OFFICE OF THE MAYOR
CITY OF CHICAGO
LORI E. LIGHTFOOT
MAYOR
January 26, 2022
TO THE HONORABLE, THE CITY COUNCIL OF THE CITY OF CHICAGO
Ladies and Gentlemen:
At the request of the Commissioner of Housing, I transmit herewith an ordinance authorizing financial assistance and the conveyance of city-owned land to RS Affordable I LLC.
Your favorable consideration of this ordinance will be appreciated.
ORDINANCE
WHEREAS, by virtue of Section 6(a) of Article Vll of the 1970 Constitution of the State of • Illinois, the City of Chicago (the "City") is a home rule unit of local government and as such may exercise any power and perform any function pertaining to its government and affairs; and
WHEREAS, as a home rule unit and pursuant to the Constitution, the City is authorized and empowered to issue multi-family housing revenue obligations for the purpose of financing the cost of the acquisition, construction, rehabilitation, development, and equipping an affordable multi-family housing facility for low- and moderate-income families located in the City ("Multi-Family Housing Financing"); and
WHEREAS, the City has determined that there exists within the City a serious shortage of decent, safe and sanitary rental housing available for persons of low- and moderate-income and that the continuance of a shortage of affordable rental housing is harmful to the health, prosperity, economic stability and general welfare ofthe City; and
WHEREAS, by this ordinance (this "Ordinance"), the City Council of the City (the "City Council") has determined that it is necessary and in the best interests ofthe City to provide Multi-Family Housing Financing and certain other funding, as provided herein, to RS Affordable I LLC, an Illinois limited liability company (the "Borrower"), the managing member of which is RS 3B LLC, an Illinois limited liability company, (the "Managing Member") the sole member of which is LR ABLA LLC, an Illinois limited liability company, to enable it to pay or reimburse a portion ofthe costs of acquiring, leasing, constructing, rehabilitating and equipping of low- and moderate-income residential facilities and related common facilities and containing approximately 309 residential rental apartments (of which 80 units will be set aside for tenants of the CHA (as hereinafter defined)) including approximately 130 apartments to be rented to households earning up to 50% of area median income ("AMI"), approximately 153 apartments to be rented to households earning up to 60% of AMI, approximately 26 apartments to be rented to households earning up to 80% of AMI (together with related common areas along with parking lot facilities and as further described on Exhibit A hereto, the "Bond Project"), on property located at 1002 South Racine Avenue, 1257 West Roosevelt Road, 1357 West Roosevelt Road, 919-925 South Ada Street (919-925 South Ada Street will contain the National Public Housing Museum in addition to residential units and the museum portion hereinafter referred to as the "Museum Property") and scattered sites along Arthington St., Taylor St., Lytle St., Racine Ave., Roosevelt Rd., Blue Island Ave., Washburn St. and 13th Street in Chicago, Cook County, Illinois, as more particularly described on Exhibit F hereto (collectively, the "Property"), and to pay a portion of the costs of issuance and other costs incurred in connection therewith; and
WHEREAS, by this Ordinance, the City Council has determined that it is necessary and in the best interests of the City to enter into a funding loan agreement (the "Funding Loan Agreement") with (i) CIBC Bank USA, an Illinois state chartered bank (the "Series A Funding Lender"), pursuant to which the City will borrow an aggregate principal amount not to exceed Thirty-Three Million Five Hundred Thousand Dollars ($33,500,000) (the "Series A Funding Loan") for a portion of the purposes set forth above and in evidence of its limited, special obligation to repay that borrowing, issue a tax-exempt revenue note, to be designated as the Multi-Family Housing Revenue Note (Roosevelt Square Phase 3B), Series 2022A (the "Series A Note") and (ii) BMO Harris Bank, N.A , a national banking association (the "Series B Funding Lender"), pursuant to which the City will borrow an aggregate principal amount not to exceed Thirty-Three Million Five Hundred Thousand Dollars ($33,500,000) (the "Series B Funding
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Loan" and, together with the Series A Funding Loan, collectively, the "Funding Loans") for a portion of the purposes set forth above and in evidence of its limited, special obligation to repay that borrowing, issue a tax-exempt revenue note, to be designated as the Multi-Family Housing Revenue Note (Roosevelt Square Phase 3B), Series 2022B (the "Series B Note" and, together with the Series A Note, collectively, the "Notes") under the terms and conditions of this Ordinance and the Funding Loan Agreement, and the City will thereafter loan the proceeds ofthe Series A Funding Loan to the Borrower (the "Series A Borrower Loan") pursuant to a borrower loan agreement (the "Borrower Loan Agreement") between the City and the Borrower, as evidenced by that certain Borrower promissory note (the "Series A Borrower Note") and thereafter loan the proceeds of the Series B Funding Loan to the Borrower (the "Series B Borrower Loan" and, together with the Series A Borrower Loan, the "Borrower Loans") pursuant to such Borrower Loan Agreement, as evidenced by that certain Borrower promissory note (the "Series B Borrower Note" and, together with the Series A Borrower Note, the "Borrower Notes"), in order to finance a portion of the cost of the Bond Project in return for loan payments sufficient to pay, when due, the principal of, prepayment premium, if any, and interest on the Notes; and
WHEREAS, the Borrower also intends to separately finance and develop approximately 97 market rate apartments on the properties located at 1002 South Racine Avenue, 1257 West Roosevelt Road, 1357 West Roosevelt Road and on a portion of the building located at 919-925 South Ada St. (the "Market Rate Project") as well as rehabilitate the Museum Property (the "Museum Rehabilitation Project," and collectively with the Bond Project and Market Rate Project, the "Project"); and
WHEREAS, the Series A Funding Lender and the Series B Funding Lender have also agreed to provide a construction loan in the amount of approximately $33,000,000, comprised of two (2) separate notes, one in an amount of approximately $16,500,000 funded by the Series A Funding Lender and one in an amount of approximately $16,500,000 funded by the Series B Funding Lender, to finance a portion of the Market Rate Project and the Museum Rehabilitation Project (the "Construction Loan") and the terms of such Construction Loan are further described on Exhibit A hereof; and
WHEREAS, the Chicago Housing Authority, an Illinois municipal corporation under the Housing Authorities Act, as amended (310 ILCS 10/1 et seq.) (the "CHA"), has indicated that it expects to make certain funds from CHA sources available for the Bond Project which, when available, may be used to secure and repay a portion ofthe Notes; and
WHEREAS, the principal of, prepayment premium, if any, and interest payable on the Notes will be secured by, among other things, the Borrower Notes, a mortgage on the Property and certain other related collateral, by certain capital contributions to be made to the Borrower by its investor member(s) in connection with the allocation to the Borrower of federal low-income housing tax credits and by pledges and/or assignments of certain funds, personal property, and contractual rights of the Borrower and its affiliates (including certain funds from CHA sources as described above); and
WHEREAS, the Funding Loans and the Notes and the obligation to pay interest thereon do not now and shall never constitute an indebtedness of or an obligation of the City, the State of Illinois or any political subdivision thereof, within the purview of any Constitutional limitation or statutory provision, or a charge against the general credit or taxing powers of any of them. No party to the Funding Loan Agreement or holder of any Notes shall have the right to compel the taxing power of the City, the State of Illinois or any political subdivision thereof to pay any principal
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installment of, prepayment premium, if any, or interest on the Notes or obligations under the Funding Loan Agreement; and
WHEREAS, in connection with the execution and delivery ofthe Funding Loan Agreement and the issuance of the Notes, the City Council has determined by this Ordinance that it is necessary and in the best interests of the City to enter into (i) the Funding Loan Agreement, providing for the security for and terms and conditions of the Funding Loans, and the Notes to be issued thereunder, (ii) the Borrower Loan Agreement providing for the loan of the proceeds of the Funding Loans to the Borrower and the use of such proceeds, (iii) one or more tax regulatory agreements and/or tax certificates (each, a "Tax Agreement" and collectively, the "Tax Agreements") between the City and the Borrower, and (iv) a Land Use Restriction Agreement between the City and the Borrower (the "Land Use Restriction Agreement"); and
WHEREAS, pursuant to an ordinance adopted by the City Council on November 4, 1998, and published at pages 80527-80630 of in the Journal of the Proceedings of the City Council (the "Journal") of such date, a certain redevelopment plan and project (the "Roosevelt/Racine Plan") for the Roosevelt/Racine Tax Increment Financing Redevelopment Project Area (the "Roosevelt/Racine Area") was approved pursuant to the Illinois Tax Increment Allocation Redevelopment Act, as amended (65 ILCS 5/11-74.4-1 et seq.) (the "Act"); and
WHEREAS, pursuant to an ordinance adopted by the City Council on November 4, 1998, and published at pages 80630-80636 ofthe Journal of such date, the Roosevelt/Racine Area was designated as a redevelopment project area pursuant to the Act; and
WHEREAS, pursuant to an ordinance (the "TIF Ordinance") adopted by the City Council on November 4, 1998, and published at pages 80636-80642 of the Journal of such date, tax increment allocation financing was adopted pursuant to the Act as a means of financing certain Roosevelt/Racine Area redevelopment project costs (as defined in the Act) incurred pursuant to the Roosevelt/Racine Plan; and
WHEREAS, to induce certain redevelopment pursuant to the Act, the City Council adopted the ordinances on February 5, 1998: approving and adopting a tax increment financing redevelopment project and plan for the Western/Ogden Redevelopment Project Area; designating the Western/Ogden Redevelopment Project Area as a tax increment financing district; and adopting tax increment financing for the Western/Ogden Redevelopment Project Area (the aforesaid Ordinances are collectively referred to herein as the "Western/Ogden TIF Ordinances", the redevelopment plan approved by the Western/Ogden TIF Ordinances is referred to herein as the "Western/Ogden Redevelopment Plan," the redevelopment project area created by the Western/Ogden TIF Ordinances, as amended, is referred to herein as the "Western/Ogden Redevelopment Area," and Increment collected from the Western/Ogden Redevelopment Area shall be known as the "Western/Ogden Increment"); and
WHEREAS, pursuant to Section 5/11-74.4-4(q) of the Act, the City can use Increment from one redevelopment project area for eligible redevelopment project costs in another redevelopment project area that is either contiguous to, or is separated only by a public right of way from, the redevelopment project area from which the Increment is received so long as the applicable redevelopment plans permit such use (the "Transfer Rights"); and
WHEREAS, the Roosevelt/Racine Redevelopment Area is either contiguous to, or is separated only by a public right of way from, the Western/Ogden Redevelopment Area, and
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WHEREAS, the Western/Ogden Redevelopment Plan permits the exercise of Transfer Rights with respect to Western/Ogden Increment and the Roosevelt/Racine Redevelopment Plan permits the receipt of Increment pursuant to Transfer Rights, and
WHEREAS, it is anticipated that the City may, in its discretion, exercise its Transfer Rights pursuant to the Act and the Roosevelt/Racine and Western/Ogden Redevelopment Plans to allocate and use a portion of Western/Ogden Increment as part of and not in addition to the City Funds (as defined below) for various portions of the Project; and
WHEREAS, the Project is necessary forthe redevelopment ofthe Roosevelt/Racine Area;
and
WHEREAS, the Borrower and Heartland Housing, Inc., an Illinois not-for-profit corporation ("Heartland Housing"), or an affiliate thereof acceptable to the City's Commissioner of Housing or a designee thereof (the "Authorized DOH Officer") (the Borrower and Heartland Housing or such affiliate hereinafter collectively referred to as the "Developer") will be obligated to undertake the Project in accordance with the terms and conditions of a proposed redevelopment agreement ("Redevelopment Agreement") to be executed by the Developer and the City, with such Project to be financed in part by certain pledged incremental taxes deposited from time to time in the Roosevelt/Racine Redevelopment Project Area Special Tax Allocation Fund for the Area (the "TIF Fund") pursuant to Section 5/11-74.4-8(b) ofthe Act ("Incremental Taxes"); and
WHEREAS, the CHA and the City each own a portion of the Property, as separately identified on Exhibit F, and
WHEREAS, the City acquired its portion ofthe Property (such portion, the "City Acquired Parcels") all or in part with funds provided by the CHA and Daniel E. Levin and The Habitat Company LLC, in their collective capacity as the receiver for CHA in the development of new non-elderly public housing (the "Receiver"), pursuant to that certain Amended and Restated Intergovernmental Agreement For Land Acquisition dated as of September 10, 2004 (the "2004 IGA"); and
WHEREAS, the CHA received the acquisition funds from HUD grant assistance; and
WHEREAS, each of the City Acquired Parcels marked with an asterisk on Exhibit F is encumbered with a HUD Declaration of Trust, granting HUD an interest in such property to secure the performance ofthe covenants in the HUD grant; and
WHEREAS, each HUD Declaration of Trust prohibits the City from transferring, conveying, assigning, leasing, mortgaging, pledging or otherwise encumbering the applicable City Acquired Parcels without HUD consent; and
WHEREAS, by Resolution No. 06-CDC-76, adopted by the Community Development Commission ("CDC") on September 12, 2006, the CDC authorized the City's Department of Planning and Development ("DPD") to publish notice of its intent to convey the City Acquired Parcels to the CHA or a developer affiliated with Borrower ("Affiliate") for the Roosevelt Square/ABLA HOPE VI transformation project and to request alternative proposals for the redevelopment of the property and sale of the City Acquired Parcels; and
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WHEREAS, DPD published notice advertising its intent to transfer the City Acquired Parcels to the CHA or the Affiliate and provided reasonable opportunity for other persons to submit alternative bids or proposals; and
WHEREAS, no alternative proposals were received by the deadline indicated in the aforesaid notices; and
WHEREAS, the City Council approved an ordinance on May 23, 2007, authorizing the City to convey the City Acquired Parcels to the CHA or the Affiliate for the redevelopment of the ABLA Homes, but the transfer of the City Acquired Parcels never took place; and
WHEREAS, Section 8 of the 2004 IGA requires that title to the City Acquired Parcels remain with the City until such City Acquired Parcels are sold to a developer, or transferred to the CHA to be ground leased to a developer, for their intended development purpose; and
WHEREAS, Section 8 of the 2004 IGA also provides that if no such intended development occurs within seven (7) years of the City's acquisition of the City Acquired Parcels, subject to three (3) one-year extensions, then the City may either retain title to the City Acquired Parcels and reimburse the CHA for its acquisition cost, or may sell the City Acquired Parcels for their fair market value and pay the proceeds from such sale to the CHA and/or the Receiver (or as otherwise directed by HUD); and
WHEREAS, the City acquired the City Acquired Parcels more than ten (10) years ago;
and
WHEREAS, the City now desires to amend the 2004 IGA in order to convey the City Acquired Parcels to the CHA for $1.00 per parcel for the Project, subject to HUD's release of the Declaration of Trust on any of such property, notwithstanding the expiration of the initial closing timeframe (including extensions) set forth in Section 8 of the 2004 IGA, and the CHA desires to accept such conveyance; and
WHEREAS, CHA intends to (i) make a donation to Heartland Housing of a 99-year ground lease of a portion of the Property, whereupon Heartland Housing will immediately assign its leasehold interest in such portion of the Property to the Borrower, who will develop the Bond Project on such portion of the Property and (ii) to make a donation to the Borrower or Heartland Housing of a 99-year ground lease of a portion of the Property, whereupon, if Heartland Housing is the assignee it will immediately assign its leasehold interest in such portion ofthe Property to the Borrower, and in either event the Borrower will develop the Market Rate Project on such portion ofthe Property; and
WHEREAS, The National Public Housing Museum, an Illinois not-for-profit corporation, intends to assign a portion of its ground lease with CHA to the Borrower for the Borrower to develop portions ofthe Bond Project, Market Rate Project and the Museum Rehabilitation Project; and
WHEREAS, pursuant to Resolution No. 21-CDC-27, the CDC has recommended that the Borrower be designated as the developer for the Project and DPD be authorized to negotiate, execute and deliver on behalf of the City a redevelopment agreement with the Borrower for the Project; and
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WHEREAS, it is anticipated that before or upon the issuance ofthe Notes, those portions of the Project comprising the Bond Project will be separately delineated from those portions of the Project comprising the Market Rate Project and the Museum Rehabilitation Project as part of a vertical separation which separates the Bond Project, the Market Rate Project and the Museum Rehabilitation Project by legal description; and
WHEREAS, it is anticipated that the Borrower will be the owner of the Bond Project and RS Market I, LLC, an Illinois limited liability company and affiliate of the Borrower, or another affiliate of the Borrower acceptable to the Authorized DOH Officer, will be the owner of the Market Rate Project; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CHICAGO, AS FOLLOWS:
Section 1. Incorporation of Recitals. The recitals contained in the preambles to this Ordinance are hereby incorporated into this Ordinance by this reference. All capitalized terms used in this Ordinance, unless otherwise defined herein, shall have the meanings ascribed thereto in the Funding Loan Agreement or the Redevelopment Agreement, as applicable.
Section 2. Findings and Determinations. The City Council hereby finds and determines that the delegations of authority that are contained in this Ordinance, including the authority to make the specific determinations described herein, are necessary and desirable because the City Council cannot itself as advantageously, expeditiously or conveniently exercise such authority and make such specific determinations. Thus, authority is granted to the Authorized Officer (as defined in Section 3) to establish the terms ofthe Funding Loan Agreement and related Notes, the Borrower Loan Agreement and the related Borrower Notes on such terms as and to the extent such officer determines that such terms are desirable and in the best financial interest of the City. Any such designation and determination by an Authorized Officer shall be signed in writing by such Authorized Officer and filed with the City Clerk and shall remain in full force and effect for all purposes of this Ordinance unless and until revoked, such revocation to be signed in writing by an Authorized Officer and filed with the City Clerk.
Section 3. Authorization of the Funding Loan Agreement, the Notes the Borrower Loan Agreement and Related Agreements. Upon the approval and availability of the additional financing as shown in Exhibit A (the "Additional Financing"), the execution and delivery of the Funding Loan Agreement and the issuance of the Notes in an aggregate principal amount of not to exceed $67,000,000 are hereby authorized. The aggregate principal amount of the Notes to be issued, and their division into one or more series of Notes, shall be as set forth in the Funding Loan Notification referred to in Section 6 below
The Funding Loan Agreement and the Notes shall contain a provision that they are executed and delivered under authority of this Ordinance. The maximum term of the Funding Loan shall not exceed 5 years from the date of execution and delivery of the Notes. The Notes shall bear interest at a rate or rates equal to the rate of interest on the related Borrower Loans as provided in the Borrower Loan Agreement (which shall not exceed the lesser of 10.0% or the maximum rate of interest allowable under state law) and shall be as determined by the Authorized Officer and shall be payable on the payment dates as set forth in the Funding Loan Agreement and the Funding Loan Notification. The Notes shall be dated, shall be subject to prepayment, shall be payable in such places and in such manner and shall have such other details and provisions as prescribed by the Funding Loan Agreement, the form(s) of the Notes therein and|1010|4854-5048-8834 9
the Funding Loan Notification. The provisions for execution, signatures, payment and prepayment, with respect to the Funding Loan Agreement and the Notes shall be as set forth in the Funding Loan Agreement and the form(s) of the Notes therein.
Each of (i) the Mayor of the City (the "Mayor"), the (ii) Chief Financial Officer of the City (as. defined below) or (in) any other officer designated in writing by the Mayor (the Mayor, the Chief Financial Officer or any such other officer being referred to as an "Authorized Officer") is hereby authorized to execute by their manual or, in the case of the Notes, manual or facsimile signature, and to deliver on behalf of the City, and the City Clerk and the Deputy City Clerk are hereby authorized to attest by their manual or, in the case of the Notes, manual or facsimile signature, the Funding Loan Agreement and the Notes, in substantially the form attached hereto as Exhibit B and made a part hereof and hereby approved, with such changes therein as shall be approved by the Authorized Officer executing the same, with such execution to constitute conclusive evidence of such officer's approval and the City Council's approval of any changes or revisions from the form of the Funding Loan Agreement and Notes therein attached to this Ordinance and reflecting the terms as determined in the Funding Loan Notification.
As used herein, the term "Chief Financial Officer" shall mean the Chief Financial Officer of the City appointed by the Mayor, or, if there is no such officer then holding said office, the City Comptroller.
Each Authorized Officer is hereby authorized to act as an authorized City representative (each an "Authorized City Representative") ofthe City forthe purposes provided in the Funding Loan Agreement.
An Authorized Officer is hereby authorized to execute and deliver on behalf of the City, and the City Clerk and the Deputy City Clerk are hereby authorized to attest, the Borrower Loan Agreement in substantially the form attached hereto as Exhibit C, and made a part hereof and hereby approved, with such changes therein as shall be approved by the Authorized Officer executing the same, with such execution to constitute conclusive evidence of such Authorized Officer's approval and the City Council's approval of any changes or revisions from the form of the Borrower Loan Agreement and the Borrower Notes therein attached to this Ordinance and reflecting the terms as determined in the Funding Loan Notification. ~
An Authorized Officer is hereby authorized to execute and deliver one or more Land Use Restriction Agreements on behalf of the City, in substantially the form attached hereto as Exhibit D and made a part hereof and hereby approved with such changes therein as shall be approved by the Authorized Officer executing the same, with such execution to constitute conclusive evidence of such Authorized Officer's approval and the City Council's approval ofany changes or revisions from the form of the Land Use Restriction Agreement attached to this Ordinance and reflecting the terms as determined in the Funding Loan Notification.
An Authorized Officer is hereby authorized to execute and deliver and the City Clerk and the Deputy City Clerk are hereby authorized to attest the Tax Agreements on behalf of the City, in substantially the forms of such documents used in previous tax-exempt multi-family housing financings (with appropriate revisions to reflect the terms and provisions of the Funding Loan Agreement and the Notes and the applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations promulgated thereunder), and with such other revisions in text as the Authorized Officer executing the same shall determine are necessary or desirable in connection with the exclusion from gross income for federal income tax purposes of interest on the Notes The execution of the Tax Agreements by the Authorized Officer shall be|1010|4854-5048-8834 9
deemed conclusive evidence of the approval of the City Council to the terms provided in the Tax Agreements.
An Authorized Officer is hereby authorized to execute and deliver on behalf of the City such security or collateral documents securing payment of the Notes as the Authorized Officer regards as appropriate, in substantially the form of the security documents used in previous issuances of tax-exempt bonds pursuant to programs similar to the Notes, with appropriate revisions to reflect the terms and provisions of the Notes and with such other revisions as the Authorized Officer executing the same shall determine are appropriate and consistent with the other provisions of this Ordinance. The execution of security or collateral documents by the Authorized Officer shall be deemed conclusive evidence of the approval of the City Council to the terms provided in such documents.
Section 4. Security for the Funding Loan Agreement and the Notes The
obligations of the City under the Funding Loan Agreement and the Notes shall be limited obligations of the City, payable solely from and/or secured by a pledge of the following security (other than certain Unassigned Rights ofthe City):
all right, title and interest of the City in, to and under the Borrower Loan Agreement and the Borrower Notes, including, without limitation, all rents, revenues and receipts derived by the City from the Borrower relating to the Bond Project and including, without limitation, all Pledged Revenues, Borrower Loan Payments and Additional Borrower Payments derived by the City under and pursuant to, and subject to the provisions of, the Borrower Loan Agreement; provided that the pledge and assignment made under the Funding Loan Agreement shall not impair or diminish the obligations of the City under the provisions ofthe Borrower Loan Agreement;
all right, title and interest of the City in, to and under, together with all rights, remedies, privileges and options pertaining to, the Funding Loan Agreement, and all other payments, revenues and receipts derived by the City under and pursuant to, and subject to the provisions of, the Funding Loan Agreement;
any and all moneys and investments from time to time on deposit in, or forming a part of, all funds and accounts created and held under the Funding Loan Agreement, subject to the provisions of the Funding Loan Agreement permitting the application thereof for the purposes and on the terms and conditions set forth therein;
any and all other real or personal property of every kind and nature or description, which may from time to time hereafter, by delivery or by writing of any kind, be subjected to the lien ofthe Funding Loan Agreement as additional security by the City or anyone on its part or with its consent, or which pursuant to any of the provisions of the Borrower Loan Agreement may come into the possession or control ofthe Funding Lender (as defined below) or a receiver appointed pursuant to the Funding Loan Agreement,
certain capital contributions to be made to the Borrower by its low income housing tax credit non-managing member in accordance with the terms and conditions of the operating agreement of the Borrower in connection with the allocation to the Borrower of federal low-income housing tax credits and certain other funds, personal property and contractual rights of the Borrower and its affiliates pledged and/or assigned to the Funding Lenders (which may include all or a portion of the CHA Loan), and
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(f) a mortgage on and security interest in the Bond Project and related collateral.
In order to secure the payment of the principal of, prepayment premium, if any, and interest on the Notes, such rights, proceeds and investment income are hereby pledged to the extent and for the purposes as provided in the Funding Loan Agreement and are hereby appropriated for the purposes set forth in the Funding Loan Agreement Nothing contained in this Ordinance shall limit or restrict the subordination of the pledge of such rights, proceeds and investment income as set forth in the Funding Loan Agreement to the payment of any other obligations of the City enjoying a lien or claim on such rights, proceeds and investment income as of the date of execution and delivery ofthe Funding Loan Agreement and the Notes, all as shall be determined by the Authorized Officer at the time of the execution and delivery of the Funding Loan Agreement and the Notes. The Funding Loan Agreement shall set forth such covenants with respect to the application of such rights, proceeds and investment income as shall be deemed necessary by the Authorized Officer in connection with the execution and delivery of the Funding Loan Agreement and the Notes.
Section 5. Delivery of the Funding Loan Agreement Sale and Delivery of Notes.
Subject to the terms and conditions ofthe Funding Loan Agreement and such additional terms as are set forth in the Funding Loan Notification with the approval of an Authorized Officer, the Notes shall be sold and delivered to CIBC Bank USA, an Illinois state chartered bank, and BMO Harris Bank, N.A., a national banking association, or such other funding lender as approved by an Authorized Officer (the "Funding Lenders"), and shall hold the Funding Loan Agreement and the Notes, subject to the terms and conditions of the required transferee representations (the "Required Transferee Representations") which shall be delivered to the City by the Funding Lender. Any subsequent Funding Lender approved by an Authorized Officer, to the extent required under the Funding Loan Agreement, may succeed the initial Funding Lenders as the registered holder of all or a portion of the Funding Loan, but only if such subsequent Funding Lender executes and delivers to the City the Required Transferee Representations, substantially in the form ofthe Required Transferee Representations set forth in the Funding Loan Agreement. The aggregate costs of origination of the Funding Loan paid from the proceeds of the Funding Loan to the Funding Lenders shall not exceed one and one half percent (1.5%) ofthe aggregate principal amount of the Notes.
Section 6. Funding Loan Notification. Subsequent to the execution and delivery of the Funding Loan Agreement and the sale of any Notes, the Authorized Officer shall file in the Office of the City Clerk a Funding Loan Notification for such Funding Loan Agreement and the Notes directed to the City Council setting forth (i) the aggregate original principal amount of, maturity schedule, redemption provisions for and nature of each series of the Notes sold, (ii) the extent of any tender rights to be granted to the holders of the Notes, (iii) the identity of the Funding Lenders, if different from CIBC Bank USA and BMO Harris Bank, N.A., (iv) the interest rates on the Notes and/or a description of the method of determining the interest rates applicable to the Notes from time to time, (v) the origination fee or other compensation paid to the Funding Lenders in connection with the origination of the Funding Loans and issuance of the Notes, and (vi) any other matter authorized by this Ordinance to be determined by an Authorized Officer at the time of the sale of any Notes. There shall be attached to such notification the final form of the Funding Loan Agreement, a specimen ofthe each ofthe Notes and the Borrower Loan Agreement.
Section 7. Limited Obligations The Notes, when issued and outstanding, will be limited obligations of the City, payable solely as provided in the Funding Loan Agreement The Notes and the interest thereon shall never constitute a debt or general obligation or a pledge of the faith, the credit or the taxing power of the City within the meaning of any Constitutional or|10 10|4854-5048-8834 9
statutory provision of the State of Illinois The Notes shall be payable solely from the funds pledged therefor pursuant to the terms of the Funding Loan Agreement herein described
Section 8. Use of Proceeds The proceeds from the Funding Loan (as evidenced by the sale of the Notes) shall be deposited as provided in the Funding Loan Agreement and used for the Bond Project.
Section 9. Volume Cap. The Funding Loan Agreement and the Notes are obligations taken into account under Section 146 of the Code in the allocation of the City's volume cap.
Section 10. Developer Designation. The Developer is hereby designated as the developer for the Project pursuant to Section 5/11-74.4-4 ofthe Act.
Section 11. Redevelopment Agreement. Upon the approval and availability of the Additional Financing, the City's Commissioner of DPD or a designee thereof (the "Authorized DPD Officer") is hereby authorized, with the approval of the City's Corporation Counsel as to form and legality, to negotiate, execute and deliver the Redevelopment Agreement and such other supporting documents as may be necessary to carry out and comply with the provisions of such agreements, with such changes, deletions and insertions as shall be approved by the persons executing such agreements. The Redevelopment Agreement shall be in substantially the form attached hereto as Exhibit E and made a part hereof and hereby approved with such changes therein as shall be approved by the Authorized DPD Officer executing the same, with such execution to constitute conclusive evidence of such officer's approval of any changes or revisions from the form of Redevelopment Agreement attached to this Ordinance.
Section 12. Payment of Incremental Taxes. The City Council hereby finds that the City is authorized to pay an aggregate amount equal to $17,000,000 ("City Funds") from Incremental Taxes deposited in the general account of the TIF Fund (the "General Account"), including up to $17,000,000 of Western/Ogden Increment upon exercise of the City's Transfer Rights to finance a portion ofthe eligible costs included within the Project, including securing any portion ofthe Additional Financing. The proceeds ofthe City Funds are hereby appropriated for the purposes set forth in this Section 12.
Section 13. Maintenance and Use of TIF Fund. Pursuant to the TIF Ordinance, the City has created the TIF Fund. The Chief Financial Officer of the City (or his or her designee) is hereby directed to maintain the TIF Fund as a segregated interest-bearing account, separate and apart from the City's Corporate Fund or any other fund ofthe City. Pursuant to the TIF Ordinance, all Incremental Taxes received by the City for the Roosevelt/Racine Area shall be deposited into the TIF Fund. The City is authorized to exercise its Transfer Rights from the Western/Ogden Increment into the TIF Fund in accordance with Section 12 above. The City shall use the funds in the TIF Fund to make payments pursuant to the terms of the Redevelopment Agreement.
Section 14. Proxies Each Authorized Officer may designate another to act as their respective proxy and to affix their respective signatures to each Note, whether in temporary or definitive form, and to any other instrument, certificate or document required to be signed by such Authorized Officer pursuant to this Ordinance or the Funding Loan Agreement. In each case, each shall send to the City Council written notice ofthe person so designated by each, such notice stating the name of the person so selected and identifying the instruments, certificates and documents which such person shall be authorized to sign as proxy for the Mayor and the Authorized Officer, respectively. A written signature of the Mayor or the Authorized Officer, respectively, executed by the person so designated underneath, shall be attached to each notice.
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Each notice, with signatures attached, shall be recorded in the Journal of Proceedings of the City Council of the City of Chicago and filed with the City Clerk When the signature of the Mayor is placed on an instrument, certificate or document at the direction of the Mayor in the specified manner, the same, in all respects, shall be as binding on the City as if signed by the Mayor in person When the signature of the Authorized Officer is so affixed to an instrument, certificate or document at the direction of the Authorized Officer in the specified manner, the same, in all respects, shall be as binding on the City as if signed by the Authorized Officer in person.
Section 15. Additional Authorization. Each Authorized Officer, the City Treasurer, and, upon the approval and availability of the additional financing as shown in Exhibit A (the "Additional Financing"), the Authorized DOH Officer are each hereby authorized to execute and deliver and the City Clerk and the Deputy City Clerk are each hereby authorized to enter into, execute and deliver such other documents and agreements, including, without limitation, any documents necessary to evidence the receipt or assignment of any collateral for the Funding Loan Agreement and the related Notes, the Borrower Loan Agreement or the Borrower Notes from the Borrower, and perform such other acts as may be necessary or desirable in connection with the City Agreements (as defined in Section 20 hereof), including, but not limited to, the exercise following the delivery date of the City Agreements of any power or authority delegated to such official under this Ordinance with respect to the City Agreements upon original execution and delivery, but subject to any limitations on or restrictions of such power or authority as herein set forth. Notwithstanding anything contained herein (including but not limited to Sections 3 and 11 hereof), if any portion of the Additional Financing is not approved and available at such time as the Authorized Officer and the Authorized DOH Officer otherwise deem it in the best interest of the City to execute the City Agreements, then the Authorized Officer and the Authorized DOH Officer may so execute the City Agreements (with such changes thereto as the Authorized Officer and the Authorized DOH Officer deem necessary and advisable) and any necessary ancillary documents and may impose such conditions upon the approval and availability of such Additional Financing as they deem necessary and advisable.
Section 16. Public Hearing. This City Council hereby directs that the Notes shall not be issued unless and until the requirements of Section 147(1) ofthe Code, including particularly the approval requirement following any required public hearing, have been fully satisfied, and that no contract, agreement or commitment to issue the Notes shall be executed or undertaken prior to satisfaction of the requirements of said Section 147(f) unless the performance of said contract, agreement or commitment is expressly conditioned upon the prior satisfaction of such requirements. All such actions taken prior to the enactment of this Ordinance are hereby ratified and confirmed.
Section 17. Severability. If any provision of this Ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such provision shall not affect any ofthe remaining provisions of this Ordinance.
Section 18. Administrative Fee. The City's Department of Housing (the "DOH") is hereby authorized to charge an administrative fee or fees in connection with the delivery and administration of the Funding Loan Agreement and the Notes, which shall be collected under such terms and conditions as determined by the Authorized DOH Officer and which shall be in an amount as determined by the Authorized DOH Officer but not to exceed the maximum amount permitted under Section 148 ofthe Code to avoid characterization ofthe Funding Loan Agreement and the Notes as "arbitrage bonds" as defined in such Section 148 Such administrative fee or fees shall be used by DOH for administrative expenses and other housing activities. Initially, such administrative fee or fees shall be an amount equal to (i) 1 5% of the original principal amount of
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4854-5048-8834 9
the Notes payable upon issuance of the Notes, plus (ii) an on-going compliance fee of $25 per unit payable annually.
Section 19. Reserve for Legal Expenses. The City is authorized to assess a legal reserve fee with respect to the Bond Project, payable upon issuance of the Notes from the proceeds of the Notes or from funds contributed by the Borrower, which shall be in an amount equal to 0.10% of the original principal amount of the Notes. Such fee shall be used by the City to pay legal costs or other expenses in connection with the Bond Project, the Notes, or other City issuances.
Section 20. No Recourse. No recourse shall be had for the payment of the principal of, prepayment premium, if any, or interest on any of the Notes or for any claim based thereon or upon any obligation, covenant or agreement contained in this Ordinance, the Funding Loan Agreement, the Notes, the Borrower Loan Agreement, the Land Use Restriction Agreement, the Tax Agreement, or the Redevelopment Agreement (collectively, the "City Agreements") against any past, present or future officer, member or employee of the City, or any officer, employee, director or trustee of any successor, as such, either directly or through the City, or any such successor, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all. such liability of any such member, officer, employee, director or trustee as such is hereby expressly waived and released as a condition of and consideration for the execution of the City Agreements and the issuance of the Notes.
Section 21. No Impairment. To the extent that any ordinance, resolution, rule, order or provision of the Municipal Code, or part thereof, is in conflict with the provisions of this Ordinance, the provisions of this Ordinance shall be controlling. No provision of the Municipal Code or violation of any provision of the Municipal Code shall be deemed to render voidable at the option of the City any document, instrument or agreement authorized hereunder or to impair the validity of this Ordinance or the instruments authorized by this Ordinance or to impair the rights of the holders of the Funding Loan and the Notes to receive payment of the principal of, prepayment premium, if any, or interest on the Note or to impair the security for the Funding Loan Agreement and the Notes; provided further that the foregoing shall not be deemed to affect the availability ofany other remedy or penalty for any violation ofany provision ofthe Municipal Code. Sections 2-44-070, 2-44-080(A)-(F) and 2-44-080(H)-(V) ofthe Municipal Code shall not apply to the Project or the Property.
Section 22. Sale of City Acquired Parcels to CHA. The sale of the City Acquired Parcels to the CHA for $1.00 per parcel is hereby approved, subject to HUD's release of the Declaration of Trust on any such parcels and notwithstanding the timeline for conveyance of such City Acquired Parcels in the 2004 IGA. The Mayor or her proxy is authorized to execute, and the City Clerk or the Deputy City Clerk is authorized to attest, one or more quitclaim deeds conveying the City Acquired Parcels to the CHA, for the Project.
Section 23. Effective Date. This Ordinance shall be in full force and effect immediately upon its passage and approval.
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Ordinance Exhibit A
Project and Financing
BORROWER: RS Affordable I LLC, an Illinois limited liability company, the managing
member of which is RS 3B LLC, an Illinois limited liability company, the sole member of which is LR ABLA LLC, an Illinois limited liability company
PROJECT: Acquisition, leasing, constructing, rehabilitating, developing, and equipping
of low- and moderate- income residential facilities and related common facilities and containing approximately 309 residential rental apartments (of which 80 units will be set aside for tenants of the CHA) including approximately 130 apartments to be rented to households earning up to 50% of AMI, approximately 153 apartments to be rented to households earning up to 60% of AMI, approximately 26 apartments to be rented to households earning up to 80% of AMI (together with related common areas along with parking lot facilities, the "Bond Project"). Additionally, acquisition, leasing, constructing and equipping of 97 market rate units (the "Market Rate Project") and rehabilitation of the Museum Property (the "Museum Rehabilitation Project" and, collectively with the Market Rate Project and the Bond Project, the "Project")
ADDITIONAL FINANCING:
The Notes, as described in this Ordinance. The Notes will be secured by a construction mortgage from the Borrower in favor ofthe holder ofthe Notes (the "Notes Mortgage"), as well as certain capital contributions to be made to the Borrower by its investor member and cash collateral, if necessary, pursuant to the terms of the Funding Loan Agreement. The Notes Mortgage will grant the holder ofthe Notes secured thereby a mortgage on the leasehold estate in the Bond Project that is senior in position subject to the terms of the CHA Regulatory and Operating Agreement.
CIBC/BMO Construction Loan
Amount: Approximately $33,000,000 comprised of two (2) separate notes, one in an amount up to $16,500,000 funded by CIBC and one in an amount up to $16,500,000 funded by BMO Harris, or such amount as may be acceptable to the Authorized DOH Officer.
Term: Approximately 4 years, or another term acceptable to the Authorized DOH Officer.
Source: CIBC Bank USA and/or BMO Harris Bank, N.A. or another entity acceptable to
the Authorized DOH Officer Interest: One Month Term SOFR plus 2.65%; provided that in no event will One Month
Term SOFR be deemed to be less than 0 15%, or such interest rate as may
be acceptable to the Authorized DOH Officer. Security. Mortgage on the leasehold estate in the Property and the Project, junior to the
Notes Mortgage, and/or such other security acceptable to the Authorized DOH
Officer.
A-1
.IN.S-loO-IX-NN.vl ')
BMO Harris Permanent Loan
Amount: Approximately $27,500,000. or such amount as may be acceptable to the
Authorized DOH Officer, upon conversion of the Series B Funding Loan
upon the satisfaction of conditions to conversion.
Term: Approximately 16 years following conversion, or another term acceptable
to the Authorized DOH Officer.
Source: BMO Harris Bank, N.A. or another entity acceptable to the Authorized DOH
Officer.
Interest: One Month Term SOFR plus 2.25%; provided that in no event will One Month Term SOFR be deemed to be less than 0.15%, or such interest rate as may be acceptable to the Authorized DOH Officer.
Security: First lien priority mortgage on the Bond Project following conversion, and/or such other security, acceptable to the Authorized DOH Officer.
CIBC Taxable Term Loan
Amount: Approximately $16,500,000, which will refinance the CIBC Tax-Exempt Funding Loan upon the satisfaction of the conditions to conversion, or such amount as may be acceptable to the Authorized DOH Officer.
Term: Approximately three years following conversion, or another term
acceptable to the Authorized DOH Officer.
Source: CIBC Bank USA or another entity acceptable to the Authorized DOH Officer.
Interest: Five year U.S. Treasury rate plus 215 basis points, or such interest rate as
may be acceptable to the Authorized DOH Officer. Security: First lien priority mortgage on the Market Rate Project following conversion,
and/or such other security acceptable to the Authorized DOH Officer.
CHA Loan(s)
Amount: Approximately $35,500,000, or such amount as may be acceptable to the
Authorized DOH Officer, all or a portion of which will be applied to the
payment of a portion of the Notes.
Term: Approximately 40 years plus construction period, or another term
acceptable to the Authorized DOH Officer.
Source: CHA or another entity acceptable to the Authorized DOH Officer.
Interest: 1% percent per annum or such interest rate as may be acceptable to the
Authorized DOH Officer. Security: Mortgage on the leasehold estate in the Bond Project, junior to the Notes
Mortgage, and/or such other security acceptable to the Authorized DOH
Officer.
A-2
;|,SS.|-5(].|,S-S,S.5-I <)
6. CHA Donation Tax Credit Loan
Amount Approximately $2,250,000, or such other amount as may be acceptable
to the Authorized DOH Officer.
Term. Approximately 40 years plus construction period, or another term
acceptable to the Authorized DOH Officer. Interest: Zero percent per annum or such other interest rate acceptable to the
Authorized DOH Officer.
Source CHA, derived from the sale by the Borrower or its managing member of
lAHTCs issued by the City, or another source acceptable to the Authorized
DOH Officer.
Security: Mortgage on the leasehold estate in the Bond Project junior to the Notes Mortgage, and/or such other security acceptable to the Authorized DOH Officer.
Seller Loan(s)
Amount: Approximately $5,000,000, or such amount as may be acceptable to the
Authorized DOH Officer.
Term: Approximately 40 years plus construction period, or another term
acceptable to the Authorized DOH Officer. Source: CHA and/or Heartland Housing, Inc. or its affiliate ("Heartland") obtaining a
leasehold interest in the Property from CHA. Interest: Long Term Applicable Federal Rate as ofthe Closing Date, or such interest
rate as may be acceptable to the Authorized DOH Officer. Security: Mortgage on the leasehold estate in the Property and the Project, junior to
the Notes Mortgage, and/or such other security acceptable to the
Authorized DOH Officer.
TIF Proceeds Loan(s)
Amount: Approximately $17,000,000, or such amount as may be acceptable to the
Authorized DOH Officer.
Source: Heartland, from available incremental taxes from the City of Chicago,
Roosevelt/Racine Redevelopment Project Area, which will be used to
repay a portion ofthe Lender Financing (as defined in the Redevelopment
Agreement).
Term: Approximately 40 years plus construction period, or another term
acceptable to the Authorized DOH Officer.
Interest: Long Term Applicable Federal Rate as of the Closing Date, or such other
interest rate acceptable to the Authorized DOH Officer. Security: Mortgage on the leasehold estate in the Bond Project junior to the Notes
Mortgage, and/or such other security acceptable to the Authorized DOH
Officer.
Low-Income Housing Tax Credit ("LIHTC") Proceeds
Amount: Approximately $43,000,000, or such amount as may be acceptable to the Authorized DOH Officer, all or a portion of which may be paid in on a delayed basis, and all or a portion of which will be applied to the
A-3
;|N>-loiMX-,SS.M ')
payment of a portion of the Notes upon the completion of rehabilitation of the Project.
Source: To be derived from the syndication of the LIHTCs generated by the issuance of the Notes.
Deferred Developer Fee
Amount: Approximately $5,000,000. Source: Deferred developer fee.
Other (Managing Member Capital Contribution)
Amount: Approximately $100. Source: Managing Member.
A-4
¦I.S'vlOlM.S-N.X.I-l l>
Ordinance Exhibit B Form of Funding Loan Agreement
See Attached
B-1
FUNDING LOAN AGREEMENT Anion"
CIBC BANK USA, as Scries A Funding Lender
BMO HARRIS BANK, N.A.,' as Series B Funding Lender
and
CITY OF CHICAGO, as Governmental Lender
Dated as of
TABLE OE CONTENTS
asze
RECITALS
ARTICLE I
Section 1.1
Section 1.2
Section 1.3
Section 1.4
Section 1.5
ARTICLE II
Section 2.1. Section 2.2. Section 2.3. Section 2.4.
DEFINITIONS; PRINCIPLES OF CONSTRUC TION|910|Definitions '.|910|Effect of Headings and Table of Contents 13
Date of Funding Loan Agreement 13
Designation of Time for Performance 13
Interpretation 13
TERMS; GOVERNMENTAL LENDER NOTE 13
Terms 13
Form of Governmental Lender Notes 15
Execution and Delivery of Governmental Lender Notes 15
Required Transferee Representations; Participations; Sale and Assignment 15
ARTICLE III PREPAYMENT 16
Section 3.1. Prepayment of a Governmental Lender Notes from Prepayment under the
Related Borrower Note , 16
Section 3.2. Notice of Prepayment 16
ARTICLE IV SECURITY 17
Section 4.1. Section 4.2.
ARTICLE V
Section 5.1.
Section 5.2. ARTICLE VI
Section 6.1.
ARTICLE VII
Section 7.1. Section 7.2.
Security for the Funding Loan 17
Delivery of Security 18
LIMITED LIABILITY 18
Source of Payment of Govenunental Lender Notes and Other Obligations;
Disclaimer of General Liability 18
Exempt from Individual Liability 19
CLOSING CONDITIONS; APPLICA TION OF FUNDS 19
Conditions Precedent to Closing 19
FUNDS AND ACCOUN TS : 20
Authorization to Create Funds and Accounts 20
Investment of Funds 20
ARTICLE VIII REPRESENTATIONS AND COVENANTS 20
Section 8.1. General Representations 20
Section 8.2. Further Assurances 21
Section 8.3. Payment of Funding Loan Obligations 21
Section 8.4. Funding Loan Agreement Performance 21
Section 8.5. Servicer 21
Section 8.6. Tax Covenants 22
Section 8.7. Performance by the Borrower 22
Section 8.8. Repayment of Funding Loan 23
Section 8.9. Borrower Loan Agieemeni Performance 23
Section 8.10. Maintenance of Records: Inspection of Records 23
IX77-S54 1-5-126 6
Section 8.1 I. Representations and Warranties of tlie funding Lender 23
Section 8 12. Funding Lender Limitations 23
ARTICLE IX DEFAULT; REMEDIES 23
Section 9.1. Events of Default 23
Section 9.2. Acceleration of Maturity; Rescission and Annulment 24
Section 9.3. Additional Remedies; Funding Lender Enforcement 25
Section 9.4. Application of Money Collected 26
Section 9.5. Remedies Vested in Funding Lender 27
Section 9.6. Restoration of Positions 27
Section 9.7. Rights and Remedies Cumulative 27
Section 9.8. Delay or Omission Not Waiver 27
Section 9.9. Waiver of Past Defaults 27
Section 9.10. Remedies Under Borrower Loan Agreement or Borrower Notes 28
Section 9.11. Waiver of Appraisement and Olher Laws 28
Section 9.12. Suits to Protect lhe Security 28
Section 9.13. Remedies Subject to Applicable Law 28
Section 9.14. Assumption of Obligat ions 28
Section 9.15. Remedies upon Unremedied Material Funding Lender Event 29
ARTICLE X AMENDMENT; AMENDMENT OF BORROWER LOAN AGREEMENT
AND OTHER DOCUMENTS 29
Section 10.1. Amendment of Funding Loan Agreement 29
Section 10.2. Amendments Requiring Funding Lender Consent 29
Section 10.3. Consents and Opinions 30
ARTICLE XI MISCELLANEOUS 30
Section 11.1. Notices 30
Section 11.2. Term of Funding Loan Agreement 32
Section 11.3. Successors and Assigns 32
Section 11.4. Legal Holidays 32
Section 11.5. Governing Law 32
Section 11.6. Severability 33
Section 11.7. Execution in Several Counterparts 33
Section 11.8. Nonrecourse Obligation of the Borrower 33
Section 11.9. Reserved 33
Section 11.10. Electronic Transactions 33
Section 11.11. Reference Date 33
Exhibit A — Form of Governmental Lender Note
Exhibit B — Form of Required Transferee Representations
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4S77-S.vtl-.5 I26 (i
FUNDING LOAN AGREEMENT
This Funding Loan Agieemeni. dated as ol" 1, 2022 (this "Funding Loan
Agreement"), is entered inlo among CIBC BANK USA. an Illinois state chartered bank (together with any successor hereunder, lhc "Series A Funding Lender'), BMO HARRIS BANK, N.A., a national banking association (together with any successor hereunder, (the "Series B Funding Lender'" and, together with lhe Series A Funding Lender, lhe "Funding Lenders"') and CITY OE CHICAGO, a municipality and home rule unit of local government duly organized and validly existing under the constitution and laws ofthe Stale of Illinois (together with its successors and assigns, the "Governmental Lender").
RECITALS
WHEREAS, the Governmental Lender has been duly created and organized pursuant to and in accordance with the provisions of Article VII, Section 6(a) ofthe 1970 Constitution of the State Illinois, is a home rule unit of local government and as such may provide a means of financing the costs of residential ownership and development that will provide decent, safe and sanitary housing for persons of low and moderate income at prices or rentals they can afford; and
WHEREAS, the Governmental Lender is authorized: (a) to make loans to any person to provide financing for rental residential developments located within the jurisdiction of the Governmental Lender and intended to be occupied in part by persons of low and moderate income, as determined by the Governmental Lender; (b) to incur indebtedness for the purpose of obtaining moneys to make such loans and provide such financing, to establish any required reserve funds and to pay administrative costs and other costs incurred in connection with the incurrence of such indebtedness of the Governmental Lender; and (c) to pledge all or any part of the revenues, receipts or resources of the Governmental Lender, including the revenues and receipts to be received by the Governmental Lender from or in connection wilh such loans, and to mortgage, pledge or grant security interests in such loans or other property of the Governmental Lender in order to secure the payment of the principal of, prepayment premium, if any, on and interest on such indebtedness oflhe Governmental Lender; and
WHEREAS, RS Affordable I LLC, an Illinois limited liability company (the "Borrower"), has requested the Governmental Lender to enter into this Funding Loan Agreement under which the Funding Lenders (i) will advance funds (the "Funding Loans") lo or for the account ofthe Governmental Lender, and (ii) apply the proceeds ofthe Funding Loans to make corresponding loans (the "Borrower Loans") to the Borrower lo finance the acquisition, lease, construction, rehabilitation, development, and equipping of a multifamily residential project located in the Cily of Chicago, Cook County, Illinois, known or to be known as Roosevelt Square Phase 3B and consisting of approximately 309 units (together with related common areas along with parking lot facilities, the "Project"); and
WHEREAS, simultaneously with the delivery of this Funding Loan Agreement, the Governmental Lender and the Borrower will enter into a Borrower Loan Agreement of even date herewith (as it may be supplemented or amended, the "Borrower Loan Agreement"), whereby the Borrower agrees lo make loan payments to the Governmental Lender in an amount which, when added lo olher funds available under this Funding Loan Agreement, will be sufficient to enable the Governmental Lender to repay the Funding Loans and to pay all costs and expenses related thereto when clue; and
WHEREAS, to evidence its payment obligations under the Borrower Loan Agreement, the Borrower will execute and deliver to lhe Governmental Lender ils Borrower Note. Series 2022A and its Borrower Noie, Series 2022B, each as defined in the Borrower Loan Agreement (each a "'Borrower Note" and collectively, the "Borrower Notes") and the obligations ofthe Borrower undei' the Bonower
¦ I.S77-N5I I -5-12d Ci
Noles will be seemed by a lien on and sccurily interest in Ihe Project puisuant to the Security Instrument (as hereinafter defined), made by the Borrower in favor oflhe Governmental Lender, as assigned to lhe Funding Lenders lo secure the performance by lhe Governmental Lender of its obligations undei- the Funding Loans; and
WHEREAS, the Governmental Lender has executed and delivered to (i) the Series A Funding Lender its not to exceed $33,500,000 City of Chicago Multi-Family Housing Revenue Note, Series 2022A (Roosevelt Square Phase 3B) (the "Governmental Lender Note, Series 2022A") and (ii) the Series B Funding Lender its not to exceed $33,500,000 City of Chicago Multi-Family Housing Revenue Note, Series 2022A (Roosevelt Square Phase 3B) (the "Governmental Lender Note, Scries 2022B") (each a "Governmental Lender Note" and collectively, the "Governmental Lender Notes"), each dated as ofthe Closing Date (defined below) collectively evidencing its obligation to make the payments due to the Funding Lenders, respectively, under the Funding Loans as provided in this Funding Loan Agreement, all things necessary to make the Funding Loan Agreement the valid, binding and legal limited obligation ofthe Governmental Lender, have been done and performed and the execution and delivery of this Funding Loan Agreement and the execution and delivery ofthe Governmental Lender Notes, subject to the terms hereof, have in all respects been duly authorized;
NOW, THEREFORE, in consideration of the premises and the mutual representations, covenants and agreements herein contained, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1. Definition's. For all purposes of this Funding Loan Agreement, except as otherwise expressly provided or unless the context otherwise clearly requires:
Unless specifically defined herein, all capitalized terms shall have the meanings ascribed thereto in the Borrower Loan Agreement.
The terms "herein, "hereof and "hereunder" and other words of similar import refer to this Funding Loan Agreement as a whole and not to any particular Article, Section or other subdivision. Lhe terms "agree" and "agreements" contained herein are intended to include and mean "covenant" and "covenants."
All references made (i) in the neuter, masculine or feminine gender shall be deemed to have been made in all such genders, and (ii) in the singular or plural number shall be deemed to have been made, respectively, in the plural or singular number as well. Singular terms shall include the plural as well as the singular, and vice versa.
All accounting terms not otherwise delined herein shall have the meanings assigned to them, and all computations herein provided for shall be made, in accordance with the Approved Accounting Method. All references herein to "Approved Accounting Method" refer to such principles as they exist at the date of application thereof.
All references in this instrument to designated "Articles." "Sections" and other subdivisions are to the designated Articles, Sections and subdivisions of this instrument as originally executed.
All references in this instrument to a separate instrument are to such separate instrument as lhe same may be amended or supplemented from time to time pursuant to the applicable provisions thereof.
•IS77-S5-I !->l2(> 6
References lo the Governmental Lender Notes as "lax-exempf" or to the "lax-exempt status" of the Governmental Lender Notes are to the exclusion of interest payable on the Governmental Lender Notes (other than any portion of the Governmental Lender Notes held by a "substantial user"" of the Project or a "related person"" (within the meaning of Section 147 ofthe Code) thereto) from gross income for federal income tax purposes pursuant to Section 103(a) ofthe Code.
The following terms have the meanings set forth below:
"Additional Borrower Payments"' shall have the meaning given such term in the Borrower Loan Agreement.
"Affiliate" shall mean, as to any Person, any other Person that, directly or indirectly, is in Control of, is Controlled by or is under common Control with such Person.
"Approved Institutional Buyer" means (1) a "qualified institutional buyer" ("Q1B") as defined in Rule 144A promulgated under the Securities Act of 1933, as in effect on the date hereof (the "Securities Act") that is a financial institution or commercial bank having capital and surplus of $5,000,000,000 or more, (2) an affiliate of the Funding Lender, or (3) a trust or custodial arrangement established by the Funding Lender or one of ils affiliates the beneficial interests in which will be owned only by QIBs."
Authorized Amount" shall mean $67,000,000, the maximum aggregate principal amount of the Funding Loan under this Funding Loan Agreement.
"Authorized City Representative" shall have the meaning as set forth for the term "Authorized Officer" in the Ordinance.
"Borrower" shall mean RS Affordable I LLC, an Illinois limited liability company.
"Borrower Controlling Entity" shall mean, if the Borrower is a partnership, any general partner or managing partner ofthe Borrower, or if the Borrower is a limited liability company, the manager or managing member ofthe Borrower.
"Borrower Loans" shall mean the mortgage loans made by the Governmental Lender to the Borrower pursuant lo the Borrower Loan Agreement in the aggregate principal amount ofthe Borrower Loan Amount, as evidenced by the Borrower Notes.
"Borrower Loan Agreement" shall mean the Borrower Loan Agieemeni, of even date herewith, between the Governmental Lender and the Bonower, as supplemented, amended or replaced from time to time in accordance with its terms.
"Borrower Loan Agreement Default" shall mean any event of default set forth in Section 8.1 of the Borrower Loan Agreement. A Borrower Loan Agreement Default shall "exist" if a Borrower Loan Agieemeni Default shall have occurred and be continuing beyond any applicable notice and cure period.
"Borrower Loan Amount'" shall mean $67,000,000, the maximum aggregate principal amount oflhe Bonower Loans under Ihe Borrower Loan Agreement.
-IN77-S5-I l -^-I2fi 0
"Borrower Loan Documents" shall have the meaning given such term in the Borrower Loan Agreement.
"Borrower Notes" shall mean the ''Borrower Notes" as defined in the Borrower Loan Agreement.
"Business Day" shall mean any day other than (i) a Saturday or a Sunday, or (ii) a day on which federally insured depository institutions in New York, New York, Chicago, Illinois or the cities in which the offices oflhe Funding Lender are located arc authorized or obligated by law, regulation, governmental decree or executive order lo be closed.
"Closing Date" shall mean , 2022, the dale that initial Funding Loan proceeds are
disbursed hereunder.
"Code" shall mean the Internal Revenue Code of 1986 as in effect on the Closing Dale or (except as otherwise referenced herein) as il may be amended to apply to obligations issued on the Closing Date, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Code.
"Construction Escrow Agreement" shall mean that certain Construction Escrow and
Disbursement Agreement, dated as of , 2022, among the Title Company named therein, in
its capacity as escrow agent, the Servicer, Governmental Lender, certain subordinate lenders named therein, and Borrower, as such agreement may be amended, modified, supplemented and replaced from time to time.
"Construction Funding Agreement" shall mean that certain Construction Funding Agreement of even date herewith, by and among the Series A Funding Lender and the Series B Funding Lender with respect to advances of its respective Funding Loan, as agent for the Governmental Lender, and Borrower, pursuant to which the Borrower Loans corresponding to each Funding Lender's Governmental Lender Note will be advanced by such Funding Lender, as agent of the Governmental Lender, to the Borrower and setting forth certain provisions relating to disbursement ofthe Borrower Loans during construction, the appointment of the Series B Funding Lender as agent and Servicer for the Funding Lenders, insurance and other matters, as such agreement may be amended, modified, supplemented and replaced from time to time.
"Contingency Draw-Down Agreement" shall mean the Contingency Draw-Down Agreement of even date herewith between the Funding Lenders and the Borrower relating to possible conversion ofthe Funding Loans from a draw-down loan to a fully funded loan.
"Control" shall mean, with respect to any Person, either (i) ownership directly or through other entities of more than 50% of all beneficial equity interest in such Person, or (ii) the possession, directly or indirectly, ofthe power to direct or cause the direction ofthe management and policies of such Person, through the ownership of voting securities, by contract or otherwise.
"Draw-Down Notice" shall mean a notice described in Section 1.01 ofthe Contingency Draw-Down Agreement regarding the conversion ofthe Funding Loan from a draw down loan to a fully funded loan.
"Equity Investor" shall have the meaning given to that term in the Bonower Loan Agreement. "Event of Default" shall have lhe meaning ascribed thereto in Section 9.1 hereof.
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-IX77-S5-I l-512'i 6
Fitch" shall mean Filch, Inc.
"Funding Lenders"' shall mean lhe Series A Funding Lender and lhe Series B Funding Lender.
"Funding Loan Agreement" shall mean (his Funding Loan Agieemeni, by and among the Funding Lenders and the Governmental Lender, as it may from time to time be supplemented, modified or amended by one or more indentures or other instruments supplemental thereto entered into pursuant to the applicable provisions thereof.
"Funding Loan Documents" shall mean (i) this Funding Loan Agreement, (ii) the Borrower Loan Agreement, (iii) the Regulatory Agreement, (iv) the fax Compliance Agreement, (v) the Borrower Loan Documents, (vi) all other documents evidencing, securing, governing or otherwise pertaining to the Funding Loan, and (vii) all amendments, modifications, renewals and substitutions of any of the foregoing.
"Government Obligations" shall mean noncallable, nonprepayable (i) direct, general obligations of the United States of America, or (ii) any obligations unconditionally guaranteed as to the full and timely payment of ail amounts due thereunder by the full faith and credit ofthe United States of America (including obligations held in book entry form), but specifically excluding any mutual funds or unit investment trusts invested in such obligations.
"Governmental Lender" shall mean the City of Chicago, a municipality and home rule unit of local government duly organized and validly existing under the constitution and laws of the State of Illinois, together with its successors and assigns.
"Governmental Lender's Administrative Fee" shall mean the administrative fee of the Governmental Lender equal to 1.5% of the original aggregate principal amount of the Governmental Lender Notes, payable upon issuance of the Governmental Lender Notes.
"Governmental Lender Notes" shall mean the Governmental Lender Notes described in the recitals of this Funding Loan Agreement.
"Highest Rating Category" shall mean, with respect to a Permitted Investment, that the Permitted Investment is rated by each Rating Agency in the highest rating category given by that Rating Agency for that general category of security. If at any time the Governmental Lender Notes are not rated (and, consequently, there is no Rating Agency), then the term "Highest Rating Category" means, with respect to a Permitted Investment, that the Permitted Investment is rated by S&P or Moody's in the highest rating given by that rating agency for that general category of security. By way of example, the Highest Rating Category for tax-exempt municipal debt established by S&P is "A 1+" for debt with a term of one year or less and "AAA" for a term greater than one year, with corresponding ratings by Moody's of "MIG 1" (for fixed rate) or "VM1G 1" (for variable rale) for three months or less and "Aaa" for greater than three months. If at any time (i) the Governmental Lender Notes are not rated, (ii) both S&P and Moody's rate a Permitted Investment and (iii) one of those ratings is below the Highest Rating Category, then such Permitted Investment will, nevertheless, be deemed to be rated in the Highest Rating Category if the lower rating is no more than one rating category below the highest rating category of that rating agency. For example, a Permitted Investment rated "AAA" by S&P and "AaV by Moody's is rated in the Highest Rating Category. If, however, lhe lower rating is more than one full rating category below the Highest Rating Category of that rating agency, then the Permitted Investment will be deemed to be rated below the Highest Rating Category. For example, a Permitted Investmeni rated "AAA" by S&P and "A I" by Moody's is not rated in the Highest Rating Category.
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"".Material funding Lender Event" shall mean the occurrence and continuation of one or more of the following:
Prior to the advancement by the Funding Lenders of the entire amount of the Funding Loans (i) a petition has been filed and is pending against either ofthe Funding Lenders under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect, and has not been dismissed within 90 days after such filing; (ii) either ofthe Funding Lenders has filed a petition, which is pending, under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect, or has consented in writing to the filing ofany petition against it under such law; or (iii) or an order, judgment or decree is entered by any court of competent jurisdiction on the application of a creditor appointing a receiver, liquidator or trustee appointed for it or for the whole or substantially all of its property and has not been dismissed within 90 days after filing. The occurrence of a Material Funding Lender Event under this subsection (a) and the exercise of remedies upon any such declaration shall be subject to any applicable limitations of federal bankruptcy law affecting or precluding such declaration or exercise during the pendency of or immediately following any bankruptcy, liquidation or reorganization proceedings; or
Prior to the advancement by the Funding Lenders of the entire amount of the Funding Loans (i) the Funding Loan Agreement or the Construction Funding Agreement is declared by a non-appealable order of a court of competent jurisdiction to be null and void; (ii) either of the Funding Lenders has, in writing, rescinded, repudiated or terminated the Funding Loan Agreement or the Construction Funding Agreement; or (iii) either ofthe Funding Lenders is dissolved or confiscated by action of government due to war or peace time emergency or the United States government declares a moratorium on either ofthe Funding Lender's activities.
"Maturity Date" shall mean (i) the Construction Period Maturity Date (as defined in the Borrower Loan Agreement) with respect to the Governmental Lender Note, Series 2022A and (ii) the Construction Period Maturity Date, provided that if the Conditions to Conversion arc satisfied on or before the Construction Period Maturity Date, the term of the Borrower Note, Series 2022B shall be extended to the Term Period Maturity Date (as defined in the Borrower Loan Agreement) with respect to the Governmental Lender Note, Series 2022B.
"Maximum Rate" shall mean the lesser of (i) 10% per annum and (ii) the maximum interest rate that may be paid on the Funding Loan under State law.
"Minimum Participation Percentage" shall mean an amount no less than fifteen percent (15%) ofthe outstanding principal amount ofthe Funding Loan.
"Moody's" shall mean Moody's Investors Service, Inc., or its successor.
"Noteowner" or "owner of the Governmental Lender Notes" mean singly, the owner of a Governmental Lender Note, or as applicable, collectively the owners, ofthe Governmental Lender Notes as shown on the registration books maintained by each ofthe Funding Lenders, as applicable, pursuant to Section 2.4(d).
"'Negative Arbitrage Deposit" has the meaning set forth in the Contingency Draw-Down Agreement.
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"Ongoing Governmental Lender Fee" shall mean an on-going compliance fee in the amount of $25 pei- unit payable annually in advance by the Borrower to the Governmental Lender, commencing on the Closing Date and on each January I thereafter, so long as any portion of the funding Loans are outstanding.
"Opinion of Counsel'" shall mean a written opinion from an attorney or firm of attorneys, acceptable to the Funding Lenders and the Governmental Lender with experience in the matters to be covered in the opinion; provided that whenever an Opinion of Counsel is required to address the exclusion of interest on the Governmental Lender Notes from gross income for purposes of federal income taxation, such opinion shall be provided by Tax Counsel.
"Ordinance" shall mean the Ordinance adopted by the Governmental Lender on January ,
2022 authorizing the Funding Loans and the execution and delivery ofthe Funding Loan Documents to which Governmental Lender is a party.
"Permitted Investments" shall mean, to the extent authorized by law for investment of any moneys held under this Funding Loan Agreement:
Government Obligations.
Direct obligations of, and obligations on which the full and timely payment of principal and interest is unconditionally guaranteed by, any agency or instrumentality of the United States of America (other than the Federal Flome Loan Mortgage Corporation) or direct obligations of the World Bank, which obligations are rated in the Highest Rating Category.
Obligations, in each case rated in the FJighest Rating Category, of (i) any state or territory of the United States of America, (ii) any agency, instrumentality, authority or political subdivision of a state or territory or (iii) any public benefit or municipal corporation the principal of and interest on which are guaranteed by such state or political subdivision.
Any written repurchase agreement entered into with a Qualified Financial Institution whose unsecured short term obligations are rated in the Highest Rating Category.
Commercial paper rated in the Highest Rating Category.
Interest bearing negotiable certificates of deposit, interest bearing time deposits, interest bearing savings accounts and bankers' acceptances, issued by a Qualified Financial Institution if either (i) the Qualified Financial Institution's unsecured short term obligations are rated in the Highest Rating Category or (ii) such deposits, accounts or acceptances are fully collateralized by investments described in clauses (a) or (b) of this definition or fully insured by the Federal Deposit Insurance Corporation.
An agreement held by either of the Funding Lenders for the investment of moneys at a guaranteed rate with a Qualified Financial Institution whose unsecured long term obligations are rated in the Highest Rating Category or the Second Highest Rating Category, or whose obligations are unconditionally guaranteed or insured by a Qualified Financial Institution whose unsecured long term obligations are rated in the Highest Rating Category or Second Highest Rating Category; provided that such agreement is in a form acceptable to such Funding Lender; and provided further thai such agreement includes the following restrictions:
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lhe invested luiuis will be available for withdrawal without penalty or premium, at any lime that (A) such Funding Fender is required lo pay moneys from the l'iind(s) established under this Funding Loan Agreement to which the agreement is applicable, or (li) any Rating Agency indicates that it will lower or actually lowers, suspends or withdraws the rating on the Funding Loan on account of the rating of the Qualified Financial Institution providing, guaranteeing or insuring, as applicable, the agreement:
the agreement, and if applicable the guarantee or insurance, is an unconditional and general obligation ofthe provider and, if applicable, the guarantor or insurer of the agreement, and ranks pari passu with all-other unsecured unsubordinated obligations ofthe provider, and if applicable, the guarantor or insurer ofthe agreement;
such Funding Lender receives an Opinion of Counsel, which may be subject to customary qualifications, that such agreement is legal, valid, binding and enforceable upon the provider in accordance with ils terms and, if applicable, an Opinion
, of Counsel that any guaranty or insurance policy provided by a guarantor or insurer is legal, valid, binding and enforceable upon the guarantor or insurer in accordance with its terms; and
lhe agreement provides that if during its term the rating ofthe Qualified Financial Institution providing, guaranteeing or insuring, as applicable, the agreement, is withdrawn, suspended by any Rating Agency or falls below the Second Highest Rating Category, the provider must, within ten days, either: (A) collateralize the agreement (if the agreement is not already collateralized) with Permitted Investments described in paragraph (a) or (b) by depositing collateral with such Funding Lender or a third party custodian, such collateralization to be effected in a manner and in an amount reasonably satisfactory to such Funding Lender, or, if the agreement is already collateralized, increase the collateral with Permitted Investments described in paragraph (a) or (b) by depositing collateral with such Funding Lender or a third party custodian, in an amount reasonably satisfactory to such Funding Lender, (B) at the request of such Funding Lender, repay the principal of and accrued but unpaid interest on the investment, in either case with no penally or premium unless required by law or (C) transfer the agreement, guarantee or insurance, as applicable, to a replacement provider, guarantor or insurer, as applicable, then meeting the requirements of a Qualified Financial Institution and whose unsecured long term obligations are then rated in the Highest Rating Category or the Second Highest Rating Category. The agreement may provide that the down-graded provider may elect which of the remedies to the down grade (other than the remedy set out in (B)) to perform.
Notwithstanding anything else in this Paragraph (g) to the contrary and with respect only to any agreement described in this Paragraph (g) or any guarantee or insurance for any such agreement which is to be in effect for any period after the Conversion Date (as defined in the Borrower Loan Agreement)., any reference in this Paragraph to the "Second Highest Rating Category" will be deemed deleted so that the only acceptable rating category for such an agreement, guarantee or insuiance will be the Highest Rating Category.
(h) Subject to the ratings requirements set forth in this definition, shares in any money market ¦mutual fund (including those ofthe Funding Lenders or any of their affiliates) registered under the Investment Company Act of 19-10. as amended, that have been rated
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"AAAm-G" or "AAAm" by S&P or "Aaa" by Moody's so long as the portfolio of such money market mutual fund is limited lo Government Obligations and agreemenis to repurchase Government Obligations. If approved in writing by the Funding Fender, a money market mutual fund ponfolio may also contain obligations and agreements to repurchase obligations described in paragraphs (b) or (c). If the Governmental Lender Notes are rated by a Rating Agency, the money market mutual fund must be rated "AAAm-G" or "AAAm" by S&P, if S&P is a Rating Agency, or "Aaa" by Moody's, if Moody's is a Rating Agency. If at any time the Governmental Lender Notes are not rated (and. consequently, there is no Rating Agency), then the money-market mutual fund must be rated "'AAAm-G" or "AAAm" by S&P or Aaa by Moody's. If at any lime (i) either ofthe Governmental Lender Notes is not rated, (ii) both S&P and Moody's rate a money market mutual fund and (iii) one of those ratings is below the level required by this paragraph, then such money market mutual fund will, nevertheless, be deemed to be rated in the Highest Rating Categoiy if the lower rating is no more than one rating category below the highest rating category of that rating agency.
(i) Any olher investmeni authorized by the laws ofthe State, if such investment is approved in writing by the Servicer or the Funding Lenders, if there is no Servicer.
Permitted Investments shall not include any ofthe following:
Except for any investment described in the next sentence, any investment wilh a final maturity or any agreement with a term greater than one year from the date of the investment. This exception (1) shall not apply to Permitted Investments listed in paragraphs (g) and (i).
Except for any obligation described in paragraph (a) or (b), any obligation with a purchase price greater or less than the par value of such obligation.
Any asset backed security, including mortgage backed securities, real estate mortgage investment conduits, collateralized mortgage obligations, credit card receivable asset backed securities and auto loan asset backed securities.
Any interest only or principal only stripped security.
Any obligation bearing interest at an inverse floating rate.
Any investment which may be prepaid or called at a price less than its purchase price prior to staled maturity.
Any investment the interest rate on which is variable and is established other than by reference to a single index plus a fixed spread, if any, and which interest rate moves proportionately with that index.
Any investment described in paragraph (d) or (g) with, or guaranteed or insured by, a Qualified Financial Institution described in clause (iv) ofthe definition of Qualified Financial Institution if such institution does not agree to submit to jurisdiction, venue and service of process in lhe United Slates of America in the agreement relating to the investment.
Any investment to which S&P has added an "r" or "f highlighter.
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"Person" shall mean any individual, corporation, limited liability company, partnership, joint venture, estate, trust, unincorporated association, any federal, state, count}- or municipal government or anv bureau, department or agency thereof and any fiduciary acting in such capacity on behalf of any of the lorcgoing.
"Pledged Revenues" shall mean the amounts pledged under this Funding Loan Agreement lo the payment of the principal of, prepayment premium, if any, and interest on the Funding Loans and the Governmental Lender Notes, consisting of the following: (i) all income, revenues, proceeds and other amounts to which the Governmental Lender is entitled (other than amounts received by the Governmental Lender with respect to the Unassigned Rights) derived from or in connection with the Project and the Funding Loan Documents, including all Borrower Loan Payments due under the Borrower Loan Agreement and the Borrower Noles, payments with respect to the Borrower Loan Payments and all amounts obtained through the exercise ofthe remedies provided in the Funding Loan Documents and all receipts credited under the provisions of this Funding Loan Agreement against said amounts payable, and (ii) moneys held in the funds and accounts established under this Funding Loan Agreement, together wilh investment earnings thereon.
"Potential Default" shall have the meaning ascribed to thai term in the Borrower Loan Agieemeni.
"Prepayment Premium" shall mean (i) any premium payable by the Borrower pursuant to the Borrower Loan Documents in connection with a prepayment of the Borrower Notes (including any Prepayment Premium as set forth in the Borrower Notes) and (ii) any premium payable on the Governmental Lender Notes pursuant to this Funding Loan Agreement.
"Project" shall have the meaning given to that term in the Ordinance.
"Qualified Financial Institution" shall mean any (i) bank or trust company organized under the laws of any state ofthe United States of America, (ii) national banking association, (iii) savings bank, savings and loan association, or insurance company or association .chartered or organized under the laws of any state of lhe United States of America, (iv) federal branch or agency pursuant to lhe International Banking Act of 1978 or any successor provisions of law or a domestic branch or agency of a foreign bank which branch or agency is duly licensed or authorized to do business under the laws of any state or territory of the United States of America, (v) government bond dealer reporting to, trading with, and recognized as a primary dealer by the Federal Reserve Bank of New York, (vi) securities dealer approved in writing by the Funding Lender the liquidation of which is subject to the Securities Investors Protection Corporation or other similar corporation and (vii) other entity which is acceptable to the Funding Lenders. With respect to an entity which provides an agreement held by a Funding Lender for the investment of moneys at a guaranteed rate as set out in paragraph (g) of the definition of the term "Permitted Investments" or an entity which guarantees or insures, as applicable, the agreement, a "Qualified Financial Institution" may also be a corporation or limited liability company organized under the laws of any slate ofthe United States of America.
"Rating Agency" shall mean any one and each of S&P, Moody's and Fitch then rating the Governmental Lender Notes or any other nationally recognized statistical rating agency then rating lhe Governmental Lender Notes, which has been approved by the Funding Lender.
"Regulations" shall mean with respect to the Code, the relevant U.S. Treasury regulations and proposed regulations thereunder or any relevant successor provision to such regulations and proposed regulations.
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-Regulatory Agreement" shall mean that certain Land Use Restriction Agreement, dated as of the Closing Date, by and between the Governmental Lender and the Bonower, as hereafter amended or moihfied.
-Remaining Funding Loan Proceeds Account" has the meaning set forth in the Contingency Draw-Down Agreement.
"Remaining Funding Loan Proceeds Account Earnings Subaccount" has the meaning set forth in the Contingency Draw-Down Agreement.
"Required Transferee Representations" shall mean the representations in substantially the form attached lo this Funding Loan Agreement as Exhibit B.
"Second Highest Rating Category" shall mean, with respect to a Permitted Investmeni, that the Permitted Investment is rated by each Rating Agency in the second highest rating category given by that Rating Agency for that general category of security. If at any time the Governmental Lender Notes are not rated (and, consequently, there is no Rating Agency), then the term "Second Highest Rating Category" means, with respect to a Permitted Investment, that the Permitted Investment is rated by S&P or Moody's in the second highest rating category given by that rating agency for that general category of security. By way of example, the Second Highest Rating Category for tax-exempt municipal debt established by S&P is "AA" for a term greater than one year, with corresponding ratings by Moody's of "Aa." If at any lime (i) the Governmental Lender Notes arc not rated, (ii) both S&P and Moody's rate a Permitted Investment and (iii) one of those ratings is below the Second Highest Rating Category, then such Permitted Investment will not be deemed to be rated in the Second Highest Rating Category. For example, an Investment rated "AA" by S&P and "A" by Moody's is not rated in the Second Highest Rating Category.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security" shall mean the security for the performance by the Governmental Lender of its obligations under the Governmental Lender Notes and this Funding Loan Agreement as more fully set forth in Article IV hereof.
"Security Instrument" shall mean the Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Filing (as amended, restated and/or supplemented from time to time) of even date herewith, made by the Borrower in favor of the Governmental Lender, as assigned by the Governmental Lender to the Scries B Funding Lender, as agent and Servicer for the Funding Lenders, to secure the performance by the Governmental Lender of its obligations under the Funding Loans.
"Series A Funding Lender" shall mean CIBC Bank USA, an Illinois state chartered bank, and any successor under this Funding Loan Agreement and the Borrower Loan Documents.
"Series B Funding Lender" shall mean BMO Harris Bank, N.A., and any successor under this Funding Loan Agreement and the Borrower Loan Documents.
--Servicer" shall mean any Servicer appointed by the Funding Lenders to perform certain servicing functions with respect to the Funding Loans and on the Bonowei- Loans pursuant to the Construction Funding Agreement or a separate servicing agreement lo be entered into between the Funding Lenders and the Servicer. Initially the Servicer shall be the Scries B Funding Lender pursuant to this Funding Loan Agreement and the Construction Funding Agreement.
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"Servicing Agreement" shall mean any servicing agreement entered into between the Funding Fenders and a Servicer with respect lo the servicing ofthe Funding Loans and/or the Borrower Loan.
""S*&F" shall mean Standard & Poor's Global Ratings Services and its successors.
"Special Limited Partner" shall have the meaning given to that term in the Borrower Loan Agreement.
"State" shall mean the Slate of Illinois.
"Tax Compliance Agreement" shall mean the Tax Compliance Agreement, dated the Closing Date, executed and delivered by the Governmental Lender and the Borrower.
"Tax Counsel" shall mean Ice Miller LLP, or any other attorney or firm of attorneys designated by the Governmental Lender and approved by the Funding Lender having a national reputation for skill in connection with the authorization and issuance of municipal obligations under Sections 103 and 141 through 150 (or any successor provisions) ofthe Code.
"Tax Counsel Approving Opinion" shall mean an opinion of Tax Counsel substantially to the effect that the Governmental Lender Notes constitute a valid and binding obligation of the Governmental Lender and that, under existing statutes, regulations, published rulings and judicial decisions, the interest on the Governmental Lender Notes is excludable from gross income for federal income tax purposes (subject to the inclusion of such customary exceptions as are acceptable to the recipient thereof).
"Tax Counsel No Adverse Effect Opinion" shall mean an opinion of Tax Counsel to the effect that the taking of the action specified therein will not impair the exclusion of interest on the Governmental L-ender Notes from gross income for purposes of federal income taxation (subject to the inclusion of such customary exceptions as are acceptable to the recipient thereof).
"UCC" shall mean the Uniform Commercial Code as in effect in the State.
"Unassigned Rights" shall mean the Govenunental Lender's rights to reimbursement and payment of its fees, costs and expenses and the Rebate Amount under Section 2.5 ofthe Borrower Loan Agreement, its right to payment of the Governmental Lender's Administrative Fee, the Ongoing Governmental Lender Fee and any other fees payable lo the Governmental Lender under Section 2.5 thereof, its rights to attorneys' fees under Section 5.14 thereof, its rights to indemnification under Section 5.15 thereof, its rights of access under Section 5.17 thereof, its fights to enforce the terms of the Regulatory Agreement, including Borrower's covenants to comply with applicable laws, its rights to give and receive notices, reports and other statements and lo enforce notice and reporting requirements and restrictions on transfers of ownership of the Project, and its rights to consent to certain matters, as provided in this Funding Loan Agreement and the Borrower Loan Agreement.
""Written Certificate," "Written Certification," "Written Consent." "Written Direction," "Written Notice." "Written Order," "Written Registration," "Written Request," and "Written Requisition" shall mean a written certificate, direction, nolice, order or requisition signed by an Authorized Borrower Representative, an Authorized City Representative or an authorized representative ofthe Funding Lender and delivered to the Funding Lender, the Servicer or such oilier Person as required under the Funding Loan Documents.
""Yield"" shall mean yield as delined in Section 148(h) of lhe Code and any regulations promulgated thereunder.
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Section 1.2. Effect of I leadings and Table of Contents. The Article and Section headings herein and in the fable of Contents are for convenience only and shall not affect the construction hereof.
Section 1.3. Dale of Funding Loan Agreement. The date of this Funding Loan Agreement is intended as and for a dale for the convenient identification oflhis Funding Loan Agreement and is not intended to indicate that this Funding Loan Agreement was executed and delivered on said date.
Section 1.4. Designation of Time for Performance. Except as otherwise expressly prov ided herein, any reference in this F unding Loan Agreement to the time of day shall mean the time of day in the city where the Funding Lender maintains its place of business for the performance of its obligations under this Funding Loan Agreement.
Section 1.5. Interpretation. The parties hereto acknowledge that each of them and their respective counsel have participated in the drafting and revision of this Funding Loan Agreement. Accordingly, the parties agree that any rule of construction that disfavors the drafting party shall not apply in the interpretation of this Funding Loan Agreement or any amendment or supplement or exhibit hereto.
ARTICLE II TERMS; GOVERNMENTAL LENDER NOTE
Section 2.1. Terms.
Principal Amount. The total aggregate principal amount ofthe Funding Loans is hereby expressly limited to the Authorized Amount.
Draw-Down Funding. The Funding Loans are originated on a draw-down basis. The proceeds of the Funding Loans evidenced by each Funding Lender's Governmental Lender Note shall be advanced by such Funding Lender directly to the Borrower(s) for the account of the Governmental Lender as and when needed to make each advance in accordance with the disbursement provisions oflhe Borrower Loan Agreement and the Construction Funding Agreement. Upon each advance of principal of the Borrower Loans under the Borrower Loan Agreement and the Construction Funding Agreement, a like amount ofthe Funding Loans shall be deemed concurrently and simultaneously advanced under this
Funding Loan Agreement, including the initial advance of $ [under each Governmental
Lender Note]. Advances ofthe Borrower Loans and Funding Loans shall be allocated to the Borrower Note, Series 2022A, and the related Governmental Lender Note, Scries 2022A and to the Borrower Note, Series 2022B and the relaled Governmental Lender Note, Series 2022B as specified by the Borrower and approved by the Servicer. Notwithstanding anything in this Funding Loan Agreement to the contrary, no additional amounts of the Funding Loans may be drawn down and funded hereunder after [three years after Closing Dale]; provided, however, that upon the delivery of a Tax Counsel No Adverse Effect Opinion to the Governmental Lender and the Funding Lenders such date may be changed to a later date as specified in such fax Counsel No Adverse Effect Opinion. The Governmental Lender has reviewed and approved the form of Contingency Draw-Down Agreement and consents to the terms thereof and agrees to take all actions reasonably required ofthe Governmental Lender in connection with the conversion of the Funding Loans to a fully drawn loan pursuant to the provisions of the Contingency Draw-Down Agreement in the event a Draw-Down Notice is filed by the Servicer or the Borrower.
Oriuination Date: Maturity. The Funding Loans shall be originated and the Governmental Lender Notes shall be issued on the Closing Date and shall mature on the applicable
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Maturity Dale at which time the entire principal amount, to lhe extent not previously paid, and all accrued ami unpaid interest, shall be due and payable.
(d) Principal. The outstanding principal amount of each Governmental Lender Note and of
each funding Loan as ofany given dale shall be the toial amount advanced by the applicable funding
Lender to or for the account ofthe Governmental Lender to fund corresponding advances with respect lo
the related Borrower Note under the Borrower Loan Agreement and the Construction funding Agreement
as proceeds ofthe Borrower Loans, less any payments of principal ofthe corresponding Governmental
Lender Note previously received upon payment of corresponding principal amounts under the related
Borrower Note, including regularly scheduled principal payments and voluntary and mandatory
prepayments. The principal amount of each Governmental Lender Note and interest thereon shall be
payable on the basis specified in this paragraph (d) and in paragraphs (e) and (f) of this Section 2.1.
The Funding Lenders shall keep a record of all principal advances and principal repayments made under the applicable Governmental Lender Note and shall upon written request provide the Governmental Lender with a statement ofthe outstanding principal balance of the Governmental Lender Notes and the corresponding Funding Loans.
(e) Interest. Interest shall be paid on the outstanding principal amount of each Governmental
Lender Note at the rate or rates set forth in the related Borrower Note and otherwise as set forth in the
Borrower Loan Agreement.
Corresponding Payments. The payment or prepayment of principal, interest and premium, if any, due on each Governmental Lender Note shall be identical wilh and shall be made on the same dates, terms and conditions, as the principal, interest, premiums, late payment fees and other amounts due on the related Borrower Note. The Governmental Lender Note, Series 2022A shall be payable from payments on the Borrower Note, Series 2022A and the Governmental Lender Note, Series 2022B shall be payable from payments on the Borrower Note, Series 2022B. Any payment or prepayment made by the Borrower of principal, interest, premium, if any, due on a Borrower Note shall be deemed to be like payments or prepayments of principal, interest and premium, if any, due on the relaled Governmental Lender Note.
Usury. The Governmental Lender intends to conform strictly to the usury laws applicable to this Funding Loan Agreement and the Governmental Lender Notes and all agreements made in the Governmental Lender Notes, this Funding Loan Agreement and the Funding Loan Documents are expressly limited so that in no event whatsoever shall the amount paid or agreed to be paid as interest or the amounts paid for the use of money advanced or to be advanced hereunder exceed the highest lawful rate prescribed under any law which a court of competent jurisdiction may deem applicable hereto. If, from any circumstances whatsoever, the fulfillment ofany provision ofthe Governmental Lender Notes, this Funding Loan Agreement or the other Funding Loan Documents shall involve the payment of interest in excess ofthe limit prescribed by any law which a court of competent jurisdiction may deem applicable hereto, then the obligation to pay interest hereunder shall be reduced to the maximum limit prescribed by law. If from any circumstances whatsoever, the Funding Lender shall ever receive anything of value deemed inteiest, the amount of which would exceed the highest lawful rate, such amount as would be excessive inteiest shall be deemed to have been applied, as ofthe date of receipt by the Funding Lender, to the reduction ofthe principal remaining unpaid hereunder and not to the payment of interest, or if such excessive interest exceeds the unpaid principal balance, such excess shall be refunded lo the Borrower. This paragraph shall control every other provision oflhe Governmental Lender Notes, this Funding Loan Agreement and all other f unding Loan Documents.
(Ii) Several Obligations. Neither the Servicer, nor any Funding Fender shall be responsible lor the failure ofany other Funding Lender to make advances under its Funding Loan or to perform any othei" obligation to be made or performed by such other Funding Lender hereunder, and the failure ofany Funding Lender to make advances under ils Funding Loan or to perform any other obligation to be made or performed by it hereunder shall not in and of itself relieve the obligation ofthe other Funding Lender to make any advance of its Funding Loan or to perform any olher obligation to be made or performed by such olher Funding Lender hereunder.
In determining whether the amount of interest charged and paid might otherwise exceed the limit prescribed by law, the Governmental Lender intends and agrees that (i) interest shall be computed upon the assumption that payments under the Borrower Loan Agreement and other Funding Loan Documents will be paid according to the agreed terms, and (ii) any sums of money that arc taken into account in the calculation of interest, even though paid at one time, shall be spread over the actual term ofthe Funding Loans.
Section 2.2. Form of Governmental Lender Notes. As evidence of its obligation to repay the Funding Loans, simultaneously with the delivery of this Funding Loan Agreement to the Funding Lenders, the Governmental Lender hereby agrees to execute and deliver the Governmental Lender Notes. The Governmental Lender Notes shall be substantially in the respective form set forth in Exhibit A attached hereto, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Funding Loan Agreement and the Ordinance.
Section 2.3. Execution and Delivery of Governmental Lender Notes. The Governmental Lender Notes shall be executed on behalf of the Governmental Lender by the manual or facsimile signature of its Chief Financial Officer, and its corporate seal (or a facsimile thereof) shall be thereunto affixed, imprinted, engraved or otherwise reproduced, and attested by the manual or facsimile signature of its City Clerk or Deputy City Clerk. In case any officer ofthe Governmental Lender whose signature or facsimile signature shall appear on the Governmental Lender Notes shall cease to be such officer before the Governmental Lender Notes so signed and sealed shall have been actually delivered, such Governmental Lender Notes may, nevertheless, be delivered as herein provided, and may be executed and delivered as if the persons who signed or sealed such Governmental Lender Notes had not ceased to hold such offices or be so employed. Each Governmental Lender Note may be signed and sealed on behalf of the Governmental Lender by such persons as, at the actual time ofthe execution of such Governmental Lender Note, shall be duly authorized or hold the proper office in or employment by the Governmental Lender, although at the date of the Governmental Lender Notes such persons may not have been so authorized nor have held such office or employment.
Section 2.4. Required Transferee Representations; Participations; Sale and Assignment.
The Funding Lenders shall deliver to the Governmental Lender the Required Transferee Representations in substantially the form attached hereto as Exhibit B on the Closing Date.
The Funding Lenders shall have the right to sell (i) the applicable Governmental Lender Note and the corresponding Funding Loan or (ii) participation interests, in whole or in part, to the extent permitted by Section 2.4(c) below, in the Governmental Lender Notes and the corresponding Funding Loan, provided that (A) such sale shall be only to Approved Institutional Buyers that execute and deliver to the Funding Lender, with a copy to the Governmental Lender, the Required Transferee Representations and (13) if any amendment is to be made to this Funding Loan Agreement or any other Funding Loan Document in conjunction wilh such transfer, a Tax Counsel No Adverse Effect Opinion
Notwithstanding the other provisions of this Section 2.4. no participation in any Governmental Lender Note and related Funding Loans shall be sold in an amount that is less than the Minimum Participation Percentage.
The Governmental Lender Notes or any interest therein, shall be in fully-registered form transferable to subsequent holders only on the registration books which shall be maintained by the applicable f unding Lender for such purpose and which shall be open to inspection by the Governmental Lender. The Governmental Lender Notes shall not be transferred through the services ofthe Depository Trust Company or any other third party registrar.
No service charge shall be made for any sale or assignment oflhe Governmental Lender Notes or a participation therein, but the Governmental Lender may require payment of a sum sufficient to cover any tax or other charge that may be imposed in connection with any such sale or assignment and payment ofany fees and expenses incurred by the Governmental Lender in connection therewith. Such sums shall be paid in every instance by the purchaser or assignee ofthe Governmental Lender Notes or a participation therein.
ARTICLE III PREPAYMENT
Section 3.1. Prepayment of a Governmental Lender Note from Prepayment under the Related Borrower Note. Each Governmental Lender Note is subject to voluntary and mandatory prepayment as follows:
Each Governmental Lender Note shall be subject to voluntary prepayment in full or in part by the Governmental Lender, from funds received by the Governmental Lender to the extent and in the manner and on any date that the related Borrower Note is subject to voluntary prepayment as set forth therein, in the Borrower Loan Agreement or in the Construction Funding Agreement, at a prepayment price equal lo the principal balance of the related Borrower Note to be prepaid, plus interest thereon to the date of prepayment and the amount ofany Prepayment Premium payable under such Borrower Note, plus any Additional Borrower Payments due and payable under the Borrower Loan Agreement through the date of prepayment.
The Borrower shall not have the right to voluntarily prepay all or any portion ofany Borrower Note, thereby causing the related Governmental Lender Note to be prepaid, except as specifically permitted in the corresponding Borrower Note, the Borrower Loan Agreement or in the Construction Funding Agreement, without the prior written consent of the Funding Lender related to such Governmental Lender Note, which may be withheld in each Funding Lender's sole and absolute discretion.
Each Governmental Lender Note shall be subject to mandatory prepayment in whole or •in-part upon prepayment ofthe related Borrower Note pursuant to the Borrower Loan Agreement or the Construction Funding Agreement at the direction of the Funding Lender holding such Governmental Lender Note in accordance with the terms of such related Bonower Note at a prepayment price equal to the outstanding principal balance of the related Borrower Note prepaid, plus accrued interest plus any-other amounts payable under the related Borrower Note or the Borrower Loan Agreement.
Section 3.2. Notice of Prepayment. Nolice of prepayment of a Governmental Lender Note shall be deemed given to the extent that notice of prepayment ofthe related Borrower Note is timely and properlv given to Funding Lenders in accordance with the terms ofthe related Borrower Note and the
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Borrower Loan Agreement, antl no separate nolice of prepayment of the corresponding Governmental Lender Note is required to be given.
ARTICLE IV SECURITY
Section 4.1. Security for the Funding Loans. To secure the payment ofthe Funding Loans and each Governmental Lender Note, to declare the terms and conditions on which the Funding Loans and each Governmental Lender Note are secured, and in consideration ofthe premises and ofthe funding of each Funding Loan by the applicable Funding Lender, the Governmental Lender by these presents does grant, bargain, sell, remise, release, convey, assign, transfer, mortgage, hypothecate, pledge, set over and confirm to the Servicer, as administrative agent for the Funding Lenders (except as limited herein), a lien on and security interest in the following described property (excepting, however, in each case, the Unassigned Rights) (said property, rights and privileges being herein collectively called, the "Security"):
All right, title and interest ofthe Governmental Lender in, to and under the Borrower Loan Agreement and the related Borrower Note, including, without limitation, all rents, revenues and receipts derived by the Governmental Lender from the Borrower relating to the Project and including, without limitation, all Pledged Revenues, Borrower Loan Payments and Additional Borrower Payments derived by the Governmental Lender under and pursuant to, and subject to the provisions of, the Borrower Loan Agreement; provided that the pledge and assignment made under this Funding Loan Agreement shall not impair or diminish the obligations of the Governmental Lender under the provisions of the Borrower Loan Agreement;
All right, title and interest of the Governmental Lender in, to and under, together with all rights, remedies, privileges and options pertaining to, the Funding Loan Documents, and all other payments, revenues and receipts derived by the Governmental Lender under and pursuant to, and subject to the provisions of, the Funding Loan Documents;
Any and all moneys and investments from time lo time on deposit in, or forming a part of, all funds and accounts created and held under this Funding Loan Agreement and any amounts held at any time in the Remaining Funding Loan Proceeds Account and the Remaining Funding Loan Proceeds Account Earnings Subaccount, any Negative Arbitrage Deposit and any other amounts held under the Contingency Draw-Down Agreement, subject to the provisions of this Funding Loan Agreement permitting the application thereof for the purposes and on the terms and conditions set forth herein; and
Any and all other real or personal property of every kind and nature or description, which may from time to time hereafter, by delivery or by writing ofany kind, be subjected lo the lien of this Funding Loan Agreement as additional security by the Governmental Lender or anyone on its part or with its consent, or which pursuant to any of Ihe provisions hereof or ofthe Borrower Loan Agreement may come into the possession or control ofthe Servicer, as administrative agent for the Funding Lenders or a receiver appointed puisuant to this Funding Loan Agreement; and the Servicer, as administrative agent for the Funding Lenders is hereby authorized to receive any and all such property as and for additional security for the corresponding Funding Loan and the corresponding Governmental Lender Note and to hold and apply all such property subject to the terms hereof.
The pledge and assignment of and the security interest granted in the Security pursuant to this Section 4.1 for the payment ofthe principal of, premium, if any, and interest on each Governmental Lender Note, in accordance with ils terms and provisions, and for the payment of all othei' amounts due hereunder, shall attach and be valid and binding from and after the lime of lhe delivery of the
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Governmental Lender Noles by the Governmental Lender. The Security so pledged and then or thereafter received by the Servicer, as administrative agent forthe funding Lenders shall immediately be subject to the lien of such pledge and security interest without any physical delivery or recording thereof or further act. and the hen of such pledge and security interest shall be valid and binding and prior lo the claims of any and all parties having claims of any kind in tort, contiaci or otherwise against the Governmental Lender irrespective of whether such parties have notice thereof. '
Section 4.2. Delivery of Security. To provide security for the payment ofthe Funding Loan and each Governmental Lender Note, the Governmental Lender has pledged and assigned to secure payment of the Funding Loans and the Governmental Lender Notes its right, title and interest in the Security lo the Servicer, as administrative agent for the Funding Lenders. In connection with such pledge, assignment, transfer and conveyance, the Governmental Lender shall deliver to the Servicer, as administrative agent for the Funding Lenders the following documents or instruments promptly following their execution and, to the extent applicable, their recording or filing:
Fach Borrower Note endorsed without recourse to the applicable Funding Lender by the Governmental Lender;
The originally executed Borrower Loan Agreement and Regulatory Agreement;
The originally executed Security Instrument and all other Borrower Loan Documents existing at the t ime of delivery of the Borrower Notes and an assignment of the Security Instrument from the Governmental Lender to the Series B Funding Lender, as administrative agent and Servicer for the Funding Lenders, in recordable form;
Uniform Commercial Code financing statements or other chattel security documents giving notice of each Funding Lender's status as an assignee of the Governmental Lender's security interest in any personal property forming part of the Project, in form suitable for filing; and
Uniform Commercial Code financing statements giving notice of the pledge by the Governmental Lender of the Security pledged under this Funding Loan Agreement.
The Governmental Lender shall deliver and deposit with the Servicer, as administrative agent for the Funding Lenders such additional documents, financing statements, and instruments as the Servicer, as administrative agent for the Funding Lenders may reasonably require from time to time for the belter perfecting and assuring to the Series B Funding Lender, as agent and Servicer for the Funding Lenders of its lien and security interest in and to the Security including, at the request of such Series B Funding Lender, any amounts held under the Contingency Draw-Down Agreement, at the expense of the Borrower.
ARTICLE V LIMITED LIABILITY
Section 5.1. Source of Payment of Governmental Lender Notes and Other Obligations; Disclaimer of General Liability. The Governmental Lender Notes, together with premium, if any, and interest thereon, are special, limited obligations ofthe Governmental Lender, payable solely from the security pledged hereunder. The Governmental Lender Notes are not a general obligation of the Governmental Lender or a charge against ils general credit or the general credit taxing powers of the State, the Governmental Lender, or any other political subdivision thereof, and shall never give rise to any pecuniary liability oflhe Governmental Lender, and neither the Governmental Lender, the Slate nor any
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other political subdivision thereof shall be liable for the payments of principal of and. premium, if any. and interest on lhe Governmental Lender Notes, and the Governmental Lender Noles are payable from no other source, but are special, limited obligations ofthe Governmental Lender, payable solely oui oflhe security pledged hereunder and receipts of the Governmental Lender derived pursuant to ihis Iunding Loan Agreement. No holder of the Governmental Lender Notes or any interest therein has the right lo compel any exercise of the taxing power of the State, the Governmental Lender or any olher political subdivision thereof to pay the Governmental Lender Notes or the interest or premium, if any, thereon.
Section 5.2. Exempt from Individual Liability. No recourse shall be had for the payment of the principal of. premium, if any, or the interest on the Governmental Lender Notes or for any claim based thereon or any obligation, covenant or agreement in this Funding Loan Agreement against any official, officer, agent, employee or independent contractor of the Governmental Lender or any person executing the Governmental Lender Notes in his or her personal capacity. No covenant, stipulation, promise, agreement or obligation contained in the Governmental Lender Notes, this . Funding Loan Agreement or any other document executed in connection herewith shall be deemed to be the covenant, stipulation, promise, agreement or obligation ofany present or future official, officer, agent or employee ofthe Governmental Lender in his or her individual capacity and neither any official ofthe Governmental Lender nor any officers executing the Governmental Lender Notes shall be liable personally on the Governmental Lender Notes or under this Funding Loan Agreement or be subject lo any personal liability or accountability by reason of the execution and delivery of the Governmental Lender Notes or the execution of this Funding Loan Agreement.
ARTICLE VI
CLOSING CONDITIONS; APPLICATION OF FUNDS
Section 6.1. Conditions Precedent to Closing. Closing ofthe Funding Loan on the Closing Date shall be conditioned upon satisfaction or waiver by each Funding Lender in its sole discretion of each of the conditions precedent to closing set forth in this Funding Loan Agreement, including but not limited to the following:
Receipt by the Funding Lenders of the original corresponding Governmental Lender
Note;
Receipt by the Funding Lenders of the original executed applicable Borrower Note, endorsed to the applicable Funding Lender by the Governmental Lender;
Receipt by the Funding Lenders of executed counterparts of this Funding Loan Agreement, the Borrower Loan Agreement, the Construction Funding Agreement, the Regulatoiy Agreement, the Tax Compliance Agreement, the Security Instrument, and any UCC financing statement required by the Security Instrument;
A certified copy ofthe Ordinance;
Executed Required Transferee Representations from the Funding Lenders;
(0 Delivery into escrow of all amounts required to be paid in connection wilh the origination of the Borrower Loans and the Funding Loans and any underlying real estate transfers or transactions, including the Costs of Funding Deposit, [in accordance with Section 2.3(c)(ii) of the Bonower Loan Agreement):
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Receipt by tlie Funding Lenders of a Lax Counsel Approving Opinion:
Receipt bv the Funding Lenders of an Opinion of Counsel from Tax Counsel to the cffcci that the Governmental Lender Noles are exempt from registration under the Securities Act. and this Funding Loan Agreement is exempt from qualification under the Trust Indenture Act of 1939. as amended;
(i) Delivery of.an opinion of counsel to the Borrower addressed to the Governmental Lender
and the Funding Lenders to the effect that the Borrower Loan Documents and the Regulatory Agreement
are valid and binding obligations ofthe Borrower, enforceable against: the Borrower in accordance with
their terms, subject to such exceptions and qualifications as are acceptable to the Governmental Lender
and the Funding Lenders: and
(j) Receipt by the Funding Lenders of any other documents or opinions that the Funding Lenders or Tax Counsel may reasonably require.
ARTICLE VII FUNDS AND ACCOUNTS
Section 7.1. Authorization to Create Funds and Accounts. No funds or accounts shall be established in connection with the Funding Loans at the time of closing and origination ofthe Funding Loans. The Funding Lenders and the Servicer, if any, are authorized to establish and create from lime lo time such other funds and accounts or subaccounts as may be necessary for the deposit of moneys (including, without limitation, insurance proceeds and/or condemnation awards), if any, received by the Governmental Lender, the Funding Lenders or the Servicer pursuant to the terms hereof or any of the olher Funding Loan Documents and not immediately transferred or disbursed pursuant to the terms ofthe Funding Loan Documents and/or the Borrower Loan Documents.
Section 7.2. Investment of Funds. Amounts held in any funds or accounts created under this Funding Loan Agreement shall be invested in Permitted Investments at the direction of the Borrower, subject in all cases to the restrictions of Section 8.7 hereof and ofthe Tax Compliance Agreement.
ARTICLE VIII REPRESENTATIONS AND COVENANTS
Section 8.1. General Representations. The Governmental Lender makes the following representations as lhe basis for the undertakings on its pari herein contained:
(a) The Governmental Lender is a municipality and home rule unil of local government duly organized and validly existing under the Constitution and laws ofthe State. The Governmental Lender has power and lawful authority to adopt the Ordinance, to execute and deliver the Funding Loan Documents lo which il is a party (the "Governmental Lender Documents"), to execute and deliver the Governmental Lender Notes and receive the proceeds ofthe Funding Loan, to apply the proceeds ofthe Funding Loan to make the Borrower Loan, to assign the revenues derived and to be derived by the Governmental Lender from the Borrower Loan to the Servicer, as administrative agent for the Funding Lender, and to perform and observe the provisions of the Governmental Lender Documents and the Governmental Lender Notes on its part to be performed and observed.
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The City Council of the Govenunental Lender has approved the Ordinance and the Ordinance has not been amended, modified or rescinded and is in full force and effect as of the dale hereof.
The Governmental Lender has duly authorized the execution and delivery of each oflhe funding Loan Agreement and the Governmental Lender Notes and the performance ofthe obligations of the Governmental Lender thereunder.
The Governmental Lender makes no representation or warranty, express or implied, that the proceeds of the funding Loans will be sufficient to finance the acquisition, construction and equipping of lhe Project or that the Project will be adequate or sufficient for the Borrower's intended purposes.
The revenues and receipts to be derived from the Borrower Loan Agreement, the Borrower Notes and this funding Loan Agreement have nol been pledged previously by the Governmental Lender to secure any of its notes or bonds other than the repayment ofthe Funding Loans.
THF GOVERNMENTAL LENDER MAKES NO REPRESENTATION, COVENANT OR AGREEMENT AS TO THE FINANCIAL POSITION OR BUSINESS CONDITION OF THE BORROWER OR THE PROJECT AND DOES NOT REPRESENT OR WARRANT AS TO ANY S TATEMENTS, MATERIALS, REPRESENTATIONS OR CERTIFICATIONS FURNISHED BY THE BORROWER IN CONNECTION WITH THE FUNDING LOANS OR THE BORROWER LOANS OR AS TO THE CORRECTNESS, COMPLETENESS OR ACCURACY THEREOF.
Section 8.2. Further Assurances. The Governmental Lender will do, execute, acknowledge, when appropriate, and deliver from time to time at the request of the Funding Lenders, to the extent permitted by the Ordinance, such further acts, instruments, financing statements and other documents as are necessary or desirable to better assure, transfer, pledge or assign to the Servicer, as administrative agent for the Funding Lenders or holders of interests in the applicable Funding Loan, and grant a security interest unto the Servicer, as administrative agent for the Funding Lenders or holders of interests in the applicable Funding Loan in and to the Security and the other properties and revenues heiein described and otherwise to carry out the intent and purpose ofthe Funding Loan Documents and the applicable Funding Loan.
Section 8.3. Payment of Funding Loan Obligations. The Governmental Lender will pay or cause to be paid the principal of, prepayment premium, if any, and the interest on the Funding Loans as the same become due, but solely from the Security, as described in Section 5.1 of this Funding Loan Agreement.
Section 8.4. Funding Loan Agreement Performance. The Funding Lenders, on behalf of the Governmental Lender and with the Written Consent ofthe Governmental Lender, may (but shall not be required or obligated) perform and observe any such agreement or covenant of the Governmental Lender under the Funding Loan Agreement, all to the end that the Governmental Lender's rights under the Funding Loan Agreement may be unimpaired and free from default.
Section 8.5. Servicer. The Funding Lenders may appoint a Servicer to service and administer the Governmental Loans and the Borrower Loans on behalf of the Funding Lenders, including w ithout limitation the fulfillment of rights and responsibilities granted by Governmental Lender to Funding Lenders pursuant to Section 2.1 of the Borrower Loan Agreement; provided, however, lhat no
appointment ot" a Servicer shall release any Funding Fender from ultimate responsibility For any obligation ol such Funding Fender hereunder.
Section 8.6. l ax Covenants. The Governmental Fender covenants to and lor the benefit of the Funding Lenders and any olher holders of an interest in the Governmental Lender Notes thai, notwithstanding any other provisions of this Funding Loan Agreement or ofany other instrument, it will:
At all times do and perform all acts and things permitted by law and this Funding Loan Agreement which are necessary or desirable in order to assure, and will not knowingly take any action which will adversely affect, the tax-exempt status ofthe Governmental Lender Notes: and
Not use or knowingly permit the use ofany proceeds ofthe Funding Loan or other funds ofthe Governmental Lender, directly or indirectly, in any manner, and will nol take or permit to be taken any other action or actions, which would result in any of the Governmental Lender Notes being treated as an obligation not described in Section 142(a)(7) ofthe Code by reason of the Governmental Lender Notes or interest thereon not meeting the requirements of Section 142(d) of the Code;
In furtherance of the covenants in this Section 8.6, the Governmental Lender and the Bonower shall execute, deliver and comply with the provisions ofthe Tax Compliance Agreement, which are by this reference incorporated into this Funding Loan Agreement and made a part of this Funding Loan Agreement as if set forth in this Funding Loan Agreement in full, and by its acceptance oflhis Funding Loan Agreement the Funding Lenders acknowledge receipt of the Tax Compliance Agreement and acknowledge its incorporation in this Funding Loan Agreement by this reference. Each Funding Lender agrees it will invest funds held under this Funding Loan Agreement in Permitted Investments in accordance with the direction ofthe Borrower and the terms of this Funding Loan Agreement and the Tax Compliance Agreement (this covenant shall extend throughout the term of the Funding Loans, to all funds and accounts created under or in connection with this Funding Loan Agreement and all moneys on deposit to the credit ofany Fund or Account); provided that each Funding Lender shall be deemed to have complied with such requirements and shall have no liability to the extent it reasonably follows directions ofthe Borrower not inconsistent with the terms of this Funding Loan Agreement and the Tax Compliance Agreement or otherwise complies with the provisions ofthe Funding Loan Agreement relating lo funds and accounts.
For purposes of this Section 8.6 the Governmental Lender's compliance shall be based solely on matters within the Governmental Lender's control and no acts, omissions or directions oflhe Bonower, the Funding Lenders or any other Persons shall be attributed to the Governmental Lender.
ln complying wilh the foregoing covenants, the Governmental Lender and/or the Funding Lenders may rely from time to time on a Tax Counsel No Adverse Effect Opinion or other appropriate ' opinion of Tax Counsel.
Section 8.7. Performance by the Borrower. Without relieving the Governmental Lender From the responsibility for performance and observance ofthe agieements and covenants required to be performed and observed by it hereunder, the Borrower, on behalf of the Governmental Lender and wilh the Written Consent of the Governmental Lender, may perform any such agreement or covenant if no Borrower Loan Agreement Default or Potential Default under the Borrower Loan Agreement exists.
Section
Section 8.9. Bonowei- Loan Agreement Performance.
The Servicer and the funding Lenders, on behalf of the Governmental Lender, may (but shall nol be required or obligated to) perform and observe any such agreement or covenant of the Governmental Lender under the Borrower Loan Agreement, all to the end that the Governmental Lender's rights under lhe Borrower Loan Agreement may be unimpaired and free from default.
The Governmental Lender will promptly notify the Bor rower, the Servicer and the funding Lenders in writing ofthe occurrence ofany Borrower Loan Agreement Default, provided that the Governmental Lender has received written notice or otherwise has actual knowledge of such event; and further provided that the Governmental Lender shall have no liability to any person for its failure to provide any such notice so long as it has made a good faith effort to comply with such provisions.
The Funding Lenders will promptly notify the Borrower, the Servicer, if any, and the Governmental Lender in writing ofthe occurrence ofany Event of Default hereunder or any Borrower Loan Agreement Default known to the Funding Lenders.
Section 8.10. Maintenance of Records; Inspection of Records.
The Funding Lenders (or the Servicer as agent for the Funding Lenders) shall keep and maintain adequate records pertaining to the funds and accounts, if any, established hereunder, including all deposits to and disbursements from said funds and accounts and shall keep and maintain the registration books for the Funding Loans and interests therein. Each Funding Lender shall retain in its possession all certifications and other documents presented to it, all such records and all records of principal, interest and prepayment premium, if any, paid on the applicable Funding Loan, subject to the inspection of the Borrower, the Governmental Lender, the Servicer and their representatives al all reasonable times and upon reasonable prior notice.
The Governmental Lender will at any and all times, upon the reasonable request of the Servicer, the Borrower or the Funding Lenders, afford and procure a reasonable opportunity by their respective representatives to inspect the books, records, reports and other papers of the Governmental Lender relating to the Project and the Funding Loans, if any, and to make copies thereof.
Section 8.11. Representations and Warranties ofthe Funding Lenders. Each funding Lender hereby separately represents to the Governmental Lender and the Borrower (hat il is duly authorized to enter into and perform this Funding Loan Agreement, and has full authority to take such action as it may deem advisable with respect to all matters pertaining to this Funding Loan Agreement.
ARTICLE IX DEFAULT; REMEDIES
Section 9.1. Events of Default. Any one or more ofthe following shall constitute an event of default (an " Event of Default7') under this Funding Loan Agreement (whatever the reason for such even! and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):
A delimit in the payment ofany interest upon the Governmental Lender Notes when such interest becomes due and payable; or
A delimit in the payment of principal of, or premium on, any Governmental Lender Notes when such principal or premium becomes due and payable, whether at ils stated maturity, by declaration of acceleration or call for mandatory prepayment or otherwise; or
Subject to Section 8.7 hereof, default in the performance or breach of any material covenant or warranty of the Governmental Lender in this Funding Loan Agreement (other than a covenant or warranty or default in the performance or breach of which is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 30 days after there has been given written notice, as provided in Section 11.1 hereof, lo the Governmental Lender and the Borrower by lhe Funding Lenders or the Servicer, specifying such default or breach and requiring it to be remedied and stating lhat such notice is a "Notice of Default" under this Funding Loan Agreement; provided that, so long as the Governmental Lender, Borrower, Equity Investor or Special Limited Partner has commenced to cure such failure to observe or perform within the thirty (30) day cure period and the subject matter of the default is not capable of cure within said thirty (30) day period and the Governmental Lender, Borrower, Equity Investor or Special Limited Partner is diligently pursuing such cure to the satisfaction oflhe Funding Lenders or the Servicer as administrative agent for the Funding Lenders, with the Funding Lender's Written Direction or Written Consent, then the Governmental Lender shall have an additional period of time as reasonably necessary (not to exceed 30 days unless extended in writing by the Funding Lenders or the Servicer) within which to cure such default; or
A default in the payment of any Additional Borrower Payments; or
Any other "Default" or "Event of Default" under any of the other Funding Loan Documents (taking into account any applicable grace periods therein).
Section 9.2. Acceleration of Maturity; Rescission antl Annulment.
Subject to the provisions of Section 9.9 hereof, upon the occurrence of an Event of Default under Section 9.1 hereof, then and in every such case, the Funding Lenders or the Servicer as administrative agent for the Funding Lenders may declare the principal ofthe applicable Funding Loan and the corresponding Governmental Lender Note and the interest accrued to be immediately due and payable, by notice to lhe Governmental Lender and the Borrower and upon any such declaration, all principal of and Prepayment Premium, if any, and interest on the applicable Funding Loan and the applicable Governmental Lender Note shall become immediately due and payable.
At any time after a declaration of acceleration has been made pursuant to subsection (a) of this Section, the Funding Lenders or the Servicer may by Written Notice to the Governmental Lender, rescind and annul such declaration and its consequences if:
There has been deposited with the Funding Lenders a sum sufficient lo pay (1) all overdue installments of interest on the Governmental Lender Notes, (2) the principal of and Prepayment Premium on the Governmental Lender Notes lhat has become due otherwise than by such declaration of acceleration and interest thereon al the rate or rales prescribed therefor in the Governmental Lender Notes, (3) to the extent that payment of such interest is lawful, interest
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upon overdue installments of interest at the rate or rates prescribed therefor in the Governmental Lender Notes, and (4) all sums paid or advanced by the Funding Lenders and the reasonable compensation, expenses, disbursements and advances of the Funding Lenders, its agents and counsel (but only to the extent not duplicative with subclauses (1) and (3) above); and
All Events of Defauli, other than the non payment ofthe principal ofthe Government Lender Notes which have become due solely by such declaration of acceleration, have been cured or have been waived in writing as provided in Section 9.9 hereof.
No such rescission and annulment shall affect any subsequent default or impair any right consequent thereon.
Notwithstanding the occurrence and continuation of an Event of Default, it is understood that the Funding Lenders shall pursue no remedies against the Borrower or the Project if no Borrower Loan Agreement Default has occurred and is continuing. An Event of Default hereunder shall not in and of itself constitute a Borrower Loan Agreement Default or a default under any other Funding Loan Document.
Section 9.3. Additional Remedies; Funding Lender Enforcement.
Upon the occurrence of an Event of Default, the Funding Lenders or the Servicer as administrative agent for the Funding Lenders may, subject to the provisions of this Section 9.3 and Section 9.9 hereof, proceed to protect and enforce the rights of the Funding Lenders by mandamus or other suit, action or proceeding at law or in equity. No remedy conferred by this Funding Loan Agreement upon or remedy reserved to the Funding Lenders is intended to be exclusive of any other remedy, but each such remedy shall be cumulative and shall be in addition to any other remedy given to the Funding Lenders hereunder or now or hereafter existing at law or in equity or by statute.
Upon the occurrence and continuation ofany Event of Default, the. Funding Lenders or the Servicer as administrative agent for the Funding Lenders, may proceed forthwith to protect and enforce the rights of the Funding Lender and this Funding Loan Agreement by such suits, actions or proceedings as the Funding Lenders, in their sole discretion, shall deem expedient. The Funding Lenders or the Servicer as administrative agent for the Funding Lenders shall have upon the occurrence and continuation ofany Event of Default all rights, powers, and remedies with respect to the Security as arc available under the Uniform Commercial Code applicable thereto or as are available under any other applicable law at the time in effect and, without limiting the generality ofthe foregoing, the Funding Lenders or the Servicer as administrative agent for the Funding Lenders may proceed at law or in equity or otherwise, to the extent permitted by applicable law:
to take possession of the Security or any part thereof, with or without legal piocess, and to hold, service, administer and enforce any rights thereunder or thereto, and otherwise exercise all rights of ownership thereof, including (but not limited to) the sale of all or part ofthe Security:
lo become mortgagee of record for the applicable Bonower Loan including, without limitation, completing the assignment ofthe Security Instrument by the Governmental Lender to the applicable Funding Lender or the Servicer as administrative agent lor the Funding Lenders as anticipated by this Funding Loan Agreement, and recording the same in the real estate records of the jurisdiction in which the Project is located, without further act or consent of the Governmental Lender, and to service and administer the same for its own account,
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lo service and adminisler lhc Funding Loan as agent and on behalf of the Governmental Lender or otherwise, and. if applicable, to take such actions necessary' to enforce the Borrower Loan Documents and the Funding Loan Documents on its own behalf, and to take such alternative courses of action, as it may deem appropriate; or
to take such steps to protect and enforce its rights whether by action, suit or proceeding in equiiy or at law for lhe specific performance of any covenant, condition or agreement in the Governmental Lender Notes, this Funding Loan Agreement or the olher Funding Loan Documents, or the Borrower Loan Documents, or in and of the execution of any power herein granted, or for foreclosure hereunder, or for enforcement ofany other appropriate legal or equitable remedy or otherwise as the Funding Lenders may elect.
Whether or not an Event of Default has occurred, and except as provided in Section 9.15, the Funding Lenders or the Servicer as administrative agent for the Funding Lenders, in their/its sole discretion, shall have the sole right to waive or forbear any term, condition, covenant or agreement ofthe Security Instrument, the Borrower Loan Agreement, the Borrower Notes or any other Borrower Loan Documents or Funding Loan Documents applicable to the Borrower, or any breach thereof, other than a covenant that would adversely impact the tax-exempt status ofthe interest on the Governmental Lender Notes, and provided that the Governmental Lender may enforce specific performance wilh respect to the Unassigned Rights.
If the Borrower defaults in the performance or observance of any covenant, agreement or obligation ofthe Borrower set forth in the Regulatory Agreement, and if such default remains uncured for a period of 60 days after the Borrower and the Funding Lenders receive Written Notice stating that a default under the Regulatory Agreement has occurred and specifying the nature of the default, the Funding Lenders or the Servicer as administrative agent for the Funding Lenders shall have the right to seek specific performance ofthe provisions of the Regulatory Agreement or to exercise its other rights or remedies thereunder.
If the Borrower defaults in the performance of its obligations under the Borrower Loan Agreement to make rebate payments, to comply with any applicable continuing disclosure requirements, or to make payments owed pursuant to Sections 2.5, 5.14 or 5.15 of the Borrower Loan Agreement for fees, expenses or indemnification, the Funding Lenders or-the Servicer as administrative agent for the Funding Lenders shall have the right to exercise all or their respective rights and remedies thereunder (subject to the last paragraph of Section 9.14 hereof).
Section 9.4. Application of Money Collected. Any money collected by the Funding Lenders or the Servicer as administrative agent for the Funding Lenders pursuant to this Article and any other sums then held by the Funding Lenders or the Servicer as part of the Security, shall be applied in the following order, at the date or dates fixed by the Funding Lenders:
First: lo the payment ofany and all fees due the Governmental Lender, the Servicer or the Rebate Analyst under the Borrower Loan Documents;
Second: To the payment ofany and all amounts due under the Funding Loan Documents other than with respect to principal and interest accrued on the Funding Loans;
Third: To the payment ofthe whole amount ofthe Funding Loans, as evidenced by the Governmental Lender Notes, then due and unpaid in respect of which or for the benefit ol which such money has been collected, with interest (to the extent that such interest has been collected or a sum
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-4X77-X5-11-5-126 fi
suflicienl therefor has been so collected and payment thereof is legally enfoiceable at the respective rale or rates prescribed therefor in the Governmental Lender Notes) on overdue principal of. and Prepayment Premium and overdue installments of interest on the Governmental Lender Notes: provided, however, that partial interests in any portion of the Governmental Lender Notes shall be paid in such order of priority as may be prescribed by Written Direction ofthe Funding Lenders or the Servicer in its sole and absolute discretion; and
Fourth: The payment ofthe remainder, if any, to the Borrower or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.
If and to the extent this Section 9.4 conflicts with the provisions of the Servicing Agreement, the provisions of the Servicing Agreement shall control. Capitalized terms used in this Section 9.4 but not otherwise delined in this Funding Loan Agreement shall have the meanings given such terms in the Servicing Agreement.
Section 9.5. Remedies Vested in Funding Lender. All rights of action and claims under this Funding Loan Agreement or the Governmental Lender Notes may be prosecuted and enforced by the Funding Lenders or the Servicer as administrative agent for the Funding Lenders without the possession ofthe Governmental Lender Notes or the production thereof in any proceeding relating thereto.
Section 9.6. Restoration of Positions. If the Funding Lenders or the Servicer shall have instituted any proceeding to enforce any right or remedy under this Funding Loan Agreement and such proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Funding Lenders, then and in every such case the Governmental Lender and the Funding Lenders shall, subject to any determination in such proceeding, be restored to their former positions hereunder, and thereafter all rights and remedies of the Governmental Lender and the Funding Lenders shall continue as though no such proceeding had been instituted.
Section 9.7. Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the Funding Lender is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment ofany right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment ofany other appropriate right or remedy.
Section 9.8. Delay or Omission Not Waiver. No delay or omission ofthe Funding Lenders or the Servicei to exercise any right or remedy accruing upon an Event of Default shall impair any such right or remedy or constitute a waiver ofany such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Funding Lenders may be exercised from time to time, and as often as may be deemed expedient, by Funding Lenders or the Servicer. No waiver ofany default or Event of Default pursuant to Section 9.9 hereof shall extend to or shall affect any subsequent default or Event of Default hereunder or shall impair any rights or remedies consequent thereon.
Section 9.9. Waiver of Past Defaults. Before any judgment or decree for payment of money due has been obtained by the Funding Lenders, the Funding Lenders or the Servicer as administrative agent for the Funding Lenders may, subject to Section 9.6 hereof, by Written Notice to the Governmental Lender and the Borrower, waive any past default hereunder or under the Borrower Loan Agreement and its consequences except for default in obligations due the Governmental Lender pursuant lo or under the Unassigned Rights. Upon any such waiver, such default shall cease to exist, and any Event of Defauli arising therefrom shall be deemed to have been cured, for every purpose oflhis funding Loan Agreement
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-IS77-Sv| lo.|.:c C
and the Borrower Loan Agreement; but no such waiver shall extend lo any subsequent or other defauli or impair any right consequent thereon.
Section 9.10. Remedies Under Borrower Loan Agreement or Borrower Notes. As set forth in this Section 9.10 but subject to Section 9.9 hereof, the Funding Lenders or the Servicer as administrative agent for tlie Funding Lenders shall have the right, in its own name or on behalf of the Governmental Lender, to declare any default and exercise any remedies under the Borrower Loan Agreement or the applicable Borrower Note, whether or not the corresponding Governmental Lender Notes have been accelerated or declared due and payable by reason of an Event of Default.
' Section 9.11. Waiver of Appraisement and Other Laws.
To the extent permitted by law, the Governmental Lender will not at any time insist upon, plead, claim or lake the benefit or advantage of, any appraisement, valuation, stay, extension or redemption law now or hereafter in force, in order to prevent or hinder the enforcement of this Funding Loan Agreement; and the Governmental Lender, for itself and all who may claim under it, so far as it or they now or hereafter may lawfully do so, hereby waives the benefit of all such laws. The Governmental Lender, for itself and all who may claim under it, waives, lo the extent that it may lawfully do so. all right to have the property in the Security marshaled upon any enforcement hereof.
If any law now in effect prohibiting the waiver referred to in Section 9.11(a) shall hereafter be repealed or cease to be in force, such law shall not thereafter be deemed to constitute any part of the contract herein contained or lo preclude the application oflhis Section 9.11.
Section 9.12. Suits to Protect the Security. The Funding Lenders or the Servicer as administrative agent for the Funding Lenders shall have power to institute and to maintain such proceedings as it may deem expedient to prevent any impairment of the Security by any acts that may be unlawful or in violation of this Funding Loan Agreement and to protect the interests of the Funding Lenders in the Security and in the rents, issues, profits, revenues and other income arising therefrom, including power to institute and maintain proceedings to restrain the enforcement of or compliance with any Governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement of or compliance with such enactment, rule or order would impair the security hereunder or be prejudicial to the interests of the Funding Lenders.
Section 9.13. Remedies Subject to Applicable Law. All rights, remedies and powers provided by this Article may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law in the premises, and all the provisions of this Article arc intended to be subject to all applicable mandatory provisions of law which may be controlling in the premises and to be limited to the extent necessary so that they will not render this Funding Loan Agreement invalid, unenforceable or not entitled lo be recorded, registered or filed under the provisions of any applicable law.
Section 9.14. Assumption of Obligations. In the event that the Funding Lenders, the Servicer or their respective permitted assignees or designees in accordance with Section 2.4 hereof shall become the legal or beneficial owner ofthe Project by foreclosure or deed in lieu of foreclosure, such party shall succeed to the rights and the obligations of the Borrower under the Borrower Loan Agreement, the applicable Borrower Notes, the Regulatory Agreement and any olher Funding Loan Documents lo which the Borrower is a party. Such assumption shall be effective from and after lhe effective date of such acquisition and shall be made with the benefit ofthe limitations of liability set forth therein and without any liability for the prior acts ofthe Borrower.
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¦IX77-X5-I C
ll is thf intention ofthe parties hereto lhat upon lhc occurrence and continuance of an Event of Defauli hereunder, rights and remedies may be pursued pursuant to the terms of the Funding Loan Documents, subject lo the last paragraph of Section 9.2.
Section 9.15. Remedies upon Unremedied Material Funding Lender Event. Upon the occurrence of a Material Funding Lender Event affecting any Funding Lender which shall continue unremedied for a pei iod of 60 days (a "Funding Lender Event of Default'5), the Governmental Lender may direct that the Governmental Lender Note of such affected Funding Lender be transferred lo and obligations and liabilities thereunder be assumed by another lender approved to act as Funding Lender by the Governmental Lender pursuant to Section 2.4(b) hereof and acceptable to the Borrower, provided, however, that no such transfer shall become effective until (a) the affected Funding Lender has been fully reimbursed for all advances made and all expenses incurred and all other amounts owed to such Funding Lender with respect to the applicable Governmental Lender Note through the date of transfer, (b) such Funding Lender shall be fully released in writing by the Governmental Lender, the Borrower and the successor Funding Lender from any and all continuing obligations and liabilities with respect lo the applicable Funding Loan, (c) such other lender shall have executed and delivered to the affected Funding Lender the Required Transferee Representations, and (d) the affected Funding Lender shall be indemnified by the Borrower for any losses incurred by such Funding Lender with respeel to the applicable Funding Loan (except losses arising from such Funding Lender's gross negligence or willful misconduct or pursuant to clause (b)(2) of the definition of Material Funding Lender Event). Notwithstanding anything herein lo the contrary contained, such Funding Lender shall not be liable lo the Governmental Lender or the Borrower for any loss of tax-exemption, tax or other charge that may be imposed in connection with any such sale or assignment or for any fees and expenses incurred by the Governmental Lender or Borrower in connection therewith; nor shall such Funding Lender be liable to the Governmental Lender or Borrower for any special, indirect, consequential, exemplary or punitive damages, all such liability being expressly waived, to the fullest extent permitted by law. The Series B Funding Lender shall not serve as administrative agent or Servicer for any replacement Funding Lender selected pursuant to this Section unless a separate servicing agreement is entered into between the replacement Funding Lender and the Series B Funding Lender.
ARTICLE X
AMENDMENT; AMENDMENT OF BORROWER LOAN AGREEMENT AND OTHER DOCUMENTS
Section 10.1. Amendment of Funding Loan Agreement. Any of the terms of this Funding Loan Agreement and the Governmental Lender Notes may be amended or waived only by an instrument signed by the Funding Lenders and the Governmental Lender, provided, however, no such amendment which materially affects the rights, duties, obligations or other interests ofthe Borrower shall be made without the consent ofthe Borrower, and, provided further, that if the Borrower is in default beyond any applicable notice and cure period under any Funding Loan Document, no Borrower consent shall be required unless such amendment has a material adverse effect on the rights, duties, obligations or other interests ofthe Borrower. All ofthe terms of this Funding Loan Agreement shall be binding upon the successors and assigns of and all persons claiming under or through the Governmental Lender or any such successor or assign, and shall inure to the benefit of and be enforceable by the successors and assigns of the Funding Lenders.
Section 10.2. Amendments Requiring Funding Lender Consent. The Governmental l ender shall nol consent to any amendment, change or modification of the Borrower Loan Agreement or any other Borrower Loan Document or Funding Loan Document without lhe prior Wrilicn Consent ofthe f unding Lenders: provided, however, that such prior Written Consent shall not be required with respect lo
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.|N77-N5-lloO> f,
any such amendment, change or modification undertaken by the Governmental Lender in order to preserve one or more of its Unassigned Rights. Governmental Lender agrees to provide the f unding Lender with prompt notification of any such amendments, modifications or changes not requiring the prior Written Consent ofthe Funding Lenders.
Section 1(1.3. Consents and Opinions. No amendment to this Funding Loan Agreement or any other Funding Loan Document entered into under this Article X or any amendment, change or modification otherwise permitted under this Article X shall become effective unless and until (i) each Funding Lender shall have approved the same in writing in its sole discretion and (ii) the Funding Lenders and the Governmental Lender shall have received, at the expense oflhe Borrower, a I ax Counsel No Advei se Effect Opinion and an Opinion of Counsel to the effect that any such proposed amendment is authorized and complies with the provisions of this Funding Loan Agreement and is a legal, valid and binding obligation ofthe parties thereto, subject to normal exceptions relating to bankruptcy, insolvency and equitable principles limitations. No modification or amendment ofthe terms ofthe Borrower Loan Agreement or the Borrower Notes may be undertaken without the prior Written Consent of the Governmental Lender and the Funding Lenders and the provision to the Funding Lenders and the Governmental Lender, at the expense ofthe Borrower, of a fax Counsel No Adverse Affect Opinion with regard to such proposed modification.
Any consents required pursuant to this Article X from, or on behalf of, the Governmental Lender may be executed by an Authorized City Representative.
ARTICLE XI MISCELLANEOUS
Section 11.1. Notices.
(a) All notices, demands, requests and other communications required or permitted to be given by any provision oflhis Funding Loan Agreement shall be in writing and sent by first class, regular, registered or certified mail, commercial delivery service, overnight courier, telegraph, telex, telecopier or facsimile transmission, air or other courier, or hand delivery to the party to be notified addressed as follows. ,
If to the Governmental Lender: City of Chicago
Department of Housing and Economic Development 121 North LaSalle Street, 10"' Floor Chicago, Illinois' 60602
Attention: Commissioner, Department of Mousing and Economic Development Telephone: (312) 744-4190 Facsimile: (312) 742-2271
and with a copy to: Cily of Chicago
Office of Corporation Counsel
121 North LaSalle Street, Room 600
Chicago, Illinois 60602
Attention: Finance and Economic Development Division Telephone: (312)744-0200 Facsimile: (312) 744-8538
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.|,S7_-S>l I -5 126 (i
City of Chicago
Office ofthe Cily Comptroller's Office 121 North LaSalle Street. Suite 700 Chicago, Illinois 60602 Attention: City Comptroller Telephone: (312)744-7106 Facsimile: (312) 742-6544
RS Affordable 1 LLC
c/o Related Companies
350 West Hubbard Street, Suite 300
Chicago, IL 60654
Attention: Sarah Wick
Levitt & Boccio, LLP 423 West 55lh Street, 8lh Floor New York, NY 10019 Attention: David Boccio
CIBC Bank USA
120 South LaSalle Street
Chicago, Illinois 60603
Attention: Cheryl Wilson, Managing Director
and with a copy lo:
Charity & Associates, P.C. 20 North Clark Street, Suite 1 150 Chicago, Illinois 60602 Attention: Elvin E. Charity.
BMO Harris Bank N.A.
115 S. LaSalle Street-19W
Chicago, IL 60603
Attention: James J. West, Director
and with a copy lo:
Charity & Associates, P.C. 20 North Clark Street, Suite I 1 50 Chicago, Illinois 60602 Attention: Elvin E. Charity
Hudson Roosevelt Square LLC Hudson SLP LLC c/o Hudson Housing Capital LLC 630 Fifth Avenue, 2V' Floor New York, New York 10111 Attention: General Counsel
And lo: Holland 10 St. James Avenue. I2the Floor Boston. Massachusetts 021 16 Attention: Dayna M. Flutchinson. Fsq.
Any such notice, demand, request or communication shall be deemed to have been given and received for all purposes under this Funding Loan Agreement: (i) three Business Days after the same is deposited iu any official depository or receptacle of the United States Postal Service first class, or, if applicable, certified mail, return receipt requested, postage prepaid; (ii) on the date of transmission when delivered by telecopier or facsimile transmission, email or other telecommunication device, provided any telecopy or other electronic transmission received by any parly after 4.00 p.m., local time, as evidenced by the time shown on such transmission, shall be deemed to have been received the following Business Day; (iii) on the next Business Day after the same is deposited with a nationally recognized overnight delivery serv ice that guarantees overnight delivery; and (iv) on the date of actual delivery to such party by any other means; provided, however, if the day such notice, demand, request or communication shall be deemed to have been given and received as aforesaid is not a Business Day, such notice, demand, request or communication shall be deemed to have been given and received on the next Business Day; and provided further that notice to the Governmental Lender shall not be deemed to have been given until actually received by the Governmental Lender. Any facsimile, PDF or DocuSign signature by a Person on a document, notice, demand, request or communication required or permitted by this Funding Loan Agreement shall constitute a legal, valid and binding execution thereof by such Person.
Any party to this Funding Loan Agreement may change such party's address for the purpose of notice, demands, requests and communications required or permitted under this Funding Loan Agreement by providing Written notice of such change of address to all of the parlies by written notice as provided herein.
Section 11.2. Term of Funding Loan Agreement. This Funding Loan Agreement shall be in full force and effect until all payment obligations of the Governmental Lender hereunder have been paid in full and the Funding Loan has been retired or the payment thereof has been provided for (such payment or provision to be solely from the Security set forth in Article IV hereof as further provided in Section 8.8 hereof); except that on and after payment in full of the Governmental Lender Notes, this Funding Loan Agreement shall be terminated, without further action by the parties hereto.
Section 11.3. Successors and Assigns. All covenants and agreements in this Funding Loan Agreement by the Governmental Lender shall bind its successors and assigns, whether so expressed or not.
Section 11.4. L.egal Holidays, ln any case in which the date of payment ofany amount due hereunder or the date on which any other aci is to be performed pursuant to this Funding Loan Agreement shall be a day that is not a Business Day, then payment of such amount or such act need not be made on such date but may be made on the next succeeding Business Day, and such later payment or such act shall have the same force and effect as if made on the date of payment or lhc dale fixed for prepayment or the date fixed for such act. and no additional interest shall accrue for the period after such date and prior to the date of payment.
Section 11.5. Governing Law. I his Funding Loan Agieemeni shall be governed by and shall be enforceable in accordance with the laws oflhe State.
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IX77-.X5-II-5-I2C) ti
Section 11.6. Severability. If any provision oflhis Funding Loan Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability ofthe remaining portions shall nol in any way be affected or impaired. In case any covenant, stipulation, obligation or agreement contained in the Governmental Lender Notes or in this Funding Loan Agreement shall for any reason be held lo be usurious or in violation of law, then such covenant, stipulation, obligation or agreement shall be deemed to be the covenant, stipulation, obligation or agreement of the Governmental Lender or the Funding Lenders only to the full extent permitted by law.
Section 11.7. Execution in Several Counterparts. This Funding Loan Agreement may be contemporaneously executed in several counterparts, all of which shall constitute one and the same instrument and each of which shall be, and shall be deemed to be, an original.
Section 11.8. Reserved.
Section 11.9. Reserved.
Section 11.10. Electronic Transactions. The transactions described in this Funding Loan Agreement may be conducted, and related documents and may be stored, by electronic means. Copies, telecopies, facsimiles, PDFs, DocuSign, electronic files and other reproductions of original executed documents shall be deemed lo be authentic and valid counterparts of such original documents for all purposes, including the filing ofany claim, action or suit in the appropriate court of law.
Section 11.11. Reference Date. This Funding Loan Agreement is dated for reference purposes
only as of the first day of , 2022.
(Remainder of this page intentionally left blank)
IN WITNESS WHEREOF, the Funding Lenders and the Governmental Lender have caused this Funding Loan Agreement lo be duly executed as ol"lhe date First written above.
CIBC BANK USA, un Illinois slate chartered bank, as Series A Funding Lender
By: _ Name: Title:.
BMO HARRIS BANK, N.A., a national banking association, as Series B Funding Lender
By:_ Name: Title:
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CITY OF CHICAGO
Bv:
Name: Jennie Huang Bennett Title: Chief Financial Officer
[SEAL] Attest:
By:
Name: Andrea M. Valencia Title: City Clerk
Signature Page to Funding Loan Agreement
-IS77-XM lo-12d ii
EXHIBIT A
FORM OF GOVERNMENTAL LENDER NOTES
THIS NOTE MAY BE OWNED ONLY BY A PERMITTED TRANSFEREE IN ACCORDANCE WITH THE TERMS OFTHE FUNDING LOAN AGREEMENT, AND THE HOLDER HEREOF, BY THE ACCEPTANCE OF THIS FUNDING LOAN AGREEMENT (A) REPRESENTS THAT IT IS A PERMITTED TRANSFEREE AND (B) ACKNOWLEDGES THAT TT CAN ONLY TRANSFER THIS GOVERNMENTAL LENDER NOTE TO ANOTHER PERMITTED TRANSFEREE IN ACCORDANCE WITH THE, TERMS OF THE FUNDING LOAN AGREEMENT.
CITY OF CHICAGO
S
MULTI-F AMILY HOUSING REVENUE NOTE, SERIES 2022[A][B| ROOSEVELT SQUARE PHASE 3B
DATED , 2022 not to exceed $[ FUN DI NG LOAN AMOUNT]
PGR VALUE RECEIVED, the undersigned CITY OF CHICAGO ("Obligor") promises to pay to the order of [CIBC BANK USA][BMO HARRIS BANK N.A.] ("Holder") the maximum principal sum
of Thousand and no/100 Dollars $ , on , 2022, or
earlier as provided herein, together with interest thereon at the rates, at the times and in the amounts provided below.
Obligor shall pay to the Holder on or before each date on which payment is due under that certain
Funding Loan Agreement, dated as of 1, 2022 (the "Funding Loan Agreement"), between
Obligor and Holder, an amount in immediately available funds sufficient to pay the principal amount of and Prepayment Premium, if any, on the Series [ A][B] Funding Loan then due and payable, whether by maturity, acceleration, prepayment or otherwise. In the event that amounts held derived from proceeds of the Series [A][B] Borrower Loan, condemnation awards or insurance proceeds or investment earnings thereon are applied to the payment of principal due on the Series [A][B] Funding Loan in accordance with the Funding Loan Agreement, the principal amount due hereunder shall be reduced to the extent ofthe principal amount ofthe Series [A][B] Funding Loan so paid. Capitalized terms not otherwise defined herein shall have the meaning assigned in the Funding Loan Agreement.
Obligor shall pay to the Holder on or before each date on which interest on the Series [A][B| Funding Loan is payable interest on the unpaid balance hereof in an amount in immediately available funds sufficient to pay the interest on the Series [A][B] Funding Loan then due and payable in the amounts and at the rate or rates set forth in the Funding Loan Agreement.
The Series [A][B] funding Loan and this Governmental Lender Note are pass-through obligations,relating to a construction loan (the "Series [A][B] Borrower Loan") made by Obligor from proceeds of the Series |A][B] Funding Loan to RS Affordable I LLC, an Illinois limited liability company, as borrower (the "Borrower"), under that certain Borrower Loan Agieemeni, dated as of
I. 2022 (as the same may be modified, amended or supplemented from lime to time, the
"¦Borrower Loan Agreement"), between the Obligor and the Borrower, evidenced by the Series |A||B| Borrower Noie (as delined in lhe Borrower Loan Agieemeni). Reference is made to the Borrower Loan
A-1
-IS77-N51 lo-12(, r,
Agreement and to the Series |A||B] Borrower Note lor complete payment and prepayment terms ofthe Series |A||B| Borrower Note, payments on which are passed-throiigh under this Governmental Lender Note.
This Governmental Lender Note is a limited obligation ofthe Obligor, payable solely from the Pledged Revenues and other funds and moneys and Security pledged and assigned under the Funding Loan Agreement. This Governmental Lender Note is not a general obligation of the Governmental Lender or a charge against its general credit or the general credit taxing powers of the State, the Governmental Lender, or any other political subdivision thereof, and shall never give rise to any pecuniary liability ofthe Governmental Lender, and neither the Governmental Lender, the State nor any other political subdivision thereof shall be liable for the payments of principal of and, premium, if any, and interest on this Governmental Lender Note, and this Governmental Lender Note is payable from no other source, but are special, limited obligations of the Governmental Lender, payable solely out of the security pledged hereunder and receipts of (lie Governmental Lender derived pursuant to this Funding Loan Agreement. No holder of this Governmental Lender Note or any interest therein lias the right to compel any exercise of the taxing power ofthe State, the Governmental Lender or any other political subdivision thereof (o pay this Governmental Lender Note or the interest or premium, if any, thereon.
All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Funding Loan Agreement or in the Borrower Loan Agreement.
This Governmental Lender Note is subject to the express condition that at no time shall interest be payable on this Governmental Lender Note or the Series [A][B] Funding Loan al a rate in excess ofthe Maximum Rate provided in the Funding Loan Agreement; and Obligor shall not be obligated or required lo pay, nor shall the Holder be permitted to charge or collect, interest at a rate in excess of such Maximum Rate. If by the terms of this Governmental Lender Note or ofthe Funding Loan Agreement, Obligor is required to pay interest at a rate in excess of such Maximum Rate, the rate of interest hereunder or thereunder shall be deemed to be reduced immediately and automatically to such Maximum Rate, and any such excess payment previously made shall be immediately and automatically applied to the unpaid balance ofthe principal sum hereof and not to the payment of interest.
Amounts payable hereunder representing late payments, penalty payments or the like shall be payable to the extent allowed by law.
This Governmental Lender Note is subject to all ofthe terms, conditions, and provisions ofthe Funding Loan Agreement, including those respecting prepayment and the acceleration of maturity.
If there is an Event of Default under the Funding Loan Documents, then in any such event and subject to the requirements set forth in the Funding Loan Agreement, the Holder may declare the entire unpaid principal balance of this Governmental Lender Note and accrued interest, if any, due and payable at once. All oflhe covenants, conditions and agreements contained in the Funding Loan Documents are hereby made part of this Governmental Lender Note.
No delay or omission on the part ofthe Holder in exercising any remedy, right or option under this Governmental Lender Note or the Funding Loan Documents shall operate as a waiver of such remedv, right or option. In any event a waiver on any one occasion shall not be construed as a waiver or bar to any such remedy, right or option on a future occasion. The rights, remedies and options of the Holder under this Governmental Lender Note and the Funding Loan Documents are and shall be cumulative and are in addition to all ofthe lights, remedies and options oflhe Holder at law or in equity or under any other agreement.
A-2
-IS77-.S5-I I -5-126 6
Obligor shall pay all costs ol collection on demand bv the Holder, including without limitation, reasonable attorneys' fees and disbursements, which costs may be added to the indebtedness hereunder, together with interest (hereon, to the extent allowed by law. as set forth in the Funding Loan Agreement.
This Governmental Lender Note may nol be changed orally. Presentment for payment, nolice of dishonor, protest and notice of protest are hereby waived. The acceptance by the Holder ofany amount after lhe same is due shall not constitute a waiver ofthe right lo require prompt payment, when due, of all other amounts due hereunder. The acceptance by the Holder of any sum in an amount less than the amount then due shall be deemed an acceptance on account only and upon condition that such acceptance shall not constitute a waiver oflhe obligation of Obligor to pay the entire sum then due. and Obligor's failure to pay such amount then due shall be and continue to be a default notwithstanding such acceptance of such amount on account, as aforesaid. Consent by the Holder to any action of Obligor which is subject to consent or approval ofthe Holder hereunder shall not be deemed a waiver ofthe right to require such consent or approval to future or successive actions.
(Remainder of this page intentionally left blank)
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Governmental Lender Note or caused this Governmental Lender Note to be duly executed and delivered by its authorized representative as ofthe dale first set forth above. The undersigned intends that this instrument shall be deemed to be signed and delivered as a sealed instrument.
OBLIGOR:
CITY OF CHICAGO
By:
Name: Jennie I luang Bennett Title: Chief Linancial Officer
[SEAL1 Attest:
By:
Name: Andrea M. Valencia Title: City Clerk
A-4
¦ IS77-S5.11 -5-l2() Ci
EXHIBIT B
FORM OF REQUIRED TRANSFEREE REPRESENTATIONS
[ , 20_|
The undersigned, as holder (the "'Holder" or the "Funding Lender") of lhc not to exceed
[$ Multi-Family (-lousing Revenue Note, Series 2022A (Roosevelt Square Phase 3B)J
[$ Multi-Family Housing Revenue Note, Series 2022B (Roosevelt Square Phase 313)].
dated as ofthe Closing Date (a "Governmental Lender Note") issued pursuant to an Ordinance adopted on January _ _, 2022 (the "Ordinance") by the City of Chicago (the "Governmental Lender") and under a
Funding Loan Agreement dated as of 1, 2022 (the "Funding Loan Agreement") between the
Governmental Lender and Holder, as a Funding Lender, hereby represents lhat:
The Funding L-ender hereby acknowledges the execution and delivery of the
Governmental Lender Note, Scries 2022[A|[B] in the original aggregate principal amount of up to
$ .
The Funding Lender has authority to make lhe Series [A][B] Funding Loan and to execute and deliver these representations and any other instrument and documents required to be executed by the Funding Lender in connection with the execution and delivery of the applicable Governmental Lender Note.
The Holder has sufficient knowledge and experience in financial and business matters with respect to the evaluation of residential real estate developments such as the Project to be able to evaluate the risk and merits of the investment represented by the Series [A][B] Governmental Lender Note. We are able to bear the economic risks of such investment.
The Holder acknowledges that it has either been supplied with or been given access to information, including financial statements and other financial information, to which a reasonable lender would attach significance in making investment decisions, and the Holder has had the opportunity to ask questions and receive answers from knowledgeable individuals concerning the Governmental Lender, the Project, the use of proceeds of the Series [A][B] Governmental Lender Note, the Funding Loan Agreement and the applicable Funding Loan and the security therefor so that, as a reasonable lender, the Holder has been able to make its decision to extend the applicable Funding Loan [or an interest therein] and purchase the Governmental Lender Notes [or an interest therein]. The Series [A]| B] Funding Lender understands that the Series [ A][B] Governmental Lender Note and the Borrower Loan Agreement are not registered under the Securities Act of 1933, as amended, and that such registration is not legally required as ofthe date hereof: and further understands that the Series [A]|B] Governmental Lender Note and the Borrower Loan Agreement (i) are not being registered or otherwise qualified for sale under the "Blue Sky" laws and regulations ofany state, (ii) will not be listed in any stock or other securities exchange, (iii) will not cany a rating from any rating service and (iv) will be delivered in a form which is not readily marketable. The Holder acknowledges that il has not relied upon the Governmental Lender for any information in connection with the Holder's purchase ofthe Governmental Lender Noles [or an interest therein].
The Holder is an Approved Institutional Buyer (as delined in the Funding Loan Agreement).
13-1
IS77-X5 I l->!2h r.
Tlie Holder acknowledges lhat it is purchasing |an inteiest in| the Series |A||B|. Governmental Lender Note for investment for ils own account and not with a present view toward resale or lhe distribution thereof, in that we do nol now intend to resell or otherwise dispose of all or any part of our interests in the Series [A][B| Governmental Lender Note. Subject to paragraph 7 below, the funding Lender acknowledges and agrees that the Series [A|[B| Governmental Lender Note, or interests therein, can be sold and subsequently transferred only to purchasers that execute and deliver to the Governmental Lender an representations from the transferee lo substantially the same effect as these required transferee representations or in such other form authorized under the Funding Loan Agreement with no revisions except as may be approved in writing by the Governmental Lender.
In the event any placement memorandum to be provided to any subsequent buyer or beneficial owner of such portion of the Series [A||B] Governmental Lender Note will not disclose information with respect to the Governmental Lender other than its name, location and type of political subdivision and general information with respect to the Series [A][B] Funding Loan and the corresponding Borrower Loan and related documents, the Holder will provide the Governmental Lender with a draft of such placement memorandum and the Governmental Lender shall have the right to approve any description ofthe Governmental Lender therein (which approval shall not be unreasonably withheld).
The Series [A][B] Funding Lender understands that the Series [AJ[B] Governmental Lender Note is a limited obligation oflhe Governmental Lender; payable solely from funds and moneys pledged and assigned under the Funding Loan Agreement, and thai Ihe liabilities and obligations of the Governmental Lender with respect to the Series [A][B] Governmental Lender Note is expressly limited as sei forth in the Funding Loan Agreement and related documents. The Series [A][B] Funding Lender acknowledges that the Series [A][B] Governmental Lender Note is not an indebtedness of the Governmental Lender or a charge against its general credit or the general credit taxing powers of the State, the Governmental Lender, or any other political subdivision thereof, and shall never give rise to any pecuniary liability of the Governmental Lender, and neither the Governmental Lender, the State nor any other political subdivision thereof shall be liable for the payments of principal of and, premium, if any, and interest on the Series [A][B] Governmental Lender Note, and the Series [A][B] Governmental Lender Note is payable from no other source, but are special, limited obligations of the Governmental Lender, payable solely out of the Security and receipts of the Governmental Lender derived pursuant to the Funding Loan Agreement and the Borrower Loan Agreement. The Series [A][B| Funding Lender acknowledges thai no holder of the Series | A |[B] Governmental Lender Note, or any interest therein, has the right to compel any exercise ofthe taxing power ofthe State, the Governmental Lender or any other political subdivision thereof to pay the Series |A][B] Governmental Lender Note or the interest or premium, if any, thereon.
Capitalized terms used herein and not otherwise defined have the meanings given such terms in the Funding Loan Agreement.
[Remainder of page intentionally left blank.]
B-2
4S77-S5-I I-5-l2f> <>
I Signature Page to Required Transferee Representations!
| INSERT FUNDING LENDER), as Holder
By:
Name:
Its:
B-3
Ordinance Exhibit C Form of Borrower Loan Agreement
See Attached
C-1
BORROWER LOAN AGREEMENT
Between
CITY OE CHICAGO, as Governmental Lender,
and
RS AFFORDABLE I LLC, an Illinois limited liability company, as Borrower
Dated as of 1, 2022
Relating to:
Not to exceed $67,000,000
Funding Loans originated by CIBC BANK USA and BMO HARRIS BANK, N.A., as Funding
Lenders
The interest of the Cily of Chicago (the "Governmental Lender") in this Borrower Loan Agreement (except for certain rights described herein) has been pledged and assigned to CIBC Bank USA, an Illinois state chartered bank, as funding lender (the "Series A funding Lender"), as a funding lender, and BMO Harris Bank, N.A., a national banking association (the "Series B funding Lender"), as funding lender and as agent and Servicer for the Scries A funding Lender and Series B funding Lender (together, the "funding Lenders"), under that certain funding Loan Agreement, of even dale herewith, by and among the Governmental Lender and lhc Funding Lenders, under which the Series A Funding Lender is originating a loan to the Governmental Lender the proceeds of which are to be used to fund the Series A Borrower Loan and the Series B funding Lender is originating a loan to the Governmental Fender the proceeds of which are lo be used to fund lhe Series B Borrower Loan, each made under this Borrower Loan Agreement.
-isr>.vI ABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS: PRINCIPLES OF CONS I RFC I ION|910|Section l.l. - Specific Definitions|910|Section 1.2. Definitions ,.|910|ARTICLE 11 GEN ERA 1 18
Section 2.1. Origination of Borrower Loan 18
Section 2.2. Security for the funding Loan 19
Section 2.3. Loan; Borrower Notes; Conditions lo Closing 20
Section 2.4. Borrower Loan Payments 21
Section 2.5. Additional Borrower Payments 21
Section 2.6. Overdue Payments; Payments if Defauli 22
Section 2.7. Calculation of Interest Payments and Deposits lo Real Estate Related
Reserve Funds 22
Section 2.8. Grant of Security Interest; Application of Funds 22
Section 2.9. Marshalling; Payments Set Aside 23
Section 2.10. Borrower Loan Disbursements 23
ARTICLE III [RESERVED] 23
ARTICLE IV REPRESENTATIONS AND WARRANTIES 23
Section 4.1. Borrower Representations 23
Section 4.2. Survival of Representations and Covenants 34
ARTICLE V AFFIRMATIVE COVENANTS 34
Section 5.1. Existence 34
Section 5.2. Taxes and Other Charges 34
Section 5.3. Repair's; Maintenance and Compliance; Physical Condition 34
Section 5.4. Litigation 34
Section 5.5. Performance of Other Agreements 35
Section 5.6. Notices 35
Section 5.7. Cooperate in Legal Pioceedings 35
Section 5.8. Further Assurances 35
Section 5.9. Delivery of Financial Information 35
Section 5.10. Environmental Matters 36
Section 5.1 1. Governmental Lender's and Funding Lender's Fees 36
Section 5.12. Estoppel Statement 36
Section 5.13. Defense of Actions 36
Section 5.14. Expenses 37
Section 5.15. Indemnity 38
Section 5.16. No Warranty of Condition or Suitability by the Governmental Funding
Lender 40
Section 5.17. Right of Access to the Project 40
Section 5.18. Notice of Default 40
Section 5.19. Covenant with Governmental Lender and Funding Lenders 40
Section 5.20. Obligation oflhe Borrower to Construct or Rehabilitate the Project 4 I
Section 5.2 1. Maintenance of Insurance 11
Section 5.22. Information: Statements and Reports 4 I
i
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Section 5.23. Additional Notices 42
Section 5.24. Compliance with Other Agreements: Legal Requirements 43
Section 5.25. Completion and Maintenance of Project 43
Section 5.26. Fixtures 44
Section 5.27. Income from Project 44
Section 5.28. Leases and Occupancy Agreements 44
Section 5.29. Project Agreements and Licenses 45
Section 5.30. Payment of Debt Payments 45
Section 5.3 I. ERISA 45
Section 5.32. Patriot Act Compliance 45
Section 5.33. Funds from Equity Investor 46
Section 5.34. Tax Covenants 46
Section 5.35. Payment of Rebate 51
Section 5.36. Covenants under Funding Loan Agreement 53
Section 5.37. Notice of Default 53
Section 5.38. Continuing Disclosure Agreement 53
Section 5.39. Compliance wilh Ground Lease 53
Section 5.40. Compliance with I IAP Contract 54
Section 5.41. Compliance with Permanent Loan Commitment. Error! Bookmark not defined.
ARTICLE VI NEGATIVE COVENANTS 54
Section 6.1. Management Agreement 54
Section 6.2. Dissolution , 55
Section 6.3. Change in Business or Operation of Properly 55
Section 6.4. Debt Cancellation 55
Section 6.5. Assets 55
Section 6.6. Transfers 55
Section 6.7. Debt 55
Section 6.8. Assignment of Rights 55
Section 6.9. Principal Place of Business 55
Section 6.10. Operating Agreement 56
Section 6.11. ERISA ~ 56
Section 6.12. No Hedging Arrangements 56
Section 6.13. Loans and Investments; Distributions; Related Party Payments 56
Section 6.14. Amendment of Related Documents or CC&R's 56
Section 6.15. Personal Properly 57
Section 6.16. Fiscal Year 57
Section 6.17. Publicity 57
Section 6.18. Subordinate Loan Documents 57
Section 6.19. Ground Lease 57
ARTICLE Vll RESERVED 57
ARTICLE VIII DEFAULTS 57
Section 8.1. Events of Default 57
Section 8.2. Remedies 61
ARTICLE IX SPECIAL PROVISIONS 65
Section 9.1 Sale of Notes and Secondary Market Transaction 65
ARTICLE X MISCELLANEOUS : ...67
11
Section 10.1. Notices 67
Section 10.2. Brokers and Financial Advisors 69
Section 10.3. Survival 69
Section 10.4. Preferences 69
Section 10.5. Waiver of Nolice 69
Section 10.6. Offsets, Counterclaims and Defenses 70
Section 10.7. Publicity 70
Section 10.8. Construction of Documents 70
Section 10.9. No Third Party Beneficiaries 70
Section 10.10. Assignment 70
Section 10.1 I. (Intentionally Omitted] 71
Section 10.12. Governmental Lender, Funding Lenders and Servicer Not in Control; No
Partnership 71
Section 10.13. Release 71
Section 10.14. Term of Borrower Loan Agreement 71
Section 10.15. Reimbursement of Expenses 72
Section 10.16. Permitted Contests 72
Section 10.17. Funding Lenders Approval of Instruments and Parties 72
Section 10.18. Funding Lender Determination of Facts 73
Section 10.19. Calendar Months 73
Section 10.20. Determinations by Lender 73
Section 10.21. Governing Law 73
Section 10.22. Consent to Jurisdiction and Venue 73
Section 10.23. Successors and Assigns 73
Section 10.24. Severability 73
Section 10.25. Entire Agreement; Amendment and Waiver - 74
Section 10.26. Counterparts 74
Section 10.27. Captions 74
Section 10.28. Servicer .....74
Section 10.29. Beneficiary Parties as Third Party Beneficiary 74
Section 10.30. Waiver of Trial by Jury 74
Section 10.31. Time of the Essence 74
Section 10.32. Modifications 74
Section 10.33. Reference Date 75
ARTICLE XI LIMITATIONS ON LIABILITY 75
Section 11.1. Limitation on Liability 75
Section 11.2. Limitation on Liability of Governmental Lender 75
Section 11.3. Waiver of Personal Liability 75
Section 1 1.4. Limitation on Liability of Funding Lenders' Officers, Employees, Etc 76
Section 11.5. Delivery of Reports. Etc 77
EXHIBIT A - Section 10.32 Modifications
ix7i-i f>
BORROWER LOAN AGREEMENT
I HIS BORROWER LOAN AGREEMENT (this Bonowei Loan Agreement") is enieied
into as oflhe first day of . 2022, between the CITV OE CHICAGO, a municipality and
home rule unil of local government duly organized and validly existing under the constitution and laws of lhe Slate of Illinois (together with its successors and assigns, the "Governmental Lender"), and RS AFFORDABLE I LLC, an Illinois limited liability company (together with its successors and assigns, the "Borrower").
WITNESSETH: RECITALS
WHEREAS, the Governmental Lender has been duly created and organized pursuant to and in accordance with the provisions of Article VII, Section 6 ofthe 1970 Constitution ofthe State of Illinois, for the purpose of providing a means of financing the costs of residential ownership and development that will provide decent, safe and sanitary housing for persons of low and moderate income at prices or rentals they can afford; and
WHEREAS, the Governmental Lender is authorized: (a) to make loans to any person to provide financing for rental residential developments located within the jurisdiction of the Governmental Lender and intended to be occupied in part by persons of low and moderate income, as determined by the Governmental Lender; (b) to incur indebtedness for the purpose of obtaining moneys to make such loans and provide such financing, to establish necessary reserve funds and to pay administrative costs and other costs incurred in connection with the incurrence of such indebtedness of the Governmental Lender; and (c) to pledge all or any part of the revenues, receipts or resources ofthe Governmental Lender, including the revenues and receipts to be received by lhe Governmental Lender from or in connection with such loans, and to mortgage, pledge or grant security interests in such loans or other property of the Governmental Lender in order to secure the payment ofthe principal or redemption price of and interest on such indebtedness of the Governmental Lender; and
WHEREAS, the Borrower has applied to the Governmental Lender for a loan (the "Borrower Loan") for the acquisition, lease, construction, rehabilitation, development, and equipping of low- and moderate- income residential facilities and related common facilities and containing approximately 309 residential rental apartments (of which 80 units will be set aside for tenants ofthe CHA (as hereinafter defined)) including approximately 130 apartments to be rented to households earning up to 50% of area median income ("AMI"), approximately 153 apartments to be rented to households earning up to 60% of AMI, approximately 26 apartments to be rented to households earning up to 80% of AMI (together wilh related common areas along with parking lot facilities, the "Project"); and
WHEREAS, the Borrower's repayment obligations under this Borrower Loan Agreement are evidenced by the Borrower Notes, as defined herein; and
WHEREAS, the Borrower has requested Ihe Governmental Lender to enter into that certain Funding Loan Agreement, of even date herewith (the "Funding Loan Agreement"), among the Governmental Lender, CIBC Bank USA. an Illinois state chartered bank (the "Series A Funding Lender") and BMO Harris Bank. N.A a national banking association (the "Series B Funding Lender" and. together with the Series A Funding Lender, lhe "Funding Lenders"), under which the Series A Funding Lender will make a loan (the "Series A Funding Loan" ) and the Series 13 Funding Lender will make a loan (lhe "Series B Funding Loan" and. together with lhe Series A Funding Loan, the "Funding Loans") to the Governmental Lender, the proceeds of which will be loaned under this Borrower Loan
.ixro->.r,2l>-l>7l-l d
Agreement to the Borrower to finance the acquisition, construction, rehabilitation, development, equipping and/or operation ofthe Project, and.
WHEREAS, the Borrower Loans are secured by. among other things, that certain Mortgage, Security Agreement, Assignment of Leases and Rents, and fixture f iling (as amended, restated and/or supplemented from time to time, the "Security Insti uinent ). of even date herewith and assigned to the Series B funding Lender, as agent and Servicer for the funding fenders to secure the funding Loans, encumbering the Project, and will be advanced to Borrower pursuant to this Borrower Loan Agreement and the Construction funding Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual representations, covenants and agreements herein contained, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS; PRINCIPLES OF CONS! RUCTION
Section 1.1. Specific Definitions, for all purposes of this Borrower Loan Agreement, except as otherwise expressly provided or unless the context otherwise requires:
Unless specifically defined herein, all capitalized terms shall have the meanings ascribed thereto in the Security Instrument or, if nol defined in the Security Instrument, in the Funding Loan Agreement.
All accounting terms not otherwise defined herein shall have the meanings assigned to them, and all computations herein provided for shall be made, in accordance with GAAP.
All references in this instrument to designated "Articles," "Sections" and other subdivisions are to the designated Articles, Sections and subdivisions of this instrument as originally executed.
All references in this instrument to a separate instrument are to such separate instrument as the same may be amended or supplemented from time to lime pursuant to the applicable provisions thereof.
Unless otherwise specilied, (i)all references to sections and schedules are to those in this Borrower Loan Agreement, (ii) the words "hereof," "herein" and "hereunder" and words of similar import refer to this Borrower Loan Agreement as a whole and not to any particular provision, (iii) all definitions are equally applicable to the singular and plural forms ofthe terms defined and (iv) the word "including" means "including but not limited to."
Section 1.2. Definitions. The following terms, when used in this Borrower Loan Agreement (including when used in the above recitals), shall have the following meanings:
"Act of Bankruptcy" shall mean the filing of a petition in bankruptcy (or any other commencement of a bankruptcy or similai proceeding) under any applicable bankruptcy, insolvency, reorganization, or similar law, now or hereafter in effect: provided that, in the case of an involuntary proceeding, such proceeding is nol dismissed within ninety (90) days after lhe commencement thereof.
"ADA" shall have lhe meaning set forth in Section 4.1.3(8 hereof.
"Additional Borrower Payments" shall mean the payments payable pursuant to Section 2.5 (Additional Borrower Payments), Section 2.6 (Overdue Payments: Payments in Default), Section 3.3.3 of the Construction Funding Agreement (Borrower Loan in Balance). Section' 7 1 of the Construction
lSC)3-l.'32o-071 -( (,
Funding Agreement (Mandatory Payments of Bonower Loan). Section 5 14 (Lxpenses) and Section 10 of the Bonower Notes (Voluntary and Involuntary Prepayments).
"Affiliate" or "Affiliate of Borrower"' means, as to the Borrower or its Managing Member, (i) any entity that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of Borrower or its Managing Member, (ii) any corporation 20 percent or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with power to vote by the Borrower or its Managing Member, (iii) any paitner, shareholder or, if a limited liability company, member of the Borrower or its Managing Member, or (iv) any other person that is related by blood or marriage to the Borrower or ils Managing Member (to the extent any ofthe Borrower or its Managing Member is a natural person)
"Agreement of Environmental Indemnification'" shall mean the Environmental Indemnity Agreement, of even date herewith, executed by the Borrower and Guarantor for the benefit ofthe Servicer and any lawful holder, owner or pledgee ofthe Borrower Notes from lime to time.
"Appraisal" shall mean an appraisal oflhe Project and Improvements, which appraisal shall be (i) performed by a qualified appraiser licensed in the State selected by Servicer, and (ii) satisfactory to Servicer (including, without limitation, as ad justed pursuant to any internal review thereof by Servicer) in all respects.
"Approved Developer Fee Payment Schedule" has the meaning assigned to such term in the Construction Funding Agreement.
"Architect" shall mean any licensed architect, space planner or design professional that Borrower may engage from time to lime, with the approval of the Servicer, to design any portion of the Improvements, including the preparation of the Plans and Specifications.
"Architect's Agreement" means any agreement that Borrower and any Architect from time to time may execute pursuant to which Borrower engages such Architect to design any portion of the Improvements, including the preparation of the Plans and Specifications, as approved by Servicer.
"Authorized Borrower Representative" shall mean a person at the time designated and authorized to act on behalf ofthe Borrower by a written certificate furnished to the Governmental Lender and the Servicer and containing the specimen signature of such person and signed on behalf of the Borrower by its Borrower Controlling Entity which certificate may designate one or more alternates.
"Bankruptcy Code" shall mean the United States Bankruptcy Reform Act of 1978, as amended from time to time, or any substitute or replacement legislation.
"Bankruptcy Event" shall mean any one or more ofthe following:
(1) (A) the commencement of a voluntary case under the Bankruptcy Code or any other insolvency laws by the Borrower, Managing Member or any Guarantor; (B) the acknowledgment in writing by the Borrower, Managing Member or any Guarantor that it is unable to pay its debts generally as they mature: (C) the making of a general assignment for the benefit of creditors by the Borrower. Managing Member or any Guarantor: (D) the commencement of an involuntary' case under the 'Bankruptcy Code or any olher insolvency laws against the Borrower. Managing Member or an\ Guarantor: or (E) lhe appointment of a receiver, liquidator, custodian, sequestrator, trustee or other similar officer who
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i
exercises control over the Borrower, .Managing Member or any Guarantor or any substantial part of the assets ol" the Borrower. Managing Member or any Guarantor, provided thai anv proceeding or case under (D) or (E) above is nol dismissed within (K) days after filing;
(2) Any Guarantor or any Affiliate of a; Guarantor files an involuntary petition against Borrower under lhe Bankruptcy Code or any other insolvency laws; or
(3) Both (A) an involuntary petition under any the Bankruptcy Code or any other insolvency laws is filed against Borrower or Managing Member or Borrower or Managing Member directly or indirectly becomes the subject ofany bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceeding relating lo it under the laws of any jurisdiction, or in equity, and (B) Borrower or any |A I'll bate of Borrower has acted in concert or conspired with such creditors of Bonower (other than Lender) lo cause the filing thereof with the intent to interfere with enforcement rights of Lender after the occurrence of an Event of Default. !
"Bankruptcy Proceeding" shall have the meaning sei forth in Section 4.1.8 hereof".
"Beneficiary Parties" shall mean, collectively, the | funding Lender and the Governmental Lender. i
"Borrower" shall have the meaning set forth in the preambles to this Borrower Loan Agreement.
"Borrower Controlling Entity" shall mean, if the Borrower is a partnership, any general partner or managing partner ofthe Borrower, or if the Borrower is a limited liability company, the manager or managing member of the Borrower, or if the Borrower is a not for profit corporation, the shareholders thereof
"Borrower Deferred Equity" shall mean the EquityJ Contributions to be made by the Equity Investor to Borrower pursuant to the Operating Agreement other than Borrower Initial Equity, in accordance with the following schedule; j
Installment of Equity Contributions; Operating Agreement Section Reference: unount: Timing of Payment
Second Installment
Third Installment
Fourth Installment
I
I
"Borrower Initial Equity"' shall mean, singly or collectively, as the context requires, an initial
installment ofthe Equity Contributions made to Borrower by the Equity Investor in an amount of at least
$ to be made on or prior to the Closing Date. j
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¦ISW-'.).'!2l)-'i7l-l Ci
"Borrower Loan(s)" shall mean, singly or collectively, as lhc context requires, the mortgage loans made by the Governmental Lender to the Borrower pursuant to this Borrower Loan Agreement, in the maximum principal amount ofthe Borrower Loan Amount, as evidenced by the Bonower Notes.
"Borrower Loan Agreement" shall mean this Borrower Loan Agreement.
"Borrower Loan Amount'' shall mean not to exceed $67,000,000, the original maximum aggregate principal amouni ofthe Borrower Notes.
"Borrower Loan Documents" shall mean this Borrower Loan Agreement, the Construction Funding Agreement, the Borrower Notes, the Guaranty, the Security Instrument, the Collateral Assignments, the Agreement of Environmental Indemnification, the Contingency Draw-Down Agreement and all other documents or agreements evidencing or relating lo the Borrower Loan.
"Borrower Loan Payment Date" shall mean (i)lhe date upon which regularly scheduled Borrower Loan Payments are due pursuant lo lhe Borrower Notes, or (ii) any other date on which one or both of the Borrower Notes are prepaid or paid, whether at the scheduled maturity or upon the acceleration ofthe maturity thereof.
"Borrower Loan Payments" shall mean the monthly loan payments payable pursuant lo the Borrower Notes.
"Borrower Loan Proceeds" shall mean proceeds of the Borrower Loan, to be disbursed in accordance with Section 2.10 of this Borrower Loan Agreement and the Construction Funding Agreement.
"Borrower Notes" shall mean collectively, the Borrower Note, Series 2022A and the Borrower Note, Series 2022B and the "Borrower Note" shall mean lhe applicable one of such Borrower Notes.
"Borrower Note, Series 2022A" shall mean that certain Promissory Note, Series 2022A, dated as of the Closing Date in the original maximum principal amount of not lo exceed $33,500,000 made by Borrower and payable to Governmental Lender, as endorsed and assigned to the Series A Funding Lender, as it may be amended, supplemented or replaced from lime lo time. The entire outstanding principal balance of the Borrower Note, Series 2022A, together with all accrued and unpaid interest thereunder shall be due and payable on the Construction Period Maturity Date.
"Borrower Note, Series 2022B" shall mean that certain Promissory Note, Series 2022B, dated as of the Closing Date in the original maximum principal amount of not to exceed $33,500,000 made by Borrower and payable to Governmental Lender, as endorsed and assigned to the Scries B Funding Lender, as it may be amended, supplemented or replaced from time to time. The entire outsianding principal balance of the Borrower Note, Series 2022B. together with all accrued and unpaid interest thereunder shall be due and payable on the Construction Period Maturity Date, provided that if the Conditions to Conversion are satisfied on or before the Construction Period Maturity Date, the term ofthe Borrower Note, Series 2022B shall be extended to the Term Period Maturity Date.
"Borrower Payment Obligations" shall mean all payment obligations ofthe Borrower under the Borrower Loan Documents, including, but not limited to. the Borrower Loan Payments and the Additional Borrower Payments.
"Business Day" shall mean anv day oilier than (i)a Saturday or Sunday, or {ii) .i day on which federally insured depository institutions in New York. New York. Chicago. Illinois or the cities in which
-ISCT-WJ-'J?!-! (i
the offices ofthe Funding Fender are located are authorized or obligated by law. regulation, governmental decree or executive order to be closed.
"Calendar Month" shall mean each ofthe twelve (12) calendar months ofthe year.
"CC&R's" shall mean any covenants, conditions, restrictions, maintenance agreements or reciprocal easement agreements affecting the Project or the Mortgaged Property, including, without limitation, the Redevelopment Agreement, the Regulatory Agreement (as delined in the Funding Loan Agreement) and the RAD Use Agreement (as defined in the Construction Funding Agreement).
"Chicago Housing Authority" shall mean the Chicago Housing Authority, an Illinois municipal corporation.
"City" shall mean the City of Chicago, Illinois.
"Closing Date" shall mean , 2022, the date lhat the initial Borrower.Loan Proceeds
are disbursed hereunder.
"Code" shall mean the Internal Revenue Code of 1986 as in effect on the Closing Date or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the Closing Date, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Code.
"Collateral" shall mean all collateral described in (i) this Borrower Loan Agreement (including, without limitation, all property in which the Funding Lenders are granted a security interest pursuant to any provision of this Borrower Loan Agreement), (ii) the Security Instrument, or (iii) any other Security Document, which Collateral shall include the Project, all of which collateral is pledged and assigned to Funding Lenders under the Funding Loan Agreement to secure the Funding Loans.
"Collateral Assignments" means all pledges and assignments made by the Borrower and/or Managing Member of ownership interests therein or in the Properly or any contracts, agreements, leases, subleases, licenses, permits, plans and specifications, accounts and other property, real or personal, related to the Property and/or the construction and operation of the Improvements, including, without limitation the Cash Collateral Agreement (as defined in the Construction Funding Agreement).
"Completion" shall have the meaning set forth in Section 5.25.
"Completion Date" shall mean the date that is 24 months subsequent to the Closing Date.
"Computation Date" shall have the meaning ascribed thereto in Section 1.148-3(e) ofthe Regulations.
"Condemnation" shall mean any action or proceeding or nolice relating to any proposed or actual condemnation or other taking, or conveyance in lieu thereof, of all or any part of the Project, whether direct or indirect.
"Conditions to Conversion" shall have the meaning assigned to such term in the Construction Funding Agreement.
"Construction Consultant" shall mean a third-party architect or engineer selected and retained by the Series 13 Funding Fender, at the cost and expense of Borrower, to monitor the progress of
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construction and/or rehabilitation of the Project and to inspect the Improvements to confirm compliance with this Borrower Loan Agieemeni.
"Construction Contract" shall mean any agieemeni that Borrower and any Contractor from lime to time may execute pursuant lo which Borrower engages ihe Contraclor to construct any portion of the Improvements, as approved by the Series B funding fender.
"Construction Escrow Agreement" shall mean thai certain Construction Escrow- and
Disbursement Agreement, dated as of 1, 2022, among lhe Title Company named therein, in
its capacity as escrow agent, Governmental fender, funding l enders, ceitain subordinate lenders named therein, and Borrower, as such agreement may be amended, modified, supplemented and replaced from time to time.
"Construction Funding Agreement" means that certain Construction Funding Agreement of even date herewith, between the Funding Lenders, as agents for the Governmental Lender, and Borrower, pursuant to which the applicable Borrower Loan will be advanced by the corresponding Funding Lender (or the Servicer on their behalf), as agent oflhe Governmental Lender, to the Borrower and setting forth certain provisions relating to disbursement of the Borrower Loans during construction, insurance and other matters, as such agreement may be amended, modified, supplemented and replaced from time to time.
"Construction Period Maturity Date" shall mean , 202_, subject to extension to
, 202_, upon the satisfaction of the conditions to extension set forth in the Construction Funding
Agreement.
"Construction Schedule" shall mean a schedule of construction or rehabilitation progress with the anticipated commencement and completion dates of each phase of construction or rehabilitation, as the case may be, and the anticipated date and amounts of each Disbursement for the same, as approved by the Series B Funding Lender, as assignee ofthe Governmental Lender.
"Contingency Draw-Down Agreement" means the Contingency Draw-Down Agreement of even date herewith, between the Funding Lenders and the Borrower relating to possible conversion of the Funding Loans from draw down loans to fully funded loans.
"Continuing Disclosure Agreement" shall mean that certain Continuing Disclosure Agreement of even date herewith, between the Borrower and the Funding Lenders, pursuant to which the Borrower agrees to provide certain information with respect to the Project, the Bonower and the Funding Loans subsequent to the Closing Date, as amended, supplemented or restated from time to time.
"Contractor" shall mean any licensed general contractor or subcontractor that Borrower may directly engage from time to time, with lhe approval of Series B Funding Lender, to construct and/or rehabilitate any portion ofthe Improvements.
"Contractual Obligation" shall mean, for any Person, any debt or equity security issued by that Person, and any indenture, mortgage, deed of trust, contiaci, undertaking, instrument or agreement (written or oral) to which such Person is a party or by which it is bound, or lo which it or any of its assets is subject.
"Conversion" means the conversion of the Borrower Loan evidenced by the Borrower Note. Series 2022B to an amortizing term loan upon Borrower's satisfaction ofthe Conditions to Conversion set forth in the Construction Funding Agreement
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"Conversion Date" has the meaning assigned to such term in the Construction Funding Agreement.
"'Cost Breakdown" shall mean the schedule of costs For the Improvements, as set forth in the Construction Funding Agreement and as the same max be amended from time to time with Series 13 Funding Lender's consent.
"Costs of Funding" shall mean the Governmental Lender's Administrative Fee and the fees, costs, expenses and other charges incurred in connection with the funding ofthe Borrower Loans and the Funding Loans, the negotiation and preparation oflhis Borrower Loan Agreement and each ofthe other Borrower Loan Documents and Funding Loan Documents and shall include, but shall not be limited to, the following: (i) counsel fees (including but not limited to Tax Counsel, counsel to the Governmental Lender, Borrower's counsel, and Funding Lender's counsel); (ii) financial advisor fees incurred in connection with the closing of the Borrower Loans and the Funding Loans; (iii) certifying and authenticating agent fees and expenses related to funding of the Funding Loans; (iv) printing costs (for any preliminary and Final offering materials relating lo the Funding Loans); (v) any recording fees; (vi)any additional fees charged by the Governmental Lender; and (vii) costs incurred in connection with the required public notices generally and costs ofthe public hearing.
"Costs of Funding Deposit" shall mean the amount required to be deposited by the Borrower with [the Title Company (or a separate escrow company, if applicable)] to pay Costs of Funding in connection with the closing of the Borrower Loans and the Funding Loans on the Closing Date.
"Cost of Improvements" shall mean the costs for the Improvements, as set forth on the Cost Breakdown.
"County" shall mean Cook County, Illinois.
"Date of Disbursement" shall mean the date of a Disbursement.
"Day" or "Days" shall mean calendar days unless expressly staled to be Business Days.
"Debt" shall mean, as to any Person, any of such Person's liabilities, including all indebtedness (whether recourse and nonrecourse, short term and long term, direct and contingent), all committed and unfunded liabilities, and all unfunded liabilities, that would appear upon a balance sheet of such Person prepared in accordance with GAAP.
"Default Rate" shall have the meaning given to that term in the Construction Funding Agreement.
"Determination of Taxability" shall mean (i)a determination by the Commissioner or any District Director ofthe Internal Revenue Service, (ii) a private ruling or Technical Advice Memorandum concerning the Governmental Lender Notes issued by the National Office ofthe Internal Revenue Service in which Governmental Lender and Borrower were afforded the opportunity to participate, (iii) a determination by any court of competent jurisdiction, (ivjthe enactment of legislation or (v) receipt by the Servicer, al the request of the Governmental Lender, the Borrower or the Funding Lenders, of an opinion of Tax Counsel, in each case to the effect that the interest on the Governmental Lender Notes is includable in gross income for federal income lax purposes ofany holder or any former holder of all or a portion ofthe Governmental Lender Notes, olher llian a holder who is a "substantial user" ofthe Project or a "related person" (as such terms are delined in Seelion 147(a) ofthe Code) lo a "substantial user"; provided, however, lhat no such Delerminalion of Taxability under clause (i) or (iii) shall be deemed lo
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have occurred if the Governmental Lender (at the sole expense of the Borrower), the Servicer (at the sole expense oflhe Borrower) or the Borrower is contesting such determination, has elecied lo contest such determination in good faith and is proceeding with all applicable dispatch to prosecute such contest until the earliest of (a) a final determination from which no appeal may be taken with respect to such determination, (b) abandonment of such appeal by the Governmental Lender or the Borrower, as the case may be, or(c) one year from the date of initial determination.
"Developer Fee" shall mean the fees and/or compensation payable to
pursuant to the Development Services Agreement dated as of , 2022, between Borrower
and such developer, which fees and/or compensation shall nol be paid except as otherwise permitted pursuant to Section 6.13(b).
"Disbursement" means a disbursement of Borrower Loan Proceeds and Other Borrower Moneys pursuant to this Borrower Loan Agreement and the Construction Funding Agreement.
"Engineer" shall mean any licensed civil, structural, mechanical, electrical, soils, environmental or other engineer that Borrower or the Architect may engage from time lo time, with the approval of Funding Lender, to perform any engineering services wilh respect lo any portion ofthe Improvements.
"Engineer's Contract" shall mean any agreement that Bonower and any Engineer from lime to time may execute pursuant to which Borrower engages such Engineer to perform any engineering services with respect to any portion ofthe Improvements, as approved by the Servicer.
"Equity Contributions" shall mean the equity to be contributed by, or on behalf of, the Equity Investor to Borrower, in accordance with and subject to the terms ofthe Operating Agreement.
"Equity Investor", shall mean Hudson Roosevelt Square LLC, a Delaware limited liability company, and its successors and assigns.
"ERISA" shall mean the Employment Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder.
"ERISA Affiliate" shall mean all members of a controlled group of corporations and all trades and business (whether or not incorporated) under common control and all other entities which, together with the Borrower, are treated as a single employer under any or all of Section 414(b), (c), (m) or (o) of the Code.
"Event of Default" shall mean any Event of Default set forth in Section 8.1 of this Borrower Loan Agreement. An Event of Default shall "exist" if a Potential Default shall have occurred and be continuing beyond any applicable cure period.
"Excess Revenues" means, for any period, the net cash flow of the Borrower available for distribution to shareholders, members or partners (as the case may be) for such period, after the payment of principal and interest on all indebtedness coming due during such period (whether in installments or al maturity, by acceleration or otherwise), the payment of all fees, costs and expenses on an occasional or recurring basis in connection with the Borrower Loans or the f unding Loans, the payment of all operating, overhead, ownership and other expenditures of the Borrower directly or indirectly in connection with the Project (whether any such expenditures are current, capital or extraordinary expenditures), and the setting aside of all reserves for taxes, insurance, water and sewer charges or other similar impositions, capital expenditures, repairs and replacements and all other amounts which the Borrower is required to set aside pursuant to the Operating Agreement, the Subordinate Loan Documents
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or any oilier agreement relating to the Propcrtv. hul excluding depreciation and amortization ol intangibles.
"Exchange Act'" shall mean the Securities Exchange Act of 1934. as amended.
"Expenses ofthe Project" shall mean, for any period, the current expenses, paid or accrued, for the operation, maintenance and current repair of the Project, as calculated in accordance with GAAP, and shall include, without limiting the generality ofthe foregoing, salaries, wages, employee benefits, cost of materials and supplies, costs of routine repairs, renewals, replacements and alterations occurring in the usual course of business, costs and expenses properly designated as capital expenditures (e.g. repairs which would not be payable from amounts on deposit in a repair and replacement fund held pursuant to
the Borrower Loan Documents), a management fee (however characterized) not to exceed % of
Gross Income, costs of billings and collections, costs of insurance, and costs of audits [and any mandatory i.e. hard pay debt service payments]. Expenses oflhe Project shall not include any payments, however characterized, on account of any subordinate [soft pay | financing in respect of the Project or other indebtedness, allowance for depreciation, amortization or other non-cash items, gains and losses or prepaid expenses not customarily prepaid.
"Fair Market Value" shall mean the price at which a willing buyer would purchase the investment from a willing seller in a bona tide, arm's length transaction (determined as ofthe date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of Section 1273 ofthe Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Code, (ii)the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Code, (iii) the investment is a United States Treasury Security State and Local Government Series that is acquired in accordance with applicable regulations ofthe United States Bureau of Public Debt, or (iv) the investment is an interest in any commingled investment fund in which the Governmental Lender and related parties do not own more than a ten percent (10%) beneficial interest therein if the return paid by the fund is without regard to the source of investment.
"Fitch" shall mean Fitch, Inc.
"Funding Lenders" shall mean the Series A f unding Lender and the Scries B Funding Lender.
"Funding Loan(s)" means, singly or collectively, as the context requires, the Series A Funding Loan and the Series B Funding Loan.
"Funding Loan Agreement" means the funding Loan Agreement, of even date herewith, between the Governmental Lender and the Funding Lenders, as it may from lime to time be supplemented, modified or amended by one or more amendments or other instruments supplemental thereto entered into pursuant to the applicable provisions thereof.
"Funding Loan Documents" shall have lhe meaning given to that term in the funding Loan Agreement.
"GAAP" shall mean generally accepted accounting principles as in effect on the date of the application thereof and consistently applied throughout the periods covered by lhe applicable linancial statements.
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"Governmental Authority"'" shall moan (i)any govenunental municipality or political subdivision thereof ( ii) any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality or public body, or (iii) any court, administrative tribunal or public utility, agency, commission, ol'llce or authority of any nature whatsoever for any governmental unit (federal, state, county, district, municipal, city or otherwise), now or hereafter in existence.
"Governmental Lender" shall have the meaning set forth in the recitals to this Borrower Loan Agreement.
"Governmental Lender Notes" shall mean collectively, the Governmental Lender Note, Series 2022A and the Governmental Lender Note, Series 2022B and "Governmental Lender Note" means the applicable one of such.
"Governmental Lender Note, Series 2022A" shall mean that certain City of Chicago Multi-Family Housing Revenue Note, Series 2022A (Roosevelt Square Phase 3B), dated the Closing Date in the original maximum principal amount of $33,500,000, made by the Governmental Lender and payable to the Series A Funding Lender, as it may be amended, supplemented or replaced from time to time.
"Governmental Lender Note, Series 20221V" shall mean that certain City of Chicago Multi-Family Housing Revenue Note, Series 2022B (Roosevelt Square Phase 3B), dated the Closing Date in the original maximum principal amount of $33,500,000, made by the Governmental Lender and payable to Series B Funding Lender, as it may be amended, supplemented or replaced from time to time.
"Governmental Lender's Administrative Fee" shall mean an amount equal to 1.5% of the original principal amount ofthe Governmental Lender Notes. The Governmental Lender's Administrative Fee is payable to the Governmental Lender on the Closing Date, pursuant to Section 2.3(c)(iii) hereof.
"Gross Income" shall mean all receipts, revenues, income and other moneys received or collected by or on behalf of Borrower and derived from the ownership or operation of the Project, if any, and all rights to receive the same, whether in the form of accounts, accounts receivable, contract rights or other rights, and the proceeds of such rights, and whether now owned or held or hereafter coming into existence and proceeds received upon the foreclosure sale ofthe Project. Gross Income shall not include loan proceeds, equity or capital contributions, or tenant security deposits being held by Borrower in accordance with applicable law.
"Gross Proceeds" shall mean, without duplication, the aggregate of:
the net amount (after payment of all expenses of originating the Funding Loans) of Funding Loans proceeds received by the Governmental Lender as a result ofthe origination of the Funding Loans;
all amounts received by the Governmental Lender as a result ofthe investment of the Funding Loans proceeds;
any amounts held in any fund or account to the extent lhat the Governmental Lender reasonably expects to use the amounts in such fund to pay any portion of the Funding Loans; and
any securities or obligations pledged by the Governmental Lender or by the Borrower as security for the payment ofany portion ofthe funding Loans.
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"Ground Lease'" shall mean lhat ceitain Ground Lease dated as of . 2022.
between the Chicago Mousing Authority, as landlord, and Heartland Housing. Inc., an Illinois not-for-profit ("Heartland Housing'") or its affiliate, as tenani. and assigned to the Borrower as tenant, with respect lo the Project.
"Guarantors'" shall mean The Relaled Companies. L.P a New York limited partnership or any other person or entity which may hereafter become a Guarantor of any of the Borrower's obligations under the Borrower Loans.
"Guaranty" shall mean, collectively the Completion and Repayment Guaranty, of even date herewith, by the Guarantors for the benefit ofthe funding fenders.
|"HAP Contract''' shall mean that certain Project-Based Voucher Rental Assistance Demonstration Housing Assistance Payments Contract entered into by and between the Chicago Housing Authority, in its capacity as contract administrator, and the Borrower.]
"Improvements" shall mean the multifamily residential project consisting of approximately 309 residential rental apartments (of which 80 units will be set aside for tenants of the Chicago Housing Authority) including approximately 130 apartments to be rented lo households earning up lo 50% of area median income ("AMI"), approximately 153 apartments to be rented lo households earning up to 60% of AMI, approximately 26 apartments to be rented to households earning up to 80% of AMI to be constructed or rehabilitated upon the Land and known or lo be known as Roosevelt Square Phase 3B, and all other buildings, structures, fixtures, wiring, systems, equipment and other improvements and personal property to be constructed, rehabilitated and/or installed in connection with the Project in accordance with the Cost Breakdown and the Plans and Specifications.
"Indemnified Party" shall have the meaning set forth in Section 5.15 hereof.
"Installment Computation Date" shall mean any Computation Date other than the first Computation Date or the final Computation Dale.
"Interest Rate" shall mean with respect lo a Borrower Note the rate of interest accruing on such Borrower Note.
"Land" means the real property described on Exhibit A to the Security Instrument.
"Late Charge" shall mean Ihe amount due and payable as a late charge on overdue payments under the Borrower Notes, as provided in Section 7 of each Borrower Note and Section 2.6 hereof.
"Legal Action" shall mean an action, suit, investigation, inquiry, proceeding or arbitration at law or in equity or before or by any foieign or domestic court, arbitrator or other Governmental Authority.
"Legal Requirements" shall mean statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities affecting all or pari ofthe Project or any property (including the Project) or the construction, rehabilitation, use. alteration or operation thereof, whether now or hereafter enacted and in force, and all permits, licenses and authorizations and regulations relating thereto, the CC&R's and all other covenants, agreemenis. restrictions and encumbrances contained in any instrument, either of record or known to the Borrower, at any time in force affecting all or part ofthe Project, including any that may (i) require repairs, modifications or alterations in or to all or part ofthe Project, or(ii) m any way limit the use and enjoyment thereof
"Liabilities" shall have the meaning set forth m Section 5.15 hereof.
"Licenses" shall have the meaning set forth m Section -I 1.22 hereof.
"Lien" shall mean any interest, or claim thereof, in the Project securing an obligation owed to. or a claim by, any Person other than the ow ner of the Project, whether such interest is based on common law, statute or contract, including the lien or security interest arising from a deed of trust, mortgage, :dced to secure debt, assignment, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes. The term "Lien" shall include reservations, exceptions, encroachments, easements, rights of way. covenants, conditions, restrictions, leases and other title exceptions and encumbrances af fecting the Project.
"Management Agreement" shall mean the Management Agreement between the Borrower and the Manager, pursuant to which the Manager is to manage the Project, as same may be amended, restated, replaced, supplemented or otherwise modified from lime lo time.
"Manager" shall mean the manageineni company to be employed by the Borrower and approved by the Series B Funding Lender in accordance with the terms ofthe Security Instrument, this Borrower Loan Agreement or any ofthe other Borrower Loan Documents.
"Managing Member" shall mean RS 3B LLC, an Illinois limited liability company, and/or any other Person that the partners ofthe Borrower, with the prior written approval ofthe Funding Lenders (or as otherwise permitted with the Funding Lenders' approval pursuant to the Borrower Loan Documents), selected to be a managing member of the Borrower, provided however the Funding Lenders' approval is not applicable if a Material Funding Lender Event has occurred and is continuing.
"Material Adverse Change" means any set of circumstances or events which (a) has or could reasonably be expected to have any material adverse effect whatsoever upon the validity or enforceability of this Borrower Loan Agreement or any other Borrower Loan Document; (b) is or could reasonably be expected to be material and adverse to the business, properties, assets, financial condition, results of operations or prospects of the Borrower, Managing Member or the Mortgaged Property; (c) could reasonably be expected to impair materially the ability of the Borrower, Managing Member or any Guarantor to duly and punctually pay or perform any of their respective obligations under any of the Borrower Loan Documents to which they are a party; or (cl) impairs materially or could reasonably be expected to impair materially any rights of or benefits available to the Governmental Lender under this Borrower Loan Agreement or any other Borrower Loan Document, including, without limitation, the ability of Governmental Lender or, upon the assignment of the Borrower Loans to it. of the Funding Lenders, to the extent permitted, to enforce its legal remedies pursuant to this Borrower Loan Agreement or any other Borrower Loan Document.
"Moody's" shall mean Moody's Investors Service. Inc or its successor.
"Mortgaged Properly" shall have the meaning given to that term in lhe Security Instrument.
"Net Operating Income" shall mean: (i) the Gross Income, less (ii) the Expenses ofthe Project.
"Nonpurpose Investment" shall mean any investment property (as defined in Section 148(b) of the Code) that is acquired with the Gross Proceeds ofthe funding Loans and which is not acquired to carry out the governmental purpose ofthe funding Loans
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"Ongoing Governmental Lender Lee ' shall mean an on-going compliance Ice in lhe amount ol $25 per unit payable annually in advance In the Borrower lo the Governmental Lender, commencing on the Closing Date and on each January I thereafter, so long as any portion of the funding Loans are outstanding.
"Operating Agreement'"' shall mean that certain Amended and Restated Operating Agreement of
RS Affordable I LLC dated as of . 2022. as the same may be amended, restated or
modified in accordance with its terms.
"Other Borrower Moneys" shall mean monies of Borrower other than Bonower Loan Proceeds and includes, but is not limited to. the Subordinate Debt, Nei Operating Income, the Borrower's Equity Contributions and any other funds contributed by or loaned lo the Borrower for application to the Costs ol" the Improvements or other costs associated with the Project.
"Other Charges" shall mean all maintenance charges, impositions other than faxes, and any olher charges, including vault charges and license fees for the use of vaults, chutes and similar areas adjoining the Project, now or hereafter levied or assessed or imposed against the Project or any part thereof.
"Patriot Act" shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT ACT) of 2001, as the same may be amended from time lo time, and corresponding provisions of future laws.
"Patriot Act Offense" shall have the meaning set forth in Section 4.1.48 hereof.
"Payment Obligations" shall mean all obligations of Borrower for the payment of money lo the Governmental Lender or to any other person under the Borrower Notes, this Borrower Loan Agreement or under any other Borrower Loan Document.
"Permanent Loan Commitment" shall have the meaning assigned to such term in the Construction Funding Agreement.
"Permitted Encumbrances" shall have the meaning given to lhat term in the Security Instrument.
"Permitted Lease" shall mean a lease and occupancy agreement pursuant to the form approved by the Servicer, to a residential tenant in compliance with lhe applicable Legal Requirements, providing for an initial term of not less than six (6) months nor more than two (2) years.
"Person" shall mean a natural person, a partnership, a joint venture, an unincorporated association, a limited liability company, a corporation, a trust, any olher legal entity, or any Governmental Authority.
"Plan" shall mean (i) an employee benefit or other plan established or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions and (ii) which is covered by Title IV of ERISA or Section 302 of ERISA or Section 4 I 2 ofthe Code.
"Plans and Specifications" shall mean the plans and specifications for the construction and/or rehabilitation, as the ease may be. ofthe Project appioved bv the Servicei'
"Potential Default" shall mean the occurrence of an event which, under this Borrower Loan Agreement or any other Borrower Loan Document, would, but for the giving of notice and/or passage of time, be an Event of Default.
"Prepayment Premium" shall mean any premium payable by the Borrower pursuant to the Borrower Loan Documents in connection with a prepayment of a Borrower Note (including any prepayment premium as set forth in such Borrower Note).
"Project" shall have the meaning set forth in the recitals to this Bonower Loan Agreement.
"Project Agreements and Licenses" shall mean any and all Construction Contracts, Engineer's Contracts and Management Agreements, and all other rights, licenses, permits, franchises, authorizations, approvals and agreements relating to use. occupancy, operation or leasing ofthe Project or the Mortgaged Property.
"Provided Information" shall have the meaning set forth in Section 9.1.1 (a) hereof.
"Qualified Project Costs" shall mean costs paid wilh respect to the Project that meel each of the following requirements: (i) the costs are properly chargeable to capital .account (or would be so chargeable with a proper election by the Borrower or but for a proper election by the Borrower to deduct such costs) in accordance with general federal income lax principles and in accordance with Section 1.103-8(a)(l) ofthe Regulations, provided, however, that only such portion ofthe interest accrued during rehabilitation or construction oflhe Project (in the case of rehabilitation, with respect to vacated units only) shall be eligible to be a Qualified Project Cost as bears the same ratio to all such interest as the Qualified Project Costs bear to all costs of the acquisition and construction or rehabilitation ofthe Project; and provided further that interest accruing after the date of completion of the Project shall nol be a Qualified Project Cost; and provided still further that if any portion ofthe Project is being constructed or rehabilitated by an Affiliate (whether as general contractor or a subcontractor), Qualified Project Costs shall include only (A) the actual Borrower out of pocket costs incurred by such Affiliate in constructing or rehabilitating the Project (or any portion thereof), (B) any reasonable fees for supervisory services actually rendered by such Affiliate, and (C) any overhead expenses incurred by such Affiliate which are directly attributable to the work performed on the Project, and shall not include, for example, intercompany profits resulting from members of an "affiliated group" (within the meaning of Section 1504 of the Code) participating in the rehabilitation or construction ofthe Project or payments received by such affiliate due to early completion ofthe Project (or any portion thereof); (ii) the costs are paid with respect to a qualified residential rental project or projects within the meaning of Section 142(d) ofthe Code, (iii) the costs are paid after the earlier of 60 days prior to July 21, 2021, being the date on which the Governmental Lender first declared its "official intent" to reimburse costs paid with respect to the Project (within the meaning of Section 1.150-2 ofthe Regulations) or the date of issue ofthe funding Loan, and (iv) if the costs ofthe acquisition and construction or rehabilitation ofthe Project were previously paid and are to be reimbursed with proceeds of the Funding Loan such costs were (A) "preliminary expenditures" (within the meaning of Section 1.1 50-2(0(2) of the Regulations) with respect to the Project (such as architectural, engineering and soil testing sei vices) incurred before commencement of acquisition and construction or rehabilitation ofthe Project that do not exceed twenty percent (20%) ofthe issue price of the Governmental Lender Notes (as defined in Section 1.1-18-1 ofthe Regulations), or (B) were capital expenditures with respect to the Project that are reimbursed no later than 18 months after the later ofthe dale the expenditure was paid or the date the Project is placed in service (but no later than three years after the expenditures are paid); provided, however, that (w) Costs of funding shall nol be deemed to be Qualified Project Cosis: (x) fees, charges or profits (including, without limitation, developer fees) payable lo the Borrower or a "relaled person" (within the meaning of Section 144(a)(3) ofthe Code) shall not be deemed to be Qualified Project Costs: (\) letter of credit fees and municipal bond insurance premiums
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which represent a transfer of credit risk shall be allocated between Qualified Project Costs and other costs and expenses to be paid from the proceeds ofthe funding Loan, and (z) letter of credit lees and municipal bond insurance premiums which do nol represent a transfer of credit risk (including, wiihoul limitation, letter of credit fees payable to a ¦¦related person'" to the Borrower) shall not constitute Qualified Project Costs.
"RAD Use Agreement'" has the meaning assigned to such term in the Construction funding Agreement.
"Rebate Amount" shall mean, for any given period, the amount determined by the Rebate Analyst as required to be rebated or paid as a yield reduction payment to the United Stales of America with respect to the funding Loans.
"Rebate Analyst" shall mean the rebate analyst selected by the Bonower prior to the Closing Date and acceptable to the Governmental Lender and ihe Servicer.
"Rebate Analyst's Fee" shall mean the annual fee of the Rebate Analyst in the amount of
$ , or such other amount as agreed to by the Borrower. The Rebate Analyst's fee is payable by the
Borrower to the Rebate Analyst, commencing I, 2022, every fifth anniversary thereof, and
the Maturity Date.
"Rebate Fund" shall mean the Rebate fund created pursuant to Section 5.35 hereof.
"Redevelopment Agreement" shall mean that certain Roosevelt Square 3B Project Redevelopment Agreement, by and among the Governmental Lender, through its Department of Planning and Development, RS Affordable I LLC, an Illinois limited liability company and Heartland Housing.
"Regulations" shall mean with respect to the Code, the relevant U.S. Treasury regulations and proposed regulations thereunder or any relevant successor provision lo such regulations and proposed regulations.
"Related Documents" shall mean, collectively, any agreement or other document (other than the Borrower Loan Documents) granting a security inteiest (including each agreement that is the subject of any Borrower Loan Document), the Operating Agreement, and any other agreement, instrument or other document (not constituting a Borrower Loan Document) relating to or executed in connection with the transactions contemplated by this Borrower Loan Agreement.
"Retainage" shall mean, for each Construction Contract, the lesser of (a) ten percent (10%) of all amounts required to be paid lo a Contractor under the Construction Contract and (b) the actual retainage required under such Construction Contract, which shall be released upon satisfaction ofthe conditions set forth in the Construction funding Agreement.
"Secondary Market Disclosure Document" shall have the meaning set forth in Section 9.1.2
hereof.
"Secondary Market Transaction" shall have the meaning set forth in Section 9.1.1 hereof "Securities'" shall have the meaning set forth in Section 9 1.1 hereof "Securities Act" shall mean the Securities Act of 1933. as amended.
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Security" shall have lhe meaning sei forth in Article IV ofthe Funding Loan Agreement
"Security Documents"' shall mean the Security Instrument, the Guaranty, the Collateral Assignments, this Borrower Loan Agreement, the Environmental Agreement, and such other security instruments that Servicer may reasonably request.
"Security Instrument" shall have lhe meaning set forth in the recitals lo this Borrower Loan Agreement.
"Scries A Funding Lender" shall mean CIBC Bank USA. an Illinois state chartered bank, in its capacity as lender under the Series A Funding Loan.
"Series B Funding Lender" shall mean BMO Harris Bank, N.A., a national banking association, in its capacity as lender under the Series B Funding Loan.
"Series A Funding Loan" means the Funding Loan in the original maximum principal amount of not to exceed $33,500,000 made by the Series A Funding Lender to Governmental Lender under the Funding Loan Agreement, the proceeds of which are used by the Governmental Lender to make the Series A Borrower Loan.
"Series B Funding Loan" means the Funding Loan in the original maximum principal amount of not to exceed $33,500,000 made by the Series B Funding Lender to Governmental Lender under the Funding Loan Agreement, the proceeds of which are used by the Governmental Lender to make the Series B Borrower Loan.
"Servicer" shall mean the Servicer contracting with or appointed by the Funding Lenders to service the Borrower Loan. The initial Servicer shall be BMO Harris Bank, N.A. in accordance with the Construction Funding Agreement.
"Servicing Agreement" shall mean any servicing agreement or master servicing agreement, among the Servicer, the Series A Funding Lender and the Series B Funding Lender relating to the servicing of the Borrower Loans and any amendments thereto or any replacement thereof The initial Servicing Agreement shall be the Construction funding Agreement.
"Special Limited Partner" shall mean Hudson SLP LLC, a Delaware limited liability company, and its successors and assigns.
"Standard & Poor's'1 or "S&P" shall mean Standard & Poor's Global Ratings Services, or its successors.
"State" shall mean the State in which the Project is located.
"Subordinate Debt" shall mean the subordinate loans to Borrower being made by the Subordinate Lenders as contemplated by the Construction funding Agreement.
"Subordinate Lenderfsf" shall mean the Chicago Housing Authority and Heartland Housing Inc each as applicable.
"Subordinate Loan Documents" shall mean, collectively, all instruments, agreements and other documents evidencing, securing or otherwise relating lo the Subordinate Debt or executed and delivered by Borrower and/or Subordinate Lender in connection with the Subordinate Debt
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"Substantial Completion Date" means the date that is three (3) months prior to the Completion
Date.
"Substantially Complete" or ""Substantially C ompleted" means the Funding l ender has determined that construction or rehabilitation, as the case may be. ol' the Improvements is sufficiently complete in accordance with the Construction Contract and the Fegal Requirements such lhat the Improvements can be occupied by tenants as a mullifamily residential rental project and the appropriate Governmental Authority has issued a temporary certificate of occupancy or equivalent.
"Tax Counsel" shall have the meaning set forth in the Funding Loan Agreement.
"Taxes" shall mean all real estate and personal property taxes, assessments, water rales or sewer rents, now or hereafter levied or assessed or imposed against all or part oflhe Project.
"Term" shall mean the term oflhis Borrower Loan Agreement pursuant to Section 10.14.
"Term Period Maturity Date" shall mean the seventeenth (17lh) anniversary ofthe Conversion
Date.
"Title Company" means Greater Illinois Title Company.
"Title Insurance Policy" shall mean the mortgagee title insurance policy, in form acceptable to the Funding Lender, issued with respect lo the Mortgaged Property and insuring the lien of the Security Instrument.
"Transfer" shall have the meaning given to that term in the Security Instrument. "UCC" shall mean the Uniform Commercial Code as in effect in the Slate. "Unit" shall mean a residential apartment unit within the Improvements.
"Written Consent" and "Written Notice" shall mean a written consent or notice signed by an Authorized Borrower Representative or an authorized representative ofthe Governmental Lender or the Funding Lender, as appropriate.
ARTICLE II GENERAL
Section 2.1. Origination of Borrower Loan. In order to provide funds for the purposes provided herein, the Governmental Lender agrees that it will, in accordance with the Ordinance, enter into the Funding Loan Agreement and accept the Series A Funding Loan from the Series A Funding Lender and the Series B Funding Loan from lhe Series B Funding Lender, lhe proceeds ofthe Funding Loans shall be advanced by the Funding Lenders to the Borrower in accordance with the terms of the Construction Funding Agreement and this Borrower Loan Agreement.
The Governmental Lender hereby appoints lhe Funding Lenders as its agent with full authority and power to act on its behalf to disburse lhe Borrower Loans for the account of the Governmental Lender, to take certain actions and exercise certain remedies with respect to the Borrower Loans, and for the other purposes set forth in this Borrower Loan Agreement and lo do all other acls necessary or incidental to the performance and execution thereof f his appointment is coupled with an interest and is irrevocable except as expressly set forth herein. Accordingly, references lo the rights of the Funding
-IS-
Lenders to take actions under this Borrower l oan Agreement shall reler to the funding Lenders in their role as agent ol" the Governmental L.ender. I he funding Lenders mav designate the Servicer to I'ullill the rights and responsibilities granted bv Governmental lender to Funding L.enders pursuant to this Section 2.1; provided, however, that such designation shall nol release or absolve funding Lenders Irom ultimate responsibility for fulfillment of such rights or responsibilities.
Section 2.2. Security for the funding Loan.
As security for the funding Loans, the Governmental L.ender has pledged and assigned the Security to the Servicer, as agent for the funding Lenders, respectively, under and pursuant to the funding Loan Agreement. All revenues and assets pledged and assigned thereby shall immediately be subject to the lien of such pledge without any physical delivery thereof or any further act, except in the case of the Borrower Notes, which shall be endorsed by the
. Governmental Lender and delivered to the applicable funding Lender. The Borrower hereby acknowledges and consents to such assignment ol" the Security to the Servicer, as agent for the Funding Lenders.
With respect lo the Unassigned Rights, subject to the limitations set forth in this Section 2.2, the Governmental Lender may:
Tax Covenants. Seek specific performance of, and enforce, the tax covenants of the funding Loan Agreement, and the Funding Loan Documents, injunctive relief against acts which may lie in violation of any ofthe tax covenants, and enforce the Borrower's obligation to pay amounts for credit to the Rebate Fund;
reserved Rights. Take whatever action at law or in equity which appears necessary or desirable to enforce the other Unassigned Rights, provided, however, that the Governmental Lender or any person under its control may only enforce any right il may have for monetary damages against Excess Revenues, if any, of the Borrower, unless Servicer otherwise specifically consents in writing to the enforcement against olher funds ofthe Borrower.
In no event shall the Governmental Lender, except at the express written direction oflhe funding Lenders or the Servicer, as agent for the Funding Lenders:
prosecute ils action to a lien on the Project; or
take any action which may have the effect, directly or indirectly, of impairing the ability ofthe Borrower lo timely pay the principal of, interest on, or other amounts due under, the Borrower Loans or of causing the Borrower to file a petition seeking reorganization, arrangement, adjustment or composition of or in respect ofthe Borrower under any applicable liquidation, insolvency, bankruptcy, rehabilitation, composition, reorganization, conservation or other similar law in effect now or in lhe future; or
interfere wilh the exercise by Funding L.enders or Servicer ofany of their rights under the Borrower Loan Documents upon the occurrence of an event of default by the Borrower under the Borrower Loan Documents or the Funding Loan Documents; or
lake anv actum to accelerate or otherwise enforce payment or seek other remedies with reaped to the Borrower Icans or the Funding Loans.
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(tl) The Governmental leiuler shall piovide written notice to the Funding l.enders and the Servicer immediately upon taking any action at law or in equity to exercise any remedy or direct any proceeding under the Borrower Loan Documents or the Funding Loan Documents.
Section 2.3. Loan; Borrower Notes; Conditions to Closing.
The Funding Loans shall be funded by the Funding Lenders directly to the Borrower or through the escrow established by the Construction Escrow Agreement, subject lo the conditions set forth in the Construction Funding Agreement, in one or more installments not to exceed the Borrower Loan Amount in accordance with the disbursement procedures set forth in the Construction Funding Agreement. Upon funding of each installment ofthe Funding Loans, the Governmental Lender shall be deemed to have made the Borrower Loans lo lhe Borrower in a like principal amount. Advances ofthe Borrower Loans and Funding Loans shall be allocated to the Borrower Note, Series 2022A and Ihe related Governmental Lender Construction Note A and the Borrower Note, Series 2022B and the related Governmental Lender Construction Note B as specified by the Borrower and appioved by the Funding Lenders. The Borrower Loans shall mature and be payable at the limes and in the amounts required under the terms hereof and of the Construction Funding Agreement and Borrower Notes. The proceeds of the Borrower Loans shall be used by the Borrower to pay costs ofthe acquisition, leasing, construction, rehabilitation, development, equipping and/or operation of the Project. The Borrower hereby accepts the Borrower Loans and acknowledges that, the Governmental Lender shall cause the Funding Lenders to fund the Borrower Loans in the manner set forth herein and in the Construction Funding Agreement and the Funding Loan Agreement. Lhc Governmental Lender acknowledges that the Borrower Loans shall be funded by the Funding Lenders for the account of the Governmental Lender. Neither the Servicer, nor any Funding Lender shall be responsible for the failure of any other Funding Lender to make advances under its Funding Loan.
The Borrower hereby accepts the Borrower Loans. As evidence of its obligation to repay the Borrower Loans, simultaneously with the delivery of this Borrower Loan Agreement to the Governmental Lender, the Borrower hereby agrees to execute and deliver the Borrower Notes. The Borrower Loans shall mature and be payable at the times and in the amounts required under the terms hereof and ofthe Borrower Notes.
Closing of the Bonower Loans on the Closing Date shall be conditioned upon satisfaction or waiver by the Governmental Lender and the Funding l.enders, in their sole discretion of each ofthe conditions precedent lo closing set forth in the Funding Loan Agreement, the Construction Funding Agreement and this Borrower Loan Agreement, including but not limited to the following:
evidence of proper recordation oflhe Security Instrument, an assignment ofthe Security Instrument from the Governmental L.ender to the Servicer, as agent for the Funding Lenders, the Regulatory Agreement, and each ofthe other documents specified for recording in instructions delivered to the Title Company by counsel to lhe Funding Lenders (or thai such documents have been delivered to an authorized agent ofthe Title Company for recordation under binding recording instructions from Funding Lenders' counsel or such other counsel as may be acceptable to the Funding Lenders): and
delivery into escrow- with the Title Company (or separate escrow-company, if applicable) of all amounts required to be paid in connection wilh the origination ofthe l3orrower L.oans and the Funding Loans and any underlying real estate transfers or transactions, including the Com-- of f unding Deposit and the 13orrower Initial
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-i8ro-');;2i.)-i>7M <',
Equity, all as specified in written instructions delivered to the I itle Company by counsel to the funding fenders (or such olher counsel as may be acceptable to the funding Lenders); and
(iii) payment of all lees payable in connection with the closing of the Borrower Loans, including lhc Governmental Lender's Administrative fee and the initial fees and expenses oflhe funding Lenders.
Section 2.4. Borrower Loan Payments.
The Borrower shall make Borrower Loan Payments in accordance with the Borrower Notes. Each Borrower Loan Payment made by the Bonower shall be made in funds immediately available to the applicable Funding Lender or the Servicer by 2:00 p.m., Chicago time, on the Borrower Loan Payment Date. Each such payment shall be made lo the Funding Lenders or the Servicer by deposit to such account as the applicable Funding Lender or Servicer, as applicable, may designate by Written Notice lo the Borrower. Whenever any Borrower Loan Payment shall be staled to be due on a day that is not a Business Day, such payment shall be due on the first Business Day immediately thereafter. In addition, the Borrower shall make Borrower Loan Payments in accordance with the Bonower Notes in the amounts and at llic times necessary to make all payments due and payable on the applicable Funding Loans. All payments made by the Borrower hereunder or by the Borrower under the other Borrower Loan Documents, shall be made irrespective of, and without any deduction for, any set-offs or counterclaims, but such payment shall not constitute a waiver ofany such set offs or counterclaims.
If there is a Servicer, payments of principal and interest on the Borrower Notes shall be paid to the Servicer. If there is no Servicer, payments of principal and interest on the Borrower Notes shall be paid directly to the applicable Funding Lender.
Section 2.5. Additional Borrower Payments.
(a) The Borrower shall pay on demand the following amounts:
lo the Servicer or the applicable Funding Lender, the Rebate Amount then due. if any, to be deposited in the Rebate Fund as specilied in Section 5.35 hereof and the Rebate Analyst's fee and any other costs incurred to calculate such Rebate Amount (to the extent such costs are not included in the Borrower Loan Payment);
to the Governmental L.ender, the Ongoing Governmental Lender Fee and all fees, charges, costs, advances, indemnities and expenses, including agent and counsel fees, of the Governmental Lender incurred under the Borrower Loan Documents or the Funding Loan Documents, and any taxes and assessments with respect to the Project, as and when the same become due;
[Reserved]:
all Costs of Funding and fees, charges and expenses, including agent and counsel fees incurred in connection with the origination ofthe Borrower Loans and the related Funding Loan, as and when the same become due.
to lhe Servicer or the applicable Funding I.X'iider. all charges, costs, advances, indemnities and expenses, including agent and counsel lees incurred bv the
Servicer or the applicable Funding L.ender at any time in connection with the Borrower L.oans. the Funding L.oans or the Project, including, without limitation, reasonable counsel fees and expenses incurred in connection with the interpretation, performance, or amendment and all counsel lees and expenses relating to the enforcement of the Borrower L.oan Documents or the Funding Loan Documents or any other documents relating to the Project or the Borrower Loans or in connection with questions or other matters arising under such documents or in connection with any federal or state tax audit; and
(vi) any Late Charge due and payable under the terms ofthe Borrower Notes and Section 2.6 hereof; provided, however, that all payments made pursuant to this subsection (vi) shall be made to the Servicer, and if there is no Servicer, such payments shall be made to the applicable Funding Lender.
(b) The Borrower shall pay to the parly entitled thereto as expressly set forth in this Borrower Loan Agreement or the other Borrower Loan Documents or Funding Loan Documents:
all expenses incurred in connection with the enforcement of any rights under this Borrower Loan Agreement or any other Borrower Loan Document, the Regulatory Agreement, or any Funding Loan Document by the Governmental Lender, Funding Lenders or the Servicer;
all other payments of whatever nature that the Borrower has agreed to pay or assume under the provisions of this Borrower Loan Agreement or any other Borrower Loan Document or Funding Loan Document; and
all expenses, costs and fees relating lo inspections oflhe Project required by the Governmental Lender, the Funding Lenders, the Servicer or the Construction Consultant, in accordance with the Borrower Loan Documents or the Funding l.oan Documents or to reimburse such parties for such expenses, costs and fees.
Section 2.6. Overdue Payments; Payments if Default. If any Borrower Payment Obligation is not paid by or on behalf ofthe Borrower when due, the Borrower shall pay to the applicable Funding Lender or the Servicer, a Late Charge in the amount and to the extent set forth in the related Borrower Note, if any.
Section 2.7. Calculation of Interest Payments and Deposits to Real Estate Related Reserve Funds. The Borrower acknowledges as follows: (a) calculation of all interest payments shall be made by the Servicer or if there is no Servicer, the Funding Lenders; and (b) deposits wilh respect lo the Faxes and Other Charges shall be calculated by the Servicer or if there is no Servicer, the Funding Lenders in accordance with the Security Instrument.
Section 2.8. Grant of Security Interest; Application of Funds. To the extent not inconsistent with the Security Instrument and as security for payment of lhc Borrower Payment Obligations and the performance by the Borrower of all other terms, conditions and provisions ofthe Borrower Loan Documents, the Hforrower hereby pledges and assigns to each Funding L.ender, and grants to each Funding L.ender. a security interest in. all the Borrower's right, title and interest in and to all payments to or moneys held in the funds and accounts created and held by such Funding Lender or the Servicer for the Project. This Borrower L.oan Agreement is. among other things, intended by the parlies to be a security agreement for purposes ofthe UCC. Upon the occurrence and during the continuance of an Event of Default hereunder, the f unding Lenders and the Servicer shall apply or cause to be applied
any s li iii s held by the Funding Lenders and lhe Servicer wilh respect to lhe Project in anv manner and in any order determined by Funding Lenders, in Funding Lenders' sole and absolute discretion.
Section 2.9. -Marshalling; Payments Set Aside. The Governmental Lender and Funding Lenders shall be under no obligation to marshal any assets in favor of Borrower or any other Person or against or in payment ofany or all ofthe proceeds. To the extent thai Borrower makes a payment or payments or transfers any assets to the Governmental Lender or Servicer or if there is no Servicer, the funding Lenders, or the Governmental Lender or Servicer or if there is no Servicer, the Funding Lenders enforces its liens, and such payment or payments or transfers, or the proceeds of such enforcement or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party in connection with any insolvency proceeding, or otherwise, then: (i) any and all obligations owed to the Governmental Lender or Funding Lenders and any and all remedies available to the Governmental Lender or Funding Lenders under the terms ofthe Borrower Loan Documents and the Funding Loan Documents or in law or equity against Borrower, Managing Member or any Guarantor and/or any of their properties shall be automatically revived and reinstated to the extent (and only to the extent) ofany recovery permitted under.clause (ii) below; and (ii) the Governmental Lender and Funding Lenders shall be entitled to recover (and shall be entitled to file a proof of claim to obtain such recovery in any applicable bankruptcy, insolvency, receivership or fraudulent conveyance or fraudulent transfer proceeding) either: (x) the amount of payments or the value of the transfer or (y) if the transfer has been undone and the assets returned in whole or in part, the value of the consideration paid to or received by Borrower for the initial asset transfer, plus in each case any deferred interest from the date oflhe disgorgement to the date of distribution lo the Governmental Lender or Funding Lenders in any bankruptcy, insolvency, receivership or fraudulent conveyance or fraudulent transfer proceeding, and any costs and expenses due and owing, including, without limitation, any reasonable attorneys' fees incurred by the Governmental Lender or Funding Lender in connection with the exercise by the Governmental Lender or either Funding Lender of its rights under this Section 2.9.
Section 2.10. Borrower Loan Disbursements. The Borrower Loans shall be disbursed by the Servicer, as agent for the Governmental Lender, pursuant to the Construction Funding Agreement.
ARTICLE III
[RESERVED)
ARTICLE IV REPRESENTATIONS AND WARRANTIES
.Section 4.1. Borrower Representations. To induce the Governmental Lender to execute this Borrower Loan Agreement and lo induce Funding Lender to make Disbursements, Borrower represents and warrants for the benefit of the Governmental Lender, Funding Lenders and the Servicer, that lhe representations and warranties set forth in this Section 4.1 are complete and accurate as ofthe Closing Date and will be complete and accurate, and deemed remade (but subject to any changed circumstances disclosed in writing to the Governmental Lender and the Funding Fenders at such time), as ofthe date of each Disbursement, and as of the Maturity Date in accordance with the terms and conditions of the Borrower Noles. Subject to Section 4.2 hereof, the representations, warranties and agreements set forth in this Section 4.1 shall survive the making ofthe Borrower Loans, and shall remain in effect and true and correct in all material respects until the Borrower Loans and all other Borrower Payment Obligations have been repaid in full.
Section 4.1.1 Organization; Special Purpose. I he Borrower is in good standing under the laws of the State (and under the laws of the stale in which the Borrower was formed if the
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Borrower was nol formed under lhe laws ofthe State), has full legal right, power and authority to enter into the Borrower l.oan Documents to which it is a party, and to cany out and consummaie all transactions conlemplaled by the Borrower l.oan Documents lo which it is a party, and by proper corporate, limited partnership or limited liability company action, as appropriate has duly authorized the execution, delivery and performance of the Bonower Loan Documents to which it is a party. The Person(s) ofthe Borrower executing lhe Borrower Loan Documents and lhe Funding Loan Documents lo which the Borrower is a parly are fully authorized to execute the same. The Borrower Loan Documents and the Funding l.oan Documents to which the Borrower is a party have been duly authorized, executed and delivered by the Borrower. The sole business ofthe Borrower is lhe ownership, management and operation ofthe Project.
Section 4.1.2 Proceedings; Enforceability. Assuming due execution and delivery by the other parties thereto, the Borrower Loan Documents and the Funding Loan Documents to which the Borrower is a party will constitute the legal, valid and binding agreements ofthe Borrower enforceable against the Borrower in accordance with their terms; except in each case as enforcement may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally, by the application of equitable principles regardless of whether enforcement is sought in a proceeding at law or in equity and by public policy.
Section 4.1.3 No Conflicts. The execution and delivery of the Borrower Loan Documents and the Funding Loan Documents to which the Borrower is a party, lhe consummation ofthe transactions herein and therein contemplated and the fulfillment of or compliance with the terms and conditions hereof and thereof, will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under the Operating Agreement of the Borrower, or to the actual knowledge ofthe Borrower and with respect to the Borrower, any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any mortgage, deed of trust, loan agreement, lease, contract or other agreement or instrument lo which the Borrower is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any lien, charge or encumbrance ofany nature whatsoever upon any ofthe properly or assets ofthe Borrower, which conflict, violation, breach, default, lien, charge or encumbrance might have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Borrower Loan Documents and the funding Loan Documents, or the financial condition, assets, properties or operations ofthe Borrower.
Section 4.1.4 Litigation; Adverse Facts. There is no Legal Action, nor is there a basis known to Borrower for any Legal Action, before or by any court or federal, slate, municipal or other governmental authority, pending, or lo Ihc actual knowledge of the Borrower, after reasonable investigation, threatened, against or affecting the Borrower, the Managing Member or any Guarantor, or their respective asseis, properties or opei ations which, if determined adversely to the Borrower, Managing Member or such Guarantor or their respective interests, would have a material adverse effect upon the consummation oflhe transactions contemplated by, or the validity of. the Borrower Loan Documents or the Funding Loan Documents, upon the ability ol each of Borrower, Managing Member and Guarantors to perform their respective obligations under the Borrower Loan Documents, the Funding Loan Documents and the Related Documents to which it is a party, or upon the linancial condition, assets (including the Project), properties or operations ofthe Bonower and the Managing Member, none ofthe Borrower. Managing Member or any Guarantor is in default (and no event has occurred and is continuing which with the giving of notice or the passage of lime or both could consiitute a default) wilh respect lo any order or decree ofany court or any order, regulation or demand ofany federal, stale, municipal or other governmental authority, which default might have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Borrower L.oan Documents and the f unding L.oan Documents, the abiliiv of each of Borrower. Managing Member and each
.lS('o-<).-;2')-l)7|.| 11
Guarantor to perform their respective obligations under the Borrower Loan Documents, the Funding Loan Documents and the Relaled Documents to which it is a party, or the financial condition, assets, properties or operations of the Borrower or Managing Member. None of Borrower, or Managing Member lo ils actual knowledge arc (a) in violation ofany applicable law. which violation materially and adversely affects or may materially and adversely affect the business, operations, assets (including the Project), condition (financial or otherwise) or prospects of Borrower. Managing Member or such Guarantor, as applicable; (b) subject to, or in default wilh respect lo, any other Legal Requirement lhat would have a material adverse effect on the business, operations, assets (including the Project), condition (financial or otherwise) or prospects of Borrower, or Managing Member as applicable; or (c) in defauli with respect to any agreement lo which Borrower or Managing Member as applicable, is a party or by which il is bound, which default would have a material adverse effect on the business, operations, assets (including the Project), condition (linancial or otherwise) or prospects of Borrower or Managing Member as applicable: and (d) there is no Legal Action pending or, to the actual knowledge of Borrower, threatened in writing against or affecting Borrower or Managing Member or any Guarantor questioning the validity or the enforceability of this Borrower Loan Agreement or any ofthe other Borrower Loan Documents or the Funding Loan Documents or ofany ofthe Related Documents. All tax returns (federal, stale and local) required to be filed by or on behalf of the Borrower have been filed, and all taxes shown thereon to be due, including interest and penalties, except such, if any, as are being actively contested by the Borrower in good faith, have been paid or adequate reseives have been made for the payment thereof which reserves, if any, are reflected in the audited financial statements described therein. The Borrower enjoys the peaceful and undisturbed possession of all ofthe premises upon which il is operating its facilities, subject to the Ground lease and the leases of residential tenants in occupancy at closing.
Section 4.1.5 Agreements; Consents; Approvals. Except as contemplated by the Borrower Loan Documents and the Funding Loan Documents, the Borrower is not a party to any agreement or instrument or subject to any restriction that would materially adversely affect the Borrower, the Project, or the Borrower's business, properties, operations or financial condition or business prospects, except the Permitted Encumbrances. The Borrower is not in default in any material respect in the performance, observance or fulfillment ofany ofthe obligations, covenants or conditions contained in any Permitted Encumbrance or any other agreement or instrument to which it is a party or by which it or the Project is bound.
No consent or appioval ofany trustee or holder ofany indebtedness of the Borrower, and to the actual knowledge of the Borrower and only with respect to the Borrower, no consent, permission, authorization, order or license of, or filing or registration wilh, any governmental authority (except no representation is made with respect to any state securities or "blue sky" laws) is necessary in connection with the execution and delivery ofthe Borrower Loan Documents or the Funding Loan Documents, or the consummation ofany transaction herein or therein contemplated, or the fulfillment of or compliance with the terms and conditions hereof or thereof, except as have been obtained or made and as are in full force and effect.
Section 4.1.6 Title. The Borrower shall have marketable title to the Project, free and clear of all Liens except the Permitted Encumbrances. The Security Instrument, when properly recorded in the appropriate records, together with any UCC financing statements required to be filed in connection therewith, will create (i) a valid, perfected first priority lien on the fee (or leasehold, if applicable) interest in the Project and (ii) perfected security interests in and to, and perfected collaieial assignments of. all personalty included in the Project (including the Leases), all in accordance with the terms thereof, in each case subject only to any applicable Permitted Encumbrances. To the Borrower's actual knowledge, there arc no delinqueni real properly taxes or assessments, including water and sewer charges, with respect to the Project, nor are there any claims for payment for work, labor or materials affecting the Project which
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are or may become a Lien prior lo. or ol equal priority with, the Liens created by the Borrower Loan Documents and the Funding l.oan Documents.
Section 4.1.7 Survey. To the best knowledge ofthe Borrower, the survey for the Project delivered to the Governmental Lender and the Funding Lenders does not fail lo reflect any-material matter affecting the Project or the title thereto.
Section 4.1.8 No Bankruptcy Filing. The Borrower is not contemplating either the filing of a petition by il under any slate or federal bankruptcy or insolvency law or the liquidation of all or a major portion of ils property (a 'Bankruptcy Proceeding"), and the Borrower has no knowledge ofany Person contemplating the filing ofany such petition against it. As ofthe Closing Dale, the Borrower has the ability to pay its debts as they become due.
Section 4.1.9 Full and Accurate Disclosure. No statement of fact made by the Borrower in any Borrower L.oan Document or any Funding Loan Document contains any untrue statement of a material fact or omits to state any material fact necessary lo make statements contained therein in light ofthe circumstances in which they were made, nol misleading. There is no material fact or circumstance presently known to the Borrower that has nol been disclosed to the Governmental Lender and the Funding Lenders which materially and adversely affects the Project or the business, operations or financial condition or business prospects ofthe Borrower or the Borrower's ability to meet its obligations under this Borrower Loan Agreement and the other Borrower Loan Documents and Funding L.oan Documents to which it is a party in a timely manner.
Section 4.1.10 No Plan Assets. The Borrower is nol an "employee benefit plan," as defined in Section 3(3) of F.RISA, subject to Title I of ERISA, and none ofthe assets ofthe Borrower constitutes or will constitute "plan assets" of one or more such plans within the meaning of 29 C.F.R. Section 2510.3 101.
Section 4.1.1! Compliance. The Borrower, the Project and the use thereof will comply, to the extent required, in all material respects with all applicable Legal Requirements. The Borrower is nol in default or violation of any order, writ, injunction, decree or demand of any Governmental Authority, the violation of which would materially adversely affect the financial condition or business prospects or the business of the-Borrower. T here has not been committed by the Borrower or any Affiliate of Borrower involved wilh the operation or use ofthe Project any act or omission affording any Governmental Authority the right of forfeiture as against the Project or any part thereof or any moneys paid in performance ofthe Borrower's obligations under any Borrower Loan Document or any Funding Loan Documents.
Section 4.1.12 Contracts. All service, maintenance or repair contracts affecting the Project have been entered into at arm's length (except for such contracts between the Borrower and ils Affiliates or the affiliates ofthe Borrower Controlling Entity oflhe Bonower) in the ordinary course of the Borrower's business and provide for the payment of fees in amounts and upon terms comparable to existing market rates.
Section 4.1.13 Financial Information. All financial data, including any statements of cash How and income and operating expense, that have been delivered to the Governmental Lender or the Funding Lenders in respect ofthe Project by or on behalf oflhe Borrower, to the best knowledge oflhe Borrower, (i)are accurate and complete in all material respects, (ii) accurately represent the linancial condition ofthe Project as oflhe date ol such reports, and (iii) to the extent prepared by an independent certified public accounting firm, have been prepared in accordance with GAAP consistently applied throughout the periods covered, except as disclosed therein Other than pursuant lo or permilted bv lhe
Borrower Loan Documents or the Funding Loan Documents or the Borrower organizational documents, the Borrower has no contingent liabilities, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments. Since the date of such linancial statements, there has been no Materially Adverse Change in the linancial condition, opeiations or business ofthe Borrower from that set forth in said (inancial statements.
Section 4.1.14 Condemnation. No Condemnation or other proceeding has been commenced or, to the Borrower's actual knowledge, is contemplated, threatened or pending with respect lo all or part ofthe Project or for the relocation of roadways providing access to the Project.
Section 4.1.15 Federal Reserve Regulations. No part oflhe proceeds ofthe Borrower Loan will be used for the purpose of purchasing or acquiring any ''margin stock1" within the meaning of Regulation LJ ofthe Board of Governors ofthe Federal Reserve System or for any other purpose lhat would be inconsistent with such Regulation U or any other regulation of such Board of Governors, or for any purpose prohibited by Legal Requirements or any Borrower Loan Document or Funding Loan Document.
Section 4.1.16 Utilities and Public Access. To the best ofthe Borrower's knowledge, the Project is or will be served by water, sewer, sanitary sewer and storm drain facilities adequate to service it for its intended uses. All public utilities necessary or convenient to the full use and enjoyment ofthe Project is or will be located in the public right-of-way abutting the Project, and all such utilities are or will be connected so as to serve the Project without passing over other property absent a valid easement. All roads necessary for lhe use ofthe Project for its current purpose have been or will be completed and dedicated to public use and accepted by all Governmental Authorities. Except for Permitted Encumbrances, the Project does not share ingress and egress through an easement or private road or share on-site or off-site recreational facilities and amenities that are not located on the Project and under lhe exclusive control of the Borrower, or where there is shared ingress and egress or amenities, there exists an easement or joint use and maintenance agreement under which (i) access to and use and enjoyment ofthe casement or private road and/or recreational facilities and amenities is perpetual, (ii) the number of parties sharing such easement and/or recreational facilities and amenities must be specified, (iii) the Borrower's responsibilities and share of expenses are specified, and (iv) the failure to pay any maintenance fee with respect to an easement will not result in a loss of usage ofthe easement.
Section 4.1.17 Not a Foreign Person. The Borrower is not a "foreign person'" within the meaning of § 1445(f)(3) ofthe Code.
Section 4.1.18 Separate Lots. Each parcel comprising the Land is (or will be) a separate tax lot and is not (or will not be) a portion ofany other tax lot that is not a part ofthe Land.
Section 4.1.19 Assessments. There arc no pending or, to the Borrower's actual knowledge, proposed special or other assessments for public improvements or otherwise affecting the Project, or any contemplated improvements to the Project that may result in such special or other assessments.
Section 4.1.20 Enforceability. The Borrower Loan Documents and the Funding Loan Documents are not subject lo. and the Borrower has not asserted, any right of rescission, set-off, counterclaim or defense, including the defense of usury.
Section 4.1.21 Insurance. The Borrower has obtained the insurance required bv ihis Borrower l.oan Agreement, if applicable, the Construction Funding Agreement and the Security Instrument and has delivered to the Servicer copies of insurance policies or certificates of insurance
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reflecting the insuiance coverages, amounts and other requirements set ti.ulh in this Borrower L.oan Agreement, if applicable, and the Security Instrument
Section 4.1.22 I ise of Property; Licenses. The Project will be used as a multifamily residential rental project and other appurtenant and related uses, which use is consistent with the zoning classification for the Project. All certifications, permits, licenses and approvals, including certificates of completion and occupancy permits required for the legal use or legal, nonconforming use, as applicable, occupancy and operation of the Project (collectively, the "Licenses") required at this time for the construction or rehabilitation, as appropriate, and equipping ofthe Project have been obtained. To the Borrower's knowledge, all Licenses obtained by the Borrower have been validly issued and are in full force and effect. Ihc Borrower has no reason to believe that any ofthe Licenses required for the future use and occupancy ofthe Project and not heretofore obtained by the Borrower will not be obtained by the Bonower in the ordinary course following the Completion Dale. No Licenses will terminate, or become void or voidable or terminable, upon any sale, transfer or other disposition ofthe Project, including any transfer pursuant to foreclosure sale under the Security Instrument or deed in lieu of foreclosure thereunder. The Project does not violate any density or building setback requirements ofthe applicable zoning law except to the extent, if any, shown on the survey. No proceedings are, to the best of lhc Borrower's knowledge, pending or threatened that would result in a change oflhe zoning of Ihe Project.
Section 4.1.23 Flood Zone. Either all Improvements will be constructed above the flood grade or the Borrower will obtain appropriate flood insurance as directed by the funding Lenders or the Servicer.
Section 4.1.24 Physical Condition. The Project, including all Improvements, parking facilities, systems, fixtures, equipment and landscaping, are or, after completion of the construction, rehabilitation and/or repairs, as appropriate, will be in good and habitable condition in all material respects and in good order and repair in all material respects (reasonable wear and tear excepted). The Borrower has not received notice from any insurance company or bonding coinpany of any defect or inadequacy in the Project, or any part thereof, which would adversely affect its insurability or cause the imposition of extraordinary premiums or charges thereon or any termination ofany policy of insurance or bond. The physical configuration of the Project is not in material violation ofthe ADA, if required under applicable law.
Section 4.1.25 Encroachments. All oflhe Improvements included in determining the appraised value ofthe Project will lie wholly within the boundaries and building restriction lines ofthe Project, and no improvement on an adjoining property encroaches upon the Project, and no easement or other encumbrance upon the Project encroaches upon any ofthe Improvements, so as lo affect the value or marketability ofthe Project, except those insured against by the Title Insurance Policy or disclosed in the survey ofthe Project as approved by the Funding Lenders or the Servicer.
Section 4.1.26 State Law Requirements. The Borrower hereby represents, covenants and agrees lo comply with the provisions of all applicable State laws relating to the Borrower Loans, the Funding l.oans and the Project.
Section 4.1.27 Filing and Recording Taxes. All transfer taxes, deed stamps, intangible taxes or olher amounts in the nature of iransfer taxes required lo be paid by any Person under applicable Legal Requirements in connection with the iransfer oflhe Project to the Borrower have been paid. All mortgage, mortgage recording, stamp, intangible or other similar taxes required lo be paid by anv Person under applicable Legal Requirements in connection with the execution, delivery, recordation, tiling, registration, perfection or enforcement of anv oflhe Borrower L.oan Documents and the funding Loan Documents have been or will be paid
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Section 4.1.2N Investment Company Act. T he Borrower is nol (i)an ¦investment companv"' or a company "controlled " In an "investment company/" within the meaning ol the Investment Company Act ol" 1940. as amended; or (ii) a "holding company" or a "subsidiary company"" of a "holding coinpany" or an "affiliate" of either a "holding company" or a "subsidiary company"' within the meaning ofthe Public Utility Holding Coinpany Aci of 1935, as amended.
Section 4.1.29 Fraudulent Transfer. T he Borrower has nol accepted the Borrower Loans or entered into any Borrower Loan Document or funding L.oan Document with the actual intent to hinder, delay or defraud any creditor, and the Borrower has received reasonably equivalent value in exchange for its obligations under the Borrower L.oan Documents and the Funding Loan Documents. Giving effect to the transactions contemplated by the Borrower Loan Documents and the funding Loan Documents, the fair saleable value ofthe Borrower's asseis exceeds and will, immediately following the execution and delivery ofthe Borrower Loan Documents and the funding Loan Documents, exceed the Borrower's total liabilities, including subordinated, unliquidated, disputed or contingent liabilities. The fair saleable value ofthe Borrower's assets is and will, immediately following the execution and delivery of the Borrower Loan Documents and the Funding Loan Documents, be greater than the Borrower's probable liabilities, including the maximum amount of its contingent liabilities or its debts as such debts become absolute and matured. The Borrower's assets do not and, immediately following the execution and delivery ol" the Bonower Loan Documents and the Funding Loan Documents will nol, constitute unreasonably small capital lo carry out its business as conducted or as proposed to be conducted. The Borrower docs nol intend to, and does not believe that it will, incur debts and liabilities (including contingent liabilities and other commitments) beyond its ability to pay such debts as they mature (taking into account the timing and amounts to be payable on or in respect of" obligations ofthe Borrower).
Section 4.1.30 Ownership of the Borrower. Except as set forth in the Operating Agreement of the Borrower, the Borrower has no obligation to any Person to purchase, repurchase or issue any ownership interest in it.
Section 4.1.31 Environmental Matters. To the best of Borrower's knowledge and except as disclosed in environmental reports previously delivered to the Funding Lenders and the Governmental Lender (the "Prior Environmental Disclosures"), the Project is not in violation ofany Legal Requirement pertaining to or imposing liability or standards of conduct concerning environmental regulation, contamination or clean-up, and will comply with covenants and requirements relating to environmental hazards as set forth in the Security Instrument. The Borrower will execute and deliver the Agreement of Environmental Indemnification.
Section 4.1.32 Name; Principal Place of Business. Unless prior Written Notice is given to the Funding Lenders, the Borrower does not use and will not use any trade name, and has not done and will not do business under any name other than its actual name set forth herein. The principal place of business ofthe Borrower is its primary address for notices as set forth in Section 10.1 hereof and lhe Borrower has no other place of business, olher than the Project and such principal place of business.
Section 4.1.33 Subordinated Debt. There is no secured or unsecured indebtedness with respect lo the Project or any residual interest therein, other than Permitted Encumbrances and the permitted secured indebtedness described in Section 6.7 hereof, except an unsecured deferred developer fee not to exceed the amount permitted Liy each Funding Lender as determined on the Closing Date as well as any unsecured operating deficit loans under the Operating Agreement that are payable solely from |Net Cash Flows| (as defined in the Operating Agreement).
Section 4.1.34 Filing of faxes. I he Borrower has filed (or has obtained effective extensions for filing) all federal, stale and local tax returns required lo be tiled and has paid or made
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adequate provision for the payment ol all federal, state and local taxes, charges and assessments, if any. payable by the Borrower.
Section 4.1.35 General Tax. All representations, warranties and certifications ofthe Borrower set forth in the Regulatory Agreement and the T ax Compliance Agreement are incorporated by reference herein and the Borrower will comply with such as if set forth herein.
Section 4.1.36 Approval of the Borrower Loan Documents and Funding Loan Documents. By its execution and delivery of this Borrower Loan Agreement, the Borrower approves the form and substance ofthe Borrower Loan Documents and the funding Loan Documents, and agrees to carry out the responsibilities and duties specified in the Borrower Loan Documents and the funding Loan Documents to be carried out by the Borrower. The Borrower acknowledges that (a) it understands the nature and structure ofthe transactions relating to the financing ofthe Project, (b) it is familiar with the provisions of all of the Borrower Loan Documents and the funding Loan Documents and other documents and instruments relating to the financing, (c) it understands the risks inherent in such transactions, including without limitation the risk of loss ofthe Project, and (d) it has not relied on the Governmental Lender, the Funding Lenders or the Servicer for any guidance or expertise in analyzing the financial or other consequences ofthe transactions contemplated by the Borrower Loan Documents and the funding Loan Documents or otherwise relied on the Governmental Lender, the Funding Lenders or the Servicer in any manner.
Section 4.1.37 Funding Loan Agreement. T he Borrower has read and accepts and agrees that it is bound by the Funding Loan Agreement and the Funding Loan Documents.
Section 4.1.38 Americans with Disabilities Act. T he Project, as designed, will conform in all material respects with all applicable zoning, planning, building and environmental laws, ordinances and regulations of governmental authorities having jurisdiction over the Project, including, but not limited to, the Americans with Disabilities Act of 1990 ("ADA"), to the extent required (as evidenced by an architect's certificate to such effect).
Section 4.1.39 Requirements of Code and Regulations. The Project satisfies all requirements ofthe Code and the Regulations applicable to the Project.
Section 4.1.40 Regulatory Agreement. The Project, as ofthe date of origination ofthe funding Loans, is in compliance with all requirements ofthe Regulatory Agreement to the extent such requirements are applicable: and the Borrower intends to cause the Project to be rented or available for rental on a basis which satisfies the requirements ofthe Regulatory Agreement, including all applicable requirements ofthe Code and the Regulations, and pursuant to leases which comply with all applicable laws.
Section 4.1.41 Intention to Hold Project. The Borrower intends to hold the Project for ils own account and has no current plans, and has not entered into any agreements, to sell the Project or any part ofthe Project (except for rights granted in the Operating Agreement): and the Borrower intends to occupy the Project or cause the Project to be occupied and to operate it or cause it to be operated at all limes during the term of this Borrower Loan Agreement in compliance with the terms of this Borrower L.oan Agreement and lhe Regulatory Agreement and does not know ofany reason why the Project will not be so used by it in the absence of circumstances not now anticipated by it or totally beyond ils control.
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Section 4.1.42 Concerning Managing Member.
The Managing Member oi' Borrower is a limited liability company, duly organized and validly existing under the laws of the State. The Managing Member has all requisite power and authority, rights and franchises to enter into and perform its obligations under the Borrower L.oan Documents and the Funding Loan Documents to be executed by such Managing Member for its own account and on behalf of Borrower, as Managing Member of Borrower, under this Borrower Loan Agreement and the other Borrower Loan Documents and the Funding Loan Documents.
Managing Member has made all filings (including, without limitation, all required filings related to the use of fictitious business names) and is in good standing in the State and in each olher jurisdiction in which the character ofthe property it owns or the nature oflhe business il transacts makes such filings necessary or where the failure to make such filings could have a material adverse effect on the business, operations, assets, condition (financial or otherwise) or prospects of Managing Member.
(c) Managing Memlier is duly authorized to do business in the State.
The execution, delivery and performance by Borrower of the Borrower Loan Documents and the Funding Loan Documents have been duly authorized by all necessary action of Managing Member on behalf of Borrower, and by all necessary action on behalf of Managing Member.
The execution, delivery and performance by Managing Member, for itself and on behalf of Borrower, of the Bonower Loan Documents and the Funding Loan Documents will not violate (i) Managing Member's organizational documents; (ii)any other Legal Requirement affecting Managing Member or any of its properties; or (iii) any agreement to which Managing Member is bound or to which il is a party; and will not result in or require the creation (except as provided in or contemplated by this Borrower Loan Agreement) of any Lien upon any of such properties, any of the Collateral or any of the property or funds pledged or delivered to the applicable Funding Lender pursuant lo the Security Documents.
Section 4.1.43 Government and Private Approvals. All governmental or regulatory orders, consents, permits, authorizations and approvals required for the construction, rehabilitation, use, occupancy and operation ofthe Improvements, that may lie granted or denied in the discretion ofany Governmental Authority, have been obtained and are in full force and effect (or. in the case ofany ofthe foregoing that Borrower is nol required to have as of (he Closing Date, will be obtained), and will be maintained in full force and effect at all limes during the construction or rehabililation of the Improvements. All such orders, consents, permits, authorizations and approvals that may not be denied in the discretion ofany Governmental Authority shall be obtained prior to the commencement ofany work for which such orders, consents, permits, authorizations or approvals are required, and, once obtained, such orders, consents, permits, authorizations and approvals will be maintained in full force and effect at all times during the construction or rehabilitation of the Improvements. Except as set forth in the preceding two sentences, no additional governmental or regulatory actions, filings or registrations wilh respect to the Improvements, and no approvals, authorizations or consents ofany trustee or holder ofany indebtedness or obligation of Borrow-er. are required for the due execution, delivery and performance by Borrower or Managing Member of anv of the Borrower Loan Documents or the funding l.oan Documents or the Related Documents executed by Borrower or Managing Member, as applicable. All required zoning approvals have been obtained, and the zoning of the Land for the Project is not conditional upon the happening ofany further evenl.
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Section 4.1.44 Concerning Guarantors. The Borrower Loan Documents and lite Funding Loan Documents to which the Guarantors are a parly or a signatory executed simultaneously with this Borrower L.oan Agreement have been duly executed and delivered by the Guarantors and are legally valid and binding obligations ofthe Guarantors, enforceable against lhe Guarantors in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization,, moratorium or similar laws affecting creditors' rights generally and by general principles of equity.
Section 4.1.45 No Material Defaults. Except as previously disclosed to Funding Lenders in writing, there exists no material violation of or material default by Borrower under, and, to the actual knowledge of Borrower, no event has occurred which, upon the giving of notice or the passage of time, or both, would constitute a material default with respect to: (i)the terms ofany instrument evidencing, securing or guaranteeing any indebtedness secured by the Project or any portion or interest thereof or therein; (ii) any lease (including the Ground Lease) or other agreement affecting the Project or to which Borrower is a parly; (iii) any license, permit, statute, ordinance, law, judgment, order, writ, injunction, decree, rule or regulation ofany Governmental Authority, or any determination or award of any arbitrator to which Borrower or the Project may be bound; or (iv) any mortgage, instrument, agreement or document by which Borrower or any of its respective properties is bound; in the case ofany ofthe foregoing: (1) which involves any Borrower Loan Document or Funding Loan Document; (2) which involves the Project and is not adequately covered by insurance; (3) that might, materially and adversely affect the ability of Borrower, Managing Member or any Guarantor to perform any of its respective obligations under any ofthe Borrower Loan Documents or the Funding Loan Documents or any olher material instrument, agreement or document to which it is a party; or (4) which might adversely affect the priority oflhe Liens created by this Borrower Loan Agreement or any ofthe Borrower Loan Documents or the Funding Loan Documents.
Section 4.1.46 Payment of Taxes. Except as previously disclosed to Funding Lender in writing: (i)all tax returns and reports of Borrower, Managing Member and Guarantors required to be filed have been timely tiled, and all taxes, assessments, fees and olher governmental charges upon Borrower, Managing Member or Guarantors, and upon their respective properties, assets, income and franchises, which are due and payable have been paid when due and payable; and (ii) Borrower knows of no proposed tax assessment against it or against the Managing Member that would be material to the condition (financial or otherwise) of Borrower or Managing Member and neither Bonower nor Managing Member have contracted with any Governmental Authority in connection with such taxes.
Section 4.1.47 Rights to Project Agreements and Licenses. Borrower is the legal and beneficial owner of all rights in and to the Plans and Specifications and all existing Project Agreements and Licenses, and will be the legal and beneficial owner of all rights in and to all future Project Agreements and Licenses. Borrower's interest in the Plans and Specifications and all Project Agreements and Licenses is not subject to any present claim (other than under the Borrower Loan Documents and the funding L.oan Documents or as otherwise approved by each funding Lender in its sole discretion), set-off or deduction other than in the ordinary course of business.
Section 4.1.48 Patriot Act Compliance. Borrower is not now. nor has ever been (i) listed on any Government Lists (as defined below), (ii)a person who has been determined by a Governmental Authority to be subject to the prohibitions contained in Presidential Executive Order No. 13224 (Sept. 23, 2001) or any other similar prohibitions contained in the rules and regulations of OFAC or in any enabling legislation or other Presidential Executive Orders in respect thereof, (iii) indicted for or convicted of any felony involving a crime or crimes of moral turpitude or for any Patriot Act Offense, or (iv) under investigation bv any Governmental Authority for alleged criminal activity. For purposes hereof, lhe term ¦¦Patriot Act Offense"" shall mean any violation ofthe criminal laws ofthe United Slates of America or of anv oflhe several stales, or that would be a criminal violation
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