Exhibit 10.40
LOAN AGREEMENT
THIS LOAN AGREEMENT
is made as of March 30, 2007, by and
between CENTURY PROPERTIES FUND XIX, a California limited
partnership (“Borrower”), and ING LIFE
INSURANCE AND ANNUITY COMPANY, a Connecticut corporation
(“Lender”).
RECITALS:
A.
Lender is the holder and owner of the
certain Promissory Note dated May 17, 2005, in the original
principal amount of $11,000,000.00 by Borrower to Lender
("Original Note") , which Original Note is secured
by, among other things, the Deed of Trust, Security Agreement,
Financing Statement and Fixture Filing recorded May 17, 2005 as
Document No. 20050652040, Maricopa County, Arizona, records
("Deed of Trust") .
B.
Borrower has requested that Lender make additional
loans (collectively the “Loan”) to
Borrower in the aggregate principal amount of $6,500,000.00, only a
portion of the principal being advanced on this date, and the
remainder to be advanced, if at all, subject to the terms and
conditions hereinafter set forth.
C.
Lender is willing to make the Loan to
Borrower only on the terms and subject to the conditions and
requirements set forth in this Agreement.
NOW, THEREFORE,
in consideration of the premises and the
mutual covenants herein contained, and for other valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby agree as
follows:
ARTICLE I
DEFINITIONS;
CONSTRUCTION
Section 1.01
Definitions
. For purposes of this Agreement,
the following terms shall have the indicated meanings as set forth
below:
“Agreement” shall mean this Loan Agreement, as amended,
supplemented or modified from time to time.
“Assignment of
Rents and Leases”
shall mean the Assignment of Rents and Leases dated as of May 17,
2005, recorded as Document No. 20050652041, Maricopa County,
Arizona, as amended.
“Borrower” shall have the meaning given such term in the
preamble to this Agreement and shall include its successors and
assigns.
“Business
Day” shall mean any
day excluding Saturday, Sunday and any other day on which banks in
Atlanta, Georgia are customarily closed.
“Collateral” shall mean any and all of the property which is
granted, pledged or assigned to Lender or in which Lender is
otherwise granted a Lien to secure the obligations pursuant to any
and all of the Security Documents.
“Deed of
Trust” shall mean
shall have the meaning given such term in the preamble to this
Agreement and any extensions, renewals, modifications or
replacements thereof or therefor.
“Default” shall mean any condition or event which, with notice
or lapse of time or both, would constitute an Event of
Default.
“Environmental
Indemnification Agreement” shall mean the Environmental Indemnification
Agreement dated as of May 17, 2005 by Borrower in favor of Lender,
and any extensions, renewals, modifications or replacements thereof
or therefor.
“Event of
Default” shall have
the meaning provided in Article III hereof.
“Improvements”
shall mean all improvements constructed
on the Land.
“Land”
shall mean, collectively, all of the real
property described and defined as “Land” in the Deed of
Trust.
“Lender”
shall have the meaning given such term in
the preamble to this Agreement and shall include such
Person’s successors and assigns.
“Lien”
shall mean any mortgage, deed to secure
debt, deed of trust, pledge, security interest, security deposit,
encumbrance, lien or charge of any kind (including any agreement to
give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the
filing of or agreement to give any financing statement under the
Uniform Commercial Code of any jurisdiction).
“Loan”
shall have the meaning given such term in
the preamble to this Agreement.
“Loan
Documents” shall
mean, collectively, this Agreement, the Notes, the Security
Documents, and any other certificates or written undertakings of
Borrower in favor of Lender delivered contemporaneously with the
delivery of this Agreement, other than the Environmental
Indemnification Agreement.
"Modification
Agreement" shall mean the
certain Modification Agreement dated as of this same date between
Borrower and Lender.
“Notes”
shall mean collectively the Original
Note, Note B, Note C and Note D.
“Note B”
shall mean the Promissory Note dated as
of this same date by Borrower and payable to the order of Lender in
the original stated principal amount of $3,000,000.00, as evidence
of the Loan, and any extensions, renewals, modifications or
replacements thereof or therefor.
“Note C”
shall mean the Promissory Note dated as
of this same date by Borrower and payable to the order of Lender in
the original stated principal amount of $1,750,000.00, as evidence
of the Loan, and any extensions, renewals, modifications or
replacements thereof or therefor.
“Note D”
shall mean the Promissory Note dated as
of this same date by Borrower and payable to the order of Lender in
the original stated principal amount of $1,750,000.00, as evidence
of the Loan, and any extensions, renewals, modifications or
replacements thereof or therefor.
“Obligations” shall mean, collectively, all amounts now or
hereafter owing to Lender by Borrower pursuant to the terms of or
as a result of this Agreement, the Notes, or any other Loan
Documents or the Environmental Indemnification Agreement, including
without limitation, the unpaid principal balance of the Loan and
all interest, fees, expenses and other charges relating thereto or
accruing thereon, as well as any and all other indebtedness,
liabilities, covenants, duties and obligations of Borrower, whether
direct or indirect, absolute or contingent, or liquidated or
unliquidated, monetary or non-monetary, which may be now existing
or may hereafter arise under or as a result of any of the Loan
Documents, the Environmental Indemnification Agreement, and
together with any and all renewals, extensions, or modifications of
any of the foregoing.
“Person”
shall mean any individual, partnership,
limited partnership, limited liability company, firm, corporation,
association, joint venture, trust or other entity, or any
government or political subdivision or agency, department or
instrumentality thereof.
“Property” shall mean, collectively, the property, including the
Land and all improvements, fixtures and related personal property
located thereon.
“Security
Documents” shall
mean, collectively, the Security Instruments, the Assignment,
Consent and Subordination Regarding Management Agreement dated as
of May 17, 2005, and each other affidavit, certificate, security,
mortgage, assignment, financing statements or other collateral
document, whether now existing or hereafter executed and delivered
in connection with, or securing any or all of, the
Obligations.
“Security
Instruments” shall
mean, collectively, the Deed of Trust, the Assignment of Rents and
Leases, the UCC Financing Statements, the Modification Agreement,
and other security instruments executed this date by Borrower in
favor of Lender, to be recorded in the real estate records of the
county where the Property is located, and any extensions, renewals,
modifications or replacements thereof or therefor.
“Title
Policy” shall mean
that certain title insurance policy issued by Stewart Title
Guaranty Company (the “ Title Company ”)
number M-9702-000639989 insuring Lender’s interest in the
Property as of the recording of the Deed of Trust, as the same may
be modified, amended and endorsed from time to time.
Section 1.02
Other Definitional Terms
. The words “hereof,”
“herein” and “hereunder” and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole, and not to any particular provision of this
Agreement. Any pronoun used herein shall be deemed to cover
all genders and all singular terms used herein shall include the
plural and vice versa. Unless otherwise expressly indicated
herein, all references herein to a period of time which runs
“from” or “through” a particular date shall
be deemed to include such date, and all references herein to a
period of time which runs “to” or “until” a
particular date shall be deemed to exclude such date.
ARTICLE II
INITIAL AND FUTURE ADVANCES OF
NOTES
Section 2.01
Initial Advance of Note
B . On or about the
date hereof, Lender shall advance $3,000,000.00 to Borrower (the
“ Initial Advance ”), representing the
portion of the original principal amount of the Loan evidenced by
Note B, and Borrower acknowledges receipt thereof.
Section 2.02
Future Funding of Note C and Note
D .
(a)
Rehabilitation . Borrower is undertaking improvements to the
Property as summarized on Schedule 1 attached hereto and
incorporated herein by this reference ("Rehabilitation").
Disbursement of the proceeds of Note C and Note D is
conditioned upon completion of the Rehabilitation and expenditure
of funds with respect thereto. Prior to the Note C Funding
Deadline (as defined below), Borrower shall have completed a
portion of the Rehabilitation and shall have paid 100% of the
costs, fees and expenses related to the completion of such portion
of the Rehabilitation, with an aggregate expenditure of at least
$6,500,000.00 in respect thereof ("Note C Rehabilitation").
Prior to the Note D Funding Deadline (as defined below),
Borrower shall have completed the remaining portion of the
Rehabilitation, with an expenditure of the balance of the cost
estimate for the Rehabilitation as set forth in Schedule 1 hereto,
approximately $2,360,000.00 for an aggregate of $8,859,321.00, and
shall have paid 100% of the costs, fees and expenses related to the
completion of such remaining portion of the Rehabilitation ("Note D
Rehabilitation").
Upon completion of each of the Note C
Rehabilitation and of the Note D Rehabilitation, Borrower shall
notify Lender of such completion, and Lender shall inspect the
Property. At the time of or prior to such notification,
Lender shall be provided by Borrower with a final inspection report
and a certificate of substantial completion in form and substance
satisfactory to Lender certifying completion of all work on the
Note C Rehabilitation or the Note D Rehabilitation, as the case may
be, from the architect/engineer and the general contractor
supervising the Note C Rehabilitation or the Note D Rehabilitation.
Borrower shall have paid for
all such work and shall obtain from the
general contractor and all subcontractors, mechanics and
materialmen lien waivers in the form customary in Arizona to
evidence such parties' receipt of payment in full for all labor and
materials and to irrevocably waive such parties' rights to lien the
Property as a result of any party's participation in the Note C
Rehabilitation or the Note D Rehabilitation, and shall provide the
same to Lender. All materials required to be delivered to
Lender for its review and approval in connection with completion of
the Note C Rehabilitation and the Note D Rehabilitation, and other
required evidence to support the funding of Note C or Note D, as
the case may be, are hereinafter sometimes referred to as the
"Completion Evidence."
In the event that (i) Borrower completes
the Note C Rehabilitation work or the Note D Rehabilitation work,
as the case may be, (ii) Lender approves the Completion Evidence in
respect of such work in its sole and absolute discretion, (iii) no
Event of Default exists under any of the Loan Documents, and (iv)
the conditions set forth in paragraph (b) below have been satisfied
with respect to Note C or Note D, as applicable, Lender shall fund
Note C and Note D, as the case may be, in accordance with this
Section 2.02 . Borrower shall be limited to no more
than one draw for each of Note C and Note D, which must be drawn
prior to the Note C Funding Deadline or the Note D Funding
Deadline, as the case may be. Borrower shall submit to Lender
(or to Johnson Capital Group) a draw request for each disbursement,
which request must be accompanied by, unless delivered to Lender
previously, (A) copies of invoices, marked paid, (B) lien waivers
from all contractors, subcontractors, mechanics and materialmen in
the form customarily required by statute and by title companies
issuing lien coverage in the state, (C) an architect’s or
engineer's certificate certifying that the Note C Rehabilitation or
Note D Rehabilitation work items have been completed pursuant to
the budget and that such work has been completed in a good and
workmanlike manner in accordance with the plans and specifications
for such work or the recommendations set forth in the engineer
report, as applicable, (D) an inspection letter from Johnson
Capital Group, and (E) to the extent required by the jurisdiction
having authority over building and repair matters in the city
and county in which the Property is located, any certificate of
occupancy, inspections or other approvals of such jurisdiction as
may be required for completion and occupancy.
(b)
Funding . Upon satisfaction of the foregoing, Borrower
shall have the right to obtain future disbursement of the principal
amounts of Note C and Note D, as the case may be (each such
disbursement hereinafter a “ Future Advance
”), upon and subject to Borrower’s full and complete
satisfaction of the following:
(i)
General Future Advance Conditions
– Both Notes
(A)
Borrower must submit to Lender, no later
than ten (10) Business Days prior to the applicable Note C Funding
Deadline or Note D Funding Deadline (as such terms are hereinafter
defined), a written request (“ Advance Notice
”) for disbursement of the applicable Note C or Note D,
together with the Completion Evidence and the supporting materials
evidencing Borrower’s completion of the conditions required
below (each set of conditions under the heading for the particular
Note, hereinafter “ Advance Conditions ”)
for the Future Advance of Note C or Note D, as
applicable.
(B)
Lender shall provide written
acknowledgment to Borrower of Lender’s receipt of an Advance
Notice no more than ten (10) days following its receipt
thereof (“ Acknowledgment Letter ”). The
Acknowledgment Letter will set forth Lender’s approval of
Borrower’s completion and satisfaction of the Completion
Evidence and the Advance Conditions or its disapproval with a
specification of the reasons for such disapproval. If Lender
approves the Advance Notice for a Future Advance, Lender shall fund
the Future Advance within twenty (20) days after Lender's
Acknowledgment Letter provided all remaining terms and conditions
of this Section 2.02 are satisfied in full by
Borrower.
(C)
Borrower shall execute such additional
loan documentation as Lender shall reasonably request to evidence
and acknowledge the funding of Note C or Note D, as applicable,
including, without limitation, a funding disbursement statement
with authorization and acknowledgment of the disbursement, and
Borrower’s certification in form and substance satisfactory
to Lender to certify ERISA representations and warranties set forth
in Paragraph 47 of the Deed of Trust remain true and
correct, to satisfy Lender and the Title Company as to all matters
necessary in order to issue the required title endorsement in
connection with such Future Advance, to certify the satisfaction of
the required Completion Evidence and complet
