- --------------------------------------------------------------------------------
AMENDED AND RESTATED
LOAN AGREEMENT, AS FURTHER
AMENDED AND RESTATED
FLORIDA HOUSING FINANCE AGENCY
AND
OTC APARTMENTS LIMITED PARTNERSHIP
Pertaining To
FLORIDA HOUSING FINANCE AGENCY
MULTI-FAMILY HOUSING REVENUE REFUNDING BONDS
1991 SERIES C
(Players Club at Tampa, Suntree
at East Bay, Suntree at Orlando,
Players Club at Magnolia Bay and
Players Club at East Bay Projects)
Dated as of June 1, 1991 and
Further Amended and Restated
as of December 1, 1993
- --------------------------------------------------------------------------------
All of the right, title and interest of the Florida Housing Finance Agency in
and to this Amended and Restated Loan Agreement (except for certain reserved
rights as set forth herein) are being assigned to Sun Bank, National
Association, as Trustee, as security for the above-referenced bonds pursuant to
a certain Trust Indenture dated as of June 1, 1991, as amended and restated as
of December 1, 1993.
TABLE OF CONTENTS
PAGE
Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Preambles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I.
DEFINITION OF TERMS
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
REPRESENTATIONS, WARRANTIES AND SPECIAL TAX COVENANTS
SECTION 2.01. Express Warranties of the Agency,
Exclusion of other Warranties . . . . . . . . . . . . . . 13
SECTION 2.02. General Representations,
Warranties and Covenants of
Developer . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.03. Acquisition, Construction and
Completion of Development . . . . . . . . . . . . . . . . 18
SECTION 2.04. [Intentionally Omitted.] . . . . . . . . . . . . . . . . . 20
SECTION 2.05. [Intentionally Omitted.] . . . . . . . . . . . . . . . . . 20
SECTION 2.06. Tax Exempt Status of the Bonds . . . . . . . . . . . . . . 20
SECTION 2.08. Sale of Development . . . . . . . . . . . . . . . . . . . . 22
ARTICLE III
THE BONDS, BOND PROCEEDS, THE INDENTURE
SECTION 3.01. Issuance of Bonds . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.02. Bond Proceeds; Investments. . . . . . . . . . . . . . . . . 24
SECTION 3.03. Indenture Approval and
Requirements. . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE IV
THE LOAN, PREPAYMENTS, ASSIGNMENTS
SECTION 4.01. Loan by Agency . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.02. Loan Payments . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.03. Credits on Loan . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.04. Prepayment Generally . . . . . . . . . . . . . . . . . . . 28
SECTION 4.05. Optional Prepayment of Loan . . . . . . . . . . . . . . . . 28
SECTION 4.06. Extraordinary Optional Prepayment . . . . . . . . . . . . . 30
(i)
SECTION 4.07. Event of Determination of
Taxability . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.08. Substitution: Extraordinary
Prepayment of Loan . . . . . . . . . . . . . . . . . . . 31
SECTION 4.09. Remarketing of Bonds and Payment
of Purchase Price . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.10. Mandatory Prepayment of the Loan . . . . . . . . . . . . . 33
SECTION 4.11. Maximum Interest . . . . . . . . . . . . . . . . . . . . . 34
SECTION 4.12. Assignments to Trustee . . . . . . . . . . . . . . . . . . 35
SECTION 4.13. Optional Substitution of Alternate
Security . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 4.13A. Confirmation . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.13B. Optional Substitution of Alternate
Confirmation . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.13C. Extensions of Confirmation . . . . . . . . . . . . . . . . 45
SECTION 4.13D. Expiration of Confirmation . . . . . . . . . . . . . . . . 46
SECTION 4.13E. Notices of Extension, Substitution
or Replacement of Confirmation . . . . . . . . . . . . . 46
SECTION 4.13F. No Liability of Agency or
Developer to Confirming Bank . . . . . . . . . . . . . . 46
SECTION 4.14. Trustee's Expenses . . . . . . . . . . . . . . . . . . . . 46
SECTION 4.15. Conversion of Bond Interest Rate
at Option of Developer . . . . . . . . . . . . . . . . . 46
SECTION 4.16. [INTENTIONALLY OMITTED] . . . . . . . . . . . . . . . . . . 48
SECTION 4.17. Assignment of Loan Agreement by
Developer . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE V
THE DEVELOPMENT
SECTION 5.01. Payment of Development Costs . . . . . . . . . . . . . . . 50
SECTION 5.02. Permits and Licenses . . . . . . . . . . . . . . . . . . . 50
SECTION 5.03. Annual Review of Management . . . . . . . . . . . . . . . . 50
ARTICLE VI
INDEMNIFICATION, PAYMENTS TO AGENCY
SECTION 6.01. Indemnification of Agency . . . . . . . . . . . . . . . . . 51
SECTION 6.02. Indemnification of Trustee . . . . . . . . . . . . . . . . 52
ARTICLE VII
BREACH OF COVENANTS, REMEDIES
SECTION 7.01. Event of Default . . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.02. Remedies for Failure to Perform . . . . . . . . . . . . . . 55
SECTION 7.03. Discontinuance of Proceedings . . . . . . . . . . . . . . . 57
SECTION 7.04. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . 57
SECTION 7.05. Reimbursement of Expenses . . . . . . . . . . . . . . . . . 57
(ii)
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amounts Remaining in Funds and
Accounts . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.02. Limited Obligation of Agency . . . . . . . . . . . . . . . 58
SECTION 8.03. Payments by Credit Enhancer . . . . . . . . . . . . . . . . 58
SECTION 8.03A. Payments by Confirming Bank . . . . . . . . . . . . . . . . 59
SECTION 8.04. Amendment of Agreement . . . . . . . . . . . . . . . . . . 59
SECTION 8.05. Payment . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 8.06. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 8.07. Severability . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 8.08. Term of Agreement . . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.09. Notice of Changes in Fact . . . . . . . . . . . . . . . . . 60
SECTION 8.10. Limited Obligations of Developer . . . . . . . . . . . . . 60
SECTION 8.11. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 8.12. Applicable Law . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 8.13. Date of This Agreement . . . . . . . . . . . . . . . . . . 63
EXHIBIT A - LEGAL DESCRIPTION OF LAND
EXHIBIT B - FORM OF TENANT INCOME CERTIFICATION
EXHIBIT C - CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
EXHIBIT D - FORM OF REQUIRED MANAGEMENT PROVISIONS
(iii)
This AMENDED AND RESTATED LOAN AGREEMENT was made and entered into as of
the first day of June, 1991 (the "Original Agreement") and is being further
amended and restated as of December 1, 1993 (as so further amended and restated
and as the same may be amended or supplemented in the future, this "Agreement"
or this "Loan Agreement") by and between the FLORIDA HOUSING FINANCE AGENCY (the
"Agency"), a state agency and instrumentality, constituting a public body
corporate and politic, duly created, organized and existing under the laws of
the State of Florida, and OTC APARTMENTS LIMITED PARTNERSHIP, or its successors
or assigns (the "Developer"), a Florida limited partnership;
W I T N E S S E T H:
WHEREAS, the Agency has been created and organized pursuant to and in
accordance with the provisions of the Florida Housing Finance Agency Act,
Sections 420.501-420.516, Florida Statutes, as amended (the "Act"), for the
purpose, among others, of encouraging the investment of private capital in
residential housing to stimulate the construction and rehabilitation of
residential housing and to provide construction and permanent mortgage loans for
projects; and
WHEREAS, the Agency entered into a Loan Commitment (the "Commitment") with
the Developer whereby the Agency agreed under certain conditions to authorize
the issuance of $48,480,000 Florida Housing Finance Agency Multi-Family Housing
Revenue Refunding Bonds, 1991 Series C (Players Club at Tampa, Suntree at East
Bay, Suntree at Orlando, Players Club at Magnolia Bay and Players Club at East
Bay Projects) (the "Bonds") by the Division of Bond Finance of the State of
Florida Department of General Services (the "Division"), on behalf of and in the
name of the Agency under the Act to provide funds for the continuation,
modification and consolidation of five outstanding mortgage loans assumed by the
Developer for the purpose of refunding the Agency's Multi Family Housing Revenue
Bonds, 1985 Series J, K, L, M and N (the "1985 Bonds") issued for the purpose of
providing permanent financing for five multi family residential developments
(collectively, the "Development") located within the State of Florida (the
"State") to be occupied by Eligible Tenants, as determined by the Agency in
accordance with the Act as in effect on the date of issuance of the 1985 Bonds,
and to be occupied partially (at least twenty percent (20%)) by "individuals of
low or moderate income, within the intendment of Section 103(b)(4)(A) of the
Internal Revenue Code of 1954, as amended as in effect on the date of issuance
of the 1985 Bonds (the "1954 Code"), all for the public purpose of assisting
persons or families of low, moderate or middle income within the State to afford
the costs of decent, safe and sanitary housing; and
WHEREAS, on June 17, 1991, the Division issued the Bonds on behalf of and
in the name of the Agency; and
WHEREAS, pursuant to its lawful authority under the Act, the Developer and
the Agency executed the Original Agreement, by the terms of which Original
Agreement the Agency lent the proceeds of the Bonds to the Developer (the
"Loan") for the purpose of providing financing for the Development; and
WHEREAS, the Agency and the Developer entered into the Original Agreement
to evidence the Loan when made pursuant to the Act;
WHEREAS, at the request of the Developer, the Agency and the Developer
desire to amend and restate the Original Agreement to: (i) provide for the
issuance by The Sumitomo Bank, Limited, a banking corporation organized under
the laws of Japan and acting by and through its Chicago Branch, and the delivery
to the Trustee for the benefit of the holders of the Bonds of a confirming
letter of credit, (ii) provide for certain changes to the amortization
requirements presently applicable to the Loan, and (iii) provide for the
principal amount of the Loan that may be optionally prepaid to be credited
against the next scheduled amortization installments applicable to the Loan, all
as more fully provided in this Agreement;
WHEREAS, Section 8.04 of the Original Agreement permits the Agency and the
Developer to amend and restate the Original Agreement for the purposes
hereinbefore recited, upon the receipt of certain consents and opinions, all of
which have been delivered to the Agency;
WHEREAS, the Agency has approved the execution of this Agreement, as
amended and restated, by resolution adopted on December 10, 1993; and
NOW, THEREFORE, the Agency and the Developer, each in consideration of the
representations, covenants and agreements of the other as set forth herein,
mutually represent, covenant and agree as follows, to wit:
-2-
ARTICLE I
DEFINITION OF TERMS
The following are defined terms under this Agreement and shall for all
purposes hereof have the meanings herein specified, unless the context clearly
otherwise requires:
"Act" - The Florida Housing Finance Agency Act, Sections 420.501-420.516,
Florida Statutes, as amended.
"ADCC" - American Diversified Capital Corporation, a California
corporation.
"ADCC Note" - The Promissory Note dated June 13, 1991 executed by the
Developer to evidence its obligations under the Standby Loan Agreement.
"Adjusted Household Income" - That annual income which does not exceed (i)
with respect to Lower-Income Tenants, the maximum income of "individuals of low
or moderate income" within the meaning of Section 103(b)(4)(A) of the 1954 Code
as such section exists as of the date hereof (unless otherwise required by
applicable law), and (ii) with respect to Eligible Tenants, 150% of the highest
of the median income for the State, county or South Census Region in which the
Development is located, as determined in the latest published Decile
Distributions of Family Income by Standard Metropolitan Statistical Areas and
Non-Metropolitan Counties prepared and published from time to time by the
United States Department of Housing and Urban Development, as adjusted at least
annually by the Agency or its executive director according to the most recent
Consumer Price Index or such other valid statistical information as the Agency
or its executive director may determine.
"Agency" - The Florida Housing Finance Agency, and its successors and
assigns.
"Agreement" - This Amended and Restated Loan Agreement, dated as of June 1,
1991, and as further amended and restated as of December 1, 1993, between the
Agency and the Developer, together with any future amendments or restatements
thereof.
"Alternate Confirmation" - any Confirmation other than the initial
Confirmation deposited with the Trustee replacing the existing Confirmation as
provided in Section 4.13B hereof.
"Alternate Security" - Any letter of credit, guaranty agreement or other
security substituted for the Credit Enhancement then in effect or any amendment
thereto (other than an extension of the term of the Credit Enhancement then in
effect) which results in the Bonds being assigned a rating in one of the three
highest alphabetical credit ratings available for instruments of its type
-3-
by a nationally recognized rating agency without regard to number ical modifiers
(e.g. rated "AAA", "AA" or "A" by S&P or rated "Aaa," "Aa" or "A" by Moody's)
or, during any period the Bonds bear interest at a Floating Rate, a comparable
short term rating (subject, however, to the requirements of Section 4.13 of this
Agreement during a Fixed Rate Period) as permitted by Section 4.13 of this
Agreement. Notwithstanding anything in this Agreement to the contrary, a
Confirmation shall not constitute Alternate Security under this Agreement.
"Arbitrage Rebate Agreement" or "Rebate Agreement" - The Arbitrage Rebate
Agreement by and among the Trustee, the Agency and the Developer, dated June 13,
1991, as amended and supplemented from time to time.
"Assignment of Rents" - The Amended and Restated Collateral Assignment of
Leases, Rents and Contract Rights from the Developer to the Agency, as the same
may be amended from time to time.
"Authorized Representative" - A person or persons at the time designated to
act on behalf of the Developer by written certificate furnished to the Trustee
containing the specimen signature of such person or persons and signed on behalf
of the Developer by one or more of its authorized signatories, which certificate
may designate an alternate or alternates, and may designate different Authorized
Representatives to act for the Developer with respect to different sections of
this Agreement and the Indenture.
"Bond" or "Bonds" - Any one or all, as the case may be, of the Bonds issued
under the Indenture and described in paragraph 3.02(a) of the Indenture.
"Bond Counsel" - The firm of bond attorneys whose opinion is set forth
on the Bonds, or such other nationally recognized Bond Counsel, as described
below, as may be appointed by the Agency to render the opinions required
herein or in related documents. In the event the Trustee shall determine, in
its sole discretion, that the Agency has not appointed such successors, then
the term "Bond Counsel" shall mean a firm of nationally recognized attorneys
at law experienced in the financing of facilities for non exempt persons
through the issuance of tax exempt revenue bonds under the exemption provided
under Sections 103(b) and 103(c) of the 1954 Code and approved by the Agency,
the Developer and the Trustee, such approval not to be unreasonably withheld.
"Bondholder" or "holder" or "owner" - The person in whose name any Bond is
registered on the Bond registration books of the Agency kept by the Trustee as
bond registrar.
"Business Day" - Any day other than a Saturday, Sunday or a
day when banks in the City of New York, New York or in the cities
in which the Principal Offices of the Trustee, the Paying Agent,
-4-
the Remarketing Agent, the Credit Enhancer or the Confirming Bank are required
or authorized by law to be closed or on which the New York Stock Exchange is
closed.
"Code" - The Internal Revenue Code of 1986, as amended, and any successor
statute, together with corresponding and applicable final, temporary or proposed
regulations and revenue rulings issued or amended with respect thereto by the
Treasury Department or Internal-Revenue Service of the United States.
"Commitment" - The Commitment Agreement referred to in the preamble hereof,
entered into by the Agency and the Developer dated April 25, 1991, pursuant to
which, subject to certain conditions, the Agency has agreed to issue the Bonds
in full compliance with Section 103 of the 1954 Code and applicable Sections of
the Code.
"Condemnation Award" - The total condemnation proceeds actually paid by the
condemnor as a result of the condemnation (or threatened condemnation) of all or
any part of the property subject to the Mortgage less the actual costs incurred,
including attorney's fees, in obtaining such award.
"Confirmation" - the initial confirming letter of credit issued by The
Sumitomo Bank, Limited, acting through its Chicago Branch, and, upon acceptance
by the Trustee, any Alternate Confirmation delivered pursuant to Section 4.13B
hereof.
"Confirmation Account" - a special trust account of that name established
within the Revenue Fund pursuant to Section 5.02 of the Indenture into which
moneys representing proceeds of a drawing under the Confirmation in respect of
the principal or redemption price of or interest on the Bonds are to be
deposited.
"Confirmation Agreement" - the Confirmation Agreement dated as of
December 1, 1993 between the Credit Enhancer and the Confirming Bank, as
amended or supplemented from time to time, and any agreement pursuant to
which an Alternate Confirmation is issued.
"Confirmation Expiration Date" - the earliest of (a) the date of
termination of the initial Credit Enhancement, (b) July 3, 1998, (c) thirty
five (35) days following receipt by the Trustee of a certificate from the
initial Confirming Bank to the effect that an Event of Termination as defined
in the Confirmation Agreement has occurred, (d) five (5) days following the
date of payment of a drawing for payment of a mandatory tender pursuant to
Section 4.13B of the Indenture or (e) thirty five (35) days following receipt
by the initial Confirming Bank of a certificate from the Trustee to the
effect that the initial Credit Enhancer has delivered to the Trustee notice
of the termination of the initial confirmation pursuant to Section 2.07(b) of
the Confirmation Agreement.
-5-
"Confirming Bank" - The Sumitomo Bank, Limited, a banking corporation
organized under the laws of Japan and acting by and through its Chicago Branch,
as issuer of the initial Confirmation delivered pursuant to the Indenture, and
the issuer of any Alternate Confirmation.
"Confirming Bank Pledged Bonds" - Bonds held by the Confirming Bank or its
designee and registered in the name of the Developer and purchased with the
proceeds of a draw under the Confirmation, which Bonds shall be deemed
Outstanding for all purposes of the Indenture so long as they constitute
Confirming Bank Pledged Bonds.
"Counsel for the Trustee" - An attorney at law or firm of attorneys at law
selected by the Trustee as its counsel.
"Credit Enhancement" - Initially the irrevocable, transferable, direct pay
Letter of Credit issued by Sumitomo Trust, as hereinafter defined and any
Alternate Security substituted therefor or for Alternate Security.
"Credit Enhancer" - Initially Sumitomo Trust, as hereinafter defined, or
the obligor of any Alternate Security substituted for the Credit Enhancement.
"Determination of Taxability" - A judgment or order of a court of competent
jurisdiction which is final (either because the time for appeal thereof has
expired or because the judgment or order is issued by a court having final
appellate jurisdiction over the matter and is not subject to collateral attack),
a ruling or decision of the Internal Revenue Service which is final (because no
action has been taken to cause such ruling or decision to be judicially reviewed
and the time for taking any such action has expired) as a result of a proceeding
in which the Developer had an opportunity to participate, to the effect that the
interest on the Bonds is includable for federal income tax purposes in the
incomes of all recipients thereof subject to federal income taxes except any'
federal tax characterized as a "minimum" or "preference" or other similar
indirect tax to the extent such tax affects the includability of interest on the
Bonds in the income of the recipient thereof.
"Developer" - OTC Apartments Limited Partnership, and it.s successors and
assigns, a Florida limited partnership.
"Development" - Collectively, Players Club at Tampa, a 216 unit
multi-family residential rental facility located in Tampa, Florida; Suntree
at East Bay a 300 unit multi-family residential rental facility located in
Clearwater, Florida; Suntree at Orlando, a 296 unit multi-family residential
rental facility located in Orlando, Florida; Players Club at Magnolia Bay, a
324 unit multi-family residential rental facility located in Orlando,
Florida; and
-6-
Players Club at East Bay, a 161 unit multi-family residential rental
facility located in Clearwater, Florida.
"Development Costs" - All of the costs and expenses incurred with
respect to the Development within the meaning of "development costs" as
defined in the Act.
"Eligible Tenants" - One or more natural persons or a family,
irrespective of race, creed, religion, color, age, national origin, marital
status, familial status, handicap or sex, whose total adjusted annual
household income, as defined in the Income Certification, does not exceed
150% of the highest of the median income for the State, the County or the
South Census Region in which the Development is located, as determined in the
latest published Decile Distributions of Family Income by Standard
Metropolitan Statistical Areas and Non-Metropolitan Counties prepared and
published from time to time by the United States Department of Housing and
Urban Development, as adjusted at least annually by the Agency or its
executive director according to the most recent Consumer Price Index or such
other valid statistical information as the Agency or its executive director
may determine, provided, however, that the annual household income as
determined above shall not be lower than the annual household income
requirement as of the date of the initial delivery of the Bonds which median
income is $33,800 and 150% of which is $50,700 as to the Developments located
in Hillsborough County and Pinellas County, Florida and which median income
is $38,900 and 150% of which is $58,350 for the Developments located in
Orange County, Florida.
"Environmental Indemnity" - That certain Environmental Indemnity dated June
13, 1991 from the Developer, Fred Gordon and Joseph M. Jacobson to the Agency.
"Expiration Date" - July 3, 1998, or the scheduled expiration date of any
Alternate Security if prior to the date of maturity of the Bonds.
"Income Certification" - An income certification substantially in the form
attached hereto as Exhibit B, as such form may be revised by the Agency from
time to time.
"Indenture" - That certain Trust Indenture dated as of June 1, 1991 and
amended and restated as of December 1, 1993 by and between the Agency and the
Trustee, pursuant to which the Bonds are issued and secured, together with any
amendments or supplements thereto.
"Insurance Proceeds" - The total proceeds of insurance actually paid or
payable by an insurance company in respect of insurance on the Development.
-7-
"Intercreditor Agreement" - The Intercreditor Agreement dated as of
June 14, 1991, between Sumitomo Trust and ADCC, regarding the parties
respective rights as creditors.
"Land" - The tracts of land on which the five Developments have been
constructed, as described on Exhibit "A" hereto.
"Land Use Restriction Agreement" - Collectively, the agreements between the
Agency and the Original Developer, dated as of March 1, 1985, recorded in the
Official Records of Hillsborough County, Official Records Book 4532, Page 1515,
as to the Players Club at Tampa Project; dated as of March 1, 1985, recorded in
the Official Records of Pinellas County, Official Records Book 5964, Page 1681,
as to the Suntree at East Bay Project; dated as of March 1, 1985, recorded in
the Official Records of Pinellas County, Official Records Book 5964, Page 1777,
as to the Players Club at East Bay Project; dated as of March 1, 1985, recorded
in the Off cial Records of Orange County, Official Records Book 3627, Page 516,
as to the Suntree at Orlando Project; and dated as of March 1, 1985, recorded in
the Official Records of Orange County, Official Records Book 3627, Page 616, as
to the Players Club at Magnolia Bay Project, as assumed by the Developer and as
amended as to each separate agreement by the First Amendment to Land Use
Restriction Agreement dated as of June 1, 1991, each among the Agency, the
Trustee, the Credit Enhancer and the Developer (respectively, the "First
Amendment") to be recorded in the Official Records of Hillsborough County,
Orange County, and Pinellas County, Florida as applicable and as same may be
further amended in accordance with this Indenture.
"Loan" - The mortgage loan from the Agency, as lender, to the Original
Developer, as borrower with respect to the Developments previously made and
assumed by the Developer in the acquisition of the Developments (and modified in
accordance with this Agreement) out of the proceeds of the 1985 Bonds (the "1985
Loan"), as the .same has been continued and modified pursuant to this Agreement
in principal amount equal to the principal amount of the Bonds.
"Loan Documents" or "Mortgage Loan Documents" - The Agreement, the Note,
the Mortgage, the Assignment of Rents, the Assignment of Mortgage and
Security Agreement and Collateral Assignment of Leases, Rents and Contract
Rights, the Land Use Restriction Agreement, the Servicing Agreement and the
Remarketing Agreement.
"Lower Income Tenants" - Individuals of low or moderate income within the
meaning of Section 103(b) (4) (A) of the 1954 Code.
"Mortgage" - The Amended and Restated Mortgage and Security Agreement dated
AS of June 1, 1991 as to the Development, amending and restating certain
Mortgage and Security Agreements, each dated as of the first day of March, 1985,
recorded in the Official Records of Hillsborough County as to the Players Club
at Tampa
-8-
Development, Pinellas County as to the Suntree at East Bay Development and
Players Club at East Bay Development and Orange County as to the Suntree at
OrlandO Development and Players Club at Magnolia Bay Development, granting a
first priority mortgage on and security interest in the Land, buildings and
equipment constituting the Development and assigned to the Trustee, securing the
Loan.
"1954 Code" - The Internal Revenue Code of 1954, as amended and in
effect on the date of issuance of the 1985 Bonds, together with corresponding
and applicable final, temporary or proposed regulations and revenue rulings
issued or amended with respect thereto by the Treasury Department or Internal
Revenue Service of the United States.
"1985 Bonds" - Collectively, the Bonds of the Agency designated $8,700,000
Florida Housing Finance Agency Multi-Family Housing Revenue Bonds, 1985 Series J
(Players Club at Tampa Project); $11,450,000 Florida Housing Finance Agency
Multi-Family Housing Revenue Bonds, 1985 Series K (Suntree at East Bay Project);
$10,000,000 Florida Housing Finance Agency Multi-Family Housing Revenue Bonds,
1985 Series L (Suntree at Orlando Project); $12,880,000 Florida Housing Finance
Agency Multi Family Housing Revenue Bonds, 1985 Series M (Players Club at
Magnolia Bay Project) and $6,870,000 Florida Housing Finance Agency Multi Family
Housing Revenue Bonds, 1985 Series N (Players Club at East Bay Project).
"Note" - The Amended, Restated and Consolidated Promissory Note dated June
13, 1991, as further amended and restated on December 30, 1993, executed by the
Developer to evidence the Loan.
"Original Developer" - Collectively, Players Club at Tampa, A California
Limited Partnership as to the Players Club at Tampa Project; Suntree at East
Bay, A California Limited Partnership as to the Suntree at East Bay Project; Rio
Bernard, A California Limited Partnership as to the Suntree at Orlando Project;
Players Club at Magnolia Bay, A California Limited Partnership as to the
Players Club at Magnolia Bay Project; and Players Club at East Bay, A California
Limited Partnership as to the Players Club at East Bay Project.
"Originator/Servicer" - First Housing Development Corporation of Florida
and its successors and assigns acting on behalf of the Agency to originate
and service the Loan.
"Pledge Agreement" - The Pledge and Security Agreement dated as of June 1,
1991, between the Developer and the Credit Enhancer, as amended as of
December 1, 1993.
"Principal Office" - The office designated as such by the respective
party in writing to the Agency, the Developer, the Trustee, the Paying Agent,
the Registrar, the Credit Enhancer, the
-9-
Remarketing Agent and the Confirming Bank, as set forth in Section 14.05 of the
Indenture.
"Private Placement Memorandum" - The Private Placement Memorandum of the
Developer dated June 13, 1991 with respect to the Bonds and any supplement
thereto.
"Project Fund" - The fund created by Section 6.01 of each separate
Indenture for each of the 1985 Bonds.
"Qualified Development Costs" - Development Costs, but only to the extent
that such costs were paid or incurred after July 13, 1984, and only to the
extent that such costs were charged to the respective Development's capital
account or were so chargeable either with a proper election or but for a proper
election to deduct such costs, within the meaning of Treasury Regulation 1.103
8(a)(1), as the same may be amended from time to time.
"Qualified Project Period" - Shall have the meaning given to such term
in the respective Land Use Restriction Agreement.
"Rebate Analyst" - A certified public accountant, financial analyst or bond
counsel, or any firm of the foregoing or financial institution experienced in
making the arbitrage and rebate calculations required pursuant to Section 148
of the Code and designated by the Agency to make the computations and give
directions required under the Arbitrage Rebate Agreement. Initially the Rebate
Analyst shall be Deloitte & Touche.
"Rebate Analyst Fee" - The annual fee to the Rebate Analyst to be paid
by the Developer, in the initial amount of $2,000 per year payable by the
Developer at the times directed by the Agency in writing to the Developer and
the Trustee.
"Rebate Fund" - The trust fund authorized to be established and so
designated under Section 5.09 of the Indenture.
"Redemption Period" - The period during any Fixed Rate Period that
commences on the Interest Payment Date nearest to the date on which one-half
of such Fixed Rate Period will have elapsed and that ends on the last day of
such Fixed Rate Period.
"Reimbursement Agreement" - The Letter of Credit and Reimbursement
Agreement, dated as of June 1, 1991, as amended from time to time, between
the Credit Enhancer and the Developer pursuant to which the Developer agrees,
INTER ALIA, to reimburse the Credit Enhancer for any and all amounts paid by
the Credit Enhancer pursuant to the Credit Enhancement or, after provision of
Alternate Security in accordance with the Indenture and this Agreement, any
reimbursement agreement between the provider of Alternate Security and the
Developer which provides for the reimbursement of the provider of Alternate
Security by the Developer for payments made by
-10-
such provider of Alternate Security pursuant to such Alternate Security.
"Remarketing Agreement" - The Remarketing Agreement, if any, entered into
among the Remarketing Agent, the Agency and the Developer, as amended or
supplemented from time to time.
"Revenue Fund" - The fund created by Section 5.02 of the Indenture.
"Second Mortgage" - The Second Mortgage and Security Agreement and
Collateral Assignment of Leases and Rents dated as of June 14, 1991 from the
Developer to Sumitomo Trust and recorded in the Official Records of
Hillsborough County, Orange County and Pinellas County, Florida, which
secures all payment obligations of the Developer under the Reimbursement
Agreement.
"Servicing Agreement" - That certain Permanent Mortgage Servicing Agreement
dated as of June 1, 1991, by and among the Agency, the Trustee, the Developer
and the Originator/Servicer.
"Standby Loan Agreement" - The Standby Loan Agreement dated as of June 14,
1991, between the Developer and ADCC.
"State" - The State of Florida.
"Sumitomo Trust" - The Sumitomo Trust and Banking Company, Limited, a
Japanese banking corporation acting through its New York Branch, as issuer of
the Credit Enhancement.
"Tender Agent Fee" - As to the initial Tender Agent, an ongoing annual
fee of $3,000 payable by the Developer to the Tender Agent on the Interest
Payment Date occurring in July of each year commencing July 3, 1991, and
thereafter during any Floating Rate Period until maturity or sooner
redemption of all the Bonds, plus activity fees in the amount of $60 for each
exercise of a Bond-holders Demand Purchase Option, together with the
reimbursement for any out-of-pocket expenses associated with acting as Tender
Agent, and as to any other Tender Agent, the fee agreed to between the
Developer and such successor Tender Agent.
"Third Mortgage" - The Third Mortgage and Security Agreement and Assignment
of Leases and Rents, dated as of June 10, 1991 from the Developer to ADCC and
recorded in the Official Records of Hillsborough County, Orange County and
Pinellas County, Florida, which secures all payment obligations of the Developer
under the Standby Loan Agreement.
"Trustee" - Sun Bank, National Association, having its principal corporate
trust office in Orlando, Florida, and its successors in trust hereunder.
-11-
"Trustee's Expenses" - The reasonable compensation and expenses payable to
the Trustee for necessary ordinary and necessary extraordinary services rendered
by it and necessary extraordinary expenses incurred by it under this Indenture
as and when the same become due, including reasonable counsel fees including
fees at trial (including, without limitation, bankruptcy proceedings) or
appellate proceedings.
In addition to the words and terms defined above, unless otherwise defined
herein or unless the context clearly otherwise requires, the capitalized words
and terms used herein shall have the same meanings defined for and assigned to
them in the Indenture and the Mortgage.
-12-
ARTICLE II
REPRESENTATIONS, WARRANTIES AND SPECIAL TAX COVENANTS
SECTION 2.01. EXPRESS WARRANTIES OF THE AGENCY, EXCLUSION OF OTHER
WARRANTIES. (a) The Agency makes the following representations and warranties as
the basis for the undertakings on the part of the Developer herein contained:
(i) The Agency is a State agency and instrumentality, constituting
a public body corporate and politic, duly created, organized, existing and
in good standing under the laws of the State;
(ii) The Agency has the power under the Act to execute and deliver
the Indenture, the First Amendment to Land Use Restriction Agreement, the
Commitment and this Agreement, to enter into the transactions contemplated
hereby and thereby including, without limitation, to authorize the issuance
and sale of the Bonds, and to carry out its obligations hereunder and
thereunder, and by proper action has duly authorized the issuance and sale
of the Bonds, the execution and delivery of the Indenture, the First
Amendment to Land Use Restriction Agreement, the Commitment and this
Agreement and the performance of all of the covenants and agreements of the
Agency contained in this Agreement, the Indenture, the Land Use Restriction
Agreement and the Commitment;
(iii) The issuance of the Bonds to obtain funds to continue financing
for the Development is intended to serve the public interest and will
further the purposes of the Act including, among others, the provision for
decent, safe and sanitary living accommodations for Lower Income Tenants
and Eligible Tenants; and
(iv) The Agency will not take or permit, or omit to take or cause to
be taken, any action that would adversely affect the exclusion from gross
income for federal income tax purposes of interest on the Bonds.
(b) The Agency makes no other warranties, either express or implied, as to
the Development or the financing thereof, of any nature or kind.
SECTION 2.02. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF
DEVELOPER. The Developer hereby represents, warrants and agrees as follows:
(a) The Developer (1) is a limited partnership validly organized and
existing under the laws of the State of Florida; (2) is organized and operated
for the purpose, among others, of developing, constructing, owning and
operating, from time to time,
-13-
the Development; (3) has full power and authority under its organizational
documents and the laws of the State to execute and deliver the Commitment, this
Agreement, the Note, the Mortgage, the Assignment of Rents, the Servicing
Agreement and the First Amendment to Land Use Restriction Agreement and the
other documents to which it is a party, to be bound by the terms of the
Indenture and to perform its obligations hereunder and thereunder; and (4) by
proper action, if required, has duly authorized the execution and delivery of
the Commitment, this Agreement, the Note, the Mortgage, the Assignment of Rents,
the Servicing Agreement and the First Amendment to Land Use Restriction
Agreement and the other documents to which it is a party, and when validly
executed and delivered by the other parties thereto, such documents, together
with the Indenture to the extent applicable to the Developer, will constitute
legal, valid and binding agreements of the Developer, enforceable against the
Developer in accordance with their respective terms, except as the
enforceability thereof may be subject to (A) the exercise of judicial discretion
in accordance with general equitable principles, and (B) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws for the relief of debtors
heretofore or hereafter enacted to the extent that the same may be
constitutionally applied, and except that enforceability of indemnification and
contribution provisions may be limited, in whole or in part, by applicable
securities laws or public policy;
(b) The execution, delivery and performance of the Commitment, this
Agreement, the Note, the Mortgage, the Assignment of Rents, the Servicing
Agreement and the First Amendment to Land Use Restriction Agreement and the
consummation of the transactions herein and therein contemplated, will not
violate in any material respect any law, regulation, ordinance, judgment or
court order of any federal, state or local government, and do not conflict in
any material respect with or constitute a material breach of or a material
default under the organizational documents of the Developer, or under the terms
and conditions of any instrument, document, agreement, commitment, indenture,
security agreement, mortgage, lease or other writing to which the Developer is a
party or by which the Developer or a substantial portion of its assets, is
bound;
(c) There are no actions, suits or proceedings pending or, to the
knowledge of the Developer threatened against or affecting the Developer, or the
Development, or involving the validity or enforceability of the Bonds, this
Agreement, the Commitment, the Land Use Restriction Agreement, the Note, the
Mortgage, the Assignment of Rents, the Servicing Agreement, the Credit
Enhancement, the Confirmation or the Indenture, or the priority of the lien of
the Mortgage, at law or in equity, or before or by any governmental authority,
except actions, which, if adversely determined would not materially impair the
ability of the Developer, to perform its obligations under this Agreement and to
cause to be paid any amounts which may become payable under the Note, the
Commitment or
-14-
this Agreement. The Developer is not in default in any material respect under
any mortgage, deed of trust, lease, loan or credit agreement, partnership
agreement or other instrument to which it is a party or by which it is bound;
(d) The Developer has caused Available Moneys to be deposited by the
Credit Enhancer or others with the Trustee in amounts determined by the Trustee
to be sufficient to pay principal of and interest on the 1985 Bonds to, but not
including, the Issue Date;
(e) Other than the Mortgage Loan Documents, the Second Mortgage and the
Third Mortgage, the Developer has made no verbal or written contract or
arrangement of any kind, the performance of which by any other party thereto
would give rise to a lien on the Development of equal or greater priority than
the liens created under the Mortgage Loan Documents, the Second Mortgage and the
Third Mortgage (other than "Permitted Encumbrances", as defined in the
Mortgage);
(f) Any Certificate signed by an Authorized Representative and delivered
in connection with the issuance of the Bonds pursuant to the Indenture, this
Agreement or otherwise in connection with the Loan, the Development or the Bonds
shall be deemed a representation and warranty by the Developer as to the
statements made therein for the benefit of, and to be relied upon by, the
Agency, its successors and assigns;
(g) All balance sheets and financial information of the Developer
delivered to the Agency or the Originator Servicer prior to or simultaneously
with the execution of this Agreement fairly present the financial condition
of the Developer, the results of operation of the business described therein
as of the respective dates and for the periods of said balance sheets or
financial statements. Said financial statements have been prepared in
accordance with generally accepted accounting principles, consistently
applied in the various statements throughout the periods involved, and show
all known material liabilities of the Developer including contingent
liabilities, long term leases and unusual commitments. Since the date of the
most recent financial statement, there has been no adverse material change in
the financial condition of the Developer. All other information submitted by
the Developer or on behalf of the Developer to the Agency or the
Originator/Servicer in support of the Developer's request for the Loan is
true and correct in all material respects as of the date of this Agreement,
and no material adverse change has occurred;
(h) The Developer has good and marketable title to all of the Developer's
properties reflected in its balance sheets and financial statements (except such
as have been disposed of in the ordinary course of business since the date of
such balance sheets or financial statements), including without limitation the
Development, and such properties are free and clear of all liens,
-15-
charges and encumbrances, except for (i) liens for taxes and assessments not yet
due, (ii) with respect to the Development, the lien of the Mortgage Loan
Documents, the Second Mortgage, the Third Mortgage and the matters defined as
Permitted Encumbrances therein, and (iii) as to other properties, such liens,
charges and encumbrances, if any, on properties acquired subsequent to such
balance sheets or financing statements and disclosed to the Agency or the
Originator/Servicer. It is acknowledged by the Developer that the only liens,
encumbrances and charges permitted under this Agreement with respect to the
Development are those permitted under the Mortgage Loan Documents, and the
Second Mortgage and matters defined as Permitted Encumbrances therein;
(i) To the best of the Developer's knowledge, no substantial loss, damage,
destruction or taking of any of the real or personal property of the Developer,
constituting all or a portion of the Development, has occurred which has not
been fully restored or replaced or which is not fully covered by insurance, less
applicable deductibles;
(j) Except as disclosed in the Private Placement Memorandum relating to
the Bonds, the Developer is not (i) a party to any contract, agreements, lease
or other instrument which would materially adversely affect the Development, or
the Developer's ability to perform its obligations under this Agreement, any
other Mortgage Loan Documents, or the Land Use Restriction Agreement, and (ii)
in default under any contract, agreement, lease or other instrument to which it
is a party and which is material to the Development, and no event of default or
occurrence that, with the giving of notice, the passage of time, or both, would
constitute an event of default thereunder has occurred and is continuing;
(k) To the best of the Developer's knowledge the Developer has complied
with all applicable laws and requirements of governmental authorities relating
to the construction, use and operation of the Development. No authorization or
approval or other action by, and no notice to or filing with, any federal, state
or local government body, agency or authority is required for the due execution,
delivery and performance by the Developer of this Agreement or any other
Mortgage Loan Document;
(l) (1) The Developer is in full compliance with the terms and conditions
of this Agreement; (2) except as they may be amended and restated or replaced by
the Mortgage Loan Documents, each of the 1985 Indentures and the Promissory
Notes, Loan Agreements, Mortgages and Security Agreements, Assignment of Leases
and Rentals and Land Use Restriction Agreements executed by the Original
Developer in connection therewith (collectively, the "1985 Bond Documents") as
assumed by the Developer and the Permanent Mortgage Servicing Agreement are in
full force and effect; (3) the Developer, on the date of execution hereof, is in
full compliance with the terms and conditions of the tax covenants and tenant
-16-
restrictions set forth in the 1985 Bond Documents; (4) all fees, expenses and
cost reimbursements owed to the Agency, the 1985 Trustee, the Originator/
Servicer and other parties to the 1985 Bond Documents, including but not limited
to amounts accrued but not yet payable, have been paid or provided for; (5) to
the best knowledge of the Developer is in compliance in all material respects
with the other material terms and conditions of the 1985 Bond Documents (except
for existing events of default disclosed to the Agency); and (6) as of the date
of execution hereof, the operation of the Development is in compliance in all
material respects with the terms and conditions of the 1985 Bond Documents;
(m) The Developer has filed all federal, state and local income tax
returns, which to the knowledge of the Developer are required at this time to be
filed, and have paid all taxes as shown on said returns and all assessments
received by the Developer to the extent that such taxes have become due;
(n) (i) The Developer has not received any notice that it or the
Development is not in compliance with all provisions of CERCLA, RCRA, SARA,
TSCA (as such terms are defined in the Environmental Indemnity) and Florida
Statutes, Chapters 376 and 403 (the "Environmental Laws"), and with any
rules, regulations and administrative orders of any governmental agency,
and with any judgments, decrees or orders of any court of competent
jurisdiction with respect thereto;
(ii) The Developer has not received any assessment, notice of
(primary or secondary) liability or notice of 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 Indemnity), nor has the Developer received notification that
any hazardous substances (as defined under CERCLA) have been disposed of or
have been found in any site at which any governmental agency is conducting
an investigation or other proceeding under any Environmental Law.
(iii) To the best of the Developer's knowledge and except as
previously disclosed to the Agency, no part of the Development or other
property used by the Developer in its business nor any building, structure
or facility located thereon or improvement thereto contains or contained
asbestos or polychlorinated biphenyls (PCBs); have or have had asbestos
containing materials or electrical transformers, fluorescent light fixture
ballasts or other equipment containing PCBs installed thereon or therein;
is or has been used for the handling, processing, storage or disposal of
Hazardous Wastes; or contain or contained above-ground or
-17-
underground storage tanks or other storage facilities for Hazardous Wastes.
(o) The Developer has not received any notice that it is not in full
compliance with all provisions of the Fair Labor Standards Act, as amended, and
regulations promulgated thereunder;
(p) The Developer has paid or made provision for the payment of all
applicable federal, state and local employees' income, social security and
unemployment taxes;
(q) The Developer has not received any notice that it is not in full
compliance with ERISA and Department of Labor regulations thereunder, with the
Code and Treasury Regulations thereunder and with terms of such plan or plans
with respect to each pension or welfare benefit plan to which the Developer is a
party or makes any employer contributions with respect to its employees, for the
current or prior plan years of such plans; and
(r) The representations and warranties made by the Developer to Sumitomo
Trust in any document or instrument executed in connection with this Agreement
and the transactions contemplated hereby are incorporated in this Agreement by
this reference and made a part hereof, and the Developer hereby represents and
warrants that all of said representations and warranties are true and correct in
all material respects as of the issuance of the Bonds and the extension of the
Loan under this Agreement.
SECTION 2.03. ACQUISITION, CONSTRUCTION AND COMPLETION OF DEVELOPMENT.
The Developer, based on inquiry of the Original Developer and review of relevant
project information maintained by the Agency, hereby represents, warrants and
agrees as follows:
(a) That the Original Developer incurred a substantial binding obligation
to commence acquisition and construction of the Development by September 1,
1985, pursuant to which the Developer expended at least the lesser of $100,000
or 2-1/2% of the total cost of acquisition and construction of each of the
Developments and proceeded with due diligence to complete the Developments;
(b) That the Players Club at Tampa Development was completed May 3, 1985,
Suntree at East Bay Development was completed April 24, 1986, Suntree at Orlando
Development was completed April 18, 1985, Players Club at Magnolia Bay
Development was completed October 9, 1985 and Players Club at East Bay
Development was completed May 31, 1985 and, at that time, the Original Developer
complied with its obligations under the documents executed by it in connection
with the issuance of the 1985 Bonds;
(c) That substantially all (at least 90%) of the aggregate amount
disbursed from the respective Project Fund for the 1985 Bonds to pay or
reimburse Development Costs (less neutral costs)
-18-
were applied to pay or reimburse Qualified Development Costs and that not more
than an insubstantial portion (not more than 10%) of the aggregate amount
disbursed from the Project Fund for the 1985 Bonds (less neutral costs) to pay
or reimburse Development Costs were applied to pay or reimburse Development
Costs other than Qualified Development Costs;
(d) That any and all contracts to acquire any part of the Development
which were entered into prior to July 13, 1984 (with respect to which payments
were made from the proceeds of the 1985 Bonds as Qualified Development Costs)
were, on such date, fully executory in nature, and none of the burdens or
benefits of ownership to any property which was the subject of such contracts
had accrued to or been imposed upon the Original Developer or any "related
person", as such term is defined in the 1954 Code, prior to such date;
(e) That the Original Developer submitted to the Trustee, prior to or upon
the date of each disbursement from the respective Project Fund for the 1985
Bonds, a statement (which statement was contained in the Original Developer's
Requisition for payment under the Indenture) certifying that the full amount of
such disbursement would be applied to pay or reimburse Development Costs and
that after taking into account the proposed disbursement substantially all (at
least 90%) of the aggregate disbursements from the respective Project Fund for
the 1985 Bonds (less neutral costs) Had been applied to pay or reimburse
Qualified Development Costs;
(f) That, upon the completion of each of the Developments, the Original
Developer submitted to the Agency and the Trustee a certificate of completion
containing the following: (i) the Original Developer's statement that all terms
and conditions to the making each of the Loans under the 1985 Bonds had been
satisfied and all documents required thereunder had been delivered in form and
substance satisfactory to the Agency; (ii) the Original Developer's statement
that the Developments have been substantially completed and was ready and
available for occupancy as of a specified date (the "Completion Date"); (iii)
the Original Developer's statement, confirmed by the Trustee, of the aggregate
amount expected to be disbursed from the respective Project Fund for the 1985
Bonds upon the Completion Date; (iv) the Original Developer's certification that
all of the amounts expected to be disbursed from the Project Fund for the 1985
Bonds were expected to be applied to pay or reimburse Development Costs and that
none of the amounts disbursed from the respective Project Fund for the 1985
Bonds were expected to be applied to pay or reimburse costs or expenses other
than Development Costs; and (v) the Original Developer's certification that
substantially all (at least 90%) of the amounts disbursed from the Project Fund
for the 1985 Bonds (less neutral costs) were applied to pay or reimburse
Qualified Development Costs and that no more than an insubstantial amount (not
more than 10%) of the amounts disbursed from the Project Fund
-19-
for the 1985 Bonds (less neutral costs) were applied to pay or reimburse costs
or expenses other than Qualified Development Costs;
(g) That money on deposit in any fund or account in connection with the
Bonds, whether or not such money was derived from other sources, has not been
and will not be used by or under the direction of the Developer in a manner
which would cause the Bonds to be "arbitrage bonds" within the meaning of
Section 103(c) of the 1954 Code or Section 148 of the Code, and the Developer
specifically agrees that the investment of money in any fund created in the
Indenture shall be restricted as may be necessary to prevent the Bonds from
being "arbitrage bonds" under the 1954 Code and the Code;
(h) That the Developer will not take or omit to take any action if such
action or omission would cause interest on the Bonds to become subject to
federal income taxation, except during such period as the Bonds are owned by a
"related person" or a "substantial user" of the Development and except for any
federal tax characterized as a "minimum" or "preference" tax to the extent such
tax affects the includability of interest on the Bonds in the income of the
recipient thereof;
(i) That the original Developer has not and the Developer will not
discriminate on the basis of race, creed, color, sex, age, marital status,
familial status (other than with respect to Eligible Tenants), handicap,
religion or national origin in the lease, use, or occupancy of the Development
or in connection with the employment or application for employment of persons
for the operation and management of the Development; and
(j) That the Original Developer and the Developer have complied in all
respects with the requirements of the 1985 Loan.
SECTION 2.04. [Intentionally Omitted.]
SECTION 2.05. [Intentionally Omitted.]
SECTION 2.06. TAX EXEMPT STATUS OF THE BONDS. The Developer hereby
represents, warrants and agrees that:
(a) It will not take or permit, or omit to take or cause to be taken, any
action that would adversely affect the exclusion from gross income for federal
income tax purposes of the interest on the Bonds (other than with respect to a
"substantial user" or "related person" under Section 147(a) of the Code) and, if
it should take or permit, or omit to take or cause to be taken, any such action,
the Developer shall take all lawful actions necessary to rescind or correct such
actions or omissions promptly upon having knowledge thereof and specifically
agrees to be bound by Section 7.03 of the Indenture;
-20-
(b) It will take such action or actions as may be necessary, in the
opinion of Bond Counsel, including, without limitation, consenting to the
amendment of this Agreement, the Indenture, the Land Use Restriction Agreement,
the Note or the Mortgage to comply fully with all applicable rules, rulings,
policies, procedures, regulations or other official statements promulgated,
proposed or made by the Department of the Treasury or the Internal Revenue
Service pertaining to obligations issued under Section 103(b)(4)(A) of the 1954
Code which are necessary in the opinion of Bond Counsel to maintain the
exclusion from gross income for federal income tax purposes of interest on the
Bonds;
(c) It will execute and file of record appropriate amendments to the Land
Use Restriction Agreement, and assure the recording of such document and take
any other steps as are necessary, in the opinion of Bond Counsel, in order to
insure that the requirements and restrictions of this Article II will be binding
upon all owners of the Development. The Developer hereby covenants to include
such requirements and restrictions in any documents transferring any interest in
the Development to another to the end that such transferee has notice of, and is
bound by such restrictions to the extent and for the period provided therein and
to obtain the agreement from any transferee to so abide; and
(d) It will not, pursuant to an arrangement, formal or informal, purchase
the Bonds in an amount related to the amount of the Loan; provided, that the
foregoing shall not preclude a purchase of Bonds using moneys provided pursuant
to Section 4.09 hereof.
SECTION 2.07. MODIFICATION AND TERMINATION OF SPECIAL TAX COVENANTS.
(a) Subsequent to the issuance of the Bonds and prior to their payment in full
(or provision for the payment thereof having been made in accordance with the
provisions of the Indenture), this Agreement may not be amended, changed,
modified, altered or terminated except as permitted in Section 8.04 hereof and
this Section 2.07 and by the Indenture. Anything contained in this Agreement or
the Indenture to the contrary notwithstanding, the Agency, the Trustee, and the
Developer hereby agree to amend this Agreement and, if appropriate, the
Indenture and the Land Use Restriction Agreement, to the extent required or
permitted, in the opinion of Bond Counsel, in order for interest on the Bonds to
remain excludable from gross income for federal income tax purposes under
Section 103(b)(4)(A) of the 1954 Code. The party requesting such amendment shall
notify the other party to this Agreement, the Credit Enhancer, the Confirming
Bank and the Trustee of the proposed amendment, with a copy of such requested
amendment to Bond Counsel, and shall pay all reasonable and necessary fees and
expenses incurred with respect to such amendment. After review of such proposed
amendment, Bond Counsel shall render to the Trustee an opinion as to the effect
of such proposed amendment upon the includability of interest on the Bonds in
the income of the recipient thereof for federal income tax purposes.
-21-
(b) The Developer, the Agency and where applicable, the Trustee shall
execute, deliver and, if applicable, file of record any and all documents and
instruments, including, without limitation, an amendment to the Land Use
Restriction Agreement, necessary to effectuate the intent of this Section 2.07,
and both the Developer and the Agency hereby appoint the Trustee as their true
and lawful attorney-in-fact to execute, deliver and, if applicable, file of
record on behalf of the Developer or the Agency, as is applicable, any such
document or instrument (in such form as may be approved by Bond Counsel) if
either the Developer or the Agency defaults in the performance of its obligation
under this subsection (b); provided, however, that the Trustee shall take no
action under this subsection (b) without first notifying the Credit Enhancer,
the Confirming Bank, the Developer or the Agency, as is applicable, of its
intention to take such action and providing the Credit Enhancer, the Confirming
Bank, the Developer or the Agency, as is applicable, a reasonable opportunity to
comply with the requirements of this Section 2.07.
(c) Notwithstanding anything to the contrary contained in this
Section 2.07, the restrictions provided in this Article II and in the Land Use
Restriction Agreement regarding the use and operation of the Development shall
be terminated in the event of involuntary noncompliance therewith caused by
fire, seizure, requisition, foreclosure, transfer of title by deed in lieu of
foreclosure to an entity other than the Developer or a "related person" within
the meaning of the Code, change in federal law or action of a federal agency
after the issuance of the Bonds which prevents the Agency from enforcing the
requirements of this Agreement and the Land Use Restriction Agreement,
condemnation or similar event (as determined by the Agency), so long as the
Bonds are redeemed within sixty days following such involuntary noncompliance
(or within a period of time thereafter determined by the Bond Counsel to be
reasonable, but in no event beyond the period permitted in Section 4.06 hereof)
or amounts received as a consequence of such event are used to provide a project
which meets and is subject to the requirements of Section 103(b)(4)(A) of the
1954 Code and of Treasury Regulations promulgated pursuant thereto and in either
such event, upon the request of the Developer and at the expense of the
Developer, the parties hereto shall execute an appropriate document in
recordable form to evidence such automatic termination; provided, however, that
the restrictions thereof shall nevertheless apply to the Development, if, at any
time during that part of the Qualified Project Period subsequent to any
involuntary event as described in this paragraph, the obligor on the acquired
purpose obligation (as that phrase is defined in Treasury Regulations) or a
related person (as that term is defined in Treasury Regulations) obtains an
ownership interest in the Development for tax purposes.
SECTION 2.08. SALE OF DEVELOPMENT. The Developer shall not, without the
prior written consent of the Agency (except as provided
-22-
in Section 8 of the Land Use Restriction Agreement), voluntarily sell, lease,
exchange, transfer, assign, convey or otherwise dispose of all or substantially
all of the Development and Developer's principals shall not sell, exchange,
assign, convey, transfer or otherwise dispose of all or a controlling interest
in the Developer.
-23-
ARTICLE III
THE BONDS, BOND PROCEEDS, THE INDENTURE
SECTION 3.01. ISSUANCE OF BONDS. Subject to the satisfaction of and
compliance with all of the provisions, covenants and requirements of this
Agreement and the Indenture, in order to provide funds for the refunding of the
1985 Bonds, the Agency has caused to be issued and delivered the Bonds to the
purchaser or purchasers thereof and has caused moneys to be deposited in the
Bond Proceeds Fund under the Indenture.
SECTION 3.02. BOND PROCEEDS; INVESTMENTS. The proceeds of the Bonds and
any earnings from any investments thereof have been deposited, and will be held,
invested and reinvested solely for the purposes and expended subject to the
limitations contained in the Indenture and in this Agreement.
SECTION 3.03. INDENTURE APPROVAL AND REQUIREMENTS. The execution of
this Agreement shall constitute conclusive evidence of approval of the Indenture
by the Developer. Additionally, Developer agrees that whenever the Indenture is
executed and by its terms imposes a duty or obligation upon it, such duty or
obligation shall be binding upon it to the same extent as if it were an express
party to the Indenture, and it hereby agrees to carry out and perform all of its
obligations thereunder, and any Event of Default thereunder shall constitute a
default under this Agreement.
-24-
ARTICLE IV
THE LOAN, PREPAYMENTS, ASSIGNMENTS
SECTION 4.01. LOAN BY AGENCY. (a) The Agency, pursuant to the terms of
this Agreement, agrees to loan to the Developer the proceeds in the amount of
$48,480,000 received by the Agency from the sale of the Bonds (the "Loan"). (As
of December 1, 1993, $48,140,000 of the principal amount of the Loan is
outstanding). Upon issuance of the Bonds, the full amount of the Loan hereunder
shall be deemed to be advanced to the Developer, shall be deposited under the
Indenture and shall be disbursed as provided in the Indenture and no amounts
deposited with the Trustee by the Developer and deposited in the Costs of
Issuance Account shall be deemed to satisfy any portion of the Developer's
obligation to repay the Loan;
(b) Concurrently with the execution and delivery of the Original
Agreement, the Developer shall cause the Mortgage, the Assignment of Rents, the
Note, the First Amendment, the Environmental Indemnity and the Credit
Enhancement to be executed and be delivered to the Trustee (unless previously
executed and delivered). Concurrently with the execution and delivery of this
Agreement, the Developer shall cause the Confirmation to be executed and
delivered to the Trustee (unless previously executed and delivered);
(c) Prior to receiving any disbursement from any fund under the Indenture
or any disbursement being made on behalf of the Developer, the Developer shall
cause the Mortgage, the Assignment of Rents, and the First Amendment, to be
recorded in the land records of Hillsborough County, Orange County and Pinellas
County, Florida, as applicable, and shall cause recording information with
respect thereto to be delivered to the Agency and/or the Trustee, as applicable,
and the Developer hereby agrees to carry out and perform all of its obligations
under the Note and the Land Use Restriction Agreement;
(d) Subject to Section 8.10 below, the Developer shall make payments
required under this Agreement and be liable therefor in such amounts, and at
such times, as shall be sufficient to pay, after applying all amounts otherwise
available for making such payments, the principal of, redemption premium, if
any, and interest on the Bonds when and as due and payable, whether by stated
maturity date, Interest Payment Date, by optional or mandatory redemption or by
acceleration, any and all documentary stamp taxes or intangible taxes due and
payable in connection with the Loan, the Note and the Mortgage, if any, and all
fees and expenses (including reasonable counsel fees) of the Agency, the
Originator/ Servicer, the Rebate Analyst, the Remarketing Agent, the Tender
Agent, the Credit Enhancer, Bond Counsel and the Trustee provided
-25-
for herein or in the Indenture together with annual rating agency review fees;
and
(e) The Agency and the Developer have agreed pursuant to the Commitment
that the Agency retain a "lending institution," as defined in the Act, for the
purpose of initially reviewing and approving the Loan and handling the
origination process with respect to the Loan on behalf of the Agency, for which
such lending institution shall be paid an annual fee in an amount equal to .035%
of the outstanding principal balance of the Loan. The Agency has retained the
Originator/Servicer for that purpose.
SECTION 4.02. LOAN PAYMENTS. (a) Except as otherwise provided herein,
the Developer covenants and agrees to make payments in respect of the Loan,
including accrued interest, directly to the Trustee for deposit to the Revenue
Fund in amounts sufficient to pay all amounts becoming due hereunder and under
the Indenture on any Interest Payment Date or other date on which any amounts
are due whether by acceleration, redemption or maturity, such payments to be
made by or on behalf of the Developer by 2:00 p.m., New York, New York time on
such Interest Payment Dates or other dates on which any such amounts are due.
(b) The Developer shall be deemed to have satisfied its obligations
hereunder and under the Note when corresponding amounts are paid pursuant to a
drawing by the Trustee under the Credit Enhancement or the Confirmation.
(c) The Developer agrees that, if applicable, upon any date of calculation
of the Rebate Amount for any period, if the sum of the amounts on deposit in the
Rebate Fund (plus any payments made to the United States, if moneys representing
any portion of the Rebate Amount for such period have been paid to the United
States under Section 5.09 of the Indenture) does not equal or exceed the Rebate
Amount, the Developer will deposit in the Rebate Fund moneys sufficient to cause
the amounts on deposit in the Rebate Fund, plus any investment earnings on
deposit in the various funds and accounts created under the Indenture (plus
amounts paid to the United States with respect to the Rebate Amount for such
period) to equal the Rebate Amount, such Developer deposit to be made on or
before the Business Day identified in the notice of any such deficiency
delivered to the Developer.
(d) The Developer agrees to pay, in addition to the amounts payable under
the Note, on the date such amounts are due hereunder or under the Indenture, (i)
to the Originator/Servicer, the Originator/Servicer's Fee, (ii) to the Rebate
Analyst, the Rebate Analyst's Fees, (iii) the fees of the Tender Agent and the
Remarketing Agent, (iv) the annual fees of any rating agency whose rating on the
Bonds is then in effect, and (v) to the Trustee for the account of the Agency,
the Agency's Fee (which includes the Trustee's Fee, the Rebate Analyst's Fee and
Audit Expense),
-26-
Trustee's Expenses and costs of issuance, for such actions as may be reasonable
and as may be required to effectuate the purposes of, and to fulfill the duties
and obligations of the Agency set forth in the Loan documents and the Indenture.
Any amounts required to be paid under this Section 4.02(d) that are not paid on
the date when due shall bear interest at the rate of eighteen percent (18%) per
annum from the due date thereof until the date paid in full, and a late fee
equal to five percent (5%) of any fees, costs and expenses not paid on the due
date thereof as reimbursement for the estimated costs and expenses incurred as a
result of such late payment and not as a penalty.
(e) The obligation of the Developer to make the Loan payments required to
be made hereunder (including payments due by reason of acceleration of the
Developer's obligations hereunder pursuant to Article VII hereof), shall be
absolute and unconditional, and shall not be subject to abatement, diminution,
postponement or deduction, or to any defense other than payment or to any right
of set-off, counterclaim or recoupment arising out of any breach under this
Agreement, the Indenture, the Credit Enhancement, the Confirmation or otherwise
by the Agency, the Credit Enhancer, the Confirming Bank, the Trustee, any owner
of Bonds or any other person, or out of any obligation or liability at any time
owing to the Developer by any of the foregoing. Nothing herein contained,
however, shall be interpreted to abridge the right of the Developer to seek
judicial remedy for any breach of covenant or contract in a separate legal
proceeding; provided, that all of the foregoing shall be subject to Section 8.10
hereof.
(f) It is understood and agreed that the Credit Enhancement in place as of
the Closing Date is a direct-pay letter of credit and will be drawn upon by the
Trustee in accordance with its terms, each time a payment of principal or
interest or both (but excluding any premium) is due on the Bonds, whether in the
normal course or upon acceleration, redemption or maturity, including draws on
the Credit Enhancement to the extent necessary for the payment of the Purchase
Price due on any Bond presented for purchase pursuant to the Indenture;
provided, however, that the Credit Enhancer's obligation to pay under the Credit
Enhancement is an independent and separate obligation, even though payment
thereunder shall be in satisfaction of the Developer's obligation hereunder and
under the Note.
(g) It is further understood that the Confirmation in place as of the date
of execution and delivery of this Agreement will be drawn upon by the Trustee in
accordance with its terms upon the wrongful failure or refusal by the Credit
Enhancer to honor its obligations under the Credit Enhancement; provided,
however, that the obligation of the Confirming Bank to pay under the
Confirmation is an independent and separate obligation, even though payment
thereunder shall be in satisfaction of the Developer's obligation hereunder and
under the Note.
-27-
SECTION 4.03. CREDITS ON LOAN. Notwithstanding any provision contained
in this Agreement or in the Indenture to the contrary the principal amount of
Bonds purchased by or on behalf of the Developer and delivered to the Trustee
and cancelled, shall be credited against the obligation of the Developer to pay
the principal of the Loan corresponding to the aggregate principal amount of the
Bonds delivered to the Trustee and cancelled. In the event that any of the Bonds
shall be redeemed pursuant to Section 4.02 of the Indenture, the aggregate
principal amount of the Bonds so redeemed shall be credited against the
obligation of the Developer to pay the principal of the Loan corresponding to
the aggregate principal amount of the Bonds so redeemed.
SECTION 4.04. PREPAYMENT GENERALLY. No prepayment of the Loan may be
made except to the extent and in the manner expressly permitted by this
Agreement. Upon receipt of written notice from the Developer that a deposit is
being made by or on behalf of the Developer for the purpose of prepaying the
Loan and thereby effecting the redemption of the Bonds, the Trustee shall take
such steps as may be required under the Indenture to accomplish the redemption
of the Bonds under the redemption provisions of the Indenture.
The Developer shall cause written notice to be given to the Trustee of its
election to prepay all or a portion of the Loan pursuant to Section 4.05 or 4.06
hereof not less than 40 days prior to the date on which such prepayment is to
occur, and the Developer shall be obligated to make such prepayment after any
notice of redemption of Bonds on the applicable redemption date or such earlier
date as may be provided for herein with respect to such prepayment has been
given by the Trustee.
SECTION 4.05. OPTIONAL PREPAYMENT OF LOAN. (a) During any Floating Rate
Period, upon election by the Developer the Developer shall have the option to
prepay the outstanding principal balance due on the Loan in whole or in part (in
any amount or amounts equivalent to Authorized Denomination or Authorized
Denominations), without any prepayment premium or penalty, by 3:00 p.m., New
York, New York time on any Interest Payment Date, upon at least 40 days' advance
written notice to the Agency, the Trustee, the Credit Enhancer, the Confirming
Bank, the Remarketing Agent and the Tender Agent and upon written consent of the
Credit Enhancer and the Confirming Bank. The Trustee is not required to give
notice of a redemption of Bonds resulting from such prepayment unless the amount
required for such redemption is first on deposit with the Trustee from the
Developer.
(b) During any Fixed Rate Period and during the applicable Redemption
Period as set forth below, upon election by the Developer the Developer shall
have the option to prepay the outstanding principal balance of the Loan in whole
at any time or in part on or prior to an Interest Payment Date (in any integral
multiple of
-28-
$5,000) from Available Moneys, at the respective prepayment prices set forth
hereinafter, upon at least 40 days' advance written notice to the Agency, the
Credit Enhancer, the Confirming Bank and the Trustee and upon written consent of
the Credit Enhancer and the Confirming Bank.
(i) If the Redemption Period is four years or longer, the Loan
shall be prepaid in whole or in part at the respective prepayment prices
set forth in the table below (expressed as percentages of the principal
amount of the Loan so pre paid), for Bond redemptions occurring during the
respective periods set forth in the table below, measured from the Interest
Payment Date on which such Redemption Period begins:
Redemption Date Prepayment Price
---------------------------------------- ---------------
During 1st year of Redemption Period 102%
During 2nd year of Redemption Period 101%
During 3rd year of Redemption Period
and thereafter 100%
(ii) If the Redemption Period is at least two years but less than
four years, the Loan shall be prepaid in whole or in part at the respective
prepayment prices set forth in the table below (expressed as percentages of
the principal amount of the Note so prepaid), for Bond redemptions
occurring during the respective periods set forth in the table below,
measured from the Interest Payment Date on which such Redemption Period
begins:
Prepayment
Redemption Date Prepayment Price
---------------------------------------- ---------------
During 1st year of Redemption Period 101%
During 2nd year of Redemption Period and thereafter 100%
(iii) If the Redemption Period is less than two years, the Loan may
be prepaid in whole or in part price of 100% of the principal amount of the
Note so prepaid.
(d) Notwithstanding the foregoing, the Developer may not prepay a portion
of the outstanding principal balance of the Loan in any amount that would
result, following redemption of Bonds as a result of such prepayment, in Bonds
being outstanding in other than Authorized Denominations.
(e) All prepayments under this Section, including principal, premium, if
any, and interest to the date of redemption shall be due and payable by no later
than 2:00 p.m., New York, New York time on the date fixed for redemption of the
Bonds pursuant to Section 4.01 of the Indenture, which date shall be
communicated in writing
-29-
by the Trustee to the Agency, the Developer and the Credit Enhancer.
(f) If the Developer prepays the Loan in part pursuant to this Section,
the principal balance of the Loan shall be reduced in the amount of such
prepayment; provided, however, that no such reduction in interest payable on the
Loan shall occur until after the date of the Bond redemption resulting from such
prepayment.
Notwithstanding anything to the contrary in this Section, if optional
prepayment of the Loan pursuant to this Section in the amount and on the date
specified above would result in the payment of an amount of interest on the Loan
(including interest on the Loan as provided therein together with any other
costs or considerations that constitute interest under applicable law which are
contracted for, charged, received, reserved or taken pursuant to the Mortgage
Loan Documents) in excess of the maximum amount which, when spread, to the
maximum extent permitted by law, over the term of the Loan, would cause the rate
of interest on the Loan to exceed the Highest Lawful Rate, then, notwithstanding
the foregoing, the provisions of Section 4.11 of this Agreement regarding
cancellation of excess interest shall apply.
SECTION 4.06. EXTRAORDINARY OPTIONAL PREPAYMENT. The Loan is subject to
extraordinary optional prepayment, and the Developer shall have the right to
prepay the same, as a whole or in part with respect to paragraph (a), (b) or (d)
hereof, upon the occurrence of any of the following events, with respect to one
or more of the Developments, at a prepayment price if as a whole, equal to the
principal amount of the Loan then outstanding prepaid, plus accrued interest to
the date fixed for such redemption and without premium from such prepayment, and
if in part, at a prepayment price including accrued interest to the date fixed
for redemption equal to the Insurance Proceeds or the proceeds of any
Condemnation Award delivered in Available Moneys to the Trustee by 2:00 p.m.,
New York, New York time on the date fixed for such redemption if:
(a) Any one or more of the Developments is so demolished, destroyed or
damaged that, in the judgment of the Developer it cannot be restored or rebuilt
with available funds to a profitable condition within a reasonable period of
time;
(b) If all of any one or more of the Developments shall have been taken
under the exercise or threatened exercise of the power of eminent domain by any
governmental authority or so much of such Development is taken or such
Development is so diminished in value that the remainder thereof cannot, in the
judgment of the Developer as certified to the Trustee by the Developer in
writing, continue to be operated profitably for the purpose for which it was
being used immediately prior to such taking or diminution;
-30-
(c) As a result of any changes in the Constitution of the State or the
Constitution of the United States of America or of legislative or administrative
action (whether State, federal or local), this Agreement shall have become void
or unenforceable or impossible of performance in accordance with the intent and
purpose of the parties as evidenced herein, or, as a result of such changes, it
is the opinion of the Developer and is certified to the Trustee by the Developer
in writing, that unreasonable burdens or excessive liabilities have been or will
be imposed on the Developer with respect to any one or more of the Developments,
including without limitation federal, State, local or other ad valorem,
property, income or other taxes, fees or other restrictions not being imposed on
the date of this Agreement; or
(d) If Insurance Proceeds or proceeds of any Condemnation Award with
respect to any one or more of the Developments are not applied to restoration of
such Development in accordance with the provisions of the Mortgage.
The Developer may exercise the option reserved in this Section only within six
months following the date that a condition has occurred which gives rise to a
right of prepayment under this Section.
SECTION 4.07. EVENT OF DETERMINATION OF TAXABILITY. Upon the occurrence
of a Determination of Taxability the Loan is not subject to mandatory prepayment
as a whole, and the Developer shall not be required to prepay the Loan as a
whole by paying the entire unpaid principal balance of the Loan and the unpaid,
accrued interest thereon to the date of prepayment. In such event, the Bonds
shall be subject to an adjustment in the rate of interest in accordance with the
provisions of Section 3.06 of the Indenture.
SECTION 4.08. SUBSTITUTION: EXTRAORDINARY PREPAYMENT OF LOAN. (a)
Within thirty (30) days after any of the events set forth in Section 7.01(e) or
(f) hereof have occurred and are continuing the Developer shall cause Alternate
Security to be provided to the Trustee in the manner and subject to the
requirements of Section 4.13 hereof.
(b) If the Developer does not provide Alternate Security within the time
prescribed hereby, the Developer shall be required to prepay the Loan as a whole
to cause redemption of Bonds at a redemption price equal to the principal amount
of the Bonds so redeemed, plus interest accrued on the principal amount of such
Bonds to the date fixed for redemption of Bonds from such prepayment. In such
event, the Bonds shall be called for redemption on such date as shall be
selected by the Trustee, after consultation with the Developer, but in no event
later than sixty (60) days following the failure to provide Alternate Security,
and the Developer shall cause sufficient moneys to be on deposit with the
Trustee by 2:00 p.m., New York, New York time at least two Business Days prior
to such date.
-31-
SECTION 4.09. REMARKETING OF BONDS AND PAYMENT OF PURCHASE PRICE.
(a) In addition to its obligation to repay the Loan and its other
obligations under this Agreement, the Developer agrees and acknowledges that it
is obligated to provide by no later than 4:30 p.m., New York, New York time, on
each Purchase Date, for the payment of the Purchase Price for purchase or
redemption of Bonds tendered or deemed tendered for purchase or redemption under
the Indenture on such Purchase Date. The Developer agrees to cause sufficient
moneys to be provided for the payment of the Purchase Price for purchase or
redemption of all Bonds so tendered, to the extent that proceeds of the
remarketing of such Bonds pursuant to the Remarketing Agreement are insufficient
to pay the Purchase Price of such Bonds on each Purchase Date or in the event
that Bonds are required to be redeemed on such Purchase Date pursuant to the
Indenture. Bonds purchased pursuant to a draw under the Credit Enhancement shall
be Pledged Bonds registered in the name of the Developer and held by the Credit
Enhancer or its designee pursuant to the Pledge Agreement. Bonds purchased
pursuant to a draw under the Confirmation shall be Confirming Bank Pledged Bonds
registered in the name of the Developer and held by the Confirming Bank or its
designee pursuant to the Pledge Agreement.
(b) The Developer further agrees that, in the event that the Remarketing
Agent shall resign or be removed, shall be dissolved or shall be in the course
of dissolution or liquidation or otherwise shall become incapable of acting as
Remarketing Agent as required by the Indenture and the Remarketing Agreement, or
in the event that the Remarketing Agent shall be taken under the control of any
public officer or officers or of a receiver appointed by a court, the Credit
Enhancer and the Confirming Bank, or the Developer with the consent of the
Credit Enhancer and the Confirming Bank, promptly will appoint a successor
Remarketing Agent in accordance with Section 10.20 of the Indenture and the
Developer will enter into a Remarketing Agreement under which the Remarketing
Agent will be obligated to perform the duties of the Remarketing Agent as
contemplated in the Indenture for a fee no greater than what is then prevailing
in the marketplace, to accomplish such succession.
(c) The Developer also agrees that, in the event that the Tender Agent
shall resign or be removed, shall be dissolved or shall be in the course of
dissolution or liquidation or otherwise shall become incapable of acting as
Tender Agent as required by the Indenture, or in the event that the Tender Agent
shall be taken under the control of any public officer or officers, or of a
receiver appointed by a court, the Credit Enhancer and the Confirming Bank, or
the Developer with the consent of the Credit Enhancer and the Confirming Bank,
promptly will appoint a successor Tender Agent in accordance with Section 10.21
of the Indenture.
-32-
(d) The Developer also agrees to pay the Remarketing Agent's fees and to
pay costs of the Agency, the Trustee and the Remarketing Agent to comply with
regulations imposed by law or regulations (including SEC. Rule 15c2-12) in
connection with a remarketing.
SECTION 4.10. MANDATORY PREPAYMENT OF THE LOAN. (a) If the Expiration
Date is prior to the maturity date of the Bonds, the Developer shall be required
to prepay and shall prepay the outstanding principal balance of the Loan in
whole, without prepayment premium or penalty, plus accrued interest, if any, by
no later than 1:30 p.m., New York, New York time, on the Expiration Date, unless
the Developer has caused to be furnished to the Trustee, at least 35 calendar
days prior to the Expiration Date, either:
(i) (A) evidence provided to the Trustee and the Agency that the
Credit Enhancement has been amended to provide that the Credit Enhancement
shall be in full force and effect to unconditionally and irrevocably
guarantee all principal and interest obligations of the Developer that
become due and payable under the Agreement and has a new Expiration Date
that is (1) if the Bonds are to be bearing interest at the Floating Rate as
of the day following the previously applicable Expiration Date, at least
one year later than the previously applicable Expiration Date, or the
maturity date of the Bonds, if earlier, or (2) if the Bonds are to bear
interest at a Fixed Rate as of the day following the previously applicable
Expiration Date, no earlier than the end of the Fixed Rate Period in effect
as of the day following the previously applicable Expiration Date, and (B)
a legal opinion in the form required by Section 4.13(b)(iii) hereof; or
(ii) (A) Alternate Security that will be in full force and effect on
such Expiration Date and that itself has and Expiration Date that is (1) if
the Bonds are to be bearing interest at the Floating Rate as of the day
following the previously applicable Expiration Date, at least one year
later than the previously applicable Expiration Date, or the maturity date
of the Bonds, if earlier, or (2) if the Bonds are to bear interest at a
Fixed Rate as of the day following the previously applicable Expiration
Date, no earlier than the end of the Fixed Rate Period in effect as of the
day following the previously applicable Expiration Date, and (B) each of
the other items required to be furnished under Section 4.13(b) hereof in
connection with the substitution of Alternate Security for the Credit
Enhancement.
(b) The Developer shall be required to prepay and shall pre pay the
outstanding principal balance of the Loan in whole, without prepayment premium,
plus accrued interest, by no later than 4:30 p.m., New York, New York time on
any Conversion Date, in the event that there is not on deposit in the Purchase
Fund, prior to 10:00 a.m., New York, New York time on such Conversion Date,
Available
-33-
Moneys in an amount sufficient to pay the Purchase Price of all Bonds tendered
or deemed tendered for purchase or redemption on such Conversion Date.
(c) The Developer shall be required to prepay and shall prepay the
outstanding principal balance of the Loan in whole, plus accrued interest, if
any, by 4:30 p.m., New York, New York time, on the earliest date for which
notice required by Section 4.15 of the Indenture can be given, following the
occurrence of an event of default under the Reimbursement Agreement and notice
of the occurrence of such event of default from the Credit Enhancer to the
Trustee directing the Trustee to redeem the Bonds in whole pursuant to Section
4.02(d) of the Indenture.
Prepayment pursuant to this Section shall be due and payable by no later
than 4:30 p.m., New York, New York time, on the date fixed by the Trustee for
the redemption of Bonds pursuant to Section 4.02(b) of the Indenture, which date
shall be communicated in writing by the Trustee to the Agency, the Developer,
the Credit Enhancer and the Confirming Bank.
SECTION 4.11. MAXIMUM INTEREST. Notwithstanding any provision of the
Mortgage Loan Documents to the contrary, it is hereby agreed by and between the
Agency and the Developer that in no event (including without limitation the
acceleration of the Loan or the mandatory prepayment of the Loan pursuant to the
Mortgage Loan Documents) shall the amount of interest contracted for, charged,
received, reserved or taken in connection with the Loan (including interest on
the Loan together with any other costs or considerations that constitute
interest under applicable law which are contracted for, charged, received,
reserved or taken pursuant to the Mortgage Loan Documents) ("Interest"), cause
the rate of interest on the Loan to exceed the Highest Lawful Rate. For purposes
of this Section, to the maximum extent permitted by law, Interest shall be: (i)
spread over the term of the Loan; (ii) if appropriate, characterized as a
premium for the privilege of making an optional prepayment of the Loan; and
(iii) computed after giving effect to the provisions of any other Mortgage Loan
Document that require the cancellation or refunding of Interest. Excess
Interest, if any (after the application of the foregoing provisions), provided
for in the Mortgage Loan Documents shall be cancelled automatically as of the
date of such acceleration or mandatory prepayment or, if theretofore paid, shall
be credited on the principal of the Loan or if the principal of the Loan has
been paid in full, refunded to the Developer. The provisions of this Section
shall control all agreements, whether now or hereafter existing and whether
written or oral, by the Agency, the Developer, the Credit Enhancer, the Trustee
and the holders of the Bonds.
SECTION 4.12. ASSIGNMENTS TO TRUSTEE. All right, title and interest of
the Agency in and to this Agreement (excepting the amounts payable to the Agency
for its own purposes pursuant to
-34-
Sections 4.01(d), 4.02(c), 4.02(d), 7.05 and the rights of the Agency to
indemnification under Article VI hereof) are to be pledged and assigned by the
Agency to the Trustee as security for the Bonds under and pursuant to the
Indenture. The Developer consents to such pledge and assignment. The Agency
directs the Developer, and the Developer agrees, to pay or cause to be paid to
the Trustee at its principal corporate trust office all payments on the Loan
pursuant to this Agreement.
SECTION 4.13. OPTIONAL SUBSTITUTION OF ALTERNATE SECURITY. At any time
and from time to time during the term of this Agreement, the Developer, at its
election and subject to satisfaction of the requirements of this Section, may
provide for the delivery, in substitution for the Credit Enhancement or
Alternate Security in effect from time to time, of new Alternate Security that
meets the requirements of this Section. The Developer shall give written notice
of intent to substitute Alternate Security to the Remarketing Agent, the
Confirming Bank and the Trustee at least twenty (20) days prior to the date
scheduled for the substitution of Alternate Security.
(a) Any Alternate Security shall constitute an irrevocable obligation of
the obligor thereon (i) to pay to the Trustee, upon proper demand, an amount
equal to any amounts of principal of and interest on the Bonds that are then due
and owing and unpaid under the Mortgage Loan Documents, and to make such payment
by not later than the time and date necessary to assure the timely payment of
the principal of, and interest on or the Purchase Price of the Bonds, or (ii) to
fully secure otherwise payment in an amount equal to the principal amount of the
Bonds outstanding from time to time plus, during any Floating Rate Period, the
number of days' interest on the Bonds then outstanding required by the rating
agency then rating the Bonds, to maintain the rating on the Bonds, computed at a
rate of interest per annum sufficient to pay interest on the Bonds as it becomes
due and, during any Fixed Rate Period, the number of days' interest on the Bonds
then outstanding required by the rating agency then rating the Bonds, to
maintain the rating on the Bonds, computed at the Fixed Rate in effect during
such Fixed Rate Period, all as necessary to assure the timely payment of the
principal of, and interest on the Bonds and the Purchase Price thereof. Any
Alternate Security substituted hereunder shall have a term of at least one year
and, during a Fixed Rate Period, shall have a term at least as long as the
Credit Enhancement or Alternate Security for which it is being substituted.
(b) As a condition to acceptance by the Trustee of the substitution of
Alternate Security hereunder on other than a Substitution Date or a Conversion
Date, the Developer shall cause to be delivered to the Trustee, concurrently
with the delivery of any Alternate Security, the following:
-35-
(i) if at the time of such substitution no default has occurred and
is continuing under the Credit Enhancement or existing Alternate Security,
the written approval of the provider thereof of the substitution hereunder
of a new Alternate Security,
(ii) during a Floating Rate Period, written acknowledgment from the
Trustee that Bondholders were notified of the pending substitution of
Alternate Security no later than fourteen days prior to the date scheduled
for substitution,
(iii) an opinion of counsel acceptable to the Agency, addressed to
the Trustee and the Agency, stating, among other things, that such
Alternate Security constitutes a legal, valid and binding obligation of the
obligor thereon, enforceable in accordance with its terms, except to the
extent that the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws for the relief of
debtors and by general principles of equity that permit the exercise of
judicial discretion and by laws, rulings and judgments applicable to the
provider of Alternate Security including authorities governing the effect
given to foreign judgments in such obligor's jurisdiction and to the extent
that the enforceability of indemnification and contribution provisions to
which such Alternate Security relates may be limited, in whole or in part,
by applicable securities laws or public policy, and addressing such other
matters as the Agency and the Trustee may reasonably require,
(iv) an opinion of Bond Counsel to the effect that substitution of
such Alternate Security is permitted under the Indenture and this Agreement
and will not adversely affect the excludability of interest on the Bonds
from gross income of the holders of the Bonds for federal income tax
purposes,
(v) written evidence from Moody's, if Moody's then rates the Bonds,
and S&P, if S&P then rates the Bonds, that each such agency has reviewed
such Alternate Security and that its substitution will not, of itself,
result in a withdrawal of or a reduction of its rating of the Bonds from
that which is then in effect,
(vi) an opinion of counsel acceptable to the Agency addressed to the
Agency and the Trustee, to the effect that the substitution of such
Alternate Security will not subject the Bonds and/or the Alternate Security
to the registration requirements of the Securities Act of 1933, as amended,
or the Indenture to qualification under the Trust Indenture Act of 1939, as
amended, or, in the alternative, that the Bonds and/or such Alternate
Security, as the case may be, have been registered pursuant to the
Securities Act of 1933, as amended,
-36-
and the Indenture has been qualified under the Trust Indenture Act of 1939,
as amended,
(vii) an amount sufficient to pay all costs incurred by the Trustee
and the Agency in connection with the substitution of such Alternate
Security, including, without limitation, the fees and expenses of their
respective counsel,
(viii) written acknowledgment from the provider of Alternate Security
that the Alternate Security has been duly executed, will be in full force
and effect from the date of its substitution for the Credit Enhancement or
other Alternate Security and has been duly authorized by all necessary
action of such provider.
(c) As a condition to acceptance by the Trustee of the substitution of
Alternate Security hereunder on a Substitution Date or a Conversion Date:
(i) the Developer shall cause to be delivered to the Trustee:
(A) a notice specifying the Substitution Date or Conversion
Date, which shall be a date not earlier than twenty (20) days from the
date of such notice, unless the Substitution Date or Conversion Date
shall also be an Expiration Date, in which case the Substitution Date
or Conversion Date shall be a date not earlier than thirty-five days
from the date of such notice, and
(B) if the securities rating agency or agencies are to
remain the same, written evidence from each securities rating
agency that has in effect a current rating on the Bonds of the
long-term and short-term ratings to be assigned to the Bonds upon
the substitution of the Alternate Security, or
(C) if a different securities rating agency from the
securities rating agency or agencies currently rating the Bonds is to
rate the Bonds on and after the Substitution Date or Conversion Date,
written evidence from said agency of the rating to be assigned to the
Bonds; and
(ii) the Developer shall cause to be delivered to the Trustee
concurrently with the delivery of the Alternate Security the following:
(A) if at the time of such substitution the provider of the
Credit Enhancement or existing Alternate Security is not in default or
the substitution is to occur in conjunction with the Expiration Date,
the
-37-
written approval of such provider of the substitution hereunder of such
Alternate Security,
(B) an opinion of counsel acceptable to the Agency, addressed
to the Trustee and the Agency, stating, among other things, that such
Alternate Security constitutes a legal, valid and binding obligation
of the obligor thereon, enforceable in accordance with its terms,
except to the extent of customary exceptions, including, without
limitation, that the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws for
the relief of debtors as such laws may be applied in the event of the
bankruptcy, insolvency, reorganization or similar proceeding of or
moratorium applicable to such obligor and by general principles of
equity that permit the exercise of judicial discretion and by laws,
rulings and judgments applicable to the provider of Alternate Security
including authorities governing the effect given to foreign judgments
in such obligor's jurisdiction and to the extent that the
enforceability of indemnification and contribution provisions to which
such Alternate Security relates may be limited, in whole or in part,
by applicable securities laws or public policy, and addressing such
other matters as the Trustee and the Agency may reasonably require,
(C) an opinion of Bond Counsel to the effect that
substitution of such Alternate Security is permitted under the
Indenture and this Agreement and will not adversely affect the
excludability of interest on the Bonds from gross income of the
holders of the Bonds for federal income tax purposes,
(D) an opinion of counsel acceptable to the Agency addressed
to the Agency and the Trustee, to the effect that the substitution of
such Alternate Security will not subject the Bonds or such Alternate
Security to the registration requirements of the Securities Act of
1933, as amended, or the Indenture to qualification under the Trust
Indenture Act of 1939, as amended, or, in the alternative, that the
Bonds and/or such Alternate Security, as the case may be, have been
registered pursuant to the Securities Act of 1933, as amended, and the
Indenture has been qualified under the Trust Indenture Act of 1939, as
amended,
(E) an amount sufficient to pay all costs incurred by the
Trustee and the Agency in connection with the substitution of such
Alternate Security, including, without limitation, the fees and
expenses of its counsel, and
-38-
(F) written acknowledgment from the provider of Alternate
Security that the Alternate Security has been duly executed, will be
in full force and effect from the date of its substitution for the
Credit Enhancement or other Alternate Security and has been duly
authorized by all necessary action of such provider.
(d) The substitution of Alternate Security under this Section shall not
prevent a redemption of Bonds on the Expiration Date pursuant to Section 4.02(a)
of the Indenture unless made by no later than the date required by such Section.
SECTION 4.13A. CONFIRMATION. The Confirmation, if one is provided, shall be
an irrevocable obligation of the Confirming Bank to the Trustee to pay to the
Trustee upon request made with respect to the Bonds and in accordance with the
terms hereof, the amounts described in this Section.
(a) Prior to the Fixed Rate Conversion Date, any Confirmation shall be in
a stated amount at least equal to (i) an amount equal to the aggregate principal
amount of the Outstanding Bonds sufficient (1) to pay the principal amount of
the Bonds when due at maturity or upon redemption or acceleration or (2) to pay
the principal portion of the purchase price of Bonds tendered for purchase
pursuant to the Indenture to the extent remarketing proceeds are not available
for such purpose, plus (ii) an amount equal to thirty seven (37) days' interest
accrued on the Bonds at the Maximum Rate then in effect (1) to pay interest on
the Bonds when due or (2) to pay the accrued interest portion of the purchase
price of the Bonds tendered for purchase pursuant to the Indenture to the extent
remarketing proceeds are not available for such purpose.
(b) On and after a Fixed Rate Conversion Date, any Confirmation shall be
effective on the Fixed Rate Conversion Date and shall be in a stated amount at
least equal to (i) an amount sufficient to pay the principal amount of, and
premium, if any, on the Outstanding Bonds when due whether at stated maturity or
upon redemption or acceleration, plus (ii) an amount equal to 225 days' interest
on the Outstanding Bonds at the Fixed Rate to pay interest accrued on the Bonds
at the Fixed Rate on or prior to the expiration date of such Fixed Rate
Confirmation.
(c) Each Confirmation delivered while the Bonds bear interest at a
Floating Rate shall have a term of not less than one year and each Confirmation
delivered while the Bonds bear interest at a Fixed Rate shall have a term of not
less than the then current Credit Enhancement. In no event will the Trustee be
entitled to draw on the Confirmation with respect to payment of principal,
purchase price or redemption price of or interest on Pledged Bonds or Confirming
Bank Pledged Bonds. The Confirmation may provide that the Confirming Bank's
obligation under the Confirmation will be
-39-
reduced to the extent of any drawing thereunder, subject to reinstatement to
the extent described therein.
(d) The Trustee shall draw under the Confirmation in accordance with the
terms thereof and the provisions of the Indenture to the extent necessary to
make timely payments of principal amount or redemption price of and interest on
the Bonds required to be made from the Interest Fund and the Principal Fund,
including payment of principal and of interest to the date of a declaration of
acceleration upon declaration of acceleration of the Bonds. The proceeds of all
such drawings shall be deposited in the Confirmation Interest Account of the
Interest Fund or in the Confirmation Principal Account of the Principal Fund as
appropriate pursuant to the Indenture and applied to such payments of principal
amount, redemption price of and interest on the Bonds.
(e) In addition, the Trustee shall draw moneys under the Confirmation in
accordance with the terms thereof to the extent necessary to make timely
payments of purchase price required to be made pursuant to and in accordance
with Article IV of the Indenture.
(f) It is understood and agreed that when drawing amounts under the
Confirmation the Trustee is not acting as an agent of the Agency but rather on
behalf of the Bondholders.
(g) In each case that Bonds are redeemed or deemed to have been paid
pursuant to the Indenture, the Trustee shall take such action as may be
permitted under the Confirmation to reduce the amount available thereunder to
the amount required by the application of this Section.
(h) The Confirming Bank may at its option and so long as the Credit
Enhancer adjusts the maximum rate in respect of the Credit Enhancement at the
same time and to the same extent, at any time prior to the Fixed Rate Conversion
Date, adjust the maximum rate (but not to a rate less than the lower of [12%]
per annum or the then current maximum rate in effect with respect to the Credit
Enhancement) upon delivery of the following items to the persons indicated not
less than five (5) days prior to the effective date of such adjustment:
(i) to the Trustee (1) a certificate of an authorized officer of
the Confirming Bank setting forth the new maximum rate and stating the
effective date of such new maximum rate, (2) an opinion of counsel for
the Confirming Bank stating that the substitute Confirmation constitutes
a legal, valid and binding obligation of the Bank in accordance with its
terms, (3) an opinion of counsel stating that the new maximum rate does
not exceed the Highest Lawful Rate, (4) an opinion of counsel stating
that all governmental approvals as required by law have been obtained
and (5) an opinion of Bond Counsel to
-40-
the effect that such adjustment will not cause the interest on the
Bonds to be includable in gross income for federal income tax purposes;
(ii) to the Remarketing Agent and the Developer, a copy of the
certificate described in paragraph (i)(1) above bearing the written
acknowledgement of receipt by the Trustee; and
(iii) to the Trustee, a substitute Confirmation in the same form,
dated the date of such substitution, for an amount determined in accordance
with the Indenture using the new maximum rate, but otherwise having terms
identical to the then outstanding Confirmation.
The Trustee shall surrender to the Confirming Bank the Confirmation for
which it has received a substitute promptly upon compliance by the Confirming
Bank with the provisions of this subsection.
(i) The Confirming Bank, so long as it honors its obligations under the
Confirmation, shall be subrogated to the rights of any owner whose Bond is paid
or purchased with proceeds paid by the Confirming Bank under the Confirmation to
the extent of the amount received by such owner plus interest thereon from the
date of such payment or purchase.
SECTION 4.13B. OPTIONAL SUBSTITUTION OF ALTERNATE CONFIRMATION. At any
time and from time to time during the term of this Agreement, the Developer, at
its election and subject to satisfaction of the requirements of this Section,
may provide for the delivery, in substitution for the Confirmation in effect
from time to time, of a new Alternate Confirmation that meets the requirements
of this Section. The Developer shall give written notice of intent to substitute
an Alternate Confirmation to the Remarketing Agent, the Confirming Bank, the
Credit Enhancer and the Trustee at least twenty (20) days prior to the date
scheduled for the substitution of an Alternate Confirmation.
(a) Any Alternate Confirmation shall constitute an irrevocable obligation
of the obligor thereon (i) to pay to the Trustee, upon proper demand, an amount
equal to any amounts of principal of and interest on the Bonds that are then due
and owing and unpaid under the Mortgage Loan Documents, and to make such payment
by not later than the time and date necessary to assure the timely payment of
the principal of, and interest on or the Purchase Price of the Bonds, or (ii) to
fully secure otherwise payment in an amount equal to the principal amount of the
Bonds Outstanding from time to time plus, during any Floating Rate Period, the
number of days' interest on the Bonds then Outstanding required by the rating
agency then rating the Bonds, to maintain the rating on the Bonds, computed at a
rate of interest per annum sufficient to pay interest on the Bonds as it becomes
due and, during any Fixed Rate Period, the
-41-
number of days' interest on the Bonds then outstanding required by the rating
agency then rating the Bonds, to maintain the rating on the Bonds, computed at
the Fixed Rate in effect during such Fixed Rate Period, all as necessary to
assure the timely payment of the principal of and interest on the Bonds and the
Purchase Price thereof. Any Alternate Confirmation substituted hereunder shall
have a term of at least one year and, during a Fixed Rate Period, shall have a
term at least as long as the Confirmation for which it is being substituted.
(b) As a condition to acceptance by the Trustee of the substitution of an
Alternate Confirmation hereunder on other than a Substitution Date or a
Conversion Date, the Developer shall cause to be delivered to the Trustee,
concurrently with the delivery of any Alternate Confirmation, the following:
(i) if at the time of such substitution no default has occurred and
is continuing under the existing Confirmation, the written approval of the
provider thereof of the substitution hereunder of a new Alternate
Confirmation,
(ii) during a Floating Rate Period, written acknowledgment from the
Trustee that Bondholders were notified of the pending substitution of an
Alternate Confirmation no later than fourteen days prior to the date
scheduled for substitution,
(iii) an opinion of counsel acceptable to the Agency, addressed to
the Trustee and the Agency, stating, among other things, that such
Alternate Confirmation constitutes a legal, valid and binding obligation of
the obligor thereon, enforceable in accordance with its terms, except to
the extent that the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws for the relief of
debtors and by general principles of equity that permit the exercise of
judicial discretion and by laws, rulings and judgments applicable to the
provider of such Alternate Confirmation including authorities governing the
effect given to foreign judgments in such obligor's jurisdiction and to the
extent that the enforceability of indemnification and contribution
provisions to which such Alternate Confirmation relates may be limited, in
whole or in part, by applicable securities laws or public policy, and
addressing such other matters as the Agency and the Trustee may reasonably
require,
(iv) an opinion of Bond Counsel to the effect that substitution of
such Alternate Confirmation is permitted under the Indenture and this
Agreement and will not adversely affect the excludability of interest on
the Bonds from gross income of the holders of the Bonds for federal income
tax purposes,
-42-
(v) written evidence from Moody's, if Moody's then rates the Bonds,
or S&P, if S&P then rates the Bonds, that each such agency has reviewed
such Alternate Confirmation and that its substitution will not, of itself,
result in a withdrawal of or a reduction of its rating of the Bonds from
that which is then in effect,
(vi) an opinion of counsel acceptable to the Agency addressed to the
Agency and the Trustee, to the effect that the substitution of such
Alternate Confirmation will not subject the Bonds and/or the Alternate
Confirmation to the registration requirements of the Securities Act of
1933, as amended, or the Indenture to qualification under the Trust
Indenture Act of 1939, as amended, or, in the alternative, that the Bonds
and/or such Alternate Confirmation, as the case may be, have been
registered pursuant to the Securities Act of 1933, as amended, and the
Indenture has been qualified under the Trust Indenture Act of 1939, as
amended,
(vii) an amount sufficient to pay all costs incurred by the Trustee
and the Agency in connection with the substitution of such Alternate
Confirmation, including, without limitation, the fees and expenses of their
respective counsel, and
(viii) written acknowledgment from the provider of the Alternate
Confirmation that the Alternate Confirmation has been duly executed, will
be in full force and effect from the date of its substitution for the
existing Confirmation and has been duly authorized by all necessary action
of such provider.
(c) As a condition to acceptance by the Trustee of the substitution of an
Alternate Confirmation hereunder on a Substitution Date or a Conversion Date:
(i) the Developer shall cause to be delivered to the Trustee:
(A) a notice specifying the Substitution Date or Conversion
Date, which shall be a date not earlier than twenty (20) days from the
date of such notice, unless the Substitution Date or Conversion Date
shall also be an Expiration Date, in which case the Substitution Date
or Conversion Date shall be a date not earlier than thirty-five days
from the date of such notice, and
(B) if the securities rating agency or agencies are to remain
the same, written evidence from each securities rating agency that has
in effect a current rating on the Bonds of the long-term and
short-term ratings to be assigned to the Bonds upon the substitution
of the Alternate Confirmation, or
-43-
(C) if a different securities rating agency from the
securities rating agency or agencies currently rating the Bonds is to
rate the Bonds on and after the Substitution Date or Conversion Date,
written evidence from said agency of the rating to be assigned to the
Bonds; and
(ii) the Developer shall cause to be delivered to the Trustee
concurrently with the delivery of the Alternate Confirmation the following:
(A) if at the time of such substitution the provider of the
existing Alternate Confirmation is not in default or the substitution
is to occur in conjunction with the Expiration Date, the written
approval of such provider of the substitution hereunder of such
Alternate Confirmation,
(B) an opinion of counsel acceptable to the Agency, addressed
to the Trustee and the Agency, stating, among other things, that such
Alternate Confirmation constitutes a legal, valid and binding
obligation of the obligor thereon, enforceable in accordance with its
terms, except to the extent of customary exceptions, including,
without limitation, that the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws for
the relief of debtors as such laws may be applied in the event of the
bankruptcy, insolvency, reorganization or similar proceeding of or
moratorium applicable to such obligor and by general principles of
equity that permit the exercise of judicial discretion and by laws,
rulings and judgments applicable to the provider of such Alternate
Confirmation including authorities governing the effect given to
foreign judgments in such obligor's jurisdiction and to the extent
that the enforceability of indemnification and contribution provisions
to which such Alternate Confirmation relates may be limited, in whole
or in part, by applicable securities laws or public policy, and
addressing such other matters as the Trustee and the Agency may
reasonably require,
(C) an opinion of Bond Counsel to the effect that
substitution of such Alternate Confirmation is permitted under the
Indenture and this Agreement and will not adversely affect the
excludability of interest on the Bonds from gross income of the
holders of the Bonds for federal income tax purposes,
(D) an opinion of counsel acceptable to the Agency addressed
to the Agency and the Trustee, to the effect that the substitution of
such Alternate Confirmation will not subject the Bonds or such
Alternate
-44-
Confirmation to the registration requirements of the Securities Act of
1933, as amended, or the Indenture to qualification under the Trust
Indenture Act of 1939, as amended, or, in the alternative, that the
Bonds and/or such Alternate Confirmation, as the case may be, have
been registered pursuant to the Securities Act of 1933, as amended,
and the Indenture has been qualified under the Trust Indenture Act of
1939, as amended,
(E) an amount sufficient to pay all costs incurred by the
Trustee and the Agency in connection with the substitution of such
Alternate Confirmation, including, without limitation, the fees and
expenses of its counsel, and
(F) written acknowledgment from the provider of the Alternate
Confirmation that the Alternate Confirmation has been duly executed,
will be in full force and effect from the date of its substitution for
the existing Alternate Confirmation and has been duly authorized by
all necessary action of such provider.
SECTION 4.13C. EXTENSIONS OF CONFIRMATION. The Confirming Bank may
extend the term of the Confirmation provided that the extended Confirmation
shall have a term meeting the requirements of Section 4.13A hereof. The Trustee
shall give written notice to the Confirming Bank ninety (90) days prior to the
Confirmation Expiration Date, which notice shall state the date upon which the
Confirmation is scheduled to expire if not extended. The Confirming Bank may
extend the Confirmation in accordance with the terms of the Confirmation
Agreement and shall amend the Confirmation to evidence such extension or cause
the substitute Confirmation effecting such extension to be delivered to the
Trustee no later than 40 days immediately preceding the Confirmation Expiration
Date.
SECTION 4.13D. EXPIRATION OF CONFIRMATION. Unless an Alternate
Confirmation or an extension of the Confirmation meeting the requirements of
Section 4.13B or Section 4.13C hereof shall have been delivered at least forty
(40) days prior to any Confirmation Expiration Date, the Bonds shall be subject
to mandatory tender for purchase pursuant to Section 4.13 of the Indenture and
the Trustee shall take all action necessary to notify the Bondholders of such
mandatory tender in accordance with the requirements of the Indenture. Bonds may
be remarketed following expiration of a Confirmation so long as a Credit
Enhancement, as applicable, meeting the requirements of Section 4.13 hereof is
in place after such Confirmation Expiration Date. An Alternate Confirmation may
be delivered at any time following a Confirmation Expiration Date provided the
requirements of Section 4.13B hereof are met.
SECTION 4.13E. NOTICES OF EXTENSION, SUBSTITUTION OR REPLACEMENT OF
CONFIRMATION.
-45-
(a) The Trustee shall, at least 15 Business Days prior to the proposed
substitution of the Confirmation with an Alternate Confirmation pursuant to
Section 4.13B or the extension of the Confirmation pursuant to Section 4.13C,
mail notice thereof to the Owners of the Bonds by first class mail, postage
prepaid.
(b) The Trustee shall promptly give notice of any proposed extension,
substitution or replacement of the Confirmation to the Remarketing Agent and to
each Rating Service.
SECTION 4.13F. NO LIABILITY OF AGENCY OR DEVELOPER TO CONFIRMING BANK.
Neither the Agency (or the Trustee as Assignee) nor the Developer shall be
liable to the Confirming Bank or any other party in respect of any Confirmation
or any transactions respecting the Confirmation.
SECTION 4.14. TRUSTEE'S EXPENSES. The Developer hereby agrees to pay to
the Trustee, in addition to the amounts payable hereunder, the Trustee's
Expenses required to be paid pursuant to the Indenture, as provided in Section
4.01(d) hereof.
SECTION 4.15. CONVERSION OF BOND INTEREST RATE AT OPTION OF DEVELOPER.
(a) During any Floating Rate Period, the Developer may elect with the
consent of the Credit Enhancer and the Confirming Bank to have the Bonds convert
from bearing interest at a Floating Rate to bearing interest at a Fixed Rate, by
providing the following to the Trustee, the Credit Enhancer, the Confirming Bank
and the Remarketing Agent:
(i) written notice stating that the Developer has elected to have
the Bonds convert from bearing interest at a Floating Rate to bearing
interest at a Fixed Rate, and specifying either (1) the length of the Fixed
Rate Period that will follow the current Floating Rate Period, which shall
be a period of a least one year ending on a December 31, a June 30, or on
the maturity date of the Bonds, but in no event ending on a date that is
later than the Expiration Date or (2) the Maximum Fixed Rate; and
(ii) a written opinion of Bond Counsel to the effect that conversion
of the Bonds from bearing interest at a Floating Rate to bearing interest
at a Fixed Rate at the election of the Developer hereunder and under the
Indenture will not cause the interest on the Bonds to become includable in
the gross income of the holders of the Bonds for federal income tax
purposes, under applicable law in effect as of the date of such opinion.
The Agency agrees that, subject to satisfaction of all conditions to such
conversion set forth in Section 3.05 of the Inden-
-46-
ture, including receipt by the Trustee of the supplemental opinion of Bond
Counsel described in Section 3.05(d)(ii) of the Indenture, the Bonds will
convert from bearing interest at a Floating Rate to bearing interest at a Fixed
Rate.
In the event that, if the Fixed Rate determined and announced by
the Remarketing Agent on any Fixed Rate Determination Date pursuant to
Section 3.05(c) of the Indenture following an election made by the Developer
under this Section 4.15(a) exceeds by more than 25 basis points the Fixed Rate
previously estimated by the Remarketing Agent with respect to the applicable
Fixed Rate Conversion Date pursuant to Section 3.05(b) of the Indenture, the
Developer may provide Immediate Notice, by no later than the Business Day
immediately following such Fixed Rate Determination Date, to the Trustee, the
Remarketing Agent, the Tender Agent, the Credit Enhancer and the Confirming
Bank, of its election that the Bonds will bear interest at the Fixed Rate as so
determined, despite the general provisions of Section 3.05(d)(i) of the
Indenture. The Developer acknowledges that failure to give such notice will
result in cancellation of the Fixed Rate Conversion Date and will cause the
Bonds to continue to bear interest at the Floating Rate.
(b) At least 35 days before the end of any Fixed Rate Period (unless such
Fixed Rate Period ends on the date of final maturity of the Bonds), the
Developer may elect to have the Bonds continue to bear interest at a Fixed Rate
by providing the following to the Trustee, the Credit Enhancer, the Confirming
Bank and the Remarketing Agent:
(i) written notice stating that the Developer has elected, as of
end of the Fixed Rate Period then in effect, to have the Bonds continue to
bear interest at a Fixed Rate and specifying either (1) the length of the
Fixed Rate Period that will follow the current Fixed Rate Period, which
shall be a period of at least one year ending on a December 31, a June 30,
or on the maturity date of the Bonds, but in no event ending on a date that
is later than the Expiration Date, or (2) the Maximum Fixed Rate; and
(ii) a written opinion of Bond Counsel to the effect that the
establishment of the interest rate on the Bonds in accordance with the
election of the Developer made pursuant to (i) above will not cause the
interest on the Bonds to become includable in the gross income of the
holders of the Bonds for federal income tax purposes, under applicable law
in effect as of the date of such opinion.
The Agency agrees that, subject to satisfaction of all conditions to the
setting of the interest rate on the Bonds in accordance with the notice
described in (i) above, as set forth in Section 3.07 of the Indenture, including
receipt by the Trustee of the supplemental opinion of Bond Counsel described in
Section
-47-
3.07(b)(iii)(2) of the Indenture, the interest rate on the Bonds will be set in
accordance with such notice and the procedures set forth in such Section 3.07.
In the event that, if the Fixed Rate determined and announced by the
Remarketing Agent on any Fixed Rate Determination Date pursuant to Section
3.07(b)(ii) of the Indenture following an election made by the Developer under
this Section 4.15(b) exceeds by more than 25 basis points the Fixed Rate
previously estimated by the Remarketing Agent with respect to the applicable
Fixed Rate Conversion Date pursuant to Section 3.07(b)(i) of the Indenture, the
Developer may provide Immediate Notice, by no later than the Business Day
immediately following such Fixed Rate Determination Date, to the Trustee, the
Remarketing Agent, the Tender Agent, the Credit Enhancer and the Confirming
Bank, of its election that the Bonds will bear interest at the Fixed Rate as so
determined, despite the general provisions of Section 3.07(b)(iii)(A) of the
Indenture. The Developer acknowledges that failure to provide any item described
in this subsection or to satisfy any condition described in Section 3.07 of the
Indenture will result in the setting of the interest rate on the Bonds at the
Floating Rate or the redemption of Bonds at the end of each Fixed Rate Period
pursuant to Section 3.07(a) of the Indenture rather than in accordance with any
election of the Developer.
SECTION 4.16. [INTENTIONALLY OMITTED]
SECTION 4.17. ASSIGNMENT OF LOAN AGREEMENT BY DEVELOPER. This Agreement
may be assigned as a whole or in part, by the Developer in accordance with the
provisions of Section 8 of the Land Use Restriction Agreement, as such
provisions relate to the assignment by the Developer of the Development,
subject, however, to consent of the Credit Enhancer and the Confirming Bank and
to each of the following conditions:
(a) No assignment (other than pursuant to Section 8 of the Lurid Use
Restriction Agreement) shall relieve the Developer from primary liability for
any of its obligations hereunder, and, in the event of any such assignment, the
Developer shall remain primarily liable for payments of the Loan payments
pursuant to Section 4.02 of this Agreement and for performance and observance of
the other agreements on its part herein provided to be performed and observed to
the same extent as though no assignment had been made;
(b) In the event that this Agreement is assigned, as a whole or in part,
the assignee shall agree to perform the obligations of the Developer hereunder
to the extent of the interest assigned;
(c) The Developer shall promptly upon the making of any assignment furnish
or cause to be furnished to the Agency and to the Trustee a true and complete
copy of each such assignment and agreement to perform; and
-48-
(d) Upon the assignment of this Agreement as a whole in accordance with
this Section 4.17, the assigning party shall be relieved from all liability for
any of its obligations hereunder with respect to matters arising after the date
of such assignment.
-49-
ARTICLE V
THE DEVELOPMENT
SECTION 5.01. PAYMENT OF DEVELOPMENT COSTS. If the moneys available
from the proceeds of the sale of the Bonds shall not be sufficient to redeem the
1985 Bonds in full, the Developer shall pay from its own funds all of that
portion of the redemption price of the 1985 Bonds, including premium, in excess
of the moneys available therefor from its own funds. Neither the Agency nor the
Trustee makes any warranty, either express or implied, that the moneys from the
proceeds of the Bonds will be sufficient to redeem the 1985 Bonds. If the
Developer shall pay from its own funds any portion of the redemption price of
the 1985 Bonds, including premium, pursuant to the provisions of this Section,
it shall not be entitled to any reimbursement therefor from the Agency, the
Trustee or the holders of any of the Bonds, nor shall it be entitled to any
diminution in or postponement of the payments required to be paid by the
Developer under this Agreement.
SECTION 5.02. PERMITS AND LICENSES. The Developer covenants and agrees
that in the operation of the Development it will use its best efforts to comply
with all federal, state and local statutes, laws, lawful ordinances, building
codes, regulations and rulings known by it to apply to the Development.
SECTION 5.03. ANNUAL REVIEW OF MANAGEMENT. The Developer hereby
authorizes the Agency to conduct a review annually of the management and
operation of the Development. The Agency shall document its findings from such
review and provide a copy of its findings to the Developer, who shall have
thirty days after receipt of such findings to respond to the Agency with respect
thereto. If the Agency shall find that any aspect of the management or operation
of the Development may cause interest on the Bonds to be subject to federal
income taxation or a violation of the Act, the Agency shall so notify the
Developer and require remedy of such condition. In order to effectuate such
remedy, the Agency may require the Developer to remove any management agent from
responsibility for the Development. The foregoing is a right which the Agency
retains and does not assign to the Trustee. Until such time as the Trustee has
been directed and indemnified by the Owners, the Trustee shall have no
responsibility for any review of the management and operation of the
Development.
-50-
ARTICLE VI
INDEMNIFICATION, PAYMENTS TO AGENCY
SECTION 6.01. INDEMNIFICATION OF AGENCY. (a) Subject to the
provisions of the succeeding sentences of this Section 6.01(a) and the
provisions of subsection (c) hereof, the Developer as an entity (as used in this
Article VI the term "Developer" shall not include any partners, shareholders,
directors, officers, agents or representatives of the Developer or any partner
thereof in such capacities) agrees to indemnify and hold the Agency, its
directors, members, officers, employees, agents and representatives, and the
State, including but not limited to, the Division, the members and officers of
its governing body, its employees, agents and representatives (any or all of the
foregoing being hereinafter referred to as the "Indemnified Persons") harmless
from and against any and all losses, costs, damages, judgments (including
specifically punitive damage awards), arbitration awards, amounts paid in
settlements, costs and expenses and liabilities of whatsoever nature or kind
(including but not limited to, reasonable attorneys' fees, whether or not suit
is brought and whether incurred in settlement negotiations, investigations of
claims, at trial, on appeal, in bankruptcy or other creditors' proceedings or
otherwise, expert witness fees and expenses, other litigation and court costs,
amounts paid in settlement and amounts paid to discharge judgments) directly or
indirectly resulting from, arising out of or in connection with any act or
omission of the Original Developer or the Developer or any of their respective
partners, directors, officers, employees, attorneys or agents or other persons
under contract with the Original Developer or the Developer directly or
indirectly resulting from, arising out of, or related to (i) the issuance,
offering, sale or delivery of the Bonds, the redemption of the 1985 Bonds and
any amendments to the respective Indentures for the 1985 Bonds in connection
with the redemption of the 1985 Bonds (ii) the interpretation or enforcement of
provisions of the Agreement, the Indenture and any other documents in connection
therewith or the issuance of 1985 Bonds, (iii) any written statements or
representations made or given by the Developer, its agents or persons under
contract with it to any Indemnified Persons relating to statements or
representations of financial information, (iv) the design, construction,
installation, operation, use, occupancy, maintenance or ownership of the
Development or (v) similar events or occurrence with respect to the 1985 Bonds.
This indemnity is effective only with respect to any loss incurred by an
Indemnified Person, not due to any negligent, illegal or unlawful action or
omission on its part.
(b) The Indemnified Persons will promptly, but in no event later than
seven (7) days following their receipt of a filing relating to a legal action or
thirty (30) days following their receipt of any other claim and after notice to
the Indemnified Persons (notice to the Indemnified Persons being service with
-51-
respect to the filing of any legal action, receipt of any claim in writing or
similar form of actual notice) of any claim as to which they assert a right to
indemnification, notify the Developer of such claim.
(c) If any claim for indemnification by an Indemnified Person arises out
of a claim for monetary damages by a person other than an Indemnified Person,
the Developer shall undertake to conduct any proceedings or negotiations in
connection therewith which are necessary to defend the Indemnified Persons and
shall take all such steps or proceedings as the Developer in good faith deems
necessary to settle or defeat any such claims, and to employ counsel to contest
any such claims; provided, however, that the Developer shall reasonably consider
the advice of the Indemnified Persons as to the defense of such claims, and the
Indemnified Persons shall have the right to participate, at their own expense,
in such defense, but control of such litigation and settlement (except for any
admission of guilt or entering of a plea of NOLO CONTENDERE with respect to any
Indemnified Person, which must be specifically consented to by such Indemnified
Person) shall remain with the Developer. The Indemnified Persons shall provide
all reasonable cooperation in connection with any such defense by the Developer.
Except as set forth herein, counsel and auditor fees, filing fees and court fees
of all proceedings, contests or lawsuits with respect to any such claim or
asserted liability shall be borne by the Developer. If any such claim is made
hereunder and the Developer does not undertake the defense thereof, the
Indemnified Persons shall be entitled to control such litigation and settlement
and shall be entitled to indemnity with respect thereto pursuant to the terms of
this Section 6.01; provided that all Indemnified Persons as to whom there is no
conflict of interest shall be entitled to indemnity for the fees and expenses of
only one firm of attorneys. To the extent that the Developer undertakes the
defense of such claim, the Indemnified Persons shall be entitled to indemnity
hereunder only to the extent that such defense is unsuccessful as determined by
a final judgment of a court of competent jurisdiction, or by written
acknowledgment of the parties. An Indemnified Person shall not be indemnified by
the Developer if the claim against or asserted liability of the Indemnified
Person is successful or found to be valid as a result of any illegal or unlawful
action on the part of the Indemnified Person, or with respect to the Trustee,
illegal or unlawful action or negligence or willful misconduct.
SECTION 6.02. INDEMNIFICATION OF TRUSTEE. (a) Subject to the provisions
of the succeeding sentences of this subsection, the Developer agrees to
indemnify and hold the Trustee, its directors and officers (as used in this
Section 6.02, the "Indemnified Persons") harmless from and against any and all
losses, costs, damages, expenses and liabilities of whatsoever nature or kind
(including but not limited to, any documentary stamp taxes or intangible taxes
due and payable in connection with the Loan, reasonable attorneys' fees
(including those incurred at all
-52-
tribunal, including, without limitation, bankruptcy court, levels), litigation
and court costs, amounts paid in settlement by or with the approval of the
Developer and amounts paid to discharge judgments) directly or indirectly
resulting from, arising out of, or related to (i) the issuance, offering, sale
or delivery of the Bonds, (ii) the enforcement of provisions of the Agreement,
the Indenture and any other documents in connection therewith, (iii) any written
statements or representations made or given by the Developer, its agents or
persons under contract with it to any Indemnified Persons relating to statements
or representations of financial information or (iv) the design, construction,
installation, operation, use, occupancy, maintenance or ownership of the
Development. It is provided, however, the Trustee shall not be indemnified
hereunder for any claims or damages arising from its own negligent acts or
omissions or from any willful misconduct by the Trustee with respect to the
provisions of the Indenture.
(b) For the purposes of the provisions of this Section 6.02, the Trustee
shall be deemed to be an "Indemnified Person" under the provisions of
subsections (b) and (c) of Section 6.01 and claims under this Section shall be
subject to such provisions.
-53-
ARTICLE VII
BREACH OF COVENANTS, REMEDIES
SECTION 7.01. EVENT OF DEFAULT. An "Event of Default" shall be deemed
to have occurred under this Agreement if:
(a) Any amount required to be paid by Section 4.02 hereof (taking into
account any credits described in Section 4.03 hereof) is not paid to the Trustee
or Tender Agent, as applicable (either by or on behalf of the Developer, by 2:00
p.m., New York, New York time) when and as required to make a corresponding
payment on the Bonds as required under the Indenture; or
(b) Any amount required to be paid by Section 4.05, 4.06, 4.07, 4.08 or
4.09 hereof (taking into account any credits described in Section 4.03 hereof)
is not paid to the Trustee (either by or on behalf of the Developer by 2:00
p.m., New York, New York time) whether in connection with a scheduled interest
payment date, at maturity, upon any date fixed for payment, by acceleration or
otherwise as and when required to make a corresponding payment on the Bonds as
required under the Indenture; or
(c) Notice is given to the Developer, ADCC, the Credit Enhancer and the
Confirming Bank by the Trustee or the Agency that the Developer has failed to
comply with or to perform any of the covenants, conditions or provisions of the
Land Use Restriction Agreement or this Agreement which apply to the Developer
(other than those referred to in Section 7.01(a) or (b) hereof) or that there
has occurred an "event of default" under the Mortgage (as defined in the
Mortgage), and, in any of such events, sixty (60) days have passed since such
notice, unless within sixty (60) days after receipt of such notice the Trustee
receives an opinion of Bond Counsel stating that (i) such failure or event of
default does not produce a material risk that interest on the Bonds will cease
to be excluded from gross income for federal income tax purposes (except during
such period as the Bonds are owned by a "substantial user" of the Development or
a "related person") or (ii) such failure or event of default can be remedied
with the effect of permitting the interest on the Bonds to continue to be
excluded from gross income for federal income tax purposes and such failure or
event of default is remedied within the period of time determined by Bond
Counsel to be necessary to permit interest on the Bonds to continue to be
excluded from gross income for federal income tax purposes, and (iii) such
failure or event of default does not cause a violation of the Act by the
Developer; or
(d) (i) The failure of the Credit Enhancement to continue in full force
and effect if, within thirty (30) days after such failure, the Developer shall
have failed to substitute Alternate Security; or (ii) the failure of the Credit
Enhancer to make payments under the Credit Enhancement within the time provided
for
-54-
therein; provided, however, that under circumstances where the Credit
Enhancement is confirmed by a Confirmation, the foregoing shall not constitute
an Event of Default hereunder unless there shall have also occurred a default by
the Confirming Bank under the Confirmation by failing to honor any draw thereon
made in accordance with the terms thereof or by an assertion by the Confirming
Bank of the invalidity or unenforceability of the Confirmation; or
(e) The Credit Enhancer shall file a voluntary petition in bankruptcy, or
shall be adjudicated bankrupt or insolvent, or shall file any petition or
agreement seeking any reorganization, incorporation, readjustment, liquidation
or similar relief for itself under any present or future statutes, laws or
regulations or shall seek or consent to or acquiesce in the appointment of any
trustee, receiver or liquidator of the Credit Enhancer or of all or any
substantial part of its properties, or shall make any general assignment for the
benefit of creditors, or shall admit in writing its inability to pay its debts
generally as they become due; or
(f) A petition shall be filed against the Credit Enhancer seeking any
reorganization, composition, readjustment, liquidation or similar relief under
any present or future statute, law or regulation and shall remain undismissed or
unstayed for an aggregate of ninety (90) days (whether or not consecutive), or
if any trustee, receiver or liquidator of the Credit Enhancer or of all or any
substantial part of its properties shall be appointed without the consent or
acquiescence of the Credit Enhancer and such appointment shall remain
undismissed or unstayed for an aggregate of ninety (90) days (whether or not
consecutive); or
(g) Any "Event of Default" occurs under the Indenture and is not cured
prior to the giving of a notice of acceleration under Section 9.01(b) thereof.
The occurrences set forth in Sections 7.01(e) and (f) above shall not
constitute Events of Default hereunder if the Developer provides Alternate
Security for the Credit Enhancement within thirty (30) days subsequent to the
happening of such occurrence pursuant to Section 4.08 hereof. In the event the
Developer fails to provide such Alternate Security, no declaration of
acceleration shall be made by the Trustee, and the Loan shall be prepaid
mandatory as provided in Section 4.08 hereof.
SECTION 7.02. REMEDIES FOR FAILURE TO PERFORM. (a) Upon the occurrence
of an "Event of Default" as defined in Section 7.01(a), (b), (c), (d) and (g)
above, all amounts due under this Agreement shall be immediately due and payable
and the date of payment thereof shall be as specified in a notice of
acceleration which shall be promptly given by the Trustee to the Developer. A
copy of such notice of acceleration shall be given to the Credit Enhancer, the
Confirming Bank, the Agency and ADCC simultaneously with such notice to the
Developer, and a demand for payment shall be made by
-55-
the Trustee under the Credit Enhancement in an amount sufficient to pay
principal of and interest on the Bonds to the date of payment therefor;
provided, however, with respect to an Event of Default specified in Section
7.01(b) hereof, the Credit Enhancer, in accordance with the Intercreditor
Agreement, shall be granted a period of fifteen (15) days in which to cure such
Event of Default before the Trustee shall enforce the remedies available to it
here under; and further provided, with respect to an Event of Default under
Section 7.01(C) hereof, the Credit Enhancer, in accordance with the
Intercreditor Agreement, shall be granted a period of thirty (30) days to cure
such Event of Default, provided, however that if such default cannot reasonably
be cured within such thirty (30) day period and the Credit Enhancer shall have
commenced to cure such default within such thirty (30) day period and thereafter
diligently and expeditiously proceeds to cure the same, such thirty (30) days
period shall be extended for 50 long as it shall require Credit Enhancer in the
exercise of due diligence to cure such default, including any period of time
necessary to foreclose the Second Mortgage or otherwise obtain possession of the
Development and the Land. To the extent that the Credit Enhancer fails to honor
such draw in the full amount of such draw, under circum stances where the Credit
Enhancement is confirmed by a Confirmation, the Trustee shall make a draw under
the Confirmation in the full amount due on the Bonds. To the extent the Credit
Enhancer and, if applicable, the Confirming Bank, fail to honor draws in the
full amount of such draws, the Trustee shall then pursue the additional remedies
available to it under the Indenture and otherwise pursuant to the laws of the
State.
(b) Upon the occurrence of an "Event of Default" in Section 7.01(c)
hereof, if the action or non action which resulted in such "Event of Default" is
cured by or on behalf of the Developer prior to the time the notice of
acceleration of the Bonds is given by the Trustee, and prior to a draw under the
Credit Enhancement or the Confirmation, and if the Trustee receives an opinion
of Bond Counsel to the effect that, following such cure and assuming no
recurrence of such default, no material risk exists that interest on the Bonds
will be included in gross income for federal income tax purposes, then any
acceleration of all amounts due under this Agreement shall be rescinded and the
parties shall be restored to the same position as though no such "Event of
Default" had occurred.
(c) Upon the occurrence of an Event of Default specified in Section
7.01(a) or (b) above, if there is paid to or deposited with the Trustee, prior
to the time the notice of acceleration of the Bonds is given by the Trustee
under the Indenture, and prior to a draw under the Credit Enhancement or the
Confirmation, a sum sufficient to pay all overdue amounts which resulted in such
Event of Default and Trustee's Expenses, if any, then the acceleration of all
amounts due under this Agreement shall be rescinded and the
-56-
parties shall be restored to the same position as though no such Event of
Default had occurred.
SECTION 7.03. DISCONTINUANCE OF PROCEEDINGS. In case any proceeding
taken by the Agency or its assigns on account of any failure to perform under
this Agreement shall have been discontinued or determined adversely to the
Agency or its assigns, then and in every case the Agency and its assigns shall
be restored to their former positions and rights hereunder, respectively, and
all rights, remedies and powers of the Agency and its assigns shall continue as
though no such proceeding had been taken.
SECTION 7.04. REMEDIES CUMULATIVE. No remedy conferred upon or reserved
to the Agency or the Trustee on behalf of the Agency by this Agreement 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 given under this Agreement, the Mortgage or the Indenture now or
hereafter existing at law or in equity. No delay or omission to exercise any
right or power accruing upon any failure to perform under this Article shall
impair any such right or power or shall be construed to be a waiver thereof. In
order to entitle the Agency or the Trustee to exercise any remedy reserved to it
in this Article, it shall not be necessary to give any notice other than as
otherwise specified in this Agreement.
SECTION 7.05. REIMBURSEMENT OF EXPENSES. (a) The Developer hereby
covenants and agrees to pay all reasonable fees of Bond Counsel in connection
with rendering opinions after the issuance of the Bonds which are contemplated
by the Indenture and this Agreement.
(b) If, upon or after the occurrence of any default hereunder, the Agency
or the Trustee on behalf of the Agency shall employ attorneys or incur other
expenses for the enforcement of performance or observance of any obligation or
agreement on the part of the Developer contained herein, the Developer will on
demand therefor reimburse the Agency or the Trustee on behalf of the Agency for
reasonable fees of such attorneys and such other reasonable expenses so
incurred.
(c) The Developer may prosecute or defend any action or proceeding or take
any other action involving any defaulting supplier, contractor, subcontractor or
surety thereof which the Developer deems to be reasonably necessary, and in such
event the Agency agrees to cooperate fully with the Developer to the extent it
may lawfully do so, in any such action or proceeding, subject to the provisions
of Section 6.01(a) hereof. All moneys recovered by way of damages, refunds,
adjustments or otherwise in connection with the foregoing shall belong to the
Developer.
-57-
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. AMOUNTS REMAINING IN FUNDS AND ACCOUNTS. Any amounts
remaining in any fund or account established under the Indenture and after
payment of the Bonds in full (including interest and premium, if any, thereon),
or provision for payment thereof having been made in accordance with the
provisions of the Indenture, and payment of all other reasonable and necessary
obligations owing to the Agency or the Trustee under this Agreement or the
Indenture, and payment of any amounts to the United States of America, if any,
including (without limitation) the payment of all Trustee's Expenses, shall
belong to and be paid to the Agency by the Trustee in accordance with the
provisions of the Indenture.
SECTION 8.02. LIMITED OBLIGATION OF AGENCY. This Agreement shall inure
to the benefit of and shall be binding upon the Agency, the Developer and the
Trustee for the benefit of the Bondholders and their respective successors and
assigns, subject to the limitation that any obligation of the Agency created by
or arising out of this Agreement shall be a limited obligation of the Agency,
payable solely out of the revenues arising from the pledge and assignment of the
Loan and the other funds held or set aside in trust under the Indenture and
shall not constitute a pledge of the faith and credit of the Agency or a debt of
the State, or of any other political corporation, subdivision or agency of the
State or a pledge of the faith and credit or taxing power of any of them, and
there shall be no further recourse against the Agency with respect thereto.
SECTION 8.03. PAYMENTS BY CREDIT ENHANCER. The Credit Enhancer shall,
to the extent of any payments made by it pursuant to the Credit Enhancement, be
subrogated to all rights of the Agency or its assigns (including, without
limitation, the Trustee) as to all obligations of the Developer with respect to
which such payments shall be made by the Credit Enhancer, but, so long as any of
the Bonds remain Outstanding under the terms of the Indenture, such right of
subrogation on the part of the Credit Enhancer shall be in all respects
subordinate to all rights and claims of the Bondholders, the Trustee and the
Agency for all payments which shall be or become due and payable under the
Indenture or otherwise arising under this Agreement, the Note, the Mortgage, the
Land Use Restriction Agreement, as amended, the Indenture or the Bonds. The
Trustee will, upon request, execute and deliver any instrument reasonably
requested and prepared by the Credit Enhancer to evidence such subrogation and
the Trustee shall assign its rights in any obligations of the Developer with
respect to which payment of the entire principal balance and accrued interest
thereon shall be made by the Credit Enhancer.
-58-
SECTION 8.03A. PAYMENTS BY CONFIRMING BANK. The Confirming Bank shall,
to the extent of any payments made by it pursuant to the Credit Enhancement, be
subrogated to all rights of the Agency or its assigns (including, without
limitation, the Trustee) as to all obligations of the Developer with respect to
which such payments shall be made by the Confirming Bank, but, so long as any of
the Bonds remain Outstanding under the terms of the Indenture, such right of
subrogation on the part of the Confirming Bank shall be in all respects
subordinate to all rights and claims of the Bondholders, the Trustee and the
Agency for all payments which shall be or become due and payable under the
Indenture or otherwise arising under this Agreement, the Note, the Mortgage, the
Land Use Restriction Agreement, as amended, the Indenture or the Bonds. The
Trustee will, upon request, execute and deliver any instrument reasonably
requested and prepared by the Confirming Bank to evidence such subrogation and
the Trustee shall assign its rights in any obligations of the Developer with
respect to which payment of the entire principal balance and accrued interest
thereon shall be made by the Confirming Bank.
SECTION 8.04. AMENDMENT OF AGREEMENT. This Agreement may be amended
only by written agreement of the parties hereto, the Trustee, as assignee, the
Credit Enhancer and the Confirming Bank, if a Confirmation shall then be in
place, and subject to the requirements for and limitations on such amendments
set forth herein and in the Indenture.
SECTION 8.05. PAYMENT. At such time as the principal of, premium, if
any, and interest on all Bonds outstanding under the Indenture shall have been
paid, or shall be deemed to be paid in accordance with the Indenture, and all
other sums payable by the Developer under this Agreement, the Note and the
Indenture shall have been paid, the Loan shall be deemed to be fully paid and
the Developer upon request shall be entitled to receive acknowledgment of such
payment in full from the Trustee.
SECTION 8.06. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which, when so executed and delivered, shall be
an original; but such counterparts shall together constitute but one and the
same Agreement, and, in making proof of this Agreement, it shall not be
necessary to produce or account for more than one such counterpart.
SECTION 8.07. SEVERABILITY. If any clause, provision or section of this
Agreement shall be held illegal or invalid by any court, the invalidity of such
provisions or sections shall not affect any other provisions or sections hereof,
and this Agreement shall be construed and enforced to the end that the
transactions contemplated hereby be effected and the obligations contemplated
hereby be enforced, as if such illegal or invalid clause, provision or section
had not been contained herein.
-59-
SECTION 8.08. TERM OF AGREEMENT. This Agreement shall be in full force
and effect from the date hereof and shall continue in effect (i) so long as any
Bonds are outstanding, or (ii) if Alternate Security is in effect in the form of
a guaranty, until 123 days have elapsed after the Developer is obligated to make
any payments under this Agreement during which no "filing" (as defined in
Section 7.01(a) hereof) by or against the Developer occurs, or (iii) so long as
the Trustee holds any moneys under the Indenture or (iv) during the continuance
of any foreclosure proceedings under the Mortgage, whichever is later. All
representations and certifications by the Developer set forth in Article II
hereof and all provisions relating to the payment of any amounts due hereunder
to the Trustee and the Agency (including any amounts due pursuant to Article VI
hereof) shall survive the termination of this Agreement.
SECTION 8.09. NOTICE OF CHANGES IN FACT. The Developer will notify the
Trustee promptly after the Developer becomes aware of (i) any change in any
material fact or circumstance represented or warranted by the Developer in this
Agreement or in connection with the issuance of the Bonds, and (ii) any default
or event which, with notice or lapse of time or both, could become an Event of
Default under this Agreement, or the Indenture, specifying in each case the
nature thereof and what action the Developer has taken, is taking, and/or
proposes to take with respect thereto.
SECTION 8.10. LIMITED OBLIGATIONS OF DEVELOPER. Notwithstanding
anything to the contrary in this Agreement (except to the extent provided solely
with respect to indemnification, payment of fees and expenses to the Agency and
the Trustee and deposits to the Rebate Fund, if any, pursuant to Sections
4.01(d), 4.02(d), 7.05 and Article VI hereof) and under the analogous provisions
of the Mortgage and of the Land Use Restriction Agreement, the Agency expressly
agrees that the Developer and the partners comprising the Developer shall have
no personal liability hereunder, and such liability shall be strictly and
absolutely limited to the property encumbered by the Mortgage and the leases,
rents, profits and issues thereof and any other collateral securing the Loan. In
the event an Event of Default shall occur: (i) the Agency shall not and may not
seek any judgment for a deficiency against the Developer or any partners
comprising the Developer in their respective capacities as partners, in any
action to foreclose, to exercise a power of sale, to confirm any foreclosure or
sale under power of sale, or to exercise any other rights or power under or by
reason of the Mortgage or any other instrument evidencing or securing the
obligations of the Developer under this Agreement; and (ii) the Agency shall not
and may not seek any judgment on this Agreement or with respect to the Loan
except as a part of judicial proceedings to foreclose the Mortgage securing the
obligations of the Developer under this Agreement. In the event any suit is
brought on this Agreement, or concerning the Loan or any amount secured by the
Mortgage as part of judicial proceedings to foreclose the Mortgage or to confirm
any foreclosure or sale pursuant to power of sale
-60-
thereunder, any judgment obtained in such suit shall constitute a lien on, and
will be and can be (except to the extent that such judgment relates to
obligations relating to indemnification, deposits to the Rebate Fund, if any,
and the payment of fees and expenses to the Agency as provided in Sections
4.01(d), 4.02(d), 7.05 and Article VI hereof) enforced only against, the
property encumbered by the Mortgage and the leases, rents, profits and issues
thereof and not against any other asset of the Developer or the partners
comprising the Developer, in their respective capacities as partners, and the
terms of such judgment shall expressly so provide; provided, that the foregoing
does not apply to the Credit Enhancer in its capacity as Credit Enhancer under
the Credit Enhancement or to the Confirming Bank in its capacity as Confirming
Bank under the Confirmation Agreement.
SECTION 8.11. NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if delivered personally or sent
registered or certified mail, postage prepaid, to the parties listed below:
To the Agency:
Florida Housing Finance Agency
2574 Seagate Drive
Suite 101
Tallahassee, Florida 32301-5026
Attention: Executive Director
To the Trustee, Registrar and Paying Agent:
Sun Bank, National Association
225 East Robinson Street, Suite 350
Orlando, Florida 32801
Attention: Kathryn R. Broecker
To the Developer:
OTC Apartments Limited Partnership
c/o JG Financial Management Services
280 North Woodward Avenue, 4th Floor
Birmingham, Michigan 48009
Attention: Fred Gordon
To the Credit Enhancer:
The Sumitomo Trust and Banking Company, Limited
New York Branch
527 Madison Avenue
New York, New York 10022
Attention: Manager, Credit Administration Department
-61-
To the Remarketing Agent:
Stephens Inc.
Smith Barney Shearson Inc.
c/o Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
Attention: Public Finance Department
To the Tender Agent:
Sun Bank, National Association
c/o Mellon Securities Transfer Services
33rd Floor 120 S. Broadway
New York, New York 10271
Attention: Daisy Pedraga
To the Rating Agency:
Standard & Poor's Corporation
25 Broadway
New York, New York 10004
Attention: Abe Losice
To ADCC:
American Diversified Capital Corporation
c/o Federal Deposit Insurance Corporation as Receiver for
American Diversified Savings Bank
P.O. Box 7549
Newport Beach, California 92658
To the Confirming Bank:
The Sumitomo Bank, Limited,
Chicago Branch
233 South Walker Drive
Sears Tower, Suite 4800
Chicago, Illinois 60606-6448
Attention: Manager, Public Finance Section
or at such other address as shall be furnished in writing by either party to the
other, and shall be deemed to have been given as of the date so delivered or
deposited in the United States mail.
SECTION 8.12. APPLICABLE LAW. Notwithstanding the place of execution,
the laws of the State shall govern the construction of this Agreement.
SECTION 8.13. DATE OF THIS AGREEMENT. This Agreement shall be dated as
of the first day of the month and the year during which it is executed by the
parties hereto.
-62-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first written above.
FLORIDA HOUSING FINANCE AGENCY
By: /s/ Carl M. Mayes
--------------------------------
Member
(SEAL)
ATTEST:
By: /s/ Mark Hendrickson
----------------------
Mark Hendrickson,
Executive Director and
Secretary
-63-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first written above.
WITNESSES: OTC APARTMENTS LIMITED
PARTNERSHIP, a Florida limited
partnership
By: JG/OT LIMITED PARTNERSHIP, a
Michigan limited partner-
/s/ Carol Gitler ship, its General Partner
- -------------------------
Carol Gitler By: ORLANDO/TAMPA CORPORATION, a
Michigan corporation, its
/s/ Donna J. O'Brien General Partner
- -------------------------
Donna J. O'Brien By: /s/ Fred Gordon
---------------------------
Fred Gordon
-64-