EXHIBIT 10.24
(▇▇▇▇▇▇▇ ▇▇▇▇▇ LOGO)
LOAN AGREEMENT
FOR A LOAN IN THE AMOUNT OF
$75,000,000.00
MADE BY AND AMONG
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, LLC,
92 BRICK ROAD, LLC, AND ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ HOLDING COMPANY LLC, EACH A DELAWARE LIMITED LIABILITY
COMPANY, AND SAN ▇▇▇▇▇▇▇ HEALTH CARE ASSOCIATES, LP, A DELAWARE LIMITED
PARTNERSHIP
AS "BORROWERS"
AND
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL,
A DIVISION OF ▇▇▇▇▇▇▇ ▇▇▇▇▇ BUSINESS FINANCIAL SERVICES INC.,
A DELAWARE CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
AS "LENDER"
PROJECT LOCATIONS:
NEW BEDFORD REHABILITATION HOSPITAL, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇;
NORTH VALLEY REHABILITATION HOSPITAL, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇;
MARLTON REHABILITATION HOSPITAL, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇;
SOUTHERN KENTUCKY REHABILITATION HOSPITAL, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇;
KENTFIELD REHABILITATION HOSPITAL, KENTFIELD, CA
SAN ▇▇▇▇▇▇▇ VALLEY REHABILITATION HOSPITAL, FRESNO, CA
DATED AS OF DECEMBER 31, 2004
TABLE OF CONTENTS
Page
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ARTICLE 1 INCORPORATION OF RECITALS, EXHIBITS AND SCHEDULES.............. 2
1.1 Incorporation of Recitals....................................... 2
1.2 Incorporation of Exhibits and Schedule.......................... 2
1.3 Definitional Provisions......................................... 2
ARTICLE 2 LOAN AND LOAN DOCUMENTS........................................ 2
2.1 [INTENTIONALLY OMITTED.]........................................ 2
2.2 Loan Documents.................................................. 2
2.3 Disbursements................................................... 2
2.4 Term of the Loan................................................ 3
2.5 Prepayments..................................................... 3
2.6 Interest........................................................ 3
2.7 Monthly Payments................................................ 3
2.8 Exit Fee........................................................ 3
2.9 Default Interest and Late Charge................................ 3
2.10 Collections, Cash Management and Clearing Accounts.............. 4
2.11 Marlton, New Jersey Property.................................... 4
ARTICLE 3 FINANCIAL REPORTING COVENANTS.................................. 5
3.1 Financial Information Reporting................................. 5
3.2 Financial Information Form and Examination...................... 7
ARTICLE 4 OPERATIONAL AND OTHER LEASE COVENANTS.......................... 7
4.1 Leasing and Operational Covenants............................... 7
4.2 Other Borrower Covenants........................................ 11
4.3 Authorized Representative....................................... 18
4.4 Health Care Matters............................................. 18
4.5 Financial Covenants............................................. 19
ARTICLE 5 BORROWERS' REPRESENTATIONS AND WARRANTIES...................... 19
5.1 Borrowers' Representations and Warranties....................... 19
ARTICLE 6 ENVIRONMENTAL MATTERS.......................................... 23
6.1 Environmental Representations and Warranties.................... 23
6.2 Environmental Covenants......................................... 24
6.3 Right of Entry and Disclosure of Environmental Reports.......... 25
6.4 Environmental Indemnitors' Remedial Work........................ 26
6.5 Environmental Indemnity......................................... 26
6.6 Remedies Upon an Environmental Default.......................... 27
6.7 Unconditional Environmental Obligations......................... 27
6.8 Assignment of Environmental Obligations Prohibited.............. 28
6.9 Indemnification Separate from the Loan.......................... 28
6.10 Further Security................................................ 29
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TABLE OF CONTENTS
(continued)
Page
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ARTICLE 7 CASUALTIES AND CONDEMNATION................................... 29
7.1 Lender's Election to Apply Insurance Proceeds on Indebtedness... 29
7.2 Borrowers' Obligation to Rebuild and Use of Insurance
Proceeds Therefor............................................ 30
ARTICLE 8 EVENTS OF DEFAULT AND REMEDIES................................ 30
8.1 Events of Default............................................... 30
8.2 Remedies Conferred Upon Lender.................................. 32
ARTICLE 9 LOAN EXPENSE, COSTS AND ADVANCES.............................. 33
9.1 Loan and Administration Expenses................................ 33
9.2 Right of Lender to Make Advances to Cure Borrowers' Defaults.... 34
9.3 Increased Costs................................................. 34
9.4 Borrower Withholding............................................ 34
9.5 Document and Recording Tax Indemnification...................... 34
ARTICLE 10 ASSIGNMENTS BY LENDER AND DISCLOSURE.......................... 35
10.1 Assignments and Participations.................................. 35
10.2 Disclosure of Information....................................... 35
ARTICLE 11 GENERAL PROVISIONS............................................ 35
11.1 Captions........................................................ 35
11.2 Waiver of Jury Trial............................................ 35
11.3 Jurisdiction.................................................... 36
11.4 Governing Law................................................... 36
11.5 Lawful Rate of Interest......................................... 36
11.6 Modification; Consent........................................... 37
11.7 Waivers; Acquiescence or Forbearance Not to Constitute
Waiver of Lender's Requirements................................. 37
11.8 California Waiver Provision..................................... 38
11.9 Disclaimer by Lender............................................ 39
11.10 Partial Invalidity; Severability................................ 39
11.11 Definitions Include Amendments.................................. 40
11.12 Execution in Counterparts....................................... 40
11.13 Entire Agreement................................................ 40
11.14 Waiver of Damages............................................... 40
11.15 Claims Against Lender........................................... 40
11.16 Set-Offs........................................................ 40
11.17 Relationship.................................................... 41
11.18 Agents.......................................................... 41
11.19 Interpretation.................................................. 41
11.20 Successors and Assigns.......................................... 41
11.21 Time is of the Essence.......................................... 41
11.22 Notices......................................................... 41
11.23 Joint and Several Liability..................................... 43
ARTICLE 12 PARTIAL RELEASE............................................... 44
12.1 Partial Release................................................. 44
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LIST OF EXHIBITS AND SCHEDULES TO LOAN AGREEMENT
Appendix A
----------
Exhibits A 1-4 The Projects
Exhibit B INTENTIONALLY OMITTED
Exhibit C INTENTIONALLY OMITTED
Exhibit D Litigation
Exhibit E Insurance Requirements
Exhibit F Environmental Documents
Exhibit G INTENTIONALLY OMITTED
Exhibit H Intellectual Property
Exhibit I Permitted Exceptions
Schedule I Definitions
Schedule II List of Project Lessees
Schedule 5.1(c) Ownership Structure
Schedule 5.1(m) Project Leases
Schedule 12.1 Release Prices
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LOAN AGREEMENT
THIS LOAN AGREEMENT ("AGREEMENT") is made as of December 31, 2004, by
and among ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, LLC, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, LLC, and KENTFIELD THCI HOLDING COMPANY LLC, each a Delaware
limited liability company, and SAN ▇▇▇▇▇▇▇ HEALTH CARE ASSOCIATES, LP, a
Delaware limited partnership (each a "BORROWER" and collectively, the
"BORROWERS"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL, a Division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business
Financial Services Inc., a Delaware corporation (collectively, with its
successors and assigns, "LENDER").
RECITALS
A. Each Borrower is the owner in fee simple (or in the case of Exhibit
A-3 the ground lessee) of its land described on Exhibit A-1 through A-6,
respectively (the "LAND"). Each described parcel of Land contains improvements
generally consisting of (i) a rehabilitation hospital or an acute care facility
containing the number of licensed beds and units described on Exhibits A-1
through A-6 and (ii) approximately the number of parking spaces described on
Exhibit A-1 through A-6 (collectively, the "IMPROVEMENTS").
B. Borrowers have applied to Lender for certain loans (collectively,
the "LOAN") in the aggregate principal amount of Seventy-Five Million and
No/100ths Dollars ($75,000,000.00) (the "LOAN AMOUNT") to refinance certain
indebtedness of Borrowers and to pay certain other costs relating to the
Projects, and Lender is willing to make the Loan on the terms and conditions
hereinafter set forth. The Loan is evidenced by (i) that certain promissory note
of even date herewith made by Borrowers to the order of Lender in the original
principal amount of $15,974,000.00 and (ii) that certain promissory note of even
date herewith made by Borrowers to the order of Lender in the original principal
amount of $59,026,000.00 (said promissory notes and all amendments thereto and
substitutions therefor are hereinafter collectively referred to as the "NOTE").
The terms and provisions of the Note are hereby incorporated by reference in
this Agreement. A portion of the indebtedness evidenced by the Note is also
evidenced by a certain Colorado Deed of Trust Note, dated as of the date hereof
(the "COLORADO NOTE"), in the principal amount of $6,364,100.00, the terms and
conditions of which are hereby incorporated by reference, it being expressly
understood that, notwithstanding the execution and delivery of the Colorado
Note, the aggregate indebtedness of Borrower to Lender is in the principal
amount of the Note.
C. Borrowers' obligations under the Loan will be secured by, among
other items, a first priority mortgage, assignment of leases and rents, security
agreement and fixture filing of even date herewith or a first priority deed of
trust, assignment of leases and rents, security agreement and fixture filing of
even date herewith and, except for the property in Thornton, Colorado described
in Exhibit A-2 attached hereto, a second priority mortgage, assignment of leases
and rents, security agreement and fixture filing of even date herewith or a
second priority deed of trust, assignment of leases and rents, security
agreement and fixture filing of even date herewith (each, a "MORTGAGE" and
collectively, the "MORTGAGES") each encumbering a Project,. This Agreement, the
Note, the Mortgages, and any other documents
evidencing or securing the Loan or executed in connection therewith, and any
modifications, renewals and extensions thereof, are referred to herein
collectively as the "LOAN DOCUMENTS."
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
ARTICLE 1
INCORPORATION OF RECITALS, EXHIBITS AND SCHEDULES
1.1 Incorporation of Recitals. The foregoing preambles and all other
recitals set forth herein are made a part hereof by this reference.
1.2 Incorporation of Exhibits and Schedule. Exhibits A through I,
Schedule I, Schedule II, Schedule 5.1(c), Schedule 5.1(m), Schedule 12.1, and
Appendix A to this Agreement, attached hereto are incorporated in this Agreement
and expressly made a part hereof by this reference.
1.3 Definitional Provisions. All terms defined in Schedule I of this
Agreement or otherwise in this Agreement shall, unless otherwise defined
therein, have the same meanings when used in the Note, Mortgages, Security
Agreements, any other Loan Documents, or any certificate or other document made
or delivered pursuant hereto. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement. The word "include(s)" when used in this Agreement and the other Loan
Documents means "include(s), without limitation," and the word "including" means
"including, but not limited to."
ARTICLE 2
LOAN AND LOAN DOCUMENTS
2.1 [INTENTIONALLY OMITTED.]
2.2 Loan Documents. Each Borrower agrees that it will, on or before
the Closing Date, execute and deliver or cause to be executed and delivered to
Lender this Agreement and the other Loan Documents in form and substance
acceptable to Lender. In addition, each Borrower shall deliver such other
documents, instruments or certificates as Lender and its counsel may reasonably
require, including such documents as are necessary or appropriate to effectuate
the terms and conditions of this Agreement and the other Loan Documents, and to
materially comply with the laws of the State of Illinois and the laws of the
state where the Project that such Borrower owns is located. Furthermore,
Borrowers acknowledge that they are obligated to cause their counsel and counsel
for each Guarantor, Baker, Donelson, Bearman, Caldwell, & ▇▇▇▇▇▇▇▇▇, PC and
local counsel as requested by Lender, to issue a legal opinion (in form and
substance reasonably satisfactory to Lender) for the benefit of Lender;
provided, however, Borrower shall be permitted to cause opinions of local
counsel to be issued within thirty (30) days after the Closing Date.
2.3 Disbursements. Subject to the terms, provisions and conditions of
this Agreement and the other Loan Documents, on the Closing Date, Borrowers
agree to borrow from Lender and Lender shall disburse to Borrowers the entire
Loan Amount.
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2.4 Term of the Loan. Unless due and payable sooner pursuant to
Section 2.7 or Article 8, all principal, interest and other sums due under the
Loan Documents shall be due and payable in full on December 31, 2007 (the
"MATURITY DATE").
2.5 Prepayments. Borrowers shall have the right to make prepayments of
the Loan, in whole or in part, at any time provided Borrowers (a) give Lender at
least seven (7) days' prior written notice, (b) pay all accrued and unpaid
interest, (c) pay the Exit Fee, if any, due under Section 2.8 hereof and (d) pay
all other reasonable fees and costs then due from Borrower to Lender including
any reasonable attorneys' fees and disbursements incurred by Lender as a result
of the prepayment. In the event Lender declares the Loan immediately due and
payable following the occurrence of an Event of Default and at a time when an
Exit Fee would be due, such Exit Fee shall be paid upon any tender of payment at
any time or upon foreclosure of the Mortgage.
2.6 Interest. Provided that no Event of Default has occurred and is
continuing, the principal amount of the Loan outstanding from time to time shall
bear interest until paid at a rate equal to a floating rate per annum equal to
three percent (3.00%) per annum plus the Base Rate (the aggregate rate referred
to as the "INTEREST RATE"). Interest shall be calculated based on a three
hundred sixty (360) day year and charged for the actual number of days elapsed.
2.7 Monthly Payments.
(a) Commencing on February 1, 2005, and on the first (1st) day of
each calendar month thereafter, Borrower shall pay (i) interest computed on the
outstanding principal balance of the Loan at the Interest Rate, monthly in
arrears plus (ii) a fixed monthly principal amortization payment of Three
Hundred Twelve Thousand Five Hundred Dollars ($312,500).
(b) Monthly payments of interest and amortization due to Lender
as described in this Section 2.7 shall be paid to Lender by Automated Clearing
House debit of immediately available funds from the financial institution
account designated by Borrowers in the Automated Clearing House debit
authorization executed by Borrowers in connection with this Agreement; and shall
be effective upon receipt. Borrowers shall execute any and all forms and
documentation reasonably necessary from time to time to effectuate such
automatic debiting.
2.8 Exit Fee. In the event that, at any time prior to the date that is
eighteen (18) months after the Closing Date, (i) the principal amount
outstanding under of the Loan for any reason shall be less than $40,000,000,
(ii) the Loan shall have been accelerated following the occurrence of an Event
of Default, or (iii) an Event of Default shall exist under Section 8.1(g) of
this Agreement, Borrowers will pay to Lender on the date that any such event
occurs, an exit fee equal to one percent (1%) of the Loan Amount (i.e. $750,000)
(the "EXIT FEE"). The Exit Fee shall be deemed to be earned in its entirety upon
the execution of this Agreement.
2.9 Default Interest and Late Charge.
(a) So long as an Event of Default is continuing, interest shall
accrue at a rate per annum equal to three percentage points (300 basis points)
in excess of the Interest
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Rate otherwise applicable on the outstanding Loan Amount, but shall not at any
time exceed the highest rate permitted by law (the "DEFAULT RATE").
(b) If payments of principal, interest due on the Loan, or any
other amounts due hereunder, under the Note or under the other Loan Documents
are not timely made and remain overdue for a period of ten (10) days (subject to
any other applicable notice, grace, or cure periods), Borrowers, without notice
or demand by Lender, promptly shall pay an amount (the "LATE CHARGE") equal to
the lesser of (i) two percent (2%) of each delinquent payment or (ii) Twelve
Thousand Five Hundred Dollars ($12,500) as liquidated damages to compensate
Lender for the costs that Lender will be required to incur by reason of
Borrowers' permitting such payment to become past due.
2.10 Collections, Cash Management and Clearing Accounts. Borrowers
shall instruct all Project Lessees to pay all rents and other payments due to
Borrowers under any Project Lease directly to Lender's Concentration Account.
Borrowers shall not accept from any Project Lessee any payment of rent or other
sums due under an Project Lease, and any payments so received by any Borrower
shall be held in trust for the benefit of Lender, shall be paid over to Lender
promptly upon receipt and shall not be commingled with any other monies of any
Borrower. Lender shall apply amounts deposited into the Concentration Account by
any Project Lessee to payment of the monthly payments of principal, interest,
escrows and reserves and other sums then due under this Agreement or the other
Loan Documents or to become due within the following thirty (30) day period
(based on twelve 30-day months). Any balance remaining in the Concentration
Account after payment of such portion of the Obligations then due under this
Agreement or the other Loan Documents shall be applied as follows:
(a) provided no Default or Event of Default exists, any such
balance shall be deposited in the account of Borrowers designated by the
Authorized Representative by written notice to Lender; and
(b) during the continuation of an Event of Default, Lender shall
be permitted to retain such balance as additional collateral security for the
Obligations or apply such balance to the Obligations in such order and manner as
Lender shall elect.
If, pursuant to the preceding sentence, a balance is to be remitted to
Borrowers, then, provided all payments of monthly sums due under this Agreement
and the other Loan Documents are received in the Concentration Account in good
and sufficient funds by no later than the tenth (10th) day of each calendar
month, Lender shall remit such balance as directed by the Authorized
Representative within two Business Days following Lender's application of the
funds to the Obligations.
2.11 Marlton, New Jersey Property. On the Closing Date, Lender shall
advance the principal sum of $56,000,000, and the Mortgages encumbering the
Marlton, New Jersey property shall not be recorded. The remaining $19,000,000 of
the principal amount of the Loan shall not be advanced until such time as the
following conditions have been satisfied:
(i) Lender shall have either (A) received a ground lessor estoppel
certificate, in the form previously requested by Lender, which
provides that Lender, and its
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successors and assigns, shall have the right to receive a new lease if
the ground lease is terminated for any reason or (B) accepted a ground
lessor estoppel certificate in a different form together with such
additional assurances from Borrowers and Guarantors as shall have been
approved by Borrowers, Guarantors and Lender;
(ii) Lender shall have received an opinion of local New Jersey counsel, in
form and substance reasonably satisfactory to Lender;
(iii) Lender, the Marlton, the New Jersey Borrower and the Marlton, New
Jersey Project Lessee shall have executed and delivered a
Subordination and Attornment Agreement, in form and substance
substantially identical to those executed by the other Borrowers and
other Project Lessees on the Closing Date; and
(iv) the Mortgages on the Marlton, New Jersey property shall have been
executed, delivered and recorded and mortgagee title insurance, in
form and substance reasonably satisfactory to Lender shall have been
issued;
(v) Borrower shall have paid to Lender all of Lender's Expenses in
connection with the supplemental transaction and otherwise then owed
under the Loan Documents.
In the event that the conditions described above shall not have been satisfied
by January 31, 2005, Lender shall have no further obligation to advance the
balance of the Loan, and at the request and expense of Borrowers, Lender and
Borrowers shall execute such documents as are necessary to eliminate ▇▇ ▇▇▇▇▇
▇▇▇▇, LLC as a Borrower and the Marlton, New Jersey property as part of the
collateral for the Loan. If such property is so eliminated, the monthly
principal payment required under Section 2.7(a) hereof shall be reduced to Two
Hundred Thirty-Three Thousand Three Hundred Thirty-Three Dollars ($233,333) from
and after the first day of the first calendar month after such elimination.
ARTICLE 3
FINANCIAL REPORTING COVENANTS
3.1 Financial Information Reporting.
(a) Monthly Information. Within thirty (30) days following the
end of each month, each Borrower shall deliver to Lender the following:
(i) monthly unaudited operating cash flow statements for
such Borrower's Project, certified as complete and correct in all material
respects by such Borrower and showing actual sources and uses of cash during the
preceding month and such Borrower's fiscal year-to-date, in comparison to the
same month and year-to-date for the prior fiscal year of such Borrower.
(ii) a current rent roll/census report (including monthly
delinquency reports and a monthly schedule of delinquency receipts and payments)
and a summary of all leasing/admissions activity then taking place with respect
to each Project; and
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(iii) internally prepared monthly financial statements
(including income statements and balance sheets) for each Project.
(b) Quarterly Information. Borrower shall cause the REIT to
deliver to Lender within forty-five (45) days after the end of each calendar
quarter unaudited consolidated and consolidating quarterly financial statements
(including a balance sheet, an income statement and a statement of cash flows)
of the REIT and its subsidiaries (including the Borrowers), in comparison to the
same quarter and year-to-date for the prior fiscal year, and certified by an
authorized signatory of the REIT.
(c) Annual Information.
(i) Not later than thirty (30) days before the end of each
fiscal year of each Borrower, each Borrower shall deliver to Lender its
Project's updated annual operating budget for the following fiscal year;
(ii) Not later than ninety (90) days after the end of each
fiscal year of the REIT, the REIT shall deliver to Lender audited annual
financial statements (including, balance sheet, an income statement and a
statement of cash flows) of the REIT and its subsidiaries on a consolidated
basis.
(iii) Within fifteen (15) days after timely filing thereof,
the REIT and each Borrower shall deliver to Lender a copy of its annual federal
income tax returns with all schedules and exhibits thereto.
(d) Defined Period Reports. For purposes of the financial
covenants listed in APPENDIX A attached hereto, within thirty (30) days after
the end of each Defined Period, each Borrower shall deliver to Lender such
financial reports and information as Lender shall reasonably require evidencing
compliance with the applicable financial covenants, and, if reasonably requested
by Lender, back-up documentation (including, without limitation, invoices,
receipts and other evidence of costs incurred during such quarter as Lender
shall reasonably require) evidencing the propriety of the deductions from
revenues in determining such compliance.
(e) Other Documents:
(i) Each Borrower shall deliver to Lender, promptly upon
receipt thereof, copies of any material reports by the independent accountants
in connection with any interim audit and copies of each management control
letter provided by independent accountants;
(ii) Each Borrower shall deliver to Lender, promptly upon
receipt thereof, copies of all material reports and financial information
received from Project Lessees. Borrower shall, at all times, enforce the
material obligations of the Project Lessees to deliver financial and other
information required to be delivered under the terms of the applicable Project
Lease.
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3.2 Financial Information Form and Examination. All financial
statements to be provided to Lender as described herein shall be in a format
approved in writing by Lender in Lender's reasonable discretion, in accordance
with GAAP (and with respect to annual financial statements, such statements
shall be audited by KPMG or such other independent certified public accountant
reasonably acceptable to Lender), which fairly present the financial
condition(s) as of the date(s) indicated, except for the absence of footnotes
and subject to normal year-end adjustments which, in the aggregate, are not
material. Each financial statement shall be certified as complete and correct,
in all material respects, by its preparer and by a Borrower or, in the case of
the REIT's financial statements, by an authorized signatory of the REIT.
Borrowers and Guarantor shall provide such additional financial information as
Lender reasonably requires. Borrowers shall, during regular business hours
following reasonable written notice from Lender, permit (subject to the terms of
the Project Leases) Lender or any of Lender's representatives (including an
independent firm of certified public accountants) to have reasonable access to
and examine all of the books and records regarding Borrowers and the development
and operation of any Project in possession of Borrower. The reasonable costs and
expenses of the examination shall be paid by Borrowers if (i) the examination
discloses, with respect to any individual Project, a monetary variance in any
financial information or computation submitted by Borrower equal to or greater
than the greater of: (A) five percent (5%) or (B) $100,000.00 or (ii) such
inspection is done as the result of a failure to provide Lender with the
financial statements and reporting required herein within thirty (30) days of
Lender's written request therefor. Each Borrower shall within ten (10) days
after Lender's reasonable request, furnish Lender with a written statement, duly
acknowledged, setting forth the sums owing under the Loan Documents according to
such Borrower's books and records and any right of set-off, counterclaim or
other defense that exists against such sums and such Borrower's obligations
under the Loan Documents.
ARTICLE 4
OPERATIONAL AND OTHER LEASE COVENANTS
4.1 Leasing and Operational Covenants.
(a) Project Leases; Other Leases. Each Borrower covenants that it
shall not execute any lease, license, occupancy agreement or similar document
for possession or occupancy of any portion of such Borrower's Project, except
for the execution of applicable Project Lease and as otherwise permitted under
the applicable Project Lease other than Material Matters (defined below), which
shall require Lender consent, in Lender's sole discretion, and shall at all
times promptly and faithfully perform, or cause to be performed in all material
respects, all of the covenants, conditions and agreements contained in the
Project Lease on the part of the landlord thereunder to be kept and performed.
Prior to Closing, Borrower shall have delivered to Lender a true, correct and
complete copy of each Project Lease. Borrowers shall not do or suffer to be done
any act that would reasonably be expected to result in a default by the landlord
under the Project Leases or allow the Project Lessees thereunder to withhold
payment of rent and, shall not further assign any Project Lease (except upon
substitution of a new Project Lessee with Lender's consent following a default
under a Project Lease by the existing Project Lessee) or accept any advance
payment of any rents or payments due under any Project Lease without the prior
written consent of Lender in each instance. Each Borrower, at no cost or expense
to Lender, shall enforce, short of termination, the performance and observance
of each
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and every material condition and covenant of each of the parties under such
Borrower's Project Lease. Each Borrower agrees that it shall not, (i) without
the prior written consent of Lender in each instance, which consent may be
granted or withheld by Lender, in Lender's sole discretion, enter into any
modification of such Borrower's Project Lease which (A) reduces the rent, (B)
reduces the term, (C) modifies or affects any Project Lessee's obligations
regarding the payment of taxes, insurance premiums or reserves for capital
expenditures, (D) affects the certificate of need or any license or consent
under the Healthcare Laws or Borrower's reversionary rights, if any, with
respect thereto, (E) affects the Primary Intended Use or otherwise adversely
affects the ability of the Premises to be used as a healthcare facility, or (F)
materially decreases the rights of the landlord or the obligations of the tenant
(collectively, "Material Matters"), or (ii) without the prior written consent of
Lender, which consent shall not be unreasonably withheld, conditioned, or
delayed, enter into any other material modification of the provisions of such
Borrower's Project Lease. Each Borrower further agrees that it will not
terminate or accept the surrender of such Borrower's Project Lease, or waive or
release any other party from the performance or observance of any material
obligation or condition under such Project Lease. Each Borrower agrees that it
shall not permit the prepayment of any rents under such Borrower's Project Lease
for more than one (1) month prior to the due date thereof. Borrower shall
diligently enforce all obligations of each Project Lessee under any Project
Lease. Each Borrower shall instruct each Project Lessee to pay all base or "Base
Rent" and all "Percentage Rent" (as such terms are defined in such Borrower's
Project Lease) directly to Lender and, in the event any such Base Rent or
Percentage Rent is paid to such Borrower, such Borrower shall hold such rent in
trust for Lender and remit such rent to Lender as promptly as possible, but not
later than two (2) Business Days after receipt thereof. As a condition to the
Closing of the Loan, Lender shall have received a Subordination, Nondisturbance
and Attornment Agreement from each Project Lessee. In the event there shall be
any successor lessee of a Project, the applicable Borrower shall instruct such
successor lessee to execute a Subordination and Attornment Agreement in form and
substance reasonably acceptable to Lender. Without limiting the foregoing, each
Borrower agrees that it shall not, without the prior written consent of Lender
in each instance (which consent shall not be unreasonably withheld, conditioned,
or delayed): (i) accept any offer by any Person to purchase such Borrower's
Project, except that a Borrower may accept an offer by a Project Lessee pursuant
to its purchase option under the applicable Project Lease so long as Borrower or
the Project Lessee complies or causes compliance with Article 12 of this
Agreement with respect to the release of the applicable Project from the lien of
the Mortgages; (ii) accept any offer to substitute properties as provided in the
Project Lease or otherwise; (iii) agree to finance any "Capital Additions" (as
defined in the Project Leases) pursuant to Article X of the Project Leases or
otherwise; or (iv) consent to any pledge or assignment of any rights of Project
Lessee under or in respect of a Project Lease except to the extent that Borrower
is required to consent to a pledge or assignment under the terms of the
applicable Project Lease (it being expressly understood that Borrowers may not
grant any discretionary consent to a pledge or assignment under a Project Lease
unless Lender shall have consented thereto in writing).
(b) Defaults Under Leases. No Borrower will suffer or permit any
material breach or default to occur in any of such Borrower's obligations under
any Project Lease or suffer or permit the same to terminate by reason of any
failure of such Borrower to meet any requirement of any Project Lease. Each
Borrower shall notify Lender promptly in writing in the event the Project Lessee
commits a material default under such Borrower's Project Lease and
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shall deliver to Lender a copy of each notice of default sent or received under
any Project Lease, within five (5) Business Days after the sending or receipt
thereof, as the case may be.
(c) Management Contracts. No Borrower shall change or permit any
Project Lessee to change the manager of its Project or enter into, modify,
amend, terminate or cancel any management contracts for its Project except (i)
in accordance with the applicable Project Lease, or (ii) for non-material
modifications that do not increase the fees or other amounts payable to the
manager or reduce the applicable Borrower's rights or the manager's obligations
under such management contract.
(d) Furnishing Notices. Borrowers shall provide Lender with
copies of all material notices pertaining to any Borrower or a Project received
by any Borrower from any Borrower, Project Lessee, Tenant, Guarantor, any
Governmental Authority or insurance company promptly after such notice is
received, including any survey results or inspection reports from any
Governmental Authority. In addition, each Borrower shall promptly provide Lender
with written notice of any material litigation, arbitration, or other material
proceeding or governmental investigation pending or, to any Borrower's
Knowledge, threatened against or relating to any Borrower, or any Guarantor, any
Project Lessee, or any Project. Furthermore, each Borrower shall promptly
provide Lender with prior written notice of any capital or other equity
contributions to such Borrower.
(e) Alterations. Without the prior written consent of Lender in
each instance (which consent shall not be unreasonably withheld, conditioned, or
delayed), no Borrower shall make or permit any Project Lessee (other than as may
be permitted under the applicable Project Lease without Borrower's consent) or
any other Person to make, any material alterations to its Project.
(f) Intentionally omitted.
(g) Replacement Reserve. At the time of and in addition to the
monthly installments of interest, and if applicable, principal due under the
Note and this Agreement, Borrowers shall pay to Lender an amount equal to the
product of (i) One Hundred Twenty-Five Dollars ($125.00) and (ii) the aggregate
number of beds in the Projects (the "REPLACEMENT RESERVE"). Funds in the
Replacement Reserve will be held by a depository institution insured by the
Federal Deposit Insurance Corporation (which institution may be an Affiliate of
Lender) in an interest-bearing account, may be commingled with the general funds
of Lender, and these sums shall not be deemed to be held in trust for the
benefit of Borrowers. Interest shall accrue on the Replacement Reserve at the
rate paid by such depository institution for such deposits. Any interest
accruing and paid on such funds shall be deemed to be part of the Replacement
Reserve and shall be applied in accordance with this Section 4.2(g). On the
Maturity Date, the monies then remaining on deposit with Lender shall, at
Lender's option, be applied against the Indebtedness or if no Event of Default
is continuing, returned to Borrowers. So long as there is no continuing Event of
Default, Borrowers may request Lender to disburse funds from the Replacement
Reserve (which request will include (i) a reasonably detailed description of the
capital expenditures at a Project which a Borrower intends to pay for with such
funds and (ii) the written consent of the applicable Project Lessee, which
request shall not be unreasonably denied by Lender. If requested by Lender, each
disbursement request will be
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accompanied by copies of invoices, lien waivers and other evidence reasonably
required by Lender. Borrowers hereby grant Lender a first priority security
interest in such funds, including all interest accruing thereon, and all such
funds are pledged as additional collateral for the Loan and Borrowers shall
execute any other documents and take any other actions necessary to provide
Lender with such a perfected security interest in such funds; provided, however,
that if such funds are the deposited by one or more Project Lessees, Borrowers
hereby assign to Lender Borrowers' security interest in such funds, including
all interest accruing thereon, as additional collateral for the Loan and
Borrowers shall execute any other documents and take any other actions necessary
to provide Lender with an assignment of Borrower's security interest in such
funds. Upon the Maturity Date or at any time following an Event of Default, the
moneys then remaining on deposit with Lender or its agent shall, at Lender's
option, be applied against the Indebtedness. The provisions of this Section
4.1(g) shall be deemed satisfied to the extent that the Project Lessees deposit
with Lender, for application in the manner specified in this Section 4.1(g), the
replacement reserve deposits required to be made under the Project Leases.
(h) Compliance With Laws. Borrowers and the Projects shall comply
with all applicable requirements (including applicable Laws) of any Governmental
Authority having jurisdiction over any Borrower or any Project including all
building, zoning, density, land use, covenants, conditions and restrictions,
subdivision requirements (including parcel maps and environmental impact and
other environmental requirements), whether now existing or later to be enacted
or promulgated and whether foreseen or unforeseen; provided, however, that other
than prompt and diligent enforcement of the terms of the Project Leases and the
obligations of the Project Lessees thereunder, Borrowers shall not be obligated
to cause the Projects to comply with healthcare-related laws to the extent that
the obligation to so comply is the obligation of a Project Lessee under a
Project Lease.
(i) Use of Projects. Unless required by applicable Law, Borrowers
shall not permit material changes in the use of any Project from that of the
time this Agreement was executed. Borrowers shall neither initiate nor acquiesce
in a material change in the plat of subdivision, or zoning classification or use
of any Project without Lender's prior written consent (which consent shall not
be unreasonably withheld, conditioned, or delayed) nor shall it grant any
encumbrances or easements burdening any Project without Lender's prior written
consent, which consent shall not be unreasonably withheld, conditioned, or
delayed.
(j) Separate Accounts. Each Borrower shall maintain separate
accounts, which may be book entry accounts, with regard to its Project, and such
accounts shall separate its funds from those relating to any other Project.
(k) Maintenance and Preservation of the Projects. Borrowers shall
enforce their rights under the Project Leases with respect to the Project
Lessees' obligations to keep the Projects in good condition and repair (ordinary
wear and tear excepted) and, if all or part of any Project becomes damaged or
destroyed, Borrowers shall promptly exercise their rights under the Project
Leases with respect to such repair and/or restoration of such Project promptly
following Lender's disbursement of the Insurance Proceeds or other sums to pay
costs of the work of repair or reconstruction pursuant to Article 7 hereof.
Subject to Borrowers' rights under the Project Leases, Borrowers shall not
commit or allow material waste or permit impairment or deterioration of any
Project. Subject to Borrowers' rights under the Project
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Leases, Borrowers shall perform such acts as are necessary in the exercise of
prudent business judgment to preserve the value of the Projects and no Borrower
shall abandon its Project.
(l) Purchase Options; Substitution Rights. If any Project Lessee
shall have or acquire any right or option of any nature whatsoever to purchase
any Project or Projects or any portion of or any interest in the Premises or the
Property, or to substitute any properties for any Project or any portion of the
Premises, such substitution rights (but not any such purchase options) shall, at
all times, be subordinated to the rights of Lender under the Loan Documents and
Lender shall have no obligation to release the lien of the Mortgage against the
Property or any portion thereof in connection with the exercise by any Project
Lessee of any such right or option unless, in connection with the exercise of
any such purchase option by a Project Lessee, Borrower shall comply with Article
12 of this Agreement with respect to the release of the applicable Project from
the lien of the Mortgages.
4.2 Other Borrower Covenants. Borrowers further covenant and agree as
follows:
(a) Loan Closing. All material conditions precedent to the
closing of the Loan shall be complied with in all material respects on or prior
to the Closing Date. If such conditions are not complied with as of the Closing
Date, Lender may terminate Lender's obligation to fund the Loan by written
notice to Borrowers.
(b) Prohibition of Assignments and Transfers by any Borrower.
(i) Generally. No Borrower shall assign or attempt to assign
its rights under this Agreement and any purported assignment shall be void.
Except as expressly permitted in Article 12 of this Agreement, without the prior
written consent of Lender, which consent may be withheld in Lender's sole
discretion, no Borrower shall suffer or permit (a) any change in the management
of any Project, except as permitted under the applicable Project Lease or (b)
any Transfer other than a Permitted Transfer. Notwithstanding the foregoing, so
long as the REIT is a real estate investment trust, transfers of direct or
indirect ownership interests in the REIT shall be permitted without notice to or
consent by Lender. Lender agrees that it will not unreasonably withhold, delay
or condition consent to a Transfer which is not a Permitted Transfer, so long as
after giving effect to such Transfer, the REIT (A) owns, directly or indirectly
not less than 51% of the beneficial ownership interests in each Borrower and (B)
Controls all Borrowers.
(ii) Transfers Prohibited by ERISA. In addition to the
prohibitions set forth in Section 4.2(b)(i), above, no Borrower shall engage in
or permit a Transfer that would reasonably be expected to constitute or result
in the occurrence of one or more non-exempt prohibited transactions under ERISA
or the Internal Revenue Code. To the extent possible, each Borrower shall unwind
any such Transfer within a reasonable period of time following its receipt of
notice from Lender describing such Transfer and describing the prohibited
transaction in reasonable detail. Alternatively, at Lender's option, each
Borrower shall assist Lender in obtaining such prohibited transaction
exemption(s) from the United States Pension and Welfare Benefits Administration
with respect to such Transfer as are necessary to remedy such prohibited
transactions. In addition to its general obligation to indemnify Lender
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under Section 4.2(k), Borrowers shall reimburse Lender for any Expenses incurred
by Lender to obtain any such prohibited transaction exemptions. Each Borrower's
obligations under this Section 4.2(b)(ii) shall survive the expiration of this
Agreement and the other Loan Documents.
(c) Mechanics' Liens and Contest Thereof. Borrowers will not
suffer or permit any mechanics' lien claims to be filed or otherwise asserted
against any Project (other than such liens that automatically attach prior to
payment being due to the lienholder so long as such liens do not remain in
effect after payment is due to the lienholder) and will promptly discharge the
same in case of the filing of any claims for lien or proceedings for the
enforcement thereof, provided, however, that Borrowers shall have the right to
contest, or permit a Project Lessee to contest, in accordance with the Project
Lease and in good faith and with reasonable diligence, the validity of any such
lien or claim, provided that the applicable Borrower or Project Lessee notifies
Lender of its desire to do so in writing, and posts a statutory ▇▇▇▇ ▇▇▇▇ that
removes such lien from title to the applicable Project, or provides other
security reasonably satisfactory of payment or bonding of such lien, to Lender,
within twenty (20) days after the earlier of (i) the date any Borrower obtains
Knowledge of the existence of such lien or (ii) written notice by Lender to
Borrowers of the existence of the lien. In the event Borrowers shall fail to
discharge any such lien or fails to prosecute such contest as set forth above,
Lender may, at its election in its sole discretion, cause such lien to be
satisfied and released or otherwise provide security to the Title Insurer to
indemnify over such lien, and any reasonable amounts so expended by Lender,
including premiums paid or security furnished in connection with the issuance of
any surety company bonds, shall be reimbursed by Borrowers within three (3) days
after deemed by Lender, together with interest at the Default Rate. In settling,
compromising or discharging any claims for lien, Lender shall not be required to
inquire into the validity or amount of any such claim.
(d) Renewal of Insurance. Borrowers shall (i) maintain in full
force, until full payment of the Loan, such insurance coverages on the Projects
as are described on the attached Exhibit E, (ii) maintain such coverages through
the applicable insurance carriers (or such other reasonably acceptable
substitute carriers selected by Borrowers) for the respective coverages (or
substantially equivalent replacement coverages) listed on the attached Exhibit
E, and (iii) name Lender as an additional insured thereunder and provide at
least thirty (30) days prior written notice to Lender of cancellation,
non-renewal or material change of the insurance policies maintained by the
Borrower pursuant hereto. Borrowers shall not bring or keep any article on any
Project or cause or allow any condition to exist on it, if that would reasonably
be expected to invalidate or would be prohibited by any insurance coverage
required to be maintained by Borrowers on the Projects. Unless Borrowers provide
Lender with appropriate evidence of the insurance coverage required by this
Agreement, Lender may, following ten (10) days written notice to Borrower of
Borrowers' failure to provide the same (or upon lesser notice or without notice
if any required insurance has lapsed or is at risk of lapsing), purchase
insurance at Borrowers' expense to protect Lender's interests in the Projects
and to maintain the insurance required by this Agreement. Borrowers may later
cancel any insurance purchased by Lender, but only after providing Lender with
appropriate evidence that Borrowers have obtained insurance as required by this
Agreement. If, in accordance with this Section, Lender purchases insurance for
any Project or insurance otherwise required by this Agreement, Borrowers will be
responsible for the costs of that insurance and other charges imposed by Lender
in connection with the placement of the insurance until the effective date of
the cancellation or expiration of the
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insurance. The costs of the insurance may be added to the Indebtedness effective
as of the date Lender purchases such insurance and such costs may be more than
the cost of insurance Borrowers are able to obtain on their own. The effective
date of coverage may be the date the prior coverage lapsed or the date on which
Borrowers failed to provide Lender proof of coverage.
(e) Payment of Taxes. Borrowers shall, subject to the terms of
Section 4.2(f) below, pay or enforce their rights under the Project Leases with
respect to the timely payment by the Project Lessees of, all real estate taxes
and assessments and charges of every kind upon the Projects before the same
become delinquent, provided, however, that Borrowers and the Project Lessees
shall have the right to pay such tax under protest or to otherwise contest any
such tax or assessment in accordance with the Project Leases. If Borrower or a
Project Lessee fails to commence such contest or, having commenced to contest
the same, shall thereafter fail to prosecute such contest in accordance with the
applicable Project Leases, or, upon adverse conclusion of any such contest,
Project Lessee or Borrower shall fail to pay such tax, assessment or charge,
Lender may, at its election (but shall not be required to), pay and discharge
any such tax, assessment or charge, and any interest or penalty thereon, and any
amounts so expended by Lender shall be deemed to constitute disbursements of the
Loan proceeds hereunder (even if the total amount of disbursements would exceed
the face amount of the Note). Borrowers shall, unless Lender has paid such taxes
directly on a Project Lessee's behalf, furnish to Lender evidence that taxes are
paid at least five business (5) days prior to the last date for payment of such
taxes and before imposition of any penalty or accrual of interest.
(f) Funds for Insurance and Taxes. Borrowers shall pay to Lender,
at the time of and in addition to the monthly installments of principal and/or
interest due under the Note, a sum equal to 1/12 of the amount estimated by
Lender to be sufficient to enable Lender to pay at least sixty (60) days before
they become due and payable, all taxes, assessments and other similar charges
levied against the Projects and all insurance premiums relating to Borrowers and
the Projects as determined by Lender (the "PROPERTY TAX AND INSURANCE DEPOSIT").
So long as no Event of Default exists hereunder and provided that Borrowers
shall have delivered to Lender a copy of the tax ▇▇▇▇ or insurance premium ▇▇▇▇,
as the case may be, and sufficient funds on deposit from Borrowers for the
purpose of paying such tax ▇▇▇▇ and/or insurance premium ▇▇▇▇, Lender shall
apply the sums to pay such real estate tax items and/or insurance premiums, as
the case may be. These sums will be held by a depository institution insured by
the Federal Deposit Insurance Corporation (which institution may be an Affiliate
of Lender) in an interest-bearing account, may be commingled with the general
funds of Lender at such institution, and shall not be deemed to be held in trust
for the benefit of Borrowers. Interest shall accrue on the Property Tax and
Insurance Deposit at the rate paid by such depository institution for such
deposits. Any interest accruing and paid on such funds shall be deemed to be
part of the Property Tax and Insurance Deposit and shall be applied in
accordance with this Section 4.2(f). If such amount on deposit with Lender is
insufficient to fully pay such tax items and/or insurance premiums, as the case
may be, Borrowers shall, within ten (10) days following notice at any time from
Lender, deposit such additional sum as may be required for the full payment of
such tax items and/or insurance premiums, as the case may be. Borrowers hereby
grant Lender a first priority security interest in such funds, including all
interest accruing thereon, and all such funds are pledged as additional
collateral for the Loan and Borrowers shall execute any other documents and take
any other actions necessary to provide Lender with such a perfected security
interest in such funds.
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Upon the Maturity Date or at any time following an Event of Default, the moneys
then remaining on deposit with Lender or its agent shall, at Lender's option, be
applied against the Indebtedness. The obligation of Borrowers to pay such tax
items and/or insurance premiums is not affected or modified by the provisions of
this paragraph. The provisions of this Section 4.2(f) shall be deemed satisfied
to the extent that the Project Lessees deposit with Lender, for application in
the manner specified in this Section 4.2(f), the property tax and insurance
reserve deposits required to be made under the Project Leases.
(g) Personal Property. All of each Borrower's personal property,
fixtures, attachments and equipment delivered upon, attached to, used or
required to be used in connection with the operation of the Project
(collectively, the "PERSONAL PROPERTY") shall always be located at such
Borrower's Project and shall be kept free and clear of all liens, encumbrances
and security interests. Except as expressly permitted in Article 12 of this
Agreement, no Borrower shall (nor, except to the extent required to do so under
the Project Leases, shall it permit any Project Lessee to), without the prior
written consent of Lender (which consent shall not be unreasonably withheld,
conditioned, or delayed), sell, assign, transfer, encumber, remove or permit to
be removed from its Project any of the Personal Property other than as provided
in the Project Leases. So long as no Event of Default exists and is continuing,
a Borrower may sell or otherwise dispose of its Personal Property when obsolete,
worn out, inadequate, unserviceable or unnecessary for use in the operation of
its Project, but only upon replacing the same with other Personal Property at
least equal in value and utility to the Personal Property that is disposed.
(h) Appraisals. Lender shall have the right to obtain a new or
updated Appraisal of a Project from time to time upon the occurrence of any
event which materially affects the value of such Project or if required by any
rules or regulations of any Governmental Authority applicable to Lender.
Borrowers shall cooperate with Lender in this regard. If the Appraisal is
obtained to comply with this Agreement or any applicable law or regulatory
requirement, or if an Event of Default shall exist at the time any Appraisal is
ordered, Borrowers shall pay for any such Appraisal upon Lender's request.
(i) Loss of Note or other Loan Documents. Upon notice from Lender
of the loss, theft, or destruction of the Note and upon receipt of an affidavit
of lost note and an indemnity reasonably satisfactory to Borrowers from Lender,
or in the case of mutilation of the Note, upon surrender of the mutilated Note,
Borrowers shall make and deliver a new note of like tenor in lieu of the then to
be superseded Note. If any of the other Loan Documents were lost or mutilated,
Borrowers agree to execute and deliver replacement Loan Documents in the same
form of such Loan Document(s) that were lost or mutilated.
(j) Publicity. Lender reserves the right to publicize the making
of the Loan and, in such publicity, may include a brief description of the
Projects and the Loan, subject to Borrowers' prior written approval of the same,
which approval shall not be unreasonably withheld, delayed or conditioned.
(k) Indemnification. Each Borrower shall indemnify Lender,
including each party owning an interest in the Loan and their respective
successors, assigns, officers, directors, employees and consultants (each, an
"INDEMNIFIED PARTY") and defend and hold each Indemnified Party harmless from
and against all claims, injury, damage, liability,
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criminal and civil penalties, excise taxes and Expenses of any and every kind to
any persons or property by reason of (i) the operation or maintenance of the
Projects; (ii) any breach of representation or warranty by Borrower, Guarantor
or any Affiliate of Borrower or Guarantor, or the occurrence of any Event of
Default hereunder or under any of the other Loan Documents; (iii) any claims or
suits brought by any Project Lessee or other tenant; or (iv) any other matter
arising in connection with any Borrower, any Guarantor, any Project Lease or any
Project Lessee, or any Project, provided, however, that no Indemnified Party
shall be entitled to be indemnified with regard to any Indemnified Party's gross
negligence or willful misconduct. Upon written request by an Indemnified Party,
each Borrower will undertake, at its own costs and expense, on behalf of such
Indemnified Party, using counsel reasonably satisfactory to the Indemnified
Party, the defense of any legal action or proceeding whether or not such
Indemnified Party shall be a party and for which such Indemnified Party is
entitled to be indemnified pursuant to this section. At Lender's option, Lender
may, at Borrowers' expense, prosecute or defend any action involving the
priority, validity or enforceability of any of the Loan Documents.
(l) No Additional Debt. Except for the Loan, no Borrower shall
(i) incur any indebtedness (whether personal or nonrecourse, secured or
unsecured) for borrowed money, liabilities under guaranties, or reimbursement
obligations of lessee under capital or operating leases, and (ii) permit there
to be any encumbrances against any Project except the Permitted Exceptions. No
Borrower shall default on the payment of any indebtedness that is not cured
within the time, if any, specified therefor in any agreement governing the same.
(m) Organizational Documents. No Borrower shall, without the
prior written consent of Lender, permit or suffer (i) a material amendment or
modification of its Organizational Documents, (ii) any change of ownership
(other than Permitted Transfers and as otherwise expressly permitted and subject
to Section 4.2(b)) or Control of such Borrower (except that there shall be no
restriction on any transfer of ownership interests in the REIT), (iii) any
dissolution or termination of its existence, or (iv) change in its state of
formation or incorporation.
(n) Single Purpose Entity. Each Borrower at all times shall
remain a Single Purpose Entity until after the Indebtedness has been repaid in
full.
(o) Furnishing Reports. Upon Lender's request, each Borrower
shall promptly provide Lender with copies of all inspections, reports, test
results and other information received by such Borrower, which in any way relate
to a Project or any part thereof. Without limiting the preceding sentence, all
Borrowers shall promptly provide Lender with copies of all of the foregoing
received from any Governmental Agency.
(p) Affiliate Transactions. Prior to entering into any agreement
with an Affiliate pertaining to any Project, a Borrower shall deliver to Lender
a copy of such agreement, which shall be satisfactory to Lender in its sole
discretion. If requested by Lender, such agreement shall provide Lender the
right to terminate it upon Lender's (or its designee's) taking possession of
such Project or acquisition of such Project through foreclosure, a deed in lieu
of foreclosure, UCC sale or otherwise. In any event, no agreement between
Borrower and
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any Affiliate which relates to any Project shall be on terms materially more
favorable than would apply to an arms' length arrangement with an unaffiliated
third party.
(q) Site Visits, Observation and Testing. Lender and its agents
and representatives shall have the right (subject to the terms of the applicable
Project Lease) at any reasonable time during normal business hours and following
reasonable written notice to Borrower to enter and visit the Projects for the
purpose of performing appraisals, observing the Projects, taking and removing
soil or groundwater samples, and conducting tests on any part of the Projects as
authorized hereunder. Lender has no duty, however, to visit or observe the
Projects or to conduct tests, and no site visit, observation or testing by
Lender, its agents or representatives shall impose any liability on any of
Lender, its agents or representatives. Neither Borrowers nor any other party is
entitled to rely on any site visit, observation or testing by any of Lender, its
agents or representatives except to the extent due to the acts of Lender, its
agents or representatives. Neither Lender nor its agents or representatives owe
any duty of care to protect Borrowers or any other party against, or to inform
Borrower or any other party of any other adverse condition affecting the
Projects other than such conditions resulting from or arising out of the acts of
the Lender, its agents or representatives. Lender shall give Borrowers
reasonable written notice before entering a Project. Lender shall avoid
interfering with a Borrower's use of its Project in exercising any rights
provided in this Section 4.2(q). In addition to all other amounts payable by
Borrowers hereunder or under the other Loan Documents, Borrowers shall pay to
Lender all reasonable direct costs and expenses incurred by Lender in connection
with any activities of Lender under this Section 4.2(q).
(r) Compliance With Anti-Terrorism Orders. Borrowers will not
Knowingly permit the transfer of any interest in a Borrower to any person or
entity (or any beneficial owner of such entity) who is listed on the specially
Designated Nationals and Blocked Persons List maintained by the Office of
Foreign Asset Control, Department of the Treasury pursuant to Executive Order
No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of
terrorists or terrorist organizations maintained pursuant to any of the rules
and regulations of Office of Foreign Asset Control, Department of the Treasury
or pursuant to any other applicable Executive Orders (such lists are
collectively referred to as the "OFAC LISTS"). Borrowers will not Knowingly
enter into a Project Lease or other agreement affecting any Project with any
party who is listed on the OFAC Lists. Borrowers shall promptly notify Lender if
a Borrower has Knowledge that any Guarantor or any member or beneficial owner of
a Borrower is listed on the OFAC Lists or (A) is indicted on or (B) arraigned
and held over on charges involving money laundering or predicate crimes to money
laundering. Borrowers shall promptly notify Lender if a Borrower knows that any
Tenant is listed on the OFAC Lists or (A) is convicted on, (B) pleads nolo
contendere to, (C) is indicted on or (D) is arraigned and held over on charges
involving money laundering or predicate crimes to money laundering.
(s) Notice of Change. Each Borrower shall give Lender prior
written notice of any change in: (i) the location of its place of business or
its chief executive office if it has more than one place of business; (ii) the
location of any material portion of its Personal Property, including such
Borrower's books and records; and (iii) such Borrower's name or business
structure. Unless otherwise approved by Lender in writing, all material Personal
Property will be located at the Projects or at a Borrower's place of business or
chief executive office if such Borrower has more than one place of business.
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(t) No Use of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Name. Borrowers shall not directly or
indirectly publish, disclose or otherwise use in any advertising or promotional
material, or press release or interview, the name, logo or any trademark of
Lender, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc. or any of their affiliates. Nothing contained
herein shall prohibit Borrowers or the REIT from making disclosures in filings
with the Securities and Exchange Commission to the extent necessary to disclose
the transactions evidenced by the Loan Documents.
(u) Bank Accounts; Notices to Account Debtors. Each Borrower will
cause all revenue arising from its Project or belonging to Borrower (other than
security deposits, to the extent addressed by Section 4.2(w) below) to be
deposited into the Concentration Account. Each Borrower shall give notices to
all current and future account debtors doing business with such Borrower or such
Borrower's Project who pay such Borrower by direct deposit or wire transfer to
make or wire payments to the Concentration Account.
(v) Vibra Promissory Note. Following an Event of Default,
Borrowers shall cause Vibra Healthcare, LLC, f/k/a Highmark Healthcare, LLC
("Vibra") and the holders of the promissory notes dated July 1, 2004, as amended
(the "Vibra Notes") made by Vibra and payable to the order of MPT Development
Services, Inc. to remit all payments due and payable under such promissory notes
directly to Lender until such time as such Event of Default has been cured.
Borrowers represent and warrant that no property that is granted as security for
the Vibra Notes is granted by any Project Lessee to any Borrower as security for
the obligations of the Project Lessees under the Project Leases.
(w) Security Deposit Reserve. On the Closing Date, all security
deposits of the Project Lessees under the Project Leases shall be transferred by
Borrowers to Lender and deposited by Lender into a reserve to be held by Lender
as additional collateral for the payment and performance of Borrowers'
obligations under the Loan Documents (the "SECURITY DEPOSIT RESERVE"). Borrowers
shall deposit into the Security Deposit Reserve all additional security deposits
made by any Project Lessee under any Project Lease. Funds in the Security
Deposit Reserve will be held by a depository institution insured by the Federal
Deposit Insurance Corporation (which institution may be an Affiliate of Lender)
in an interest-bearing account, may be commingled with the general funds of
Lender at such institution, and shall not be deemed to be held in trust for the
benefit of Borrowers. Interest shall accrue on amounts in the Security Deposit
Reserve at the rate paid by such depository institution for such deposits. Any
interest accruing and paid on such funds shall be deemed to be part of the
Security Deposit Reserve and shall be applied in accordance with this Section
4.2(w). Borrowers hereby grant Lender a first priority security interest in such
funds, including all interest accruing thereon, and all such funds are pledged
as additional collateral for the Loan and Borrowers shall execute any other
documents and take any other actions necessary to provide Lender with such a
perfected security interest in such funds. So long as no default shall exist
under any Project Lease, funds in the Security Deposit Reserve shall be release
upon delivery by Borrowers to Lender of evidence reasonably satisfactory to
Lender that the Project Lessee is entitled to a refund of its security deposit.
Upon the occurrence and during the continuation of an Event of Default, amounts
in the Security Deposit Reserve that may be retained or applied by the landlord
under any Project Lease shall, at Lender's option, be applied against the
Indebtedness.
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4.3 Authorized Representative. Each Borrower hereby appoints each of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. and R. ▇▇▇▇▇▇ ▇▇▇▇▇▇ as their "AUTHORIZED REPRESENTATIVE"
for purposes of dealing with Lender on behalf of such Borrower in respect of any
and all matters in connection with this Agreement, the other Loan Documents, and
the Loan. Subject to the terms of Section 4.2(b) above (concerning transfers by
any Borrower), each Authorized Representative shall have the power, in his
discretion, to give and receive all notices, monies, approvals, and other
documents and instruments, and to take any other action on behalf of such
Borrower. All actions by an Authorized Representative shall be final and binding
on such Borrower. Lender may rely on the authority given to each Authorized
Representative until actual receipt by Lender of a duly authorized resolution of
such Borrower substituting a different person as the Authorized Representative
of such Borrower.
4.4 Health Care Matters. If required under applicable Healthcare Laws,
each Borrower has and shall maintain in full force and effect a valid
certificate of need ("CON") or similar certificate, license, or approval issued
by the applicable Government Authority for the requisite number of beds and
units in the Projects. If Borrower has authorized or permitted a Project Lessee
to apply for or maintain the CON, Borrower shall enforce all rights, if any,
under the Project Leases to seek to prevent the Project Lessee from taking any
action that would reasonably be expected to cause or permit such CON to be
pledged, transferred or hypothecated.
(a) The CON shall continue in full force and effect throughout
the term of the Loan and shall be free from restrictions or known conflicts
which would materially impair the use or operation of each Project for its
current use, and shall not be provisional, probationary or restricted in any
way.
(b) Subject to, and to the extent of, the Borrowers' rights under
the Project Leases and the applicable licenses, no Borrower shall do (or suffer
to be done by a Borrower or any Affiliate of a Borrower) any of the following
without Lender's prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed:
(i) Replace or transfer all or any part of any Project's
units or beds to another site or location
(ii) Transfer any CON or other Governmental Approval or
rights thereunder to any Person (other than Lender) or to any location other
than the Project to which such CON or Governmental Approval pertains; or
(iii) Pledge or hypothecate any CON or other Governmental
Approval as collateral security for any indebtedness other than indebtedness to
Lender.
(c) Borrower hereby represents and warrants that no Borrower is a
participant in any federal, state, or local program whereby any federal, state,
or local government or quasi-governmental body, or any intermediary, agency,
board, or other authority or entity may have the right to recover funds by
reason of the advance of federal, state, or local funds, including, without
limitation, those authorized under the ▇▇▇▇-▇▇▇▇▇▇ Act (42 U.S.C. Section 291,
et seq.), other than the Medicare and Medicaid programs.
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(d) Borrower shall use its reasonable good faith efforts to cause
the Projects to be operated by licensed healthcare providers in accordance with
applicable laws; provided, however, in the event a Project Lessee loses its
license to operate a Project, Borrowers shall act in good faith to promptly
replace such Project Lessee or assist such Project Lessee to reinstate such
license in accordance with the terms of the applicable Project Lease. Borrower
shall not become the licensed operator for any Project in contravention of any
law, rules or regulations applicable to real estate investment trusts, nor shall
Borrower or any Affiliate of Borrower render any regulated healthcare service at
any Project in connection with or in the furtherance of the operation of the
Project as a rehabilitation hospital or long-term acute care hospital, as
applicable, in contravention of any law, rules or regulations applicable to real
estate investment trusts.
4.5 Financial Covenants. Borrowers shall comply with and shall not
breach any of the financial covenants set forth in APPENDIX A.
ARTICLE 5
BORROWERS' REPRESENTATIONS AND WARRANTIES
5.1 Borrowers' Representations and Warranties. To induce Lender to
execute this Agreement and perform its obligations hereunder, Borrowers hereby
represent and warrant to Lender as follows:
(a) Each Borrower lawfully possesses and holds fee simple title
to its Project (except for 92 Brick Road, LLC, which holds leasehold title to
its Project), free and clear of all liens, claims, encumbrances, covenants,
conditions and restrictions, security interest and claims of others, except only
the Permitted Exceptions. Each Borrower is a Single Purpose Entity.
(b) Except as set forth in Exhibit D, there is no litigation or
proceedings pending, or to Borrower's Knowledge threatened, against any Project,
Borrower, or Guarantor, which would reasonably be expected to, if adversely
determined, cause a Material Adverse Change with respect to any Borrower,
Guarantor or any Project. There are no Environmental Proceedings and no Borrower
has Knowledge of any threatened Environmental Proceedings.
(c) Each Borrower is a duly formed and validly existing limited
liability company and is in good standing under the laws of the State of
Delaware, with its principal place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇. Each Borrower has full power and authority to
execute, deliver and perform all Loan Documents to which such Borrower is a
party, and such execution, delivery and performance have been duly authorized by
all requisite action on the part of such Borrower. The Loan Documents have each
been duly executed and delivered and each constitutes the duly authorized, valid
and legally binding obligation of Borrowers and the Guarantors, as the case may
be, enforceable against Borrowers and the Guarantors, as the case may be, in
accordance with their respective terms. Borrower does not uses any trade names
other than its actual names set forth herein. The direct and indirect ownership
interests in each Borrower and Guarantor are shown on Schedule 5.1(c) attached
hereto.
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(d) The REIT is a corporation duly organized, validly existing
and in good standing under the laws of the State of Maryland, with its principal
place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇. MPT Operating Partnership, L.P. is a limited partnership duly formed,
validly existing and in good standing under the laws of the State of Delaware,
with its principal place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇. Each Guarantor has full right, power and authority to
execute the Loan Documents on its own behalf.
(e) A true and complete copy the articles of incorporation and
by-laws, articles of organization/certificate of formation and limited liability
company operating agreement or certificate of limited partnership and
partnership agreement, as the case may be, creating each Borrower and Guarantor,
and all other documents creating and governing each Borrower and Guarantor and
any and all amendments thereto (collectively, the "ORGANIZATIONAL DOCUMENTS")
has been furnished to Lender. There are no other material agreements, oral or
written, among any of the partners or members of any Borrower or any Guarantor
relating to Borrower or Guarantor, as the case may be. The Organizational
Documents were duly executed and delivered, are in full force and effect, and
binding upon and enforceable against each Borrower and Guarantor, as applicable,
in accordance with their terms. The Organizational Documents constitute the
entire understanding among the shareholders, partners, members of each Borrower,
and Guarantor. No breach exists under the Organizational Documents and no act
has occurred and no condition exists which, with the giving of notice or the
passage of time would reasonably be expected to constitute a breach under the
Organizational Documents.
(f) No consent, approval or authorization of or declaration,
registration or filing with any Governmental Authority or nongovernmental person
or entity, including any creditor, partner, or member of any Borrower or
Guarantor, is required in connection with the execution, delivery and
performance of this Agreement or any of the other Loan Documents by Borrower
other than the recordation of the Mortgages and the filing of UCC Financing
Statements, except for such consents, approvals or authorizations of or
declarations or filings with any Governmental Authority or non-governmental
person or entity where the failure to so obtain would not have a material
adverse effect on any Borrower or Guarantor or which have been obtained as of
any date on which this representation is made or remade. None of the Borrowers
or Guarantors is insolvent and there has been no: (i) assignment made for the
benefit of the creditors of any of them; (ii) appointment of a receiver for any
of them or for the property of any of them; or (iii) bankruptcy, reorganization,
or liquidation proceeding instituted by or against any of them.
(g) There is no Default under this Agreement or the other Loan
Documents, nor any condition, which, after notice or the passage of time or
both, would reasonably be expected to constitute a Default or an Event of
Default under, said documents. In addition, no Borrower is in default under any
material contract, agreement or commitment to which it is a party. The
execution, delivery and compliance by each Borrower with the terms and
provisions of this Agreement and the other Loan Documents will not (i) to such
Borrower's Knowledge, violate any provisions of law or any applicable
regulation, order or other decree of any court or governmental entity, or (ii)
materially conflict or be materially inconsistent with, or result in any
material default under, any contract, agreement or commitment to which such
Borrower is bound. Borrowers have delivered to Lender copies of any material
agreements
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between any Borrower and any Affiliate of any Borrower or Guarantor related in
any way to any Project.
(h) To each Borrowers' Knowledge, (1) no condemnation of any
portion of any Project, (2) no condemnation or relocation of any roadways
abutting any Project, and (3) no proceeding to deny access to any Project from
any point or planned point of access to any Project, has commenced or is
contemplated by any Governmental Authority.
(i) To Borrowers' Knowledge, the use of each Project for its
Primary Intended Use (as defined in the applicable Project Lease), including the
present and contemplated accessory uses do not materially violate (i) any Laws
(including subdivision, zoning, building, environmental protection and wetland
protection Laws), or (ii) any building permits, covenants, conditions and
restrictions of record affecting any Project or any part thereof. Except as
shown in the Title Policies and the surveys of the Projects, to Borrowers'
Knowledge, no building or other improvement encroaches upon any property line,
building line, set back line, side yard line or any recorded or visible easement
(or other easement of which a Borrower is aware) with respect to any Project.
Except as shown in the Title Policies and the surveys of the Projects, to
Borrowers' Knowledge, no Project is situated in an area designated as having
special flood hazards as defined by the Flood Disaster Protection Act of 1973,
as amended, or as a wetland by any governmental entity having jurisdiction over
a Project. To Borrowers' Knowledge, all Governmental Approvals required for the
operation of the Projects have been obtained, except where the failure to so
obtain would not reasonably be expected to have a material adverse effect on the
Project. To Borrowers' Knowledge, all Laws relating to the operation of the
Improvements have been materially complied with and all material permits and
licenses required for the operation of the Projects have been obtained. To
Borrowers' Knowledge, each Project is accessible through fully improved and
dedicated roads, accepted for maintenance and public use by public authority
having jurisdiction. To Borrowers' Knowledge, each Project has adequate water,
gas and electrical supply, storm and sanitary sewerage facilities, other
required public utilities, and means of access between the Project and public
highways; none of the foregoing will be foreseeably delayed or impeded by virtue
of any requirements To each Borrower's Knowledge, there are no, nor are there
any alleged or asserted, violations of Law, regulations, ordinances, codes,
permits, licenses, declarations, covenants, conditions or restrictions of
record, or other agreements relating to any Project, or any part thereof.
(j) No brokerage fees or commissions are payable by or to any
person in connection with this Agreement or the Loan to be disbursed hereunder
with whom any Borrower or Guarantor has dealt other than to ▇.▇. Melody &
Company.
(k) All financial statements previously furnished by any Borrower
or Guarantor to Lender in connection with the Loan are complete and correct in
all material respects and fairly present the financial conditions of the
subjects thereof as of the respective dates thereof (except for the absence of
footnotes and subject to normal year-end adjustments which, in the aggregate,
are not material), and no Material Adverse Change with respect to any Borrower
or Guarantor or any Project has occurred since the most-recent financial
statement furnished to Lender with respect to such Borrower or Guarantor. None
of the Borrowers nor any Guarantor has any material liability, contingent or
otherwise, not disclosed in such financial statements if such disclosure would
be required pursuant to GAAP.
-21-
(l) Each Project is taxed separately without regard to any other
real property and for all purposes each Project may be mortgaged, conveyed and
otherwise dealt with as an independent parcel. There are no unpaid or
outstanding real estate or other taxes or assessments on or against the Projects
or any part thereof, except general real estate taxes for the current tax year
not yet due or payable. To any Borrower's Knowledge, there is no pending or
contemplated action pursuant to which any special assessment may be levied
against any portion of the Projects.
(m) Each of the Borrowers represents and warrants that (i) it is
a party to a Project Lease, as listed on Schedule 5(m) attached hereto, (ii) a
true, correct and complete copy of each Project Lease has been delivered to
Lender, (iii) except for the subject Project Lease (and as permitted
thereunder), there are no leases or subleases affecting such Borrower's Project
or any portion of the Property, (iv) no Borrowers have issued or received any
notice of default under any Project Lease, (v) no Borrowers and, to each
Borrower's Knowledge, no Project Lessee is in material default under the terms
of any Project Lease, (vi) each Project Lease materially complies with all
applicable laws, (vii) no rent payment under any Project Lease has been paid
more than thirty (30) days in advance, (viii) no rents or charges under any
Project Lease have been waived, released or otherwise discharged or compromised
and (ix) except as provided in the Project Leases, there are no outstanding
options or rights of first offer or refusal to purchase all or any portion of
the Projects or Borrowers' interest therein or any portion thereof.
(n) The proceeds of the Loan shall be used for proper business
purposes. The Loan is not being made for the purpose of purchasing or carrying
"margin stock" within the meaning of Regulation T, U or X issued by the Board of
Governors of the Federal Reserve System and no portion of the proceeds of the
Loan shall be used in any matter that would violate such Regulations or
otherwise violate the Securities Act of 1933 or the Securities Exchange Act of
1934, and Borrowers agree to execute all instruments necessary to comply with
all the requirements of Regulation U of the Federal Reserve System.
(o) No Borrower is a party in interest to any plan defined or
regulated under ERISA, and no assets of any Borrower are "plan assets" of any
employee benefit plan covered by ERISA or Section 4975 of the Internal Revenue
Code.
(p) No Borrower is or will be, and no legal or beneficial
interest of a partner or member in Borrower is or will be held directly or
(other than by reason of transfers of ownership interests in the REIT)
indirectly by a "foreign corporation", "foreign partnership", "foreign trust",
"foreign estate", "foreign person", "affiliate" of a "foreign person" or a
"United States intermediary" of a "foreign person" within the meaning of the
Internal Revenue Code Sections 897, 1445 or 7701, the Foreign Investments in
Real Property Tax Act of 1980, the International Foreign Investment Survey Act
of 1976, the Agricultural Foreign Investment Disclosure Act of 1978, or the
regulations promulgated pursuant to such Acts or any amendments to such Acts.
(q) Borrowers and Guarantors have furnished Lender with a true
and complete copy of all material documents relating to Projects.
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(r) No Borrower nor Guarantor, nor any beneficial owner of any
Borrower, is currently listed on the OFAC Lists.
(s) All statements set forth in the Recitals are true and correct
in all material respects.
(t) To Borrowers' Knowledge, there has been no material damage or
destruction of any part of any Project by fire or other casualty that has not
been repaired. Except as part of routine maintenance, there are presently no
existing material defects in the Projects and no repairs or alterations thereof
are reasonably necessary or appropriate.
(u) To each Borrower's Knowledge, there are no strikes, boycotts,
or labor disputes which would reasonably be anticipated to have a material
adverse effect on the operation of any Project.
(v) No Borrower has any employees.
(w) Except as set forth on Exhibit H, no Borrower has any
interest in any trademarks, copyrights, patents or other intellectual property
with respect to the Projects.
Borrowers agree that all of the representations and warranties set forth above
and elsewhere in this Agreement are true in all material respects as of the date
hereof. It shall be a condition precedent to the Closing Date and each
subsequent disbursement, if any, that each of said representations and
warranties is true and correct in all material respects as of the date of such
requested disbursement. Each disbursement from any escrows or reserves held by
or on behalf of Lender shall be deemed to be a reaffirmation by Borrowers that
each of the representations and warranties is true and correct in all material
respects as of the date of such disbursement except as otherwise disclosed by
Borrowers in writing and approved by Lender in connection with such
disbursement. In addition, at Lender's request, Borrowers shall reaffirm such
representations and warranties in writing prior to each such disbursement.
ARTICLE 6
ENVIRONMENTAL MATTERS
6.1 Environmental Representations and Warranties. Each Borrower hereby
represents and warrants to Lender that, except as specifically disclosed in the
documents listed in Exhibit F attached hereto (the "ENVIRONMENTAL DOCUMENTS")
and in any Environmental Report, (a) to each Borrower's Knowledge, (i) each
Project is in a clean, safe and healthful condition and, except for materials
used in the ordinary course of maintenance and operation (and in material
compliance with all Laws) of such Project, has been and is free of all Hazardous
Material, and (ii) no release of any Hazardous Material has occurred on, onto or
about the Projects; (b) no Borrower nor, to each Borrower's Knowledge, any other
person or entity, has ever caused or permitted any Hazardous Material to be
placed, held, located or disposed of on, under, at or in a manner to affect any
Project, or any part thereof, and no Project has ever been used (whether by a
Borrower or, to each Borrower's Knowledge, by any other person or entity) for
any activities involving, directly or indirectly, the use, generation,
treatment, storage, transportation, or disposal of any Hazardous Material,
except as permitted under the Project
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Leases and for materials used in the ordinary course of maintenance and
operation (and in material compliance with all Laws) of the Projects; (c) to
each Borrower's Knowledge, the Project currently complies, and will comply based
on its anticipated use, with all Laws relating to Hazardous Material; (d) to
each Borrower's Knowledge in connection with the ownership, operation, and use
of the Project, all necessary notices have been filed and all required permits,
licenses and other authorizations have been obtained relating to the generation,
treatment, storage, disposal or use of Hazardous Material; (e) to each
Borrower's Knowledge, there is no present, past or threatened investigation,
inquiry or proceeding relating to the environmental condition of, or to events
on or about, the Project; (f) to each Borrower's Knowledge, neither the Project
nor any Borrower is subject to any remedial obligations under any Laws relating
to Hazardous Material, health or the environment; (g) to each Borrower's
Knowledge, there are no underground tanks, vessels, or similar facilities for
the storage, containment or accumulation of Hazardous Materials of any sort on,
under or affecting any Project; and (h) it has not, nor will it, release or
waive the liability of any previous owner, lessee or operator of any Project or
any party who may be potentially responsible for the presence of or removal of
Hazardous Material from any Project, nor has it made promises of indemnification
regarding Hazardous Material on any Project to any party, except as contained
herein and in the Loan Documents.
6.2 Environmental Covenants. Environmental Indemnitors shall:
(a) materially comply, and enforce their rights under the Project
Leases with respect to each Project Lessee's compliance, with all Laws relating
to Hazardous Material;
(b) not install, use, generate, manufacture, store, treat,
release or dispose of, nor permit the installation, use, generation, storage,
treatment, release or disposal of, Hazardous Material on, under or about any
Project, except for materials used in the ordinary course of maintenance and
operation (and in material compliance with all Laws) of the Projects;
(c) following Borrowers' Knowledge thereof, promptly advise
Lender in writing of: (i) any and all Environmental Proceedings; (ii) the
presence of any Hazardous Material on, under or about any Project of which
Lender has not previously been advised in writing (other than Hazardous
Materials permitted by applicable law and (A) permitted under the Project Leases
or (B) used in the ordinary course of maintenance and operation of the
Projects); (iii) any remedial action taken by, or on behalf of, any
Environmental Indemnitor in response to any Hazardous Material on, under or
about any Project or to any Environmental Proceedings of which Lender has not
previously been advised in writing and (iv) receipt of written notice by any
Environmental Indemnitor of any occurrence or condition on any real property
adjoining or in the vicinity of any Project that could cause any Project or any
part thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use of such Project under any Laws relating to Hazardous
Materials;
(d) provide Lender with copies of all material reports, analyses,
notices, licenses, approvals, orders, correspondences or other written materials
in its possession or control relating to the environmental condition of each
Project or real property or bodies of water adjoining or in the vicinity of each
Project or Environmental Proceedings promptly upon receipt, completion or
delivery of such materials;
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(e) not install or allow to be installed any tanks on, at or
under any Project for the purpose of storing Hazardous Materials (other than as
permitted under the Project Leases or materials used in the ordinary course of
maintenance and operation);
(f) not create or permit to continue in existence any lien
(whether or not such lien has priority over the lien created by the Mortgage)
upon any Project imposed pursuant to any Laws relating to Hazardous Material;
and
(g) not materially change or alter the present use as a
healthcare facility of any Project (except as permitted under the terms of a
Project Lease) unless Borrowers shall have notified Lender thereof in writing
and Lender shall have determined, in its reasonable discretion, that such change
or modification will not result in the presence of Hazardous Material on the
Project in question in such a level that would increase the potential liability
for Environmental Proceedings.
6.3 Right of Entry and Disclosure of Environmental Reports. Subject to
any applicable restrictions under the Project Leases, each Borrower hereby
grants to Lender its agents, employees, consultants and contractors, an
irrevocable license and authorization to enter upon and inspect such Borrower's
Project at reasonable times and upon reasonable advance written notice and
without disturbing the business of the Project Lessees, and conduct such
reasonable environmental audits and tests, including, without limitation,
subsurface testing, soils and groundwater testing, and other tests which may
physically invade the Project. With respect to invasive testing, such as soil
borings, Lender shall consult with Borrowers in advance of such tests. Lender
agrees, however, that it shall not conduct any such audits or tests, unless an
Event of Default exists and is continuing under the Loan Documents at the time
in question or Lender has reason to believe that such audit or test may disclose
the presence or release of Hazardous Material or unless an environmental audit
deems further testing necessary. All reasonable out-of-pocket costs and expenses
incurred by Lender in connection with any inspection, audit or testing conducted
in accordance with this Section 6.3 shall be paid by Borrowers. The results of
all investigations and reports prepared by Lender shall be and at all times
remain the property of Lender and, if no Event of Default shall have occurred
and be continuing, upon request by a Borrower, Lender shall provide to Borrowers
a copy of the written report with respect to any inspection, audit or testing
for which any Borrower has paid hereunder. Lender hereby reserves the right, and
Borrowers hereby expressly authorize Lender to make available to any party in
connection with a sale of any Project any and all environmental reports, whether
prepared by Lender or prepared by any Borrower and provided to Lender
(collectively, the "ENVIRONMENTAL REPORTS"), which Lender may have with respect
to the Project. Borrower consents to Lender notifying any party under such
circumstances of the availability of any or all of the Environmental Reports and
the information contained therein. Each Environmental Indemnitor further agrees
that Lender may disclose such Environmental Reports to any governmental agency
or authority if they reasonably believe that they are required to disclose any
matter contained therein to such agency or authority; provided that Lender shall
give Borrowers at least ten (10) days' prior written notice (or such shorter
time as shall be necessary to permit Lender to comply with the requirements of
any applicable Governmental Authority) before so doing. Each Environmental
Indemnitor acknowledges that Lender cannot control or otherwise assure the
truthfulness or accuracy of the Environmental Reports, and that the release of
the Environmental Reports, or any information contained therein, to prospective
bidders at any foreclosure sale of
-25-
any Project may have a material and adverse effect upon the amount, which a
party may bid at such sale. Each Environmental Indemnitor agrees that Lender
shall not have any liability whatsoever as a result of delivering any or all of
the Environmental Reports or any information contained therein to any third
party, and each Environmental Indemnitor 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 Environmental Reports or the delivery
thereof.
6.4 Environmental Indemnitors' Remedial Work. Environmental
Indemnitors shall promptly perform any and all necessary remedial work
("REMEDIAL WORK") in response to any Environmental Proceedings or the presence,
storage, use, disposal, transportation, discharge or release of any Hazardous
Material on, under or about any of the Projects; provided, however, that
Environmental Indemnitors shall perform or cause to be performed such Remedial
Work so as to minimize any impairment to Lender's security under the Loan
Documents.
All Remedial Work shall be conducted: (a) in a diligent and timely fashion by
licensed contractors acting under the supervision of a consulting environmental
engineer; (b) pursuant to a detailed written plan for the Remedial Work approved
by any public or private agencies or persons with a legal or contractual right
to such approval; (c) with such insurance coverage pertaining to liabilities
arising out of the Remedial Work as is then customarily maintained with respect
to such activities; and (d) only following receipt of any required permits,
licenses or approvals. The selection of the Remedial Work contractors and
consulting environmental engineer, the contracts entered into with such parties,
any disclosures to or agreements with any public or private agencies or parties
relating to Remedial Work and the written plan for the Remedial Work (and any
changes thereto) shall each be subject to Lender's prior written approval, which
shall not be unreasonably withheld, conditioned, or delayed. In addition,
Environmental Indemnitors shall submit to Lender, promptly upon receipt or
preparation, copies of any and all material reports, studies, analyses,
correspondence, governmental comments or approvals, proposed removal or other
Remedial Work contracts and similar information prepared or received by
Environmental Indemnitors in connection with any Remedial Work, or Hazardous
Material relating to a Project. All costs and expenses of such Remedial Work
shall be paid by Environmental Indemnitors, including, without limitation, the
charges of the Remedial Work contractors and the consulting environmental
engineer, any taxes or penalties assessed in connection with the Remedial Work
and Lender's reasonable fees and out-of-pocket costs incurred in connection with
monitoring or review of such Remedial Work. Lender shall have the right but not
the obligation to join and participate in, as a party if it so elects, any legal
proceedings or actions initiated in connection with any Environmental
Proceedings.
6.5 Environmental Indemnity. Environmental Indemnitors shall protect,
indemnify, defend and hold Lender and any successors to Lender's interest in the
Projects, and any other party who acquires any portion of any Project at the
first foreclosure sale or otherwise in the first transfer of ownership through
the exercise of Lender's rights and remedies under the Loan Documents, and all
directors, officers, employees and agents of all of the aforementioned
indemnified parties, harmless from and against any and all claims, liabilities,
damages, and Expenses which arise out of or relate in any way to any breach of
any representation, warranty or covenant contained in this Article 6, or any
Environmental Proceedings or any use, handling, production, transportation,
disposal, release or storage of any Hazardous Material in, under or on
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any Project, whether by any Environmental Indemnitor or any other person (except
to the extent attributable to Lender's gross negligence or willful misconduct),
including, without limitation:
(a) all foreseeable and unforeseeable Expenses (including any
loss of principal and interest due and owing on the Loan) arising out of: (i)
Environmental Proceedings or the use, generation, storage, discharge or disposal
of Hazardous Material by Environmental Indemnitors, any prior owner or operator
of any Project or any person on or about any Project; (ii) any residual
contamination affecting any natural resource or the environment; or (iii) any
exercise by Lender of any of its rights and remedies hereunder; and
(b) the reasonable costs of any required or necessary
investigation, assessment, testing, remediation, repair, cleanup, or
detoxification of any Project and the preparation of any closure or other
required plans.
Environmental Indemnitors' liability to the aforementioned indemnified parties
shall arise upon the earlier to occur of (1) discovery of any Hazardous Material
on, under or about any Project, or (2) the institution of any Environmental
Proceedings, and not upon the realization of loss or damage, and Environmental
Indemnitors shall pay to Lender from time to time, promptly upon request, an
amount equal to such Expenses, as reasonably determined by Lender. The foregoing
indemnity shall not include Expenses arising solely from Hazardous Material
which first exists on any Project following the date on which the Lender takes
title to such Project, whether by foreclosure of the applicable Mortgage,
deed-in-lieu thereof or otherwise.
6.6 Remedies Upon an Environmental Default. Upon the occurrence of an
Event of Default under Section 8.1(j) of this Agreement or under any other Loan
Documents relating to environmental compliance, Lender may exercise any and all
remedies provided for herein or therein, and/or do or cause to be done whatever
is reasonably necessary to cause the Projects to comply with all Laws relating
to Hazardous Material and other applicable Laws, rules, regulations or orders
and the cost thereof shall constitute an Expense hereunder and shall become
immediately due and payable following written notice from Lender of the amount
of such Expense and with interest thereon at the Default Rate until paid.
Environmental Indemnitors shall give to Lender and its agents and employees
access to the Projects for the purpose of effecting such compliance and hereby
specifically grant to Lender a license, effective upon expiration of the
applicable period as described above, if any, to do whatever is necessary to
cause the Projects to so comply, including, without limitation, to enter the
Projects and remove therefrom any Hazardous Material or otherwise comply with
any Laws relating to Hazardous Material.
6.7 Unconditional Environmental Obligations. Notwithstanding any term
or provision contained herein or in the other Loan Documents, the covenants and
obligations of the Environmental Indemnitors under this Article 6 (the
"ENVIRONMENTAL OBLIGATIONS") are unconditional. Environmental Indemnitors shall
be fully, personally, jointly and severally liable for the Environmental
Obligations, and such liability shall not be limited to the original principal
amount of the Loan. The Environmental Obligations shall be enforceable by
Lender, its Affiliates, and its successors and assigns. The Environmental
Obligations shall survive the repayment of the Loan and any foreclosure,
deed-in-lieu or transfer in lieu of foreclosure or
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similar proceedings or any transfer of title to the Projects or any portion
thereof. The Environmental Obligations are independent obligations that are not
secured by the Project.
6.8 Assignment of Environmental Obligations Prohibited. The
Environmental Obligations may not be assigned or transferred, in whole or in
part, by Environmental Indemnitors and any purported assignment by Environmental
Indemnitors of the Environmental Obligations shall be void ab initio and of no
force or effect.
6.9 Indemnification Separate from the Loan.
(a) The Environmental Indemnitors agree that the Environmental
Obligations are separate, independent of and in addition to the undertakings of
the Environmental Indemnitors, as applicable, pursuant to the Loan, the Note,
the other provisions of this Agreement and the other Loan Documents. With
respect to the Projects located in the State of California, the provisions of
this Article Six are intended to be supplemental, and not in derogation of,
Lender's rights under California Civil Code Section 2929.5 and California Code
of Civil Procedure Sections 564, 726.5 and 736 and any successor sections
thereof. A separate action may be brought to enforce the provisions of this
Article 6, which shall in no way be deemed to be an action on the Note, whether
or not the Loan has been repaid and whether or not Lender would be entitled to a
deficiency judgment following a judicial foreclosure, trustee's sale or UCC
sale. The Environmental Obligations shall not be affected by any exculpatory
provisions contained in the Note, this Agreement or any of the other Loan
Documents. All rights and obligations of this Article 6 shall survive
performance and repayment of the obligations evidenced by and arising under the
Loan Documents, surrender of the Note, reconveyance of the Mortgages, release of
other security provided in connection with the Loan, trustee's sale or
foreclosure under the Mortgages and/or any of the other Loan Documents (whether
by deed or other assignment in lieu of foreclosure, or otherwise, acquisition of
any Project by Lender, any other transfer of any Project, and transfer of all of
Lender's rights in the Loan, the Loan Documents, and the Projects.
(b) The Environmental Indemnitors may not assign or delegate
their covenants, agreements and obligations hereunder without the prior written
consent of Lender, in Lender's sole discretion. The covenants, agreements and
obligations of the Environmental Indemnitors hereunder shall be binding upon the
Environmental Indemnitors, their heirs, administrators, legal representatives,
successors and assigns. The rights, remedies and benefits of Lender hereunder
shall inure to the benefit of Lender, its legal representatives and the
successors and assigns of its interest under any or all of the Loan Documents
and its Affiliates, it being the intention hereof that the covenants and
indemnities of the Environmental Indemnitors shall, without limitation, further
extend to any person or entity who holds an interest in the Note without in any
way terminating, limiting or diminishing the benefits to any previous or
existing beneficiary of this Article 6.
(c) Environmental Indemnitors waive all rights to require Lender
to (i) proceed against or exhaust any security for the Loan or (ii) pursue any
remedy in Lender's power whatsoever.
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6.10 Further Security. As further security for the Environmental
Obligations, Environmental Indemnitors do hereby assign to Lender, to the extent
assignable, all of Environmental Indemnitors' rights and benefits under any
right of indemnification or right to contribution to which Environmental
Indemnitors may be entitled (whether under Hazardous Materials law, by contract
or otherwise) with respect to any Hazardous Materials or environmental condition
(collectively, the "Indemnification Rights") and Environmental Indemnitors
hereby covenant to take such further actions and to execute such further
instruments as are necessary to transfer to Lender all rights and benefits
accruing in favor of Environmental Indemnitors under any of the Indemnification
Rights. Notwithstanding the foregoing, Environmental Indemnitors shall continue
to fully perform all of their respective covenants and obligations under such
Indemnification Rights and shall continue to enforce the terms of the
Indemnification Rights, and Lender shall have no liabilities or obligations
under the Indemnification Rights or for enforcement of the Indemnification
Rights by reason of the foregoing assignment. The assignment and covenants in
this Section 6.10 shall survive in perpetuity.
ARTICLE 7
CASUALTIES AND CONDEMNATION
7.1 Lender's Election to Apply Insurance Proceeds on Indebtedness.
(a) Subject to the provisions of Section 7.1(b) below and the
Project Leases, Lender may elect to collect, retain and apply upon the
Indebtedness of Borrower under this Agreement or any of the other Loan Documents
all proceeds of insurance resulting from any loss at any Project or condemnation
or other taking of any Project or a portion thereof (individually and
collectively referred to as "INSURANCE PROCEEDS") after deduction of all
reasonable expenses of collection and settlement, including reasonable
attorneys' and adjusters' fees and charges. Any proceeds remaining after
repayment of the Indebtedness shall be paid by Lender to the Borrower which owns
such Project.
(b) Notwithstanding anything in Section 7.1(a) to the contrary,
except as otherwise expressly agreed by Lender, a Borrower and a Project Lessee
in a Subordination and Attornment Agreement, in the event of any casualty to any
Improvements or any condemnation of part of any Project, Lender agrees to make
available the Insurance Proceeds to restoration of such Improvements if (i) no
Event of Default exists and is continuing, (ii) all Insurance Proceeds are
deposited with Lender, (iii) in Lender's reasonable judgment, the amount of
Insurance Proceeds available for restoration of the Improvements is sufficient
to pay the full and complete costs of such restoration or that Borrowers have
adequate reserves therefor, (iv) the applicable Project Lease will not be
terminated as a result of such casualty or condemnation, (v) the applicable
Borrower shall have provided Lender with reasonable evidence that the census of
the applicable Project and the Project Lessee's income will be restored to the
levels that existed as of the Closing Date prior to the earlier to occur of (i)
one year after the date of the casualty or condemnation or (ii) the date that
any applicable rental loss/business interruption insurance will expire, (vi) the
cost of restoration does not exceed twenty-five percent (25%) of the Loan
Amount, (vii) in Lender's reasonable determination after completion of
restoration, the Loan Amount allocated to the affected Project will not exceed
sixty percent (60%) of the fair market value of affected Project, (viii) in
Lender's reasonable determination, such Project can be
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restored to an architecturally and economically viable project in compliance
with applicable Laws, (ix) Guarantor reaffirms its guaranty, in writing, and (x)
in Lender's reasonable determination, such restoration is likely to be completed
not later than six (6) months prior to the Maturity Date.
7.2 Borrowers' Obligation to Rebuild and Use of Insurance Proceeds
Therefor. In case Lender does not elect to apply or does not have the right to
apply the Insurance Proceeds to the Indebtedness, as provided in Section 7.1
above, Borrowers shall:
(a) Proceed with diligence to make settlement with insurers or
the appropriate governmental authorities and cause the Insurance Proceeds to be
deposited with Lender;
(b) In the event the Insurance Proceeds and the available
proceeds of the Loan are insufficient to assure Lender that the all contemplated
repairs or construction will be completed and Borrowers promptly deposit with
Lender any amount necessary to assure that such contemplated repairs or
construction will be completed or provide Lender evidence, satisfactory to
Lender in Lender's sole discretion, of Borrowers' adequate reserves to pay the
costs of such repairs or construction; and
(c) Promptly proceed with the assumption of construction of the
Improvements, including the repair of all damage resulting from such fire,
condemnation or other cause and restoration to its former condition.
Except as otherwise expressly agreed by Lender, a Borrower and a
Project Lessee in a Subordination and Attornment Agreement, any disbursement by
Lender of Insurance Proceeds and funds deposited by a Borrower shall be
conditioned upon Borrowers' compliance with and satisfaction of the Loan as are
determined by Lender and as are customarily imposed by institutional Lenders for
construction or restoration of similar properties.
ARTICLE 8
EVENTS OF DEFAULT AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of the
following shall constitute an "EVENT OF DEFAULT" as said term is used herein:
(a) Failure of Borrowers to pay the outstanding principal amount,
all interest thereon and all other amounts owing hereunder or under any the
other Loan Documents (the "INDEBTEDNESS") on the Maturity Date or the failure to
pay, within five (5) days of the due date, any other scheduled payment
obligations of Borrowers to Lender, including any payments of interest,
principal amortization or Exit Fee due pursuant to this Agreement;
(b) Failure of Borrowers to pay any amounts due and owing to
Lender under the Loan Documents (other than as described in Section 8.1(a)
above), including, without limitation, insurance premiums payable under Section
4.2(d), as the same become due in accordance with the terms of the Loan
Documents and the continuation of such failure for a period of ten (10) days
following written notice thereof from Lender to Borrower;
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(c) Failure of Borrowers to strictly comply with the provisions
of Section 4.2(b) (transfers), Section 4.2(l) (no additional debt), Section
4.2(m) (organizational documents), or Section 4.2(n) (single purpose entity);
(d) Failure of Borrowers for a period of thirty (30) days after
written notice from Lender, to observe or perform any non-monetary covenant or
condition contained in this Agreement or any other Loan Documents not set forth
in the subsections above; provided, however, that if any such failure concerning
a non-monetary covenant or condition is susceptible to cure and cannot
reasonably be cured within said thirty (30) day period, then Borrowers shall
have an additional sixty (60) day period to cure such failure and no Event of
Default shall be deemed to exist hereunder so long as (Y) Borrowers commences
such cure within the initial thirty (30) day period and diligently and in good
faith pursues such cure to completion within such resulting ninety (90) day
period from the date of Lender's notice, and (Z) the existence of such default
will not result in any Project Lessee having the right to terminate its Project
Lease due to such default; and provided further that if a different notice or
grace period is specified under any other subsection of this Section 8.1 with
respect to a particular breach, or if another subsection of this Section 8.1
applies to a particular breach and does not expressly provide for a notice or
grace period, the specific provision shall control;
(e) Any material default by a Borrower, as lessor, under the
terms of any Project Lease following the expiration of any applicable notice,
grace, and cure period, provided that if the Project Lease does not provide a
notice, grace, and cure period, then the notice, grace, and cure periods
provided in subsections (a) and (b) above, as applicable, will apply to any such
monetary default, and the notice and cure period provided in subsection (d)
above will apply to any such non-monetary default (which respective periods
shall commence upon written notice of default from Lender or the applicable
Project Lessee, whichever occurs first);
(f) If any warranty or representation made now or hereafter by
any Borrower or Guarantor under any Loan Document is untrue or incorrect in any
material respect at the time made or delivered, provided that if such breach is
reasonably susceptible of cure, then no Event of Default shall exist so long as
the applicable party cures said breach (i) by the due date provided in
subsection (a) or (b) above, as applicable, for a breach that can be cured by
the payment of money, or (ii) within the notice and cure period provided in
subsection (d) above for any other breach;
(g) A petition under any Chapter of Title 11 of the United States
Code or any similar law or regulation is filed by or against any Borrower or
Guarantor (and in the case of an involuntary petition in bankruptcy, such
petition is not discharged within sixty (60) days of its filing), or a
custodian, receiver or trustee for any Project or any portion thereof is
appointed, or any Borrower or Guarantor makes an assignment for the benefit of
creditors, or any of them are adjudged insolvent by any state or federal court
of competent jurisdiction, or any of them admit their insolvency or inability to
pay their debts as they become due or an attachment or execution is levied
against any Project or any portion thereof;
(h) if at any time the REIT shall cease to (i) except as
specifically consented to by Lender (pursuant to Section 4.2(b) or otherwise)
own directly or indirectly, 65%
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of the ownership interest in each Borrower and (ii) Control (A) the day to day
management and operation of each Borrower's business and (B) all material
business decisions (including a sale or refinance) for each Borrower during the
term of the Loan;
(i) Borrowers shall fail to cause any of the financial covenants
set forth in Appendix A to be complied with;
(j) if Environmental Indemnitors fail to comply with the
provisions of Article 6 within the earlier to occur of (i) thirty (30) days
after written notice from Lender referring to Article 6 and specifying the
default thereunder or (B) the cure period, if any, permitted under any
applicable law, rule, regulation or order; or
(k) The occurrence of any other event or circumstance specified
to be an Event of Default herein or under any of the other Loan Documents and
the expiration of any applicable notice, grace or cure periods, if any,
specified for such Event of Default herein or therein, as the case may be.
8.2 Remedies Conferred Upon Lender. Lender's rights, remedies and
powers, as provided herein and the other Loan Documents, are cumulative and
concurrent, and may be pursued singly, successively or together against any
Borrower, any guarantor of the Loan, the security described in the Loan
Documents, and any other security given at any time to secure the payment
hereof, all at the sole discretion of Lender. Additionally, Lender may resort to
every other right or remedy available at law or in equity without first
exhausting the rights and remedies contained herein, all in Lender's sole
discretion. Failure of Lender, for any period of time or on more than one
occasion, to exercise its option to accelerate the Maturity Date shall not
constitute a waiver of the right to exercise the same at any time during the
continued existence of any Event of Default or any subsequent Event of Default.
Upon the occurrence of any Event of Default, Lender may pursue any one or more
of the following remedies concurrently or successively, it being the intent
hereof that none of such remedies shall be to the exclusion of any other:
(a) Take possession of any Project and do anything that is
necessary or appropriate in its sole judgment to fulfill the obligations of
Borrowers under this Agreement and the other Loan Documents. Without restricting
the generality of the foregoing and for the purposes aforesaid, each Borrower
hereby appoints and constitutes Lender its lawful attorney-in-fact with full
power of substitution in the Projects to use unadvanced funds remaining under
the Note or which may be reserved, escrowed or set aside for any purposes
hereunder at any time, or to advance funds in excess of the face amount of the
Note, to pay, settle or compromise all existing bills and claims, which may be
liens or security interests, or to avoid such bills and claims becoming liens
against any Project; to execute all applications and certificates in the name of
a Borrower prosecute and defend all actions or proceedings in connection with
any of the Improvements or Projects; and to do any and every act which a
Borrower might do in its own behalf; it being understood and agreed that this
power of attorney shall be a power coupled with an interest and cannot be
revoked;
(b) Declare the Note or the Indebtedness to be immediately due
and payable;
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(c) Use and apply any monies or letters of credit deposited by
Borrowers with Lender, including all escrows and reserves, regardless of the
purposes for which the same was deposited, to cure any such default or to apply
on account of any Indebtedness under this Agreement which is due and owing to
Lender;
(d) Exercise or pursue any other remedy or cause of action
permitted under this Agreement or any other Loan Documents, or conferred upon
Lender by operation of Law.
Notwithstanding the foregoing, upon the occurrence of any Event of Default under
Section 8.1(f) all amounts evidenced by the Note shall automatically become due
and payable, without any presentment, demand, protest or notice of any kind to
Borrowers.
ARTICLE 9
LOAN EXPENSE, COSTS AND ADVANCES
9.1 Loan and Administration Expenses. Whether or not the Loan is made
(unless the Loan is not made due to a default by the Lender), each Borrower
unconditionally agrees to pay all Expenses of the Loan, including all amounts
payable pursuant to Sections 2.7, 2.8 and 9.2 and any and all other fees owing
to Lender pursuant to the Loan Documents, and also including all reasonable
documentation, modification, or workout costs relating to the Loan, recording,
filing and registration fees and charges, mortgage or documentary taxes, UCC
searches, title and survey charges, all reasonable fees and disbursements of
Lender's consultants, any costs involved in the disbursement, syndication and
administration of the Loan, any reasonable repair or maintenance costs or
payments made to remove or protect against liens, all reasonable costs and
expenses incurred by Lender in connection with the determination of whether or
not Borrowers have performed the obligations undertaken by Borrowers hereunder
or has satisfied any conditions precedent to the obligations of Lender hereunder
and, if any Event of Default occurs hereunder or under any of the Loan Documents
or if the Loan or Note or any portion thereof is not paid in full when and as
due (subject to any applicable notice, grace, or cure periods, if any), all
reasonable costs and expenses of Lender incurred in attempting to enforce or
collect payment of the Loan or enforce any rights of Lender or any Borrower's
obligations hereunder and reasonable expenses of Lender incurred (including
reasonable expenses relating to documentary and expert evidence, publication
costs) in attempting to realize, after an Event of Default has occurred, on any
security or incurred in connection with the sale, disposition (or preparation
for sale or disposition) or liquidation of any security for the Loan (including
any foreclosure sale, deed in lieu transaction or reasonable costs incurred in
connection with any litigation or bankruptcy or administrative hearing and any
appeals therefrom and any post-judgment enforcement action including, without
limitation, supplementary proceedings in connection with the enforcement of this
Agreement). All such Expenses incurred or advances or payments made by Lender
shall also include court costs, reasonable legal fees and disbursements relating
thereto and shall be included as additional Indebtedness evidenced by the Note
and secured by the Mortgages and the other Loan Documents bearing interest at
the Default Rate set forth in the Note until paid. Borrowers agree to pay all
brokerage, finder or similar fees or commissions payable in connection with the
transactions contemplated hereby and shall indemnify, defend and hold Lender
harmless against all claims, liabilities, and Expenses arising in relation to
any claim by broker, finder or similar person. Lender may require the payment of
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Lender's reasonable outstanding fees and expenses as a condition to any
disbursement of the Loan. Lender is hereby authorized to make disbursements from
time to time in payment of or to reimburse Lender for all reasonable Loan
expenses and fees pursuant to this Section 9.1.
9.2 Right of Lender to Make Advances to Cure Borrowers' Defaults. In
the event that Borrowers fail to perform any of Borrowers' covenants, agreements
or obligations contained in this Agreement or any of the other Loan Documents
(after the expiration of applicable notice, grace or cure periods, if any,
except in the event of an emergency), Lender may (but shall not be required to)
perform any of such covenants, agreements and obligations, and any amounts
expended by Lender in so doing shall constitute additional Indebtedness
evidenced by the Note and secured by the Mortgages and the other Loan Documents
and shall bear interest at a rate per annum equal to the Interest Rate (or
Default Rate following an Event of Default).
9.3 Increased Costs. Borrowers agree to pay Lender additional amounts
to compensate Lender for any increase in its actual costs incurred in
maintaining the Loan or any portion thereof outstanding or for the reduction of
any amounts received or receivable from any Borrower as a result of any change
after the date hereof in any applicable Law, regulation or treaty, or in the
interpretation or administration thereof, or by any domestic or foreign court,
changing the basis of taxation of payments under this Agreement to Lender (other
than taxes imposed on or measured by the net income or receipts of Lender or any
franchise tax imposed on Lender). Any amount payable by Borrowers under this
Article 9 shall be paid within five (5) days of receipt by Borrowers of a notice
by Lender setting forth the amount due and the basis for the determination of
such amount, which statement shall be conclusive and binding upon Borrowers,
absent manifest error. Failure on the part of Lender to demand payment from
Borrowers for any such amount attributable to any particular period shall not
constitute a waiver of Lender's right to demand payment of such amount for any
subsequent or prior period.
9.4 Borrower Withholding. If by reason of a change in any applicable
Laws occurring after the date hereof, any Borrower is required by Law to make
any deduction or withholding in respect of any taxes (other than taxes imposed
on or measured by the net income of or receipts of Lender or any franchise tax
imposed on Lender), duties or other charges from any payment due under the Note,
the sum due from Borrowers in respect of such payment shall be increased to the
extent necessary to ensure that, after the making of such deduction or
withholding, Lender receives and retains a net sum equal to the sum which it
would have received had no such deduction or withholding been required to be
made.
9.5 Document and Recording Tax Indemnification. Borrowers agree to
indemnify, defend and hold harmless Lender from and against any claim that any
documentary or mortgage tax is due and payable in connection with the Loan or
the execution, delivery or recording of the Loan Documents to pay such taxes and
Expenses incurred by Lender in connection therewith. Borrowers may contest any
determination that any such taxes are due, but shall pay any such taxes
(including penalties and interest) when legally required. This paragraph shall
survive repayment of the Loan.
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ARTICLE 10
ASSIGNMENTS BY LENDER AND DISCLOSURE
10.1 Assignments and Participations. Lender may from time to time,
without the consent of Borrowers, sell, transfer, pledge, assign and convey the
Loan and the Loan Documents (or any interest therein) and may grant
participations in the Loan. Borrowers agree to cooperate with Lender's efforts
to do any of the foregoing and to execute all documents reasonably required by
Lender in connection therewith which do not adversely affect Borrowers' rights
or unreasonably expand Borrower's obligations under the Loan Documents.
10.2 Disclosure of Information. To the extent not prohibited from
doing so by applicable law, Lender shall have the right (but shall be under no
obligation) to make available to any party for the purpose of granting
participations in or selling, transferring, assigning or conveying all or any
part of the Loan (including any governmental agency or authority and any
prospective bidder at any foreclosure sale of any Project) any and all
information that Lender may have with respect to the Projects and Borrowers,
whether provided by Borrowers, Guarantors, or any third party or obtained as a
result of any environmental assessments. Borrowers and Guarantors agree that
Lender shall have no liability whatsoever as a result of delivering any such
information to any third party, and Borrowers and Guarantors, on behalf of
themselves and their successors and assigns, hereby release and discharge Lender
from any and all liability, claims, damages, or causes of action, arising out
of, connected with or incidental to the delivery of any such information to any
third party.
ARTICLE 11
GENERAL PROVISIONS
11.1 Captions. The captions and headings of various Articles, Sections
and subsections of this Agreement and the other Loan Documents and the Exhibits
and Schedules pertaining thereto are for convenience only and are not to be
considered as defining or limiting in any way the scope or intent of the
provisions hereof or thereof.
11.2 Waiver of Jury Trial. BORROWERS AND LENDER EACH KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY CLAIM,
CONTROVERSY DISPUTE, ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS (INCLUDING WITHOUT LIMITATION ANY ACTIONS
OR PROCEEDINGS FOR ENFORCEMENT OF THE LOAN DOCUMENTS) AND AGREE THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
BORROWERS AND LENDER EACH ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT
TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH OF THEM HAS RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THAT
EACH OF THEM WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE
DEALINGS. BORROWERS AND LENDER EACH WARRANT AND REPRESENT THAT EACH HAS HAD THE
OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
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11.3 Jurisdiction. TO THE GREATEST EXTENT PERMITTED BY LAW, EACH
BORROWER AND EACH GUARANTOR HEREBY WAIVES ANY AND ALL RIGHTS TO REQUIRE
MARSHALLING OF ASSETS BY LENDER. WITH RESPECT TO ANY SUIT, ACTION OR PROCEEDINGS
RELATING TO THIS AGREEMENT (EACH, A "PROCEEDING"), BORROWER AND EACH GUARANTOR
IRREVOCABLY (A) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND
FEDERAL COURTS HAVING JURISDICTION IN THE CITY OF CHICAGO, COUNTY OF ▇▇▇▇ AND
STATE OF ILLINOIS, AND (B) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO
THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT IN ANY SUCH COURT, WAIVES ANY
CLAIM THAT ANY PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER
WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO SUCH PROCEEDING, THAT SUCH COURT
DOES NOT HAVE JURISDICTION OVER SUCH PARTY. NOTHING IN THIS AGREEMENT SHALL
PRECLUDE LENDER FROM BRINGING A PROCEEDING IN ANY OTHER JURISDICTION NOR WILL
THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE JURISDICTIONS PRECLUDE THE
BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION. EACH BORROWER AND EACH
GUARANTOR HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND FURTHER
AGREES AND CONSENTS THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS
PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY PROCEEDING IN
ANY ILLINOIS STATE OR UNITED STATES COURT SITTING IN THE CITY OF CHICAGO AND
COUNTY OF ▇▇▇▇ MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, DIRECTED TO EACH BORROWER AND/OR EACH GUARANTOR, AS APPLICABLE, AT
THE ADDRESS INDICATED BELOW OR AT THE ADDRESS SET FORTH IN THE GUARANTY, AND
SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT; EXCEPT THAT IF A BORROWER OR A
GUARANTOR SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE FIVE
(5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.
11.4 Governing Law. Irrespective of the place of execution and/or
delivery, this Agreement and the other Loan Documents shall be governed by, and
shall be construed in accordance with, the internal laws of the State of
Illinois, without regard to conflicts of law principles except as provided in
the Mortgages.
11.5 Lawful Rate of Interest. In no event whatsoever shall the amount
of interest paid or agreed to be paid to Lender pursuant to this Loan Agreement,
the Note or any of the Loan Documents exceed the highest lawful rate of interest
permissible under applicable law. If, from any circumstances whatsoever,
fulfillment of any provision of this Loan Agreement, the Note and the other Loan
Documents shall involve exceeding the lawful rate of interest which a court of
competent jurisdiction may deem applicable hereto ("EXCESS INTEREST"), then ipso
facto, the obligation to be fulfilled shall be reduced to the highest lawful
rate of interest permissible under such law and if, for any reason whatsoever,
Lender shall receive, as interest, an amount which would be deemed unlawful
under such applicable law, such interest shall be applied to the Loan (whether
or not due and payable), and not to the payment of interest, or refunded to
Borrowers if such Loan has been paid in full. No Borrower, guarantor, endorser
or surety nor
-36-
their heirs, legal representatives, successors or assigns shall have any action
against Lender for any damages whatsoever arising out of the payment or
collection of any such Excess Interest.
11.6 Modification; Consent. No modification, waiver, amendment or
discharge of this Agreement or any other Loan Document shall be valid unless the
same is in writing and signed by the party against which the enforcement of such
modification, waiver, amendment or discharge is sought. Consent by Lender to any
act or omission by Borrowers shall not be construed as a consent to any other or
subsequent act or omission or to waive the requirement for Lender's consent to
be obtained in any future or other instance.
11.7 Waivers; Acquiescence or Forbearance Not to Constitute Waiver of
Lender's Requirements.
(a) Except for any notice, grace, or cure periods expressly set
forth in the Loan Documents, each Borrower (i) waives presentment for payment,
demand, notice of nonpayment or dishonor, protest of any dishonor, protest and
notice of protest and all other notices in connection with the delivery,
acceptance, performance, default or enforcement of the payment of the Loan; (ii)
waives and renounces all rights to the benefits of any statute of limitations
and any moratorium, reinstatement, marshalling, forbearance, valuation, stay,
extension, redemption, appraisement, or exemption and homestead laws now
provided, or which may hereafter be provided, by the laws of the United States
and of any state thereof against the enforcement and collection of the
obligations evidenced by the Note or this Loan Agreement or as a bar to the
enforcement of the lien created by any of the Loan Documents.
(b) Each Borrower (i) consents to any indulgences and all
extensions of time, renewals, waivers, or modifications that may be granted by
Lender with respect to the payment or other provisions of this Loan Agreement,
the Note, and to any substitution, exchange or release of the collateral, or any
part thereof, with or without substitution, and agrees to the addition or
release of any Borrowers, whether primarily or secondarily liable, without
notice to Borrowers and without affecting its liability hereunder; (ii) agrees
that its liability shall be unconditional and without regard to the liability of
any other tax; and (iii) expressly waives the benefit of any statute or rule of
law or equity now provided, or which may hereafter be provided, which would
produce a result contrary to or in conflict with the foregoing.
(c) Each and every covenant and condition for the benefit of
Lender contained in this Agreement and the other Loan Documents may be waived by
Lender, provided, however, that to the extent that Lender may have acquiesced in
any noncompliance with any requirements or conditions precedent to the closing
of the Loan or to any subsequent disbursement of Loan proceeds, such
acquiescence shall not be deemed to constitute a waiver by Lender of such
requirements with respect to any future disbursements of Loan proceeds and
Lender may at any time after such acquiescence require Borrower to comply with
all such requirements. Any forbearance by Lender in exercising any right or
remedy under any of the Loan Documents, or otherwise afforded by applicable law,
including any failure to accelerate the Maturity Date shall not be a waiver of
or preclude the exercise of any right or remedy nor shall it serve as a novation
of the Note or as a reinstatement of the Loan or a waiver of such right of
acceleration or the right to insist upon strict compliance of the terms of the
Loan Documents. Lender's acceptance of payment of any sum secured by any of the
Loan Documents after the due
-37-
date of such payment shall not be a waiver of Lender's right to either require
prompt payment when due of all other sums so secured or to declare a default for
failure to make prompt payment. The procurement of insurance or the payment of
taxes or other liens or charges by Lender shall not be a waiver of Lender's
right to accelerate the maturity of the Loan, nor shall Lender's receipt of any
awards, proceeds, or damages under Article 7 of this Agreement operate to cure
or waive any Borrower's or Guarantor's default in payment of sums secured by any
of the Loan Documents.
11.8 California Waiver Provision. EXCEPT AS OTHERWISE EXPRESSLY
PERMITTED IN THE NOTE OR THIS AGREEMENT, EACH BORROWER HEREBY EXPRESSLY (A)
WAIVES ANY RIGHTS IT MAY HAVE UNDER LAW, PURSUANT TO CALIFORNIA CIVIL CODE
SECTION 2954.10 OR OTHERWISE, TO PREPAY THE NOTE, IN WHOLE OR IN PART, WITHOUT
PENALTY, UPON ACCELERATION OF THE MATURITY DATE, AND (B) AGREES THAT IF, FOR ANY
REASON, A PREPAYMENT OF ALL OR ANY PORTION OF THE PRINCIPAL AMOUNT OF THIS NOTE
IS MADE INCLUDING, WITHOUT LIMITATION, UPON OR FOLLOWING ANY ACCELERATION OF THE
MATURITY DATE BY LENDER ON ACCOUNT OF ANY DEFAULT BY BORROWERS, INCLUDING,
WITHOUT LIMITATION, ANY TRANSFER, DISPOSITION OR FURTHER ENCUMBRANCE PROHIBITED
OR RESTRICTED BY THE DEED OF TRUST OR OTHER LOAN DOCUMENTS, THEN BORROWERS SHALL
BE OBLIGATED TO PAY CONCURRENTLY WITH SUCH PREPAYMENT THE EXIT FEE AND ANY OTHER
PREPAYMENT CHARGE OR PREMIUM TO THE EXTENT REQUIRED UNDER THIS LOAN AGREEMENT,
THE NOTE OR UNDER ANY OTHER LOAN DOCUMENT. BY INITIALING THIS PROVISION IN THE
SPACE PROVIDED BELOW, EACH BORROWER HEREBY DECLARES THAT (1) EACH OF THE FACTUAL
MATTERS SET FORTH IN THIS PARAGRAPH IS TRUE AND CORRECT IN ALL MATERIAL
RESPECTS, (2) LENDER'S AGREEMENT TO MAKE THE LOAN EVIDENCED BY THIS NOTE AT THE
INTEREST RATE AND FOR THE TERM SET FORTH HEREIN CONSTITUTES ADEQUATE
CONSIDERATION FOR THIS WAIVER AND AGREEMENT, AND HAS BEEN GIVEN INDIVIDUAL
WEIGHT BY BORROWERS AND LENDER, (3) EACH BORROWER IS A SOPHISTICATED AND
KNOWLEDGEABLE REAL ESTATE INVESTOR WITH COMPETENT AND INDEPENDENT LEGAL COUNSEL,
AND (4) EACH BORROWER FULLY UNDERSTANDS THE EFFECT OF THIS WAIVER.
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▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, LLC
------------------------------------- ----------------------------------------
Initials Initials
▇▇ ▇▇▇▇▇ ▇▇▇▇, LLC ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, LLC
------------------------------------- ----------------------------------------
Initials Initials
KENTFIELD THCI HOLDING COMPANY LLC MPT OPERATING PARTNERSHIP, L.P.
------------------------------------- ----------------------------------------
Initials Initials
SAN ▇▇▇▇▇▇▇ HEALTH CARE
ASSOCIATES, LP
-------------------------------------
Initials
11.9 Disclaimer by Lender. This Agreement and the other Loan Documents
are made for the sole benefit of Borrowers and Lender, and no other person or
persons shall have any benefits, rights or remedies under or by reason of this
Agreement or the other Loan Documents, or by reason of any actions taken by
Lender pursuant to this Agreement or the other Loan Documents. Lender shall not
be liable to any contractors, subcontractors, supplier, architect, engineer,
Tenant or other party for labor or services performed or materials supplied in
connection with the Project. Lender shall not be liable for any debts or claims
accruing in favor of any such parties against any Borrower or others or against
the Project. Lender neither undertakes nor assumes any responsibility or duty to
any Borrower to select, review, inspect, supervise, pass judgment upon or inform
Borrowers of any matter in connection with the Projects. Borrowers shall rely
entirely upon their own judgment with respect to such matters, and any review,
inspection, supervision, exercise of judgment or supply of information to
Borrowers by Lender in connection with such matters is for the protection of
Lender only, and no Borrower nor any third party is entitled to rely thereon.
11.10 Partial Invalidity; Severability. If any of the provisions of
this Agreement or the other Loan Documents, or the application thereof to any
person, party or circumstances, shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement or the other Loan Documents, or
the application of such provision or provisions to persons, parties or
-39-
circumstances other than those as to whom or which it is held invalid or
unenforceable, shall not be affected thereby, and every provision of this
Agreement shall be valid and enforceable to the fullest extent permitted by law
and to this end, the provisions of this Agreement and all the other Loan
Documents are declared to be severable. All covenants and agreements of
Borrowers shall be joint and several.
11.11 Definitions Include Amendments. Definitions contained in this
Agreement which identify documents, including, but not limited to, the Loan
Documents, shall be deemed to include all amendments and supplements to such
documents from the date hereof, and all future amendments, modifications, and
supplements thereto entered into from time to time to satisfy the requirements
of this Agreement or otherwise with the consent of Lender. Reference to this
Agreement contained in any of the foregoing documents shall be deemed to include
all amendments and supplements to this Agreement.
11.12 Execution in Counterparts. This Agreement and the other Loan
Documents may be executed in any number of counterparts and by different parties
hereto or thereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one
and the same agreement.
11.13 Entire Agreement. This Agreement, taken together with all of the
other Loan Documents and all certificates and other documents delivered by
Borrowers or Guarantors to Lender, embody the entire agreement and supersede all
prior commitments, agreements, representations, and understandings, written or
oral, relating to the subject matter hereof, and may not be contradicted or
varied by evidence of prior, contemporaneous, or subsequent oral agreements or
discussions of the parties hereto.
11.14 Waiver of Damages. In no event shall Lender be liable to any
other party for punitive, exemplary or consequential damages, including, without
limitation, lost profits, whatever the nature of a breach by Lender of its
obligations under this Agreement or any of the Loan Documents, and each
Borrower, for itself and Guarantors, waives all claims for punitive, exemplary
or consequential damages.
11.15 Claims Against Lender. Lender shall not be in default under this
Agreement, or under any other Loan Documents, unless a written notice
specifically setting forth the claim of Borrowers shall have been given to
Lender within three (3) months after any Borrower first had Knowledge of the
occurrence of the event which Borrowers allege gave rise to such claim and
Lender does not remedy or cure the default, if any there be, promptly
thereafter. Each Borrower waives any claim, set-off or defense against Lender
arising by reason of any alleged default by Lender as to which Borrowers do not
give such notice timely as aforesaid. Borrowers acknowledge that such waiver is
or may be essential to Lender's ability to enforce its remedies without delay
and that such waiver therefore constitutes a substantial part of the bargain
between Lender and Borrowers with regard to the Loan. No Guarantor or Tenant is
intended to have any rights as a third-party beneficiary of the provisions of
this Section 11.15
11.16 Set-Offs. During the continuance of an Event of Default, each
Borrower hereby irrevocably authorizes and directs Lender from time to time to
charge any Borrower's accounts and deposits with Lender (or its Affiliates), and
to pay over to Lender an amount equal
-40-
to any amounts from time to time due and payable to Lender hereunder, under the
Note or under any other Loan Document. Each Borrower hereby grants to Lender a
security interest in and to all such accounts and deposits maintained by any
Borrower with Lender (or its Affiliates).
11.17 Relationship. The relationship between Lender and Borrowers
shall be that of creditor-debtor only. No term in this Agreement or in the other
Loan Documents and no course of dealing between the parties shall be deemed to
create any relationship of agency, partnership or joint venture or any fiduciary
duty by Lender to Borrowers or any other party.
11.18 Agents. In exercising any rights under the Loan Documents or
taking any actions provided for therein, Lender may act through its employees,
agents or independent contractors as authorized by Lender.
11.19 Interpretation. With respect to all Loan Documents, whenever the
context requires, all words used in the singular will be construed to have been
used in the plural, and vice versa, and each gender will include any other
gender. The word "obligations" is used in its broadest and most comprehensive
sense, and includes all primary, secondary, direct, indirect, fixed and
contingent obligations. It further includes all principal, interest, prepayment
charges, late charges, loan fees and any other fees and charges accruing or
assessed at any time, as well as all obligations to perform acts or satisfy
conditions. No listing of specific instances, items or matters in any way limits
the scope or generality of any language in the Loan Documents. This Agreement
and all of the other Loan Documents shall not be construed more strictly against
one party than against the other, merely by virtue of the fact that it may have
been prepared primarily by counsel for one of the parties.
11.20 Successors and Assigns. Subject to the restrictions in Section
4.2(b) on transfer and assignment contained in this Agreement, this Agreement
and the other Loan Documents shall inure to the benefit of and shall be binding
on Lender, Borrowers, and Guarantors and their respective heirs, successors and
permitted assigns.
11.21 Time is of the Essence. Borrowers agrees that time is of the
essence under this Agreement and the other Loan Documents and the performance of
each of the covenants and agreement contained herein and therein.
11.22 Notices. Any notice, demand, request or other communication
which any party hereto may be required or may desire to give hereunder shall be
in writing and shall be deemed to have been properly given (a) if hand
delivered, when delivered; (b) if mailed by United States Certified Mail
(postage prepaid, return receipt requested), three (3) Business Days after
mailing (c) if by Federal Express or other reliable overnight courier service,
on the next Business Day after delivered to such courier service or (d) if by
telecopier on the day of transmission if before 3:00 p.m. (Chicago time) on a
Business Day so long as copy is sent on the same day by overnight courier as set
forth below:
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If to Borrowers:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Baker, Donelson, Bearman, Caldwell, & ▇▇▇▇▇▇▇▇▇, PC
1600 SouthTrust Tower
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 205-322-8007
If to Lender:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital, a Division of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President, Portfolio Project Lessee
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital, a Division
of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial
Services Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Healthcare Legal
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
or at such other address as the party to be served with notice may have
furnished in writing to the party seeking or desiring to serve notice as a place
for the service of notice. Any notice or demand delivered to the person or
entity named above to accept notices and demands for such party shall constitute
notice or demand duly delivered to such party, even if delivery is refused.
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11.23 Joint and Several Liability.
(a) The Indebtedness and all other obligations of Borrowers under
the Loan Documents (collectively, the "OBLIGATIONS") shall be the joint and
several obligations and liabilities of Borrowers. Hence, each Borrower shall be
primarily and directly liable for repayment of the Indebtedness and all other
Obligations.
(b) Notwithstanding any provisions of this Agreement to the
contrary, it is intended that the joint and several nature of the liability of
each Borrower for the Obligations and the liens and security interests granted
by Borrowers to secure the Obligations, not constitute a "Fraudulent Conveyance"
(as defined below). Consequently, Lender and each Borrower agree that if the
liability of a Borrower for the Obligations, or any liens or security interests
granted by such Borrower securing the Obligations would, but for the application
of this sentence, constitute a Fraudulent Conveyance, the liability of such
Borrower and the liens and security interests securing such liability shall be
valid and enforceable only to the maximum extent that would not cause such
liability or such lien or security interest to constitute a Fraudulent
Conveyance, and the liability of such Borrower and this Agreement shall
automatically be deemed to have been amended accordingly. For purposes hereof,
"FRAUDULENT CONVEYANCE" means a fraudulent conveyance under Section 548 of
Chapter 11 of Title II of the United States Code (11 U.S.C. Section 101, et
seq.), as amended (the "BANKRUPTCY CODE") or a fraudulent conveyance or
fraudulent transfer under the applicable provisions of any fraudulent conveyance
or fraudulent transfer law or similar law of any state, nation or other
governmental unit, as in effect from time to time.
(c) Lender is hereby authorized, without notice or demand and
without affecting the liability of any Borrower hereunder, to, at any time and
from time to time, (i) renew, extend or otherwise increase the time for payment
of the Obligations; (ii) with the written agreement of any Borrower accelerate
or otherwise change the terms relating to the Obligations or otherwise modify,
amend or change the terms of any promissory note or other agreement, document or
instrument now or hereafter executed by any Borrower and delivered to Lender;
(iii) accept partial payments of the Obligations; (iv) take and hold security or
collateral for the payment of the Obligations or for the payment of any
guaranties of the Obligations and exchange, enforce, waive and release any such
security or collateral; (v) apply such security or collateral and direct the
order or manner of sale thereof Lender, in its sole discretion, may determine;
and (vi) settle, release, compromise, collect or otherwise liquidate the
Obligations and any security or collateral therefor in any manner, without
affecting or impairing the obligations of any Borrower. Except as specifically
provided in this Agreement or any of the other Loan Documents, Lender shall have
the exclusive right to determine the time and manner of application of any
payments or credits, whether received from any Borrower or any other source, and
such determination shall be binding on all Borrowers. All such payments and
credits may be applied, reversed and reapplied, in whole or in part, to any of
the Obligations Lender shall determine in its sole discretion without affecting
the validity or enforceability of the Obligations of any other Borrower.
(d) Each Borrower hereby agrees that, except as hereinafter
provided, its obligations hereunder shall be unconditional, irrespective of (i)
the absence of any attempt to collect the Obligations from any obligor or other
action to enforce the same; (ii) the waiver or consent by Lender with respect to
any provision of any instrument evidencing the Obligations, or
-43-
any part thereof, or any other agreement heretofore, now or hereafter executed
by a Borrower and delivered to Lender; (iii) failure by Lender to take any steps
to perfect and maintain its security interest in, or to preserve its rights to,
any security or collateral for the Obligations; (iv) the institution of any
proceeding under the Bankruptcy Code, or any similar proceeding, by or against a
Borrower or Lender's election in any such proceeding of the application of
Section 1111(b)(2) of the Bankruptcy Code; (v) any borrowing or grant of a
security interest by a Borrower as debtor-in-possession, under Section 364 of
the Bankruptcy Code; (vi) the disallowance, under Section 502 of the Bankruptcy
Code, of all or any portion of Lender's claim(s) for repayment of any of the
Obligations; or (vii) any other circumstance other than payment in full of the
Obligations which might otherwise constitute a legal or equitable discharge or
defense of a guarantor or surety.
(e) Until all Obligations have been paid and satisfied in full,
no payment made by or for the account of a Borrower including, without
limitation, (i) a payment made by such Borrower on behalf of the liabilities of
any other Borrower or (ii) a payment made by any other person under any
guaranty, shall entitle such Borrower, by subrogation or otherwise, to any
payment from any other Borrower or from or out of any other Borrower's property
and such Borrower shall not exercise any right or remedy against any other
Borrower or any property of any other Borrower by reason of any performance of
such Borrower of its joint and several obligations hereunder.
ARTICLE 12
PARTIAL RELEASE
12.1 Partial Release. The Loan is secured by, among other things, the
Mortgages covering six (6) separate and distinct parcels of improved real
property, which are identified on Exhibit A-1 through Exhibit A-6, annexed
hereto and made a part hereof, and all Improvements thereon. Lender agrees to
release from the lien of the Mortgages and the other security documents (each, a
"Release") one or more of said parcels, subject to satisfaction of the following
conditions precedents:
(i) Borrowers shall deliver to Lender a written request (a
"RELEASE NOTICE"), not more than one hundred twenty (120) nor less than thirty
(30) days before the date of any requested Release, containing among other
things, the parcel that is the subject of the Release Notice (the "RELEASE
PROPERTY") and the proposed date of the Release (the "RELEASE DATE");
(ii) Borrowers shall pay to Lender a release price (the "RELEASE
PRICE") equal to the higher of (A) the applicable amount set forth on Schedule
12.1 with respect to the Release Property or (B) the amount required to satisfy
the requirements of subsection (iii) below;
(iii) the principal amount of the Loan after application of the
Release Price (the "REDUCED LOAN AMOUNT") shall be no more than sixty percent
(60%) of Lender's then underwritten value of the Projects other than the Release
Property (the "REMAINING PROJECTS") and the value of the Remaining Projects
shall be not less than $35,000,000, based on (I) Appraisals of the Remaining
Projects reasonably acceptable to Lender
-44-
and dated within three (3) months of the projected release date and (II) the
underwriting criteria and methodology applied by Lender generally to properties
similar to the Real Property at the time of the Release Notice;
(iv) no Default shall have occurred and be continuing and no
Event of Default shall have occurred on either or both of (A) the date on which
the Release Notice is delivered to Lender or (B) the date on which the actual
Release would occur;
(v) the representations and warranties made by Borrowers in this
Agreement and in the other Loan Documents shall be true and correct in all
material respects on and as of the Release Date with the same force and effect
as if made on and as of such date;
(vi) Borrowers shall deliver to Lender an Officer's Certificate
confirming the satisfaction of the conditions set forth in the foregoing
clauses;
(vii) Borrowers shall have executed and delivered or caused to be
executed and delivered to Lender (i) amendments and/or modifications of any of
the Loan Documents as reasonably required by Lender, (ii) reaffirmations of any
Guaranty and (iii) such other agreements as Lender may reasonably require to
reflect the release of Property;
(viii) Borrowers shall pay all costs and expenses incurred by
Lender in connection with the Release and the determination of the Release,
including, without limitation, Lender's reasonable attorney's fees and expenses;
and
(ix) Borrowers shall have paid to Lender on or before the Release
Date, by wire transfer of immediately available funds, (A) the Release Price, as
a principal prepayment under the Loan, (B) all accrued interest, costs,
prepayment premiums or fees relating to the Release, and (C) the Exit Fee (if
any), to the extent payable by reason of the Release and the principal repayment
relating thereto.
In connection with Lender's review of the above conditions, Borrowers shall
provide Lender with such information as Lender may reasonably require,
including, but not limited to, the following: (i) operating statements for the
Remaining Projects for the trailing twelve (12) months; (ii) a then-current rent
roll/census report for the Real Property; (iii) evidence of no material adverse
change in the condition of Borrowers, the Remaining Projects and any Guarantor
from the Closing Date; and (iv) an updated or new Appraisal of the Remaining
Projects. Upon release of the Release Property, Lender shall notify the
applicable bank that Lender has also released its rights to any Clearing Account
or Governmental Clearing Account into which income from the Release Property is
deposited.
-45-
EXECUTED as of the date first set forth above.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC
By: MPT Operating Partnership, L.P.
Its Sole Member
By: /s/ R. ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
R. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Executive Vice President and CFO
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, LLC
By: MPT Operating Partnership, L.P.
Its Sole Member
By: /s/ R. ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
R. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Executive Vice President and CFO
92 BRICK ROAD, LLC
By: MPT Operating Partnership, L.P.
Its Sole Member
By: /s/ R. ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
R. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Executive Vice President and CFO
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, LLC
By: MPT Operating Partnership, L.P.
Its Sole Member
By: /s/ R. ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
R. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Executive Vice President and CFO
KENTFIELD THCI HOLDING COMPANY LLC
By: MPT Operating Partnership, L.P.
Its Sole Member
By: /s/ R. ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
R. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Executive Vice President and CFO
SAN ▇▇▇▇▇▇▇ HEALTH CARE ASSOCIATES, LP
By: MPT of California, LLC
Its General Partner
-46-
By: MPT Operating Partnership, L.P.
Its Sole Member
By: /s/ R. ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
R. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Executive Vice President and CFO
[Signatures continued on next page]
-47-
LENDER:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL, a division of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial
Services Inc., a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
APPENDIX A
FINANCIAL COVENANTS
1. INTEREST COVERAGE RATIO (EBITDA/INTEREST EXPENSE). The Interest
Coverage Ratio shall be a minimum of 2 to1 for the first Defined Period after
the Closing Date and for each subsequent Defined Period thereafter.
2. FIXED CHARGE COVERAGE RATIO (EBITDA/FIXED CHARGES). The Fixed
Charge Coverage Ratio shall be greater than 1.65 to 1.0 for the first Defined
Period after the Closing Date, and for each subsequent Defined Period
thereafter.
3. MINIMUM TANGIBLE NET WORTH. The REIT will maintain a Tangible Net
Worth at all times of not less than $200,000,000.
4. NET DEBT TO TOTAL ASSET VALUATION RATIO. The Net Debt to Total
Asset Valuation Ratio for the first Defined Period after the Closing Date and
for each subsequent Defined Period thereafter shall be not greater than 70%.
5. BASE RENT COVERAGE RATIO (EBITDARM/BASE RENT). The Base Rent
Coverage Ratio for each Project for the first Defined Period after the Closing
Date and for each subsequent Defined Period thereafter shall be equal to or
greater than 1:25:1.
For purposes of the covenants set forth in this APPENDIX A, the terms
listed below shall have the following meanings:
"ASSUMED CAPITAL EXPENDITURES" means (i) $300 per licensed bed at the
Projects, minus, (ii) the amount per bed paid by the Project Lessees under the
Project Leases for replacement reserves, determined in the case of (i) and (ii),
on an annualized basis.
"BASE RENT COVERAGE RATIO" means, at any date of determination, the
ratio of (i) EBITDARM to (ii) Base Rent under the Project Leases.
"DEFINED PERIOD" means a period ending on the last day of each
calendar month and comprised of the three (3) most recent calendar months then
ended (taken as one accounting period) unless some other period is specified in
the Agreement or any Appendix thereto; PROVIDED, that the first (1st) Defined
Period following the Closing Date shall consist of the first (1st) full calendar
month following the Closing Date (on an annualized basis) and the second (2nd)
Defined Period following the Closing Date shall consist of the first (1st) and
second (2nd) full calendar months following the Closing Date (on an annualized
basis).
"EBITDA" for the applicable Defined Period is defined as follows: Net
Income (or loss) of the REIT and its consolidated subsidiaries, determined in
accordance with GAAP, but excluding: (a) the income (or loss) of any Person in
which the REIT or any of its subsidiaries has an ownership interest except to
the extent received by the REIT or any subsidiary in a cash distribution; and
(b) the income (or loss) of any Person accrued prior to the date it became a
subsidiary of the REIT or is merged into or consolidated with the REIT, PLUS
(without duplication): (i) any provision for (or less any benefit from) income
and franchise taxes
A-1
included in the determination of Net Income for the Defined Period, (ii)
interest expense, net of interest income, deducted in the determination of Net
Income for the Defined Period, (iii) amortization and depreciation deducted in
the determination of Net Income for the Defined Period, (iv) losses (or less
gains) from asset dispositions included in the determination of Net Income for
the Defined Period (excluding sales, expenses or losses related to current
assets), (v) other non-cash losses (or less gains) included in the determination
of Net Income for the Defined Period and for which no cash outlay (or cash
receipt) is foreseeable, (vi) expenses and fees included in the determination of
Net Income and incurred during the Defined Period to consummate the transactions
contemplated by the Operative Documents, but solely to the extent disclosed to
Lender prior to the Closing Date, (vii) extraordinary losses (or less gains)
included in the determination of Net Income during the Defined Period, net of
related tax effects.
"EBITDARM" for the applicable Defined Period is defined as follows:
Net Income (or loss) of the applicable Project Lessee determined in accordance
with GAAP, but excluding: (a) the income (or loss) of any Person in which any
Project Lessee or any of its subsidiaries has an ownership interest except to
the extent received by any Project Lessee or any subsidiary in a cash
distribution; and (b) the income (or loss) of any Person accrued prior to the
date it became a subsidiary of the Project Lessee or is merged into or
consolidated with the Project Lessee, PLUS (without duplication): (i) any
provision for (or less any benefit from) income and franchise taxes included in
the determination of Net Income for the Defined Period, (ii) interest expense,
net of interest income, deducted in the determination of Net Income for the
Defined Period, (iii) amortization and depreciation deducted in the
determination of Net Income for the Defined Period, (iv) losses (or less gains)
from asset dispositions included in the determination of Net Income for the
Defined Period (excluding sales, expenses or losses related to current assets),
(v) other non-cash losses (or less gains) included in the determination of Net
Income for the Defined Period and for which no cash outlay (or cash receipt) is
foreseeable, (vi) [intentionally deleted], (vii) extraordinary losses (or less
gains) included in the determination of Net Income during the Defined Period,
net of related tax effects, (viii) "Base Rent" and "Percentage Rent" (as such
terms are defined in the applicable Project Lease) payable under the applicable
Project Lease during the Defined Period and (ix) management fees payable under
the management agreement for the Project delivered to and approved by Lender at
the Closing.
"GAAP" means generally accepted accounting principles in the United
States of America in effect from time to time as applied by nationally
recognized accounting firms.
"FIXED CHARGE COVERAGE RATIO" means, for the applicable Defined
Period, the ratio of (a) EBITDA, to (b) Fixed Charges.
"FIXED CHARGES" means, for the applicable Defined Period, the sum of
the following: (a) Total Debt Service, (b) Assumed Capital Expenditures, (c)
income taxes paid in cash or accrued, and (d) preferred dividends distributed in
cash by the REIT.
"INDEBTEDNESS" of any Person means (without duplication) (a) all items
which, in accordance with GAAP, would be included in determining total
liabilities as shown on the liability side of the balance sheet of such Person
as of the date as of which Indebtedness, (b) all indebtedness secured by any
mortgage, pledge, security, lien or conditional sale or other title retention
agreement to which any property or asset owned or held by such Person is
subject,
A-2
whether or not the indebtedness secured thereby shall have been assumed, (c) all
indebtedness of others which such Person has directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business), discounted or sold with recourse or agreed (contingently or
otherwise) to purchase or repurchase or otherwise acquire, or in respect of
which such Person has agreed to supply or advance funds (whether by way of loan,
stock, equity or other ownership interest purchase, capital contribution or
otherwise) or otherwise to become directly or indirectly liable.
"INTANGIBLE ASSETS" means all intangible assets (determined in
conformity with GAAP) including, without limitation, goodwill, intellectual
property, licenses, organizational costs, deferred amounts, covenants not to
compete, unearned income and restricted funds.
"INTEREST COVERAGE RATIO" means, for any applicable Defined Period,
the ratio of (a) EBITDA to (b) Interest Expense.
"INTEREST EXPENSE" means, for any Defined Period, total interest
expense (including rent under capital leases in accordance with GAAP), fees with
respect to all outstanding Indebtedness of the REIT, on a consolidated
basis,including capitalized interest but excluding commissions, discounts and
other fees owed with respect to letters of credit and bankers' acceptance
financing and net costs under Interest Rate Agreements.
"INTEREST RATE AGREEMENT" means any interest rate swap, cap or collar
agreement or other similar agreement or arrangement designed to hedge the
position with respect to interest rates.
"NET DEBT TO TOTAL ASSET VALUATION RATIO" means, for the applicable
Defined Period, the ratio of (i) Total Net Debt to (ii) the product of (A) nine
(9) and (B) NOI for the most recent Defined Period.
"NET INCOME" means net income (or loss) determined in conformity with
GAAP, provided that there shall be excluded (i) the income (or loss) of any
Person in which any other Person (other than any Borrower) has a joint interest,
except to the extent of the amount of dividends or other distributions actually
paid to a Borrower by such Person, (ii) the income (or loss) of any Person
accrued prior to the date it becomes a Borrower or is merged into or
consolidated with a Borrower or that Person's assets are acquired by a Borrower,
(iii) the income of any subsidiary of Borrower to the extent that the
declaration or payment of dividends or similar distributions of that income by
that subsidiary is not at the time permitted by operation of the terms of the
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that subsidiary, (iv) compensation expense
resulting from the issuance of capital stock, stock options or stock
appreciation rights issued to former or current employees, including officers,
of a Borrower, or the exercise of such options or rights, in each case to the
extent the obligation (if any) associated therewith is not expected to be
settled by the payment of cash by a Borrower or any affiliate thereof, and (v)
compensation expense resulting from the repurchase of capital stock, options and
rights described in clause (iv) of this definition.
A-3
"NOI" means, for the applicable Defined Period, for the REIT on a
consolidated basis, Net Income plus (i) Interest Expense and (ii) depreciation
and (iii) amortization, minus (A) management fees not to exceed one percent (1%)
of aggregate net revenue and (B) $300 per licensed bed per annum (as a capital
expenditure reserve).
"PERSON" means an individual, a partnership, a corporation, a limited
liability company, a business trust, a joint stock company, a trust, an
unincorporated association, a joint venture, a governmental authority or any
other entity of whatever nature.
"REIT" means Medical Properties Trust, Inc., a Maryland corporation.
"TANGIBLE NET WORTH" means assets (excluding Intangible Assets) plus
all depreciation and amortization related to any real estate, less liabilities,
determined in accordance with GAAP.
"TOTAL NET DEBT" means, at the date of determination, total
Indebtedness of the REIT on a consolidated basis, on such date, MINUS the amount
of cash or cash equivalents held by the Borrowers, on a consolidated basis.
"TOTAL DEBT SERVICE" means for the applicable Defined Period, the sum
of (i) scheduled or other required payments of principal on Indebtedness of the
REIT, and (ii) Interest Expense.
▇-▇
▇▇▇▇▇▇▇ ▇-▇
Borrower: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC
Name of Facility: New Bedford Rehabilitation Hospital
Address of Land: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇
Number of Beds: 90 long term acute care beds
Number of Parking Spaces: 126 Regular
4 Handicap
Legal Description of Land: All that certain parcel of land with the
buildings thereon situated on Acushnet Avenue,
New Bedford, Bristol County, Massachusetts, all
more particularly described as follows:
Beginning at a point, said point being the
southeast corner of the premises to be
described and being N 15 degrees 02' 51" E, 340
feet more or less by the westerly sideline of
Acushnet Avenue from the northwest corner of
the intersection of said Acushnet Avenue with
Sassaquin Avenue;
Thence N 68 degrees 27' 39" W, 153.74 feet to a
point;
Thence N 69 degrees 29' 39" W, 123.56 feet to a
point;
Thence S 74 degrees 56' 21" W, 39.50 feet to a
point;
Thence N 17 degrees 13' 09" W, 11.50 feet to a
point;
Thence N 88 degrees 30' 09" W, 41.74 feet to a
point;
Thence along a curve as it deflects to the
right, having a radius of 142.96 feet, an arc
length of 37.41 feet to a point;
Thence S 86 degrees 35' 13" W, 50.17 feet to a
stake
and tack;
The last seven courses being by land now or
formerly of ▇▇▇▇▇▇ ▇▇▇▇▇;
Thence N 14 degrees 07' 13" W, 376.41 feet to a
concrete bound;
Thence N 39 degrees 26' 23" W, 60.00 feet to a
point;
Thence N 48 degrees 34' 41" E, 151.51 feet to a
point;
Thence N 63 degrees 36' 55" E, 54.87 feet to a
point;
Thence S 70 degrees 46' 13" E, 349.96 feet to a
point;
Thence S 77 degrees 27' 09" E, 199.85 feet to a
point on the westerly sideline of said Acushnet
Avenue;
The last six courses being by land now or
formerly of SLH Property Inc.;
Thence S 15 degrees 02' 51" W, 498.68 feet by
the westerly sideline of said Acushnet Avenue
to the point of beginning.
Said parcel contains 6.14 acres and is shown on
a plan entitled "Plan of Land in New Bedford,
Mass., Surveyed for SLH Property, Inc.", Scale
1" = 40' and dated March 2, 1992, by ▇▇▇▇▇▇▇▇
Engineering Corp. recorded in Bristol County
Registry of Deeds (Southern District) in Plan
Book 129, Page 6.
There is included in this conveyance a parcel
of registered land described as follows:
A certain parcel of land situated in New
Bedford, Bristol County, Massachusetts, and
bounded and described as follows:
Easterly by the westerly line of Acushnet
Avenue, two hundred thirty-six and 62/100
(236.62) feet;
-2-
Southerly by land now or formerly of ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, five hundred forty-nine and 41/100
(549.41) feet;
Westerly and Southwesterly by Lot 30 on a plan
hereinafter mentioned, two hundred thirty and
77/100 (230.77) feet;
Northwesterly two hundred six and 38/100
(206.38) feet;
Northerly five hundred forty-nine and 81/100
(549.81) feet by Lot 33 on said plan.
Said land is shown as Lot 32 on subdivision
plan 1652K, drawn by ▇▇▇▇▇▇▇▇ Engineering
Corp., Surveyors, dated February 6, 1992, and
filed with the Land Registration Office at
Boston, a copy of which is filed in the Bristol
County Southern District Registry of Deeds, in
Registration Book 91, Page 79, with Certificate
of Title No. 16763.
-3-
EXHIBIT A-2
Borrower: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, LLC
Name of Facility: North Valley Rehabilitation Hospital
Address of Land: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
Number of Beds: 70 rehab beds; 24 skilled nursing facility
beds; 23 psychiatric beds
Number of Parking Spaces: 389 Regular
18 Handicap
1 Mediplex Van Space
Legal Description of Land: PARCEL A:
▇▇▇▇ ▇, ▇ ▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Rehabilitation Center Subdivision recorded in
Plat Book F16, at Page ▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇,
▇▇▇▇▇ of Colorado.
Together with an access easement across Outlot
"C", Mediplex Thornton Rehabilitation Center
Subdivision, as set forth in Declaration
recorded August 1, 1990, in Book 3697, Page
634, County of ▇▇▇▇▇, State of Colorado.
PARCEL B:
▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc., Medical
Office Building Subdivision, recorded in Plat
Book F17, at Page ▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇
of Colorado.
EXHIBIT A-3
Borrower: ▇▇ ▇▇▇▇▇ ▇▇▇▇, LLC
Name of Facility: Marlton Rehabilitation Hospital
Address of Land: ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
Number of Beds: 46 acute rehab beds
Number of Parking Spaces: 864 Regular
44 Handicap
Legal Description of Land: ALL that certain lot, parcel or tract of land,
situated and lying in the Township of Evesham,
County of Burlington, State of New Jersey, and
being more particularly described as follows:
BEGINNING at a point in the Northeasterly right
of way line of ▇▇▇▇▇▇ ▇▇▇▇ (▇/▇/▇ ▇▇▇▇▇ ▇▇▇▇)
(▇▇.▇ feet wide); said point being South 76
degrees 39 degrees 29 seconds East, a distance
of 320.00 feet along said right of way line
from its intersection with the Easterly line of
the site corner of New Jersey State Highway
Route 73; thence
(1) along the lands now or formerly belonging
to Garden State Community Medical Center, North
13 degrees 20 minutes 31 seconds East, a
distance of 840.77 feet to a point in the
Southeasterly line of lands belonging to
Evesham Township Board of Education; thence
(2) along said line of lands belonging to the
Board of Education, North 54 degrees 39 minutes
01 seconds East, a distance of 767.24 feet to
an angle point therein; thence
(3) continuing along said lands of the Board of
Education, South 64 degrees 35 minutes 38
seconds East, a distance of 329.32 feet to a
point in the Northwesterly line of lands now or
formerly belonging to C & V Realty Co.; thence
(4) along said line of lands of C & V Realty
Co., South 48 degrees 44 minutes 20 seconds
West, a
distance of 187.32 feet to an angle point
therein; thence
(5) continuing along said lands of C & V Realty
Co., South 13 degrees 20 minutes 31 seconds
West, a distance of 1195.54 feet to a point in
the aforesaid Northeasterly right of way line
of ▇▇▇▇▇▇ Road; thence
(6) along said Northeasterly right ▇▇ ▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇ degrees 39 minutes 29
seconds West, a distance of 720.00 feet to the
point of beginning.
Less and except: a strip of land 19.25 feet in
width dedicated to the Township of Evesham for
road widening purposes and more particularly
bounded and described as follows:
BEGINNING at a point in the Northeasterly right
of way line of ▇▇▇▇▇▇ Road; said point being
the point of beginning of the whole tract as
described above; thence
(1) Along the first course of the whole tract,
North 13 degrees 20 minutes 31 seconds East, a
distance of 19.25 feet to a point therein;
thence
(2) South 76 degrees 39 minutes 29 seconds
East, a distance of 720.00 feet to a point;
thence
(3) South 13 degrees 20 minutes 31 seconds
West, a distance of 19.25 feet to a point;
thence
(4) North 76 degrees 39 minutes 29 seconds
East, a distance of 720.00 feet to the point of
beginning.
FOR INFORMATIONAL PURPOSES ONLY: Also known as
Lot 5.01 in Block 26 on the Township of Evesham
Tax Map.
-2-
EXHIBIT A-4
Borrower: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, LLC
Name of Facility: Southern Kentucky Rehabilitation Hospital
Address of Land: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
Number of Beds: 60 acute rehab beds
Number of Parking Spaces: 137 Regular
14 Handicap
Legal Description of Land: A part of Lot #2 of major plat recorded at Plat
Book 24, Page 27, located in Bowling ▇▇▇▇▇,
▇▇▇▇▇▇ County, Kentucky, described as follows:
Beginning at a 5/8" rebar set at the
intersection of the Southeast right-of-way line
of ▇▇▇▇▇▇▇▇ and the Northeast right-of-way line
of ▇▇▇▇▇▇▇▇ ▇▇▇▇ THE POINT OF BEGINNING,
Thence North 44 deg. 53' 36" East, a distance
of 26.94 feet along the Southeast right-of-way
line of ▇▇▇▇▇▇▇▇ Street to a point being N 85
deg. 26' 21" W 1.01 feet of a 1/2" rebar found,
Thence along a curve to the left having a
radius of 368.96 feet, an arc length of 208.78
feet, a chord bearing of North 28 deg. 30' 25"
East, and a chord distance of 206.01 feet along
said right-of-way line to a point being N 54
deg. 25' 32" W 0.65' of a 1/2" rebar found,
Thence North 12 deg. 28' 09" East, a distance
of 243.98 feet along said right-of-way line to
a point being N 58 deg. 29' 33" W 0.69' of a
1/2" rebar found,
Thence along a curve to the right having a
radius of 927.96 feet, an arc length of 566.49
feet a chord bearing of North 30 deg. 02' 08"
East, and a chord distance of 557.73 feet along
said right-of-way line to a 5/8" rebar found,
Thence South 44 deg. 11' 09" East, a distance
of 834.96 feet to a 5/8" rebar found;
Thence South 45 deg. 48' 59" West, a distance
of
978.76 feet to a 1/2'" rebar found on the
Northeast right-of-way line of ▇▇▇▇▇▇▇▇ ▇▇▇▇
passing a 5/8" rebar found at 678.75 feet;
Thence North 45 deg. 06' 35" West, a distance
of 190.90 feet along said right-of-way line to
a 5/8" rebar set,
Thence North 41 deg. 23' 32" West, a distance
of 74.10 feet along said right-of-way line to a
concrete right-of-way marker found,
Thence North 45 deg. 12' 26" West, a distance
of 172.80 feet along said right-of-way line to
a concrete right-of-way marker found,
Thence North 24 deg. 42' 28" West, a distance
of 53.20 feet along said right-of-way line to
the POINT OF BEGINNING.
Being the real estate conveyed to Meditrust of
Kentucky, Inc., by deed dated June 23, 1994,
and of record in Deed Book 690, Page 258, less
and except so much as was conveyed to the
Commonwealth of Kentucky for the use and
benefit of the Transportation Cabinet, by deed
dated October 17, 1994, and recorded in Deed
Book 698, Page 212, in the Office of the Clerk
of ▇▇▇▇▇▇ County, Kentucky. Being the same real
estate conveyed to the ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ LLC,
a Delaware limited liability company, by deed
dated April 1, 2003, and recorded in Deed Book
871, Page 691, in the office aforesaid
-2-
EXHIBIT A-5
Borrower: Kentfield THCI Holding Company
Name of Facility: Kentfield Rehabilitation Hospital
Address of Land: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
Number of Beds: 60 long term acute care beds
Number of Parking Spaces: 79 Regular
7 Handicap
Legal Description of Land: All that certain real property situate partly
in the Town of ▇▇▇▇, and partly in the County
of Marin, State of California, described as
follows:
PARCEL ONE:
BEGINNING at a point on the Southwest line of
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Boulevard at the most
Easterly corner of Lot B, as shown upon that
certain map entitled, "Amended Map of Bosqui
Tract, ▇▇▇▇ Valley, Marin Co., Cal.", filed
March 13, 1905 in Volume 2 of Maps, at Page 18,
Marin County Records; running thence from said
point of beginning along the Southwest line of
said road, North 46 degrees 39' West 137 feet
to the most Easterly corner of the lands
conveyed by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, et ux to ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, by Deed recorded in Book 154 of Deeds,
at Page 32; thence Southwesterly on and along
the Southeast line of the lands so described
South 71 degrees 04' West to the center of San
Anselmo Creek, at a point 13 feet Southerly
measured at right angles from the Northerly
line of Lot C of Map above referred to; thence
Southerly at right angles to said line of Lot
C, 1 foot; thence continuing Westerly along
said ▇▇▇▇▇▇'▇ Line to the Easterly line of the
right of way of the North Shore Railroad at a
point 25 feet Southerly from the Northwest
corner of Lot C; thence Southeasterly along
said right of way line 125 feet to the
Southwest corner of Lot B; thence North 69
degrees 20' East on and along the Southeasterly
line of said ▇▇▇ ▇, ▇▇▇.▇ feet to the ▇▇▇▇
Landing and Red Hill Road and the point of
beginning.
EXCEPTING from the above, the following
described parcel of land:
BEGINNING at a point on the Southwest line of
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Boulevard at the most
Easterly corner of Lot B, as shown upon that
certain map entitled, "Amended Map of Bosqui
Tract, ▇▇▇▇ Valley, Marin Co., Cal.", filed
March 13, 1905 in Book 2 of Maps at Page 18;
running thence from said point of beginning
along the Southwest line of said road, North 46
degrees 39' West 137 feet to the most Easterly
corner of lands conveyed by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, et
ux, to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by Deed recorded in Book
154 of Deeds, at Page 32, Marin County Records;
running thence along the Southeast line of the
lands so conveyed to ▇▇▇▇▇▇, South 71 degrees
04' West 212 feet; thence leaving said line
South 23 degrees 25' East 129.57 feet to a
point on the Southeast line of the aforesaid
Lot B; thence along said lot line, North 69
degrees 20' East 266 feet to the point of
beginning.
EXCEPTING THEREFROM the portion conveyed to
Marin County Flood Control and Water
Conservation District, a political subdivision
of the State of California, recorded March 7,
1972 in Book 2547 of Official Records, at Page
298, Marin County Records.
PARCEL TWO:
BEGINNING at a point on the Northwesterly line
of Lot A of the Bosqui Tract, on file in the
office of the County Recorder of Marin County,
said point being distant thereon South 69
degrees 20' West 323.84 feet from the most
Northerly corner of said Lot A; thence from
said point of beginning, along the
Northwesterly boundary line of said lot, South
69 degrees 20' West 144.25 feet, more or less,
to the most Westerly corner of said Lot A;
thence along the Southwesterly line of said
lot, which line is also the Northeasterly line
of the North Shore Railroad in a Southeasterly
direction for a distance of 123 feet to the
most Southerly corner of said Lot A; thence
leaving said line of the North Shore Railroad
and running North 86 degrees 50' East 52.53
feet, more or less, to the Westerly bank of the
▇▇▇▇▇▇ San ▇▇▇▇▇▇▇; thence along said Westerly
bank North 26 degrees 15' East
-2-
49.63 feet to a point; thence leaving said bank
of the ▇▇▇▇▇▇ San Anselmo and continuing along
the same course, North 26 degrees 15' East
24.52 feet to a point; thence North 63 degrees
05' West 31.13 feet; thence North 27 degrees
34' West 6.78 feet; thence North 29 degrees 34'
44" East 27.68 feet; thence North 22 degrees
38' 30" West 30.14 feet; thence North 61
degrees 23' 20" East 36.29 feet; thence South
85 degrees 46' 20" East 6.86 feet; thence North
20 degrees 40' West 11.22 feet to the point of
beginning.
EXCEPTING THEREFROM the portion conveyed to
Marin County Flood Control and Water
Conservation District, a political subdivision
of the State of California, recorded March 7,
1972 in Book 2547 of Official Records, at Page
298, Marin County Records.
PARCEL THREE:
THAT PORTION of the former right of way of the
Northwestern Pacific Railroad Company, as
described in Deed to ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, et al,
recorded in Book 538 of Official Records, at
Page 447, which lies between the extension
Easterly of the Southerly boundary line of Lot
3, as shown on the map entitled, "Bosqui
Tract", filed in Volume 2 of Maps, at Page 12
and a line drawn South 70 degrees 11' West from
the most Westerly corner of the land conveyed
to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, et ux, in Deed recorded
April 11, 1944 in Book 463 of Official Records,
at Page 160, Marin County Records.
EXCEPTING THEREFROM the following described
land:
BEGINNING at the most Easterly corner of Lot 4,
as shown on the map of "Bosqui Tract", filed in
Volume 2 of Maps, at Page 12; thence North 76
degrees 49' East 5 feet; thence North 22
degrees 11' West 100 feet; thence South 76
degrees 49' West 5 feet to the Northeasterly
corner of Lot 5, as shown on the map above
referred to; thence South 22 degrees 11' East
along the Easterly line of Lots 5 and 4 to the
point of beginning.
-3-
AND FURTHER EXCEPTING the following:
BEGINNING at the most Easterly corner of said
Lot 3; thence from said point of beginning
along the Easterly boundary line of said ▇▇▇ ▇,
▇▇▇▇▇ ▇▇ degrees 11' West 50 feet to the most
Easterly corner of Lot 4 of said map; thence
North 76 degrees 49' East 5 feet; thence South
22 degrees 11' East 50 feet, more or less, to a
point which is North 67 degrees 42' East 5 feet
from the point of beginning; thence South
67 degrees 42' West 5 feet to the point of
beginning.
PARCEL FOUR:
THOSE PORTIONS of the former right of way of
the Northwestern Pacific Railroad Company, as
described in the Deed recorded in Book 538 of
Official Records, at page 447, which is
described as follows:
BEGINNING at a point on the Northeasterly line
of said former right of way line, said point
being distant 60 feet Northeasterly from the
most Northerly corner of Lot 2, as shown upon
that certain map entitled, "Amended Map of the
Bosqui Tract, Marin Co., Cal.", filed March 13,
1905 in Volume 2 of Maps, at Page 18, Records
of Marin County; running thence from said point
of beginning, Southwesterly 19.5 feet along a
line which is the extension Easterly of the
Northerly line of said Lot 2; thence leaving
said line and running Southeasterly, parallel
with the Northeasterly line of said former
right of way line 50 feet to a line which is
the extension Easterly of the Southerly line of
said Lot 2; thence along said last mentioned
line Northeasterly 19.5 feet to the
Northeasterly line of said right of way line;
thence along said line Northwesterly 50 feet to
the point of beginning.
PARCEL FIVE:
BEGINNING at the most Westerly corner of Parcel
Four, described above, and running thence
Southwesterly 10 feet along a line which is the
extension Easterly of the Northerly line of
said Lot 2, to a point; thence leaving said
line and running
-4-
Southeasterly in a straight line to a point in
the Southwesterly boundary line of Parcel Five
described herein, which point is distant
thereon Southeasterly 10 feet from the point of
beginning; running thence along said
Southwesterly boundary line in a Northwesterly
direction 10 feet to the point of beginning.
PARCEL SIX:
BEGINNING at a point on a line which is the
Easterly extension of the Southerly line of Lot
2, said lot is shown on that certain map
entitled, "Bosqui Tract, ▇▇▇▇ Valley, Marin
County, Calif", filed in Volume 2 of Maps, at
Page 12, Marin County Records, which point is
distant thereon 40.5 feet Easterly from the
most Easterly corner of said Lot 2, running
thence from said point of beginning, along the
Easterly extension of Lot 2, Westerly 10.5
feet; thence leaving said Easterly extension of
Lot 2 and running Northwesterly parallel with
the Easterly boundary line of said Lot 2, 50
feet to a point in a line which is the Easterly
extension of the Northerly line of said Lot 2,
which point is distant thereon Easterly 30.00
feet from the Northeast corner of said Lot 2;
thence Easterly along said Easterly extension
0.5 feet thence leaving said Easterly extension
and running South 67 degrees 18' East 14.14
feet; thence Southeasterly in a straight line
parallel with the Easterly boundary line of
said Lot 2, 40 feet to the point of beginning.
BEING a portion of the former railroad right of
way lying Northeasterly of Lot 2, Map
hereinabove referred to.
PARCEL SEVEN:
BEGINNING at a point on the Northwesterly line
of the parcel of land conveyed to ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, et ux, by Deed recorded September 23,
1960 in Book 1401 of Official Records, at Page
155, distant thereon Northeasterly 180 feet
from the Northeasterly line of Poplar Avenue;
thence continuing along said Northwesterly line
Northeasterly 24 feet; thence Southeasterly 6
feet to
-5-
a point on the Northeasterly line of said
▇▇▇▇▇▇▇ Parcel, distant thereon Southeasterly 6
feet from the most Northerly corner thereof;
thence along said Northeasterly line
Southeasterly 61 feet to the Southeasterly
corner of said ▇▇▇▇▇▇▇ Parcel; thence
Southwesterly along the Southeasterly line of
said parcel, 30 feet; thence leaving said line
Northwesterly 67 feet to the point of
beginning.
PARCEL EIGHT:
AN EASEMENT for parking purposes 10 feet in
width lying Westerly of, adjacent to and
parallel with the following described line:
BEGINNING at a point on the Northwesterly line
of the parcel of land conveyed to ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, et ux, by Deed recorded September 23,
1960 in Book 1401 of Official Records, at Page
155, distant thereon 180 feet from the
Northeasterly line of Poplar Avenue; thence
Southeasterly 67 feet to a point on the
Southeasterly line of said ▇▇▇▇▇▇▇ Parcel which
bears Northeasterly 180 feet from said
Northeasterly line of Poplar Avenue.
PARCEL NINE:
AN EASEMENT for parking purposes 10 feet in
width lying Westerly of, adjacent to and
parallel with the following described line:
BEGINNING at a point on a line which is the
Easterly extension of the Southerly line of Lot
2, as said lot is shown on that certain map
entitled, "Bosqui Tract, ▇▇▇▇ Valley, Marin
County, Calif.", filed in Volume 2 of Maps, at
Page 12, Marin County Records, which point is
distant 30.00 feet Easterly thereon; thence
from said point of beginning Northwesterly in a
straight line parallel with the Easterly
boundary line of said Lot 2, 50.00 feet.
PARCEL TEN:
AN EASEMENT five feet in width for sewer
purposes lying Southerly of, adjacent to and
parallel
-6-
with the Northerly line of Lot 2, and its
extension Easterly 30.5 feet, as said lot is
shown on that certain map entitled, "Bosqui
Tract, ▇▇▇▇ Valley, Marin County, California",
filed in Volume 2 of Maps, at Page 12, Marin
County Records.
PARCEL ELEVEN:
BEGINNING at the Northeasterly corner of the
land conveyed to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, et ux, in
Deed recorded September 23, 1960 in Book 1401
of Official Records, at Page 155, Marin County
Records; thence along the Northwesterly line of
said land conveyed to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, et ux,
above referred to South 67 degrees 42' West 6
feet; thence Easterly to a point on the
Easterly line of the land of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
et ux, above referred to distant thereon
Southeasterly 6 feet from the point of
beginning; thence along said Easterly line
Northwesterly 6 feet to the point of beginning.
PARCEL TWELVE:
BEGINNING at a point on the intersection lines
of the land of the North Shore Railroad Company
and the Southwesterly corner of Lot A of the
Bosqui Tract, as shown on the Record Map of
said Tract; thence running Southerly along the
Easterly boundary line of the land of the North
Shore Railroad Company, 105 feet, more or less
to the middle of the creek; thence running
Northerly along the center of said creek to a
certain point, said point being the
Southeasterly corner of Lot A of the Bosqui
Tract; thence running Westerly along the
Southerly boundary line of said Lot A, 67 feet,
more or less, to the point of beginning.
SAID premises are shown as ▇▇▇ ▇▇ ▇▇ ▇▇▇ "▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇", filed in Volume 2 of Maps, at
Page 77, Marin County Records.
EXCEPTING THEREFROM the portion conveyed to
Marin County Flood Control and Water
Conservation District, a political subdivision
of the State of California, recorded March 7,
1972 in Book 2547 of Official Records, at Page
▇▇▇, ▇▇▇▇▇
-▇-
▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
PARCEL THIRTEEN:
BEGINNING at a point on the Easterly right of
way line formerly of the Northwestern Pacific
Railway Company, said point also being the
southwesterly corner of the land described in
the Deed to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, et ux, in Book
1266 of Official Records, at Page 121; thence
South 68 degrees 08' West along the
Southeasterly line of said parcel if extended
60.00 feet to a point, said point being on the
Westerly right of way line formerly of the
Northwestern Pacific Railway Company; thence
along said Westerly right of way line North
22 degrees 11' West 124.67 feet to an iron pipe
monument; thence North 67 degrees 49' East
180.00 feet to an iron pipe monument; thence
South 22 degrees 11' East 50.39 feet to an iron
pipe monument; thence North 73 degrees 58' East
34.06 feet; thence South 26 degrees 15' East
72.02 feet to a point on the Southerly line of
the lands now or formerly of ▇▇▇▇▇, as above
described; thence along said Southerly line
South 68 degrees 08' West 158.97 feet to the
point of beginning.
NOTE: Iron Pipe Monuments are marked with
Engineers Tag No. RCE 10734.
EXCEPTING THEREFROM the portion conveyed to
Marin County Flood Control and Water
Conservation District, a political subdivision
of the State of California, recorded March 7,
1972 in Book 2547 of Official Records, at Page
298, Marin County Records.
PARCEL FOURTEEN:
BEING a portion of the lands conveyed to the
Marin County Flood Control and Water
Conservation District by a Deed recorded June
30, 1971 in Book 2478 of Official Records, at
Page 22, Marin County Records.
BEGINNING at the most Southerly corner of
Parcel Two of said lands of the Marin County
Flood Control and Water Conservation District;
said point of beginning is marked by a found
iron pipe and tag
-8-
▇▇ ▇▇▇▇▇; thence North 20 degrees 47' 59" West
55.00 feet along the Southwesterly line of the
former right of way of the Northwestern Pacific
Railroad Company; thence leaving said
Southwesterly right of way line North
69 degrees 20' 16" East 161.09 feet; thence
South 36 degrees 39' 32" East 57.22 feet to a
point in the Northwesterly line of the lands
conveyed to ▇▇▇▇▇ by Deed recorded February 19,
1965 in Book 1912 of Official Records, at Page
364, Marin County Records; thence along said
Northwesterly line of the lands of ▇▇▇▇▇ South
69 degrees 20' 16" West 177.33 feet to the
point of beginning.
PARCEL FIFTEEN:
A PERMANENT NON-EXCLUSIVE access easement for
ingress and egress and travel over the
following described real property in the County
of Marin, State of California:
BEING a portion of the lands of ▇▇▇▇▇ ▇. ▇▇▇▇▇
and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, his wife, as Joint
Tenants, described by Joint Tenancy Deed
recorded July 9, 1969 in Book 2310 of Official
Records, at Page 647, Marin County Records.
BEGINNING at a point in the Southerly line of
said lands of ▇▇▇▇▇ distant thereon South
73 degrees 50' 20" West (recorded South
72 degrees 45' West) 180.57 feet from a found
nail and tag LS 2738 marking the most Easterly
corner of said lands; thence from said point of
beginning North 36 degrees 39' 32" West 4.75
feet; thence South 84 degrees 40' West 43.42
feet; thence North 41 degrees 15' 24" West
39.17 feet to a found hub and tag LS 2738
marking an angle point in the Westerly line of
said lands of ▇▇▇▇▇; thence South 28 degrees
16' 50" East (recorded South 29 degrees 24'
East) 49.15 feet to a found nail and tag LS
2738 marking the most Southerly corner of said
lands of ▇▇▇▇▇; thence North 73 degrees 50' 20"
East 50.51 feet to the point of beginning.
PARCEL SIXTEEN:
THAT PORTION of Lots C, D, E, F and the former
right of way of the Northwestern Pacific
Railroad Company, as shown upon that certain
map entitled,
-9-
"Amended Map of the Bosqui Tract", filed March
13, 1905 in Map Book 2, at Page 18, Marin
County Records, described as follows:
BEGINNING at a point on the Southwestern line
of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Boulevard, formerly known
as Red Hill and ▇▇▇▇ Landing Road, distant
thereon South 47 degrees 47' East 13 feet from
the Northern corner of said Lot D, thence
continuing along the Southwestern line South
47 degrees 47' East 75 feet to the Eastern
corner of the parcel of land described in the
Deed from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, et ux, to ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, recorded June 27, 1913 in Book 154 of
Deeds, at Page 32, Marin County Records, thence
along the Southeasterly line thereof South
70 degrees 11' West 233 feet to a point in the
center line of San Anselmo Creek, distant at a
right angle 13 feet Southeasterly from the
Northwestern line of said Lot C, running thence
Southeasterly at a right angle to said
Northwestern line of Lot C, 1 foot and South
68 degrees 08' West 21.00 feet to the
intersection thereof with the Northeastern line
of the parcel of land described in the Deed
from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, et al, to ▇▇▇▇▇▇▇
▇▇▇▇▇, et al, recorded February 19, 1965 in
Book 1912 of Official Records, at Page 354,
Marin County Records, running thence along said
Northeastern line North 26 degrees 15' West
72.02 feet to an angle point therein, thence
leaving said ▇▇▇▇▇ parcel (1912/354) and
running thence South 73 degrees 59' West 34.06
feet, North 22 degrees 11' West 50.39 feet and
South 67 degrees 49' West 180.00 feet to a
point on the Westerly line of the former right
of way of the Northwestern Pacific Railroad
Company as described in the Deed to ▇▇▇▇▇▇▇
▇▇▇▇ Perry, et al, recorded in Book 538 of
Official Records, at Page 447, Marin County
Records, running thence along said Westerly
line of the former right of way North
22 degrees 11' West to its intersection with
the most Easterly corner of Lot 13, as shown on
the map entitled, "Bosqui Tract", filed in
Volume 2 of Maps, at Page 12; thence leaving
said line of the former right of way and
running Easterly to the Northwesterly corner of
Lot F, as shown on said map of Bosqui Tract;
thence Easterly along the Northerly line of
said Lot F to the Westerly bank of
-▇▇-
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇; thence Southeasterly along
the Westerly bank of said creek and following
the meanderings thereof to the Northerly line
of Lot D; thence North 72 degrees 45' East
along said Northerly line to the Southwesterly
line of ▇▇▇▇ Landing and Red Hill Road, thence
Southeasterly along said line, 13 feet to the
point of beginning.
EXCEPTING THEREFROM that portion conveyed by
Cal-West Capital Corporation to the Marin
County Flood Control and Water Conservation
District, a political subdivision of the State
of California, by Deed recorded June 30, 1971
in Book 2478 of Official Records, at Page 22,
Marin County Records.
FURTHER EXCEPTING THEREFROM that portion
conveyed to the County of Marin by Deed
recorded October 6, 1965 in Book 1987 of
Official Records, at Page 216, Marin County
Records, and being described as follows:
BEGINNING at a point on the Westerly line of
Red Hill and ▇▇▇▇ Landing Road, distant thereon
South 47 degrees 47' East 13 feet from the most
Northerly corner of Lot "D" of the Bosqui
Tract, as shown on the map filed December 3,
1904 in Volume 2 of Maps, at Page 12, Marin
County Records; said point also being the
Northeasterly corner of that certain parcel of
land described in the Deed from R.E. Valentine,
et ux, to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, et ux, recorded
January 15, 1936 in Book 308 of Official
Records, at Page 241, Marin County Records;
thence leaving said road line and running along
the Northerly boundary line of said Henderson
Parcel, South 71 degrees 45' West 34.48 feet to
a point; thence leaving said line and running
North 47 degrees 47' West 13.00 feet, more or
less to a point on the Northerly line of Said
Lot "D"; thence Northeasterly along said
Northerly line of Lot "D", 34.83 feet, more or
less, to the Northerly corner of said Lot "D";
thence South 47 degrees 47' East 13 feet to the
point of beginning.
PARCEL SEVENTEEN:
SUITES A through P inclusive, and 100% interest
in
-11-
the "common area" as shown upon that certain
map entitled, "Map of Vertical Subdivision of
Redwood Medical Center, being a portion of Lots
B & C, Amended Map of Bosqui Tract, recorded by
Marin County Recorder in Bk. 2, Page 18, in the
County of Marin, California", filed for record
March 13, 1963 in Volume 11 of Maps, at Page
68, Marin County Records.
PARCEL EIGHTEEN:
AN EASEMENT for ingress, egress and travel,
twenty feet in width a vertical clearance of
eight feet, more particularly described as
follows:
COMMENCING at a point which bears South
46 degrees 39' East 23.00 feet, South
60 degrees 50' West 38.66 feet, South
87 degrees 54' West 52.30 feet, South
68 degrees 44' 30" West 169.5 feet and South
23 degrees 17' East 10.006 feet from the most
Easterly corner of Lot B, as shown upon that
certain map entitled, "Amended Map of Bosqui
Tract, ▇▇▇▇ Valley, Marin Co., Cal.", filed
from record March 13, 1905 in Volume 2 of Maps,
at Page 18, Marin County Records; running
thence from said true point of beginning, South
68 degrees 44' 30" West 74.8 feet, North
22 degrees 08' West 57.5 feet, North 67 degrees
52' East 19.3 feet, North 22 degrees 08' West
52.0 feet, North 67 degrees 42' East 14.2 feet,
South 22 degrees 08' East 90.05 feet, North
68 degrees 44' 30" East 40.89 feet and South
23 degrees 17' East 20.012 feet to the point of
beginning.
-12-
EXHIBIT A-6
Borrower: San ▇▇▇▇▇▇▇ Health Care Associates, LP
Name of Facility: San ▇▇▇▇▇▇▇ Valley Rehabilitation Hospital
Address of Land: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇
Number of Beds: 62 acute rehab beds
Number of Parking Spaces: 196 Regular
12 Handicap
Legal Description of Land: Real property in the City of FRESNO, County of
FRESNO, State of California, described as
follows:
▇▇▇▇ ▇, ▇ ▇▇▇ ▇ ▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇, in the City
of Fresno, County of Fresno, State of
California, according to the map thereof
recorded September 23, 1988 in Book 47, Pages
62, 63 and 64 of Plats, Fresno County Records
and according to a Certificate of Correction
recorded September 7, 1989, as Document No.
89095980, Official Records.
EXHIBIT D
LITIGATION
None
EXHIBIT E
MINIMUM INSURANCE REQUIREMENTS
Borrowers shall at all times maintain in full force and effect insurance
policies and evidence of insurance meeting the following minimum requirements.
Borrowers, Guarantor or the Project Lessees shall be the owners of all insurance
policies required. If Borrowers are not the owners of the applicable policies,
Borrower shall cause the owner of the policies to at all times permit Borrowers
to be named as additional insureds (in the case of liability coverages) and
named insureds (in the case of property coverages) on all policies.
If any policy provides coverage for multiple locations or entities, then the
following additional requirements shall apply:
A. Borrower must provide to Lender, prior to policy renewal (or within ten
days of closing in the case of evidence of insurance issued to Lender at
closing), a breakdown of coverages per location (if applicable) and a breakdown
of premium allocations per location.
B. All premiums shall be allocated based upon then prevailing standards in
the industry.
If the terms of this Minimum Insurance Requirements exhibit are more restrictive
than the terms of the Loan Agreement to which it is attached, the terms of this
exhibit shall govern and control.
Property Insurance:
1. Shall be evidenced by ▇▇▇▇▇ 27 form (Evidence of Insurance), signed by
authorized agent.
2. Carrier must be rated A- VII or better (by A.M. Best)
3. Policy must be an all risk/special perils coverage form
4. Must provide replacement cost coverage with waiver of coinsurance or agreed
amount endorsement
5. Must provide for no terrorism exclusion
6. Deductible shall be no greater than $25,000
- If the deductible is subject to an overall aggregate deductible, this
must be disclosed with a copy of the specific aggregate deductible
agreement provided.
7. Must reflect building coverage greater than or equal to replacement cost
valued by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital or its representatives (if blanket limit or
loss limit is indicated on the policy, declared building value must be
shown on the evidence of insurance). Renewal amount shall be adjusted by
Borrower, subject to Lender's approval, to maintain proper insurable
values.
8. Must provide loss of rents coverage greater than or equal to 12 months
rental income valued by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital or its representatives
9. Must provide boiler & machinery coverage
10. Must provide building Law and Ordinance coverage for a limit of $1,000,000
each location.
11. Must provide windstorm coverage, if applicable (For Florida/Coastal
properties only).
12. Must provide flood coverage, if applicable (For properties in FEMA flood
zones A, B, V, and X-Shaded). For this coverage, the policy may have a
deductible of up to $50,000 and shall be written for a blanket limit of no
less than $1,000,000.
13. Must provide earthquake coverage, if applicable (For properties located in
Seismic Zones 3 and 4). For this coverage, the policy may have a deductible
of 5% of total insured value and may be subject to a minimum of $100,000
and shall be written for a per occurrence and aggregate limit of no less
than $1,500,000. Excess coverage must be provided for $3,500,000 per
occurrence, for a combined $5,000,000 per occurrence and aggregate limit.
14. ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital shall be included as Mortgagee and Loss Payee (as
applicable) and Certificate Holder (see below)
15. ▇▇▇▇▇ 27 must provide 30 days (10 days for non-payment) notice of
cancellation or any material change in the policy to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital.
If the carrier will so permit, ▇▇▇▇▇ 27 must delete "endeavor to" and "but
failure to mail such notice shall impose no obligation or liability of any
kind upon the company, its agents or representatives" language.
16. Must provide Waiver of Subrogation endorsement in favor of ▇▇▇▇▇▇▇ ▇▇▇▇▇
Capital
17. Higher limits and special coverages in addition to those indicated above
may be required depending upon the property size and nature of operations
(if a joint venture)
GENERAL/PROFESSIONAL LIABILITY INSURANCE:
1. Shall be evidenced by ▇▇▇▇▇ 25 form (Certificate of Insurance), signed by
authorized agent
2. Carrier must be rated A- VII or better (by A.M. Best)
3. Policy must include coverage for Contractual Liability
4. Must provide for no terrorism exclusion
5. Policy may have a self insured retention of up to $100,000
6. Coverage is required in a minimum $1,000,000 per claim and $10,000,000 in
the aggregate; primary and umbrella/excess can be combined to achieve
minimum limits
7. Excess/umbrella coverage is required in the amount of $5,000,000 per claim
and $5,000,000 in the aggregate
8. ▇▇▇▇▇ 25 must provide 30 days (10 days for non-payment) notice of
cancellation or any material change in the policy to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital.
If the carrier will so permit, ▇▇▇▇▇ 25 must delete "endeavor to" and "but
failure to mail such notice shall impose no obligation or liability of any
kind upon the company, its agents or representatives" language
9. ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital must be included as Additional Insured
10. Must include Separation of Insureds/Cross Liability
11. ▇▇▇▇▇ 27 must note that insurance is primary without right of contribution
of any other insurance carried by or on behalf of borrower
AUTOMOBILE LIABILITY INSURANCE:
1. Shall be evidenced by ▇▇▇▇▇ 25 form (Certificate of Insurance), signed by
authorized agent
2. Carrier must be rated A- VII or better (by A.M. Best)
3. Must provide Coverage for Owned, Non-Owned, and Hired autos
4. No exclusion for terrorism shall be permitted
5. Must provide for liability deductible not greater than $5,000
- If the deductible is subject to an overall aggregate deductible, this
must be disclosed with a copy of the specific aggregate deductible
agreement provided.
6. Must provide minimum of $1,000,000 per occurrence limit (primary and
umbrella/excess can be combined to achieve minimum limit
7. ▇▇▇▇▇ 25 must provide 30 days (10 days for non-payment) notice of
cancellation or any material change in the policy to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital,
and if the carrier will permit, will delete "endeavor to" and "but failure
to mail such notice shall impose no obligation or liability of any kind
upon the company, its agents or representatives" language
8. ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital must be included as Additional Insured (see below)
9. Must include Separation of Insureds/Cross Liability
10. ▇▇▇▇▇ 25 shall note insurance as being primary without right of
contribution of any other insurance carried by or on behalf of borrower
11. Higher limits and special coverages in addition to those indicated above
may be required depending upon the property size and nature of operations
(if a joint venture)
-2-
Certificate Holder and Entity to be Shown on Required Endorsements:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital,
a Division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business
Financial Services Inc.,
and its successors and assigns
▇▇▇ ▇. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - 18th Floor
Chicago, IL 60601
INSURANCE CONSULTANT FOR ▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL:
Lockton Companies of Houston
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PRIMARY CONTACT: SECONDARY CONTACT:
---------------- ------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, CPCU ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President, Risk Management Services Assistant Vice President,
Account Manager
713.458.5200 (Main) 713.458.5200 (Main)
713.458.5281 (Direct) 713.458.5454 (Direct)
▇▇▇.▇▇▇.▇▇▇▇ (Mobile) ▇▇▇.▇▇▇.▇▇▇▇ (Mobile)
▇▇▇.▇▇▇.▇▇▇▇ (Fax) ▇▇▇.▇▇▇.▇▇▇▇ (Fax)
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇ (E-MAIL) ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇ (E-MAIL)
-3-
EXHIBIT F
ENVIRONMENTAL DOCUMENTS
PRE-EXISTING ENVIRONMENTAL REPORTS
LOCATION EMG PROJECT NO. DATE OF REPORT ON-SITE DATE
-------- --------------- -------------- --------------
New ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ June 30, 2004 May 24, 2004
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ June 29, 2004 March 27, 2004
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ July 2, 2004 May 25, 2004
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ June 30, 2004 May 26, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ June 29, ▇▇▇▇ ▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ June 29, 2004 March 26, 2004
EMG reports prepared by:
EMG
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Website: ▇▇▇.▇▇▇▇▇▇▇.▇▇▇
EMG reports reviewed by:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Technical Relationship Manager
Tel.: (800) 733-0660 ext. 7626
Email: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
[Continued on Next Page]
SCHEDULE OF CURRENT PHASE I ENVIRONMENTAL SITE ASSESSMENT REPORTS
Location Blake Project No. Date of Report
-------- ----------------- -----------------
New Bedford, MA 04-17-17-505-807B November 30, ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ 04-17-17-505-803B November 29, 2004
Thornton, CO 04-17-17-505-805B November 29, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ 04-17-17-505-808B November 30, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ 04-17-17-505-806B December 29, ▇▇▇▇
▇▇▇▇▇▇, ▇▇ 04-17-17-505-804B November 29, 2004
Blake reports prepared for:
▇▇. ▇▇▇▇▇▇▇ Punches
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Blake reports reviewed by:
▇▇ ▇▇▇▇▇ Technical Services LLC
Engineering & Environmental Due Diligence Services
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ / ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT H
INTELLECTUAL PROPERTY
NONE
EXHIBIT I
PERMITTED EXCEPTIONS
Filing Number Filing Office Secured Party Debtor/Co-Debtor
------------- --------------------- ---------------- -------------------------
200432289530 Secretary of State of 4499 Acushnet ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC
(to be assigned to Massachusetts Avenue Operating
▇▇▇▇▇▇▇ ▇▇▇▇▇) Company, LLC
200432289350 Secretary of State of MPT Development Vibra Healthcare, LLC
Massachusetts Services, Inc. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC
(co-debtor)
SCHEDULE I
DEFINITIONS
DEFINED TERMS.
The following terms as used herein shall have the following meanings:
AFFILIATE: With respect to a specified person or entity, any
individual, partnership, corporation, limited liability company, trust,
unincorporated organization, association or other entity which, directly or
indirectly, through one or more intermediaries, Controls or is Controlled by or
is under common Control with such person or entity, including, without
limitation, any general or limited partnership in which such person or entity is
a partner.
AGREEMENT: This Loan Agreement, as modified from time to time.
APPRAISAL: An appraisal of each of the Projects performed in
accordance with FIRREA and Lender's appraisal requirements by an independent
appraiser licensed in the state in which each Project is located and selected
and retained by Lender. Borrowers may provide to Lender a copy of any FIRREA
appraisal prepared for another lender within the past six (6) months. Lender
may, in its sole discretion: (a) accept such appraisal; (b) request an update of
such appraisal; and (c) retain a state licensed appraiser to perform a new
appraisal.
AUTHORIZED REPRESENTATIVE: As defined in Section 4.3.
BASE RATE: The London Interbank Offered Rate (LIBOR) rate of interest
per annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) equal to
the rate of interest which is identified and normally published by Bloomberg
Professional service Page BBAM 1 (the "PAGE") as the offered rate for loans in
U.S. Dollars under the caption British Bankers Association LIBOR Rates at 11:00
A.M. London time. Throughout the term of the Loan, the Base Rate will float
daily and be determined two (2) Business Days prior to each day of such calendar
month utilizing the one (1) month LIBOR rate set forth on the Page. If Bloomberg
Professional service no longer reports the Base Rent or Lender determines in
good faith that the rate so reported no longer accurately reflects the rate
available to Lender in the London Interbank Market or if such index no longer
exists or if Page BBAM 1 no longer exists or accurately reflects the rate
available to Lender in the London Interbank Market, Lender may select a
replacement index or replacement page, as the case may be.
BORROWER AND BORROWERS: As such terms are defined in the opening
paragraph of this Agreement, and including any successor obligor on the Loan
from time to time.
BUSINESS DAY: A day of the year on which banks are not required or
authorized to close in Chicago, Illinois.
CLOSING DATE: The date of the disbursement of the proceeds of the
Loan.
CONCENTRATION ACCOUNT. An account or accounts owned and controlled by
Lender as from time to time designated by Lender.
I-1
CONTROL: As such term is used with respect to any person or entity,
including the correlative meanings of the terms "controlled by," "controlling"
and "under common control with", shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
policies of such person or entity, whether through the ownership of voting
securities, by contract or otherwise.
DEFAULT: Any event, circumstance or condition, which, if it were to
continue uncured, would, with notice or lapse of time or both, constitute an
Event of Default hereunder.
DEFAULT RATE: As such term is defined in Section 2.9(a).
ENVIRONMENTAL DOCUMENTS: As such term is defined in Section 6.1.
ENVIRONMENTAL INDEMNITOR: Individually, each Borrower and each
Guarantor, and collectively sometimes referred to as Environmental Indemnitors.
ENVIRONMENTAL OBLIGATIONS: As such term is defined in Section 6.7.
ENVIRONMENTAL PROCEEDINGS: Any environmental proceedings, whether
civil (including actions by private parties), criminal, or administrative
proceedings, relating to any Project.
ENVIRONMENTAL REPORTS: As such term is defined in Section 6.3.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated thereunder from time to time.
EVENT OF DEFAULT: As such term is defined in Section 8.1.
EXCESS INTEREST: As such term is defined in Section 11.5.
EXIT FEE: As such term is defined in Section 2.8.
EXPENSES: All losses, fines, penalties, judgments, awards, costs and
expenses (including, without limitation, reasonable attorneys' fees and costs,
and expenses of investigation).
FIRREA: The Financial Institutions Reform, Recovery And Enforcement
Act of 1989, as amended from time to time.
GAAP: Generally accepted accounting principles applied in a consistent
manner.
GOVERNMENTAL APPROVALS: Collectively, all consents, licenses, and
permits and all other authorizations or approvals required from any Governmental
Authority to operate the Project.
GOVERNMENTAL AUTHORITY: Any federal, state, county or municipal
government, or political subdivision thereof, any governmental or
quasi-governmental agency, authority,
I-2
board, bureau, commission, department, instrumentality, or public body, or any
court, administrative tribunal, or public utility.
GUARANTOR: Collectively in the singular, Medical Properties Trust,
Inc., a Maryland corporation, MPT Operating Partnership, L.P., a Delaware
limited partnership, and any other Person who may from time to time guaranty,
pledge assets as security for or otherwise become obligated, whether primarily,
contingently or otherwise, in respect of the Obligations or any portion thereof
individually or collectively, as the context shall imply.
HAZARDOUS MATERIAL: Means and includes gasoline, petroleum, asbestos
containing materials, explosives, radioactive materials or any hazardous or
toxic material, substance or waste which is defined by those or similar terms or
is regulated as such under any Law of any Governmental Authority having
jurisdiction over any of the Projects or any portion thereof or its use,
including: (i) any "hazardous substance" defined as such in (or for purposes of)
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C.A. Section 9601(14) as may be amended from time to time, or any so-called
"superfund" or "superlien" Law, including the judicial interpretation thereof;
(ii) any "pollutant or contaminant" as defined in 42 U.S.C.A. Section 9601(33);
(iii) any material now defined as "hazardous waste" pursuant to 40 C.F.R. Part
260; (iv) any petroleum, including crude oil or any fraction thereof; (v)
natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable
for fuel; (vi) any "hazardous chemical" as defined pursuant to 29 C.F.R. Part
1910; and (vii) any other toxic substance or contaminant that is subject to any
other Law or other past or present requirement of any Governmental Authority.
Any reference above to a Law, includes the same as it may be amended from time
to time, including the judicial interpretation thereof.
HEALTHCARE LAWS: All applicable laws relating to patient healthcare
and/or patient healthcare information, as amended from time to time, and the
rules and regulations promulgated thereunder.
IMPROVEMENTS: As such term is defined in Recital A.
INCLUDE OR INCLUDING: Including, but not limited to.
INDEBTEDNESS: As such term is defined in Section 8.1(a).
INDEMNIFIED PARTY: As such term is defined in Section 4.2(k).
INSURANCE PROCEEDS: As such term is defined in Section 7.1(a).
INTEREST RATE: As such term is defined in Section 2.6.
INTERNAL REVENUE CODE: The Internal Revenue Code of 1986, as amended
from time to time.
KNOWLEDGE and KNOWINGLY: Such terms shall mean (a) with respect to the
Borrowers or the Guarantors, the conscious awareness of any of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, R. ▇▇▇▇▇▇ ▇▇▇▇▇▇ and any other principal officer of such
applicable party,
I-3
and (b) with respect to any other person or entity, the conscious awareness of
facts or other information by such person or the principal officers of such
entity.
LAND: As such term is defined in Recital A.
LATE CHARGE: As such term is defined in Section 2.9(b).
LAW OR LAWS: Collectively, all federal, state and local laws,
statutes, codes, ordinances, orders, rules and regulations, including judicial
opinions or presidential authority in the applicable jurisdiction.
LEASES: The collective reference to all leases, subleases and
occupancy agreements affecting any of the Projects or any part thereof now
existing or hereafter executed (including all patient and resident care
agreements and service agreements which include an occupancy agreement) and all
amendments, modifications or supplements thereto.
LENDER: As defined in the opening paragraph of this Agreement, and
including any successor holder of the Loan from time to time.
LOAN: As such term is defined in Recital B.
LOAN AMOUNT: The maximum amount of the Loan as initially set forth in
Recital B.
LOAN DOCUMENTS: The collective reference to this Agreement, the
documents and instruments described in Recital C, and all the other agreements
entered into from time to time, evidencing or securing the Loan or any
obligation of payment thereof or performance of each Borrower's or any
Guarantor's obligations in connection with the transaction contemplated
hereunder, each as amended.
MANAGER: Vibra Healthcare, LLC, or an affiliate thereof, as manager of
one or more of Projects pursuant to the Management Agreement, and any subsequent
manager approved by Lender in Lender's sole discretion.
MANAGEMENT AGREEMENT: One or more management agreements between
Project Lessees and Manager, as the same have been provided to Lender.
MATERIAL ADVERSE CHANGE OR MATERIAL ADVERSE CHANGE: If in Lender's
reasonable discretion, the business, operations or financial condition of a
person, entity or property has changed in a manner which could materially impair
the value of Lender's security for the Loan, prevent timely repayment of the
Loan when due or otherwise prevent the applicable person or entity from timely
performing any of its material obligations under the Loan Documents.
MATERIAL MATTERS: As defined in Section 4.1(a).
MATURITY DATE: As such term is defined in Section 2.4.
I-4
MORTGAGE AND MORTGAGES: As such terms are defined in Recital C.
NOTE: As such term is defined in Recital B.
OBLIGATIONS: Collectively (a) the principal of, and interest on, the
Note and all other sums, fees, charges and expenses due or payable under this
Agreement or the other Loan Documents, (b) all agreements and covenants with and
obligations to Lender arising under, out of, or as a result of or in connection
with the Loan Documents, (c) all amounts advanced by Lender to preserve,
protect, defend, and enforce its rights under this Agreement and the other Loan
Documents or in the collateral for the Loan, and all expenses incurred by Lender
in connection therewith, and (d) any and all other present and future
indebtedness, liabilities and obligations of every kind and nature whatsoever of
Borrowers to Lender, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, joint or several, both now and hereafter
existing, or due or to become due, whether as borrower, guarantor, surety,
indemnitor, assignor, pledgor or otherwise.
OFAC LISTS: As such term is defined in Section 4.2(r).
ORGANIZATIONAL DOCUMENTS: As such term is defined in Section 5.1(e).
PERMITTED EXCEPTIONS: (a) Those matters listed on the Title
Policy(ies) which title to the Projects may be subject at the closing and
thereafter such other title exceptions as Lender may reasonably approve in
writing; (b) those encumbrances, liens, assignments or security interests
currently outstanding and described on the attached Exhibit I; (c) those
encumbrances, liens, assignments or security interests pledged previously to the
Lender or incurred pursuant to this Agreement; (d) tax liens for taxes not yet
due or which are being contested in good faith; or (e) materialmen's lien for
sums not yet due and payable, or which are being contested in good faith and for
which security has been provided to assure bonding or payment thereof.
PERMITTED TRANSFER: Any transfer of any direct or indirect ownership
interest in a Borrower as to which the following conditions have been satisfied:
(i) such Borrower shall have given Lender a written notice of such Transfer on
or before the date of such Transfer, (ii) after giving effect to such transfer
the REIT (A) owns, directly or indirectly, not less than 65% of the beneficial
ownership interests in such Borrower and (B) Controls Borrower.
PERSON: An individual, partnership, corporation, trust, joint venture,
joint stock company, limited liability company, association, unincorporated
organization, Governmental Authority, or any other entity.
PERSONAL PROPERTY: As such term is defined in Section 4.2(g).
PROCEEDING: As such term is defined in Section 11.3.
PROJECT AND PROJECTS: (i) Each Borrower's Land described on Exhibit
▇-▇, ▇-▇, ▇-▇ ▇-▇, ▇-▇, or A-6, respectively, together with all buildings,
structures and improvements now or hereafter located thereon, including the
Improvements, (ii) all rights, privileges, easements and hereditaments relating
or appertaining thereto, and (iii) the Personal Property located on such
I-5
Land or Improvements or used in connection with the facility thereat or which is
owned by such Borrower, is referred to individually as a "Project"; and
collectively as the "Projects".
PROJECT LEASE(S): Those certain lease or leases referred, if any,
between Borrower and Project Lessee(s) pursuant to which the Projects are
demised by Borrower to Project Lessee(s).
PROJECT LESSEE(S): The Person(s) set forth in SCHEDULE II as the
lessee of the Project(s) set forth beside the name of such Person(s), if any,
licensed under all applicable Laws as the operators of the Project..
PROPERTY TAX AND INSURANCE DEPOSIT: As such term is defined in Section
4.2(f).
REIT: Medical Properties Trust, Inc., a Maryland corporation.
REMEDIAL WORK: As such term is defined in Section 6.4.
SINGLE PURPOSE ENTITY: An entity which (i) exists solely for the
purpose of owning and operating one Project, (ii) conducts business only in its
own name, (iii) does not engage in any business other than the ownership,
management and operation of one Project, (iv) does not hold, directly or
indirectly, any ownership interest (legal or equitable) in any entity or any
real or personal property other than the interest which it owns in such Project,
(v) does not have any assets other than those related to its interest in such
Project and does not have any debt other than as permitted by this Agreement and
does not guarantee or otherwise obligate itself with respect to the debts of any
other person or entity, (vi) has its own separate books, records and accounts,
(vii) holds itself out as being a company separate and apart from any other
entity, (viii) observes limited liability company/partnership/corporate
formalities, as the case may be, independent of any other entity.
TENANT: Any tenant, resident or occupant under any Lease, including
any Project Lease.
TITLE INSURER: First American Title Insurance Company.
TITLE POLICY(IES): An ALTA Mortgagee's Loan Title Insurance Policy
with extended coverage issued by the Title Insurer insuring the lien of the
Mortgages as a valid first, prior and paramount lien upon the Projects and all
appurtenant easements, and subject to no other exceptions other than the
Permitted Exceptions approved by Lender at the closing and otherwise satisfying
the requirements of Lender.
TRANSFER: Any sale, transfer, lease (other than a Lease approved by
Lender), conveyance, alienation, pledge, assignment, mortgage, encumbrance
hypothecation or other disposition of (a) all or any portion of any of the
Projects or any portion of any other security for the Loan, (b) all or any
portion of any Borrower's right, title and interest (legal or equitable) in and
to a Project or any portion of any other security for the Loan, or (c) any
interest in any Borrower or Guarantor.
I-6
SCHEDULE II
List of Project Lessees
Project Lessee Managers
------- ------ --------
New Bedford Rehabilitation ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Operating Company, LLC Vibra Management, LLC
Hospital, New Bedford, MA
North Valley Rehabilitation ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Operating Company, LLC Vibra Management, LLC
Hospital, Thornton, CO
Marlton Rehabilitation ▇▇ ▇▇▇▇▇ ▇▇▇▇ Operating Company, LLC Vibra Management, LLC
Hospital, Marlton, NJ
Southern Kentucky ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ Operating Company, LLC Vibra Management, LLC
Rehabilitation Hospital,
Bowling Green, KY
Kentfield Rehabilitation 1125 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Boulevard Operating Vibra Management, LLC
Hospital, Kentfield, CA Company, LLC
San ▇▇▇▇▇▇▇ Valley ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Operating Company, Vibra Management, LLC
Rehabilitation Hospital, LLC
Fresno, CA
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SCHEDULE 5.1(C)
OWNERSHIP STRUCTURE
This Schedule should describe the direct and indirect ownership interests
in each Borrower and Guarantor.
1. Medical Properties Trust, Inc., a Maryland corporation, owns:
(a) 100% of the membership interest in Medical Properties Trust, LLC, a
Delaware limited liability company; and
(b) 99% limited partnership interest in MPT Operating Partnership, L.P., a
Delaware limited partnership.
2. Medical Properties Trust, LLC, a Delaware limited liability company, owns a
1% general partnership interest in MPT Operating Partnership, L.P., a
Delaware limited partnership.
3. MPT Operating Partnership, L.P., a Delaware limited partnership, owns:
(a) 100% of the membership interest in ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC, a
Delaware limited liability company;
(b) 100% of the membership interest in ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, LLC, a Delaware
limited liability company;
(c) 100% of the membership interest in 92 BRICK ROAD, LLC, a Delaware
limited liability company;
(d) 100% of the membership interest in ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, LLC, a Delaware
limited liability company;
(e) 100% of the membership interest in KENTFIELD THCI HOLDING COMPANY LLC,
a Delaware limited liability company, a Delaware limited liability
company; and
(f) 89% limited partnership interest in SAN ▇▇▇▇▇▇▇ HEALTH CARE
ASSOCIATES, LP, a Delaware limited partnership.
4. MPT of California, LLC, a Delaware limited liability company, owns a 5%
general partnership interest in SAN ▇▇▇▇▇▇▇ HEALTH CARE ASSOCIATES, LP, a
Delaware limited partnership.
5. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, LLC, a Delaware limited liability company, owns a
6% limited partnership interest in SAN ▇▇▇▇▇▇▇ HEALTH CARE ASSOCIATES, LP,
a Delaware limited partnership.
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SCHEDULE 5.1(M)
PROJECT LEASES
1. The Lease Agreement, dated August 17, 2004, by and between ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, LLC, a Delaware limited liability company, and ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
OPERATING COMPANY, LLC, a Delaware limited liability company.
2. The Lease Agreement, dated August 17, 2004, by and between ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
LLC, a Delaware limited liability company, and ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ OPERATING
COMPANY, LLC, a Delaware limited liability company.
3. The Lease Agreement, dated August 2, 2004, by and between 92 BRICK ROAD, LLC,
a Delaware limited liability company, and ▇▇ ▇▇▇▇▇ ▇▇▇▇ OPERATING COMPANY, LLC,
a Delaware limited liability company.
4. The Lease Agreement, dated August 2, 2004, by and between ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
LLC, a Delaware limited liability company, and ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ OPERATING
COMPANY, LLC, a Delaware limited liability company.
5. The Lease Agreement, dated August 2, 2004, by and between KENTFIELD THCI
HOLDING COMPANY, a Delaware limited liability company, and 1125 ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ BOULEVARD OPERATING COMPANY, LLC, a Delaware limited liability company.
6. The Lease Agreement, dated August 2, 2004, by and between SAN ▇▇▇▇▇▇▇ HEALTH
CARE ASSOCIATES, LP, a Delaware limited partnership, and ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ OPERATING COMPANY, LLC, a Delaware limited liability company.
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SCHEDULE 12.1
PROPOSED RELEASE PRICES
FACILITY PRICE
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1. New Bedford Rehabilitation Hospital, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇, ▇▇; $16,140,000.00
2. North Valley Rehabilitation Hospital, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇; $ 6,917,500.00
3. Marlton Rehabilitation Hospital, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇; $23,702,500.00
4. Southern Kentucky Rehabilitation Hospital, ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇; $27,022,500.00
5. Kentfield Rehabilitation Hospital, Kentfield, CA $ 6,225,000.00
6. San ▇▇▇▇▇▇▇ Valley Rehabilitation Hospital, Fresno, CA $13,742,500.00