, and (ii) the execution,
delivery and performance of this Guaranty by Guarantor has been duly and validly
authorized and the person(s) signing this Guaranty on Guarantor's behalf has
been validly authorized and directed to sign this Guaranty.
(b) Valid and Binding Obligation. This Guaranty constitutes Guarantor's legal,
valid and binding obligation, enforceable against it in accordance with its
terms, except to the extent enforceability may be limited under applicable
bankruptcy and insolvency laws and similar laws affecting creditors' rights
generally and to general principles of equity.
(c) No Conflict with Other Agreement. Guarantor's execution, delivery and
performance of this Guaranty will not (i) violate Guarantor's organizational
documents if Guarantor is not an individual, (ii) result in the breach of, or
conflict with, or result in the acceleration of, any obligation under any
guaranty, indenture, credit facility or other instrument to which Guarantor or
any of its assets may be subject, or (iii) violate any order, judgment or decree
to which Guarantor or any of its assets is subject.
(d) No Pending Litigation. No action, suit, proceeding or investigation,
judicial, administrative or otherwise (including without limitation any
reorganization, bankruptcy, insolvency or similar proceeding), currently is
pending or, to the best of Guarantor's knowledge, threatened against Guarantor
which, either in any one instance or in the aggregate, may have a material,
adverse effect on Guarantor's ability to perform its obligations under this
Guaranty.
(e) Consideration. Guarantor owns a direct or indirect interest in Borrower and
will derive substantial benefit from the Loan to Borrower.
(f) Financial Condition. Guarantor currently is solvent and will not be rendered
insolvent by providing this Guaranty. No change that would have a Material
Adverse Effect has occurred in the financial condition of Guarantor since the
date of its most recent financial statements submitted to Lender, other than has
been disclosed in writing to Lender and acknowledged by Lender.
ARTICLE 5
MISCELLANEOUS
5.01 Notices. All notices and other communications under this Guaranty are to be
in writing and addressed in the case of Lender to the address as set forth below
and in the case of each Guarantor, as set forth below such Guarantor's signature
hereto. Default or demand notices shall be deemed to have been duly given upon
the earlier of: (a) actual receipt; (b) one (1) business day after having been
timely deposited for overnight delivery, fee prepaid, with a reputable overnight
courier service, having a reliable tracking system; (c) one (1) business day
after having been sent by telecopier (with answer back acknowledged) provided an
additional notice is given pursuant to (b); or (d) three (3) business days after
having been deposited in any post office or mail depository regularly maintained
by the U.S. Postal Service and sent by certified mail, postage prepaid, return
receipt requested, and in the case of clause (b) and (d) irrespective of whether
delivery is accepted. A new address for notice may be established by written
notice to the other parties; provided, however, that no address change will be
effective until written notice thereof actually is received by the party to whom
such address change is sent. Lender's notice address is as follows:
GMAC Commercial Mortgage Bank
6955 Union Park Center, Suite 330
Midvale, Utah 84047
Attn: President
With a copy to:
GMAC Commercial Mortgage Corporation
200 Witmer Road
Horsham, PA 19044
Attn: Servicing - Executive Vice President
Fax: 215-328-3478
with a required copy to:
GMAC Commercial Mortgage Corporation
200 Witmer Road
Horsham, PA 19044
Attn: PLG Asset Manager
Fax: 215-328-1190
5.02 Entire Agreement; Modification. This Guaranty is the entire agreement
between the parties hereto with respect to the subject matter hereof, and
supersedes and replaces all prior discussions, representations, communications
and agreements (oral or written). This Guaranty shall not be modified,
supplemented, or terminated, nor any provision hereof waived, except by a
written instrument signed by the party against whom enforcement thereof is
sought, and then only to the extent expressly set forth in such writing.
5.03 Binding Effect; Joint and Several Obligations. This Guaranty is binding
upon and inures to the benefit of Guarantors, Lender and their respective heirs,
executors, legal representatives, successors, and assigns, whether by voluntary
action of the parties or by operation of law. No Guarantor may delegate or
transfer its obligations under this Guaranty. If there is more than one
Guarantor, each Guarantor shall be jointly and severally liable hereunder.
5.04 Unenforceable Provisions. Any provision of this Guaranty which is
determined by a court of competent jurisdiction or government body to be
invalid, unenforceable or illegal shall be ineffective only to the extent of
such determination and shall not affect the validity, enforceability or legality
of any other provision, nor shall such determination apply in any circumstance
or to any party not controlled by such determination.
5.05 Duplicate Originals; Counterparts. This Guaranty may be executed in any
number of duplicate originals, and each duplicate original shall be deemed to be
an original. This Guaranty (and each duplicate original) also may be executed in
any number of counterparts, each of which shall be deemed an original and all of
which together constitute a fully executed Guaranty even though all signatures
do not appear on the same document.
5.06 Construction of Certain Terms. Defined terms used in this Guaranty may be
used interchangeably in singular or plural form, and pronouns shall be construed
to cover all genders. Article and section headings are for convenience only and
shall not be used in interpretation of this Guaranty. The words "herein,"
"hereof" and "hereunder" and other words of similar import refer to this
Guaranty as a whole and not to any particular section, paragraph or other
subdivision; and the word "section" refers to the entire section and not to any
particular subsection, paragraph of other subdivision; and "Guaranty" and each
of the Loan Documents referred to herein mean the agreement as originally
executed and as hereafter modified, supplemented, extended, consolidated, or
restated from time to time.
5.07 Governing Law. This Guaranty shall be interpreted and enforced according to
the laws of the State where the Property is located (excluding any choice of law
rules that may direct the application of the laws of another jurisdiction).
5.08 Consent to Jurisdiction. Each Guarantor irrevocably consents and submits to
the exclusive jurisdiction and venue of any state or federal court sitting in
the county and state where the Property is located with respect to any legal
action arising with respect to this Guaranty and waives all objections which it
may have to such jurisdiction and venue.
5.09 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW,
EACH GUARANTOR WAIVES AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO
ANY ISSUE ARISING OUT OF THIS GUARANTY.
[Remainder of page is blank; signatures appear on next page.]
Loan Number: 46774
Landmark Apartments
IN WITNESS WHEREOF, the undersigned hereby sign, seal and deliver this
Guaranty
AIMCO PROPERTIES, L.P., a Delaware
limited partnership
By: AIMCO-GP, Inc., a Delaware
corporation, its general partner
By: /s/ Harry Alcock
Harry Alcock
Executive Vice President
Date: November 1, 2004
Address for Notice:
c/o AIMCO
Stanford Place 3
4582 S. Ulster Street Parkway, Suite 1100
Denver, Colorado 80237
Attn.: Patti K. Fielding
Fax: 303-300-3241