EXECUTION COPY
FINANCING AGREEMENT
AMONG
HOUSING FINANCE AUTHORITY OF BROWARD COUNTY, FLORIDA
AS ISSUER,
THE BANK OF NEW YORK
AS TRUSTEE
AND
OTC APARTMENTS LIMITED PARTNERSHIP
AS BORROWER
RELATING TO
$9,870,000
BROWARD COUNTY, FLORIDA MULTIFAMILY
HOUSING REVENUE REFUNDING BONDS
(BOARDWALK APARTMENTS PROJECTS) SERIES 1996
DATED AS OF JUNE 15, 1996
TABLE OF CONTENTS
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RECITALS .................................................................. 1
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions.................................................... 2
Section 1.2 Rules of Construction ......................................... 2
Section 1.3 Effective Date ................................................ 3
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.1 Representations, Warranties and Covenants by the Borrower...... 4
ARTICLE III
THE BONDS AND THE PROCEEDS THEREOF
Section 3.1 Bonds ......................................................... 10
ARTICLE IV
THE MORTGAGE LOAN
Section 4.1 Amount and Source of Mortgage Loan ............................ 11
Section 4.2 Terms of the Mortgage Loan .................................... 11
Section 4.3 Payment of Fees and Expenses................................... 11
Section 4.4 Application of Mortgage Loan Payments ......................... 13
Section 4.5 Notification of Prepayment of Mortgage Note.................... 13
ARTICLE V
COVENANTS, UNDERTAKINGS AND OBLIGATIONS OF THE BORROWER
Section 5.1 Taxes, Other Governmental Charges and Utility Charges.......... 14
Section 5.2 Compliance With Laws .......................................... 14
Section 5.3 Maintenance of Legal Existence ................................ 14
Section 5.4 Operation of Project .......................................... 15
Section 5.5 Tax Covenants.................................................. 15
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Section 5.6 Further Assurances and Corrective Instruments ................. 15
Section 5.7 Compliance With Other Documents ............................... 15
Section 5.8 Notice of Certain Events....................................... 16
Section 5.9 Indemnification ............................................... 16
Section 5.10 Right to Perform Borrower's Obligations........................ 17
Section 5.11 Nonrecourse Provisions ........................................ 18
ARTICLE VI
MORTGAGE LOAN DOCUMENTS
Section 6.1 Assurances .................................................... 19
Section 6.2 Financial Obligations Personal to the Borrower................. 19
ARTICLE VII
THE PROJECT
Section 7.1 Regulatory Agreement .......................................... 20
Section 7.2 Right to Enforce Compliance ................................... 20
Section 7.3 Damage, Destruction and Condemnation .......................... 20
ARTICLE VIII
TRUSTEE'S INTEREST IN AGREEMENT
Section 8.1 Issuer Assignment of this Financing Agreement.................. 21
Section 8.2 Third-Party Beneficiaries ..................................... 21
Section 8.3 Issuer Compliance With Indenture............................... 21
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
Section 9.1 Events of Default ............................................. 22
Section 9.2 Remedies upon an Event of Default ............................. 23
Section 9.3 Default Under Regulatory Agreement............................. 24
Section 9.4 Limitation on Waivers ......................................... 25
Section 9.5 Notice of Default: Fannie Mae's Right to Cure ................. 26
Section 9.6 Rights Cumulative.............................................. 26
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ARTICLE X
MISCELLANEOUS
Section 10.1 Notices ...................................................... 27
Section 10.2 Amendment..................................................... 27
Section 10.3 Entire Agreement ............................................. 27
Section 10.4 Binding Effect................................................ 27
Section 10.5 Severability.................................................. 27
Section 10.6 Execution in Counterparts .................................... 28
Section 10.7 Governing Law ................................................ 28
Section 10.8 Limited Liability ............................................ 28
Section 10.9 Term of this Financing Agreement.............................. 28
ARTICLE XI
CONTINUING DISCLOSURE
Section 11.1 Furnishing of Information Generally........................... 29
Section 11.2 Continuing Disclosure Undertaking ............................ 29
Section 11.3 Borrower to Provide Information to Trustee.................... 31
Section 11.4 Issuer Not Obligated ......................................... 32
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FINANCING AGREEMENT
This FINANCING AGREEMENT (this "FINANCING AGREEMENT"), is dated as of June
15, 1996, and entered into by and among the HOUSING FINANCE AUTHORITY OF BROWARD
COUNTY, FLORIDA (the "ISSUER"), THE BANK OF NEW YORK, as trustee under the
Indenture referred to below (together with its successors and assigns, the
"TRUSTEE") and OTC APARTMENTS LIMITED PARTNERSHIP, a Florida limited
partnership, (together with its successors and assigns, the "BORROWER").
RECITALS:
A. As more fully set forth in the Indenture of Trust, of even date
herewith, between the Issuer and the Trustee (the "INDENTURE"), the Issuer is
issuing its MULTIFAMILY REVENUE REFUNDING BONDS (BOARDWALK APARTMENTS PROJECT)
SERIES 1996 in the aggregate principal amount of $9,870,000 (herein the
"BONDS").
B. The parties hereto acknowledge the matters set forth in the
Recitals to the Indenture.
NOW, THEREFORE, the parties hereto, in consideration of the premises and
the mutual covenants and commitments of the parties set forth herein, the
receipt and sufficiency of which are hereby acknowledged by the parties hereto,
hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS. Capitalized terms used herein without definition
shall have the respective meanings set forth in the Indenture. In addition to
the terms elsewhere defined in this Financing Agreement, the following terms
used in this Financing Agreement (including the recitals) shall have the
following meanings unless the context indicates another or different meaning or
intent, and such definitions shall be equally applicable to both the singular
and plural forms of any of the terms herein defined:
"BOND DOCUMENTS" means this Financing Agreement, the Regulatory Agreement,
the Tax Certificate, the Indenture and the Bond Purchase Agreement, dated June
19, 1996 among Underwriter, the Issuer and the Borrower.
"EVENT OF DEFAULT" means any event of default specified and defined in
Section 9.1(a) of this Financing Agreement.
"KEY PRINCIPAL" has the meaning assigned to that term in the Mortgage.
"MORTGAGE LOAN DOCUMENTS" means the Mortgage Note, the Mortgage and all
other documents evidencing, securing or otherwise relating to the Mortgage Loan,
including all amendments, supplements, modifications and restatements thereof,
excluding, however, the Bond Documents.
"MORTGAGE NOTE RATE" shall mean a per annum rate of interest calculated in
accordance with the Mortgage Note.
"PERMITTED LIENS" shall mean any easements and restrictions listed in a
schedule of exceptions to coverage in the title insurance policy delivered with
respect to the Project as required by the Mortgage Loan Documents.
"PERSON" means any natural person, firm, partnership, association,
corporation or public body.
"TAX CERTIFICATE" means the Tax Compliance Certificate, dated the Closing
Date, executed and delivered by the Issuer and the Borrower, as amended,
supplemented or otherwise modified from time to time.
SECTION 1.2 RULES OF CONSTRUCTION.
(a) The singular form of any word used herein, including the terms
defined in Section 1.1, shall include the plural, and vice versa, unless the
context otherwise requires. The use herein of a pronoun of any gender shall
include correlative words of the other genders.
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(b) All references herein to "Articles," "Sections" and other
subdivisions hereof are to the corresponding Articles, Sections or subdivisions
of this Financing Agreement as originally executed; and the words "herein,"
"hereof," "hereunder" and other words of similar import refer to this Financing
Agreement as a whole and not to any particular Article, Section or subdivision
hereof.
(c) The headings or titles of the several Articles and Sections
hereof, and any table of contents appended to copies hereof, shall be solely for
convenience of reference and shall not limit or otherwise affect the meaning,
construction or effect of this Financing Agreement or describe the scope or
intent of any provisions hereof.
(d) All accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with applicable generally accepted
accounting principles as in effect from time to time.
(e) Every "request," "order," "demand," "application," "appointment,"
"notice," "statement," "certificate," "consent," or similar action hereunder by
any party shall, unless the form thereof is specifically provided, be in writing
signed by a duly authorized representative of such party with a duly authorized
signature.
(f) The parties hereto acknowledge that each such party and their
respective counsel have participated in the drafting and revision of this
Financing Agreement and the Indenture. Accordingly, the parties agree that any
rule of construction which disfavors the drafting party shall not apply in the
interpretation of this Financing Agreement or the Indenture or any amendment or
supplement or exhibit hereto or thereto.
(g) Whenever Fannie Mae is required to give its consent or approval
to any matter, whether stated as "consent," "written consent," "prior written
consent," "approval," "written approval," "prior written approval," or
otherwise, the giving of such consent or approval by Fannie Mae shall be in its
sole and complete discretion.
(h) Whenever Fannie Mae shall have any right or option to exercise
any discretion, to determine any matter, to accept any presentation or to
approve or consent to any matter, such exercise, determination, acceptance,
approval or consent shall, without exception, be in Fannie Mae's sole and
absolute discretion.
SECTION 1.3 EFFECTIVE DATE. The provisions of this Financing Agreement
shall be effective on and as of the Closing Date, immediately upon the
effectiveness of the Indenture.
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ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 2.1 REPRESENTATIONS, WARRANTIES AND COVENANTS BY THE BORROWER.
The Borrower represents, warrants and covenants as follows:
(a) The Borrower is a Florida limited partnership and is qualified to
do business in the State and in every other state in which the nature of its
business requires such qualification. The Borrower has full power and authority
to own its properties and to carry on its business as now being conducted and as
contemplated to be conducted with respect to the Project, and to enter into, and
to perform and carry out the transactions provided for in this Financing
Agreement, all other Bond Documents contemplated hereby to be executed by the
Borrower and the Mortgage Loan Documents. This Financing Agreement, the other
Bond Documents to which the Borrower is a party, the Mortgage Loan Documents and
all other documents to which the Borrower is a party and contemplated hereby or
thereby have been duly authorized, executed and delivered by the Borrower and,
upon execution and delivery of the other parties thereto, constitute the legal,
valid and binding obligations of the Borrower, enforceable against the Borrower
in accordance with their respective terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the rights of
creditors generally and general equitable principles.
(b) Neither the execution and delivery of this Financing Agreement,
all other Bond Documents to be executed by the Borrower, the Mortgage Loan
Documents or any other documents contemplated hereby or thereby, the
consummation of the transactions contemplated hereby or thereby, nor the
fulfillment of or compliance with the terms and conditions of this Financing
Agreement, all other Bond Documents to be executed by the Borrower, the Mortgage
Loan Documents or any other documents contemplated hereby or thereby, will
violate any provision of law, any order of any court or other agency of
government, or any of the organizational or other governing documents of the
Borrower, or any indenture, agreement or other instrument to which the Borrower
is now a party or by which it or any of its properties or assets is bound, or be
in conflict with, result in a breach of or constitute a default (with due notice
or the passage of time or both) under any such indenture, agreement or other
instrument or any license, judgment, decree, law, statute, order, rule or
regulation of any governmental agency or body having jurisdiction over the
Borrower or any of its activities or properties, or, except as provided
hereunder, result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the property or assets of the
Borrower, except for Permitted Liens.
(c) The Borrower has and will have fee simple title to the Project,
subject to the Permitted Liens. The Borrower is the sole borrower under the
Mortgage Loan.
(d) No litigation or proceeding is pending or, to the knowledge of the
Borrower, threatened against the Borrower or with respect to the Project which
has a reasonable probability of having a material adverse effect on its
financial condition or business, or the
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transactions contemplated by this Financing Agreement, the Indenture, the other
Bond Documents or the Mortgage Loan Documents, or which in any way would
adversely affect the validity or enforceability of the Bonds, the Indenture,
this Financing Agreement, the other Bond Documents or the Mortgage Loan
Documents, or the ability of the Borrower to perform its obligations under this
Financing Agreement, the other Bond Documents or the Mortgage Loan Documents
executed by the Borrower.
(e) The Project conforms in all material respects with all applicable
zoning, planning, building and environmental laws, ordinances and regulations of
governmental authorities having jurisdiction over the Project, all necessary
utilities are available to the Project, and the Borrower will obtain all
requisite zoning, planning, building and environmental and other permits which
may become necessary with respect to the Project. The Borrower has obtained all
licenses, permits and approvals necessary for the ownership, operation and
management of the Project, including all approvals essential to the transactions
contemplated by this Financing Agreement, the Indenture, the other Bond
Documents, the Mortgage Loan Documents and any other documents contemplated
hereby or thereby.
(f) The financial statements which have been furnished by or on behalf
of the Borrower to the Issuer, the Servicer or Fannie Mae are complete and
accurate in all material respects and present fairly the financial condition of
the Borrower as of their respective dates in accordance with generally accepted
accounting methods applied by the Borrower on a consistent basis, and since the
date of the most recent of such financial statements there has not been any
material adverse change, financial or otherwise, in the condition of the
Borrower, and there has not been any material transaction entered into by the
Borrower other than transactions in the ordinary course of business, and the
Borrower does not have any material contingent obligations which are not
otherwise disclosed in its financial statements. There (i) is no completed,
pending or threatened bankruptcy, reorganization, receivership, insolvency or
like proceeding, whether voluntary or involuntary, affecting the Project, the
Borrower or any Key Principal, and (ii) has been no assertion or exercise of
jurisdiction over the Project, the Borrower by any court empowered to exercise
bankruptcy powers.
(g) No event has occurred and no condition exists with respect to the
Borrower or the Project that would constitute an Event of Default or which, with
the lapse of time, if not cured, or with the giving of notice, or both, would
become an Event of Default. The Borrower is not in default under the Regulatory
Agreement, the Prior Mortgage or any other document executed in connection with
the Prior Loan.
(h) The Borrower has complied with all the terms and conditions of the
Tax Certificate, including the terms and conditions of the exhibits thereto, and
the representations set forth in the Tax Certificate pertaining to the Borrower
and the Project are true and accurate.
(i) The Project is, as of the Closing Date, in compliance with all
requirements of the Regulatory Agreement, including all applicable requirements
of the Act and the Code. The Borrower intends to cause the residential units in
the Project to be rented or available for rental on a basis which satisfies the
requirements of the Regulatory Agreement, including all
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applicable requirements of the Act and the Code. All leases will comply with all
applicable laws and the Regulatory Agreement. The Project meets the requirements
of this Financing Agreement, the Regulatory Agreement, the Act and the Code with
respect to multifamily rental housing.
(j) No information, statement or report furnished in writing to the
Issuer, Fannie Mae, the Servicer or the Trustee by the Borrower in connection
with this Financing Agreement, the other Bond Documents or Mortgage Loan
Documents or the consummation of the transactions contemplated hereby and
thereby (including, without limitation, any information furnished by the
Borrower in connection with the preparation of any materials related to the
issuance delivery or offering of the Bonds on the Closing Date) contains any
material misstatement of fact or omits to state a material fact necessary to
make the statements contained therein, in the light of the circumstances under
which they were made, not misleading; and the representations and warranties of
the Borrower and the statements, information and descriptions contained in the
Borrower's closing certificates, as of the Closing Date, are true, correct and
complete, do not contain any untrue statement or misleading statement of a
material fact, and do not omit to state a material fact required to be stated
therein or necessary to make the certifications, representations, warranties,
statements, information and descriptions contained therein, in the light of the
circumstances under which they were made, not misleading; and the estimates and
the assumptions contained herein and in any certificate of the Borrower
delivered as of the Closing Date are reasonable and based on the best
information available to the Borrower.
(k) To the best knowledge of the Borrower, no member, officer, agent
or employee of the Issuer has been or is in any manner interested, directly or
indirectly, in that person's own, name or in the name of any other person, in
the Bonds, the Bond Documents, the Mortgage Loan Documents, the Borrower or the
Project, in any contract for property or materials to be furnished or used in
connection with the Project, or in any aspect of the transactions contemplated
by the Bond Documents or the Mortgage Loan Documents.
(l) No authorization, consent, approval, order, registration
declaration or withholding of objection on the part of or filing of or with any
governmental authority not already obtained or made (or to the extent not yet
obtained or made the Borrower has no reason to believe that such authorizations,
consents, approvals, orders, registrations or declarations will not be obtained
or made in a timely fashion) is required for the execution and delivery or
approval, as the case may be, of this Financing Agreement, the other Bond
Documents, the Mortgage Loan Documents or any other documents contemplated by
this Financing Agreement, the other Bond Documents or the Mortgage Loan
Documents, or the performance of the terms and provisions hereof or thereof by
the Borrower.
(m) The Borrower is not presently under any cease or desist order or
other orders of a similar nature, temporary or permanent, of any federal or
state authority which would have the effect of preventing or hindering
performance of its duties hereunder, nor are there any proceedings presently in
progress or to its knowledge contemplated which would, if successful, lead to
the issuance of any such order.
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(n) The Borrower acknowledges, represents and warrants that it
understands the nature and structure of the transactions relating to the
refinancing of the Project; that it is familiar with the provisions of all of
the documents and instruments relating to such financing to which it or the
Issuer is a party or of which it is a beneficiary including, without limitation,
the Indenture; that it approves the initial appointment of the Trustee under the
Indenture; that it understands the risks inherent in such transactions,
including, without limitation, the risk of loss of the Project; and that it has
not relied on the Issuer, the Servicer or Fannie Mae for any guidance or
expertise in analyzing the financial or other consequences of the transactions
contemplated by this Financing Agreement and the Indenture or otherwise relied
on the Issuer, the Servicer or Fannie Mae in any manner.
(o) The Borrower has not received any notice that it is not in
compliance with all provisions of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended ("CERCLA"); the Resource
Conservation and Recovery Act; the Superfund Amendments and Reauthorization Act
of 1986; the Toxic Substances Control Act and all environmental laws of the
State (the "ENVIRONMENTAL LAWS"), or with any rules, regulations and
administrative orders of any governmental agency, or with any judgments, decrees
or orders of any court of competent jurisdiction with respect thereto; and the
Borrower has not received any assessment, notice (primary or secondary) of
liability or financial responsibility, and no notice of any action, claim or
proceeding to determine such liability or responsibility, or the amount thereof,
or to impose civil penalties with respect to a site listed on any federal or
state listing of sites containing or believed to contain "hazardous materials"
(as defined in the Environmental Laws), nor has the Borrower received
notification that any hazardous substances (as defined under CERCLA) that it has
disposed of have been found in any site at which any governmental agency is
conducting an investigation or other proceeding under any Environmental Law.
(p) The Borrower has not received any notice that it is not in full
compliance with the Employment Retirement Income Security Act of 1974, as
amended, and the Department of Labor regulations thereunder, with the Code and
Regulations thereunder and with terms of such plan or plans with respect to each
pension or welfare benefit plan to which the Borrower is a party or makes any
employer contributions with respect to its employees, for the current or prior
plan years of such plans.
(q) The average maturity of the Bonds does not exceed 120% of the
average reasonably expected economic life of the facilities of the Project
financed with the original net proceeds.
(r) The Bonds are not and shall not be "federally guaranteed" as
defined in Section 149(b) of the Code.
(s) The Borrower intends to hold the Project for its own account and
has no current plans to sell and has not entered into any agreement to sell all
or any portion of the Project.
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(t) No money on deposit in any fund or account in connection with the
Prior Bonds, whether or not such money was derived from other sources, has been
used by or under the direction of the Borrower in a manner which would cause the
Prior Bonds to be "arbitrage bonds" within the meaning of Section 103(c) of the
1954 Code.
(u) The Borrower has complied in all material respects with the
requirements of the loan agreement executed in connection with the Prior Loan.
SECTION 2.2 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ISSUER. The
Issuer represents, warrants and covenants as follows:
(a) The Issuer is a public body corporate and politic, duly organized
and existing under the Constitution and laws of the State. The Issuer has the
full legal right, power and authority to execute and deliver this Financing
Agreement, the Regulatory Agreement, the Tax Certificate and the Indenture, and
to carry out its obligations hereunder and thereunder. The execution, delivery
and performance of this Financing Agreement, the Indenture, the Tax Certificate
and the Regulatory Agreement (including the issuance of the Bonds) have been
duly authorized by the Issuer, and each of the foregoing has been duly executed
and delivered by the Issuer and is a legal, valid and binding obligation of the
Issuer, enforceable against the Issuer in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the rights of creditors generally and general equitable principles.
(b) Neither the execution and delivery of the Bonds, this Financing
Agreement, the Regulatory Agreement, the Tax Certificate or the Indenture, the
consummation of the transactions contemplated hereby and thereby, nor the
fulfillment of or compliance with the terms, conditions or provisions of the
Bonds, this Financing Agreement, the Regulatory Agreement, the Tax Certificate
or the Indenture conflicts in any material respect with or results in a material
breach of any of the terms, conditions or provisions of the Constitution or any
statute of the State, or of any agreement, instrument, judgment, order or decree
to which the Issuer is now a party or by which it is bound or constitutes a
material default under any of the foregoing.
(c) Except as otherwise provided in the Indenture, the Issuer has not
created and will not create any debt, lien or charge upon the Trust Estate, and
has not made and will not make any pledge or assignment of or create any
encumbrance thereon, other than the pledge and assignment thereof under the
Indenture.
(d) The Issuer has complied and will comply with all material
provisions of the Act applicable to the Bonds and the transactions contemplated
by this Financing Agreement and the other Bond Documents.
(e) The Bonds have been issued under the Indenture, and are secured by
the Indenture, pursuant to which the Issuer's interest in this Financing
Agreement (other than the Reserved Rights), and the revenues and receipts to be
derived by the Issuer pursuant to this Financing Agreement, will be pledged and
assigned to the Trustee as security for payment of
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the principal of, premium, if any, and interest on the Bonds. The Issuer
covenants that it has not pledged and will not pledge or assign its interest in
this Financing Agreement or the revenues and receipts derived pursuant to this
Financing Agreement (except Reserved Rights) other than to the Trustee under the
Indenture to secure the Bonds.
(f) Upon the discovery by the Issuer of any noncompliance by the
Borrower with this Financing Agreement or the Regulatory Agreement, the Issuer
will notify the Trustee, the Servicer and Fannie Mae of such noncompliance and
will, subject to the provisions of Article IX hereof, promptly institute action,
or cause the Trustee to institute action, to correct such noncompliance, will
diligently pursue such action and will attempt to correct such noncompliance
within sixty (60) days after such discovery, all strictly in accordance with the
terms and conditions of this Financing Agreement or the Regulatory Agreement, as
the case may be, provided that no such action shall be taken which would
adversely affect the interests of the Bondholders or Fannie Mae.
(g) No litigation or administrative action of any nature has been
served on it and is now pending (i) seeking to restrain or enjoin the execution
and delivery of the Indenture or this Financing Agreement, or in any manner
questioning the proceedings or authority relating thereto or otherwise affecting
the validity of the Bonds, or (ii) as to the existence or authority of the
Issuer or that of its present or former members or officers and, to the best
knowledge of the Issuer, none of the foregoing are threatened.
(h) The Issuer has issued the Bonds in order to currently refund the
Prior Bonds which were issued for the purpose of providing permanent financing
for the acquisition and development of the Project.
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ARTICLE III
THE BONDS AND THE PROCEEDS THEREOF
SECTION 3.1 BONDS. The Issuer has authorized the issuance of the Bonds in
the aggregate principal amount of $9,870,000 and Bonds in such amount shall be
issued and Outstanding as of the Closing Date. The obligations of the Issuer,
the Trustee and the Borrower under this Financing Agreement are expressly
conditioned upon (i) the issuance, sale and delivery of the Bonds, (ii) receipt
by the Trustee of the proceeds thereof, and (iii) delivery, contemporaneously
with the issuance of the Bonds, to the Trustee of the Pass Through Certificate.
Neither the Issuer, the Servicer, the Trustee nor Fannie Mae shall have any
liability for any fees, costs or expenses, including, without limitation,
issuance costs relating to the Bonds; all of such fees, costs and expenses shall
be paid by the Borrower.
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ARTICLE IV
THE MORTGAGE LOAN
SECTION 4.1 AMOUNT AND SOURCE OF MORTGAGE LOAN. Upon the issuance and
delivery of the Bonds, pursuant to Section 4.02 of the Indenture the Issuer will
apply the proceeds of the Bonds to fund the Mortgage Loan. The Borrower accepts
the Mortgage Loan from the Issuer, upon the terms and conditions set forth
herein, in the Mortgage Loan Documents and in the Indenture, and subject to the
terms and conditions of the Regulatory Agreement, and agrees to have the
proceeds of the Mortgage Loan applied and disbursed to provide for the current
refunding of the Prior Bonds.
SECTION 4.2 TERMS OF THE MORTGAGE LOAN. The Mortgage Loan shall (a) be
evidenced by the Mortgage Note; (b) shall be secured by the Mortgage; (c) be in
the principal amount of $9,870,000 (d) bear interest at the rate of 6.90% per
annum; (e) provide for payment of principal and interest on the principal amount
thereof, commencing August 1, 1996, or such earlier date required by the Issuer,
and continuing on the first day of each month thereafter through and including
August 1, 2016, in amounts equal to level monthly installments of principal and
interest on the Mortgage Loan based on a 360 day-year amortization schedule
(computed at the per annum rate of interest specified above on the outstanding
principal amount of the Mortgage Loan); PROVIDED, HOWEVER, that all indebtedness
evidenced by the Mortgage Note shall be due and payable on the date of the final
maturity of the Mortgage Note set forth above; and (f) be subject to optional
and mandatory prepayment at the times, in the manner and on the terms, and have
such other terms and provisions, as are set forth therein.
SECTION 4.3 PAYMENT OF FEES AND EXPENSES. In addition to all fees, costs,
expenses and other amounts required to be paid by the Borrower under the
Mortgage Note the Borrower shall pay, without duplication, the following fees
and expenses:
(a) All amounts required to (i) pay the fees of the Trustee for
its duties and services as Trustee in connection with the Bonds (as such
duties and services are set out in the Indenture), and (ii) reimburse the
Trustee for all out-of-pocket expenses (including an annual audit fee of
$3,000 per year), fees, costs and other charges, including counsel fees and
taxes (excluding income, value added and single business taxes), reasonably
and necessarily incurred by the Trustee in performing its duties as Trustee
under the Indenture. All payments for fees and expenses shall be made by
the Borrower not later than ten (10) days after receipt of invoices or
other statements rendered to the Borrower by the Trustee.
(b) The Issuer's annual fee in an amount equal to .18 percent per
annum of the Outstanding principal amount of the Bonds and all amounts
required to pay to the Issuer or to any payee designated by the Issuer, all
expenses of the Issuer incurred at any time related to the Project or the
refinancing thereof which are not paid from the amounts held under the
Indenture, including, without limitation, legal fees and expenses incurred
in connection with the interpretation, performance, enforcement or
amendment
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of any documents relating to the Project or the Bonds or in connection with
questions or other matters arising under such documents, which amounts
shall be paid within thirty (30) days after receipt of request for payment
thereof.
(c) The fees of the rebate monitor, if any, upon receipt of an
appropriately completed invoice, all out-of-pocket expenses of the rebate
monitor.
(d) The annual rating maintenance fee, if any, of any Rating
Agency then rating the Bonds.
(e) All costs and expenses of issuing the Bonds, including, but
not limited to, Rating Agency fees, the Bond Fund Initial Funding
Requirement, printing expenses, attorneys' fees and underwriters' fees, and
all expenses of originating the Mortgage Loan by the Issuer and assigning
and delivering the Mortgage Loan to Fannie Mae, the Borrower acknowledging
that all such fees costs and expenses (excluding the portions of the
ongoing trust administration fees of the Trustee, the Issuer's annual fee
and the rebate monitor's fee to the extent included in the Mortgage Note
Rate) must be paid by the Borrower separate and apart from payments due
under the Mortgage Loan and will not be included in the Mortgage Note Rate.
(f) The Costs of Issuance deposit to be made to the Costs of
Issuance Fund on the Closing Date pursuant to Section 4.01 of the
Indenture.
(g) In addition to the above, the Borrower shall pay, at the
times and in the amounts required in the Indenture, all amounts necessary
to pay any premium and any costs due in connection with an optional
redemption of the Bonds pursuant to the Indenture.
The Borrower acknowledges that the following fees and expenses have
been included in the Mortgage Note Rate:
(i) the annual administrative fees of the Trustee in an amount
equal to .025% of the principal amount of the Bonds Outstanding, payable
semi-annually in advance on August 1 and February 1 of each year commencing
February 1, 1997.
(ii) a servicing fee to the Servicer in the amount of .125% per
annum of the principal amount of the Mortgage Loan outstanding from time to
time, payable monthly in arrears on the same dates on which and for the
same periods for which interest is payable under the Mortgage Note.
(iii) the guaranty fee of Fannie Mae in the amount of .65% per
annum of the principal amount of the Mortgage Loan outstanding from time to
time, payable monthly in arrears on the same dates on which and for the
same periods for which interest is payable under the Mortgage Note.
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(iv) the Issuer's annual fee in an amount equal to .18% of the
principal amount of the Bonds Outstanding, payable semiannually on the
first day of each August and February commencing February 1, 1997.
The Borrower shall give notice to Fannie Mae and the Servicer of the
payment of all fees and expenses not included within the Mortgage Note Rate. All
fees and expenses not included in the Mortgage Note Rate shall not be secured by
the Mortgage and shall be unsecured personal obligations of the Borrower and
shall be subordinate to the Borrower's obligations under the Mortgage Loan in
all respects.
SECTION 4.4 APPLICATION OF MORTGAGE LOAN PAYMENTS. All payments of
interest, principal or other amounts payable by the Borrower under the
Mortgage Loan shall be paid to the Servicer and then by the Servicer to
Fannie Mae (less the portion thereof allocable to servicing fees). Fannie Mae
will remit to the Trustee for deposit in the Revenue Fund amounts
representing interest at the stated rate on the Mortgage Note (less the
portion thereof allocable to servicing and Fannie Mae guaranty fees) or
principal on the Mortgage Loan at the times and in the manner provided in the
Pass-through Certificate without regard to whether timely payment of amounts
payable as principal and interest on the Mortgage Loan shall have been made.
SECTION 4.5 NOTIFICATION OF PREPAYMENT OF MORTGAGE NOTE. The Servicer
shall notify the Trustee promptly of the receipt of any prepayment of the
Mortgage Note, whether upon acceleration, by reason of application of
insurance or condemnation proceeds, optional prepayment or otherwise, unless
the Servicer has received written evidence that the Borrower has notified the
Trustee of such prepayment, and the Trustee shall provide notice thereof to
the Rating Agency.
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ARTICLE V
COVENANTS, UNDERTAKINGS AND OBLIGATIONS OF THE BORROWER
SECTION 5.1 TAXES, OTHER GOVERNMENTAL CHARGES AND UTILITY CHARGES. The
Borrower shall pay, or cause to be paid, promptly as the same become due and
payable, every lawful cost, expense and obligation of every kind and nature,
foreseen or unforeseen, for the payment of which the Issuer, the Trustee, the
Servicer or Fannie Mae is or shall become liable by reason of its or their
estate or interest in the Project or any portion thereof, by reason of any right
or interest of the Issuer, the Trustee, the Servicer or Fannie Mae in or under
this Financing Agreement, or by reason of or in any manner connected with or
arising out of the possession, operation, maintenance, alteration, repair,
rebuilding, use or occupancy of the Project or any portion thereof, including,
without limitation, all taxes, assessments, whether general or special, and
governmental charges of any kind whatsoever that may at any time be lawfully
assessed or levied against or with respect to the Project or any machinery,
equipment or other property installed or brought by the Borrower therein or
thereon; PROVIDED that any amounts payable hereunder that are also required to
be paid by the terms of the Mortgage shall be paid on the terms provided in the
Mortgage.
Upon request, the Borrower shall furnish to the Issuer, the Trustee,
Fannie Mae and the Servicer proof of the payment of any such tax, assessment or
other governmental or similar charge, or any other charge which is payable by
the Borrower as set forth above.
SECTION 5.2 COMPLIANCE WITH LAWS. The Borrower shall, throughout the term
of this Financing Agreement and at no expense to the Issuer, the Trustee or
Fannie Mae promptly comply or cause compliance with all laws, ordinances, rules,
regulations and requirements of duly constituted public authorities which may be
applicable to the Project or to the repair and alteration thereof, or to the use
or manner of use of the Project, including, but not limited to, the Americans
With Disabilities Act and all federal, State and local environmental, labor,
health and safety laws, rules and regulations.
SECTION 5.3 MAINTENANCE OF LEGAL EXISTENCE. During the term of this
Financing Agreement, the Borrower shall maintain its existence as set forth in
Section 2.1(a) and shall not terminate, dissolve or dispose of all or
substantially all of its assets; PROVIDED, HOWEVER, that the Borrower may, with
the written permission of the Issuer, consolidate with or merge into another
entity or permit one or more other entities to consolidate with or merge into
it, or transfer all or substantially all of its assets to another entity, but
only on the condition that the assignee entity or the entity resulting from or
surviving such merger or consolidation (if other than the Borrower), or the
entity to which such transfer shall be made, shall be duly organized and
existing, in good standing and qualified to do business under the laws of the
State, shall remain so continuously during the term hereof, and shall expressly
assume in writing and agree to perform all of the Borrower's obligations
hereunder and under all other documents executed by the Borrower in connection
with the issuance of the Bonds; PROVIDED, FURTHER, that (i) Borrower delivers an
opinion of Bond Counsel to the effect that such consolidation or merger shall
not cause interest on the Bonds to be included in gross income for federal
income tax purposes, and
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(ii) any transfer of the Project shall be effected in accordance with the
Mortgage. Nothing in this Section 5.3 shall be deemed to relieve the Borrower
of its obligations to comply with the provisions of the Mortgage Loan
Documents.
SECTION 5.4 OPERATION OF PROJECT. The Borrower will not sell, transfer or
otherwise dispose of the Project except as provided in the Regulatory Agreement,
the Mortgage and Section 5.3 of this Financing Agreement.
SECTION 5.5 TAX COVENANTS. The Borrower covenants that it will comply
with the requirements and conditions of the Tax Certificate and the
Regulatory Agreement. Without limiting the foregoing, the Borrower covenants
that, notwithstanding any provision of this Financing Agreement or the rights
of the Borrower hereunder, it will not take, or permit to be taken on its
behalf, any action which would cause interest on the Bonds to be included in
gross income for federal income tax purposes and that it will take such
reasonable action as may be necessary to continue such exclusion from gross
income, including, without limitation, (a) the preparation and filing of any
statements required to be filed by it in order to maintain such exclusions;
and (b) the payment to the United States of any amount required to be paid by
the Issuer or the Borrower pursuant to Section 148(f) of the Code and the
Regulations thereunder, including, to the extent applicable, Section 1.148-3
of the Regulations or subsequent applicable Regulations, at the times, in the
amounts and at the places required thereby in order to maintain the exclusion
of interest on the Bonds for federal income tax purposes; and the Borrower
hereby irrevocably authorizes and directs the Issuer and the Trustee (and any
other agent designated by the Issuer) to make payment of such amounts from
funds of the Borrower, if any, held by the Issuer, the Trustee, or any agent
of the Issuer or the Trustee. The Borrower further covenants and agrees that,
pursuant to the requirements of Section 1. 148-1(b) of the Regulations, it
(or any related person contemplated by such Regulations) will not purchase
Bonds in an amount related to the amount of the Mortgage Loan.
SECTION 5.6 FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS. The parties
hereto agree that they will, from time to time, execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, such supplements
hereto and to the other documents contemplated hereby as may reasonably be
required to carry out the intention of or to facilitate the performance of this
Financing Agreement, the Mortgage Loan Documents or the other Bond Documents or
to perfect or give further assurances of any of the rights granted or provided
for herein, the Mortgage Loan Documents or the other Bond Documents.
SECTION 5.7 COMPLIANCE WITH OTHER DOCUMENTS. The Borrower shall make all
payments and shall observe and perform all covenants, conditions and agreements
required to be paid, observed or performed by the Borrower under the Mortgage
Note, the Mortgage, the other Mortgage Loan Documents, the Regulatory Agreement
and all other documents, instruments or agreements which may at any time, or
from time to time, be entered into by the Borrower with respect to the Project
or the operation, occupancy or use thereof. The Indenture has been submitted to
the Borrower for examination, and the Borrower, by execution of this Financing
Agreement, acknowledges and agrees that it has participated in the drafting of
the Indenture that it has approved and agreed to each of the provisions of the
Indenture and that it
15
is bound by, shall adhere to the provisions of, and shall have the rights set
forth by the terms and conditions of, the Indenture and covenants and agrees to
perform all obligations required of the Borrower pursuant to the terms of the
Indenture.
The Borrower hereby grants to the Trustee for the benefit of Fannie
Mae and the Bondholders a security interest in all of its rights in and to all
funds (except the Rebate Fund and the Cost of Issuance Fund) created or
established by the Trustee under the Indenture in the manner and subject to the
terms and conditions of the Indenture.
SECTION 5.8 NOTICE OF CERTAIN EVENTS. The Borrower hereby covenants to
advise the Servicer, the Issuer, the Trustee and Fannie Mae promptly in writing
of the occurrence of any default by the Borrower in the performance or
observance of any covenant, agreement, representation, warranty or obligation of
the Borrower set forth in this Financing Agreement, in any of the other Bond
Documents or any other documents contemplated hereby or thereby, or of any Event
of Default hereunder known to it or of which it has received notice, or any
event which, with the passage of time or service of notice, or both, would
constitute an Event of Default hereunder, specifying the nature and period of
existence of such event and the actions being taken or proposed to be taken with
respect thereto. Such notice shall be given promptly, and in no event less than
ten (10) Business Days after the Borrower receives notice or has knowledge of
the occurrence of any such event. The Borrower further agrees that it will give
prompt written notice to the Servicer if insurance proceeds or condemnation
awards are received with respect to the Project and are not used to repair or
replace the Project, which notice shall state the amount of such proceeds or
award.
SECTION 5.9 INDEMNIFICATION. The Borrower hereby releases the Issuer
and its officers and employees from, and covenants and agrees to indemnify,
hold harmless and defend the Issuer, the Trustee, the Servicer and their
respective officers, members, directors, officials, agents and employees and
each of them (each an "INDEMNIFIED PARTY") from and against, (a) any and all
claims, joint or several, by or on behalf of any person arising from any
cause whatsoever in connection with transactions contemplated hereby or
otherwise in connection with the Project, the Bonds or the execution or
amendment of any document relating thereto; (b) any and all claims, joint or
several, arising from any cause whatsoever in connection with the approval of
refinancing for the Project or the making of the Mortgage Loan; (c) any and
all claims, joint or several, arising from any act or omission of the
Borrower or any of its agents, servants, employees or licensees, in
connection with the Mortgage Loan or the Project; (d) all reasonable costs,
counsel fees, expenses or liabilities incurred in connection with any such
claim, or proceeding brought thereon; (e) any and all claims arising in
connection with the issuance and sale, resale or remarketing of any Bonds or
any certifications or representations made by any Person other than the
Issuer or the party seeking indemnification in connection therewith and the
carrying out by the Borrower of any of the transactions contemplated by the
Bonds, the Indenture, the Regulatory Agreement and this Financing Agreement;
(f) any and all claims arising in connection with the operation of the
Project, or the conditions thereof, environmental or otherwise, occupancy,
use, possession, conduct or management of work done in or about, or from the
planning, design, acquisition, installation or construction of, the Project
or any part thereof; (g) any and all losses, claims, damages, liabilities or
expenses, joint or several, arising
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out of or connected with the Trustee's acceptance or administration of the
trusts created by the Indenture and the exercise of its powers or duties
thereunder or under this Financing Agreement, the Regulatory Agreement or any
other agreements in connection therewith to which it is a party; and (h) any or
all claims arising in connection with the Prior Bonds, including but not limited
to claims arising in connection with the redemption and/or defeasance of the
Prior Bonds; except (i) in the case of the foregoing indemnification of the
Trustee or the Servicer or any of their respective officers, members, directors,
officials and employees, to the extent such damages are caused by the negligence
or willful misconduct of such Person; or (ii) in the case of the foregoing
indemnification of the Issuer or any of its officers, members, directors,
officials and employees, to the extent such damages are caused by the willful
misconduct of such Person. In the event that any action or proceeding is brought
against any indemnified party with respect to which indemnity may be sought
hereunder, the Borrower, upon written notice from the indemnified party, shall
assume the investigation and defense thereof, including the employment of
counsel selected by the Borrower, subject to the approval of the indemnified
party in such party's sole discretion, and shall assume the payment of all
expenses related thereto, with full power to litigate, compromise or settle the
same in its sole discretion; PROVIDED that the Issuer, the Trustee and the
Servicer shall have the right to review and approve or disapprove any such
compromise or settlement. Each indemnified party shall have the right to employ
separate counsel in any such action or proceeding and participate in the
investigation and defense thereof, and the Borrower shall pay the reasonable
fees and expenses of such separate counsel; PROVIDED, HOWEVER, that unless such
separate counsel is employed with the approval of the Borrower, which approval
shall not be unreasonably withheld, the Borrower shall not be required to pay
the fees and expenses of such separate counsel. Borrower hereby approves the use
of the County Attorney office by the Issuer as separate counsel.
Notwithstanding any transfer of the Project to another owner in
accordance with the provisions of the Regulatory Agreement, the Borrower shall
remain obligated to indemnify each indemnified party pursuant to this Section if
such subsequent owner fails to indemnify any party entitled to be indemnified
hereunder, unless such indemnified party has consented to such transfer and to
the assignment of the rights and obligations of the Borrower hereunder.
During any period that Fannie Mae owns the Project and that this
Section 5.9 is applicable to Fannie Mae, Fannie Mae's obligations under this
Section 5.9 shall be limited to acts and omissions of Fannie Mae occurring
during the period of Fannie Mae's ownership of the Project.
SECTION 5.10 RIGHT TO PERFORM BORROWER'S OBLIGATIONS. In the event the
Borrower fails to perform any of its obligations under this Financing Agreement,
the Issuer, the Servicer, Fannie Mae and/or the Trustee, after giving the
requisite notice, if any, may, but shall be under no obligation to, perform such
obligation and pay all costs related thereto, and all such costs so advanced by
the Issuer, the Servicer, Fannie Mae or the Trustee shall become an additional
obligation of the Borrower hereunder, payable on demand with interest thereon at
the default rate of interest payable under the Mortgage Loan Documents.
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SECTION 5.11 NONRECOURSE PROVISIONS.
(a) Except as provided in Section 5.11(b) hereof and except as
otherwise provided in the Mortgage, in any action or proceeding brought on any
instrument evidencing any indebtedness to the Issuer or the Trustee no
deficiency or other money judgment shall be enforced against the Borrower
personally, or any successor or assign of the Borrower, and any judgment
obtained shall, subject in all respects to the limitations of the Regulatory
Agreement, be enforced only against the property of the Borrower, and the rents,
issues and profits thereof, and any other security for the indebtedness
evidenced hereby, and not against the Borrower, or any successor or assign of
the Borrower. It is understood and agreed that nothing herein shall be construed
in any way to limit or restrict any of the Reserved Rights of the Issuer or any
of the rights and remedies of the Issuer in any proceeding or other enforcement
for the payment of any indebtedness, subject only to the aforesaid limitation
upon enforcement of any judgment against the Borrower, and any successor or
assign of the Borrower, subject in all respects to the limitations of the
Regulatory Agreement.
(b) Notwithstanding anything to the contrary contained in subsection
(a) of this Section 5.11, the obligations of the Borrower pursuant to Section
4.3 (a) through (g) and Section 5.9 shall be recourse to the Borrower.
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ARTICLE VI
MORTGAGE LOAN DOCUMENTS
SECTION 6.1 ASSURANCES. The Borrower, the Issuer and the trustee mutually
agree that no party hereto shall enter into any contract or agreement, perform
any act, or request any other party hereto to enter into any contracts or
agreements or perform any acts, which shall adversely affect the Mortgage Loan
Documents.
SECTION 6.2 FINANCIAL OBLIGATIONS PERSONAL TO THE BORROWER. The Issuer
acknowledges that the Project shall be encumbered by the Mortgage Loan
Documents. Notwithstanding any provisions of this Financing Agreement or the
Regulatory Agreement to the contrary, all obligations of the Borrower under this
Financing Agreement and the Regulatory Agreement for the payment of money and
all claims for damages against the Borrower occasioned by breach or alleged
breach by the Borrower of its obligations under the Regulatory Agreement or this
Financing Agreement, including indemnification obligations, shall not be secured
by or in any manner constitute a lien on the Project and no Person shall have
the right to enforce such obligations other than directly against the Borrower.
No subsequent owner of the Project shall be liable or obligated for the breach
or default of any obligation of any prior owner under the Regulatory Agreement
or this Financing Agreement, including but not limited to any payment or
indemnification obligation. Such obligations are personal to the Person who was
the owner at the time the default or breach was alleged to have occurred and
such Person shall remain liable for any and all damages occasioned thereby even
after such Person ceases to be the owner.
Nothing in this Section shall be construed to effect the Trustee's right to
receive payment of any moneys under and pursuant to this Agreement or the
Indenture from payments on the Mortgage Loan to the extent the Trustee or the
Issuer is entitled to such payment.
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ARTICLE VII
THE PROJECT
SECTION 7.1 REGULATORY AGREEMENT. The covenants of the Borrower in the
Regulatory Agreement shall be deemed to constitute covenants of the Borrower
running with the land and an equitable servitude for the benefit of the owners
of the Bonds and shall be binding upon any owner of the Project until (i) such
time as such restrictions expire under their own terms, or (ii) the Issuer (in
its sole and absolute discretion) and the Trustee (as provided in the Indenture)
consent to the release of such restrictions, or (iii) the Regulatory Agreement
is otherwise terminated by its terms. The Borrower hereby covenants to file of
record the Regulatory Agreement and such other documents and take such other
steps as are necessary in order to assure that the restrictions contained in the
Regulatory Agreement will be binding upon all owners of the Project. The
Borrower hereby covenants to include such restrictions in any documents
transferring any interest in the Project to another to the end that such
transferee has notice of, and is bound by, such restrictions.
SECTION 7.2 RIGHT TO ENFORCE COMPLIANCE. The Issuer, the Trustee, the
Servicer and Fannie Mae shall have the right, but not the obligation, to enforce
compliance by the Borrower and its successors as subsequent owners of the
Project with the requirements contained in this Article VII and the requirements
of the Regulatory Agreement.
SECTION 7.3 DAMAGE, DESTRUCTION AND CONDEMNATION. If prior to full
payment of the Bonds (or provision for payment thereof in accordance with the
provisions of the Indenture) the Project or any portion thereof is destroyed (in
whole or in part) or is damaged by fire or other casualty, or title to, or the
temporary use of, the Project or any portion thereof shall be taken under the
exercise of the power of eminent domain by any governmental body or by any
person, firm or corporation acting under governmental authority, the Borrower
shall nevertheless be obligated to continue to pay the amounts specified herein
and in the Mortgage Note to the extent the Mortgage Loan is not prepaid in
accordance with provisions thereof.
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ARTICLE VIII
TRUSTEE'S INTEREST IN AGREEMENT
SECTION 8.1 ISSUER ASSIGNMENT OF THIS FINANCING AGREEMENT.
(a) Pursuant to the Indenture, the Issuer shall pledge, assign and
transfer all of its right, title and interest in this Financing Agreement (other
than the Reserved Rights of the Issuer), and the revenues, receipts and
collections hereunder and thereunder, to the Trustee in the manner and to the
extent provided in the Indenture as security for the payment of the principal
of, premium, if any, and interest on the Bonds, and the parties hereby
acknowledge that the covenants and agreements contained herein are for the
benefit of the registered owners from time to time of the Bonds and may be
enforced on their behalf by the Trustee. The Issuer shall execute and deliver
from time to time, in addition to the instruments of assignment herein
specifically provided for, such other and further instruments and documents as
may be reasonably requested by the Trustee from time to time to further
evidence, effect or perfect such pledge and assignment for the purposes
contemplated in the Indenture.
(b) The Borrower hereby acknowledges and consents to the assignment
and pledge (subject to the reservation by the Issuer of its Reserved Rights) by
the Issuer to the Trustee in the manner and to the extent provided in the
Indenture. The Borrower further acknowledges and consents to the right of the
Trustee to enforce all rights of the Issuer and the Bondholders assigned under
the Indenture.
SECTION 8.2 THIRD-PARTY BENEFICIARIES. The Bondholders, the Servicer and
Fannie Mae are intended to be, and shall be, third-party beneficiaries of this
Financing Agreement; and Fannie Mae and the Servicer shall have the right (but
not the obligation) to enforce the terms of this Financing Agreement insofar as
this Financing Agreement sets forth obligations of the Borrower under this
Financing Agreement.
SECTION 8.3 ISSUER COMPLIANCE WITH INDENTURE. The Issuer shall comply
with the covenants, requirements and provisions of the Indenture applicable to
it and perform all of its obligations thereunder.
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ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
SECTION 9.1 EVENTS OF DEFAULT.
(a) Each of the following shall constitute an event of default under
this Financing Agreement, and the term "EVENT OF DEFAULT" shall mean, whenever
used in this Financing Agreement, any one or more of the following events:
(i) Failure by the Borrower to pay any amounts due under this
Financing Agreement at the times and in the amounts required hereby or
thereby; or
(ii) Failure by the Borrower to observe or perform any
covenants, agreements or obligations in this Financing Agreement on its
part to be observed or performed (other than as provided in clause (i)
above) for a period of thirty (30) days after receipt of written notice
specifying such failure and requesting that it be remedied, given to the
Borrower by any party to this Financing Agreement; PROVIDED, HOWEVER, that
if said failure shall be such that it cannot be corrected within such
period, it shall not constitute an Event of Default if the failure is
correctable without material adverse effect on the Bonds and if corrective
action is instituted by the Borrower within such period and diligently
pursued until the failure is corrected, and PROVIDED FURTHER that any such
failure shall have been cured within ninety (90) days of receipt of notice
of such failure; or
(iii) Breach of any of the covenants, agreements or obligations
of the Borrower under or the occurrence of a default under the Regulatory
Agreement, including any exhibits to any of the foregoing; or
(iv) The occurrence of an Event of Default caused by the
Borrower under and as defined in the Indenture or under any of the other
Bond Documents; or
(v) An Event of Default declared pursuant to paragraph (b) of
this Section 9.1;
(b) The occurrence of a default under the Mortgage Loan Documents
shall, at the option of Fannie Mae, in its sole and absolute discretion,
constitute an Event of Default under this Financing Agreement, and the
occurrence of a default under this Financing Agreement shall, at the option of
Fannie Mae, in its sole and absolute discretion, constitute a default under the
Mortgage Loan Documents.
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Nothing contained in this Section 9.1 is intended to amend or modify
any of the provisions of the Mortgage Loan Documents nor to bind the Servicer or
Fannie Mae to any notice and cure periods other than as expressly set forth in
the Mortgage Loan Documents.
SECTION 9.2 REMEDIES UPON AN EVENT OF DEFAULT.
(a) Subject to Section 9.2(d), whenever any Event of Default shall
have occurred and be continuing, the Issuer or the Trustee as the Issuer's
assignee may take any one or more of the following remedial steps:
(i) By any suit, action or proceeding, pursue all remedies now
or hereafter existing at law or in equity to collect all amounts then due
and thereafter to become due under this Financing Agreement, to enforce the
performance of any covenant, obligation or agreement of the Borrower under
this Financing Agreement (subject to the nonrecourse provisions of this
Financing Agreement and the Regulatory Agreement) or, to enjoin acts or
things which may be unlawful or in violation of the rights of the Issuer or
the Trustee.
(ii) Take whatever other action at law or in equity may appear
necessary or desirable to enforce any monetary obligation of the Borrower
under this Financing Agreement or to enforce any other covenant, obligation
or agreement of the Borrower under (1) this Financing Agreement, or (2) the
Regulatory Agreement.
(iii) Have access to and inspect, examine, audit and make copies
of the books and records and any and all accounts, data and income tax and
other tax returns of the Borrower.
(b) The provisions of subsection (a) hereof are subject to the
condition that if, after any Event of Default, except a default under the
Regulatory Agreement, (i) all amounts which would then be payable hereunder by
the Borrower if such Event of Default had not occurred and was not continuing
shall have been paid by or on behalf of the Borrower, and (ii) the Borrower
shall have also performed all other obligations in respect of which it is then
in default hereunder and shall have paid the reasonable charges and expenses of
the Issuer and the Trustee, including reasonable attorney fees and expenses paid
or incurred in connection with such default, then and in every such case, such
Event of Default may be waived and annulled by the Trustee, but no such waiver
or annulment shall extend to or affect any subsequent Event of Default or impair
any right or remedy consequent thereon.
(c) The Issuer and the Trustee hereby acknowledge that the occurrence
of an Event of Default hereunder will not by itself cause a default to arise
under any of the Mortgage Loan Documents unless otherwise declared a default
under the Mortgage Loan Documents by Fannie Mae.
(d) Subject to the limitations of the Regulatory Agreement and this
Financing Agreement, the Issuer, without the consent of the Trustee, but only
after written notice to the
23
Trustee, the Borrower, the Servicer and Fannie Mae, may take whatever action at
law or in equity may appear necessary or desirable to enforce performance and
observance of any Reserved Right of the Issuer; PROVIDED that, the Issuer may
not, without the consent of the Fannie Mae, (i) terminate this Financing
Agreement or cause the Mortgage Loan to become due and payable, (ii) cause the
Trustee to declare the principal of all Bonds then Outstanding and the interest
accrued thereon to be immediately due and payable, or cause the Trustee to
accelerate, foreclose or take any other action or seek other remedies under the
Bond Documents, the Mortgage Loan Documents or any other documents contemplated
hereby or thereby to obtain such performance or observance, (iii) cause the
acceleration, foreclosure or taking of any other action or the seeking of any
remedies under the Mortgage Loan Documents, (iv) initiate or take any action
which may have the effect, directly or indirectly, of impairing the ability of
the Borrower to timely pay the principal, interest and other amounts due under
the Mortgage Loan, or (v) interfere with or attempt to influence the exercise by
Fannie Mae of any of its rights under the Bond Documents or the Mortgage Loan
Documents.
(e) Except as required to be deposited in the Rebate Fund pursuant to
the Tax Certificate any amounts collected pursuant to action taken under this
Section 9.2 shall, after the payment of the costs and expenses of the
proceedings resulting in the collection of such moneys and of the expenses,
liabilities and advances incurred or made by the Trustee, the Issuer, the
Servicer or Fannie Mae and their respective counsel, be applied in accordance
with the provisions of the Indenture. No action taken pursuant to this Section
shall relieve the Borrower from the Borrower's obligations pursuant to Section
5.9 hereof.
(f) No remedy herein conferred upon or reserved to the Issuer or the
Trustee is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to
every other remedy now or hereafter existing pursuant to any other agreement at
law or in equity or by statute.
(g) Notwithstanding any other provision of this Financing Agreement to
the contrary, so long as Fannie Mae is not in default under the Pass-through
Certificate, none of the Issuer, the Trustee or any person under their control
shall exercise any remedies or direct any proceedings under this Financing
Agreement or the Mortgage Loan Documents, other than to (i) enforce rights under
the Pass-through Certificate, (ii) enforce the tax and indemnification covenants
in the Indenture and this Financing Agreement, or (iii) enforce rights of
specific performance under the Regulatory Agreement; provided, however, that any
enforcement under (ii) or (iii) above shall not include seeking monetary
damages.
SECTION 9.3 DEFAULT UNDER REGULATORY AGREEMENT.
(a) If the Borrower fails, at any time for any reason, to comply with
the requirements of the Regulatory Agreement, then within thirty (30) days after
the earlier of the date the violation is discovered by the Issuer or the Trustee
or the date the Issuer or the Trustee received notice thereof, the Issuer (if
necessary to preserve the exclusion of interest on the Bonds from gross income
for federal income tax purposes) or the Trustee, on behalf of the Issuer, shall
institute an action for specific performance to correct the violation. The
Borrower
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hereby acknowledges and agrees that were money damages a remedy under the
Regulatory Agreement, money damages alone would not be an adequate remedy at law
for a default by the Borrower arising from a failure to comply with the
Regulatory Agreement, and therefore the Borrower agrees that the remedy of
specific performance (subject to the provisions of Section 9.2(d) hereof) shall
be available to the Issuer and/or the Trustee in-any such case.
(b) Notwithstanding the availability of the remedy of specific
performance provided for in subsection (a) of this Section, promptly upon
determining that a violation of the Regulatory Agreement has occurred, the
Issuer shall, by notice in writing to the Servicer and Fannie Mae, inform Fannie
Mae and the Servicer that a violation of the Regulatory Agreement has occurred;
notwithstanding the occurrence of such violation, neither the Issuer nor the
Trustee shall have, and each of them acknowledges that they shall not have, any
right to cause or direct acceleration of the Mortgage Loan, to enforce the
Mortgage Note or to foreclose on the Mortgage.
SECTION 9.4 LIMITATION ON WAIVERS.
(a) No delay or omission to exercise any right or power occurring upon
any Event of Default shall impair any such right or power or shall be construed
to be a waiver thereof, but any such right and power may be exercised from time
to time and as often as may be deemed appropriate. The Issuer and the Trustee
agree to give only such notices as may be herein expressly required.
(b) In the event any covenant, agreement or condition contained in
this Financing Agreement shall be breached by a party and thereafter waived by
another party, such waiver shall not bind any party which has not waived the
breach and shall be limited to the particular breach so waived and shall not be
deemed to waive any other breach hereunder nor be a waiver of the same breach on
a future occasion. By reason of the assignment and pledge of certain of the
Issuer's rights and interests in this Financing Agreement to the Trustee, the
Issuer shall have no power to waive or release the Borrower from any Event of
Default or the performance or observance of any obligation or condition of the
Borrower under this Financing Agreement without first requesting and receiving
the prior written consent of the Trustee, but shall do so if, requested by the
Trustee; PROVIDED that the Issuer shall not be required to grant such waiver or
release unless it shall have been provided with (i) an Opinion of Counsel that
such action will not result in any pecuniary liability to it and an opinion of
Bond Counsel that such waiver shall not cause interest on the Bonds to be
included in the gross income of the Holders thereof for federal income tax
purposes, (ii) such indemnification as the Issuer shall deem reasonably
necessary, and (iii) written notice from the Trustee of the request for such
waiver or release.
SECTION 9.5 NOTICE OF DEFAULT: FANNIE MAE'S RIGHT TO CURE. The Issuer and
the Trustee shall each give notice to the other and to the Servicer and Fannie
Mae of the occurrence of any Event of Default by the Borrower hereunder of which
it has actual knowledge. Fannie Mae and the Servicer shall have the right, but
not the obligation, to cure any such default by the Borrower, and upon
performance by Fannie Mae or the Servicer to the satisfaction of the Issuer
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and the Trustee of the covenant, agreement or obligation of the Borrower with
respect to which an Event of Default has occurred, the parties hereto shall be
restored to their former respective positions, it being agreed that Fannie Mae
and the Servicer shall have the right to repayment from the Borrower of moneys
it has expended and any other appropriate redress for actions it has taken to
cure any default by the Borrower; PROVIDED that the Borrower's reimbursement
obligation shall be non-recourse to the same extent as the underlying obligation
is non-recourse to the Borrower.
SECTION 9.6 RIGHTS CUMULATIVE. All rights and remedies herein given
or granted to the Issuer and the Trustee are cumulative, nonexclusive and in
addition to any and all rights and remedies that the Issuer and the Trustee
may have or may be given by reason of any law, statute, ordinance or
otherwise. Notwithstanding anything to the contrary contained in this
Financing Agreement, neither the Trustee nor the Issuer may commence any
action against the Borrower for specific performance or any other remedy at
law or in equity, other than to enforce performance and observance of any
Reserved Right of the Issuer and its rights under Section 9.3, without first
obtaining the prior written consent of Fannie Mae.
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ARTICLE X
MISCELLANEOUS
SECTION 10.1 NOTICES. All notices, certificates or other communications
herein provided shall be given in writing to the Issuer, the Borrower, the
Trustee, Fannie Mae and the Servicer, and shall be sufficiently given and shall
be deemed given if given in the manner provided in the Indenture. Copies of each
notice, certificate or other communication given hereunder by any party hereto
shall be given to all parties hereto. By notice given hereunder, any party may
designate further or different addresses to which subsequent notices,
certificates or other communications are to be sent. A duplicate copy of each
notice, certificate, request or other communication given hereunder to the
Issuer, the Borrower, the Servicer or the Trustee shall also be given to Fannie
Mae.
SECTION 10.2 AMENDMENT. This Financing Agreement and all other documents
contemplated hereby to which the Issuer is a party may be amended or terminated
only if permitted by the Indenture, and no amendment to this Financing Agreement
shall be binding upon, any party hereto until such amendment is reduced to
writing and executed by the parties hereto; PROVIDED that no amendment,
supplement or other modification to this Financing Agreement or any other Bond
Document shall be effective without the prior written consent of Fannie Mae.
SECTION 10.3 ENTIRE AGREEMENT. Except as provided in the other Bond
Documents and the Mortgage Loan Documents, this Financing Agreement contains all
agreements among the parties hereto, and there are no other representations,
warranties, promises, agreements or understandings, oral, written or implied,
among the parties hereto, unless reference is made thereto in this Financing
Agreement or the Indenture.
SECTION 10.4 BINDING EFFECT. This Financing Agreement shall be binding
upon the Issuer, the Borrower and the Trustee and their respective successors
and assigns. Notwithstanding anything herein to the contrary, to the extent
Fannie Mae or its designee shall become the owner of the Project as a result
of a foreclosure or a deed in lieu of foreclosure or similar conveyance,
Fannie Mae, and its designee, if applicable, shall not be liable for any
breach or default or any of the obligations of any prior owner of the Project
under this Financing Agreement, and shall only be responsible for defaults
and obligations incurred during the period Fannie Mae or its designee, if
applicable, is the owner of the Project.
SECTION 10.5 SEVERABILITY. If any clause, provision or section of this
Financing Agreement shall be ruled invalid or unenforceable by any court of
competent jurisdiction, the invalidity or unenforceability of such clause,
provision or section shall not affect any of the remaining clauses, provisions
or sections.
SECTION 10.6 EXECUTION IN COUNTERPARTS. This Financing Agreement may be
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
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SECTION 10.7 GOVERNING LAW. This Financing Agreement shall be governed by
and interpreted in accordance with the internal laws of the State without regard
to conflicts of laws principles.
SECTION 10.8 LIMITED LIABILITY. All obligations of the Issuer incurred
hereunder, under the Regulatory Agreement, the Tax Certificate and the Indenture
shall be limited obligations of the Issuer, payable solely and only from Bond
proceeds, revenues and other amounts available under the Indenture. The Bonds
shall be payable solely from the revenues and other funds and property pledged
under the Indenture for the payment of the Bonds, and no owner or owners of any
of the Bonds shall ever have the right to compel any exercise of the taxing
power of the State or any political subdivision or other public body thereof,
nor to enforce the payment thereof against any property of the State or any such
political subdivision or other public body, including the Issuer except as
provided in the Indenture.
No member, officer, agent, employee or attorney of the Issuer, including any
person executing this Financing Agreement, shall be liable personally hereunder
or for any reason relating to the issuance of the Bonds. No recourse shall be
had for the payment of the principal of or the interest on the Bonds, or for any
claim based therein, or otherwise in respect thereof, or based on or in respect
of this Financing Agreement or any amendment hereto, against any member,
officer, employee or agent, as such, of the Issuer or any successor whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue of the Bonds, expressly
waived and released.
SECTION 10.9 TERM OF THIS FINANCING AGREEMENT. This Financing Agreement
shall be in full force and effect from its date to and including such date as
all of the Bonds shall have been fully paid or retired (or provision for such
payment shall have been made as provided in the Indenture); PROVIDED, HOWEVER,
that the provisions of Sections 2.1, 5.5 and 5.9 of this Financing Agreement
shall survive the termination hereof.
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ARTICLE XI
CONTINUING DISCLOSURE
SECTION 11.1 FURNISHING OF INFORMATION GENERALLY. The Borrower hereby
agrees at the Borrower's sole cost and expense to provide such information to
such parties or entities as shall be necessary for compliance with Rule 15c2-12
of the Securities Exchange Act of 1934, as amended (the "Rule"), and all other
applicable federal and state securities laws, rules, and regulations.
SECTION 11.2 CONTINUING DISCLOSURE UNDERTAKING. The Borrower hereby
agrees, in accordance with the provisions of the Rule, to provide or cause to be
provided, to each nationally recognized municipal securities information
repository ("NRMSIR") designated by the Securities and Exchange Commission (the
"Commission") in accordance with the Rule, and to the appropriate state
information depository ("SID"), if any, designated by the State of Florida, the
following annual financial information and operating data (the "Annual
Information"), commencing with the fiscal year ended December 31, 1996: the
annual 10-K report of Apartment Investment Management Company ("AIMCO") as filed
with the Securities and Exchange Commission utilizing generally accepted
accounting principles, except as may be modified from time to time and described
in such report and other information regarding the Borrower and the Project in a
manner consistent with the presentation of such information under the heading
"THE OWNER AND THE PROJECT" in the Official Statement for the Bonds.
The information in the preceding paragraph will be available on or before
July 15th of each year for the preceding fiscal year and will be made available,
in addition to the NRMSIR's and the SID, to each holder of Bonds who requests
such information. If audited financial statements are not available by the said
July 15 of any year, then the Borrower will make available unaudited financial
statements. The audited financial statements are generally available within six
months after the end of the fiscal year of AIMCO.
The Borrower agrees to provide or cause to be provided, in a timely manner,
to (i) each NRMSIR or to the Municipal Securities Rulemaking Board ("MSRB") and
(ii) the SID, notice of the occurrence of any of the following events with
respect to the Bonds, if material:
(a) principal and interest payment delinquencies;
(b) non-payment related defaults;
(c) unscheduled draws on debt service reserves reflecting financial
difficulties;
(d) unscheduled draws on credit enhancements reflecting financial
difficulties;
(e) substitution of credit or liquidity providers, or their failure
to perform;
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(f) adverse tax opinions or events affecting the tax-exempt status of
the Bonds;
(g) modifications to rights of holders of the Bonds;
(h) bond calls;
(i) defeasance;
(j) release, substitution, or sale of any security securing repayment
of the Bonds;
(k) rating changes, if any.
The Borrower agrees to provide or cause to be provided, in a timely manner,
to (i) each NRMSIR or to the MSRB and (ii) the SID, notice of its failure to
provide the Annual Information with respect to itself on or prior to the date
set forth in the third paragraph above.
The obligations of the Borrower hereunder shall remain in effect only so
long as the Bonds are Outstanding. The Borrower reserves the right to terminate
its obligation to provide the Annual Information and notices of material events,
as set forth above, if and when the Borrower no longer remains an obligated
person with respect to the Bonds within the meaning of the Rule.
The Borrower agrees that its undertaking pursuant to the Rule set forth in
this Section is intended to be for the benefit of the holders of the Bonds and
shall be enforceable by any holder of the Bonds; PROVIDED, HOWEVER, that, the
right of any such holder to enforce the provisions of this undertaking shall be
limited to a right of the holder, or the Trustee or the Issuer to obtain
specific enforcement of the Borrower's obligations hereunder and any failure by
the Borrower to comply with the provisions of this undertaking shall not be a
default hereunder with respect to the Bonds.
Notwithstanding the foregoing, the NRMSIRs to which information shall be
provided shall include those NRMSIRs approved by the Commission prior to the
issuance of the Bonds. In the event the Commission approves any additional
NRMSIRs after the date of issuance of the Bonds, the Borrower shall, if the
Borrower is notified of such additional NRMSIRs, provide such information to the
additional NRMSIRs. Failure to provide information to any new NRMSIR whose
status as a NRMSIR is unknown to the Borrower shall not constitute a breach of
the foregoing covenant
As of the date of this Agreement, (i) the Commission has recognized each of
the following entities as a NRMSIR:
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J.J. Kenny Bond Buyer
65 Broadway 395 Hudson Street
16th Floor 3rd Floor
New York, NY 10006 New York, NY 10014
(212) 770-4595 (212) 870-3868
Moody's NRMSIR Disclosure, Inc.
Public Finance Information Center 5161 River Road
99 Church Street Bethesda, MD 20816
New York, NY 10707 Attn: Document Acquisitions/Municipal
(800) 339-6306 Securities
(301) 951-1300
Bloomberg Financial Markets Municipal Securities
c/o Municipal Repository Disclosure Archive (MSDA)
Post Office Box 888 559 Main Street
Princeton, NJ 08452-0888 Hudson, MA 01749
(800) 448-5678 (800) 580-3670
and (ii) no SID has been created for the State of Florida. If, however, a SID is
hereafter created for the State of Florida, the Borrower hereby agrees, at
Borrower's sole cost and expense, to make all filings and provide all notices to
such SID as squired by the Rule.
Additionally, the requirements imposed hereby do not necessitate the
preparation of any separate annual report addressing only the Bonds. The
requirements may be met by the filing of a general annual information statement
of the Borrower or AIMCO, provided such report includes all of the required
information and is available by July 15. Additionally, the Borrower may
incorporate any information provided in any prior filing with each NRMSIR or
included in any final official statement or private placement memorandum of the
Borrower provided such final official statement or private placement memorandum
is filed with the MSRB or filed with the Securities and Exchange Commission.
The Borrower reserves the right to modify from time to time the specific
types of information provided or the format of the presentation of such
information, to the extent necessary or appropriate in the judgment of the
Borrower; provided that, the Borrower agrees that any such modification will be
done in a manner consistent with the Rule.
SECTION 11.3. BORROWER TO PROVIDE INFORMATION TO TRUSTEE. Notwithstanding
the foregoing, the Borrower shall provide all of the filings and information
required by Section 11.2 hereof to the Trustee for filing with the appropriate
repositories. Such information shall be provided to the Trustee at least five
Business Days prior to the date such information is required to be submitted to
the repositories, in the case of annual filings. The Trustee shall notify the
Issuer and the Borrower if such annual information is not received by the date
required. Additionally, the Trustee shall notify the NRMSIRs and the SID, if
any, of such failure. The
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Trustee is acting solely as a dissemination agent with respect to its duties
under this Section on behalf of the Issuer and the holders and beneficial owners
of the Bonds and shall not be considered to be the agent of the Borrower when
performing any actions required to be taken by the Trustee under this Section.
The Trustee shall not have any obligation under this Section to investigate or
determine whether any filing made under this Agreement complies with federal
securities laws or rules.
Promptly upon receipt of any filings by the Borrower, the Trustee shall
distribute such filings to the NRMSIRs, SID and MSRB, as the case may be, as set
forth in Section 11.2 hereof.
SECTION 11.4. ISSUER NOT OBLIGATED. The Borrower acknowledges and agrees
that the Issuer is not an "obligated person" (as defined in the Rule) with
respect to the Bonds and represents that the Borrower is the only obligated
person with respect to the Bonds. Notwithstanding any other provision of this
Agreement, any failure by the Borrower to comply with any provisions of Section
11.1 and Section 11.2 shall not be a failure or a default, or an Event of
Default, under this Agreement or the Trust Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused this Financing
Agreement to be executed by their duly authorized representatives as of the date
of execution set forth below.
[SEAL]
HOUSING FINANCE AUTHORITY OF
BROWARD CO, FLORIDA
ATTEST:
By: /s/ (illegible)
--------------------------------
Title: Chairman
/s/ Daisy Mallard
- ------------------------------
Secretary
OTC APARMENTS LIMITED
PARTNERSHIP
By: /s/ H. Alcock
--------------------------------
Title: Vice President, AIMCO/OTC QRS, Inc,
General Partner
THE BANK OF NEW YORK
By: The Bank of New York Trust
Company of Florida, N.A.,
as agent
By: /s/ Elizabeth Flynn
--------------------------------
Authorized Signatory
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