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Exhibit 10.1
(Alterra / Meditrust)
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") is made as of January 28, 2000
by and between AHC PURCHASER, INC., a Delaware corporation (together with its
successors and assigns, "Borrower"), and GMAC COMMERCIAL MORTGAGE CORPORATION, a
California corporation (together with its successors and assigns, "Lender").
RECITALS
A. Borrower has requested that Lender make a total of sixteen (16)
loans to Borrower, as provided herein, in the aggregate principal amount of
Sixty Million Dollars ($60,000,000) (collectively, the "Loan").
B. This Agreement is intended to state and set forth the terms,
provisions and conditions upon which Lender will make the Loan to Borrower.
NOW, THEREFORE, it is hereby agreed as follows:
ARTICLE I
DEFINITIONS, ACCOUNTING PRINCIPLES, UCC TERMS.
1.1 As used in this Agreement, the capitalized terms set forth in
Schedule I attached hereto shall have the meanings set forth therein unless the
context hereof shall otherwise indicate.
1.2 Singular terms shall include the plural forms and vice versa, as
applicable, of the terms defined.
1.3 Terms contained in this Agreement shall, unless otherwise defined
herein or unless the context otherwise indicates, have the meanings, if any,
assigned to them by the Uniform Commercial Code in effect in the State of
Kansas.
1.4 All accounting terms used in this Agreement shall be construed in
accordance with GAAP, except as otherwise specified.
1.5 All references to other documents or instruments shall be deemed
to refer to such documents or instruments as they may hereafter be extended,
renewed, modified, or amended and all replacements and substitutions therefor.
1.6 All references herein to "Medicaid" and "Medicare" shall be
deemed to include any successor program thereto.
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ARTICLE II
TERMS OF THE LOAN
2.1 THE LOAN. Borrower has agreed to borrow the Loan from Lender, and
Lender has agreed to make the Loan to Borrower, subject to Borrower's compliance
with and observance of the terms, conditions, covenants, and provisions of this
Agreement and the other Loan Documents, and Borrower has made the covenants,
representations, and warranties herein and therein as a material inducement to
Lender to make the Loan.
2.2 SECURITY FOR THE LOAN. The Loan will be evidenced, secured and
guaranteed by the Loan Documents.
ARTICLE III
BORROWER'S REPRESENTATIONS AND WARRANTIES
To induce Lender to enter into this Agreement, and to make the Loan to
Borrower, Borrower represents and warrants to Lender as follows:
3.1 EXISTENCE, POWER AND QUALIFICATION. Borrower is a duly organized
and validly existing Delaware corporation, has the power to own its properties
and to carry on its business as is now being conducted, and is duly qualified to
do business and is in good standing in every jurisdiction in which the character
of the properties owned by it or in which the transaction of its business makes
its qualification necessary.
3.2 POWER AND AUTHORITY. Borrower has full power and authority to
borrow the indebtedness evidenced by the Notes and to incur the Loan Obligations
provided for herein, all of which have been authorized by all proper and
necessary action. All consents, approvals, authorizations, orders or filings of
or with any court or governmental agency or body, if any, required for the
execution, delivery and performance of the Loan Documents by Borrower have been
obtained or made.
3.3 DUE EXECUTION AND ENFORCEMENT. Each of the Loan Documents to
which Borrower and Guarantor are a party has been duly executed and delivered by
such party, constitutes a valid and legally binding obligation of Borrower and
Guarantor, and will be, enforceable in accordance with its terms (except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium, or other laws relating to the rights of creditors
generally, by general principles of equity and by regulatory restrictions
applicable to operators of assisted living/adult home facilities) and does not
violate, conflict with, or constitute any default under any law, government
regulation, decree, judgment, Borrower's or Guarantor's articles of
organization/incorporation, partnership agreement or operating agreement, as
applicable, or any other agreement or instrument binding upon Borrower and
Guarantor.
3.4 SINGLE PURPOSE ENTITY. Borrower is a Single Purpose Entity.
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3.5 PENDING MATTERS.
(a) Operations; Financial Condition. No action or investigation
is pending or, to the best of Borrower's knowledge, threatened before or by any
court or federal, state or local government administrative agency which might
result in any material adverse change in the financial condition, operations or
prospects of Borrower. Neither Borrower nor Guarantor are in violation of any
agreement, the violation of which might reasonably be expected to have a
material adverse effect on its business or assets, and neither Borrower nor
Guarantor are in violation of any order, judgment, or decree of any court, or
any statute or governmental regulation to which it is subject, the violation of
which could reasonably be expected to have a material adverse effect on the
operation of any Facility or on any of the Mortgaged Property.
(b) Condemnation or Casualty. There are no proceedings pending,
or, to the best of Borrower's knowledge, threatened, to acquire through the
exercise of any power of condemnation, eminent domain or similar proceeding any
part of any Land, the related Improvements or any interest therein, or to enjoin
or similarly prevent or restrict the use of the Land or the operation of any
Facility in any manner. None of the Improvements is subject to any unrepaired
casualty or other damage, except as reported in the engineering reports prepared
for each Facility by EMG and dated as follows:
Facility Date of Report
-------- --------------
▇▇▇ Arbor 12/23/99
Bowling Green 12/23/99
Mansfield 12/27/99
Northampton Manor 12/23/99
▇▇▇▇▇▇▇▇▇▇ I 12/23/99
▇▇▇▇▇▇▇▇▇▇ II 12/23/99
New Braunfels 12/27/99
Deland 12/21/99
▇▇▇▇▇▇▇▇ ▇▇/▇▇/▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ I 12/22/99
West Melbourne II 12/22/99
Port Orange Date blank; Date of ground survey 12/13/99
Tequesta I 12/22/99
Tequesta II 12/22/99
Abilene 12/22/99
▇▇▇▇ 12/22/99
Wichita 12/22/99
Stuart 12/20/99
Sussex 12/23/99
3.6 FINANCIAL STATEMENTS ACCURATE. All financial statements
heretofore or hereafter provided by Borrower and Guarantor are and will be true
and complete in all material respects as
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of their respective dates and fairly present the respective financial condition
of Borrower and Guarantor and each Facility, and there are no material
liabilities, direct or indirect, fixed or contingent, as of the respective dates
of such statements which are not reflected therein or in the notes thereto or in
a written certificate delivered with such statements. The financial statements
of Borrower have been prepared on an accounting basis consistent with
Guarantor's audited financial statements. There has been no material adverse
change in the financial condition, operations, or prospects of Borrower and
Guarantor since the dates of such statements except as fully disclosed in
writing with the delivery of such statements. All financial statements of the
operations of each Facility heretofore or hereafter provided to Lender are and
will be true and complete in all material respects as of their respective dates.
3.7 COMPLIANCE WITH FACILITY LAWS.
(a) Each of the Facilities are duly licensed and operated as
follows:
(i) with respect to the ▇▇▇ Arbor Facility, as a
36-unit "home for the aged" under the applicable laws of the State of Michigan;
(ii) with respect to the Bowling Green Facility, as a
37-unit "residential care facility" under the applicable laws of the State of
Ohio;
(iii) with respect to the Mansfield Facility, as a
42-unit "residential care
facility" under the applicable laws of the State of Ohio;
(iv) with respect to the Northampton Manor Facility, as
a 113-unit "personal care facility" under the applicable laws of the
Commonwealth of Pennsylvania;
(v) with respect to the ▇▇▇▇▇▇▇▇▇▇ I Facility, as a
48-unit "personal care facility" under the applicable laws of the Commonwealth
of Pennsylvania;
(vi) with respect to the ▇▇▇▇▇▇▇▇▇▇ II Facility, as a
72-unit "personal care facility" under the applicable laws of the Commonwealth
of Pennsylvania;
(vii) with respect to the New Braunfels Facility, as
a 37-unit "personal care facility" under the applicable laws of the State of
Texas;
(viii) with respect to the Deland Facility, as a
42-unit "assisted living facility" under the applicable laws of the State of
Florida;
(ix) with respect to the Leesburg Facility, as a 42-
unit "assisted living facility" under the applicable laws of the State of
Florida;
(x) with respect to the West Melbourne I Facility, as a
38-unit "assisted living facility" under the applicable laws of the State of
Florida;
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(xi) with respect to the West Melbourne II Facility, as
a 42-unit "assisted living facility" under the applicable laws of the State of
Florida;
(xii) with respect to the Port Orange Facility, as a 42-
unit "assisted living facility" under the applicable laws of the State of
Florida;
(xiii) with respect to the Tequesta I Facility, as a
42-unit "assisted living facility" under the applicable laws of the State of
Florida;
(xiv) with respect to the Tequesta II Facility, as a
42-unit "assisted living facility" under the applicable laws of the State of
Florida;
(xv) with respect to the Abilene Facility, as a 26-unit
"adult care home" under the applicable laws of the State of Kansas;
(xvi) with respect to the ▇▇▇▇ Facility, as a 33-unit
"adult care home" under the applicable laws of the State of Kansas;
(xvii) with respect to the Wichita Facility, as a 26-unit
"adult care home" under the applicable laws of the State of Kansas;
(xviii) with respect to the Stuart Facility, as a 42-unit
"assisted living facility" under the applicable laws of the State of Florida;
and
(xix) with respect to the Sussex Facility, as a 20-unit
"community based residential facility" under the applicable laws of the State of
Wisconsin.
(b) Borrower has acquired, and Guarantor has leased the ▇▇▇
Arbor Facility, the Bowling Green Facility, the Mansfield Facility, the
Northampton Manor Facility, the ▇▇▇▇▇▇▇▇▇▇ Facilities, the Tequesta II Facility,
the Abilene Facility, the ▇▇▇▇ Facility and the Wichita Facility, and Guarantor
is the lawful owner of all operating, healthcare and assisted living Permits for
the ▇▇▇ Arbor Facility, the Bowling Green Facility, the Mansfield Facility, the
Northampton Facility, the ▇▇▇▇▇▇▇▇▇▇ Facilities and the Tequesta II Facility,
and Guarantor and Borrower are the lawful owners of all operating, healthcare
and assisted living Permits for the Abilene Facility, the ▇▇▇▇ Facility, and the
Wichita Facility. Borrower has acquired, and Assisted Living Properties, Inc., a
Kansas corporation, has leased the New Braunfels Facility, the Deland Facility,
the Leesburg Facility, the West Melbourne Facilities, the Port Orange Facility,
the Tequesta I Facility and the Stuart Facility, and Assisted Living Properties,
Inc. is the lawful owner of all operating, healthcare and assisted living
Permits for such Facilities. Borrower has acquired, and ALS Leasing, Inc., a
Delaware corporation, has leased the Sussex Facility, and ALS Leasing, Inc. is
the lawful owner of all operating, healthcare and assisted living Permits for
the Sussex Facility.
(c) All Permits for the Facilities (i) are in full force and
effect, (ii) constitute all of the material permits, licenses and certificates
required for the use, operation and occupancy
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thereof, (iii) have not been pledged as collateral for any other loan or
Indebtedness, (iv) are held free from restrictions or any encumbrance which
would materially adversely affect the use or operation of the applicable
Facility, and (v) are not provisional, probationary or restricted in any way.
Borrower and Lessee, as well as the operation of each Facility, are in
compliance in all material respects with the provisions of all laws, rules,
regulations and published interpretations to which each Facility is subject. No
waivers of any laws, rules, regulations, or requirements (including, but not
limited to, minimum foot requirements per bed or unit) are required for any
Facility to operate at its current licensed bed capacity. All Reimbursement
Contracts (if any) are in full force and effect with respect to the Facility,
and Borrower and Lessee are in good standing with all the respective agencies
governing the above-described licenses, program certifications, and
Reimbursement Contract (if any). Borrower and Lessee are current in the payment
of all so-called provider specific taxes or other assessments with respect to
such Reimbursement Contracts (if any). Borrower will maintain, and will cause
Lessee to maintain (without allowing to lapse), the Certificate of Need, if
applicable, and any required Permits. In the event that Lender acquires the
Facility through foreclosure or otherwise, neither Lender nor a subsequent
manager, a subsequent lessee or any subsequent purchaser (through foreclosure or
otherwise) must obtain a Certificate of Need prior to applying for and receiving
a license to operate the Facility and certification to receive Medicare and
Medicaid payments (and its successor programs) for patients having coverage
thereunder (if any), provided that no service or bed unit complement is changed.
3.8 MAINTAIN UNIT CAPACITY. Neither Borrower nor Lessee nor the
holder of any Permit for any Facility has granted to any third party the right
to reduce the number of licensed bed/units in the Facility or to apply for
approval to transfer the right to any and all of the licensed Facility
units/beds to any other location.
3.9 MEDICARE AND MEDICAID. The Facilities have no patient
reimbursement agreements, Medicare or Medicaid cost reports or surveys or
provider agreements.
3.10 THIRD-PARTY PAYORS. There is no threatened or pending revocation,
suspension, termination, probation, restriction, limitation, or nonrenewal
affecting Borrower, Lessee or any Facility or any participation or provider
agreement with any third-party payor, including Medicare, Medicaid, Blue Cross
and/or Blue Shield, if applicable, and any other private commercial insurance
managed care and employee assistance program (such programs, the "Third-Party
Payors' Programs") to which Borrower or Lessee presently is subject. All
Medicare (if any), Medicaid (if any), and private insurance cost reports and
financial reports submitted by Borrower or Lessee are and will be materially
accurate and complete and have not been and will not be misleading in any
material respects. No cost reports for the Facility remain "open" or unsettled,
except as otherwise disclosed in writing.
3.11 GOVERNMENTAL PROCEEDINGS AND NOTICES. Neither Borrower nor Lessee
nor the Facility is currently the subject of any proceeding by any governmental
agency that would, and no notice of any violation has been received from a
governmental agency that would, directly or indirectly, or with the passage of
time, have a material adverse impact on Borrower's ability to accept and/or
retain residents or result in the imposition of a fine in excess of $5,000 (with
respect
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to a Facility or Facilities or with respect to Borrower) or a governmental
sanction, or modify, limit or annul or result in the transfer, suspension,
revocation or imposition of probationary use of any of the Permits or would
result in the appointment of a receiver or manager.
3.12 PHYSICAL PLANT STANDARDS. Each Facility and the use thereof
complies in all material respects with applicable local, state and federal
building codes, fire codes, zoning codes, use restrictions, health care, health
care facility and other similar regulatory requirements (the "Physical Plant
Standards"), and no material waivers of Physical Plant Standards exist at any
Facility.
3.13 PLEDGES OF RECEIVABLES. Neither Borrower nor Lessee has pledged
its Accounts as collateral security for any loan or indebtedness other than, if
applicable, the Loan.
3.14 PAYMENT OF TAXES AND PROPERTY IMPOSITIONS. Borrower and Guarantor
have filed or have obtained appropriate extensions for filing of all federal,
state, and local tax returns which they are required to file and have paid, or
made adequate provision for the payment of, all taxes which are shown pursuant
to such returns or are required to be shown thereon or to assessments received
by Borrower or Guarantor, including, without limitation, provider taxes. All
such returns are complete and accurate in all respects. Borrower has paid or
made adequate provision for the payment of all insurance premiums, applicable
water and sewer charges, government assessments or charges, ground rents (if
applicable) and Taxes (as defined in the Mortgage) with respect to the Mortgaged
Property.
3.15 TITLE TO MORTGAGED PROPERTY. Borrower has good and marketable
title to all of the Mortgaged Property, subject to no lien, mortgage, pledge,
encroachment, zoning violation, or encumbrance, except Permitted Encumbrances,
which Permitted Encumbrances do not and will not materially interfere with the
security intended to be provided by the Mortgage or the current use or operation
of the Land and or the current ability of any Facility to generate net operating
income sufficient to service the Loan allocated to such Facility as shown on
Schedule III. All Improvements situated on the Land are situated wholly within
the boundaries of the Land, and no neighboring properties encroach onto the
Land.
3.16 PRIORITY OF MORTGAGE. Each Mortgage constitutes a valid first
lien against the real and personal property described therein, prior to all
other liens or encumbrances, including those which may hereafter accrue,
excepting only Permitted Encumbrances, which Permitted Encumbrances do not and
will not materially and adversely affect (a) the ability of Borrower to pay in
full the principal of and interest on the respective Notes when due, (b) the
security (and its value) intended to be provided by the Mortgage or (c) the
current use of the Land and the Improvements.
3.17 LOCATION OF CHIEF EXECUTIVE OFFICE. The location of Borrower's
principal place of business and chief executive office is set forth on Exhibit B
hereto.
3.18 DISCLOSURE. All information furnished or to be furnished by
Borrower and Guarantor to Lender in connection with the Loan or any of the Loan
Documents, is, or will be at the time the
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same is furnished, accurate and correct in all material respects and complete
insofar as completeness may be necessary to provide Lender with true and
accurate knowledge of the subject matter.
3.19 TRADE NAMES. Except as shown on Exhibit G attached hereto and
incorporated herein, neither Borrower nor any Facility, which will operate under
the trade names shown on Exhibit G, has ever changed its name, been known by any
other name or been a party to a merger, reorganization or similar transaction
since the date acquired by Borrower or an Affiliate thereof.
3.20 ERISA. As of the date hereof and throughout the term of this
Agreement,
(a) Borrower is not and will not be an "employee benefit
plan," as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), subject to Title I of ERISA, and none of the
assets of Borrower constitutes or will constitute "plan assets" (within the
meaning of Department of Labor Regulation Section 2510.3-101) of one or more
such plans, and
(b) Borrower is not and will not be a "governmental plan"
within the meaning of Section 3(32) of ERISA, and transactions by or with
Borrower are not and will not be subject to state statutes applicable to
Borrower regulating investments of and fiduciary obligations with respect to
governmental plans.
The execution and delivery of the Loan Documents, and the
borrowing of indebtedness hereunder, does not constitute a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue
Code of 1986, as amended (the "Code"). Borrower shall not engage in a non-exempt
prohibited transaction described in Section 406 of ERISA or Section 4975 of the
Code, as such sections relate to Borrower, or in any transaction that would
cause any obligation or action taken or to be taken hereunder or the exercise by
Lender of any of its rights under the Loan Documents) to be a non-exempt
prohibited transaction under ERISA.
3.21 OWNERSHIP. The ownership interests in Borrower are correctly and
accurately set forth on Exhibit C hereto.
3.22 COMPLIANCE WITH APPLICABLE LAWS. Each Facility and its operations
and the Land and Improvements comply in all material respects with all covenants
and restrictions of record and applicable laws, ordinances, rules and
regulations, including, without limitation, the Americans with Disabilities Act
and the regulations thereunder, and all laws, ordinances, rules and regulations
relating to zoning, setback requirements and building codes. There are no
waivers of any building codes currently in existence for any Facility except for
waivers with respect to parking requirements, in which case each Facility
complies with the applicable parking requirement resulting from such waiver.
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3.23 SOLVENCY. Borrower is solvent for purposes of 11 U.S.C.
Section548, and the borrowing of the Loan and acquisition of the Mortgaged
Property will not render Borrower insolvent for purposes of 11 U.S.C.
Section548.
3.24 OTHER INDEBTEDNESS. Borrower has no outstanding Indebtedness,
secured or unsecured, direct or contingent (including any guaranties), other
than (a) the Loan, (b) indebtedness which represents trade payables or accrued
expenses incurred in the ordinary course of business of owning and operating the
Facility and the Mortgaged Property, and (c) indebtedness secured by purchase
money liens or represented by equipment or vehicle leases, provided that (i) the
aggregate amount of such indebtedness incurred with respect to any one Facility,
together with the rental income from all leases (other than the Lease Agreements
and resident agreements) of space in such Facility entered into by Borrower as
landlord or by Lessee as sublessor, does not exceed Two Hundred Fifty Thousand
Dollars ($250,000) with respect to the ▇▇▇▇▇▇▇▇▇▇ Facilities or the Northampton
Manor Facility or One Hundred Thousand Dollars ($100,000) with respect to any
other Facility, and (ii) the indebtedness secured by such liens is used for the
purchase of equipment which is unique to, or necessary for the operation of, the
Mortgaged Property for its Intended Use; no other debt will be secured (senior,
subordinate or pari passu) by the Mortgaged Property.
3.25 OTHER OBLIGATIONS. Borrower has no material financial obligation
under any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which Borrower is a party or by which Borrower or the Mortgaged
Property is otherwise bound, other than (a) obligations incurred in the ordinary
course of the operation of the Mortgaged Property, (b) obligations under the
Mortgage and the other Loan Documents., and (c) obligations permitted under
Section 3.24(c) hereof.
3.26 FRAUDULENT CONVEYANCES. Borrower (a) has not entered into this
Agreement or any of the other Loan Documents with the actual intent to hinder,
delay, or defraud any creditor and (b) has received reasonably equivalent value
in exchange for its obligations under the Loan Documents. Giving effect to the
transactions contemplated by the Loan Documents, the fair saleable value of
Borrower's assets exceeds and will, immediately following the execution and
delivery of the Loan Documents and acquisition of the Mortgaged Property, be
greater than Borrower's probable liabilities, including the maximum amount of
its contingent liabilities or its debts as such debts become absolute and
mature. Borrower's assets do not and, immediately following the execution and
delivery of the Loan Documents and acquisition of the Mortgaged Property will
not, constitute unreasonably small capital to carry out its business as
conducted or as proposed to be conducted. Borrower does not intend to, and does
not believe that it will, incur debts and liabilities (including, without
limitation, 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 of Borrower).
3.27 WARRANTY OF TITLE. Borrower represents and warrants that Borrower
is the fee simple owner of the Facilities. The Land encumbered by each Mortgage
exists as a separate single tax parcel, except that the West Melbourne
Facilities are located on two separate but contiguous tax parcels.
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3.28 REPRESENTATIONS AND WARRANTIES. Borrower agrees that its
representations and warranties and covenants contained herein are true and
correct as of the date hereof and shall survive closing of the Loan and the
assignment and delivery of the Loan to Investor. Borrower agrees that Investor
shall be a third party beneficiary of the representations, warranties and
covenants set forth herein.
3.29 LEASE AGREEMENT. Each Lease Agreement is in full force and
effect, and there are no defaults (either monetary or nonmonetary) by Borrower
or Lessee thereunder.
3.30 LICENSES. Borrower has obtained (in its own name and/or in
Lessee's name, and in any event, in the name of the person(s) as required under
all applicable legal requirements) all Permits necessary to use and operate the
Mortgaged Property and the Facility for its Intended Use, and all such Permits
are in full force and effect. The Intended Use being made of the Mortgaged
Property and the Facility is in conformity in all material respects with the
certificate of occupancy and/or Permits for such property and any other
restrictions, covenants or conditions affecting such property. The Mortgaged
Property and the Facility contain all equipment necessary to use and operate
such property for its Intended Use.
3.31 APPLICABLE LAWS. Borrower and each Mortgaged Property and the
Facility (and the operation thereof) are in compliance in all material respects
with the applicable provisions of all laws, statutes, regulations, ordinances,
orders, standards, restrictions and rules of any federal, state or local
government or quasi-governmental body, agency, board or authority having
jurisdiction over the operation of the Mortgaged Property and the Facility,
including, without limitation: (a) health care and fire safety codes, (b) laws
regulating the handling and disposal of medical or biological waste, (c) the
applicable provisions of all laws, rules, regulations and published
interpretations thereof to which Borrower or the Mortgaged Property and the
Facility are subject by virtue of its Intended Use, (d) all criteria established
to classify the Mortgaged Property and the Facility as "housing for older
persons" under the Fair Housing Amendments Act of 1988, and (e) each of the
following:
(i) Title VIII of the Civil Rights Act of 1968, as
amended, 42 U.S.C. Sections 3601 et seq. (1996),
(ii) Title VII of the Consumer Credit Protection Act,
as amended, 15 U.S.C. Sections 1691 - 1691f(1996), and
(iii) Section 527 of the National Housing Act, as
amended, 12 U.S.C. Section 1735f-5 (1996).
3.32 MEDICARE/MEDICAID. Borrower does not currently participate in any
Medicaid or Medicare programs or any other third party payor's programs, or
other similar provider payment programs in connection with the operations of any
Mortgaged Property and any Facility.
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3.33 PENDING PROCEEDINGS. Neither Borrower nor Lessee nor the holder
of any Permit nor any Mortgaged Property nor any Facility are subject to any
proceeding, suit or investigation by any federal, state or local government or
quasi-governmental body or agency or any other administrative or investigative
body, and neither Borrower nor Lessee nor the holder of any Permit has received
any notice from any such agency which, (a) may result in the imposition of a
material fine or alternative, interim or final sanction against Borrower, Lessee
or the holder of any Permit, (b) would have a material adverse effect on
Borrower or Lessee or the operation of the Mortgaged Property and the Facility,
(c) would result in the appointment of a receiver or manager, (d) would affect
Borrower's or Lessee's ability to accept and/or retain residents for the
Mortgaged Property, or (e) would result in the revocation, transfer, surrender,
suspension or other impairment of any Permit for the Mortgaged Property.
3.34 EXECUTION OF DOCUMENTS. Neither the execution and delivery of the
Notes, any Mortgage or any other Loan Documents, Borrower's performance
thereunder, the recordation of any Mortgage, nor the exercise of any remedies by
Lender against Borrower, Guarantor or the Mortgaged Property, in accordance with
applicable health care laws, will adversely affect the Permit.
3.35 FEDERAL PROGRAMS; ANTITRUST LAW. Neither Borrower nor Lessee is a
participant in any federal program whereby any federal, state or local,
government or quasi-governmental body or agency, may have the right to recover
funds by reason of the advance of federal funds. Neither Borrower nor Lessee has
received notice of, and neither is aware of, any violation of applicable
antitrust laws.
3.36 CERTIFICATE OF NEED. In the event any existing management
agreement is terminated or Lender acquires any Mortgaged Property through
foreclosure or otherwise, neither Borrower, Lender, any subsequent manager, nor
any subsequent purchaser (through foreclosure or otherwise) must obtain a
certificate of need from any applicable state health care regulatory authority
or agency (other than giving such notice required under the applicable state law
or regulation) prior to applying for any applicable Permit, provided that no
service is changed and the unit complement is not changed.
3.37 TENANT ROSTER. Each tenant roster for each Mortgaged Property,
dated December 31, 1999, and submitted by Borrower to Lender, contains no
errors, and is true, complete and correct as of the date thereof and accurately
states both the gross potential rents (if requested in writing by Lender) and
the actual leased unit rents for the Mortgaged Property within a tolerance range
of seven and one-half percent (7.5%).
3.38 PROPERTY CONDITION. Each Mortgaged Property is in good and
habitable condition and there are no deficiencies in the repair or maintenance
of the Mortgaged Property that threaten the health or safety of its tenants and
their invited guests. There is no material uncured violation at the Mortgaged
Property of any building or housing code or similar law or ordinance, and the
physical configuration of the Mortgaged Property is not in material violation of
the Americans With Disabilities Act.
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3.39 ZONING. The existing use of each Mortgaged Property is consistent
with the zoning classification of such property or is a legal non-conforming use
that is permitted notwithstanding any inconsistency with such classification.
Except as shown on the surveys delivered by Borrower to Lender and for which
exceptions Lender has obtained affirmative title insurance coverage (in
jurisdictions where such insurance is available), the Mortgaged Property does
not violate any density or building setback requirements of applicable zoning
law. No proceedings are pending or, to the best knowledge of Borrower and
Guarantor, threatened, which would result in a change of zoning of any Mortgaged
Property.
3.40 INVESTMENT QUALITY. Neither Borrower nor any of its Affiliates
knows of any fact or circumstance affecting Borrower, Guarantor, Lessee or the
Mortgaged Property that Borrower has not disclosed to Lender, which fact or
circumstance materially and adversely affects or could materially and adversely
affect Borrower's or Guarantor's ability, respectively, to meet its obligations
under the Loan and the Loan Documents in a timely manner.
3.41 ACCESS. The Land 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 Land and under the exclusive control
of Borrower, or where there is such shared ingress and egress or amenities which
are offsite or not under Borrower's exclusive control, there exists an easement
or joint use and maintenance agreement, a copy of which has been delivered to
Lender, under which (a) access to and use and enjoyment of the easement or
private road and/or recreational facilities and amenities is perpetual, and (b)
there are no provisions providing that the failure to pay any maintenance fee
will result in a loss of usage of the easement.
ARTICLE IV
AFFIRMATIVE COVENANTS OF BORROWER
Borrower agrees with and covenants unto Lender that until the Loan
Obligations have been paid in full, Borrower shall:
4.1 PAYMENT OF LOAN/PERFORMANCE OF LOAN OBLIGATIONS. Duly and
punctually pay or cause to be paid the principal and interest of each Note in
accordance with its terms and duly and punctually pay and perform or cause to be
paid or performed all Loan Obligations hereunder and under the other Loan
Documents.
4.2 MAINTENANCE OF EXISTENCE. Maintain its existence as a Delaware
corporation, and, in each jurisdiction in which the character of the property
owned by it or in which the transaction of its business makes qualification
necessary, maintain good standing.
4.3 MAINTENANCE OF SINGLE PURPOSE.
(a) Maintain its existence as a Single Purpose Entity;
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(b) Cause its board of directors to hold appropriate meetings
(or act by unanimous consent) to authorize all appropriate corporate actions
and, in authorizing such actions, to observe all corporate formalities; and
(c) At all times cause there to be at least one duly appointed
member of its board of directors (an "Independent Director") reasonably
satisfactory to Lender who shall not have been at the time of such individual's
initial appointment, and may not have been at any time during the preceding five
years, and shall not be at any time while serving as such director either (i) an
owner of any of its equity interests, or an officer, director, partner or
employee of, it or any of its shareholders, principals, subsidiaries or
affiliates, (ii) a customer of, or supplier to, it or any of its shareholders,
principals, subsidiaries or affiliates, (iii) a person controlling or under
common control with any such shareholder, principal, director, employee,
supplier or customer, or (iv) a member of the immediate family of any such
shareholder, principal, director, employee, supplier or customer. As used
herein, the term "control": means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policy of a person,
whether through ownership of voting securities, by contract or otherwise.
4.4 ACCRUAL AND PAYMENT OF TAXES. During each fiscal year, make
accurate provision for the payment of all current tax liabilities of all kinds
(including, without limitation, federal and state income taxes, franchise taxes,
payroll taxes, provider taxes (to the extent necessary to participate in and
receive maximum funding pursuant to Reimbursement Contracts, if any) and Taxes
(as defined in the Mortgage)), all required withholding of income taxes of
employees, all required old age and unemployment contributions, and all required
payments to employee benefit plans, and pay the same when they become due.
4.5 INSURANCE. Maintain or cause Lessee to maintain the following
insurance coverages with respect to the Mortgaged Property and each Facility:
(a) Insurance against loss or damage by fire, casualty and
other hazards as now are or subsequently may be covered by an "all risk" policy
or a policy covering "special" causes of loss, with such endorsements as Lender
may from time to time reasonably require and which are customarily required by
institutional lenders of similar properties similarly situated, including,
without limitation, building ordinance law, lightning, windstorm, civil
commotion, hail, riot, strike, water damage, sprinkler leakage, collapse,
malicious mischief, explosion, smoke, aircraft, vehicles, vandalism, falling
objects and weight of snow, ice or sleet, and covering the Facility in an amount
equal to 100% of the full insurable replacement value of the Facility (exclusive
of footings and foundations below the lowest basement floor) without deduction
for depreciation. The determination of the replacement cost amount shall be
adjusted annually to comply with the requirements of the insurer issuing the
coverage or, at Lender's election, by reference to such indexes, appraisals or
information as Lender determines in its reasonable discretion, and, unless the
insurance required by this paragraph shall be effected by blanket and/or
umbrella policies in accordance with the requirements of this Agreement, the
policy shall include inflation guard coverage that ensures that the policy
limits will be increased over time to reflect the effect of inflation. Each
policy shall, subject to Lender's approval, contain (i) a replacement cost
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endorsement, without deduction for depreciation, (ii) either an agreed amount
endorsement or a waiver of any co-insurance provisions, and (iii) an ordinance
or law coverage or enforcement endorsement if the Improvements or the use of the
Mortgaged Property constitutes any legal nonconforming structures or uses, and
shall provide for deductibles in such amounts as Lender may permit in its sole
discretion.
(b) Commercial general liability insurance under a policy
containing "Comprehensive General Liability Form" of coverage (or a comparably
worded form of coverage) and the "Broad Form CGL" endorsement (or a policy which
otherwise incorporates the language of such endorsement), providing coverage on
an occurrence (not "claims made") basis, which policy shall include, without
limitation, coverage against claims for personal injury, bodily injury, death
and property damage liability with respect to the Facility and the operations
related thereto, whether on or off the Mortgaged Property, and the following
coverages: Employee as Additional Insured, Product Liability/Completed
Operations; Broad Form Contractual Liability, Independent Contractor, Personal
Injury and Advertising Injury Protection, Medical Payment (with a minimum limit
of $5,000 per person), Broad Form Cross Suits Liability Endorsement, where
applicable, hired and non-owned automobile coverage (including rented and leased
vehicles), and, if any alcoholic beverages shall be sold, manufactured or
distributed in the Facility, liquor liability coverage, all of which shall be in
such amounts as Lender may from time to time reasonably require, but not less
than One Million Dollars ($1,000,000) per occurrence, Two Million Dollars
($2,000,000) in the aggregate and with umbrella coverage not less than Five
Million Dollars ($5,000,000). If such policy shall cover more than one property,
such limits (other than the umbrella coverage) shall apply on a "per location"
basis. If any swimming pool is located at any Facility in the future, such
umbrella coverage shall be increased to Ten Million Dollars ($10,000,000). Such
liability policy shall delete the contractual exclusion under the personal
injury coverage, if possible, and if available, shall include the following
endorsements: Notice of Accident, Knowledge of Occurrence, and Unintentional
Error and Omission.
(c) Professional liability insurance coverage in an amount
equal to not less than One Million Dollars ($1,000,000) per occurrence and One
Million Dollars ($1,000,000) in the aggregate and insuring Borrower for acts
occurring prior to the date of the Loan.
(d) Business interruption insurance (i) covering the same
perils of loss as are required to be covered by the property insurance required
under Section 4.5(a) above, (ii) in an amount equal to the projected annual net
income from the Facility plus carrying costs and extraordinary expenses of the
Mortgaged Property for a period of twelve (12) months, based upon Borrower's
reasonable estimate thereof as approved by Lender, (iii) including either an
agreed amount endorsement or a waiver of any co-insurance provisions, so as to
prevent Borrower, Lender and any other insured thereunder from being a
co-insurer, and (iv) providing that any covered loss thereunder shall be payable
to Lender.
(e) During the period of any new construction on the Premises,
a so-called "Builder's All-Risk Completed Value" or "Course of Construction"
insurance policy in non-reporting form for any improvements under construction,
including, without limitation, for demolition and
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increased cost of construction or renovation, in an amount equal to 100% of the
estimated replacement cost value on the date of completion, including "soft
cost" coverage, and Workers' Compensation Insurance covering all persons engaged
in such construction, in an amount at least equal to the minimum required by
law. In addition, each contractor and subcontractor shall be required to provide
Lender with a certificate of insurance for (i) workers' compensation insurance
covering all persons engaged by such contractor or subcontractor in such
construction in an amount at least equal to the minimum required by law, and
(ii) general liability insurance showing minimum limits of at least $5,000,000,
including coverage for products and completed operations. Each contractor and
subcontractor also shall cover Borrower and Lender as an additional insured
under such liability policy and shall indemnify and hold Borrower and Lender
harmless from and against any and all claims, damages, liabilities, costs and
expenses arising out of, relating to or otherwise in connection with its
performance of such construction.
(f) If the Facility contains steam boilers, steam pipes, steam
engines, steam turbines or other high pressure vessels, insurance covering the
major components of the central heating, air conditioning and ventilating
systems, boilers, other pressure vessels, high pressure piping and machinery,
elevators and escalators, if any, and other similar equipment installed in the
Improvements, in an amount equal to one hundred percent (100%) of the full
replacement cost of the Facility, which policies shall insure against physical
damage to and loss of occupancy and use of the Improvements arising out of an
accident or breakdown covered thereunder.
(g) Flood insurance with a deductible not to exceed Three
Thousand Dollars ($3,000), or such greater amount as may be satisfactory to
Lender in its sole discretion, and in an amount equal to the full insurable
value of the Facility or the maximum amount available, whichever is less, if the
Facility is located in an area designated by the Secretary of Housing and Urban
Development or the Federal Emergency Management Agency as having special flood
hazards.
(h) Workers' compensation insurance or other similar insurance
which may be required by governmental authorities or applicable legal
requirements in an amount at least equal to the minimum required by law, and
employer's liability insurance with a limit of One Hundred Thousand Dollars
($100,000) per accident and per disease per employee, and Five Hundred Thousand
Dollars ($500,000) in the aggregate for disease arising in connection with the
operation of the Mortgaged Property.
(i) Such other insurance coverages, in such amounts, and such
other forms and endorsements, as may from time to time be reasonably required by
Lender and which are customarily required by institutional lenders to similar
properties, similarly situated, including, without limitation, coverages against
other insurable hazards (including, by way of example only, earthquake, sinkhole
and mine subsidence), which at the time are commonly insured against and
generally available.
All insurance required under this Section 4.5 shall have a
term of not less than one year and shall be in the form and amount and with
deductibles as, from time to time, shall be
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reasonably acceptable to Lender, under valid and enforceable policies issued by
financially responsible insurers either licensed to transact business in the
State where the Facility is located, or obtained through a duly authorized
surplus lines insurance agent or otherwise in conformity with the laws of such
State, with (a) a rating of not less than the third (3rd) highest rating
category by either Standard & Poor's Ratings Group, Duff & ▇▇▇▇▇▇ Credit Rating
Co., ▇▇▇▇▇'▇ Investors Service, Inc., Fitch Investors Service, Inc. or any
successors thereto, or (b) an A-:V rating in Best's Key Rating Guide; provided,
however, that if the initial principal balance of the Loan is greater than Seven
Million Five Hundred Thousand Dollars ($7,500,000.00), such insurer must, in
lieu of such Best's rating, have a long term senior debt rating of at least "A"
by Standard & Poor's Ratings Group. Certificates of Insurance shall be delivered
to and held by Lender, and, upon Lender's reasonable request, originals or
certified copies of all insurance policies shall be delivered to Lender. All
such policies shall name Lender as an additional insured, shall provide for loss
payable solely to Lender and shall contain: (a) standard "non-contributory
mortgagee" endorsement or its equivalent relating, inter alia, to recovery by
Lender notwithstanding the negligent or willful acts or omissions of Borrower
and notwithstanding (i) occupancy or use of the Facility for purposes more
hazardous than those permitted by the terms of such policy, (ii) any foreclosure
or other action taken by Lender pursuant to the Mortgage upon the occurrence of
an Event of Default, or (iii) any change in title or ownership of the Facility;
and (b) a provision that such policies shall not be canceled or amended,
including, without limitation, any amendment reducing the scope or limits of
coverage, or failed to be renewed, without at least thirty (30) days prior
written notice to Lender in each instance. With respect to insurance policies
which require payment of premiums annually, not less than thirty (30) days prior
to the expiration dates of the insurance policies obtained pursuant to this
Agreement, Borrower shall pay such amount, except to the extent Lender is
escrowing sums therefor pursuant to the Loan Documents. Not less than thirty
(30) days prior to the expiration dates of the insurance policies obtained
pursuant to this Agreement, certificates evidencing renewals of such policies
bearing notations evidencing the payment of premiums or accompanied by other
evidence reasonably satisfactory to Lender of such payment shall be delivered by
Borrower to Lender. Borrower shall not carry separate insurance, concurrent in
kind or form or contributing in the event of loss, with any insurance required
under this Section 4.5. If the limits of any policy required hereunder are
reduced or eliminated due to a covered loss, Borrower shall pay the additional
premium, if any, in order to have the original limits of insurance reinstated,
or Borrower shall purchase new insurance in the same type and amount that
existed immediately prior to the loss.
If Borrower fails to maintain and deliver to Lender the
certificates of insurance required by this Agreement, Lender may, at its option,
procure such insurance and Borrower shall pay or, as the case may be, reimburse
Lender for, all premiums thereon promptly, upon demand by Lender, with interest
thereon at the Default Rate from the date paid by Lender to the date of
repayment and such sum shall constitute a part of the Loan Obligations.
The insurance required by this Agreement may, at the option of
Borrower, be effected by blanket and/or umbrella policies issued to Borrower or
to an Affiliate of Borrower covering the Facility and the properties of such
Affiliate; provided that, in each case, the policies otherwise comply with the
provisions of this Agreement and allocate to the Facility, from time to time,
the coverage specified by this Agreement, without possibility of reduction or
coinsurance by
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reason of, or damage to, any other property (real or personal) named therein. If
the insurance required by this Agreement shall be effected by any such blanket
or umbrella policies, Borrower shall furnish to Lender certificates of insurance
showing the amount of the insurance provided under such policies which is
applicable to the Facility.
Neither Lender nor its agents or employees shall be liable for
any loss or damage insured by the insurance policies required to be maintained
under this Agreement; it being understood that (a) Borrower shall look solely to
its insurance company for the recovery of such loss or damage, (b) such
insurance company shall have no rights of subrogation against Lender, its agents
or employees, and (c) Borrower shall use its best efforts to procure from such
insurance company a waiver of subrogation rights against Lender. If, however,
such insurance policies do not provide for a waiver of subrogation rights
against Lender (whether because such a waiver is unavailable or otherwise), then
Borrower hereby agrees, to the extent permitted by law and to the extent not
prohibited by such insurance policies, to waive its rights of recovery, if any,
against Lender, its agents and employees, whether resulting from any damage to
the Facility, any liability claim in connection with the Facility or otherwise.
If any such insurance policy shall prohibit Borrower from waiving such claims,
then Borrower must obtain from such insurance company a waiver of subrogation
rights against Lender.
Net proceeds of insurance or condemnation (after payment of Lender's
reasonable costs and expenses) received at any time other than the last twelve
(12) months of the Loan term (a) in an amount less than $250,000, shall be made
available, and (b) in the amount of $250,000 or more may be made available, in
Lender's sole discretion, to Borrower for Borrower's repair, restoration and
replacement of the Improvements, Equipment and Inventory damaged or taken on the
following terms and subject to Borrower's satisfaction of the following
conditions:
(i) The aggregate amount of all such proceeds shall not
exceed the aggregate amount of all such Loan Obligations.
(ii) At the time of such loss or damage and at all
times thereafter while Lender is holding any portion of such proceeds, there
shall exist no Default or Event of Default;
(iii) The Improvements, Equipment, and Inventory for
which loss or damage has resulted shall be capable of being restored to its
preexisting condition and utility in all material respects with a value equal to
or greater than that which existed prior to such loss or damage and such
restoration shall be capable of being completed prior to the earlier to occur of
(A) the expiration of business interruption insurance as determined by an
independent inspector or (B) the Maturity Date;
(iv) Within thirty (30) days from the date of such
loss or damage Borrower shall have given Lender a written notice electing to
have the proceeds applied for such purpose;
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(v) Within sixty (60) days following the date of
notice under the preceding subparagraph (c) and prior to any proceeds being
disbursed to Borrower, Borrower shall have provided to Lender all of the
following:
(A) complete plans and specifications for
restoration, repair and replacement of the Improvements, Equipment and Inventory
damaged to the condition, utility and value required by (ii) above,
(B) if loss or damage exceeds $50,000,
fixed-price or guaranteed maximum cost bonded construction contracts with a
bondable contractor for completion of the repair and restoration work in
accordance with such plans and specifications,
(C) builder's risk insurance for the full
cost of construction with Lender named under a standard mortgagee loss-payable
clause,
(D) such additional funds as in Lender's
reasonable opinion are necessary to complete such repair, restoration and
replacement, and
(E) copies of all material permits and licenses
necessary to complete the work in accordance with the plans and specifications;
(vi) Lender may, at Borrower's expense, retain an
independent inspector to review and approve plans and specifications and
completed construction and to approve all requests for disbursement, which
approvals shall be conditions precedent to release of proceeds as work
progresses;
(vii) No portion of such proceeds shall be made
available by Lender for architectural reviews or for any other purposes which
are not directly attributable to the cost of repairing, restoring or replacing
the Improvements, Equipment and Inventory for which a loss or damage has
occurred unless the same are covered by such insurance;
(viii) Borrower shall diligently pursue such work and
shall complete such work prior to the earlier to occur of the expiration of
business interruption insurance or the Maturity Date;
(ix) The Facility continues to achieve the Debt Service
Coverage requirements set forth in Section 4.13 below;
(x) Each disbursement by Lender of such proceeds and
deposits shall be funded subject to conditions and in accordance with
disbursement procedures which a commercial construction lender would typically
establish in the exercise of sound banking practices and shall be made only upon
receipt of disbursement requests on an AIA G702/703 form (or similar form
approved by Lender) signed and certified by Borrower and, if required by Lender,
its architect and general contractor with appropriate invoices and lien waivers
as required by Lender; and
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(xi) Lender shall have a first lien security interest
in all building materials and completed repair and restoration work and in all
fixtures and equipment acquired with such proceeds, and Borrower shall execute
and deliver such mortgages, deeds of trust, security agreements, financing
statements and other instruments as Lender shall request to create, evidence, or
perfect such lien and security interest.
In the event and to the extent such proceeds become available
during the last twelve (12) months of the Loan term or are not permitted or
required to be used for the repair, restoration and replacement of the
Improvements, Equipment and Inventory for which a loss or damage has occurred,
or in the event Borrower fails to timely make the election to have insurance
proceeds applied to the restoration of the Improvements, Equipment, or
Inventory, or, having made such election, fails to timely comply with the terms
and conditions set forth herein, or, if the conditions set forth herein for such
application are otherwise not satisfied, then Lender shall be entitled without
notice to or consent from Borrower to apply such proceeds, or the balance
thereof, at Lender's option either (a) to the full or partial payment or
prepayment of the Loan Obligations (without premium) in the manner aforesaid, or
(b) to the repair, restoration and/or replacement of all or any part of such
Improvements, Equipment and Inventory for which a loss or damage has occurred.
Borrower agrees to give Lender written notice of any loss in
excess of $10,000 in connection with the Improvements, the Equipment or the
Inventory not more than one (1) Business Day after Borrower has knowledge
thereof.
Borrower appoints Lender as Borrower's attorney-in-fact to
cause the issuance of an endorsement of any insurance policy to bring Borrower
into compliance herewith and, as limited above, at Lender's sole option, to make
any claim for, receive payment for, and execute and endorse any documents,
checks or other instruments in payment for loss, theft, or damage covered under
any such insurance policy; provided, however, that in no event will Lender be
liable for failure to collect any amounts payable under any insurance policy.
If the Mortgaged Property is sold at a foreclosure sale or
Lender acquires title to the Mortgaged Property, Lender shall automatically
succeed to all rights of Borrower in and to any insurance policies and unearned
insurance premiums and in and to the proceeds resulting from any damage to the
Mortgaged Property prior to such sale or acquisition.
4.6 FINANCIAL AND OTHER INFORMATION. Provide Lender, or cause Lessee
to provide to Lender, at its address set forth in Section 8.7 and at GMAC
Commercial Mortgage Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, the following financial statements and information on a
continuing basis during the term of the Loan:
(a) Within ninety (90) days after the end of each fiscal year
of each Facility and Borrower (if different from such Facility) unaudited
financial statements of the operations of such Facility and Borrower, which
statements shall be prepared on an accounting basis consistent with Guarantor's
audited financial statements, and shall include a balance sheet and a statement
of
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income and expenses for the year then ended, certified by a financial officer of
Borrower to be true and correct in all material respects;
(b) Within one hundred twenty (120) days after the end of each
fiscal year of Guarantor, audited consolidated financial statements of Guarantor
prepared by KPMG Peat Marwick or any other nationally recognized accounting firm
or independent certified public accountant reasonably acceptable to Lender,
which consolidated statements shall be prepared in accordance with GAAP and
shall include a balance sheet and a statement of income and expenses for the
year then ended. In lieu of its obligations hereunder, Guarantor may submit to
Lender, upon its filing thereof, a copy of Form 10K as filed with the United
States Securities and Exchange Commission;
(c) Within one hundred twenty (120) days after the end of each
fiscal year of Borrower, and at any other time upon Lender's request, an
accounting of all security deposits held pursuant to all Leases, including the
name of the institution (if any) and the names and identification number of the
accounts (if any) in which such security deposits are held and the name of the
person to contact at such financial institution, along with any authority or
release necessary for Lender to access information regarding such accounts;
(d) Within forty-five (45) days after the end of each of the
first three fiscal quarters, and within ninety (90) days after the end of the
fourth fiscal quarter of each Facility and Borrower (if different from such
Facility), unaudited financial statements of the operations of such Facility and
Borrower prepared on an accounting basis consistent with Guarantor's audited
financial statements, which statements shall include a balance sheet and
statement of income and expenses for the quarter then ended, and shall be
certified as true and correct in all material respects by a financial officer of
Borrower;
(e) Within forty-five (45) days after the end of each of the
first three fiscal quarters, and within one hundred twenty (120) days after the
end of the fourth fiscal quarter of Guarantor, unaudited interim financial
statements of Guarantor, prepared on an accounting basis consistent with
Guarantor's audited financial statements, which shall include a balance sheet
and statement of income and expenses for the quarter then ended, and shall be
certified as true and correct in all material respects by a financial officer of
Guarantor. In lieu of its obligations hereunder, Guarantor may submit to Lender
a copy of Form 10Q as filed by Guarantor with the United States Securities and
Exchange Commission;
(f) Within forty-five (45) days of the end of each fiscal
quarter of each Facility, a statement of the number of bed days available and
the actual resident days incurred for such quarter, together with, if
applicable, quarterly census information of such Facility as of the end of such
quarter in sufficient detail to show patient-mix (i.e., private, Medicare,
Medicaid, and V.A.), if applicable, on a daily average basis for such year
through the end of such quarter, certified by a financial officer of Borrower
and Guarantor to be true and correct. Such statements of each Facility shall be
accompanied by a summary showing the information described in Exhibit D;
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(g) Within one hundred twenty (120) days after the end of each
fiscal year of Borrower, and at any other time upon Lender's request, an
accounting of all security deposits held by Borrower or Lessee, including the
name of the institution (if any) and the names and identification numbers of the
accounts (if any) in which such security deposits are held and the name of the
person to contact at such financial institution, along with any authority or
release necessary for Lender to access information regarding such accounts;
(h) Within ten (10) days of filing or receipt, all Medicare
and/or Medicaid cost reports and any amendments thereto filed with respect to
the Facility, if any, and all responses, audit reports, or other inquiries with
respect to such cost reports;
(i) Within ten (10) days of receipt, a copy of the Medicaid
Rate Calculation Worksheet (or the equivalent thereof), if any, issued by the
appropriate Medicaid Agency for the Facility;
(j) Within ten (10) days of receipt, any and all notices
(regardless of form) from any and all licensing and/or certifying agencies that
the Facility license and/or the Medicare and/or Medicaid certification of the
Facility (if any) is being downgraded to a substandard category, revoked, or
suspended or that any such action is pending or being considered;
(k) Upon Lender's request, evidence of payment by Borrower or
Lessee of any applicable provider bed taxes or similar taxes, which taxes
Borrower agrees to pay or cause Lessee to pay; and
(l) Within one hundred twenty (120) days after the end of each
of Lessee's fiscal years, and more frequently if reasonably requested by Lender,
an aged accounts payable report for the Facility (if requested in writing by
Lender) and an aged accounts receivable report for the Facility in sufficient
detail to show amounts due from each class of patient-mix, if applicable, (i.e.,
private, Medicare, Medicaid and V.A.), by the account age classifications of 30
days, 60 days, 90 days, 120 days, and over 120 days.
Lender reserves the right to require that the annual financial
statements of Borrower be audited by a nationally recognized accounting firm or
independent certified public accountant acceptable to Lender if (a) a monetary
default continues beyond the applicable cure period, (b) if Lender has
reasonable grounds to believe that the unaudited financial statements do not
accurately represent the financial condition of Borrower, on an accounting basis
consistent with Guarantor's audited financial statements, or (c) Borrower fails
to provide in a timely manner the statements, schedules and reports required in
this Section 4.6.
Lender further reserves the right to require such other
financial information of Borrower, Lessee, Guarantor and/or the Facility, in
such form and at such other times (including monthly or more frequently) as
Lender shall reasonably require, and Borrower agrees promptly to provide or to
cause to be provided, such information to Lender. All financial statements must
be
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in the form and detail as Lender may from time to time reasonably request,
provided, however, that Lender will make reasonable efforts to use Borrower's
existing forms of reports for all purposes.
4.7 COMPLIANCE CERTIFICATE. At the time of furnishing the quarterly
operating statements required under the foregoing Section, furnish to Lender a
compliance certificate in the form attached hereto as Exhibit E executed by a
financial officer of Borrower and of Lessee.
4.8 BOOKS AND RECORDS. Keep and maintain at all times at the
Facility, and upon Lender's reasonable request make available at Borrower's
office, complete and accurate books of account and records (including copies of
supporting bills and invoices) adequate to reflect correctly the results of the
operation of the Facility, and copies of all written contracts, subleases (if
any), and other instruments which affect the Mortgaged Property, which books,
records, contracts, subleases (if any) and other instruments shall be subject to
examination and inspection at any reasonable time by Lender (upon reasonable
advance notice, which for such purposes only may be given orally, except in the
case of an emergency or following an Event of Default, in which case no advance
notice shall be required); provided, however, that if an Event of Default has
occurred and is continuing, Borrower shall deliver to Lender upon written demand
all books, records, contracts, subleases (if any) and other instruments relating
to the Facility or its operation and Borrower authorizes Lender to obtain a
credit report on Borrower at any time. Any such inspections by Lender shall be
subject to confidentiality requirements relating to resident records imposed by
law in the respective jurisdiction in which each Facility is located.
4.9 PAYMENT OF INDEBTEDNESS. Duly and punctually pay or cause to be
paid all other Indebtedness now owing or hereafter incurred by Borrower in
accordance with the terms of such Indebtedness, except such Indebtedness owing
to those other than Lender which is being contested in good faith and with
respect to which any execution against properties of Borrower has been
effectively stayed and for which reserves and collateral for the payment and
security thereof have been established as determined by Lender in its sole
discretion.
4.10 RECORDS OF ACCOUNTS. Maintain complete copies of all records,
including records pertaining to the Accounts of Borrower, at the principal place
of business of Borrower as set forth in this Agreement.
4.11 CONDUCT OF BUSINESS. Conduct, or cause Lessee to conduct, the
operation of each Facility at all times in a manner consistent with the level of
operation of the Facility as of the date hereof, including without limitation,
the following:
(a) to maintain the standard of care for the residents of the
Facility at all times at a level necessary to ensure quality care for the
residents of the Facility in accordance with customary and prudent industry
standards;
(b) to operate the Facility in a prudent manner and in
compliance in all material respects with applicable laws and regulations
relating thereto and cause all Permits, Reimbursement Contracts, and any other
agreements necessary for the use and operation of the Facility or as may
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be necessary for participation in the Medicaid, Medicare, or other applicable
reimbursement programs if Lessee, with prior written consent of Lender, which
consent may be withheld in its sole discretion, elects to participate in any
such program to remain in effect without reduction in the number of licensed
beds authorized for use in the Medicaid, Medicare, or other applicable
reimbursement programs;
(c) to maintain sufficient Inventory and Equipment of types
and quantities at the Facility to enable Lessee adequately to perform operations
of the Facility for its Intended Use;
(d) to keep all Improvements and Equipment located on or used
or useful in connection with the Facility in good repair, working order and
condition, reasonable wear and tear excepted, and from time to time make all
needed and proper repairs, renewals, replacements, additions, and improvements
thereto to keep the same in good operating condition;
(e) to maintain sufficient cash in the operating accounts of
the Facility in order to satisfy the working capital needs of the Facility; and
(f) to keep all required Permits current and in full force and
effect.
4.12 PERIODIC SURVEYS. Furnish or cause Lessee to furnish to Lender,
within thirty (30) days of receipt, a copy of any Medicare, Medicaid, or other
licensing agency survey or report and any statement of deficiencies and/or any
other report indicating that any action is pending or being considered to
downgrade any Facility to a substandard category, and within the time period
required by the particular agency for furnishing a plan of correction also
furnish or cause to be furnished to Lender a copy of the plan of correction
generated from such survey or report for such Facility, and correct or cause to
be corrected any deficiency, the curing of which is a condition of continued
licensure or for full participation in Medicaid, Medicare or other reimbursement
program pursuant to any Reimbursement Contract for existing residents or for new
residents to be admitted with Medicaid or Medicare coverage, if Borrower or
Lessee, with the prior written consent of Lender, which consent may be withheld
in its sole discretion, elects to participate in any such program, by the date
required for cure by such agency (plus extensions granted by such agency).
4.13 DEBT SERVICE COVERAGE REQUIREMENTS.
(a) Maintain (commencing with the closing of the Loan), and,
within forty-five (45) days after the end of each fiscal quarter of each
Facility, provide evidence satisfactory to Lender of the achievement of, the
following Debt Service Coverage for the Facilities ratios until the Loan
Obligations are paid in full:
(i) a Debt Service Coverage for the Facilities, after
deduction of Actual Management Fees, of not less than 1.10 to 1.0 based on a
rolling twelve (12) month period, tested quarterly; and
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(ii) a Debt Service Coverage for the Facilities, after
deduction of Assumed Management Fees, of not less than 1.25 to 1.0 based on a
rolling twelve (12) month period, tested quarterly.
(b) If the Facilities fail for two consecutive quarters to
achieve or provide evidence of achievement of the Debt Service Coverage for the
Facilities, upon fifteen (15) days written notice to Borrower, Borrower will
deposit with Lender additional cash or other liquid collateral in an amount
which, when added to the first number of the debt service coverage calculation,
would have resulted in the noncomplying debt service coverage requirement having
been satisfied. If such failure continues for four (4) consecutive quarters
after deposit of the requisite additional cash or other liquid collateral, upon
fifteen (15) days written notice to Borrower, Borrower will deposit with Lender
additional cash or other liquid collateral (with credit for amounts currently
being held by Lender pursuant to the foregoing sentence), in an amount which, if
the same had been applied on the first day of the first quarter for which such
noncompliance of the debt service coverage requirement occurred to reduce the
outstanding principal indebtedness of the Loan Obligations, would have resulted
in the noncomplying debt service coverage requirement having been satisfied, and
Borrower agrees promptly to provide such additional cash or other liquid
collateral. Such additional collateral will be held by Lender in a standard
custodial account, and shall constitute additional collateral for the Loan
Obligations and an "Account" as defined in this Agreement, and, upon the
occurrence of an Event of Default, may be applied by Lender, in such order and
manner as Lender may elect, to the reduction of the Loan Obligations. Borrower
shall not be entitled to any interest earned on such additional collateral.
Provided that there is no outstanding Default or Event of Default, such
additional collateral which has not been applied to the Loan Obligations will be
released by Lender at such time as Borrower provides Lender with evidence that
the required debt service coverage requirements outlined above have been
achieved and maintained (without regard to any cash deposited pursuant to this
Section 4.13) as of the end of each of two (2) consecutive quarters.
4.14 OCCUPANCY. Maintain or cause to be maintained at all times a
daily average annual (calender year) occupancy for the Facilities, on a combined
basis for all Facilities, of eighty percent (80%) or more (based on the number
of beds available at each Facility with the minimum number of beds available at
any Facility remaining at or in excess of the number of beds set forth in the
Facility description in Schedule I); provided, however, that failure to maintain
such occupancy level shall not constitute an Event of Default if, at such time,
the Debt Service Coverage for the Facilities ratios are being achieved.
4.15 CAPITAL EXPENDITURES. Maintain and cause Lessee to maintain the
Facilities in good condition and make minimum capital expenditures for each
Facility in each fiscal year in the average amount of $250.00 per unit, which
average shall be determined based on total capital expenditures for all
Facilities, (which capital expenditures may include those necessary for ordinary
repairs and routine maintenance), commencing the first year of the Loan term
and, within ninety (90) days of the end of such fiscal year, provide evidence
thereof satisfactory to Lender. In determining whether or not such requirement
has been met, with respect to each Facility, Lender will carry forward to the
next year(s) the excess amount of capital expenditures made for such
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Facility in excess of $250.00 per unit in any one year. In the event that
Borrower shall fail to do so, Borrower shall, upon Lender's written request,
immediately establish and maintain a capital expenditures reserve fund with
Lender equal to the difference between the required amount per unit and the
amount per unit actually spent by Borrower. Borrower grants to Lender a right of
setoff against all moneys in the capital expenditures reserve fund, and Borrower
shall not permit any other Lien to exist upon such fund. The proceeds of such
capital expenditures reserve fund will be disbursed monthly upon Lender's
receipt of satisfactory evidence that Borrower has made the required capital
expenditures. Upon Borrower's failure to adequately maintain the Facility in
good condition, Lender may, but shall not be obligated to, make such capital
expenditures and may apply the moneys in the capital expenditures reserve fund
for such purpose. To the extent there are insufficient moneys in the capital
expenditures reserve fund for such purposes, all funds advanced by Lender to
make such capital expenditures shall constitute a portion of the Loan
Obligations, shall be secured by the Mortgage and shall accrue interest at the
Default Rate until paid. Upon an Event of Default, Lender may apply any moneys
in the capital expenditures reserve fund to the Loan Obligations, in such order
and manner as Lender may elect. For any partial fiscal year during which the
Loan is outstanding, the required expenditure amount shall be prorated by
multiplying the total of the required amount per unit by a fraction, the
numerator of which is the number of days during such year for which all or part
of the Loan is outstanding and the denominator of which is the number of days in
such year.
4.16 [INTENTIONALLY OMITTED]
4.17 UPDATED APPRAISALS. For so long as the Loan remains outstanding,
if any Event of Default shall occur hereunder, or if, in Lender's judgment, a
material depreciation in the value of any Mortgaged Property shall have
occurred, then in any such event, Lender may cause such Mortgaged Property to be
appraised by an appraiser selected by Lender, and in accordance with Lender's
appraisal guidelines and procedures then in effect, and Borrower agrees to
cooperate in all respects with such appraisals and furnish to the appraisers all
requested information regarding the Mortgaged Property and the Facility.
Borrower agrees to pay all reasonable costs incurred by Lender in connection
with such appraisal which costs shall be secured by the relevant Mortgage and
shall accrue interest at the Default Rate until paid.
4.18 COMPLY WITH COVENANTS AND LAWS. Comply, and cause Lessee to
comply in all material respects, with all applicable covenants and restrictions
of record and all laws, ordinances, rules and regulations and keep the Facility
and the Mortgaged Property in compliance in all material respects with
applicable laws, ordinances, rules and regulations, including, without
limitation, the Americans with Disabilities Act and regulations promulgated
thereunder, and laws, ordinances, rules and regulations relating to zoning,
health, building codes, setback requirements, Medicaid and Medicare laws, if
applicable, and keep the Permits for the Facility in full force and effect.
4.19 TAXES AND OTHER CHARGES. Subject to Borrower's right to contest
the same as set forth in Section 9(d) of the Mortgage, pay and cause Lessee to
pay all taxes, assessments, charges, claims for labor, supplies, rent, and other
obligations which, if unpaid, might give rise to a Lien against property of
Borrower, except Liens to the extent permitted by this Agreement.
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4.20 COMMITMENT LETTER. Provide all items and pay all amounts required
by the Commitment Letter. If any term of the Commitment Letter shall conflict
with the terms of this Agreement, this Agreement shall govern and control. As to
any matter contained in the Commitment Letter, and as to which no mention is
made in this Agreement or the other Loan Documents, the Commitment Letter shall
continue to be in effect and shall survive the execution of this Agreement and
all other Loan Documents.
4.21 CERTIFICATE. Upon Lender's written request, furnish Lender with a
certificate stating that Borrower has complied with and is in compliance with
all terms, covenants and conditions of the Loan Documents to which Borrower is a
party and that there exists no Default or Event of Default or, if such is not
the case, that one or more specified events have occurred, and describing such
event.
4.22 NOTICE OF FEES OR PENALTIES. Notify Lender, within fifteen (15)
days of Borrower's knowledge thereof, of the assessment or threat of assessment
by any state or any Medicare, Medicaid, health or licensing agency of any
material fines or penalties against Borrower, Lessee or the Facility.
4.23 LOAN CLOSING CERTIFICATION. Immediately notify Lender, in
writing, in the event any representation, warranty or covenant contained herein
or in that certain Loan Closing Certification, executed by Borrower for the
benefit of Lender of even date herewith, becomes untrue in any material respect.
4.24 LEASE AGREEMENT.
(a) Maintain each Lease Agreement, and cause Lessee to
maintain each Lease Agreement to which it is a party, in full force and effect
and timely perform, and cause Lessee to perform all of their respective
obligations thereunder and not permit the termination or amendment of any Lease
Agreement unless the prior written consent of Lender is first obtained (which
consent shall not be unreasonably withheld or delayed); provided, however, that
Lender's prior consent shall not be required for termination of a Lease
Agreement in accordance with its terms upon issuance of a license to Guarantor
to operate the relevant Facility, or in the event of emergency situations (i.e.
termination of the applicable Facility's operating Permit) or for the
termination of license.
(b) In the event that bankruptcy or insolvency proceedings are
instituted by or against Lessee, terminate the Lease Agreement (to the extent
permitted by the applicable bankruptcy court having jurisdiction over such
proceedings), upon written instruction received from Lender.
4.25 PUBLIC HEALTH AND SAFETY NOTICES. Provide any servicer of the
Loan with notice of any incident reported to any public health or safety
provider or any claim referred to its liability insurance provider immediately
after such claim is made.
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ARTICLE V
NEGATIVE COVENANTS OF BORROWER
Until the Loan Obligations have been paid in full, Borrower shall not:
5.1 ASSIGNMENT OF LICENSES AND PERMITS. Assign or transfer or permit
any other party to assign or transfer any of its or their interest in the
Permits, or Reimbursement Contracts, if any, (including rights to payment
thereunder) pertaining to the Facility, or assign, transfer, or remove or permit
any other person to assign, transfer, or remove any records pertaining to the
Facility including, without limitation, resident records, medical and clinical
records (except for removal of such resident records as directed by the
residents owning such records) without Lender's prior written consent, which
consent may be granted or refused in Lender's sole discretion.
5.2 NO LIENS; EXCEPTIONS. Create, incur, assume or suffer to exist
any Lien upon or with respect to the Facility or any of its properties, rights,
income or other assets relating thereto, including, without limitation, the
Mortgaged Property, whether now owned or hereafter acquired, other than the
following permitted Liens ("Permitted Encumbrances"):
(a) Liens at any time existing in favor of Lender;
(b) Liens which are listed in Exhibit F attached hereto;
(c) Inchoate Liens arising by operation of law for the
purchase of labor, services, materials, equipment or supplies, provided payment
shall not be delinquent and, if such Lien is a lien upon any of the Land or
Improvements, such Lien must be fully disclosed to Lender and bonded off and
removed from the Land and Improvements within thirty (30) days of its creation
in a manner satisfactory to Lender;
(d) Liens incurred in the ordinary course of business in
connection with workers' compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than for money borrowed or
for credit received with respect to property acquired) entered into in the
ordinary course of business as presently conducted or to secure obligations for
surety or appeal bonds;
(e) Liens for current year's taxes, assessments or
governmental charges or levies not yet due and payable; and
(f) Liens securing indebtedness permitted under Section 3.24.
5.3 MERGER, CONSOLIDATION, ETC. Except as otherwise provided in the
Mortgage, consummate any merger, consolidation or similar transaction, or sell,
assign, lease or otherwise dispose of (whether in one transaction or in a series
of transactions), all or substantially all of its assets (whether now or
hereafter acquired), without the prior written consent of Lender, which consent
may be granted or refused in Lender's sole discretion.
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5.4 MAINTAIN SINGLE PURPOSE ENTITY STATUS.
(a) Engage in any business or activity other than the
ownership, leasing, operation, management and maintenance of the Mortgaged
Property, and activities incidental thereto;
(b) Acquire or own any material assets other than (i) the
Mortgaged Property, and (ii) such incidental machinery, equipment, fixtures and
other personal property as may be necessary for the operation of the Mortgaged
Property;
(c) Merge into or consolidate with any person or dissolve,
terminate or liquidate in whole or in part, transfer or otherwise dispose of all
or substantially all of its assets or change its legal structure, without in
each case Lender's consent;
(d) Fail to preserve its existence as a corporation, validly
existing and in good standing under the laws of the jurisdiction of its
organization or formation, or without the prior written consent of Lender,
amend, modify, terminate or fail to comply with the provisions of its articles
of incorporation and bylaws, as same may be further amended or supplemented, if
such amendment, modification, termination or failure to comply would adversely
affect its ability to perform its obligations hereunder, under the note or any
other document evidencing or securing the Loan;
(e) Own any subsidiary or make any investment in, any person
without the consent of Lender;
(f) Commingle its assets with the assets of any of its
shareholders, principals, affiliates or of any other person;
(g) Incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than the Loan, trade payables
incurred in the ordinary course of business, and obligations permitted under
Section 3.24(c) hereof, provided same are paid when due;
(h) Fail to maintain its records, books of account and bank
accounts separate and apart from those of its shareholders, principals and
affiliates, the affiliates of any of its shareholders, principals and any other
person;
(i) Enter into any contract or agreement with any of its
shareholders, principals or affiliates, or the affiliates of any of its
shareholders or principals, except upon terms and conditions that, taken as a
whole with respect to the underlying transaction, are intrinsically fair and
substantially similar to those that would be available on an arms-length basis
with third parties;
(j) Seek its dissolution or winding up in whole, or in part;
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(k) Maintain its assets in such a manner that it will be
costly or difficult to segregate, ascertain or identify its individual assets
from those of any of its shareholders, principals and affiliates, the affiliates
of any of its shareholders, principals or any other person;
(l) Hold itself out to be responsible for the debts of another
person;
(m) Make any loans or advances to any third party, including
any of its shareholders, principals or affiliates, or the affiliates of any of
its shareholders or principals;
(n) Fail to file its own tax returns;
(o) Agree to, enter into or consummate any transaction which
would render it unable to confirm that (i) it is not an "employee benefit plan"
as defined in Section 3(32) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), which is subject to Title I of ERISA, or a
"governmental plan" within the meaning of Section 3(32) of ERISA; (B) it is not
subject to state statutes regulating investments and fiduciary obligations with
respect to governmental plans; and (iii) less than twenty-five (25) percent of
each of its outstanding class of equity interests are held by "benefit plan
investors" within the meaning of 29 C.F.R. Section 2510.3-101(f)(2);
(p) Fail either to hold itself out to the public as a legal
person separate and distinct from any other person or to conduct its business
solely in its own name in order not (A) to mislead others as to the identity
with which such other party is transacting business, or (B) to suggest that it
is responsible for the debts of any third party (including any of its
shareholders, principals or affiliates, or any general partner, principal or
affiliate thereof);
(q) Fail to maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations; or
(r) Cause or permit its board of directors to take any action
which, under the terms of any certificate of incorporation, bylaws or any voting
trust agreement with respect to any common stock, requires a vote of the board
of directors unless at the time of such action there shall be at least one
member of the board of directors who is an Independent Director.
5.5 CHANGE OF BUSINESS; CHANGE OF USE. Make any material change in
the nature of its business as it is being conducted as of the date hereof or
change the use of any Facility from its Intended Use; provided, however, that
Borrower may engage in activities closely related to and compatible with
assisted living/adult home facilities and offer additional services not offered
on the date hereof to the extent permitted with respect to assisted living/adult
home facilities and under applicable Permits.
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5.6 CHANGES IN ACCOUNTING. Change its methods of accounting, unless
such change is permitted by GAAP, and provided such change does not have the
effect of curing or preventing what would otherwise be an Event of Default or
Default had such change not taken place.
5.7 ERISA FUNDING AND TERMINATION. Permit (a) the funding
requirements of ERISA with respect to any employee plan to be less than the
minimum required by ERISA at any time, or (b) any employee plan to be subject to
involuntary termination proceedings at any time.
5.8 TRANSACTIONS WITH AFFILIATES. Enter into any transaction with any
Affiliate of Borrower other than in the ordinary course of its business and on
fair and reasonable terms no less favorable to Borrower than those it could
obtain in a comparable arms-length transaction with a Person not an Affiliate.
5.9 TRANSFER OF OWNERSHIP INTERESTS. Except as otherwise provided in
the Mortgage, permit a change in the majority ownership of the stock of Borrower
as of the date of this Agreement unless the written consent of Lender is first
obtained, which consent may be granted or refused in Lender's sole discretion.
5.10 LEASE OR MANAGEMENT AGREEMENT. Lease, enter into or permit any
Lessee to enter into any Management Agreement or any sublease for any portion of
the Facility, except as permitted under the applicable Mortgage and Assignment
of Leases and Rents, or enter into any operating lease for the Facility (other
than the Lease Agreements), unless Borrower first notifies Lender and provides
Lender a copy of the proposed lease, sublease or management agreement, obtains
Lender's written consent thereto, which consent shall not be unreasonably
withheld, and obtains and provides Lender with a subordination agreement in form
satisfactory to Lender, as determined by Lender in its sole reasonable
discretion, from such lessee, sublessee or manager subordinating to all rights
of Lender.
5.11 PLACE OF BUSINESS. Change its chief executive office or its
principal place of business, as set forth on Exhibit B hereto, without first
giving Lender at least thirty (30) days prior written notice thereof and
promptly providing Lender such information and amendatory financing statements
as Lender may request in connection therewith.
5.12 ACQUISITIONS. Directly or indirectly, purchase, lease, manage,
own, operate, or otherwise acquire any property or other assets (or any interest
therein) which are not used in connection with the ownership, leasing, operation
or maintenance of the Facility.
5.13 PARTICIPATION IN MEDICARE/MEDICAID; TRANSFER OF LICENSE
(a) Without the prior written consent of Lender, which may be
granted or withheld in its discretion, participate or permit any operator or
manager of the Mortgaged Property to participate, in Medicare and Medicaid, or
any provider agreement under Medicare and Medicaid, or accept any residents
whose ability to reside in the Mortgaged Property requires that Borrower,
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the Mortgaged Property or any operator or manager participate in Medicare,
Medicaid or any similar provider program; or
(b) (i) Transfer any Permit to any location other than the
Mortgaged Property for which it is issued or pledge any Permit as collateral
security for any other loan or indebtedness, (ii) rescind, withdraw, modify, or
otherwise alter any Permit if doing so would have a material adverse effect on
the Mortgaged Property, or (iii) pledge any receivables as collateral security
for any other loan or Indebtedness or allow any operator or manager to do so.
ARTICLE VI
ENVIRONMENTAL HAZARDS
6.1 PROHIBITED ACTIVITIES AND CONDITIONS. Except for matters covered
by a written program of operations and maintenance approved in writing by Lender
(an "O&M Program") or matters described in Section 6.2, Borrower shall not cause
or permit any of the following:
(a) The presence, use, generation, release, treatment,
processing, storage (including storage in above ground and underground storage
tanks), handling, or disposal-of any Hazardous Materials in, on or under the
Land or any Improvements;
(b) The transportation of any Hazardous Materials to, from, or
across the Land or the Improvements;
(c) Any occurrence or condition on the Land or in the
Improvements or any other property of Borrower that is adjacent to the Land,
which occurrence or condition is or may be in violation of Hazardous Materials
Laws; or
(d) Any violation of or noncompliance with the terms of any
Environmental Permit with respect to the Land, the Improvements or any property
of Borrower that is adjacent to the Land.
The matters described in clauses (a) through (d) above are referred to
collectively in this Article VI as "Prohibited Activities and Conditions" and
individually as a "Prohibited Activity and Condition."
6.2 EXCLUSIONS. Notwithstanding any other provision of Article VI to
the contrary, "Prohibited Activities and Conditions" shall not include the safe
and lawful use and storage of quantities of (a) pre-packaged supplies, medical
waste, cleaning materials and petroleum products customarily used in the
operation and maintenance of comparable Facilities, (b) cleaning materials,
personal grooming items and other items sold in pre-packaged containers for
consumer use and used by occupants of the Facility; and (c) petroleum products
used in the operation and maintenance of motor vehicles from time to time
located on the Land's parking areas, so long as all of the foregoing are used,
stored, handled, transported and disposed of in compliance with Hazardous
Materials Laws.
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6.3 PREVENTIVE ACTION. Borrower shall take all appropriate steps
(including the inclusion of appropriate provisions in any Leases approved by
Lender which are executed after the date of this Agreement) to prevent its
employees, agents, contractors, tenants and occupants of the Facility from
causing or permitting any Prohibited Activities and Conditions.
6.4 O & M PROGRAM COMPLIANCE. If an O&M Program has been established
with respect to Hazardous Materials, Borrower shall comply in a timely manner
with, and cause all tenants, subtenants, employees, agents, and contractors of
Borrower and any other persons present on the Land or in the Improvements to
comply with the O&M Program. All costs of performance of Borrower's obligations
under any O&M Program shall be paid by Borrower, and Lender's out-of-pocket
costs incurred in connection with the monitoring and review of the O&M Program
and Borrower's performance shall be paid by Borrower upon demand by Lender. Any
such out-of-pocket costs of Lender which Borrower fails to pay promptly shall
become an additional part of the Loan Obligations.
6.5 BORROWER'S ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. Borrower
represents and warrants to Lender that, except as previously disclosed by
Borrower to Lender in writing:
(a) Neither Borrower nor Guarantor nor Lessee has at any time
caused or permitted any Prohibited Activities and Conditions.
(b) No Prohibited Activities and Conditions exist or have
existed.
(c) The Land and the Improvements do not now contain any
underground storage tanks, and, to the best of Borrower's knowledge after
reasonable and diligent inquiry, the Land and the Improvements have not
contained any underground storage tanks in the past. If there is an underground
storage tank located on the Land or the Improvements which has been previously
disclosed by Borrower to Lender in writing, that tank complies with all
requirements of Hazardous Materials Laws.
(d) Borrower, Guarantor and Lessee have complied with all
Hazardous Materials Laws, including all requirements for notification regarding
releases of Hazardous Materials. Without limiting the generality of the
foregoing, Borrower has obtained all Environmental Permits required for the
operation of the Land and the Improvements in accordance with Hazardous
Materials Laws now in effect and all such Environmental Permits are in full
force and effect. No event has occurred with respect to the Land and/or
Improvements that constitutes, or with the passing of time or the giving of
notice would constitute, noncompliance with the terms of any Environmental
Permit.
(e) There are no actions, suits, claims or proceedings pending
or, to the best of Borrower's knowledge after reasonable and diligent inquiry,
threatened that involve the Land and/or the Improvements and allege, arise out
of, or relate to any Prohibited Activity and Condition.
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(f) Neither Borrower nor Guarantor nor Lessee have received any
complaint, order, notice of violation or other communication from any
Governmental Authority with regard to air emissions, water discharges, noise
emissions or Hazardous Materials, or any other environmental, health or safety
matters affecting the Land, the Improvements or any other property of Borrower
that is adjacent to the Land. The representations and warranties in this Article
VI shall be continuing representations and warranties that shall be deemed to be
made by Borrower throughout the term of the Loan evidenced by the Note, until
the Loan Obligations have been paid in full.
6.6 NOTICE OF CERTAIN EVENTS. Borrower shall, and shall cause Lessee,
to promptly notify Lender in writing of any and all of the following that may
occur:
(a) The discovery by Borrower or Lessee of any Prohibited
Activity and Condition.
(b) The receipt by Borrower or Lessee or knowledge of any
complaint, order, notice of violation or other communication from any
Governmental Authority or other person with regard to present, or future alleged
Prohibited Activities and Conditions or any other environmental, health or
safety matters affecting the Land, the Improvements or any other property of
Borrower or Lessee that is adjacent to the Land.
(c) Any representation or warranty in this Article VI which
becomes untrue at any time after the date of this Agreement.
Any such notice given by Borrower or Lessee shall not relieve
Borrower of, or result in a waiver of, any obligation under this Agreement, the
Note, or any of the other Loan Documents.
6.7 COSTS OF INSPECTION. Borrower shall pay promptly the costs of any
environmental inspections, tests or audits ("Environmental Inspections")
required by Lender in connection with any foreclosure or deed in lieu of
foreclosure, or, if required by Lender, as a condition of Lender's consent to
any "Transfer" (as defined in the Mortgage), or required by Lender following a
reasonable determination by Lender that Prohibited Activities and Conditions may
exist. Any such costs incurred by Lender (including the fees and out-of-pocket
costs of attorneys and technical consultants whether incurred in connection with
any judicial or administrative process or otherwise) which Borrower fails to pay
promptly shall become an additional part of the Loan Obligations as provided in
Section 7 of the Mortgage.
The results of all Environmental Inspections made by Lender shall
at all times remain the property of Lender and Lender shall have no obligation
to disclose or otherwise make available to Borrower or any other party such
results or any other information obtained by Lender in connection with its
Environmental Inspections unless Lender intends to take any legal action against
Borrower to enforce its rights under Section 12.19 of the Note, pursuant to or
as a result of such Environmental Inspections. Borrower acknowledges that Lender
cannot control or otherwise ensure the truthfulness or the accuracy of the
results of any of its Environmental Inspections and that the
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release of such results to prospective bidders at a foreclosure sale of the
Mortgaged Property and the Improvements located therein may have a material and
adverse effect upon the amount which a party may bid at such sale. Borrower
agrees that Lender shall have no liability whatsoever as a result of delivering
the results of any of its Environmental Inspections to any third party in
accordance with the terms of this Section 6.7, and Borrower hereby releases and
forever discharges Lender from any and all claims, damages or causes of action
arising out of, connected with, or incidental to the results of, the delivery of
any of Lender's Environmental Inspections.
6.8 REMEDIAL WORK. If any investigation, site monitoring,
containment, clean-up, restoration or other remedial work ("Remedial Work") is
necessary to comply with any Hazardous Materials Laws or order of any
Governmental Authority that has or acquires jurisdiction over the Land, the
Improvements or the use, operation or improvement of the Mortgaged Property
under any Hazardous Materials Laws, Borrower shall, by the earlier of (a) the
applicable deadline required by Hazardous Materials Laws or (b) 30 days after
notice from Lender demanding such action, begin performing the Remedial Work,
and thereafter diligently prosecute it to completion, and shall in any event
complete such work by the time required by applicable Hazardous Materials Laws.
If Borrower fails to begin on a timely basis or diligently prosecute any
required Remedial Work, Lender may, at its option, cause the Remedial Work to be
completed, in which case Borrower shall reimburse Lender on demand for the cost
of doing so. Any reimbursement due from Borrower to Lender shall become part of
the Loan Obligations.
6.9 COOPERATION WITH GOVERNMENTAL AUTHORITIES. Borrower shall
cooperate with any inquiry by any Governmental Authority and shall comply with
any governmental or judicial order which arises from any alleged Prohibited
Activity and Condition.
6.10 INDEMNITY.
(a) Borrower shall hold harmless, defend and indemnify (i)
Lender, (ii) any prior owner or holder of the Note, (iii) the officers,
directors, partners, agents, shareholders, employees and trustees of any of the
foregoing, and (iv) the heirs, legal representatives, successors and assigns of
each of the foregoing (together, the "Indemnitees") against all proceedings,
claims, damages, losses, expenses, penalties and costs (whether initiated or
sought by any Governmental Authority or private parties), including fees and out
of pocket expenses of attorneys and expert witnesses, investigatory fees, and
remediation costs, whether incurred in connection with any judicial or
administrative process or otherwise, arising directly or indirectly from any of
the following:
(A) Any breach of any representation or warranty
of Borrower in this Article VI,
(B) Any failure by Borrower to perform any of its
obligations under this Article VI,
(C) The existence or alleged existence of
any Prohibited Activity and Condition,
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(D) The presence or alleged presence of
Hazardous Materials in, on, or around under the Land, the Improvements or any
property of Borrower that is adjacent to the Land, or
(E) Actual or alleged violation of any
Hazardous Materials Laws.
(b) Counsel selected by Borrower to defend Indemnitees shall be
subject to the approval of those Indemnitees. Notwithstanding anything contained
herein, any Indemnitee may elect to defend any claim or legal or administrative
proceeding at Borrower's expense if such Indemnitee has reason to believe that
its interests are not being adequately represented or diverge from other
interests being represented by such counsel (but Borrower shall be obligated to
bear the expense of at most only one such separate counsel). Nothing contained
herein shall prevent an Indemnitee from employing separate counsel in any such
action at any time and participating in the defense thereof at its own expense.
(c) Borrower shall not, without the prior written consent of
those Indemnitees who are named as parties to a claim or legal or administrative
proceeding (a "Claim") settle or compromise the Claim if the settlement (i)
results in the entry of any judgment that does not include as an unconditional
term the delivery by the claimant or plaintiff to Lender of a written release of
those Indemnitees, satisfactory in form and substance to Lender or (ii) may
materially and adversely affect any Indemnitee, as determined by such Indemnitee
in its sole discretion.
(d) The liability of Borrower to indemnify the Indemnitees
shall not be limited or impaired by any of the following, or by any failure of
Borrower or any guarantor to receive notice of or consideration for any of the
following:
(i) Any amendment or modification of any Loan Document,
(ii) Any extensions of time for performance required by
any of the Loan Documents,
(iii) The accuracy or inaccuracy of any representations
and warranties made by Borrower under this Agreement or any other Loan Document,
(iv) The release of Borrower or any other person, by
Lender or by operation of law, from performance of any other obligation under
any of the Loan Documents,
(v) The release or substitution in whole or in part of
any security for the Loan Obligations,
(vi) Lender's failure to properly perfect any lien or
security interest given as security for the Loan Obligations, and
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(vii) Any provision in any of the Loan Documents
limiting Lender's recourse to property securing the Loan or limiting the
personal liability of Borrower or any other party for payment of all or any part
of the Loan.
(e) Borrower shall, at its own cost and expense, do all of the
following:
(i) Pay or satisfy any judgment or decree that may be
entered against any Indemnitee or Indemnitees in any legal or administrative
proceeding incident to any matters against which Indemnitees are entitled to be
indemnified under this Article VI,
(ii) Reimburse Indemnitees for any expenses paid or
incurred in connection with any matters against which Indemnitees are entitled
to be indemnified under this Article VI, and
(iii) Reimburse Indemnitees for any and all expenses,
including reasonable fees and costs of attorneys and expert witnesses, paid or
incurred in connection with the enforcement by Indemnitees of their rights under
this Article VI, or in monitoring and participating in any legal or
administrative proceeding.
(f) In any circumstances in which the indemnity under this
Article VI applies, Lender may employ its own legal counsel and consultants to
prosecute, defend or negotiate any claim or legal or administrative proceeding
and Lender, with the prior written consent of Borrower (which shall not be
unreasonably withheld, delayed or conditioned) may settle or compromise any
action or legal or administrative proceeding. Borrower shall reimburse Lender
upon demand for all costs and expenses incurred by Lender, including all costs
of settlements entered into in good faith, and the reasonable fees and out of
pocket expenses of such attorneys and consultants.
(g) The provisions of this Article VI shall be in addition to
any and all other obligations and liabilities that Borrower may have under the
applicable law or under the other Loan Documents, and each Indemnitee shall be
entitled to indemnification under this Article VI without regard to whether
Lender or that Indemnitee has exercised any rights against the Land and/or the
Improvements or any other security, pursued any rights against any guarantor, or
pursued any other rights available under the Loan Documents or applicable law.
If Borrower consists of more than one person or entity, the obligation of those
persons or entities to indemnify the Indemnitees under this Article VI shall be
joint and several. The obligations of Borrower to indemnify the Indemnitees
under this Article VI shall survive any repayment or discharge of the Loan
Obligations, any foreclosure proceeding, any foreclosure sale, any delivery of
any deed in lieu of foreclosure, and any release of record of the lien of the
Mortgage.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
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7.1 EVENTS OF DEFAULT. The occurrence of any one or more of the
following shall constitute an "Event of Default" hereunder:
(a) The failure by Borrower to pay any installment of
principal, interest, or other payments required under any Note, within five (5)
days after the same becomes due; or
(b) Borrower's violation of any covenant set forth in Article V
hereof; or
(c) Borrower's failure to deliver or cause to be delivered the
financial statements and information set forth in Section 4.6 above within the
times required and such failure is not cured within thirty (30) days following
Lender's written notice to Borrower thereof; or
(d) The failure of Borrower properly and timely to perform or
observe any covenant or condition set forth in this Agreement (other than those
specified in this Section 7.1) or any other Loan Documents which is not cured
within any applicable cure period as set forth herein or, if no cure period is
specified therefor, is not cured within thirty (30) days of Lender's notice to
Borrower of such Default; provided, however, that if such default cannot be
cured within such thirty (30) day period, such cure period shall be extended for
an additional sixty (60) days, as long as Borrower is diligently and in good
faith prosecuting said cure to completion; or
(e) The filing by Borrower, Lessee or Guarantor of a voluntary
petition, or the adjudication of any of the aforesaid Persons, or the filing by
any of the aforesaid Persons of any petition or answer seeking or acquiescing,
in any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief for itself under any present or future federal,
state or other statute, law or regulation relating to bankruptcy, insolvency or
other relief for debtors, or if any of the aforesaid Persons should seek or
consent to or acquiesce in the appointment of any trustee, receiver or
liquidator for itself or of all or any substantial part of its property or of
any or all of the rents, revenues, issues, earnings, profits or income thereof,
or the mailing of any general assignment for the benefit of creditors or the
admission in writing by any of the aforesaid Persons of its inability to pay its
debts generally as they become due; or
(f) The entry by a court of competent jurisdiction of an order,
judgment, or decree approving a petition filed against Borrower, Lessee or
Guarantor which petition seeks any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future federal, state or other statute, law or regulation relating to
bankruptcy, insolvency, or other relief for debtors, which order, judgment or
decree remains unvacated and unstayed for an aggregate of sixty (60) days
(whether or not consecutive) from the date of entry thereof, or the appointment
of any trustee, receiver or liquidator of any of the aforesaid Persons or of all
or any substantial part of its properties or of any or all of the rents,
revenues, issues, earnings, profits or income thereof, which appointment shall
remain unvacated and unstayed for an aggregate of sixty (60) days (whether or
not consecutive); or
(g) Unless otherwise permitted hereunder or under any other
Loan Documents, the sale, transfer, lease, assignment, or other disposition,
voluntarily or involuntarily, of the
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Mortgaged Property, or any part thereof, or, except for Permitted Encumbrances
as described in Section 5.2 above, any further encumbrance of the Mortgaged
Property, unless the prior written consent of Lender is obtained, which consent
may be withheld for any reason; or
(h) The failure of Borrower to take the corrective measures
required in this Agreement within the time periods specified following Lender's
demand because the Debt Service Coverage for the Facilities has not been met; or
(i) Any certificate, statement, representation, warranty or
audit heretofore or hereafter furnished by or on behalf of Borrower, Lessee or
Guarantor pursuant to or in connection with this Agreement (including, without
limitation, representations and warranties contained herein or in any of the
Loan Documents) or as an inducement to Lender to make the Loan to Borrower, (i)
proves to have been false in any material respect at the time when the facts
therein set forth were stated or certified, or (ii) proves to have omitted any
substantial contingent or unliquidated liability or claim against Borrower or
Guarantor, or (iii) on the date of execution of this Agreement there shall have
been any material adverse change in any of the facts previously disclosed by any
such certificate, statement, representation, warranty or audit, which change
shall not have been disclosed to Lender in writing at or prior to the time of
such execution; or
(j) The failure of Borrower to correct or cause Lessee to
correct, within the time deadlines set by any applicable Medicare, Medicaid or
licensing agency, any deficiency which would result in the following actions by
such agency with respect to the Facility:
(i) a termination of any Reimbursement Contract or any
Permit; or
(ii) a ban on new admissions generally or on admission
of patients otherwise qualifying for Medicare or Medicaid coverage; or
(k) Borrower or the Facility should be assessed fines or
penalties by any state or any Medicare, Medicaid, health or licensing agency
having jurisdiction over such Persons or the Facility in excess of $25,000 which
are not paid within the time specified therefor; or
(l) A final judgment shall be rendered by a court of law or
equity against Borrower in excess of $25,000, and the same shall remain
undischarged for a period of thirty (30) days, unless such judgment is either
(i) fully covered by collectible insurance and such insurer has within such
period acknowledged such coverage in writing, or (ii) although not fully covered
by insurance, enforcement of such judgment has been effectively stayed, such
judgment is being contested or appealed by appropriate proceedings and Borrower
or Guarantor, as the case may be, has established reserves adequate for payment
in the event such Person is ultimately unsuccessful in such contest or appeal
and evidence thereof is provided to Lender; or
(m) The occurrence of any material adverse change in the
financial condition or prospects of Borrower or Guarantor, or the existence of
any other condition which, in Lender's reasonable determination, constitutes a
material impairment of any such Person's ability to operate
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the Facility or of such Person's ability to perform their respective obligations
under the Loan Documents, and is not remedied within thirty (30) days after
written notice; or
(n) The termination of any Lease Agreement except in accordance
with its terms in connection with the issuance to Guarantor of a license to
operate the relevant Facility; or
(o) The occurrence of a default under any Lease Agreement which
remains uncured after any applicable cure period; or
(p) The termination of any management or operating agreement
for the Facility without the prior written consent of Lender; or
(q) The occurrence of an Event of Default under any of the
Notes or other Loan Documents executed in connection therewith, as listed and
described on Schedule III attached hereto.
Notwithstanding any provision in this Section 7.1, all
requirements of notice shall be deemed eliminated if Lender is prevented from
declaring an Event of Default by bankruptcy or other applicable law. The cure
period, if any, shall then run from the occurrence of the event or condition of
Default rather than from the date of notice.
7.2 REMEDIES. Upon the occurrence of any one or more of the foregoing
Events of Default, Lender may, at its option:
(a) Declare the entire unpaid principal of the Loan Obligations
to be, and the same shall thereupon become, immediately due and payable, without
presentment, protest or further demand or notice of any kind, all of which are
hereby expressly waived;
(b) Proceed to protect and enforce its rights by action at law
(including, without limitation, bringing suit to reduce any claim to judgment),
suit in equity and other appropriate proceedings including, without limitation,
for specific performance of any covenant or condition contained in this
Agreement;
(c) Exercise any and all rights and remedies afforded by the
laws of the United States, the states in which any of the Land or other
Mortgaged Property is located or any other appropriate jurisdiction as may be
available for the collection of debts and enforcement of covenants and
conditions such as those contained in this Agreement and the Loan Documents;
(d) Exercise the rights and remedies of setoff and/or banker's
lien against the interest of Borrower in and to every account and other property
of Borrower which is in the possession of Lender or any person who then owns a
participating interest in the Loan, to the extent of the full amount of the
Loan; or
(e) Exercise its rights and remedies pursuant to any other Loan
Documents.
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ARTICLE VIII
MISCELLANEOUS
8.1 WAIVER. No remedy conferred upon, or reserved to, Lender in this
Agreement or any of the other Loan Documents is intended to be exclusive of any
other remedy or remedies, and each and every remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing in law or in equity. Exercise of or omission to exercise any right of
Lender shall not affect any subsequent right of Lender to exercise the same. No
course of dealing between Borrower and Lender or any delay on Lender's part in
exercising any rights shall operate as a waiver of any of Lender's rights. No
waiver of any Default under this Agreement or any of the other Loan Documents
shall extend to or shall affect any subsequent or other then existing Default or
shall impair any rights, remedies or powers of Lender.
8.2 COSTS AND EXPENSES. Borrower will bear all taxes, fees and
expenses (including reasonable attorneys' fees and expenses of counsel for
Lender) in connection with the Loan, the Notes, the preparation of this
Agreement and the other Loan Documents (including any amendments hereafter
made), and in connection with any modifications thereto and the recording of any
of the Loan Documents. If, at any time, a Default occurs or Lender becomes a
party to any suit or proceeding in order to protect its interests or priority in
any Mortgaged Property for any of the Loan Obligations or its rights under this
Agreement or any of the Loan Documents, or if Lender is made a party to any suit
or proceeding by virtue of the Loan, this Agreement or any Mortgaged Property
and as a result of any of the foregoing, Lender employs counsel to advise or
provide other representation with respect to this Agreement, or to collect the
balance of the Loan Obligations, or to take any action in or with respect to any
suit or proceeding relating to this Agreement, any of the other Loan Documents,
the Lease Agreements, any Mortgaged Property, Borrower, any Guarantor or Lessee
or to protect, collect, or liquidate any of the security for the Loan
Obligations, or attempt to enforce any security interest or lien granted to
Lender by any of the Loan Documents, then in any such events, all of the actual
attorney's fees arising from such services, including attorneys' fees for
preparation of litigation and in any appellate or bankruptcy proceedings, and
any expenses, costs and charges relating thereto shall constitute additional
obligations of Borrower to Lender payable on demand of Lender. Without limiting
the foregoing, Borrower has undertaken the obligation for payment of, and shall
pay, all recording and filing fees, revenue or documentary stamps or taxes,
intangibles taxes, and other taxes, expenses and charges payable in connection
with this Agreement, any of the Loan Documents, the Loan Obligations, or the
filing of any financing statements or other instruments required to effectuate
the purposes of this Agreement, and should Borrower fail to do so, Borrower
agrees to reimburse Lender for the amounts paid by Lender, together with
penalties or interest, if any, incurred by Lender as a result of underpayment or
nonpayment. Such amounts shall constitute a portion of the Loan Obligations,
shall be secured by the Mortgage and shall bear interest at the Default Rate
from the date advanced until repaid.
8.3 PERFORMANCE OF LENDER. At its option, upon Borrower's failure to
do so, Lender may make any payment or do any act on Borrower's behalf that
Borrower or others are inquired to do to remain in compliance with this
Agreement or any of the other Loan Documents, and Borrower agrees to reimburse
Lender, on demand, for any payment made or expense incurred by Lender
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pursuant to the foregoing authorization, including, without limitation,
reasonable attorneys' fees, and until so repaid any sums advanced by Lender
shall constitute a portion of the Loan Obligations, shall be secured by the
Mortgage and shall bear interest at the Default Rate from the date advanced
until repaid.
8.4 INDEMNIFICATION. Borrower shall, at its sole cost and expense,
protect, defend, indemnify and hold harmless the Indemnified Parties from and
against any and all claims, suits, liabilities (including, without limitation,
strict liabilities), actions, proceedings, obligations, debts, damages, losses,
costs, expenses, diminutions in value, fines, penalties, charges, fees,
judgments, awards, amounts paid in settlement, punitive damages, foreseeable and
unforeseeable consequential damages, of whatever kind or nature (including but
not limited to reasonable attorneys' fees and other costs of defense) imposed
upon or incurred by or asserted against Lender by reason of (a) ownership of the
Notes, the Mortgage, the Mortgaged Property or any interest therein or receipt
of any Rents; (b) any amendment to, or restructuring of, the Loan Obligations
and/or any of the Loan Documents; (c) any and all lawful action that may be
taken by Lender in connection with the enforcement of the provisions of the
Mortgage or the Notes or any of the other Loan Documents, whether or not suit is
filed in connection with same, or in connection with Borrower, Lessee, any
guarantor and/or any partner, joint venturer, member or shareholder thereof
becoming a party to a voluntary or involuntary federal or state bankruptcy,
insolvency or similar proceeding; (d) any accident, injury to or death of
persons or loss of or damage to property occurring in, on or about the Land, the
Improvements or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, streets or ways; (e) any use, nonuse or
condition in, on or about the Land, the Improvements or any part thereof or on
the adjoining sidewalks, curbs, adjacent property or adjacent parking areas,
streets or ways; (f) any failure on the part of Borrower, Lessee, or any
guarantor to perform or comply with any of the terms of this Agreement or any of
the other Loan Documents; (g) any claims by any broker, person or entity
claiming to have participated in arranging on behalf of Borrower the making of
the Loan evidenced by the Notes; (h) any failure of the Mortgaged Property to be
in compliance with any applicable laws; (i) performance of any labor or services
or the furnishing of any materials or other property with respect to the Land,
the Improvements or any part thereof; (j) the failure of any person to file
timely with the Internal Revenue Service an accurate Form 1099-b, statement for
recipients of proceeds from real estate, broker and barter exchange
transactions, which may be required in connection with the Mortgage, or to
supply a copy thereof in a timely fashion to the recipient of the proceeds of
the transaction in connection with which the Loan is made; (k) any
misrepresentation made to Lender in this Agreement or in any of the other Loan
Documents; (l) any tax on the making and/or recording of the Mortgage, the Notes
or any of the other Loan Documents; (m) the violation of any requirements of the
Employee Retirement Income Security Act of 1974, as amended; (n) any fines or
penalties assessed or any corrective costs incurred by Lender if the Facility or
any part of the Mortgaged Property is determined to be in violation of any
covenants, restrictions of record, or any applicable laws, ordinances, rules or
regulations; or (o) the enforcement by any of the Indemnified Parties of the
provisions of this Section 8.4; provided, however, that no indemnity shall be
required for any such damages, costs, liabilities, losses or judgments arising
from the gross negligence or willful misconduct of the Indemnified Party. Any
amounts payable to Lender by reason of the application of this Section 8.4 shall
become immediately due and payable and shall constitute a portion of the
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Loan Obligations, shall be secured by the Mortgage and shall accrue interest at
the Default Rate. The obligations and liabilities of Borrower under this Section
8.4 shall survive any termination, satisfaction, assignment, entry of a judgment
of foreclosure or exercise of a power of sale or delivery of a deed in lieu of
foreclosure of the Mortgage. For purposes of this Section 8.4, the term
"Indemnified Parties" means Lender and any Person who is or will have been
involved in the origination of the Loan, any Person who is or will have been
involved in the servicing of the Loan, any Person in whose name the encumbrance
created by the Mortgage is or will have been recorded, any Person who may hold
or acquire or will have held a full or partial interest in the Loan (including,
without limitation, the Investor and any investor in any securities backed in
whole or in part by the Loan) as well as the respective directors, officers,
shareholder, partners, members, employees, agents, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries, participants, successors
and assigns of any and all of the foregoing (including, without limitation, any
other Person who holds or acquires or will have held a participation or other
full or partial interest in the Loan or the Mortgaged Property, whether during
the term of the Mortgage or as a part of or following a foreclosure of the Loan
and including, without limitation, any successors by merger, consolidation or
acquisition of all or a substantial portion of Lender's assets and business).
8.5 HEADINGS. The headings of the Sections of this Agreement are for
convenience of reference only, are not to be considered a part hereof, and shall
not limit or otherwise affect any of the terms hereof.
8.6 SURVIVAL OF COVENANTS. All covenants, agreements, representations
and warranties made herein and in certificates or reports delivered pursuant
hereto shall be deemed to have been material and relied on by Lender,
notwithstanding any investigation made by or on behalf of Lender, and shall
survive the execution and delivery to Lender of the Note and this Agreement.
8.7 NOTICES, ETC. Any notice or other communication required or
permitted to be given by this Agreement or the other Loan Documents or by
applicable law shall be in writing and shall be deemed received (a) on the date
delivered, if sent by hand delivery (to the person or department if one is
specified below) with receipt acknowledged by the recipient thereof, (b) three
(3) Business Days following the date deposited in the U.S. mail, certified or
registered, with return receipt requested, or (c) one (1) Business Day following
the date deposited with Federal Express or other national overnight carrier, and
in each case addressed as follows:
If to Borrower:
AHC Purchaser, Inc.
c/o Alterra Healthcare Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to:
▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇
2700 International Tower
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
provided, however, that failure to send such copies shall not render any such
notice or other communications invalid.
If to Lender:
GMAC Commercial Mortgage Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Servicing Department
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
provided, however, that failure to send such copies shall not render any such
notice or other communications invalid.
Either party may change its address to another single address by notice given as
herein provided, except any change of address notice must be actually received
in order to be effective.
8.8 BENEFITS. All of the terms and provisions of this Agreement shall
bind and inure to the benefit of the parties hereto and their respective
successors and assigns. No Person other than Borrower or Lender shall be
entitled to rely upon this Agreement or be entitled to the benefits of this
Agreement.
8.9 PARTICIPATION. Borrower acknowledges that Lender may, at its
option, sell participation interests in the Loan or to other participating banks
or Lender may (but shall not be obligated to) assign its interest in the Loan to
its affiliates or to other assignees, including, without limitation, the Federal
Home Loan Mortgage Corporation (the "Assignee"). Borrower agrees with each
present and future participant in the Loan or Assignee of the Loan that if an
Event of Default should occur, each present and future participant or Assignee
shall have all of the rights and
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remedies of Lender with respect to any deposit due from Borrower. The execution
by a participant of a participation agreement with Lender, and the execution by
Borrower of this Agreement, regardless of the order of execution, shall evidence
an agreement between Borrower and said participant in accordance with the terms
of this Section. If the Loan is assigned to the Assignee, the Assignee will
engage an underwriter (the "Underwriter"), who will be responsible for the due
diligence, documentation, preparation and execution of certain documents.
Borrower agrees that Lender may, at its sole option and without notice to or
consent of Borrower, assign its interest in the Loan to the Assignee for
inclusion in a Real Estate Mortgage Investment Conduit ("REMIC") and, in such
event, Borrower agrees to provide the Assignee with such information as may be
reasonably required by the Underwriter in connection therewith or by an investor
in any securities backed in whole or in part by the Loan or any rating agency
rating such securities. Borrower irrevocably waives any and all right it may
have under applicable law to prohibit such disclosure, including, but not
limited to, any right of privacy, and consents to the disclosure of such
information to the Assignee, the Underwriter, to potential investors in the
REMIC, and to such rating agencies.
8.10 SUPERSEDES PRIOR AGREEMENTS; COUNTERPARTS. This Agreement and
the instruments referred to herein supersede and incorporate all
representations, promises, and statements, oral or written, made by Lender in
connection with the Loan. This Agreement may not be varied, altered, or amended
except by a written instrument executed by an authorized officer of Lender and
Borrower. This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be an original, but such counterparts
shall together constitute one and the same instrument.
8.11 LOAN AGREEMENT GOVERNS. The Loan is governed by terms and
provisions set forth in this Loan Agreement and the other Loan Documents and in
the event of any irreconcilable conflict between the terms of the other Loan
Documents and the terms of this Loan Agreement, the terms of this Loan Agreement
shall control; provided, however, that in the event there is any apparent
conflict between any particular term or provision which appears in both this
Loan Agreement and the other Loan Documents, and it is possible and reasonable
for the terms of both this Loan Agreement and the Loan Documents to be performed
or complied with, then, notwithstanding the foregoing, both the terms of this
Loan Agreement and the other Loan Documents shall be performed and complied
with.
8.12 CONTROLLING LAW. THE PARTIES HERETO AGREE THAT THE VALIDITY,
INTERPRETATION, ENFORCEMENT AND EFFECT OF THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF KANSAS AND THE
PARTIES HERETO SUBMIT (AND WAIVE ALL RIGHTS TO OBJECT) TO NON-EXCLUSIVE PERSONAL
JURISDICTION IN THE STATE OF KANSAS, FOR THE ENFORCEMENT OF ANY AND ALL
OBLIGATIONS UNDER THE LOAN DOCUMENTS, EXCEPT THAT IF ANY SUCH ACTION OR
PROCEEDING ARISES UNDER THE CONSTITUTION, LAWS OR TREATIES OF THE UNITED STATES
OF AMERICA, OR IF THERE IS A DIVERSITY OF CITIZENSHIP BETWEEN THE PARTIES
THERETO, SO THAT IT IS TO BE BROUGHT IN A UNITED STATES DISTRICT COURT, IT SHALL
BE BROUGHT IN THE
44
45
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS OR ANY SUCCESSOR FEDERAL
COURT HAVING ORIGINAL JURISDICTION.
8.13 WAIVER OF JURY TRIAL. BORROWER AND LENDER HEREBY WAIVE ANY RIGHT
THAT THEY MAY HAVE TO A TRIAL BY JURY ON ANY CLAIM, COUNTERCLAIM, SETOFF,
DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING OUT OF OR IN ANY WAY RELATED TO
THIS AGREEMENT OR THE LOAN OR (B) IN ANY WAY CONNECTED WITH OR PERTAINING OR
RELATED TO OR INCIDENTAL TO ANY DEALINGS OF LENDER AND/OR BORROWER WITH RESPECT
TO THE LOAN DOCUMENTS OR IN CONNECTION WITH THIS AGREEMENT OR THE EXERCISE OF
EITHER PARTY'S RIGHTS AND REMEDIES UNDER THIS AGREEMENT OR OTHERWISE, OR THE
CONDUCT OR THE RELATIONSHIP OF THE PARTIES HERETO, IN ALL OF THE FOREGOING CASES
WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN CONTRACT, TORT
OR OTHERWISE. BORROWER AND LENDER AGREE THAT EITHER PARTY MAY FILE A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY, AND
BARGAINED AGREEMENT OF EITHER PARTY HERETO TO IRREVOCABLY WAIVE THEIR RIGHTS TO
TRIAL BY JURY AS AN INDUCEMENT OF LENDER TO MAKE THE LOAN AND THAT, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, ANY DISPUTE OR CONTROVERSY WHATSOEVER
(WHETHER OR NOT MODIFIED HEREIN) BETWEEN BORROWER AND LENDER SHALL INSTEAD BE
TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
8.14 NONRECOURSE. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, OR
IN ANY OF THE OTHER LOAN DOCUMENTS EVIDENCING THE LOAN, THE LIABILITY OF
BORROWER FOR THE PAYMENT OF PRINCIPAL AND INTEREST AND AGREED CHARGES, AND THE
OBSERVANCE AND PERFORMANCE OF ALL OF THE TERMS, COVENANTS, AND CONDITIONS AND
PROVISIONS OF THE NOTE AND THE OTHER LOAN DOCUMENTS, SHALL BE LIMITED TO THE
EXTENT PROVIDED IN THE MORTGAGE AND THE NOTES.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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46
IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to
be properly executed, by their respective duly authorized representatives, as of
the date first above written.
BORROWER:
WITNESS: AHC PURCHASER, INC., a Delaware corporation
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (Seal)
------------------------------- ----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Print Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ Vice President
--------------------
LENDER:
WITNESS: GMAC COMMERCIAL MORTGAGE
CORPORATION, a California corporation
/s/ R. ▇▇▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (Seal)
-------------------------------- -----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Print Name: R. ▇▇▇▇▇▇ ▇▇▇▇ Senior Vice President
---------------------
46
47
SCHEDULE I
DEFINITIONS
"ACCOUNTS" has the meaning given to that term in the Mortgage.
"ACTUAL MANAGEMENT FEES" means actual management fees paid or
incurred in connection with operation of the Facility.
"AFFILIATE" means, with respect to any Person, (a) each Person
that controls, is controlled by or is under common control with such Person, (b)
each Person that, directly or indirectly, owns or controls, whether beneficially
or as a trustee, guardian or other fiduciary, more than forty-nine percent (49%)
of the Stock of such Person, and (c) each of such Person's officers, directors,
members, joint venturers and partners.
"ASSIGNMENT OF LEASES AND RENTS" means those certain
Assignments of Leases and Rents of even date herewith executed in connection
with the Loan by Borrower in favor of Lender with respect to each Facility.
"ASSIGNMENTS OF LICENSES, PERMITS AND CONTRACTS" means,
collectively, those certain Assignments of Licenses, Permits and Contracts of
even date herewith executed by Lessee for the benefit of Lender.
"ASSUMED MANAGEMENT FEES" means imputed management fees of
five percent (5%) of net resident revenues of the Facility (which shall be
reduced by those expenses normally compensated as part of management fees and
separately paid by Borrower and otherwise included in net income and also for
any Medicare and Medicaid contractual adjustments, if Borrower elects, in its
sole discretion, to participate in such programs).
"BUSINESS DAY" means a day on which commercial banks are not
authorized or required by law to close in New York, New York.
"CLOSING DATE" means the date of this Agreement.
"COMMITMENT LETTER" means the commitment letter issued by
Lender to Borrower dated January 19, 2000.
"CROSS-COLLATERALIZATION AND CROSS-DEFAULT AGREEMENTS" means
the Cross-Collateralization, Cross-Default and Mortgage Modification Agreements,
or the Cross-Collateralization, Cross-Default and Deed of Trust Modification
Agreement, as applicable, of even date herewith executed by Borrower in favor of
Lender with respect to each Mortgaged Property.
SCHEDULE I-1
48
"DEBT SERVICE COVERAGE FOR THE FACILITIES" means a ratio in
which the first number is the sum in the aggregate for all Facilities of net
pre-tax income of Borrower from the operations of the Facilities as set forth in
the quarterly statements provided to Lender (without deduction for Actual
Management Fees or management expenses paid or incurred in connection with the
operation of the Facilities), calculated based upon the preceding twelve (12)
months, plus interest expense and non-cash expenses or allowances for
depreciation and amortization of the Facilities for said period to the extent
deducted in determining net income, less either Assumed Management Fees or
Actual Management Fees, as applicable, and the second number is the sum of the
actual principal amounts due (even if not paid) on the Loan (but which shall not
include that portion associated with the balloon payment of the Loan) for the
applicable period plus the interest amount due on the Loan for the applicable
period. In calculating "pre-tax income", Extraordinary Income and Extraordinary
Expenses shall be excluded.
"DEFAULT" means the occurrence or existence of any event
which, but for the giving of notice or expiration of time or both, would
constitute an Event of Default.
"DEFAULT RATE" means a per annum rate equal to the lesser of
the interest rate on the Note plus five percent (5%) per annum or the maximum
rate permitted by applicable law.
"ENVIRONMENTAL PERMIT" means any permit, license, or other
authorization issued under any Hazardous Materials Law with respect to any
activities or businesses conducted on or in relation to the Land and/or the
Improvements.
"EQUIPMENT" has the meaning given to that term in the
Mortgage.
"EVENT OF DEFAULT" means any "Event of Default" as defined
in Article VII hereof.
"EXTRAORDINARY INCOME AND EXTRAORDINARY EXPENSES" means
material items of a character significantly different from the typical or
customary business activities of Borrower which would not be expected to recur
frequently and which would not be considered as recurring factors in any
evaluation of the ordinary operating processes of Borrower's business.
"EXHIBIT" means an Exhibit to this Agreement, unless the
context refers to another document, and each such Exhibit shall be deemed a part
of this Agreement to the same extent as if it were set forth in its entirety
wherever reference is made thereto.
"FACILITIES" means all of the facilities named and described
in Schedule II attached hereto and made a part hereof.
"FACILITY" means, collectively and individually, each facility
named and described in Schedule II attached hereto and made a part hereof.
SCHEDULE I-2
49
"GAAP" means, as in effect from time to time, generally
accepted accounting principles consistently applied as promulgated by the
American Institute of Certified Public Accountants.
"GOVERNMENTAL AUTHORITY" means any board, commission,
department or body of any municipal, county, state or federal governmental unit,
or any subdivision of any of them, that has or acquires jurisdiction over the
Land and/or the Improvements or the use, operation or improvement of the
Mortgaged Property.
"GUARANTOR" means Alterra Healthcare Corporation, Inc., a
Delaware corporation.
"GUARANTY AGREEMENT" means, with respect to each Loan, that
certain Exceptions to Nonrecourse and Additional Collateral Guaranty of even
date herewith executed by Guarantor for the benefit of Lender pursuant to which
Guarantor has made certain guarantees with respect to such Loan.
"HAZARDOUS MATERIALS" means petroleum and petroleum products
and compounds containing them, including gasoline, diesel fuel and oil,
explosives, flammable materials, radioactive materials, polychlorinated
biphenyls ("PCBs") and compounds containing them, lead and lead-based paint,
asbestos or asbestos-containing materials in any form that is or-could become
friable, underground storage tanks, whether empty or containing any substance,
any substance the presence of which on the Land or in the Improvements is
prohibited by any federal, state or local authority, any substance that requires
special handling, any medical products or devices, including those materials
defined as "medical waste" or "biological waste" under relevant statutes or
regulations pertaining to Hazardous Materials Laws, and any other material or
substance now or in the future defined as a "hazardous substance," "hazardous
material," "hazardous waste," "toxic substance," "toxic pollutant,"
"contaminant," or "pollutant" within the meaning of any Hazardous Materials Law.
"HAZARDOUS MATERIALS LAWS" means all federal, state, and local
laws, ordinances and regulations and standards, rules, policies and other
governmental requirements, administrative rulings and court judgments and
decrees in effect now or in the future and including all amendments, that relate
to Hazardous Materials and apply to Borrower or to the Land and/or the
Improvements. Hazardous Materials Laws include, but are not limited to, the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., the Toxic Substance Control Act, 15 U.S.C. Section 2601,
et seq., the Clean Water Act, 33 U.S.C. Section 1251, et seq., and the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, and their state analogs.
"IMPROVEMENTS" has the meaning given to that term in the
Mortgage.
"INDEBTEDNESS" means any (a) obligations for borrowed money,
(b) obligations, payment for which is being deferred by more than thirty (30)
days, representing the deferred purchase price of property other than accounts
payable arising in connection with the purchase of inventory customary in the
trade and in the ordinary course of Borrower's business, (c) obligations,
SCHEDULE I-3
50
whether or not assumed, secured by Liens or payable out of the proceeds or
production from the Accounts and/or property now or hereafter owned or acquired,
and (d) the amount of any other obligation (including obligations under
financing leases) which would be shown as a liability on a balance sheet
prepared in accordance with GAAP.
"INTENDED USE" means, with respect to each Facility, the use
for which such Facility is licensed/operated as described in Section 3.7.
"INVENTORY" has the meaning given to that term in the
Mortgage.
"INVESTOR" means the Federal Home Loan Mortgage Corporation, a
publicly held government-sponsored enterprise, and any other purchaser of all or
a portion of the Loan, whether by participation or otherwise.
"LAND" has the meaning given to that term in the Mortgage.
"LEASE AGREEMENT" means, individually and collectively:
(a) with respect to each of the New Braunfels Facility, the
Deland Facility, the Leesburg Facility, the West Melbourne Facilities, the Port
Orange Facility, the Tequesta I Facility and the Stuart Facility, until a
license to operate such Facility is issued to Guarantor by the applicable
regulatory authority, the Lease of even date herewith by and between Borrower,
as landlord, and Assisted Living Properties, Inc., a Kansas corporation, as
lessee, pursuant to which such lessee has leased such Facility and the related
Mortgaged Property in its entirety (except for the Lease Agreement for the
Tequesta I Facility, as to which such Lessee has leased the Tequesta I Facility
and a portion of the Land constituting the related Mortgaged Property) and,
after the issuance of such license to Guarantor, the lease effective upon
issuance of such license by and between Borrower, as landlord, and Guarantor, as
lessee, pursuant to which Guarantor will lease such Facility and the related
Mortgaged Property in its entirety (except for the Lease Agreement for the
Tequesta I Facility, as to which such Lessee has leased the Tequesta I Facility
and a portion of the Land constituting the related Mortgaged Property);
(b) with respect to the Sussex Facility, until a license to
operate such Facility is issued to Guarantor by the applicable regulatory
authority, the Lease of even date herewith by and between Borrower, as landlord,
and ALS Leasing, Inc., a Delaware corporation, as lessee, pursuant to which such
lessee has leased such Facility and the related Mortgaged Property in its
entirety and, after the issuance of such license to Guarantor, the lease
effective upon issuance of such license by and between Borrower, as landlord,
and Guarantor, as lessee, pursuant to which Guarantor will lease such Facility
and the related Mortgaged Property in its entirety; and
(c) with respect to each of the ▇▇▇ Arbor Facility, the
Bowling Green Facility, the Mansfield Facility, the Northampton Manor Facility,
the ▇▇▇▇▇▇▇▇▇▇ Facilities, the Tequesta II Facility, the Abilene Facility, the
▇▇▇▇ Facility and the Wichita Facility, the Lease of even date herewith by and
between Borrower, as landlord, and Guarantor, as lessee, pursuant to which
SCHEDULE I-4
51
Guarantor has leased such Facility and the related Mortgaged Property in its
entirety (except for the Lease Agreement for the Tequesta II Facility, as to
which such Lessee has leased the Tequesta II Facility and a portion of the Land
constituting the related Mortgaged Property).
"LESSEE" means, individually and collectively:
(a) with respect to each of the New Braunfels Facility, the
Deland Facility, the Leesburg Facility, the West Melbourne Facilities, the Port
Orange Facility, the Tequesta I Facility and the Stuart Facility, until a
license to operate such Facility is issued to Guarantor by the applicable
regulatory authority, Assisted Living Properties, Inc., a Kansas corporation,
and, after the issuance of such license to Guarantor, Guarantor;
(b) with respect to the Sussex Facility, until a license to
operate such Facility is issued to Guarantor by the applicable regulatory
authority, ALS Leasing, Inc., a Delaware corporation, and, after the issuance of
such license to Guarantor, Guarantor; and
(c) with respect to each of the ▇▇▇ Arbor Facility, the
Bowling Green Facility, the Mansfield Facility, the Northampton Manor Facility,
the ▇▇▇▇▇▇▇▇▇▇ Facilities, the Tequesta II Facility, the Abilene Facility, the
▇▇▇▇ Facility and the Wichita Facility, Guarantor.
"LESSEE'S SECURITY AGREEMENTS" means the respective Lessee's
Security Agreements of even date herewith by and between Lessee and Lender.
"LESSEE'S SUBORDINATION AGREEMENTS" means the respective
Lessee's Subordination and Attornment Agreements of even date herewith,
pertaining to each Facility, by and among Borrower, Lessee and Lender.
"LIEN" means any voluntary or involuntary mortgage, security
deed, deed of trust, lien, pledge, assignment, security interest, title
retention agreement, financing lease, levy, execution, seizure, judgment,
attachment, garnishment, charge, lien or other encumbrance of any kind,
including those contemplated by or permitted in this Agreement and the other
Loan Documents.
"LOAN" means , individually, with respect to each Facility,
the loan made by Lender to Borrower as of the date hereof in the amount set
forth on Schedule III hereto, and, collectively, all sixteen (16) loans in the
aggregate principal amount of Sixty Million Dollars ($60,000,000) made by Lender
to Borrower as of the date hereof.
"LOAN DOCUMENTS" means, collectively, this Agreement, the
Notes, the Lease Agreements, the Assignments of Licenses, Permits and Contracts,
the Guaranty Agreements, the Mortgage, the Assignments of Leases and Rents, the
Lessee's Security Agreements, the Lessee's Subordination Agreements, the
Cross-Collateralization and Cross-Default Agreements and the Stock Pledge
Agreement, together with any and all other documents executed by Borrower or
others, evidencing, securing or otherwise relating to the Loan.
SCHEDULE I-5
52
"LOAN OBLIGATIONS" means, with respect to each Loan, the
aggregate of all principal and interest owing from time to time under the Note
evidencing such Loan and all expenses, charges and other amounts from time to
time owing under such Note, this Agreement, or the other Loan Documents
pertaining to such Loan and all covenants, agreements and other obligations from
time to time owing to, or for the benefit of, Lender pursuant to such Loan
Documents.
"MATURITY DATE" means February 1, 2005.
"MEDICAID" means that certain program of medical assistance,
funded jointly by the federal government and the States, for impoverished
individuals who are aged, blind and/or disabled, and/or members of families with
dependent children, which program is more fully described in Title XIX of the
Social Security Act (42 U.S.C. Sections 1396 et seq.) and the regulations
promulgated thereunder.
"MEDICARE" means that certain federal program providing health
insurance for eligible elderly and other individuals, under which physicians,
hospitals, skilled nursing homes, home health care and other providers are
reimbursed for certain covered services they provide to the beneficiaries of
such program, which program is more fully described in Title XVIII of the Social
Security Act (42 U.S.C. Sections 1395 et seq.) and the regulations
promulgated thereunder.
"MORTGAGE" means, collectively, and individually with respect
to each Facility, those certain Mortgages or Deeds of Trust and Security
Agreements, of even date herewith, from Borrower to or for the benefit of
Lender, encumbering the specific real property described in Exhibits "A-1"
through "A-16" hereto".
"MORTGAGED PROPERTY" has the meaning given to that term in the
Mortgage.
"NOTE" means, with respect to each Loan, the Promissory Note
of even date herewith in the principal amount of such Loan payable by Borrower
to the order of Lender.
"NOTES" means the sixteen (16) Notes of even date herewith,
each of which evidences a single Loan, as listed and described in Schedule III.
"O&M PROGRAM" means a written program of operations and
maintenance established or approved in writing by Lender relating to any
Hazardous Materials in, on or under the Land or the Improvements.
"PERMITS" has the meaning given to that term in the Mortgage.
"PERMITTED ENCUMBRANCES" has the meaning given to that term in
Section 5.2 hereof.
"PERSON" means any natural person, firm, corporation,
partnership, limited liability company, trust and any other form of legal
entity.
SCHEDULE I-6
53
"PROCEEDS" has the meaning given to that term in the Mortgage.
"REIMBURSEMENT CONTRACTS" has the meaning given to that term
in the Mortgage.
"RENTS" has the meaning given to that term in the Mortgage.
"SINGLE PURPOSE ENTITY" means a Person which owns no interest
or property other than the Mortgaged Property or interests in Borrower.
"STOCK" means all shares, options, warrants, general or
limited partnership interests, membership interests, participations or other
equivalents (regardless of how designated) in a corporation, limited liability
company, partnership or any equivalent entity, whether voting or nonvoting,
including, without limitation, common stock, preferred stock, or any other
"equity security" (as such term is defined in Rule 3a11-1 of the General Rules
and Regulations promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended).
"STOCK PLEDGE AGREEMENT" means the Stock Pledge Agreement of
even date herewith executed by AHC Purchaser Holding, Inc., a Delaware
corporation, in favor of Lender.
SCHEDULE I-7
54
SCHEDULE II
DEFINITION OF FACILITY
"FACILITY" means, individually and collectively:
(a) the facility known as "Clare Bridge of ▇▇▇ Arbor" or
"Alterra Clare Bridge of ▇▇▇ Arbor," presently a 36-bed, 36-unit home for the
aged, located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as it may
now or hereafter exist, together with any other general and specialized care
facilities, if any (including any Alzheimer's care unit, subacute, and nursing
home facility), now or hereafter operated on the Land (the "▇▇▇ Arbor
Facility");
(b) the facility known as "Sterling House of Bowling Green" or
"Alterra Sterling House of Bowling Green," presently a 37-bed, 37-unit
residential care facility, located at ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, as it may now or hereafter exist, together with any other general
and specialized care facilities, if any (including any Alzheimer's care unit,
subacute, and nursing home facility), now or hereafter operated on the Land (the
"Bowling Green Facility");
(c) the facility known as "Sterling House of Mansfield" or
"Alterra Sterling House of Mansfield," presently a 42-bed, 42-unit residential
care facility, located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, as it
may now or hereafter exist, together with any other general and specialized care
facilities, if any (including any Alzheimer's care unit, subacute, and nursing
home facility), now or hereafter operated on the Land (the "Mansfield
Facility");
(d) the facility known as "Wynwood of Northampton Manor" or
"Alterra Wynwood of Northampton Manor," presently a 113-bed, 113-unit personal
care facility, located at ▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, as it may now or hereafter exist, together with any other general and
specialized care facilities, if any (including any Alzheimer's care unit,
subacute, and nursing home facility), now or hereafter operated on the Land (the
"Northampton Manor Facility");
(e) the facility known as "Clare Bridge of Montgomery" or
"Alterra Clare Bridge of ▇▇▇▇▇▇▇▇▇▇," presently a 48-bed, 48-unit personal care
facility, located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"▇▇▇▇▇▇▇▇▇▇ I Facility"), and the facility known as "Wynwood of Montgomery" or
"Alterra Wynwood of ▇▇▇▇▇▇▇▇▇▇," presently a 72-bed, 72-unit personal care
facility, located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"▇▇▇▇▇▇▇▇▇▇ II Facility"), as each may now or hereafter exist, together with any
other general and specialized care facilities, if any (including any Alzheimer's
care unit, subacute, and nursing home facility), now or hereafter operated on
the Land (collectively, the "Montgomery Facilities");
(f) the facility known as "Sterling House of New Braunfels" or
"Alterra Sterling House of New Braunfels," presently a 37-bed, 37-unit personal
care facility, located at 2457 Loop
Schedule II-1
55
337, New ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, as it may now or hereafter exist, together with
any other general and specialized care facilities, if any (including any
Alzheimer's care unit, subacute, and nursing home facility), now or hereafter
operated on the Land (the "New Braunfels Facility");
(g) the facility known as "Sterling House of Deland" or
"Alterra Sterling House of Deland," presently a 42-bed, 42-unit assisted living
facility, located at ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, as it may now
or hereafter exist, together with any other general and specialized care
facilities, if any (including any Alzheimer's care unit, subacute, and nursing
home facility), now or hereafter operated on the Land (the "Deland Facility");
(h) the facility known as "Sterling House of Leesburg" or
"Alterra Sterling House of Leesburg," presently a 42-bed, 42-unit assisted
living facility, located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, as
it may now or hereafter exist, together with any other general and specialized
care facilities, if any (including any Alzheimer's care unit, subacute, and
nursing home facility), now or hereafter operated on the Land (the "Leesburg
Facility");
(i) the facility known as "Sterling House of West Melbourne"
or "Alterra Sterling House of West Melbourne," presently a 42-bed, 38-unit
assisted living facility, located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "West Melbourne I Facility"), and the facility known as
"Sterling House of West Melbourne" or "Alterra Sterling House of West
Melbourne," presently a 42-bed, 42-unit assisted living facility, located at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "West Melbourne II
Facility"), as each may now or hereafter exist, together with any other general
and specialized care facilities, if any (including any Alzheimer's care unit,
subacute, and nursing home facility), now or hereafter operated on the Land
(collectively, the "West Melbourne Facilities");
(j) the facility known as "Sterling House of Port Orange" or
"Alterra Sterling House of Port Orange," presently a 42-bed, 42-unit assisted
living facility, located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
as it may now or hereafter exist, together with any other general and
specialized care facilities, if any (including any Alzheimer's care unit,
subacute, and nursing home facility), now or hereafter operated on the Land (the
"Port Orange Facility");
(k) the facility known as "Sterling House of Tequesta" or
"Alterra Sterling House of Tequesta," presently a 42-bed, 42-unit assisted
living facility, located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Tequesta I Facility"), and the facility known as "Sterling House of Tequesta"
or "Alterra Sterling House of Tequesta," presently a 42-bed, 42-unit assisted
living facility, located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Tequesta II Facility"), as each may now or hereafter exist, together with any
other general and specialized care facilities, if any (including any Alzheimer's
care unit, subacute, and nursing home facility), now or hereafter operated on
the Land (collectively, the "Tequesta Facilities");
(l) the facility known as "Sterling House of Abilene"or
"Alterra Sterling House of Abilene," presently a 33-bed, 26-unit adult care
home, located at ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, as it may now or
hereafter exist, together with any other general and specialized care
Schedule II-2
56
facilities, if any (including any Alzheimer's care unit, subacute, and nursing
home facility), now or hereafter operated on the Land (the "Abilene Facility");
(m) the facility known as "Sterling House of Hays" or "Alterra
Sterling House of Hays," presently a 33-bed, 33-unit adult care home, located at
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, as it may now or hereafter exist,
together with any other general and specialized care facilities, if any
(including any Alzheimer's care unit, subacute, and nursing home facility), now
or hereafter operated on the Land (the "Hays Facility");
(n) the facility known as "Sterling House of Wichita" or
"Alterra Sterling House of Wichita," presently a 30-bed, 26-unit adult care
home, located at ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, as it may now or
hereafter exist, together with any other general and specialized care
facilities, if any (including any Alzheimer's care unit, subacute, and nursing
home facility), now or hereafter operated on the Land (the "Wichita Facility");
(o) the facility known as "Sterling House of Stuart" or
"Alterra Sterling House of Stuart," presently a 42-bed, 42-unit assisted living
facility, located at ▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, as it may now
or hereafter exist, together with any other general and specialized care
facilities, if any (including any Alzheimer's care unit, subacute, and nursing
home facility), now or hereafter operated on the Land (the "Stuart Facility");
and
(p) the facility known as "WovenHearts of Sussex," "Sterling
House of Sussex" or "Alterra Sterling House of Sussex," presently a 20-bed,
20-unit community based residential facility, located at W240 ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as it may now or hereafter exist, together with
any other general and specialized care facilities, if any (including any
Alzheimer's care unit, subacute, and nursing home facility), now or hereafter
operated on the Land (the "Sussex Facility").
Schedule II-3
57
SCHEDULE III
DESCRIPTION OF LOANS
"LOAN" means, individually and collectively:
(a) the loan in the principal sum of Two Million Eight Hundred
Fifty Thousand and No/100 Dollars ($2,850,000.00) evidenced by that certain
Promissory Note dated as of even date herewith from Borrower to Lender in the
principal amount of the loan, which loan is secured by that certain Mortgage and
Security Agreement dated as of even date herewith, encumbering the real property
in Washtenaw County, Michigan on which the ▇▇▇ Arbor Facility is situated;
(b) the loan in the principal sum of Two Million Eight Hundred
Sixty Thousand and No/100 Dollars ($2,860,000.00) evidenced by that certain
Promissory Note dated as of even date herewith from Borrower to Lender in the
principal amount of the loan, which loan is secured by that certain Open-End
Mortgage and Assignment of Rents dated as of even date herewith, encumbering the
real property in Wood County, Ohio on which the Bowling Green Facility is
situated;
(c) the loan in the principal sum of Two Million Four Hundred
Thousand and No/100 Dollars ($2,400,000.00) evidenced by that certain Promissory
Note dated as of even date herewith from Borrower to Lender in the principal
amount of the loan, which loan is secured by that certain Open-End Mortgage and
Assignment of Rents dated as of even date herewith, encumbering the real
property in Richland County, Ohio on which the Mansfield Facility is situated;
(d) the loan in the principal sum of Nine Million One Hundred
Sixty-five Thousand and No/100 Dollars ($9,165,000.00) evidenced by that certain
Promissory Note dated as of even date herewith from Borrower to Lender in the
principal amount of the loan, which loan is secured by that certain Open-End
Mortgage and Security Agreement dated as of even date herewith, encumbering the
real property in Bucks County, Pennsylvania on which the Northampton Manor
Facility is situated;
(e) the loan in the principal sum of Ten Million One Hundred
Forty Thousand and No/100 Dollars ($10,140,000.00) evidenced by that certain
Promissory Note dated as of even date herewith from Borrower to Lender in the
principal amount of the loan, which loan is secured by that certain Open-End
Mortgage and Security Agreement dated as of even date herewith, encumbering the
real property in ▇▇▇▇▇▇▇▇▇▇ County, Pennsylvania on which the Montgomery
Facilities are situated;
(f) the loan in the principal sum of Two Million Four Hundred
Thousand and No/100 Dollars ($2,400,000.00) evidenced by that certain Promissory
Note dated as of even date herewith from Borrower to Lender in the principal
amount of the loan, which loan is secured by that
Schedule III-1
58
certain Deed of Trust and Security Agreement dated as of even date herewith,
encumbering the real property in Comal County, Texas on which the New Braunfels
Facility is situated;
(g) the loan in the principal sum of Two Million Seven Hundred
Thousand and No/100 Dollars ($2,700,000.00) evidenced by that certain Promissory
Note dated as of even date herewith from Borrower to Lender in the principal
amount of the loan, which loan is secured by that certain Mortgage and Security
Agreement dated as of even date herewith, encumbering the real property in
Volusia County, Florida on which the Deland Facility is situated;
(h) the loan in the principal sum of Two Million Eight Hundred
Thousand and No/100 Dollars ($2,800,000.00) evidenced by that certain Promissory
Note dated as of even date herewith from Borrower to Lender in the principal
amount of the loan, which loan is secured by that certain Mortgage and Security
Agreement dated as of even date herewith, encumbering the real property in Lake
County, Florida on which the Leesburg Facility is situated;
(i) the loan in the principal sum of Six Million Eight Hundred
Thousand and No/100 Dollars ($6,800,000.00) evidenced by that certain Promissory
Note dated as of even date herewith from Borrower to Lender in the principal
amount of the loan, which loan is secured by that certain Mortgage and Security
Agreement dated as of even date herewith, encumbering the real property in
Brevard County, Florida on which the West Melbourne Facilities are situated;
(j) the loan in the principal sum of Two Million Nine Hundred
Thousand and No/100 Dollars ($2,900,000.00) evidenced by that certain Promissory
Note dated as of even date herewith from Borrower to Lender in the principal
amount of the loan, which loan is secured by that certain Mortgage and Security
Agreement dated as of even date herewith, encumbering the real property in
Volusia County, Florida on which the Port Orange Facility is situated;
(k) the loan in the principal sum of Five Million Six Hundred
Thousand and No/100 Dollars ($5,600,000.00) evidenced by that certain Promissory
Note dated as of even date herewith from Borrower to Lender in the principal
amount of the loan, which loan is secured by that certain Mortgage and Security
Agreement dated as of even date herewith, encumbering the real property in Palm
Beach County, Florida on which the Tequesta Facilities are situated;
(l) the loan in the principal sum of Two Million One Hundred
Twenty-eight Thousand and No/100 Dollars ($2,128,000.00) evidenced by that
certain Promissory Note dated as of even date herewith from Borrower to Lender
in the principal amount of the loan, which loan is secured by that certain
Mortgage and Security Agreement dated as of even date herewith, encumbering the
real property in ▇▇▇▇▇▇▇▇▇ County, Kansas on which the Abilene Facility is
situated;
(m) the loan in the principal sum of One Million Eight Hundred
Eighty-two Thousand and No/100 Dollars ($1,882,000.00) evidenced by that certain
Promissory Note dated as of even date herewith from Borrower to Lender in the
principal amount of the loan, which loan is
Schedule III-2
59
secured by that certain Mortgage and Security Agreement dated as of even date
herewith, encumbering the real property in ▇▇▇▇▇ County, Kansas on which the
Hays Facility is situated;
(n) the loan in the principal sum of One Million Three Hundred
Sixty-one Thousand and No/100 Dollars ($1,361,000.00) evidenced by that certain
Promissory Note dated as of even date herewith from Borrower to Lender in the
principal amount of the loan, which loan is secured by that certain Mortgage and
Security Agreement dated as of even date herewith, encumbering the real property
in Sedgwick County, Kansas on which the Wichita Facility is situated;
(o) the loan in the principal sum of Two Million Eight Hundred
Sixty Thousand and No/100 Dollars ($2,860,000.00) evidenced by that certain
Promissory Note dated as of even date herewith from Borrower to Lender in the
principal amount of the loan, which loan is secured by that certain Mortgage and
Security Agreement dated as of even date herewith, encumbering the real property
in ▇▇▇▇▇▇ County, Florida on which the Stuart Facility is situated; and
(p) the loan in the principal sum of One Million One Hundred
Fifty-four Thousand and No/100 Dollars ($1,154,000.00) evidenced by that certain
Promissory Note dated as of even date herewith from Borrower to Lender in the
principal amount of the loan, which loan is secured by that certain Mortgage and
Security Agreement dated as of even date herewith, encumbering the real property
in Waukesha County, Wisconsin on which the Sussex Facility is situated.
Schedule III-3
60
EXHIBIT A
LEGAL DESCRIPTIONS
A-1
61
EXHIBIT B
BORROWER'S CHIEF EXECUTIVE OFFICE
AND PRINCIPAL PLACE OF BUSINESS
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
B-1
62
EXHIBIT C
OWNERSHIP INTERESTS
% of Ownership
Shareholder in Borrower
----------- -----------
AHC Purchaser Holding, Inc., a Delaware corporation 100
C-1
63
EXHIBIT D
QUARTERLY FINANCIAL STATEMENT AND CENSUS DATA
Facility Name:
------------------------------------------------------------------
Management Company:
-------------------------------------------------------------
Report Date:
--------------------------------------------------------------------
QUARTER QUARTER QUARTER QUARTER 12 MONTHS
ENDING ENDING ENDING ENDING ENDING
(DATE) (DATE) (DATE) (DATE) (DATE)
CENSUS DATA
Total Number of Beds: ________ ________ ________ ________ ________
Number of Days in Period: ________ ________ ________ ________ ________
Total Patient Days Available: ________ ________ ________ ________ ________
Patient Utilization Days:
Medicaid ________ ________ ________ ________ ________
Private ________ ________ ________ ________ ________
Medicare ________ ________ ________ ________ ________
Other ________ ________ ________ ________ ________
Total Utilization Days: ________ ________ ________ ________ ________
CASH FLOW ANALYSIS
Total Routine Patient Revenue: ________ ________ ________ ________ ________
Total Net Revenue: ________ ________ ________ ________ ________
Total Expenses: ________ ________ ________ ________ ________
Pre-Tax Income: ________ ________ ________ ________ ________
ADD BACK
Depreciation and Amortization: ________ ________ ________ ________ ________
Interest on Mortgage: ________ ________ ________ ________ ________
Facility Lease Expense (if applicable): ________ ________ ________ ________ ________
Management Fees: ________ ________ ________ ________ ________
Extraordinary Items: ________ ________ ________ ________ ________
Net Operating Income: ________ ________ ________ ________ ________
I hereby certify the above to be true and correct. Dated this ____ day
of _________, _____.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
D-1
64
EXHIBIT E
COMPLIANCE CERTIFICATE
GMAC Commercial Mortgage Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
RE: Loan Agreement dated January ___, 2000 (together with
amendments, if any, the "Loan Agreement"), by and between GMAC
Commercial Mortgage Corporation, as Lender, and AHC Purchaser,
Inc., as Borrower
The undersigned officer of the above-named Borrower, does hereby certify that
for the quarterly financial period ending ____________________:
1. No Default or Event of Default has occurred or exists except
____________________.
2. The Debt Service Coverage for the Facility after deduction of
Actual Management Fees for the preceding twelve (12) months (or such lesser
period as shown have elapsed following the closing of the Loan) through the end
of such period was:
Required: 1.10 to 1.0
Actual: _____ to 1.0
THE MANNER OF CALCULATION IS ATTACHED.
3. The Debt Service Coverage for the Facility after deduction of
Assumed Management Fees for the preceding twelve (12) months (or such lesser
period as shall have elapsed following the closing of the Loan) through the end
of such period was:
Required: 1.25 to 1.0
Actual: _____ to 1.0
THE MANNER OF CALCULATION IS ATTACHED.
4. The fiscal year to date average daily occupancy for the Facility:
Required: Not less than 80%
Actual: __________
▇-▇
▇▇
▇. The capital expenditures per unit was: [ANNUAL COMPLIANCE
CERTIFICATE ONLY]
Required: $250 per unit.
Actual: $______ per unit.
EVIDENCE OF SUCH CAPITAL EXPENDITURES IS ATTACHED.
6. Capitalized terms not defined herein shall have the meanings
given to such terms in the Loan Agreement.
7. The Persons owning interests, and percentage of ownership in
(a) Borrower and (b) Guarantor as of the date hereof are set forth below:
8. All information set forth in this Certificate is true and
correct in all material respects (a) as of the date of this Certificate with
respect to Paragraph 1, and (b) as of the end of the quarter for which the
information is provided in all other Paragraphs.
AHC PURCHASER, INC., a Delaware corporation,
Borrower
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
ALTERRA HEALTCHCARE CORPORATION, a Delaware
corporation, Lessee
By:
---------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
Dated this the _____ day of _____________, 200__.
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
PERMITTED LIENS
I. The real property on which is situated the Abilene Facility as more
particularly described in Exhibit "A-1" attached hereto:
1. Taxes for the year 2000 and all subsequent years. None now due
and payable.
2. Easement granted City of Abilene, Kansas by instrument date
August 8, 1995 and recorded in Misc. Book 230, Page 950.
Grants a permanent and perpetual easement for utility purposes
on the West 10 feet of the property.
3. The burden of joint easement for ingress, egress, and parking,
dated November 10, 1997, by and between The City of Abilene,
Kansas, a municipal corporation and Sterling House
Corporation, filed November 13, 1997 and recorded in Misc.
Book 237, Page 450.
4. Terms and Provisions of Easement granted Sterling House
Corporation by instrument dated November 10, 1997 and recorded
in Misc. Book 237, Page 458. (Affects Parcel C only.)
5. Rights of residents, as of the date hereof, as residents only,
pursuant to unrecorded leases.
II. The real property on which is situated the ▇▇▇ Arbor Facility as more
particularly described in Exhibit "A-2" attached hereto:
1. Easement of sanitary sewer facilities as recorded in Liber
2238, page 907, Washtenaw County Records.
2. Grant of Easement to the City of ▇▇▇ Arbor for sanitary sewer
as recorded in Liber 1784, page 569, Washtenaw County Records.
3. Cranbrook Subdivision Escrow Agreement between the City of ▇▇▇
Arbor and Cranbrook Venture as recorded in Liber 2155, page
988, Washtenaw County Records.
4. Subject to the terms and conditions of an Easement Agreement
as recorded in Liber 2238, page 895, Washtenaw County Records.
5. Declaration of Covenants as recorded in Liber 2279, page 589,
Washtenaw County Records.
F-1
67
6. Easement for watermains, storm sewers, sanitary sewers and
drainage over the lot as shown in the Master Deed recorded in
Liber 3016, page 455 through 492, both inclusive, Washtenaw
County Records.
7. Private Easement granted to Michigan ▇▇▇▇ Telephone Company as
recorded in Liber 1204, page 397, Washtenaw County Records.
8. Subject to a Underground Right of Way Agreement in favor of
the Detroit Edison Company as recorded in Liber 2257, page
287, Washtenaw County Records.
9. Subject to the rights of the co-owners of Brookhaven
Condominium, in general common elements and limited common
elements, as set forth in the Master Deed recorded in Liber
3016, page 455 through 492, both inclusive, Washtenaw County
Records, and as described in Act 59 of the Public Acts of
1978, as amended, and all of the terms and conditions,
regulations, restrictions, easements and other matters as set
forth in the above described Master Deed and Statute.
10 Taxes for year 2000 and subsequent years not yet due and
payable.
11. Rights of residents in possession, as of the date hereof, as
residents only, under unrecorded residency agreements.
III. The real property on which is situated the Bowling Green Facility as
more particularly described in Exhibit "A-3" attached hereto:
1. Taxes and assessments for the full year 2000 are a lien but
not yet due and payable.
2. If applicable, said premises are subject to unpaid charges, if
any, for sewer and/or water services provided to said
premises.
3. Zoning regulations, if any, imposed by the zoning designation
applicable to the premises as set forth on the zoning
endorsement which is a part of Lender's title policy.
4. Rights of residents in possession as of the date hereof, as
residents only, under unrecorded residency agreements.
IV. The real property on which is situated the Deland Facility as more
particularly described in Exhibit "A-4" attached hereto:
1. Any claim that any portion of said lands are sovereign lands
of the State of Florida, including submerged, filled or
artificially exposed lands and lands accreted to such lands.
F-2
68
2. Taxes and assessments for the year 2000 and subsequent years,
not yet due and payable.
3. Rights of residents in possession as of the date hereof, as
residents only, under any unrecorded residency agreements.
4. The plat of Scarlett's Subdivision, recorded in Deed Book G,
Page 660, Public Records of Volusia County, Florida.
V. The real property on which is situated the Hays Facility as more
particularly described in Exhibit "A-5" attached hereto:
1. All assessments and taxes due for the 2nd half of year 1999,
due and payable, but not delinquent.
2. The lien of any special taxes or assessments entered after the
date hereof, none, now due and payable.
3. Covenants, conditions and restrictions as contained in Plat
and Dedication of ▇▇▇▇▇▇▇▇▇ First Addition to the City of
Hays, Kansas, filed in Book 407 of OGL, page 451, relating to
land use and building types; fencing; Architectural Control
Committee; easement; nuisances; recreational vehicles;
outbuildings; utilities and media services.
4. A utility easement over the East 10 feet of the land and over
the West 20 feet of the land, as shown on the aforesaid
▇▇▇▇▇▇▇▇▇ First Additional to the City of Hays, Kansas.
5. A 75 foot building setback line over the South line of the
land from the centerline of ▇▇▇▇ ▇▇▇▇▇▇ as shown on the
aforesaid Plat.
VI. The real property on which is situated the Leesburg Facility as more
particularly described in Exhibit "A-6" attached hereto:
1. Any claim that any portion of said lands are sovereign lands
of the State of Florida, including submerged, filled or
artificially exposed lands and lands accreted to such lands.
2. Taxes and assessments for the year 2000 and subsequent years
not yet due and payable.
3. Rights of residents in possession as of the date hereof, as
residents only, under any unrecorded residency agreements.
F-3
69
4. Potable Water Utility Easement by Sterling House Corporation,
a Kansas corporation, to the City of Leesburg, Florida, and
filed in Official Records Book 1506, Page 1102, Public Records
of Lake County, Florida.
5. Ingress/Egress and Lighting Easement by Meditrust Company,
LLC, a Delaware limited liability company (successor by merger
to Meditrust of Florida, Inc.), to ALS-Clare Bridge, Inc., a
Delaware corporation, filed in Official Records Book 1667,
Page 1607, Public Records of Lake County, Florida.
6. The burdens and the terms and conditions of Reciprocal
Retention and Drainage Easement by and between Meditrust
Company, LLC, a Delaware limited liability company (successor
by merger to Meditrust of Florida, Inc.), and ALS-Clare
Bridge, Inc., a Delaware corporation, filed in Official
Records Book 1667, Page 1595, Public Records of Lake County,
Florida.
7. Restrictive Covenants recorded July 5, 1978, in Official
Records Book 654, Page 971, of the Public Records of Lake
County, Florida. Restrictions concerning nursing homes and
professional offices were removed by Release of Restrictive
Covenants, dated May 31, 1996, and recorded June 6, 1996, in
Official Records Book 1442, Page 397, Public Records of Lake
County, Florida.
8. Matters as disclosed in and by virtue of that certain
ALTA/ACSM Land Title Boundary Survey prepared by McGlohorn
Land Surveyor, Inc., dated January 14, 2000, last revised
1/19/2000, as follows:
a) encroachment of sod (plus or minus) 6 feet over
northern boundary line.
b) encroachment of mitered end section of drainage pipe
approximately 0.51 feet over southern property line.
VII. The real property on which is situated the Mansfield Facility as more
particularly described in Exhibit "A-7" attached hereto:
1. Plat Volume 22, Page 83 shows a 40 foot building setback line
on Middle Bellville, ▇▇▇▇▇▇ Road and Sequoia and an 8 foot
easterly utility easement.
2. The premises are subject to a right of way, filed for record
February 9, 1912, established by instrument recorded in Volume
7, Page 446 of Richland County Records.
3. The premises are subject to an easement, filed for record July
14, 1978, established by the instrument recorded in Volume
775, Page 451 of Richland County Records.
F-4
70
4. The premises are subject to an easement, filed for record May
31, 1978, established by the instrument recorded in Volume
773, Page 23 of Richland County Records.
5. The premises are subject to an easement, filed for record
November 21, 1977, established by the instrument recorded in
Volume 764, Page 321 of Richland County Records.
6. The premises are subject to an easement, from Sterling House
to Multi Cannel TV Cable Company filed for record December 31,
1997, established by the instrument recorded in Volume 0561,
Page 403 of Richland County Records.
7. The premises are subject to an easement, from Sterling House
to Ohio Edison Company filed for record February 6, 1998,
established by the instrument recorded in Volume 0568, Page
536 of Richland County Records.
8. The survey done by ▇▇▇▇ ▇. ▇▇▇▇ Registered Surveyor Number
7384 of ▇▇▇▇▇▇▇▇ Associates dated December 24, 1999 and being
Project No. 97-1283 shows the following:
(A) Overhead electrical line crossing the North property line.
(B) Cable line crossing over the Northeast property line.
(C) Storm sewer and sanitary sewer crossing over the East
property line.
9. Taxes for the year 1999 are a lien, but not yet due and
payable.
10. Rights of residents in possession as of the date hereof, as
residents only, under unrecorded residency agreements.
VIII. The real property on which is situated the ▇▇▇▇▇▇▇▇▇▇ I and II
Facilities as more particularly described in Exhibit "A-8" attached
hereto:
1. Taxes or special assessments which are not shown except as
otherwise specifically set forth herein, as existing liens by
the public record.
2. Title to that portion of premises lying within the bed of
Horsham Road is subject to public and private rights therein.
3. Deed of Release to County of ▇▇▇▇▇▇▇▇▇▇ as in Deed Book 1155
page 194.
4. Rights granted to the Philadelphia Electric Co. as in Deed
Book 1160 page 28.
5. Rights granted to the Peco Energy Co. as in Deed Book 5142
page 1086.
6. Rights granted to ▇▇▇▇ Atlantic-Pennsylvania, Inc. as in Deed
Book 5150 page 1621.
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7. Declaration of Covenants and Restrictions as in Deed Book 5138
page 771.
8. Land Development Agreement as in Deed Book 5138 page 776; and
First Amendment thereto recorded in Deed Book 5161 page 1766.
9. Tapping Fee and Development Agreement as in Deed Book 5138
page 1760.
10. Deed of Declaration of Public Water Easement as in Deed Book
5140 page 1201.
11. Tapping Fee and Development Agreement Clare Bridge of
▇▇▇▇▇▇▇▇▇▇, Phase 2 as in Deed Book 5180 page 1399.
12. Land Development Agreement as in Deed Book 5182 page 527.
13. Declaration of Covenants and Restrictions as in Deed Book 5182
page 548.
14. Conditions disclosed on Plan recorded in Land Site Plan Book 3
page 225 and in Land Site Plan Book 3 page 480:
a) Building set back lines
b) Easement of Wetlands Boundary
c) Future Widening of Horsham Road
d) Easement of 20 feet wide sanitary sewer easement over
Northeast
e) Notes
IX. The real property on which is situated the New Braunfels Facility as
more particularly described in Exhibit "A-9" attached hereto:
1. Standby fees, taxes and assessments by any taxing authority
for the year 2000 and subsequent years, and subsequent taxes
and assessments by any taxing authority for prior years due to
change in land usage or ownership.
2. Liens and leases that affect the title to the land, but that
are subordinate to the lien of the insured mortgage.
3. The following matters and all terms of the documents creating
or offering evidence of the matters.
a. Water Quality Control Zoning or ruling orders issued
by the Water Quality Board of Texas, the
Environmental Protection Agency, or any other
governmental agencies having jurisdiction over
subject property due to the location of subject
property over the Edward's Underground Aquifer or its
Recharge Zone.
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b. Aerial easement five feet on each side of all
easements and streets and extended upward as required
for the purpose of utilities as recited on map and
plat recorded in Volume 12, Page 65, Comal County Map
and Plat Records.
c. 25 foot building setback line and a 20 foot utility
easement along Loop 337; a 20 foot utility easement
along the rear and a private 20 foot access along the
rear property line as shown on map and plat recorded
in Volume 12, page 65, Comal County, Texas Map and
Plat Records.
d. Reservation of an easement for a right of access to
utilities as shown on plat and set out in Doc
#9606024962, Official Public Records, Comal County,
Texas.
e. Rights of residents in possession, as of the date
hereof, as residents only, pursuant to unrecorded
leases.
X. The real property on which is situated the Northampton Manor Facility
as more particularly described in Exhibit "A-10" attached hereto:
1. Taxes or special assessments which are not shown as existing
liens except as otherwise specifically set forth herein by the
public records.
2. Title to that portion of premises lying within the bed of
Newtown - Richboro Road (S.R. 332) is subject to public and
private rights therein.
3. Agreement as in Deed Book 2580 page 436.
4. Public Water Improvement Agreement as in Deed Book 2847 page
1.
5. Sanitary Sewer Improvement Agreement as in Deed Book 2847 page
34.
6. Rights granted to Philadelphia Electric Company as in Deed
Book 2858 page 78.
7. Restrictions and Reservations as in Land Record Book 79 page
1265.
8. Deed of Dedication (Roadway Right of Way) as in Land Record
Book 92 page 421.
9. Rights granted to The ▇▇▇▇ Telephone Company of Pennsylvania
as in Land Record Book 127 page 2365 and Land Record Book 172
page 403.
10. Deed of Dedication (Public Water and Sanitary Sewer
Facilities) as in Land Record Book 291 page 1072.
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11. Reservations as in Land Record Book 386 page 2086 and Land
Record Book 395 page 532.
12. Deed of Temporary Construction and Grading Easement as in Land
Record Book 924 page 1089.
13. Conditions of an Easement Agreement as in Land Record Book 924
page 1095.
14. Deed of Dedication (Public Water and Sanitary Sewer
Facilities) as in Land Record Book 1190 page 1547.
15. Final Plan recorded in Plan Book 223 page 76, shows the
following:
a) Future road widening line
b) Notes
c) Building setback lines
16. Final Plan of Willow Bend as recorded in Plan Book 248 page 97
shows the following:
a) Building set back lines
b) 30 foot wide sanitary sewer easement extends through
premises
c) Notes
d) Detention basin.
17. Plan as recorded in Plan Book 274 page 41, shows the following:
a) Building set back lines
b) Easement of driveway extending onto lands adjoining
to the West.
18. Plan recorded in Plan Book 278 page 29, shows the following:
a) Notes
b) Existing sanitary sewer easement
c) Requirement of building set back lines
d) Easement of utility poles and guy wire along
▇▇▇▇▇▇-Richboro Road
e) Easement of drive extending onto lands adjoining to
the West
f) Utility easement
g) Permanent grading and stormwater management easement
h) Detention basin.
19. Rights of access to Center Street are not insured. The Plan as
recorded in Plan Book 278 page 29 shows as "wood barrier"
being erected along the end of Center Street.
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20. Conditions disclosed by a Survey made for Northampton Manor by
▇▇▇▇▇▇▇▇ Engineering Associates, Inc., dated 10/22/1996,
revised 11/6/1996, as follows:
a) Surveyor's Notes
b) Public Utilities servicing premises
c) Detention Basin located on Tax Parcel ▇▇-▇▇-▇▇▇
d) Building setback lines
e) Sanitary Sewer on Northerly portion of property
f) Stormwater management easement
g) Temporary stone parking
h) Portion of decks, fences and concrete pads encroach
into grading and stormwater management easement but
do not substantially impair the use of that easement
i) Ultimate right-of-way line encroaches on southerly
property line
j) 8" VCP on Southerly portion of property
k) 18" RCP on Southerly and Westerly portion of property
l) Driveway encroaches on the northeastern boundary of
subject premises.
21. Rights of residents in possession, as of the date hereof, as
residents only, pursuant to unrecorded leases.
XI. The real property on which is situated the Port Orange Facility as more
particularly described in Exhibit "A-11" attached hereto:
1. Any claim that any portion of said lands are sovereign lands
of the State of Florida, including submerged, filled or
artificially exposed lands and lands accreted to such lands.
2. Taxes or special assessments for the year 2000 and subsequent
years not yet due and/or payable.
3. Rights of residents as of the date hereof, as residents only,
under any unrecorded residency agreements.
4. Countryside PUD (Planned Unit Development) Agreement filed
December 18, 1981 in Official Records Book 2317, page 1531,
and First Amendment to Countryside PUD Agreement filed March
23, 1987 in Official Records Book 2954, page 1529, Public
Records of Volusia County, Florida.
5. Restrictions, reservations and easements as indicated and/or
shown on the recorded plat of said subdivision, recorded in
Map Book 45, Page 161, Public Records of Volusia County,
Florida, which easements are as follows:
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(a) 10 foot wide conservation easement to City of Port
Orange along the southern boundary of the insured
parcel.
(b) 12 foot wide drainage and utility easement to City of
Port Orange along the southern boundary of the
insured parcel.
(c) 7.5 foot wide drainage and utility easement to City
of Port Orange along the eastern and western
boundaries of the insured parcel.
(d) 10 foot wide underground utility easement to City of
Port Orange and pedestrian access easement to
Countryside Residential Homeowners Association.
6. Amended and Restated Declaration of Residential Covenants and
Restrictions, Countryside Planned Unit Development filed
February 7, 1989 in Official Records Book 3258, page 1454,
Public Records of Volusia County, Florida.
7. City of Port Orange Standard Form of Subdivision Improvement
Agreement between the City of Port Orange, and Coastline
Enterprises, Inc., filed in Official Records Book 2754, page
1488, Public Records of Volusia County, Florida.
XII. The real property on which is situated the Stuart Facility as more
particularly described in Exhibit "A-12" attached hereto:
1. Any claim that any portion of said lands are sovereign lands
of the State of Florida, including submerged, filled or
artificially exposed lands and lands accreted to such lands.
2. Taxes or special assessments for the year 2000 and subsequent
years, not yet due and/or payable.
3. Rights of residents as of the date hereof, as residents only,
under any unrecorded residency agreements.
4. Easement recorded in Official Records Book 1189, page 1272,
Public Records of ▇▇▇▇▇▇ County, Florida.
5. Resolution Number 137-A-95 of the City Commission City of
Stuart, Florida, regarding Easement Exchange Agreement
recorded in Official Records Book 1154, Page 2606, Public
Records of ▇▇▇▇▇▇ County, Florida.
6. Declaration of Common Use; Access and Maintenance for Lift
Station; Water Mains and Drainage Easement recorded in
Official Records Book 1154, Page 2617, Public Records of
▇▇▇▇▇▇ County, Florida.
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7. Grant of Easement recorded in Official Records Book 1172, Page
2685, Public Records of ▇▇▇▇▇▇ County, Florida.
XIII. The real property on which is situated the Sussex Facility as more
particularly described in Exhibit "A-13" attached hereto:
1. General taxes for the year 1999, due and payable on 3/31/2000,
and subsequent years thereto.
2. Terms, conditions, restrictions and provisions, relating to
the use and maintenance of the easement described as Parcel B
of the subject premises as contained in Easement recorded as
Document No. 2014740 and First Amendment to Easement Agreement
recorded as Document No. 2163800.
3. Utility Easement granted to Wisconsin Gas and Electric Company
recorded as Document No. 135720, at Vol. 191, Page 222.
4. Utility Easement granted to Wisconsin Gas and Electric Company
recorded as Document No. 256180 at Vol. 338, page 101.
5. Utility Easement granted to Wisconsin Telephone Company and
the Lisbon Telephone Corporation recorded as Document No.
458971, at Vol. 740, page 1.
6. Ingress and Egress Easement set forth in Certified Survey Map
No. 7557.
7. Rights of residents in possession as of the date hereof, as
residents only, under unrecorded residency agreements.
XIV. The real property on which is situated the Tequesta I and II Facilities
as more particularly described in Exhibit "A-14" attached hereto:
1. Any claim that any portion of said lands are sovereign lands
of the State of Florida, including submerged, filled or
artificially exposed lands and lands accreted to such lands.
2. Taxes and assessments for the year 2000 and subsequent years,
not yet due and payable.
3. The rights of residents in possession as of the date hereof as
residents only, under unrecorded residency agreements.
4. Standard Developer Agreement by and between Loxahatchee River
Environmental Control District, and Sterling House
Corporation, filed in Official Records Book 10047, Page 650,
Public Records of Palm Beach County, Florida.
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77
5. Matters contained in Notice of Lien Rights filed by
Loxahatchee River Environmental Control District recorded in
Official Records Book 4984, Page 1254, Revised Notice of Lien
Rights filed in Official Records Book 7048, Page 655 and
Second Revised Notice of Lien Rights filed in Official Records
Book 7187, Page 1712, Public Records of Palm Beach County,
Florida.
6. Standard Developer Agreement by Loxahatchee River
Environmental Control District, filed in Official Records Book
9233, Page 1404, of the Public Records of Palm Beach County,
Florida.
7. Developer Agreement by and between Sterling House Corporation,
and Tequesta Water Department, filed in Official Records Book
9334, Page 1615, of the Public Records of Palm Beach County,
Florida.
8. Developer's Agreement by and between Village of Tequesta,
Florida, and Sterling House Corporation, a Kansas corporation,
filed in Official Records Book 10159, Page 56, of the Public
Records of Palm Beach County, Florida.
9. Water Service Agreement by and between Sterling House
Corporation, and Tequesta Water Department, filed in Official
Records Book 10302, Page 1123, Public Records of Palm Beach
County, Florida.
10. Unity of Title Agreement by and between Meditrust Company LLC,
a Delaware limited liability company, successor by merger to
Meditrust of Florida, Inc., a New York corporation, and
Village of Tequesta, filed in Official Records Book 10430,
Page 1942, Public Records of Palm Beach County, Florida.
11. The burdens and terms and conditions of Reciprocal Retention
and Drainage Easement by Meditrust Company LLC, a Delaware
limited liability company (successor by merger to Meditrust of
Florida, Inc.), to ALS-Clare Bridge, Inc., a Delaware
corporation, filed in Official Records Book 10845, Page 137,
Public
Records of Palm Beach County, Florida.
12. Parking, Ingress/Egress and Utilities Easement by Meditrust
Company LLC, a Delaware limited liability company (successor
by merger to Meditrust of Florida, Inc.), to ALS-Clare Bridge,
Inc., a Delaware corporation, filed in Official Records Book
10845, Page 169, Public Records of Palm Beach County, Florida.
13. Sewer Easement Deed Between Meditrust Company, LLC a Delaware
limited liability company (successor by merger to Meditrust of
Florida, Inc.), and Loxahatchee River Environmental Control
District, filed in O.R. Book 10846, page 86, Public Records of
Palm Beach County, Florida.
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14. The plat of Sterling House of Tequesta as recorded on May 19,
1998, in Plat Book 82, page 102, Public Records of Palm Beach
County, Florida.
15. Declaration of Easement Between Assisted Living Properties,
Inc. and The Village of Tequesta recorded in Official Records
Book 10005, Page 346, Public Records of Palm Beach County,
Florida, as disclosed by that certain ▇▇▇▇ of Sale between
Assisted Living Properties, Inc., and Village of Tequesta,
filed in Official Records Book 10005, Page 344, Public Records
of Palm Beach County, Florida.
16. Easement in favor of Florida Power and Light, recorded in
Official Records Book 9728, Page 1872, Public Records of Palm
Beach County, Florida.
XV. The real property on which is situated the West Melbourne I and II
Facilities as more particularly described in Exhibit "A-15" attached
hereto:
1. Any claim that any portion of said lands are sovereign lands
of the State of Florida, including submerged, filled or
artificially exposed lands and lands accreted to such lands.
2. Taxes or special assessments for the year 2000 and subsequent
years, not yet due and/or payable.
3. Rights of residents in possession, as of the date hereof, as
residents only, under any unrecorded residency agreements.
4. Restrictions, covenants, conditions and easements shown on the
plat of Greenboro Acres, recorded on May 4, 1983, in Plat Book
29, Pages 66 and 67, of the Public Records of Brevard County,
Florida, which shows an easement of 14 feet along the front
lot line property line for public utility and drainage
easement purposes as set out and reserved on said plat.
5. Easement to Florida Power & Light Company, dated December 13,
1996, filed in Official Records Book 3629, page 1165, Public
Records of Brevard County, Florida.
6. Easement to Florida Power & Light Company, dated January 30,
1998, filed in Official Records Book 3780, Page 1910, Public
Records of Brevard County, Florida.
7. Grant of Easement by Meditrust of Florida, Inc. to the City of
West Melbourne, dated March 20, 1998, filed in Official
Records Book 3815, Page 2608, Public Records of Brevard
County, Florida.
XVI. The real property on which is situated the Wichita Facility as more
particularly described in Exhibit "A-16" attached hereto:
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79
1. Easement to Kansas Gas and Electric Company over the North 5
feet of the South 55 feet of the Southwest Quarter recorded in
Film 457 at Page 213 as shown granted on the recorded plat in
the office of the Sedgwick County Register of Deeds.
2. Utility Easement to the City of Wichita recorded on Film 476
at Page 309 and as shown and granted on the recorded plat in
the office of the Sedgwick County Register of Deeds.
3. Drainage Easement to the City of Wichita recorded on Film 1809
at Page 1321 in the office of the Sedgwick County Register of
Deeds.
4. Vacation order for vacation of drainage easement and
dedication of additional drainage easement recorded on Film
1809 at Page 1285, of aforesaid records.
5. Building Setback Lines, Easements and Access control minimum
pad elevation established by and shown on recorded plat of
said subdivision in the office of the Sedgwick County Register
of Deeds.
6. Avigational Easement for "Navigable Airspace" as recorded on
Film 1289 at Page 1352 in the office of the Sedgwick County
Register of Deeds.
7. Terms, Conditions and Restrictions (deleting any restrictions
indicating any preference, limitation or discrimination based
on age, color, religion, sex, handicap, financial status or
national origin) as contained in the Declaration of
Restrictions, Covenants and Conditions (which do not contain a
forfeiture or reverter clause) on Film 172 at Page 879 in the
office of the Sedgwick County Register of Deeds.
8. Terms, Conditions and Restrictions (deleting any restrictions
indicating any preference, limitation or discrimination based
on age, color, religion, sex, handicap, financial status or
national origin) as contained in the Declaration of
Restrictions, Covenants and Conditions (which do not contain a
forfeiture or reverter clause) on Film 1289 at Page 1351 in
the office of the Sedgwick County Register of Deeds.
9. Encroachment of a cedar fence over the North line and a chain
link fence over the east line as disclosed by the survey of
▇▇▇▇▇▇▇▇▇ Land Survey, P.A. dated January 17, 1996, last
revised ___________, 2000.
10. Any special assessment arising from Certificate on Film 1289
at Page 1353 (Misc.), and Resolution on Film 1349 at Page 875
(Sewer) all in the office of the Sedgwick County Register of
Deeds.
11. Rights of residents in possession as of the date hereof, as
residents only; under unrecorded residency agreements.
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12. Real Estate Taxes and Special Assessments for the year 1999
and subsequent years, a lien due and/or payable but not
delinquent.
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EXHIBIT G
LIST OF PRIOR TRADE NAMES
FACILITY OWNER FROM DATE OF LEASEHOLDER PRIOR TRADE NAME/DBA
ACQUISITION BY ALTERRA
HEALTHCARE CORPORATION'S
AFFILIATES
----------------------------------------------------------------------------------------------------------------------------
Alterra Clare Meditrust Acquisition Company, LLC, ALS Leasing, Inc. Alterra Clare Bridge of ▇▇▇ Arbor;
Bridge of ▇▇▇ successor by merger to Meditrust (prior) Clare Bridge of ▇▇▇ Arbor; Alterra
Arbor Acquisition Corporation III Clare Bridge; Clare Bridge; Alterra
Alterra Healthcare Assisted Living Properties, Inc.;
Alternative Living Services-Midwest, Corporation (current) Assisted Living Properties, Inc.
Inc.
----------------------------------------------------------------------------------------------------------------------------
Alterra Sterling New Meditrust Company LLC, Assisted Living Alterra Sterling House of Bowling
House of successor by merger to Meditrust of Properties, Inc. Green; Sterling House of Bowling
Bowling Green Ohio, Inc. (prior) Green; Alterra Sterling House;
Sterling House
York Development, L.P. Alterra Healthcare
Corporation (current)
Sterling House Corporation
----------------------------------------------------------------------------------------------------------------------------
Alterra Sterling New Meditrust Company LLC, Assisted Living Alterra Sterling House of Mansfield;
House of successor by merger to Meditrust of Properties, Inc. Sterling House of Mansfield; Alterra
Mansfield Ohio, Inc. (prior) Sterling House; Sterling House
Sterling House Corporation Alterra Healthcare
Corporation (current)
----------------------------------------------------------------------------------------------------------------------------
Alterra Meditrust Acquisition Company LLC, ALS Leasing, Inc. Alterra Wynwood of Northampton
Wynwood of successor by merger to Meditrust (prior) Manor; Wynwood of Northampton
Northampton Acquisition Corporation III Manor; Alterra Wynwood;
Manor Alterra Healthcare Wynwood; Alterra Wynwood of
CCCI/ Corporation (current) Northampton; Wynwood of
Northampton Limited Partnership Northampton;
----------------------------------------------------------------------------------------------------------------------------
Alterra Clare Meditrust Acquisition Company LLC, ALS Leasing, Inc. Alterra Clare Bridge of
Bridge of successor by merger to Meditrust (prior) ▇▇▇▇▇▇▇▇▇▇; ▇▇▇▇▇ Bridge of
▇▇▇▇▇▇▇▇▇▇ Acquisition Corporation III/ ▇▇▇▇▇▇▇▇▇▇; Alterra Clare Bridge;
Alterra Healthcare Clare Bridge
Clare Bridge of ▇▇▇▇▇▇▇▇▇▇, a Corporation (current)
Pennsylvania General Partnership
----------------------------------------------------------------------------------------------------------------------------
Alterra Meditrust Acquisition Company LLC, ALS Leasing, Inc. Alterra Wynwood of ▇▇▇▇▇▇▇▇▇▇;
Wynwood of successor by merger to Meditrust (prior) Wynwood of ▇▇▇▇▇▇▇▇▇▇; Alterra
▇▇▇▇▇▇▇▇▇▇ Acquisition Corporation III Wynwood; Wynwood
Alterra Healthcare
Clare Bridge of ▇▇▇▇▇▇▇▇▇▇, a Corporation (current)
Pennsylvania General Partnership
----------------------------------------------------------------------------------------------------------------------------
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82
FACILITY OWNER FROM DATE OF LEASEHOLDER PRIOR TRADE NAME/DBA
ACQUISITION BY ALTERRA
HEALTHCARE CORPORATION'S
AFFILIATES
----------------------------------------------------------------------------------------------------------------------------
Alterra Sterling T and F Properties LP Assisted Living Alterra Sterling House of New
House of New Properties, Inc. Braunfels; Sterling House of New
Braunfels Meditrust of Texas, Inc. Braunfels; Alterra Sterling House;
Sterling House
Sherwood Development, LLC
Sterling House Corporation
----------------------------------------------------------------------------------------------------------------------------
Alterra Sterling New Meditrust Company LLC, Assisted Living Alterra Sterling House of Deland;
House of Deland successor by merger to Meditrust of Properties, Inc. Sterling House of Deland; Alterra
Florida, Inc. Sterling House; Sterling House
Sterling House Corporation
----------------------------------------------------------------------------------------------------------------------------
Alterra Sterling New Meditrust Company LLC, Assisted Living Alterra Sterling House of Leesburg;
House of successor by merger to Meditrust of Properties, Inc. Sterling House of Leesburg; Alterra
Leesburg Florida, Inc. Sterling House; Sterling House
Sterling House Corporation
----------------------------------------------------------------------------------------------------------------------------
Alterra Sterling New Meditrust Company LLC, Assisted Living Alterra Sterling House of W.
House of W. successor by merger to Meditrust of Properties, Inc. Melbourne II; Sterling House of W.
Melbourne II Florida, Inc. Melbourne II; Alterra Sterling
(7200 Greenboro House of W. Melbourne; Sterling
Drive) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ a/k/a ▇▇▇▇▇▇▇ ▇. House of W. Melbourne; Alterra
Saundry, Sr. Sterling House; Sterling House
----------------------------------------------------------------------------------------------------------------------------
Alterra Sterling New Meditrust Company LLC, Assisted Living Alterra Sterling House of W.
House of W. successor by merger to Meditrust of Properties, Inc. Melbourne I; Sterling House of W.
Melbourne I Florida, Inc./ Melbourne I; Alterra Sterling House
(7300 Greenboro of W. Melbourne; Sterling House of
Drive) Sterling House Corporation W. Melbourne; Alterra Sterling
House; Sterling House
----------------------------------------------------------------------------------------------------------------------------
Alterra Sterling New Meditrust Company LLC, Assisted Living Alterra Sterling House of Port
House of Port successor by merger to Meditrust of Properties, Inc. Orange; Sterling House of Port
Orange Florida, Inc. Orange; Alterra Sterling House;
Sterling House
Claremont Development, L.P.
----------------------------------------------------------------------------------------------------------------------------
Alterra Sterling New Meditrust Company LLC, Assisted Living Alterra Sterling House of Tequesta;
House of successor by merger to Meditrust of Properties, Inc. Sterling House of Tequesta; Alterra
Tequesta Florida, Inc. Sterling House of Tequesta I;
(205 Village Sterling House of Tequesta I;
Boulevard) Sterling House Corporation Alterra Sterling House; Sterling
House
----------------------------------------------------------------------------------------------------------------------------
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83
FACILITY OWNER FROM DATE OF LEASEHOLDER PRIOR TRADE NAME/DBA
ACQUISITION BY ALTERRA
HEALTHCARE CORPORATION'S
AFFILIATES
----------------------------------------------------------------------------------------------------------------------------
Alterra Sterling New Meditrust Company LLC, Assisted Living Alterra Sterling House of Tequesta
House of successor by merger to Meditrust of Properties, Inc. II; Sterling House of Tequesta II;
Tequesta II Florida, Inc. Alterra Sterling House of Tequesta;
(211 Village Sterling House of Tequesta; Alterra
Boulevard) Sterling House Corporation Sterling; Sterling House
----------------------------------------------------------------------------------------------------------------------------
Alterra Sterling Meditrust of Kansas, Inc. Assisted Living Alterra Sterling House of Abilene
House of Abilene Properties, Inc. II; Sterling House of Abilene II;
II Sterling House Corporation (prior) Alterra Sterling House of Abilene;
Sterling House of Abilene; Alterra
Alterra Healthcare Sterling House; Sterling House
Corporation (current)
----------------------------------------------------------------------------------------------------------------------------
Alterra Sterling Meditrust of Kansas, Inc. Assisted Living Alterra Sterling House of ▇▇▇▇;
House of ▇▇▇▇ Properties, Inc. Sterling House of ▇▇▇▇; Alterra
▇▇▇▇ Assisted Living, L.L.C. (prior) Sterling House; Sterling House
Alterra Healthcare
Corporation (current)
----------------------------------------------------------------------------------------------------------------------------
Alterra Sterling Meditrust of Kansas, Inc. Assisted Living Alterra Sterling House of Wichita;
House of Wichita Properties, Inc. Sterling House of Wichita; Alterra
Sterling House Corporation (prior) Sterling House; Sterling House
Alterra Healthcare
Corporation (current)
----------------------------------------------------------------------------------------------------------------------------
Alterra Sterling New Meditrust Company LLC, Assisted Living Alterra Sterling House of Stuart;
House of Stuart successor by merger to Meditrust of Properties, Inc. Sterling House of Stuart; Alterra
Florida, Inc. Sterling House; Sterling House
Sterling House Corporation
----------------------------------------------------------------------------------------------------------------------------
Alterra New Meditrust Company LLC, ALS Leasing, Inc. Alterra Sterling House of Sussex;
WovenHearts of successor by merger to Meditrust of Sterling House of Sussex; Alterra
Sussex Florida, Inc./ Sterling House; Sterling House;
WovenHearts of Sussex;
ALS/ WovenHearts
WovenHearts Sussex, LLC
----------------------------------------------------------------------------------------------------------------------------
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