SPECIAL RIDER TO MULTIFAMILY INSTRUMENT
THIS SPECIAL RIDER TO MULTIFAMILY INSTRUMENT (this "Special Rider") is made
as of the 1st day of August, 1996, and is incorporated into and shall be deemed
to amend and supplement the Multifamily Third Mortgage, Assignment of Rents and
Security Agreement as of even date herewith (the "Instrument"), given by OTC
APARTMENTS LIMITED PARTNERSHIP, a Florida limited partnership ("Borrower") for
the benefit of FEDERAL NATIONAL MORTGAGE ASSOCIATION, a federally chartered
corporation ("Fannie Mae" or "Lender") and covering the property described in
the Instrument and located in Escambia County, Florida (the "Property"), as
amended by that certain Rider to Multifamily Instrument as of the same date (the
"Rider") (collectively, with this Special Rider and any other riders to the
Instrument given by the Borrower to Lender and covering the Property, the
"Multifamily Instrument").
The covenants and agreements of this Special Rider, and the covenants and
agreements of any other riders to the Instrument, shall be incorporated into and
shall amend and supplement the covenants and agreements of the Instrument as if
this Special Rider and the other riders were a part of the Instrument, and all
references to the Instrument in the Loan Documents (as defined in the Rider
below) shall mean the Instrument as so amended and supplemented. Any conflict
between the provisions of the Instrument, as amended by the Rider and this
Special Rider shall be resolved in favor of this Special Rider.
Initially-capitalized terms used in this Multifamily Instrument, which are not
defined in this Multifamily Instrument, shall have the meanings given to those
terms in the Reimbursement Agreement.
ADDITIONAL COVENANTS. Borrower and Lender further covenant and agree as
follows:
A. ADDITIONAL SECURITY - OBLIGATIONS SECURED BY OTHER SECURITY
INSTRUMENTS. The term "Secured Obligations" as used in this Multifamily
Instrument shall also include, and this Multifamily Instrument shall also
secure, the payment and performance of all obligations secured by (i) each of
the other mortgages, deeds to secure debt and/or deeds of trust identified in
the Reimbursement Agreement as the "REIMBURSEMENT MORTGAGES", including any
Reimbursement Mortgage on any New Property that is granted after the date hereof
(collectively, the "Reimbursement Mortgages"); and (ii) each of the other
mortgages, deeds to secure debt and/or deeds of trust identified in the
Reimbursement Agreement as the "Bond Mortgages" (other than the Bond Mortgage,
if any, with respect to the Property), including any Bond Mortgage on a New
Property that is granted after the date hereof (collectively, the "Subject Bond
Mortgages"). Each of the other Reimbursement Mortgages and each of the Subject
Bond Mortgages is hereinafter referred to individually as an "Other Security
Instrument," and collectively as the "Other Security Instruments". The Other
Security Instruments existing as of the date of this Multifamily Instrument are
identified on Schedule I to this Multifamily Instrument attached hereto.
B. CROSS DEFAULT. The failure by Borrower to pay when due any amount
payable under any Related Mortgage Note, the Reimbursement Agreement, this
Multifamily Instrument or any other Loan Document or the failure (beyond
applicable cure periods, if any) by the Borrower to perform or observe any
covenant or any obligation of Borrower contained in (a) any other Loan Document,
(b) any subordinate financing, (c) that certain Master Reimbursement Agreement
as of July 1, 1996, by Borrower and Fannie Mae, as the same may be amended,
supplemented or otherwise modified from time to time (the "Reimbursement
Agreement"), and (d) any form of public, quasi-public, public/private or private
debt and/or equity infusion, grant, subsidy, tax relief or abatement plan,
program or other form of assistance, shall, at Lender's option, in its
discretion, constitute a default under
this Multifamily Instrument and the other Loan Documents. Any such default by
Borrower under this Multifamily Instrument shall: (i) entitle Lender, at its
option, in its discretion, to invoke any of the remedies set forth in Paragraph
27 of the Instrument or as otherwise afforded by law or equity; and (ii) at
Lender's option, in its discretion, constitute a default by Borrower under any
or all of the Other Security Instruments and the Reimbursement Agreement.
C. WAIVER OF MARSHALLING RIGHTS. Borrower waives all rights to have all
or part of the Property described in this Instrument and/or the mortgaged
property described in any of the Other Security Instruments marshalled upon any
foreclosure of this Instrument or any of the Other Security Instruments. Lender
shall have the right to sell, and any court in which foreclosure proceedings may
be brought shall have the right to order a sale of the Property described in
this Instrument or the mortgaged property described in any of the Other Security
Instruments as a whole or in separate parcels, in any order that Lender may
designate. Borrower makes this waiver for itself, for all persons and entities
claiming through or under Borrower and for persons and entities who may acquire
a lien on all or any part of the Property described in this Instrument or in the
mortgaged property described in any of the Other Security Instruments, or on any
interest therein.
D. LEASES. All leases of the residential housing units in the Property
must (a) be legally valid, binding and enforceable obligations of the tenants,
(b) comply with all applicable laws and (c) satisfy the standards of the Fannie
Mae Delegated Underwriting and Servicing Guide in its present form as of the
date of any such lease.
E. MORTGAGE EXPENSES. Should Lender (or "Servicer" as such term is
defined in the Reimbursement Agreement) pay any Mortgage Expenses (as
hereinafter defined), Borrower shall on demand immediately reimburse Lender (or
Servicer, as applicable) for the full amount of such Mortgage Expenses paid by
Lender (or Servicer, as applicable). For purposes of this paragraph E,
"Mortgage Expenses" shall mean the cost of real estate taxes, appraisal fees,
insurance fees, legal fees and any other expenses which may be required to
maintain the priority of, or to protect or enforce Lender's rights in, the
Multifamily Instrument, including (i) fees and expenses of the servicer engaged
by Fannie Mae to service and administer the Mortgage Loans which are not paid by
Borrower, (ii) fees and expenses paid to maintain in full force and effect or
realize the benefit of any insurance with respect to the Multifamily Instrument
and (iii) any fees advanced on behalf of Borrower by Fannie Mae to any Related
Trustee or Issuer.
F. CHARGES; LIENS. Uniform Covenant 4 of the Instrument ("Charges;
Liens") is amended to add the following provisions at the end thereof:
Provided that Borrower is not in breach of any of its covenants,
obligations or agreements under this Instrument and no event of default has
occurred and is continuing under the Reimbursement Agreement or any other
Loan Document, Borrower shall not be required to pay or discharge any
obligation imposed upon Borrower by this paragraph 4 so long as Borrower
has given written notice of the same to Lender and is in good faith and at
its sole cost and expense diligently contesting the same or the validity
thereof by appropriate legal proceedings, which proceedings must operate to
prevent the collection thereof or realization thereon, the sale or
forfeiture of the Property or any portion thereof to satisfy the same;
provided, however, that during such contest (i) Borrower shall, at the
option of Lender, provide security reasonably satisfactory to Lender and
sufficient in Lender's reasonable judgment to cover the
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amount of the contested obligations, with interest on such obligations (to
the extent interest would be due the obligee) for that period that such
proceedings may reasonably be expected to take, and of any additional
interest, charge, fine, penalty, fee or expense arising from or incurred as
a result of such contest, (ii) the title company insuring the Property
agrees to insure over any potential lien that may result from such contest,
and (iii) if at any time the payment of any obligation imposed upon
Borrower by this paragraph 4 shall become necessary to prevent (a) the
delivery of a tax deed conveying the Property or any portion thereof, or
(b) the sale of the tax lien therefor because of non-payment or (c) the
imposition of any penalty, fine, charge, fee, cost or expense on Lender,
then Borrower shall pay the same in sufficient time to prevent the
occurrence of any of the foregoing.
G. CONDEMNATION PROCEEDS; RESTORATION OF PROPERTY. Uniform Covenant 11 of
the Instrument ("Condemnation") is amended to add the following provision at the
end thereof:
Lender shall permit Borrower to apply any such awards, payments,
proceeds or damages, after deduction of Lender's expenses incurred in the
collection of such amounts, to the payment of repairs to the Property if
all of the following conditions are met: (i) Borrower is not in breach or
default of any provision of the Instrument, the Reimbursement Agreement or
any other Loan Document; (ii) Lender determines that there will be
sufficient funds to restore and repair the Property to a condition approved
by Lender; (iii) Lender determines that the rental income of the Property,
after restoration and repair of the Property to a condition approved by
Lender, will be sufficient to meet all operating costs and other expenses,
payments for reserves and loan repayment obligations relating to the
Property; (iv) Lender determines that restoration and repair of the
Property to a condition approved by Lender will be completed prior to the
earlier of either (1) the maturity date of the Fannie Mae Credit Facility
or (2) within one year of the date of the loss or casualty to the Property;
and (v) Lender determines that upon the restoration and repair of the
Property there will not have been a material dimunition in the value of the
Property since the date immediately preceding the condemnation.
H. LEASES. Uniform Covenant 16 of the Instrument ("Leases of the
Property") is modified by adding the phase "entered into hereafter" after the
words "All leases of the Property" in the third (3rd) sentence of such Uniform
Covenant 16.
I. ACCELERATION IN CASE OF BORROWER'S INSOLVENCY. Uniform covenant 18 of
the Instrument is amended to read as follows:
ACCELERATION IN CASE OF BORROWER'S INSOLVENCY. In the event (i)
Borrower shall (A) commence a voluntary case under the Federal bankruptcy
laws (as now or hereafter in effect), (B) file a petition seeking to take
advantage of any other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, debt adjustment, winding up or composition or
adjustment of debts, (C) consent to or fail to contest in a timely and
appropriate manner any petition filed against it in an involuntary case
under such bankruptcy laws or other laws, (D) apply for or consent to, or
fail to contest in a timely and appropriate manner, the appointment of, or
the taking of possession by, a receiver, custodian, trustee or liquidator
of itself or of a substantial part of its property, domestic or foreign,
(E) admit in writing its inability to pay, or generally not be paying, its
debts as they become due, (F) make a general assignment for the benefit of
creditors, (G) assert that it has no liability or obligations under the
Note, this
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Instrument or any of the other Loan Documents, or (H) take any action for
the purpose of effecting any of the foregoing; or (ii) a case or other
proceedings shall be commenced against Borrower in any court of competent
jurisdiction seeking (A) relief under the Federal bankruptcy laws (as now
or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts, or (B) the appointment of a trustee,
receiver, custodian, liquidator or the like of Borrower or of all or a
substantial part of the property, domestic or foreign, of Borrower, and any
such case or proceeding shall continue undismissed or unstayed for a period
of 60 consecutive calendar days, or any order granting the relief requested
in any such case or proceeding against Borrower (including an order for
relief under such Federal bankruptcy laws) shall be entered, or (iii) there
is an attachment, execution or other judicial seizure of any portion of
Borrower's property and such seizure is not discharged within ten calendar
days, then Lender may, at Lender's option, declare all of the sums secured
by this Instrument to be immediately due and payable without prior notice
to Borrower, and Lender may invoke any remedies permitted by paragraph 27
of this Instrument. Any attorney's fees and other expenses incurred by
Lender in connection with Borrower's bankruptcy or any of the other
aforesaid events shall be additional indebtedness of Borrower secured by
this Instrument pursuant to paragraph 8 hereof.
J. NON-IMPAIRMENT. Except as supplemented and/or modified by this
Special Rider, all of the terms, covenants and conditions of the Other Security
Instruments and the other loan documents executed in connection therewith shall
remain in full force and effect.
K. MODIFICATION OF SINGLE ASSET REQUIREMENTS. Paragraph J of the Rider
is amended to read as follows:
J. Single Purpose Entity.
Borrower covenants and agrees that Borrower shall at all times
during the term of this Instrument comply with the covenants set forth
in Sections 2.2(i) and 2.3(k) of the Reimbursement Agreement and that
Borrower shall not violate the provisions of subsections 2.3(a)(iii)
or 2.3(a)(iv) of the Reimbursement Agreement.
L. GRANT OF INTEREST IN CERTAIN FUNDS. Without limiting the generality
of the first (1st) sentence of Uniform Covenant 15 of the Instrument and
pursuant to the Uniform Commercial Code, Borrower hereby grants, pledges and
assigns to Lender all of Borrower's right, title and interest in and to all
funds and accounts and investments of funds and accounts now or hereafter held
by each Related Bond Trustee pursuant to the Indentures, including any and all
loan funds, escrow funds, revenue funds, debt service funds, reserve funds,
redemption funds and other funds and securities and other instruments comprising
investments of any of the foregoing and interest and other income derived from
any of the foregoing, all to be held in trust in accordance with the terms of
the Indentures.
M. NOTICES. Uniform Covenant 20 of the Instrument is amended to read as
follows:
All notices, directions, certificates or other communications
hereunder shall be given by certified or registered mail, return receipt
requested, OR by overnight courier addressed to the appropriate notice
address set forth below. Any of the parties hereto may, by such notice
described above, designate any further or different address
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to which subsequent notices, certificates or other communications shall be
sent without any requirement of execution of any amendment to this
Instrument. Any such notice, certificate or communication shall be deemed
to have been given as of the date of actual delivery or the date of failure
to deliver by reason of refusal to accept delivery or changed address of
which no notice was given pursuant to this paragraph 20. Unless otherwise
directed by Fannie Mae, all notices from Borrower pursuant to this
Instrument shall also be given to the Servicer in accordance with this
paragraph 20. The notice addresses are as follows:
(a) if to Borrower:
OTC Apartments Limited Partnership
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222
Attn: Vice Chairman
(b) if to Fannie Mae:
if by mail or overnight courier:
Fannie Mae
3900 Wisconsin Avenue, N.W.
Washington, DC 20016
Attn: Senior Vice President
Multifamily Activities
if by messenger:
Fannie Mae
3939 Wisconsin Avenue, N.W.
Washington, DC 20016
Attn: Senior Vice President
Multifamily Activities
in each case, with copies to:
Fannie Mae
Southwest Regional Office
Two Galleria Tower
13455 Noel Road, Suite 600
Dallas, Texas 75240
Attn: Regional Vice President
Multifamily Activities
and to:
Fannie Mae
3900 Wisconsin Avenue, N.W.
Washington, DC 20016
Attn: Multifamily Mortgage Operations
Manager, Multifamily Deliveries
(c) if to Servicer:
GMAC Commercial Mortgage Corporation
650 Dresher Road
Horsham, Pennsylvania 19044-8015
Attn: Barry Moore
N. TRANSFERS OF THE PROPERTY OR INTERESTS IN BORROWER.
(a) Definitions
For purposes of this Instrument, the following terms have the respective
meanings set forth below:
(i) The term "TRANSFER" means (A) a sale, assignment, pledge,
transfer or other disposition (whether
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voluntary or by operation of law) of, for the granting or
creating of a lien, encumbrance or security interest in, any of
Borrower's estate, rights, title or interest in the Property, or
any portion thereof, or (B) a sale, assignment, pledge, transfer
or other disposition of any interest in Borrower, its General
Partner, AIMCO REIT or in AIMCO OP, or (C) the issuance or other
creation of new ownership interests in Borrower, its General
Partner, AIMCO REIT or in AIMCO OP, or (D) a merger or
consolidation of Borrower, its General Partner, AIMCO REIT or
AIMCO OP, or (E) the reconstitution of Borrower, its General
Partner, AIMCO REIT or AIMCO OP from one type of entity to
another type of entity.
(ii) A "CHANGE OF CONTROL" shall mean the earliest to occur of: (A)
the date an Acquiring Person becomes (by acquisition,
consolidation, merger or otherwise), directly or indirectly, the
beneficial owner of more than forty percent (40%) of the total
Voting Equity Capital of AIMCO REIT then outstanding, or (B) the
date on which AIMCO REIT shall cease to hold (whether directly
or indirectly through a wholly owned intermediary entity such as
AIMCO-LP, Inc. or AIMCO-GP, Inc.) 50.1% or more of the limited
partnership interests in AIMCO OP or (C) the date of which AIMCO
REIT shall cease for any reason to own 100% of the Voting Equity
Capital (or any other securities) of the General Partner of
Borrower, or (D) the replacement (other than solely by reason of
retirement at age sixty-five or older, death or disability) of
50% or more of the board of directors or trustees, if
applicable) of the members of the board of directors (or
trustees, if applicable) of AIMCO REIT over a one-year period
where such replacement shall not have been approved by a vote of
at least a majority of the board of directors (or trustees, if
applicable) of AIMCO REIT then still in office who either were
members of such board of directors (or trustees, if applicable)
at the beginning of such one-year period or whose election as
members of the board of directors (or trustees, if applicable)
was previously so approved.
(iii) An "ACQUIRING PERSON" shall mean a "PERSON" or "GROUP OF
PERSONS" within the meaning of Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended; PROVIDED. HOWEVER,
that notwithstanding the foregoing, "ACQUIRING PERSON" shall not
be deemed to include any member of the Borrower Control Group
unless such member has, directly or indirectly, disposed of,
sold or otherwise transferred to, or encumbered or restricted
(whether by means of voting trust agreement or otherwise) for
the benefit of an Acquiring Person, all or any portion of the
Voting Equity Capital of AIMCO REIT directly or indirectly owned
or controlled by such member or such member directly or
indirectly votes all or any portion of the Voting Equity Capital
of AIMCO REIT, directly or indirectly, owned or controlled by
such member for the taking of any action which, directly or
indirectly, constitutes or would result in a Change of Control,
in which event such member of the Borrower Control Group shall
be deemed to constitute an Acquiring Person to the
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extent of the Voting Equity Capital of AIMCO REIT owned or
controlled by such member.
(iv) "BORROWER CONTROL GROUP" shall mean Terry Considine, Peter K.
Kompaniez, Richard S. Ellwood, J. Landis Martin, Thomas L.
Rhodes and John D. Smith.
(v) A "PERSON" shall mean an individual, an estate, a trust, a
corporation, a partnership, a limited liability company or any
other organization or entity (whether governmental or private).
(vi) "SECURITY" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
(vii) "VOTING EQUITY CAPITAL" shall mean Securities of any class or
classes, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the board of
directors (or Persons performing similar functions).
(viii) "AIMCO REIT" shall mean Apartment Investment and Management
Company, a corporation organized and existing under the laws of
the State of Maryland.
(ix) "AIMCO OP" shall mean AIMCO Properties, L.P., a limited
partnership organized and existing under the laws of the State
of Delaware.
(x) "GENERAL PARTNER" shall mean "AIMCO/OTC QRS, INC., a corporation
organized and existing under the laws of the State of Delaware.
(b) ACCELERATION OF THE LOAN UPON TRANSFERS OF THE PROPERTY OR SIGNIFICANT
INTERESTS
Subject to clause (c) hereof, Lender may, at Lender's option, declare all
sums secured by this Instrument immediately due and payable and Lender may
invoke any remedies permitted by paragraph 27 of this Instrument if, without
Lender's prior written consent, any of the following shall occur:
(i) a Transfer of all or any part of the Property or any interest in
the Property; or
(ii) a Transfer of any interest in Borrower or the General Partner;
or
(iii) a Change in Control.
(c) No Acceleration of the Loan For Transfers Caused by Certain Events
Notwithstanding the foregoing provisions of this covenant, Lender shall not
be entitled to declare sums secured by this Instrument immediately due and
payable or to invoke any remedy permitted by paragraph 27 of this Instrument
solely upon the occurrence of any of the following:
(i) A Transfer that occurs by inheritance, devise, or bequest or by
operation of law upon the death of a natural person who is an
owner of an indirect ownership interest in the Borrower.
(ii) The grant of a leasehold interest in individual dwelling units
for a term of two years or less and leases for commercial uses
provided that (A) commercial leases do not exceed 5 percent (5%)
of
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(1) the rentable space of the Property (measured as required by
Lender) or (2) the rental income from the Property, (B) no such
commercial leasehold interest contains an option to purchase the
Property, and (C) all such commercial leasehold interests, in
the aggregate, (1) do not adversely affect the value of the
Property and (2) are coincidental to the current use of the
Property for multifamily residential purposes.
(iii) A sale or other disposition of obsolete or worn out personal
property which is contemporaneously replaced by comparable
personal property of equal or greater value which is free and
clear of liens, encumbrances and security interests other than
those created by the Loan Documents.
(iv) The creation of a mechanic's or materialmen's lien or judgment
lien against the Property which is released of record or
otherwise remedied to Lender's satisfaction, within thirty (30)
days of the date of creation.
(v) The grant of an easement, if prior to the granting of the
easement Borrower causes to be submitted to Lender all
information required by Lender to evaluate the easement, and if
Lender determines that the easement will not materially affect
the operation of the Property or Lender's interest in the
Property and Borrower pays to Lender on demand, all costs and
expenses incurred by Lender in connection with reviewing
Borrower's request. Lender shall not unreasonably withhold its
consent to (A) the grant of a utility easement serving the
Property to a publicly operated utility, or (B) the grant of an
easement related to expansion or widening of roadways, provided
that such easement is in form and substance reasonably
acceptable to Lender and does not materially and adversely
affect the access, use or marketability of the Property.
(vi) The Transfer of shares of common stock, limited partnership
interests or other beneficial or ownership interests or other
forms of securities in AIMCO REIT or AIMCO OP, and the issuance
of all varieties of convertible debt, equity and other similar
securities of AIMCO REIT or AIMCO OP, and the subsequent
Transfer of such securities; provided, however, that no Change
in Control occurs as a result of such Transfer, either upon such
Transfer or upon the subsequent conversion to equity of such
convertible debt or other securities.
(vii) The issuance by AIMCO REIT or AIMCO OP of additional common
stock, limited partnership interests or other beneficial or
ownership interests, convertible debt, equity and other similar
securities, and the subsequent Transfer of such convertible debt
or securities; provided, however, that no Change in Control
occurs as the result of such Transfer, either upon such Transfer
or upon the subsequent conversion to equity of such convertible
debt or other securities.
(viii) A Transfer that occurs pursuant to Section 4.5 of the
Reimbursement Agreement.
(ix) A Transfer that occurs pursuant to Section 4.7 of the
Reimbursement Agreement.
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(x) So long as AIMCO REIT owns 100% of the stock of AIMCO-LP, Inc.,
a Transfer of limited partnership interests that results in
AIMCO-LP, Inc. owning not less than 50.1% of the limited
partnership interests in AIMCO OP.
O. CHOICE OF LAW; CONSENT TO JURISDICTION. The provisions of Section 7.8
and Section 7.9 of the Reimbursement Agreement are hereby incorporated by
reference herein as fully set forth therein.
[REMAINDER OF PAGE INTENTIONALLY BLANK;
SEE ATTACHED SIGNATURE PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Special Rider or
have caused the same to be executed by their respective representatives
thereunto duly authorized.
Signed and BORROWER:
Delivered in the
Presence of: OTC APARTMENTS LIMITED PARTNERSHIP, a
Florida limited partnership
By: AIMCO/OTC QRS, INC., a Delaware
limited corporation, its sole General
Partner
/s/ Sharon Phillips
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/s/ Donna R. Gallup By: /s/ H. Alcock
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Harry Alcock
Vice President