MASTER CREDIT FACILITY
AGREEMENT
SUMMIT RUSSETT, LLC,
2009 CPT COMMUNITY OWNER, LLC,
2009 CUSA COMMUNITY OWNER, LLC,
2009 CSP COMMUNITY OWNER, LLC AND
2009 COLP COMMUNITY OWNER, LLC
AND
CAMDEN PROPERTY TRUST
RED MORTGAGE CAPITAL,
INC.
MASTER CREDIT FACILITY
AGREEMENT
THIS MASTER CREDIT FACILITY AGREEMENT is made as
of the 17th day of April, 2009 (this “Agreement”), by
and among (i) SUMMIT RUSSETT, LLC, 2009 CPT COMMUNITY OWNER,
LLC, 2009 CUSA COMMUNITY OWNER, LLC, 2009 CSP COMMUNITY OWNER, LLC
AND 2009 COLP COMMUNITY OWNER, LLC, each a Delaware limited
liability company, individually and collectively
(“Borrower”); (ii) RED MORTGAGE CAPITAL, INC., an
Ohio corporation (“Lender”); and (iii) CAMDEN
PROPERTY TRUST, a Real Estate Investment Trust organized under the
laws of the State of Texas, as guarantor
(“Guarantor”).
A. Borrower (other than Summit Russett,
LLC) and Camden Summit owns one (1) or more Multifamily
Residential Properties (unless otherwise defined or the context
clearly indicates otherwise, capitalized terms shall have the
meanings ascribed to such terms in Appendix I of this
Agreement) as more particularly described in Exhibit A
to this Agreement.
B. Borrower has requested that Lender make
a Term Loan in the amount of $420,000,000 in favor of Borrower,
comprised of a $420,000,000 Fixed Loan.
C. To secure the obligations of Borrower
under this Agreement and the other Loan Documents issued in
connection with the Term Loan, Borrower (other than Summit Russett,
LLC) and Camden Summit shall create a Collateral Pool in favor of
Lender. The Collateral Pool shall be comprised of (i) the
Multifamily Residential Properties listed on Exhibit A
and (ii) any other collateral pledged to Lender from time to
time by Borrower and Camden Summit pursuant to this Agreement or
any other Loan Documents.
D. Each Note and Security Document,
including the Indemnity Multifamily Deed of Trust, related to the
Mortgaged Properties comprising the Collateral Pool shall be
cross-defaulted ( i.e. , a default under any Note, Security
Document relating to the Collateral Pool and under this Agreement,
shall constitute a default under each Note, Security Document and
this Agreement related to the Mortgaged Properties comprising the
Collateral Pool) and cross-collateralized ( i.e. , each
Security Instrument related to the Mortgaged Properties within the
Collateral Pool other than the Security Instrument for the property
commonly known as Camden Russett shall secure all of
Borrower’s obligations under this Agreement and the other
Loan Documents and the Security Instrument for the property
commonly known as Camden Russett shall secure Camden Summit’s
obligations under the IDOT Guaranty) and it is the intent of the
parties to this Agreement that, after an Event of Default, Lender
may accelerate any Note without needing to accelerate any other
Note and that in the exercise of its rights and remedies under the
Loan Documents, Lender may, except as provided in this Agreement,
exercise and perfect any and all of its rights in and under the
Loan Documents with regard to any Mortgaged Property without
needing to exercise and perfect its rights and remedies with
respect to any other Mortgaged Property and that any such exercise
shall be without regard to the Allocable Loan Amount assigned to
such Mortgaged Property and that Lender may recover an amount equal
to the full amount outstanding in respect of any of the Notes in
connection with such exercise and any such amount shall be applied
as determined by Lender pursuant to the terms of this Agreement,
the Notes and the other Loan Documents.
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E. Subject to the terms, conditions and
limitations of this Agreement, Lender has agreed to make a Term
Loan.
NOW, THEREFORE, Borrower, Lender and Guarantor,
in consideration of the mutual promises and agreements contained in
this Agreement, hereby agree as follows:
Section 1.01. Term Loan
.
Subject to the terms, conditions and limitations
of this Agreement, Lender agrees to make the Term Loan to Borrower
on the Initial Closing Date. The aggregate original principal
amount of the Term Loan shall be $420,000,000.
The obligation of the Borrower to repay the Term
Loan shall be evidenced by the following Notes: (i) a Fixed
Note in the principal amount of $420,000,000 and (ii) any
other Notes as may be necessary for Borrower to execute during the
Term in connection with a conversion. The Notes shall be payable to
the order of Lender and shall equal the aggregate original
principal amount of the Term Loan to the Borrower.
Section 1.03. Maturity
Date.
The maturity date of the Fixed Loan made on the
Initial Closing Date shall be May 1, 2019 . The Term
Loan is payable interest only and shall not require amortization,
except as otherwise set forth in Section 1.05(e)(ii)
.
Section 1.04. Yield
Maintenance/Prepayment.
The terms and conditions of yield maintenance
and/or prepayment premiums, as applicable, are contained in the
Notes and such terms and conditions shall apply to the prepayment
in part or whole of the Term Loan during the term of this
Agreement.
Section 1.05. Conversion from Variable
Loan to Fixed Loan .
Except as provided in Section 1.06
and subject to the terms of Section 1.10 , Borrower
shall have the right to convert all or any portion of the Variable
Loan to a Fixed Loan. Borrower shall not be required to pay any fee
maintenance in connection with any such conversion.
(a) Request . To convert all or a portion
of the Variable Loan to a Fixed Loan, Borrower shall deliver a
Conversion Request to Lender. Each Conversion Request shall
designate the amount of the Variable Loan to be converted, and the
maturity date of such converted Fixed Loan, subject to
Section 1.05(e).
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(b) Closing . Subject to
Section 1.06 and Section 1.10 , and provided
that all conditions contained in Section 1.07 are
satisfied, Lender shall permit the requested conversion to close at
offices designated by Lender on a Closing Date selected by Lender,
within thirty (30) Business Days after all of the conditions
for a conversion have been satisfied (or on such other date as
Borrower and Lender may agree). At the closing, Lender and Borrower
shall execute and deliver, at the sole cost and expense of
Borrower, in form and substance satisfactory to Lender, the
Conversion Documents. Borrower shall be obligated to pay an
interest rate and fees in connection with a conversion as
determined in accordance with the applicable requirements of the
Fannie Mae product line then in effect.
(c) Minimum Remaining Amount of Variable
Loans . After the closing of any conversion, if any Variable
Loan remains Outstanding, the minimum aggregate principal amount
Outstanding of such remaining Variable Loan shall be not less than
$25,000,000. If the aggregate principal amount Outstanding of the
Variable Loan is less than $25,000,000, such Variable Loan must be
repaid (together with all associated prepayment premiums and other
amounts due under the Variable Note) or converted to a Fixed Loan
pursuant to the terms of this Section and Sections 1.06 and
1.07.
(d) If the Variable Loan is converted to a
Fixed Loan, such Fixed Loan may be a cash execution or an MBS
execution at Lender’s option and rates shall be set in
accordance with the following procedures:
(i) Preliminary, Nonbinding Quote .
At Borrower’s request, Lender shall quote an estimate of the
Cash Interest Rate (for a Fixed Loan with a cash execution) or the
MBS Pass-Through Rate plus Fixed Facility Fee (for a Fixed Loan
with an MBS execution). Lender’s quote shall be based on
(A) in the case of an MBS execution, a solicitation of bids
from institutional investors selected by Lender or, in the case of
a cash execution, the rate quoted by Fannie Mae and (B) the
proposed terms and amount of the Fixed Loan selected by Borrower.
The quote shall not be binding upon Lender.
(ii) Rate Setting . Borrower may
submit to Lender, by facsimile transmission before 1:00 p.m.
Washington, D.C. time on any Business Day (“ Rate
Setting Date ”), a completed and executed Rate Form.
The Rate Form shall specify the amount, term, MBS Issue Date, as
applicable, Fixed Facility Fee, any breakage fee deposit amount,
the proposed maximum interest rate (“ Maximum Annual
Interest Rate ”), the proposed Cash Interest Rate, as
applicable, and Closing Date for the conversion.
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(iii) Rate Confirmation . In the
case of an MBS execution, within one (1) Business Day after
receipt of the Rate Form and upon satisfaction of all of the
conditions for conversion, Lender shall solicit bids from
institutional investors selected by Lender based on the information
in the Rate Form and, provided the MBS Pass-Through Rate would be
at or below the Maximum Annual Interest Rate, shall obtain a
commitment (“ MBS Commitment ”) for the
purchase of an MBS having the bid terms described in the related
Rate Form. In the case of a cash execution, within one
(1) Business Day after receipt of the Rate Form, Lender shall
obtain a commitment from Fannie Mae (“ Fannie Mae
Commitment ”) for the converted Fixed Loan having the
terms described in the related Rate Form. Lender shall then
complete and countersign the Rate Form thereby confirming the
amount, term, and Closing Date for the conversion, for a Fixed Loan
with an MBS execution, the MBS Issue Date, MBS Delivery Date, MBS
Pass-Through Rate, and Fixed Facility Fee and for a Fixed Loan with
a cash execution, the Cash Interest Rate, and shall immediately
deliver by facsimile transmission the Rate Form to
Borrower.
(iv) Breakage and other Costs . If
Lender obtains, and then fails to fulfill, the MBS Commitment or
Fannie Mae Commitment because the conversion does not occur (for a
reason other than Lender’s default), Borrower shall pay all
reasonable out-of-pocket costs payable to the potential investor
and other reasonable costs, fees and damages incurred by Lender in
connection with its failure to fulfill the MBS Commitment or Fannie
Mae Commitment. Lender reserves the right to require Borrower to
post a deposit at the time the MBS Commitment or Fannie Mae
Commitment is obtained. Such deposit shall be refundable to
Borrower upon the delivery of the MBS or the closing of the
conversion.
(e) Term and Conditions of Converted
Loans .
(i) Until the date which is five years from
the Initial Closing Date, Borrower shall have the right to convert
all or a portion of the Outstanding Variable Loan to a Fixed Loan
for a term of at least five (5) years from the Closing Date of
the conversion, provided that the amendment to the Variable Note
executed in connection with such Fixed Loan shall not have a
maturity date beyond the Fixed Loan Termination Date.
(ii) As an alternative to its rights under
Section 1.05(e)(i) and subject to Section 1.10, during
the period of time between the first day of the fourth month after
the Initial Closing Date and the last Business Day of the fourth
month prior to the Variable Loan Termination Date, Borrower shall
have the right to convert all or a portion of the Outstanding
Variable Loan to a Fixed Loan for a term as determined by Borrower
of no more than ten (10) years from the Closing Date of the
conversion. The maturity date of such Fixed Loan may extend beyond
May 1, 2019. Any Fixed Loan converted in accordance with this
subsection 1.05(e)(ii) shall require amortization calculated over
the Amortization Period. No Collateral may be released from the
Collateral Pool, upon the maturity dates of any Loan made under
this Agreement, unless the requirements of Sections 3.04 and
6.05 are satisfied.
Section 1.06. Limitations on Right to
Convert .
Borrower’s right to convert all or any
portion of the Variable Loan to a Fixed Loan is subject to the
following limitations:
(a) Minimum Request . Each Conversion
Request shall be in the minimum amount of $5,000,000.
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(b) Failure to Underwrite . In the event
all or a portion of the amount of the Variable Loan set forth in
the Conversion Request cannot be converted because the increased
debt service on the Fixed Loan does not result in the Collateral
Pool satisfying the Coverage and LTV Tests, Borrower shall prepay
the amount of the Variable Loan that cannot be converted to a Fixed
Loan and shall pay all prepayment premiums and other fees
associated with such prepayment.
(c) Notwithstanding the foregoing, if
either of the tests set forth above in subsection (b), are not
satisfied after the conversion, such conversion may be permitted by
Lender if the conversion improves the Collateral Pool based on
factors that are consistent with Lender’s Underwriting
Requirements and results in improvement in one or both of the
following areas: the then current Aggregate Debt Service Coverage
Ratio or the then current Aggregate Loan to Value Ratio.
Notwithstanding the foregoing, under no circumstances shall the
Aggregate Loan to Value Ratio exceed ninety percent
(90%).
Section 1.07. Conditions to
Conversion .
The conversion of all or any portion of the
Variable Loan to a Fixed Loan is subject to the satisfaction, on or
before the Closing Date, of the conditions precedent contained in
Section 6.08 and Section 6.11 and all
applicable General Conditions contained in Section 6.01
.
Section 1.08. Interest Rate
Execution .
In the event that the Term Loan made on the
Initial Closing Date is solely a Fixed Loan, the provisions in this
Agreement referencing the Variable Loan and Variable Note shall be
deemed to be of no further force and effect and be deemed to be
eliminated from this Agreement.
Section 1.09. Interest Rate
Cap.
To protect against fluctuations in interest
rates during the term, pursuant to the terms of the Pledge,
Interest Rate Cap Agreement, Borrower shall make arrangements for a
One-Month LIBOR-based interest rate cap in form and substance
satisfactory to Lender with a counterparty satisfactory to Lender
(“ Interest Rate Cap ”) to be in place
and maintained at all times with respect to the portion of the
Variable Loan which remains Outstanding. As set forth in the
Pledge, Interest Rate Cap Agreement, Borrower agrees to pledge its
right, title and interest in the Interest Rate Cap to Lender as
additional collateral for the Indebtedness.
Section 1.10. Limitation on All
Loans.
Notwithstanding anything in this Agreement or
any other Loan Document to the contrary, any conversion of a Loan
shall be subject to the precondition that the Lender must confirm
with Fannie Mae that Fannie Mae is generally offering to purchase
in the marketplace loans of the execution type requested by
Borrower at the time of the Request and at the time of the rate
setting date for the conversion. In the event Fannie Mae is not
purchasing loans of the type requested by Borrower, Lender agrees
to offer, to the extent available from Fannie Mae, alternative loan
executions based on the types of executions Fannie Mae is generally
offering to purchase in the marketplace at that time. Any
alternative execution offered would be subject to mutually
agreeable documentation necessary to implement the terms and
conditions of such alternative execution.
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ARTICLE 2
THE ALLOCABLE LOAN AMOUNT/SUPPLEMENTAL LOANS
Section 2.01. Determination of Allocable
Loan Amount and Valuations .
(a) Initial Determinations . On the
Initial Closing Date, Lender shall determine the Allocable Loan
Amount and Valuation for each Initial Mortgaged Property, and the
Aggregate Debt Service Coverage Ratio and the Aggregate Loan to
Value Ratio. Subject to Section 2.01(b), the determinations
made as of the Initial Closing Date shall remain unchanged until
the First Anniversary. Changes in Allocable Loan Amount,
Valuations, the Aggregate Debt Service Coverage Ratio and the
Aggregate Loan to Value Ratio shall be made pursuant to
Section 2.01(b) .
(b) Monitoring Determinations . Once each
Calendar Quarter or, if only Fixed Loans are Outstanding, once each
Calendar Year, within twenty (20) Business Days after Borrower
has delivered to Lender the reports required in
Section 8.03 , Lender shall determine the Aggregate
Debt Service Coverage Ratio, the Aggregate Loan to Value Ratio, the
Valuations and the Allocable Loan Amounts and whether Borrower is
in compliance with the other covenants set forth in the Loan
Documents. After the First Anniversary, on an annual basis, and if
Lender decides that changed market or property conditions warrant,
Lender shall redetermine Allocable Loan Amounts and Valuations.
Lender shall also redetermine Allocable Loan Amounts to take
account of any substitution or release of Collateral or a
conversion of interest rate or other event that invalidates the
outstanding determinations. In determining Valuations, Lender shall
use Capitalization Rates based on its internal survey and analysis
of capitalization rates for comparable sales in the vicinity of the
Mortgaged Property, with such adjustments as Lender deems
appropriate and without any obligation to use any information
provided by Borrower. If Lender is unable to determine a
Capitalization Rate for a Mortgaged Property, Lender shall have the
right, with the prior consent of Borrower, not more than once
annually, to obtain, at Borrower’s expense, a market study in
order to establish a Capitalization Rate. In the event Borrower
fails to consent to Lender obtaining a market study, Lender shall
determine the Capitalization Rate pursuant to the Underwriting
Requirements. Lender shall promptly disclose its determinations to
Borrower. Until redetermined, the outstanding Allocable Loan
Amounts and Valuations shall remain in effect. Notwithstanding
anything in this Agreement to the contrary, no change in Allocable
Loan Amounts, Valuations, the Aggregate Loan to Value Ratio or the
Aggregate Debt Service Coverage Ratio shall, unless resulting from
the concurrent release or substitution of Collateral from the
Collateral Pool or the concurrent conversion of the interest rate,
result in a Potential Event of Default or Event of Default, require
the prepayment of any Note in whole or in part, or require the
addition of Collateral to the Collateral Pool.
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Section 2.02. Supplemental
Loan .
After the First Anniversary, Borrower may
participate in the Fannie Mae Supplemental Loan product if the
Supplemental Loan product is offered by Fannie Mae at the time. Any
such Supplemental Loan is subject to Lender’s determination
that, as a result of its annual valuation of the Collateral Pool, a
Supplemental Loan may be made pursuant to Lender’s
Underwriting Requirements for Loans which meet the Coverage and LTV
Tests. The Supplemental Loan will be documented with loan documents
similar to the Loan Documents (“ Supplemental Loan
Documents ”). Supplemental Loans will not be loans
advanced under this Agreement. Any Supplemental Loan will be priced
at market at the time of the loan and will be cross-defaulted with
the Term Loan. To secure the obligations of Borrower under the
Supplemental Loan Documents, Borrower shall grant, convey and
assign to Lender a second Lien on each Mortgaged Property in the
Collateral Pool and on any other collateral pledged to Lender from
time to time pursuant to the Supplemental Loan Documents. On the
closing date of the Supplemental Loan, Lender shall determine the
portion of the Supplemental Loan allocated to a particular
Mortgaged Property by Lender (the “ Supplemental
Allocable Loan Amount ”), which Supplemental
Allocable Loan Amounts shall be set forth in a separate exhibit to
this Agreement. Lender shall redetermine the Supplemental Allocable
Loan Amounts in the same manner and at the same time as the
redetermination of the Allocable Loan Amounts pursuant to
Section 2.01(b) . In the event of a Supplemental Loan,
Borrower shall pay the Supplemental Loan Fee on the date of the
closing of such Supplemental Loan. Notwithstanding the foregoing,
the Supplemental Loan shall be monitored pursuant to
Section 2.01 of this Agreement and Lender shall include the
Supplemental Loan upon calculating the Coverage and LTV Tests,
Aggregate Debt Service Coverage Ratio and Aggregate Loan to Value
Ratio, in connection with any Request.
ARTICLE 3
COLLATERAL CHANGES
Section 3.03. Right to Obtain Releases
of Collateral .
Subject to the terms and conditions of this
Article 3 and the limitations set forth in Section
15.17 , Borrower shall have the right from time to time to
obtain a release of Collateral from the Collateral Pool.
Section 3.04. Procedure for Obtaining
Releases of Collateral .
(a) Request . To obtain a release of
Collateral from the Collateral Pool, Borrower shall deliver a
Release Request to Lender. Upon delivery of the Release Request,
Borrower shall not be permitted to re-borrow any amounts that will
be prepaid in connection with the release of Collateral.
(b) Closing . If all conditions precedent
contained in Section 6.05 and all General Conditions
contained in Section 6.01 are satisfied, Lender shall
cause the Release Mortgaged Property to be released, at a closing
to be held at offices designated by Lender on a Closing Date
selected by Lender, and occurring within thirty (30) days
after Lender’s receipt of the Release Request (or on such
other date as Borrower and Lender may agree), by executing and
delivering, and causing all applicable parties to execute and
deliver, all at the sole cost and expense of Borrower, the Release
Documents. Borrower shall prepare the Release Documents and submit
them to Lender for its review.
(c) Release Price . The “
Release Price ” for each Release Mortgaged
Property means the greater of one hundred percent (100%) of the
Allocable Loan Amount for the Release Mortgaged Property plus one
hundred percent (100%) of the Supplemental Allocable Loan Amount
for the Release Mortgaged Property and one hundred percent (100%)
of the amount, if any, of the amount of the Term Loan Outstanding
and any Supplemental Loan Outstanding that is required to be repaid
by Borrower to Lender in connection with the proposed release of
the Release Mortgaged Property from the Collateral Pool so that,
immediately after the release, the Collateral Pool satisfies the
better of the following tests (i.e. the test which produces a lower
Aggregate Loan to Value Ratio and a higher Aggregate Debt Service
Coverage Ratio): (1) the Aggregate Debt Service Coverage Ratio and
the Aggregate Loan to Value Ratio immediately prior to the release
or (2) the Coverage and LTV Test. In addition to the Release
Price, Borrower shall pay to Lender all associated prepayment
premiums and other amounts due under the Notes being repaid. In
connection with a non-simultaneous substitution of Collateral
pursuant to Section 3.06(c)(ii) of this Agreement,
Borrower shall be permitted, in lieu of paying the Release Price,
to post a Letter of Credit issued by a financial institution
acceptable to Lender and having terms and conditions acceptable to
Lender, having a face amount equal to the Release Price.
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(d) Application of Release Price .
(i) The Release Price for the Release Mortgaged Property shall
be applied in the order selected by Borrower, provided that
(A) any amount of the Supplemental Loan Outstanding which
Borrower elects to prepay must be prepaid in full, or if the
Release Price is not sufficient to do so, the Supplemental Loan
shall only be partially prepaid; (B) any amount of the Term
Loan Outstanding which Borrower elects to prepay must be prepaid in
full, or if the Release Price is not sufficient to do so, the Term
Loan shall be only partially prepaid; (C) any prepayment is
permitted under the applicable Note; (D) any prepayment
premium due and owing is paid; and (E) interest is paid
through the end of the month. If Borrower is unable to meet the
conditions set forth in (A) through (E), then the Release
Price shall be applied first against any variable rate Supplemental
Loan Outstanding so long as the prepayment is permitted under the
applicable note, until any variable rate Supplemental Loan is no
longer Outstanding, then against any Variable Loan Outstanding so
long as the prepayment is permitted under the Variable Note, until
any Variable Loan is no longer Outstanding, then against any fixed
rate Supplemental Loan Outstanding so long as the prepayment is
permitted under the applicable note, until any fixed rate
Supplemental Loan is not longer Outstanding, then against any Fixed
Loan Outstanding so long as the prepayment is permitted under the
applicable Fixed Note.
(ii) In the event Borrower desires to
release a Release Mortgaged Property on a date other than the last
Business Day of the month, the Release Price or the remainder of
the Release Price, if any, shall be held by Lender (or its
appointed collateral agent) as Additional Collateral, in accordance
with a security agreement (if required by Lender) and other
documents in form and substance acceptable to Lender. Any
Additional Collateral shall first be used to prepay the applicable
Supplemental Loan and then the applicable Term Loan on the last
Business Day of the month.
(e) Release of Borrower and Guarantor .
Upon the release of a Mortgaged Property, the Borrower that is the
owner of such Release Mortgaged Property shall be released of all
obligations under this Agreement and the other Loan Documents with
respect to the Release Mortgaged Property, except for any
provisions of this Agreement and the other Loan Documents that are
expressly stated to survive any release or termination or for any
liabilities or obligations of such Borrower which arose prior to
the Closing Date of such release. In addition, each Borrower and
Guarantor shall be released of all obligations related to the
Release Mortgaged Property under this Agreement and the other Loan
Documents except for any provisions of this Agreement and the other
Loan Documents that are expressly stated to survive any release or
termination or for any liabilities or obligations of such Borrower
or Guarantor which arose prior to the Closing Date of such
release.
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(f) Test for Release . A Release may be
effected if immediately after giving effect to the requested
release, the better of the following tests are satisfied (i.e. the
test which produces a lower Aggregate Loan to Value Ratio and a
higher Aggregate Debt Service Coverage Ratio), (1) the
Aggregate Debt Service Coverage Ratio and the Aggregate Loan to
Value Ratio immediately prior to the release or (2) the
Coverage and LTV Test. Notwithstanding the foregoing, if either of
the tests set forth above in subsection (1) or (2) are
not satisfied after the release of a Mortgaged Property, such
release may be permitted by Lender if the release improves the
Collateral Pool based on factors that are consistent with
Lender’s Underwriting Requirements and results in improvement
in one or both of the following areas: the then current Aggregate
Debt Service Coverage Ratio or the then current Aggregate Loan to
Value Ratio.
Section 3.05. Right to
Substitutions.
Subject to the terms and conditions of this
Article 3 and the limitations sets forth in
Section 15.17 , Borrower shall have the right to obtain
the release of the Mortgaged Property securing the Term Loan made
to such Borrower by replacing such Mortgaged Property with a
Multifamily Residential Property that meets the requirements of
this Agreement (the “ Substitute Mortgaged
Property ”) thereby effecting a “
Substitution ” of Collateral.
Section 3.06. Procedure for
Substitutions.
(a) Request . Borrower shall deliver to
Lender a completed and executed Substitution Request. Each
Substitution Request shall be accompanied by the following:
(i) the information required by the Underwriting Requirements
with respect to the proposed Substitute Mortgaged Property and any
additional information Lender reasonably requests; and (ii) the
payment of all Additional Collateral Due Diligence Fees.
(i) Lender shall evaluate the proposed
Substitute Mortgaged Property in accordance with the Underwriting
Requirements.
(ii) A Substitution may be effected if
(1) the proposed Substitute Mortgaged Property has a Debt
Service Coverage Ratio of not less than 1.35:1.0 with respect to
the amount of the Fixed Loan which is allocated as the Allocable
Loan Amount for such Substitute Mortgaged Property and 1.10:1.0
with respect to the amount of the Variable Loan which is allocated
as the Allocable Loan Amount for such Substitute Mortgaged Property
and its Loan to Value Ratio must not exceed seventy percent (70%)
and (2) the Collateral Pool, immediately after the
Substitution, satisfies the better of the following tests (i.e. the
test which produces a lower Aggregate Loan to Value Ratio and a
higher Aggregate Debt Service Coverage Ratio): (A) the
Coverage and LTV Test and (B) the Aggregate Debt Service
Coverage Ratio and the Aggregate Loan to Value Ratio of the
Collateral Pool immediately prior to the Substitution. If necessary
in order for the Collateral Pool to meet the tests set forth in
this Section 3.06(b)(ii) after the Substitution, Borrower may
prepay a portion of the Term Loan (including all prepayment
premiums) pursuant to the terms of the Notes and this Agreement.
Notwithstanding the foregoing, if either of the tests set forth
above in subsection (1) or (2) are not satisfied after
the Substitution of a proposed Substitute Mortgaged Property, such
Substitution may be permitted by Lender if the Substitution
improves the Collateral Pool based on factors that are consistent
with Lender’s Underwriting Requirements and result in
improvement in one or more of the following areas: the then current
Valuation of the Mortgaged Properties, the then current Aggregate
Debt Service Coverage Ratio, or the then current Aggregate Loan to
Value Ratio.
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(iii) Within thirty (30) Business Days
after receipt of (A) the Substitution Request and (B) all
reports, certificates and documents required by the Underwriting
Requirements and this Agreement, including a zoning analysis
required by Lender in connection with similar loans anticipated to
be sold to Fannie Mae, Lender shall notify the applicable Borrower
whether the Substitute Mortgaged Property meets the requirements of
this Section 3.06(b) and the Underwriting Requirements
and the other requirements for the Substitution of a Mortgaged
Property as set forth in this Agreement. Within five
(5) Business Days after receipt of Lender’s written
notice in response to the Substitution Request, Borrower shall
notify Lender whether it elects to proceed with the Substitution.
If Borrower fails to respond within the period of five
(5) Business Days, it shall be conclusively deemed to have
elected not to proceed with the Substitution.
(c) Closing . If Lender determines that
the Substitution Request satisfies the conditions set forth herein,
Borrower timely elects to proceed with the substitution, and all
conditions precedent contained in Section 3.05 ,
Section 3.06 , Section 6.05 ,
Section 6.06 , Section 6.11 ,
Section 6.12 and all General Conditions contained in
Section 6.01 are satisfied, the proposed Substitute
Mortgaged Property shall be added in replacement of the Mortgaged
Property being released, at a closing to be held at offices
designated by Lender on a Closing Date selected by Lender and
occurring —
(i) if the substitution of the proposed
Substitute Mortgaged Property is to occur simultaneously with the
release of the Release Mortgaged Property, within sixty
(60) days after Lender’s receipt of the applicable
Borrower’s election (or on such other date to which Borrower
and Lender may agree); or
(ii) if the substitution of the proposed
Substitute Mortgaged Property is to occur subsequent to the release
of the Release Mortgaged Property, within ninety (90) days
after the release of such Release Mortgaged Property (provided such
date may be extended an additional ninety (90) days if
Borrower provides evidence satisfactory to Lender of
Borrower’s diligent efforts in finding a suitable proposed
Substitute Mortgaged Property) (the “ Property Delivery
Deadline ”) in accordance with the terms of
Section 3.06 .
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Section 3.07. Substitution Deposit .
(a) The Deposit . If a Substitution of
the proposed Substitute Mortgaged Property is to occur subsequent
to the release of the Release Mortgaged Property pursuant to
Section 3.06(c)(ii), at the Closing Date of the release of the
Release Mortgaged Property, Borrower shall deposit with Lender the
“ Substitution Deposit ” described in
Section 3.07(b) in the form of cash in a non-interest
bearing account held by Lender or, in lieu of depositing cash for
the Substitution Deposit, Borrower may post a Letter of Credit
issued by a financial institution acceptable to Lender and having
terms and conditions acceptable to Lender, having a face amount
equal to the Substitution Deposit.
(b) Substitution Deposit Amount . The
“ Substitution Deposit ” for each
proposed substitution shall be an amount equal to the sum of
(i) the Release Price, plus (ii) any and all of the fee
maintenance or the prepayment premium for the Notes, calculated as
of the end of the month in which the Property Delivery Deadline
occurs, as if the Notes (and the MBS, if applicable) were to be
prepaid in such month, plus (iii) interest on the Notes
through the end of the month in which the Property Delivery
Deadline occurs, if necessary as reasonably estimated by Lender,
plus (iv) costs, expenses and fees of Lender pertaining to the
substitution (the “ Substitution Cost Deposit
”). If a Substitution of the last remaining asset is taking
place, the cash collateral or Letter of Credit must include,
(A) any yield maintenance that would be due to the extent that
the Fixed Notes must be prepaid to effect a release at that time
and (B) any fee maintenance that would be due to the extent
that the Variable Note must be prepaid to effect a release at that
time. The Substitution Cost Deposit shall be used by Lender to
cover all reasonable out-of-pocket costs and expenses incurred by
Lender and Fannie Mae, including any out-of-pocket legal fees and
expenses incurred by Fannie Mae and Lender in connection with such
substitution whether such substitution actually closes. In the
event that the Borrower elects to post a Letter of Credit in lieu
of cash for the Substitution Deposit, Borrower shall also be
obligated to make any regularly scheduled payments of principal and
interest due under the applicable Notes during any period between
the closing of the Release Mortgaged Property and the earlier of
the closing of the Substitute Mortgaged Property and the date of
prepayment of the Notes, or the MBS, if applicable.
(c) Failure to Close Substitution . If
the substitution of the proposed Substitute Mortgaged Property does
not occur by the Property Delivery Deadline in accordance with
Section 3.06(c)(ii) , then such Borrower shall have
irrevocably waived its right to substitute such Release Mortgaged
Property with the proposed Substitute Mortgaged Property, and the
release of the Release Mortgaged Property shall be deemed a
prepayment of the Note and the MBS, if applicable. The Property
Delivery Deadline shall be no later than the date ninety
(90) days (or one hundred eighty (180) days, if
applicable) after the date the Lender’s lien on such Release
Mortgaged Property is released. Any MBS being prepaid shall be
deemed to be prepaid as of the end of the month in which the
Property Delivery Deadline falls, and the Lender, shall follow
standard Fannie Mae procedures for the prepayment of the Note, or
any applicable MBS, including delivery of the Substitution Deposit
(less the Substitution Cost Deposit) to Fannie Mae in accordance
with such procedures. Any portion of the Substitution Deposit not
needed to prepay the Note, or any applicable MBS, all interest, and
any prepayment fees (including any portion of the Substitution Cost
Deposit not used by Lender to cover all reasonable out-of-pocket
costs and expenses incurred by Lender and Fannie Mae, including any
out-of-pocket legal fees and expenses incurred by Fannie Mae and
Lender in connection with such Substitution) shall be promptly
refunded to the applicable Borrower after the Property Delivery
Deadline.
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(d) Substitution Deposit Disbursement .
At closing of the Substitution, the Lender shall disburse the
Substitution Deposit (less any portion of the Substitution Cost
Deposit used by Lender to cover all reasonable out-of-pocket costs
and expenses incurred by Lender and Fannie Mae, including any
out-of-pocket legal fees and expenses incurred by Fannie Mae and
Lender in connection with such substitution) directly to the
Borrower at such time as the conditions set forth in
Sections 3.05 , 3.06 , 6.05 , 6.06
, 6.11 , 6.12 and all General Conditions contained in
Section 6.01 have been satisfied, which must occur no
later than the Property Delivery Deadline.
ARTICLE 6
CONDITIONS PRECEDENT TO ALL REQUESTS
Section 6.01. Conditions Applicable to
All Requests .
Borrower’s right to close the transaction
requested in a Request shall be subject to Lender’s
determination that all of the following general conditions
precedent (“ General Conditions ”) have
been satisfied, in addition to any other conditions precedent
contained in this Agreement:
(b) Payment of Expenses . The payment by
Borrower of Lender’s and Fannie Mae’s reasonable third
party out-of-pocket fees and expenses payable in accordance with
this Agreement, including, but not limited to, the legal fees and
expenses described in Section 10.03 .
(c) No Material Adverse Change . There
has been no material adverse change in the financial condition,
business or prospects of Borrower or Guarantor or in the physical
condition, operating performance or value of any of the Mortgaged
Properties since the date of the most recent Compliance Certificate
(or, with respect to the conditions precedent to the Term Loan,
from the condition, business or prospects reflected in the
financial statements, reports and other information obtained by
Lender during its review of Borrower and Guarantor and the Initial
Mortgaged Properties).
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(d) No Default . There shall exist no
Event of Default or Potential Event of Default in each case under
Sections 11.01 (b)-(l) or , in any material respect, under
Sections 11.01 (a), (m) or (n) (it being understood and
agreed that any default comparable to the Events of Default listed
in 11.01(b) — (l) in the other Loan Documents or
Supplemental Loan Documents will be treated to be material) on the
Closing Date for the Request and, after giving effect to the
transaction requested in the Request, no Event of Default or
Potential Event of Default shall have occurred.
(e) No Insolvency . Receipt by Lender on
the Closing Date for the Request of evidence satisfactory to Lender
that neither Borrower nor Guarantor is insolvent (within the
meaning of any applicable federal or state laws relating to
bankruptcy or fraudulent transfers) or will be rendered insolvent
by the transactions contemplated by the Loan Documents, or, after
giving effect to such transactions, will be left with an
unreasonably small capital with which to engage in its business or
undertakings, or will have intended to incur, or believe that it
has incurred, debts beyond its ability to pay such debts as they
mature or will have intended to hinder, delay or defraud any
existing or future creditor.
(f) No Untrue Statements . The Loan
Documents shall not contain any untrue or misleading statement of a
material fact and shall not fail to state a material fact necessary
to make the information contained therein not
misleading.
(g) Representations and Warranties . All
representations and warranties made by Borrower and Guarantor in
the Loan Documents shall be true and correct in all material
respects on the Closing Date for the Request with the same force
and effect as if such representations and warranties had been made
on and as of the Closing Date for the Request.
(h) No Condemnation or Casualty . Except
in connection with a Release Request, there shall not be pending or
threatened any condemnation or other taking, whether direct or
indirect, against the Mortgaged Property and there shall not have
occurred any casualty which has not been previously completely
repaired in accordance with the terms of the Loan Documents to any
improvements located on the Mortgaged Property, which casualty
would have a Material Adverse Effect.
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(i) Delivery of Closing Documents . The
receipt by Lender of the following, each dated as of the Closing
Date for the Request, in form and substance satisfactory to Lender
in all respects:
(i) The
Loan Documents relating to such Request;
(ii) A
Compliance Certificate;
(iii) An
Organizational Certificate; and
(iv) Such other documents, instruments,
approvals (and, if requested by Lender, certified duplicates of
executed copies thereof) and opinions as Lender may reasonably
request.
(j) Covenants . Borrower is in full
compliance with each of the covenants contained in Article 8
and Article 9 of this Agreement, without giving effect to
any notice and cure rights of Borrower.
Section 6.02. Conditions Precedent to
the Term Loan .
The obligation of Lender to make the Term Loan
is subject to the following conditions precedent:
(b) Receipt by Lender at least five
(5) days prior to the Initial Closing Date, of the
confirmation of an Interest Rate Cap commitment, in accordance with
the Pledge, Interest Rate Cap Agreement, effective as of the
Initial Closing Date;
(c) Receipt by Lender of Interest Rate Cap
Documents in accordance with the Pledge, Interest Rate Cap
Agreement, effective as of the Initial Closing Date;
(d) Receipt by Lender of the Guaranty,
Certificate of Camden Summit, Indemnification Agreement Regarding
Taxes and the Indemnity Multifamily Deed of Trust, Assignment of
Rents and Security Agreement;
(e) Delivery to the Title Company with
fully executed instructions directing the Title Company to file
and/or record in all applicable jurisdictions, of all applicable
Loan Documents required by Lender to be filed or recorded,
including duly executed and delivered original copies of the
Variable Note or Fixed Note, as applicable, the Guaranty, the
Initial Security Instruments covering the Initial Mortgaged
Properties and UCC-1 Financing Statements covering the portion of
the Collateral comprised of personal property, and other
appropriate instruments, in form and substance reasonably
satisfactory to Lender and in form proper for recordation, as may
be necessary in the opinion of Lender to perfect the Liens created
by the applicable Security Instruments and any other Loan Documents
creating a Lien in favor of Lender, and the payment of all taxes,
fees and other charges payable in connection with such execution,
delivery, recording and filing;
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(f) Receipt by Lender of the documents and
instruments required by Section 6.12; and
(g) Receipt by Lender of the Initial
Origination Fee pursuant to Section 10.01(a) and the Initial
Due Diligence Fee pursuant to Section 10.02(a) .
Section 6.05. Conditions Precedent to
Release of Property from the Collateral Pool
.
The release of a Mortgaged Property from the
Collateral Pool is subject to the satisfaction of the following
conditions precedent on or before the Closing Date:
(a) Receipt by Lender of the fully executed
Release Request;
(b) Immediately after giving effect to the
requested release, the provisions of Section 3.04(f) are
satisfied;
(c) Receipt by Lender of the Release
Price;
(d) Receipt by Lender of the Release Fee
and all other amounts owing under Section 3.04(c);
(e) Receipt by Lender on the Closing Date
of one (1) or more counterparts of each Release Document,
dated as of the Closing Date, signed by each of the parties (other
than Lender) who is a party to such Release Document;
(f) If required by Lender, amendments to
this Agreement, the Notes and the Security Instruments reflecting
the release of the Release Mortgaged Property from the Collateral
Pool and, as to any Security Instrument or Note so amended or if
Lender determines that such endorsement is necessary to maintain
the priority of the Lien created in favor of Lender with respect to
the Outstanding Indebtedness or to maintain the validity of any
Title Insurance Policy, the receipt by Lender of an endorsement to
each Title Insurance Policy insuring the Security Instruments,
amending the effective date of each Title Insurance Policy to the
Closing Date and showing no additional exceptions to coverage other
than the exceptions shown on the Initial Closing Date, Permitted
Liens and other exceptions approved by Lender;
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(g) If Lender determines the Release
Mortgaged Property to be one (1) phase of a project, and one
(1) or more other phases of the project are Mortgaged
Properties which will remain in the Collateral Pool (“
Remaining Mortgaged Properties ”), Lender must
determine that the Remaining Mortgaged Properties can be operated
separately from the Release Mortgaged Property and any other phases
of the project which are not Mortgaged Properties and whether any
cross use agreements or easements are necessary. In making this
determination, Lender shall evaluate access, utilities,
marketability, community services, ownership and operation of the
Release Properties and any other issues identified by Lender in
connection with similar loans anticipated to be sold to Fannie
Mae;
(h) Receipt by Lender of endorsements to
the tie-in endorsements of the Title Insurance Policies, if deemed
necessary by Lender, to reflect the release; and
(i) Receipt by Lender on the Closing Date
of a Confirmation of Obligations.
Section 6.06. Conditions Precedent to
Substitutions .
The obligation of Lender to make a requested
Substitution is subject to Lender’s determination that each
of the following conditions precedent has been met:
(a) Receipt by Lender of the fully executed
Substitution Request;
(b) Receipt by Lender of the Substitution
Deposit to the extent necessary under Section 3.07;
(c) Receipt by Lender of the Additional
Collateral Due Diligence Fees and Substitution Fee;
(d) Such Substitute Mortgaged Property
shall comply with the provisions of Section 3.06(b) of this
Agreement;
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(e) Delivery to the Title Company, with
fully executed instructions directing the Title Company to file
and/or record in all applicable jurisdictions, all applicable Loan
Documents reasonably required by Lender to be filed or recorded,
including duly executed and delivered original copies of the
Security Instruments covering the Substitute Mortgaged Properties
and UCC-1 Financing Statements covering the portion of the
Substitute Mortgaged Property comprised of personal property, and
other appropriate instruments, in form and substance reasonably
satisfactory to Lender and in form proper for recordation, as may
be necessary in the reasonable opinion of Lender to perfect the
Lien created by the applicable additional Security Instrument, and
any other relevant Loan Document creating a Lien in favor of
Lender, and the payment of all taxes, fees and other charges
payable in connection with such execution, delivery, recording and
filing;
(f) Receipt by Lender of endorsements to
the tie-in endorsements of the Title Insurance Policies, if deemed
necessary by Lender, to reflect the substitution, to the extent a
tie-in endorsement is available with respect to the applicable
Title Insurance Policies;
(g) Receipt of all documents required for
the addition of the Substitute Mortgaged Property pursuant to the
Underwriting Requirements;
(h) Any proposed Additional Borrower meets
and satisfies all of the requirements and conditions of
Section 14.02;
(i) Receipt by Lender on the Closing Date
of a Confirmation of Obligations and Confirmation of Guaranty;
and
(j) Amendments to this Agreement, the Notes
and the Security Instruments, reflecting the Substitution and, as
to any Security Instrument or Note so amended or if Lender
determines that such endorsement is necessary to maintain the
priority of the Lien created in favor of Lender with respect to the
Outstanding Indebtedness or to maintain the validity of any Title
Insurance Policy, the receipt by Lender of an endorsement to each
Title Insurance Policy insuring the Security Instrument, amending
the effective date of each Title Insurance Policy to the Closing
Date and showing no additional exceptions to coverage other than
the exceptions shown on the Initial Closing Date, Permitted Liens
and other exceptions approved by Lender, together with any
reinsurance agreements required by Lender.
Section 6.08. Conditions Precedent to
Conversion .
The conversion of all or a portion of the
Variable Loan to a Fixed Loan is subject to the satisfaction of the
following conditions precedent on or before the Closing
Date:
(a) Receipt by Lender of the fully executed
Conversion Request;
(b) After giving effect to the requested
conversion, the Coverage and LTV Tests will be
satisfied;
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(c) If required by Lender, receipt by
Lender of an endorsement to each Title Insurance Policy, amending
the effective date of the Title Insurance Policy to the Closing
Date and showing no additional exceptions to coverage other than
the exceptions shown on the Initial Closing Date, Permitted Liens
and other exceptions approved by Lender; and
(d) Receipt by Lender of one (1) or
more executed, original counterparts of all Conversion Documents,
dated as of the Closing Date, each of which shall be in full force
and effect and in form and substance reasonably satisfactory to
Lender in all respects.
Section 6.11. Delivery of Opinion
Relating to Substitution Request or Conversion
Request .
With respect to the closing of a Substitution
Request, or a Conversion Request, it shall be a condition precedent
that Lender receives favorable opinions of counsel (including local
counsel, as applicable) to Borrower, as to the due organization and
qualification of Borrower, the due authorization, execution,
delivery and enforceability of each Loan Document executed in
connection with the Request and such other matters as Lender may
reasonably require, each dated as of the Closing Date for the
Request, in form and substance satisfactory to Lender in all
respects.
Section 6.12. Delivery of
Property-Related Documents .
With respect to each of the Initial Mortgaged
Properties or a Substitute Mortgaged Property, it shall be a
condition precedent that Lender receive from Borrower each of the
documents and reports required by Lender pursuant to the
Underwriting Requirements in connection with the addition of such
Mortgaged Property to the Collateral Pool and, each of the
following, each dated as of the applicable Closing Date for the
Initial Mortgaged Property or a Substitute Mortgaged Property, as
the case may be, in form and substance satisfactory to Lender in
all respects:
(a) A commitment for the Title Insurance
Policy applicable to the Mortgaged Property and a pro forma Title
Insurance Policy based on the Term Loan amount;
(b) The Insurance Policy (or a certified
copy of the Insurance Policy) applicable to the Mortgaged
Property;
(c) The Survey applicable to the Mortgaged
Property;
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\
(d) Evidence satisfactory to Lender of
compliance of the Mortgaged Property with Applicable
Laws;
(e) A Replacement Reserve Agreement or an
amendment thereto, providing for the establishment of a replacement
reserve account, to be pledged to Lender, in which the owner shall
(unless waived by Lender) periodically deposit amounts for
replacements for improvements at the Mortgaged Property and as
additional security for Borrower’s obligations under the Loan
Documents;
(f) A Completion/Repair and Security
Agreement or an amendment thereto, together with required escrows,
on the standard form required by Lender;
(g) An Assignment of Management Agreement
or an amendment thereto, on the standard form required by Lender,
if applicable;
(h) An Assignment of Leases and Rents, if
Lender determines one to be necessary or desirable, provided that
the provisions of any such assignment shall be substantively
identical to those in the Security Instrument covering the
Collateral, with such modifications as may be necessitated by
applicable state or local law;
(i) In relation to each Initial Mortgaged
Property, a Security Instrument to effectuate the addition of such
Initial Mortgaged Property to the Collateral Pool, and in relation
to each Substitute Mortgaged Property, a Security Instrument to
effectuate the addition of such Substitute Mortgaged Property to
the Collateral Pool, and a Note relating to the Mortgaged
Properties. The amount secured by each Security Instrument shall be
equal to the Term Loan;
(j) A Certificate of Borrower
Parties;
(k) A Confirmation of Guaranty by each
party providing a guaranty to Lender; and
(l) A Contribution Agreement or an
amendment thereto.
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Section 6.13. Additional Collateral .
If Lender determines that, with respect to the
substitution of Mortgaged Properties, the Coverage and LTV Tests
are not met when required to be satisfied by the terms of this
Agreement, Borrower shall have the option of either
(A) providing to Lender a Letter of Credit which shall either
have a term equal to the Term of this Agreement or shall have a
term of at least 364 days and provide for a drawing
30 days prior to its date of termination in the event it is
not renewed; (B) depositing cash or Cash Equivalents (as
defined in Sections (a) through (c) of the definition of
Cash Equivalents) to the Cash Collateral Account; (any of the above
constituting “ Additional Collateral ”); or
(C) to the extent permitted under the Loan Documents,
prepaying in part or in whole the outstanding principal amount of
the Notes designated by Lender, in each case in an amount equal to
that amount which Lender determines will cause the Coverage and LTV
Tests to be satisfied. For purposes of making such calculation,
Lender shall deduct the amount of cash and Cash Equivalents (as
defined in Sections (a) through (c) of the definition of
Cash Equivalents) deposited to the Cash Collateral Account or the
amount available under the Letter of Credit from the outstanding
principal balance of all of the Notes (the “ Assumed
Mortgage Principal Amount ”) and (i) calculate the
interest component of debt service based on such Assumed Mortgage
Principal Amount and the Cash Interest Rate or MBS Pass-Through
Rate plus the Fixed Facility Fee, as applicable and
(ii) calculate the principal component of debt service by
multiplying the actual amount of principal times a fraction with a
numerator equal to the Assumed Mortgage Principal Amount and a
denominator equal to the actual outstanding principal amount of all
of the Notes. In the event such Borrower exercises either of the
options set forth in clauses (A) or (B) of this paragraph,
Borrower shall execute and deliver a Cash Collateral Agreement.
Lender shall agree at the request of Borrower to exchange one type
of Additional Collateral for another type of Additional Collateral
within a reasonable time period, provided such other type of
Additional Collateral is of equivalent value and which meets the
requirements of this Agreement. Notwithstanding any provision
hereof to the contrary, except for any Substitution Deposit
delivered in accordance with Section 3.07 (the amount and
application of which shall be determined in accordance with said
Section 3.07), (i) the value of any Additional Collateral
delivered pursuant to this Section 6.13 (other than
Substitution Deposits) shall not exceed ten percent (10%) of the
aggregate Valuation of all Mortgaged Properties in the Collateral
Pool, and (ii) in the event the Coverage and LTV Tests
(without regard to the Additional Collateral) are not satisfied
within one year after delivery of the Additional Collateral,
Borrower shall be required to prepay the amounts Outstanding under
the Notes in an amount determined by Lender to cause the Coverage
and LTV Tests to be satisfied, and the Lender may draw on such
Additional Collateral and use the monies to make such prepayment.
Any Notes required to be prepaid pursuant to the preceding sentence
shall be selected by the Borrower and, in addition to the
prepayment of the related Notes, Borrower shall pay all associated
prepayment premiums and other amounts due under the Notes being
prepaid.
Section 6.15. Letters of
Credit.
(a) Letter of Credit Requirements .
If Borrower provides Lender with a Letter of Credit pursuant to
this Agreement, the Letter of Credit shall be in form and substance
satisfactory to Lender and Lender shall be entitled to draw under
such Letter of Credit solely upon presentation of a sight draft to
the LOC Bank. Any Letter of Credit shall be for a term of at least
364 days. Any Letter of Credit shall be issued by a financial
institution satisfactory to Lender and shall have its long-term
debt obligations and its short-term debt obligations rated in
accordance with the requirements of Fannie Mae then in
effect.
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(b) Draws Under Letter of Credit .
Lender shall have the right to draw monies under the Letter of
Credit:
(i) upon the occurrence of (A) an
Event of Default; or (B) a Potential Event of Default of which
the Borrower has knowledge has occurred and continued for two
(2) Business Days;
(ii) if 30 days prior to the
expiration of the Letter of Credit, the Letter of Credit has not
been extended for a term of at least 364 days; or
(iii) upon the downgrading of the ratings
of the long-term or short-term debt obligations of the LOC Bank
below the requirements of Fannie Mae then in effect.
(c) Deposit to Cash Collateral
Agreement . If Lender draws under the Letter of Credit pursuant
to Section 6.15(b)(ii) or (iii) above, Lender shall
deposit such draw monies into the Cash Collateral Account. Borrower
shall have the right to obtain a release of such draw monies in the
Cash Collateral Account pursuant to the Cash Collateral Agreement
if Borrower provides Lender with a replacement Letter of Credit in
accordance with Section 6.15(a) above and in an amount of the
draw monies in the Cash Collateral Account.
(d) Default Draws . If Lender draws
under the Letter of Credit pursuant to Section 6.15(b)(i) above,
Lender shall have the right to use monies drawn under the Letter of
Credit for any of the following purposes:
(i) to pay any amounts required to be paid
by Borrower under the Loan Documents (including, without
limitation, any amounts required to be paid to Lender under this
Agreement);
(ii) to (on such Borrower’s behalf,
or on its own behalf if Lender becomes the owner of the Mortgaged
Property) prepay any Note;
(iii) to make improvements or repairs to
any Mortgaged Property; or
(iv) to
deposit monies into the Cash Collateral Account.
(e) Legal Opinion . Prior to or
simultaneous with the delivery of any new Letter of Credit (but not
the extension of any existing Letter of Credit), such Borrower
shall cause the LOC Bank’s counsel to deliver a legal opinion
substantially in the form of Exhibit Q-1 or
Exhibit Q-2 , as applicable, and in any event
satisfactory in form and substance to the Lender.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
Section 7.01. Representations and
Warranties of Borrower .
The representations and warranties of Borrower
Parties are contained in the Certificate of Borrower
Parties.
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Section 7.02. Representations and
Warranties of Lender .
Lender hereby
represents and warrants to Borrower as follows as of the date
hereof:
(a) Due Organization . Lender is a
corporation duly organized, validly existing and in good standing
under the laws of Ohio.
(b) Power and Authority . Lender has the
requisite power and authority to execute and deliver this Agreement
and to perform its obligations under this Agreement.
(c) Due Authorization . The execution and
delivery by Lender of this Agreement, and the consummation by it of
the transactions contemplated thereby, and the performance by it of
its obligations thereunder, have been duly and validly authorized
by all necessary action and proceedings by it or on its
behalf.
ARTICLE 8
AFFIRMATIVE COVENANTS OF BORROWER AND GUARANTOR
Borrower agrees and covenants with Lender that,
at all times during the Term of this Agreement:
Section 8.01. Compliance with
Agreements.
(a) Borrower and Guarantor shall comply
with all the terms and conditions of each Loan Document to which it
is a party or by which it is bound; provided, however, that
Borrower’s or Guarantor’s failure to comply with such
terms and conditions shall not be an Event of Default until the
expiration of the applicable notice and cure periods, if any,
specified in the applicable Loan Document.
(b) Borrower shall comply with all the
material terms and conditions of any building permits or any
conditions, easements, rights-of-way or covenants of record,
restrictions of record, or any recorded or, to the extent Borrower
has knowledge thereof, unrecorded agreement affecting or concerning
any Mortgaged Property including planned development permits,
mitigation plans, condominium declarations, and reciprocal easement
and regulatory agreements with any Governmental Authority;
provided, however, that Borrower’s failure to comply with
such terms and conditions shall not be an Event of Default until
the expiration of the applicable notice and cure periods, if any,
specified in the applicable document.
Section 8.02. Maintenance of
Existence .
(a) Each Borrower Party shall maintain its
existence and continue to be organized under the laws of the state
of its organization. Borrower shall continue to be duly qualified
to do business in each jurisdiction in which such qualification is
necessary to the conduct of its business and where the failure to
be so qualified would adversely affect the validity of, the
enforceability of, or the ability to perform, its obligations under
this Agreement or any other Loan Document.
22
(b) During the Term of this Agreement,
Camden shall qualify, and be taxed as, a real estate investment
trust under Subchapter M of the Internal Revenue Code and will not
be engaged in any activities which would reasonably be anticipated
to jeopardize such qualification and tax treatment.
Section 8.03. Financial Statements;
Accountants’ Reports; Other Information
.
(a) Each Borrower Party shall keep and
maintain at all times at the address set forth in
Section 15.08 of this Agreement, and (at Lender’s
request after an Event of Default) shall make available at the
Mortgaged Property, complete and accurate books of accounts and
records (including copies of supporting bills and invoices) in
sufficient detail to correctly reflect all of Borrower’s and
Guarantor’s financial transactions and assets, and the
results of the operation of each Mortgaged Property, and copies of
all written contracts, Leases and other instruments which affect
each Mortgaged Property (including all bills, invoices and
contracts for electrical service, gas service, water and sewer
service, waste management service, telephone service and management
services). The books, records, contracts, Leases and other
instruments shall be subject to examination and inspection at any
reasonable time by Lender.
(b) In addition, each Borrower and
Guarantor (with respect to clauses (i), (ii), (ix) and
(xi) set forth below) shall furnish, or cause to be furnished,
to Lender:
(i) Annual Financial Statements .
As soon as available, and in any event within one hundred twenty
(120) days after the close of its fiscal year during the Term
of this Agreement, the audited consolidated balance sheet showing
all assets and liabilities of Camden, the audited consolidated
statement of operations of Camden and the unaudited consolidated
statement of operations of Borrower for such fiscal year, and the
audited consolidated statement of cash flows of Camden and the
unaudited consolidated statement of cash flows of Borrower for such
fiscal year, all in reasonable detail and stating in comparative
form the respective figures for the corresponding date and period
in the prior fiscal year, prepared in accordance with GAAP
consistently applied and as to Camden, accompanied by an
unqualified opinion of Camden’s independent certified public
accountants to the effect that such financial statements have been
audited by such accountants, and that such financial statements
fairly present the results of Camden’s operations and
financial condition for the periods and dates indicated with such
opinion to be free of exceptions and qualifications as to the scope
of the audit and as to the going concern nature of the
business;
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(ii) Quarterly Financial Statements
. As soon as available, and in any event within forty five
(45) days after each of the first three fiscal quarters of
each fiscal year during the Term of this Agreement, beginning with
the fiscal quarter ending September 30, 2009, the unaudited
consolidated balance sheet showing all assets and liabilities of
Camden as of the end of any such fiscal quarter, the unaudited
consolidated statement of operations of Borrower and Camden and the
unaudited consolidated statement of cash flows of Borrower and
Camden for the portion of the fiscal year ended with the last day
of such quarter, all prepared in accordance with GAAP and in
reasonable detail and stating in comparative form the respective
figures for the corresponding date and period in the previous
fiscal year, accompanied by a certificate of an authorized
representative of Borrower and Camden reasonably acceptable to
Lender stating that such financial statements have been prepared in
accordance with GAAP, consistently applied, and fairly present the
results of its operations and financial condition for the periods
and dates indicated, subject to year end adjustments in accordance
with GAAP;
(iii) Quarterly Property Statements
. As soon as available in electronic format, and in any event
within forty five (45) days after each Calendar Quarter, a
statement of income and expenses of each Mortgaged Property
prepared in accordance with GAAP and accompanied by a certificate
of an authorized representative of Borrower reasonably acceptable
to Lender to the effect that each such statement of income and
expenses fairly, accurately and completely presents the operations
of each such Mortgaged Property for the period
indicated;
(iv) Annual Property Statements .
As soon as available in electronic format, and in any event on an
annual basis within forty five (45) days after the close of
its fiscal year, an annual statement of income and expenses of each
Mortgaged Property accompanied by a certificate of an authorized
representative of Borrower reasonably acceptable to Lender to the
effect that each such statement of income and expenses fairly,
accurately and completely presents the operations of each such
Mortgaged Property for the period indicated;
(v) Monthly Property Statements .
Upon Lender’s request and no later than 30 days after
such request, a monthly electronic property management report for
each Mortgaged Property, showing the number of inquiries made and
rental applications received from tenants or prospective tenants
and deposits received from tenants and any other information
requested by Lender and a statement of income and expense of each
Mortgaged Property for the prior month;
(vi) Updated Rent Rolls . Within
120 days after the end of each fiscal year of each Borrower,
and at any other time upon Lender’s request, a current Rent
Roll for each Mortgaged Property, showing the name of each tenant,
and for each tenant, the space occupied, the lease expiration date,
the rent payable for the current month, the date through which rent
has been paid and any other information requested by Lender and
accompanied by a certificate of an authorized representative of
Borrower reasonably acceptable to Lender to the effect that each
such Rent Roll fairly, accurately and completely presents the
information required therein;
(vii) Security Deposit Information
. Within 120 days after the end of each fiscal year of
Borrower, and at any other time upon Lender’s request, an
accounting of all security deposits held in connection with any
Lease of any part of any Mortgaged Property, including the name and
identification number of the accounts in which such security
deposits are held, the name and address of the financial
institutions in which such security deposits are held and the name
and telephone number of the person to contact at such financial
institution, along with any authority or release necessary for
Lender to access information regarding such accounts;
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(viii) Accountants’ Reports;
Other Reports . Promptly upon receipt thereof: (1) copies of
any reports which address material weaknesses or problems or
management letters which address material weaknesses or problems or
audit opinions submitted to Borrower by its independent certified
public accountants in connection with the examination of its
financial statements made by such accountants (except for reports
otherwise provided pursuant to subsection (a) above);
provided, however, that Borrower shall only be required to deliver
such reports and management letters to the extent that they relate
to Borrower or any Mortgaged Property; and (2) all schedules,
financial statements or other similar reports delivered by Borrower
pursuant to the Loan Documents or requested by Lender with respect
to Borrower’s business affairs or condition (financial or
otherwise) or any of the Mortgaged Properties;
(ix) Ownership Interests . Within
120 days after the end of each fiscal year of Borrower and
Guarantor, and at any other time upon Lender’s request, a
statement that identifies all owners of any direct interest in any
Targeted Entity (other than Guarantor) and the interest held by
each, if Borrower is a corporation, all executive officers and
directors of Borrower or Guarantor, and if Borrower is a limited
liability company, all managers who are not members;
(x) Annual Budgets . Prior to the
start of its fiscal year, an annual budget for each Mortgaged
Property for such fiscal year, setting forth an estimate of all of
the costs and expenses, including capital expenses, of maintaining
and operating each Mortgaged Property;
(xi) Federal Tax Returns . Upon the
request of Lender, after an Event of Default, the Federal tax
return of Borrower and Guarantor that was filed with the Internal
Revenue Service, United States Department of Treasury;
and
(xii) Quarterly Litigation Report .
Within forty five (45) days after each Calendar Quarter or
from time to time as Lender may request or as Camden may deem
appropriate, Camden shall provide Lender with a written update,
reasonably satisfactory to Lender, with respect to the pending
litigation against Affiliates of Camden, as more particularly
described in Section 14.01(a)(vi) of this Agreement.
(c) Each of the statements, schedules and
reports required by Section 8.03 shall be certified to
be complete and accurate in all material respects by an individual
having authority to bind Borrower, and shall be in such form and
contain such detail as Lender may reasonably require. Upon an Event
of Default, Lender also may require that any statements, schedules
or reports be audited at Borrower’s expense by independent
certified public accountants acceptable to Lender.
(d) If Borrower fails to provide in a
timely manner the statements, schedules and reports required by
Section 8.03 , Lender shall have the right to have
Borrower’s books and records audited, at Borrower’s
expense, by independent certified public accountants selected by
Lender in order to obtain such statements, schedules and reports,
and all related costs and expenses of Lender shall become
immediately due and payable and shall become an additional part of
the Indebtedness as provided in Section 12 of each Security
Instrument.
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(e) If an Event of Default has occurred and
is continuing, Borrower shall deliver to Lender upon written demand
all books and records, or copies thereof, relating to the Mortgaged
Property or its operation.
(f) Borrower irrevocably authorizes Lender
to obtain a credit report on Borrower at any time.
(g) If an Event of Default has occurred and
Lender has not previously required Borrower to furnish a quarterly
statement of income and expense for the Mortgaged Property, Lender
may require Borrower to furnish such a statement within forty five
(45) days after the end of each fiscal quarter of Borrower
following such Event of Default.
Section 8.04. Access to Records;
Discussions With Officers and Accountants.
To the extent permitted by law and in addition
to the applicable requirements of the Security Instruments,
Borrower shall permit Lender to:
(a) inspect, make copies and abstracts of,
and have reviewed or audited, such of Borrower’s books and
records as may relate to the Obligations or any Mortgaged
Property;
(b) at any time discuss Borrower’s
affairs, finances and accounts with Borrower’s senior
management or property managers and independent public accountants;
after an Event of Default, discuss Borrower’s affairs,
finances and account with Guarantor’s officers, partners and
employees;
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(c) discuss the Mortgaged Properties’
conditions, operations or maintenance with the managers of such
Mortgaged Properties, the officers and employees of Borrower and/or
the Guarantor; and
(d) receive any other information that
Lender reasonably deems necessary or relevant in connection with
the Term Loan, any Loan Document or the Obligations from the
officers and employees of such Borrower or third
parties.
Notwithstanding
the foregoing, prior to an Event of Default or Potential Event of
Default and in the absence of an emergency, all inspections shall
be conducted at reasonable times during normal business hours upon
reasonable notice to Borrower.
Section 8.05. Certificate of
Compliance.
Borrower shall deliver to Lender concurrently
with the delivery of the financial statements and/or reports
required by Section 8.03(a) and
Section 8.03(b) a certificate signed by an authorized
representative of Borrower reasonably acceptable to Lender setting
forth in reasonable detail the calculations required to establish
whether Borrower and Guarantor were in compliance with the
requirements of this Article 8 of this Agreement on the date
of such financial statements, and stating that, to the best
knowledge of such individual following reasonable inquiry, no Event
of Default or Potential Event of Default has occurred, or if an
Event of Default or Potential Event of Default has occurred,
specifying the nature thereof in reasonable detail and the action
Borrower is taking or proposes to take. Any certificate required by
this Section shall run directly to and be for the benefit of Lender
and Fannie Mae.
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Section 8.06. Maintain
Licenses.
Borrower shall procure and maintain in full
force and effect all licenses, Permits, charters and registrations
which are material to the conduct of its business and shall abide
by and satisfy all terms and conditions of all such licenses,
Permits, charters and registrations.
Section 8.07. Inform Lender of Material
Events.
Borrower shall promptly inform Lender in writing
of any of the following (and shall deliver to Lender copies of any
related written communications, complaints, orders, judgments and
other documents relating to the following) of which an officer of
Camden has actual knowledge:
(a) Defaults . The occurrence of
any Event of Default or any Potential Event of Default under this
Agreement or any other Loan Document or any loan document in
connection with a Supplemental Loan;
(b) Regulatory Proceedings . The
commencement of any rulemaking or disciplinary proceeding or the
promulgation of any proposed or final rule which would have, or may
reasonably be expected to have, a Material Adverse Effect; the
receipt of notice from any Governmental Authority having
jurisdiction over Borrower that Borrower is being placed under
regulatory supervision, any license, Permit, charter, membership or
registration material to the conduct of Borrower’s business
or the Mortgaged Properties is to be suspended or revoked or
Borrower is to cease and desist any practice, procedure or policy
employed by Borrower in the conduct of its business, and such
cessation would have, or may reasonably be expected to have, a
Material Adverse Effect;
(c) Bankruptcy Proceedings . The
commencement of any proceedings by or against Borrower or Guarantor
under any applicable bankruptcy, reorganization, liquidation,
insolvency or other similar law now or hereafter in effect or of
any proceeding in which a receiver, liquidator, trustee or other
similar official is sought to be appointed for any such
party;
(d) Environmental Claim . The
receipt from any Governmental Authority or other Person of any
notice of violation, claim, demand, abatement, order or other order
or direction (conditional or otherwise) for any damage, including
personal injury (including sickness, disease or death), tangible or
intangible property damage, contribution, indemnity, indirect or
consequential damages, damage to the environment, pollution,
contamination or other adverse effects on the environment, removal,
cleanup or remedial action or for fines, penalties or restrictions,
resulting from or based upon the existence or occurrence, or the
alleged existence or occurrence, of a Hazardous Substance Activity
on any Mortgaged Property in violation of any law or the violation,
or alleged violation, of any Hazardous Materials Laws in connection
with any Mortgaged Property or any of the other assets of
Borrower;
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(e) Material Adverse Effects . The
occurrence of any act, omission, change or event (including the
commencement or written threat of any proceedings by or against
Borrower in any Federal, state or local court, or before any
Governmental Authority, or before any arbitrator), that has, or
would have, a Material Adverse Effect, subsequent to the date of
the most recent audited financial statements of Borrower delivered
to Lender pursuant to Section 8.03 ;
(f) Accounting Changes . Any
material change in Borrower’s accounting policies or
financial reporting practices;
(g) Legal and Regulatory Status .
The occurrence of any act, omission, change or event, including any
Governmental Approval, the result of which is to change or alter in
any way the legal or regulatory status of Borrower; if such act,
omission, change or event has or may reasonably be expected to
have, a Material Adverse Effect; and
(h) Change
in Senior Management . Any change in the identity of Senior
Management.
Section 8.08. Compliance with Applicable
Law.
Borrower shall comply in all material respects
with all Applicable Laws now or hereafter affecting any Mortgaged
Property or any part of any Mortgaged Property or requiring any
alterations, repairs or improvements to any Mortgaged Property.
Borrower shall procure and continuously maintain in full force and
effect, and shall abide by and satisfy all material terms and
conditions of all Permits, and shall comply with all written
notices from Governmental Authorities.
Section 8.09. Alterations to the
Mortgaged Properties.
Except as otherwise provided in the Loan
Documents, Borrower shall have the right to undertake any
alteration, improvement, demolition, removal or construction
(collectively, “ Alterations ”) to the
Mortgaged Property which it owns without the prior consent of
Lender; provided, however, that in any case, no such
Alteration shall be made to any Mortgaged Property without the
prior written consent of Lender if such Alteration could reasonably
be expected to adversely affect the value of such Mortgaged
Property or its operation as a multifamily housing facility in
substantially the same manner in which it is being operated on the
date such property became Collateral, the construction of such
Alteration could reasonably be expected to result in interference
to the occupancy of tenants of such Mortgaged Property such that
tenants in occupancy with respect to five percent (5%) or more of
the Leases would be permitted to terminate their Leases or to abate
the payment of all or any portion of their rent, or such Alteration
will be completed in more than fifteen (15) months from the
date of commencement or in the last year of the Term of this
Agreement. Notwithstanding the foregoing, Borrower must obtain
Lender’s prior written consent to construct Alterations with
respect to the Mortgaged Property costing in excess of, with
respect to any Mortgaged Property, the number of units in such
Mortgaged Property multiplied by $2,000, but in any event, costs in
excess of $250,000 and Borrower must give prior written notice to
Lender of its intent to construct Alterations with respect to such
Mortgaged Property costing in excess of $100,000; provided,
however, that the preceding requirements shall not be applicable to
Alterations made, conducted or undertaken by Borrower as part of
Borrower’s routine maintenance, and repair or replacement of
obsolete equipment of the Mortgaged Properties as required by the
Loan Documents. Notwithstanding anything contained in this
paragraph, in the event that the cost of an Alteration is less than
$100,000 for any Mortgaged Property and such Alteration shall take
place in the last year of the Term of this Agreement, the Borrower
shall not be required to request the prior written consent of
Lender prior to making such Alteration.
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Section 8.10. Loan Document
Taxes.
If any tax, assessment or Imposition (other than
a franchise tax or excise tax imposed on or measured by, the net
income or capital (including branch profits tax) of Lender (or any
transferee or assignee thereof, including a participation holder))
(“ Loan Document Taxes ”) is levied,
assessed or charged by the United States, or any State in the
United States, or any political subdivision or taxing authority
thereof or therein upon any of the Loan Documents or the
obligations secured thereby, the interest of Lender in the
Mortgaged Properties, or Lender by reason of or as holder of the
Loan Documents, Borrower shall pay all such Loan Document Taxes to,
for, or on account of Lender (or provide funds to Lender for such
payment, as the case may be) within thirty (30) days after
written notice from Lender and shall promptly furnish proof of such
payment to Lender, as applicable. In the event of passage of any
law or regulation permitting, authorizing or requiring such Loan
Document Taxes to be levied, assessed or charged, which law or
regulation in the opinion of counsel to Lender may prohibit
Borrower from paying the Loan Document Taxes to or for Lender,
Borrower shall enter into such further instruments as may be
permitted by law to obligate Borrower to pay such Loan Document
Taxes.
Section 8.11. Further
Assurances.
Borrower, at the request of Lender, shall
execute and deliver and, if necessary, file or record such
statements, documents, agreements, UCC financing and continuation
statements and such other instruments and take such further action
as Lender from time to time may reasonably request as reasonably
necessary, desirable or proper to carry out more effectively the
purposes of this Agreement or any of the other Loan Documents or to
subject the Collateral to the lien and security interests of the
Loan Documents or to evidence, perfect or otherwise implement, to
assure the lien and security interests intended by the terms of the
Loan Documents or in order to exercise or enforce its rights under
the Loan Documents. If Lender believes that an
“all-asset” collateral description, as contemplated by
Section 9-504(2) of the UCC, is appropriate as to any
Collateral under any Loan Document, the Lender is irrevocably
authorized to use such a collateral description, whether in one or
more separate filings or as part of the collateral description in a
filing that particularly describes the collateral.
Section 8.12. Transfer of Ownership
Interests in Borrower or Guarantor.
(a) Prohibition on Transfers .
Subject to paragraph (b) of this Section, neither Borrower nor
Guarantor shall cause or permit a Transfer or a Change of
Control.
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(b) Permitted Transfers .
Notwithstanding the provisions of paragraph (a) of this
Section, the following Transfers by Borrower or Guarantor (or
owners of interests in Guarantor), upon prior written notice to
Lender (however, prior notice will not be required with respect to
the Transfers described in subsections (i), (ii) or
(iii) below), are permitted without the consent of Lender (or
the payment of any fee):
(i) The issuance by Camden of additional
stock and the subsequent Transfer of such stock and the issuance by
Camden Summit and Camden OP of additional partnership units and
subsequent Transfer of such units; provided, however, that no
Change in Control occurs as the result of such Transfer.
(ii) A merger with or acquisition of
another entity by Camden (or, with respect to a merger solely to
reincorporate in another state, by Camden into another entity),
provided that Camden is the surviving entity (other than a merger
to reincorporate in another state when the other entity can be the
surviving entity in which case Lender is satisfied that the
surviving corporation in such merger shall succeed to all the
rights, properties, assets and liabilities of Camden) after such
merger or acquisition, no Change in Control occurs, and such merger
or acquisition does not result in an Event of Default, as such
terms are defined in this Agreement.
(iii) The Transfer of shares of common
stock of Camden; provided, however, that no Change in Control
occurs as the result of such Transfer.
(iv) A Transfer of Ownership Interests in
CPT-LP, Inc.; provided, however, after such Transfer, CPT-LP, Inc.
shall continue to own at least 51% of the Ownership Interests in
Camden OP.
(v) A Transfer of Ownership Interests in
Camden Summit; provided, however, after such Transfer, Camden
General Partner shall maintain Control of Camden Summit and shall
continue to own at least 51% of the Ownership Interests in Camden
Summit.
(vi) A Transfer of Ownership Interests in
Camden OP; provided, however, after such Transfer, CPT-GP, Inc.
shall maintain Control of Camden OP and CPT-LP, Inc. shall continue
to own at least 51% of the Ownership Interests in Camden
OP.
(vii) A Transfer of Ownership Interests in
Camden Legacy Park Member; provided, however, after such Transfer,
Camden OP shall maintain Control of Camden Legacy Park Member and
shall continue to own at least 51% of the Ownership Interests in
Camden Legacy Park Member.
(viii) A Transfer of Ownership Interests in
Camden CSP Member; provided, however, after such Transfer, Camden
Summit shall maintain Control of Camden CSP Member and shall
continue to own at least 51% of the Ownership Interests in Camden
CSP Member.
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(ix) A Transfer of Ownership Interests in
Camden CUSA Member; provided, however, after such Transfer, Camden
USA shall maintain Control of Camden CUSA Member and shall continue
to own at least 51% of the Ownership Interests in Camden CUSA
Member.
(x) A Transfer of Ownership Interests in
Camden CPT Member; provided, however, after such Transfer, Camden
shall maintain Control of Camden CPT Member and shall continue to
own at least 51% of the Ownership Interests in Camden CPT
Member.
(xi) A Transfer of any or all, direct or
indirect, Ownership Interests in Borrower to any wholly-owned
subsidiary of Camden.
Section 8.13. Transfer of Ownership of
Mortgaged Property.
(a) Prohibition on Transfers .
Subject to paragraph (b) of this Section, neither Borrower nor
Guarantor shall cause or permit a Transfer of all or any part of a
Mortgaged Property or interest in any Mortgaged
Property.
(b) Permitted Transfers .
Notwithstanding provision (a) of this Section, the following
Transfers of a Mortgaged Property by Borrower or Guarantor, upon
prior written notice to Lender (however, prior notice will not be
required with respect to the Transfers permitted pursuant to
subsections (i) and (ii) below), are permitted without
the consent of Lender (or the payment of any fee):
(i) The grant of a leasehold interest in
individual dwelling units or commercial spaces in accordance with
the Security Instrument.
(ii) A sale or other disposition of
obsolete or worn out personal property which is contemporaneously
replaced by comparable personal property of equal or greater value
which is free and clear of liens, encumbrances and security
interests other than those created by the Loan Documents or
Permitted Liens.
(iii) The creation of a mechanic’s or
materialmen’s lien or judgment lien against a Mortgaged
Property which is released of record or otherwise remedied to
Lender’s satisfaction within thirty (30) days of the
date of creation.
(iv) The grant of an easement if, prior to
the granting of the easement, Borrower or Camden Summit (with
respect to the Mortgaged Property known as Camden Russett) causes
to be submitted to Lender all information required by Lender to
evaluate the easement, and if Lender consents to such easement
based upon Lender’s determination that the easement will not
materially affect the operation of the Mortgaged Property or
Lender’s interest in the Mortgaged Property and Borrower or
Camden Summit (with respect to the Mortgaged Property known as
Camden Russett) pays to Lender, on demand, all reasonable third
party out-of-pocket costs and expenses incurred by Lender in
connection with reviewing Borrower’s or Camden Summit’s
(with respect to the Mortgaged Property known as Camden Russett)
request. Lender shall not unreasonably withhold its consent to or
withhold its agreement to subordinate the lien of a Security
Instrument to the grant of a utility easement serving a Mortgaged
Property to a publicly operated utility, or the grant of an
easement related to expansion or widening of roadways, provided
that any such easement is in form and substance reasonably
acceptable to Lender and does not materially and adversely affect
the access, use or marketability of a Mortgaged
Property.
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(c) Assumption of Collateral Pool .
Notwithstanding paragraph (a) of this Section, a Transfer of
the entire Collateral Pool may be permitted with the prior written
consent of Lender if each of the following requirements is
satisfied:
(i) the transferee (“ New
Collateral Pool Borrower ”) is a Single Purpose
entity, and executes an assumption agreement that is acceptable to
Lender pursuant to which such New Collateral Pool Borrower assumes
all obligations of Borrower and Camden Summit (with respect to the
Mortgaged Property known as Camden Russett) under all the
applicable Loan Documents and Supplemental Loan
Documents;
(ii) the applicable Loan Documents and
Supplemental Loan Documents shall be amended and restated as deemed
necessary or appropriate by Lender to meet the then-applicable
requirements of Fannie Mae; provided, however, any waivers granted
in connection with the Term Loan or Supplemental Loan will not be
reinstated unless specifically approved by Lender and Fannie
Mae;
(iii) after giving effect to the
assumption, the requirements of Section 6.05 and the General
Conditions contained in Section 6.01 shall be
satisfied;
(iv) New Collateral Pool Borrower shall
make such deposits to the reserves or escrow funds established
under the Loan Documents and Supplemental Loan Documents, including
replacement reserves, completion/repair reserves, and all other
required escrow and reserve funds at such times and in such amounts
as determined by Lender at the time of the assumption;
(v) New Collateral Pool Borrower shall
propose a guarantor acceptable to Lender, which guarantor executes
and delivers a guaranty acceptable to Lender provided that the
guaranty is guaranteeing a non-recourse loan with comparable
exceptions to non-recourse as set forth in Section
14.01;
(vi) Lender shall be the servicer of the
loan; and
(vii) the requirements of Section 8.14
are satisfied.
Section 8.14. Consent to Prohibited
Transfers.
(a) Consent to Prohibited Transfers
. Lender may, in its sole and absolute discretion, consent to a
Transfer that would otherwise violate Sections 8.12 and
8.13 if, prior to the Transfer, Borrower or Guarantor, as
the case may be, has satisfied or caused to be satisfied each of
the following requirements:
(i) the submission to Lender of all
information required by Lender to make the determination required
by this Section;
(ii) the
absence of any Event of Default;
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(iii) the transferee meets all of the
eligibility, credit, management and other standards (including any
standards with respect to previous relationships between Lender and
the transferee and the organization of the transferee) customarily
applied by Lender at the time of the proposed Transfer to the
approval of borrowers or guarantors, as the case may be, in
connection with the origination or purchase of similar mortgages,
deeds of trust or deeds to secure debt on multifamily
properties;
(iv) in the case of a Transfer of direct or
indirect ownership interests in Borrower or Guarantor, as the case
may be, if transferor or any other person has obligations under any
Loan Documents, the execution by the transferee of one (1) or
more individuals or entities acceptable to Lender and/or Fannie Mae
of an assumption agreement that is acceptable to Lender and that,
among other things, requires the transferee to perform all
obligations of transferor or such person set forth in such Loan
Document, and may require that the transferee comply with any
provisions of this Instrument or any other Loan Document which
previously may have been waived by Lender and/or Fannie
Mae;
(v) Lender’s receipt of all of the
following:
(1) a transfer fee equal to one
(1) percent of the unpaid Outstanding principal balance of the
Term Loan.
(2) In addition, Borrower shall be required
to reimburse Lender for all of Lender’s reasonable
out-of-pocket costs (including reasonable attorneys’ fees)
incurred in reviewing the Transfer request;
(vi) the Transfer will not result in a
significant modification under Section 1001 of the Internal
Revenue Code of any Fixed Loan or any Variable Loan that has been
securitized in a mortgage-backed security.
Section 8.15. Date-Down
Endorsements.
Before the release or substitution of a
Mortgaged Property and at any time and from time to time that
Lender has reason to believe that an additional lien may encumber a
Mortgaged Property, Lender may obtain an endorsement to each Title
Insurance Policy containing a revolving credit endorsement,
amending the effective date of each such Title Insurance Policy to
the date of the title search performed in connection with the
endorsement. Borrower shall pay for the cost and expenses incurred
by Lender to the Title Company in obtaining such endorsement,
provided that, for each Title Insurance Policy, it shall not be
liable to pay for more than one (1) such endorsement in any
consecutive twelve (12) month period.
Section 8.16. Ownership of Mortgaged
Properties.
Borrower shall be the sole owner of each of the
Mortgaged Properties free and clear of any Liens other than
Permitted Liens.
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Section 8.17. Compliance with Net Worth
Test.
Camden shall at
all times maintain its Net Worth so that it is not less than:
$325,000,000.
Section 8.18. Compliance with Liquidity
Test.
Camden shall at
all times maintain cash and Cash Equivalents of not less than
$20,000,000.
Section 8.19. Change in Property
Manager.
Borrower shall give Lender notice of any change
in the identity of the property manager of each Mortgaged Property,
and except with respect to property managers which are Affiliates
of the applicable Borrower, no such change shall be made without
the prior consent of Lender.
Any management agreement must be in form and
substance satisfactory to Lender. Borrower agrees to enter into and
cause any property manager to enter into an assignment and
subordination of property management agreement in form and
substance satisfactory to Lender and any other documents or
agreements Lender shall deem necessary in connection with the
execution of any property management agreement.
Section 8.20. Single Purpose Entity
.
Borrower and each general partner or managing
member of Borrower shall maintain itself as a Single Purpose
entity, provided, however, that (i) Borrower may own more than
one Mortgaged Property, each of which is part of the Collateral
Pool and (ii) Borrower and each general partner or managing
member may commingle its funds with Camden provided that such funds
are separately identified and accounted for.
Borrower shall at all times remain in compliance
in all material respects with all applicable provisions of ERISA,
if any, and shall not incur any liability to the PBGC on a Plan
under Title IV of ERISA. Neither the Borrower, nor any member of
the Controlled Group is or ever has been obligated to contribute to
any Multiemployer Plan. The assets of the Borrower do not
constitute plan assets within the meaning of Department of Labor
Regulation §2510.3-101 of any employee benefit plan subject to
Title I of ERISA.
Section 8.22. Consents or
Approvals.
Borrower shall obtain any required consent or
approval of any creditor of Borrower, any Governmental Authority or
any other Person to perform its obligations under this Agreement
and any other Loan Documents.
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Section 8.23. Post-Closing
Obligations .
Borrower shall use commercially reasonable
efforts to deliver to Lender, at Borrower’s sole cost and
expense, no later than thirty (30) days from the Initial
Closing Date (“Estoppel and SNDA Delivery Date”) the
estoppel certificates and subordination, non-disturbance and
attornment agreements as described below in form and substance
satisfactory to Lender, provided, however, on a rolling thirty
(30) day basis, Borrower shall have the right to extend the
Estoppel and SNDA Delivery Date for an additional thirty
(30) days if Borrower furnishes proof satisfactory to Lender
that it is diligently pursuing and undertaking all commercially
reasonable efforts to obtain an estoppel certificate and a
subordination, non-disturbance and attornment agreement as
described below. Borrower shall pay, or reimburse Lender for, all
reasonable out-of-pocket third party legal fees and expenses
incurred by Lender and by Fannie Mae in respect of the review
and/or negotiation of such estoppel certificates and subordination,
non-disturbance and attornment agreements.
(a) Tenant Estoppel Certificate from Moto
Enterprises, Inc. for a sit-in and take-out coffee and tea house
located on the property commonly known as Camden Harbor
View.
(b) Tenant Estoppel Certificate from Frank
Buono for a family-style Italian restaurant located on the property
commonly known as Camden Harbor View.
(c) Tenant Estoppel Certificate from Design
X Manufacturing, Inc. for the operation of a salon furniture
showroom and design center located on the property commonly known
as Camden Harbor View.
(d) Tenant Estoppel Certificate from
Healthcare Partners Medical Group for general medical office use
located on the property commonly known as Camden Harbor
View.
(e) Tenant Estoppel Certificate from
Mosher’s Gourmet, Inc. for a sit-in and take-out
delicatessen-style restaurant located on the property commonly
known as Camden Harbor View.
(f) Tenant Estoppel Certificate from Andrew
M. Kripp for an upscale hair salon located on the property commonly
known as Camden Harbor View.
(g) Tenant Estoppel Certificate from Stuart
Smith and Lisa Smith for an upscale wine bar located on the
property commonly known as Camden Harbor View.
(h) Tenant Estoppel Certificate from Yoga
World Studio, Inc. for the operation of a yoga studio located on
the property commonly known as Camden Harbor View.
(i) Subordination, Non-Disturbance and
Attornment Agreement by and between Camden USA, Inc. and Moto
Enterprises, Inc. for a sit-in and take-out coffee and tea house
located on the property commonly know as Camden Harbor View.
Borrower shall, at Borrower’s sole cost and expense, make
immediate arrangements for delivery to the Title Company with fully
executed instructions directing the Title Company to file and/or
record such Subordination, Non-Disturbance and Attornment Agreement
in the recorder’s office in the County of Los Angeles, State
of California.
36
(j) Subordination, Non-Disturbance and
Attornment Agreement by and between Camden USA, Inc. and Frank
Buono for a family-style Italian restaurant located on the property
commonly know as Camden Harbor View. Borrower shall, at
Borrower’s sole cost and expense, make immediate arrangements
for delivery to the Title Company with fully executed instructions
directing the Title Company to file and/or record such
Subordination, Non-Disturbance and Attornment Agreement in the
recorder’s office in the County of Los Angeles, State of
California.
(k) Subordination, Non-Disturbance and
Attornment Agreement by and between Camden USA, Inc. and Design X
Manufacturing, Inc. for the operation of a salon furniture
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