EXHIBIT 10.50
FACILITY AGREEMENT
Dated as of April 23, 1992
Among
FIRST HEALTHCARE CORPORATION
and
Certain Limited Partnerships
TABLE OF CONTENTS
Page
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RECITALS.................................................................. 1
ARTICLE I - DEFINITIONS................................................... 1
1.01 Certain Defined Terms.............................................. 1
1.02 Accounting Terms................................................... 7
1.03 Sections, Etc...................................................... 7
1.04 Construction of Certain Provisions................................. 7
ARTICLE II - TERMS OF PURCHASE AND SALE; SUBLEASE......................... 8
2.01 Purchase and Sale.................................................. 8
2.02 Excluded Assets.................................................... 9
2.03 Assumption of Liabilities.......................................... 9
2.04 Assignment of Contracts and Rights; No Adjustment of Purchase
Price or Rent or Termination of Agreement......................... 9
2.05 Deposit............................................................ 10
2.06 Purchase Price..................................................... 10
2.07 Allocation of Purchase Price....................................... 10
2.08 Payment of Purchase Price.......................................... 10
2.09 Security for Buyers' Obligations................................... 11
2.10 Subleases; Rent.................................................... 11
2.11 Subsidy............................................................ 11
2.12 Subsidy Reduction.................................................. 11
2.13 Guaranty of Buyers' Obligations.................................... 12
2.14 No Recourse........................................................ 12
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF SELLER.................... 13
3.01 Corporate Existence and Power...................................... 13
3.02 Corporate Authorization............................................ 13
3.03 Non-Contravention.................................................. 13
3.04 Litigation......................................................... 13
3.05 Bankruptcy......................................................... 13
3.06 Compliance with Laws............................................... 13
3.07 Reporting Requirements............................................. 13
3.08 License............................................................ 14
3.09 Personal Funds of Residents........................................ 14
3.10 Life Care Contracts................................................ 14
3.11 Admission Agreements and Patient Rolls............................. 14
3.12 Facility Financial Statements...................................... 14
3.13 Absence of Certain Changes......................................... 14
3.14 Collective Bargaining Agreements................................... 14
3.15 Taxes.............................................................. 14
3.16 Environmental Compliance........................................... 15
3.17 Finders' Fees...................................................... 15
3.18 Third Party Consents............................................... 15
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3.19 No Default......................................................... 15
3.20 Schedules.......................................................... 15
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF BUYERS..................... 15
4.01 Partnership Existence and Power.................................... 15
4.02 Partnership Authorization, Etc..................................... 15
4.03 Non-Contravention.................................................. 16
4.04 Litigation......................................................... 16
4.05 Bankruptcy......................................................... 16
4.06 Finders' Fees...................................................... 16
4.07 Schedules.......................................................... 16
4.08 General Partner.................................................... 16
ARTICLE V - CERTAIN COVENANTS OF SELLER.................................... 16
5.01 Operation of the Facilities........................................ 16
5.02 Access to Information.............................................. 17
5.03 Notices of Certain Events.......................................... 17
5.04 Taxes.............................................................. 17
5.05 Reporting Requirements............................................. 17
5.06 Government Surveys, Reports and Other Information.................. 18
5.07 Confidentiality.................................................... 18
5.08 Non-Competition Agreement.......................................... 19
5.09 Further Encumbrances............................................... 19
5.10 Payment of Certain Senior Debt..................................... 19
5.11 Prepayments of Promissory Notes; Release Premium................... 19
5.12 Release of Mortgages............................................... 20
ARTICLE VI - CERTAIN COVENANTS OF BUYERS.................................. 20
6.01 Conduct............................................................ 20
6.02 Notices of Certain Events.......................................... 20
6.03 Confidentiality.................................................... 20
6.04 Access............................................................. 21
6.05 Removal of Signs, Etc.............................................. 21
6.06 Licenses, Etc...................................................... 21
6.07 Application of Certain Proceeds.................................... 21
6.08 Books, Records, Etc................................................ 21
ARTICLE VII - CERTAIN COVENANTS OF SELLER AND BUYERS...................... 22
7.01 Diligent Efforts; Further Assurances............................... 22
7.02 Certain Filings.................................................... 22
7.03 Public Announcements............................................... 22
7.04 Cooperation as to Taxes............................................ 22
7.05 Allocation of Taxes................................................ 22
7.06 Allocation of Other Charges........................................ 23
7.07 Employees.......................................................... 23
7.08 Receivables........................................................ 24
7.09 Patient Trust Funds................................................ 25
7.10 Preliminary Commitment for Title Insurance......................... 25
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7.11 Condition of Purchased Assets and Leased Facilities; Disclaimer
of Warranties..................................................... 25
7.12 Inspection......................................................... 26
7.13 Destruction of or Damage to Facilities............................. 27
7.14 Consents........................................................... 28
7.15 Inventory.......................................................... 28
7.16 Schedules and Exhibits............................................. 28
7.17 Financing.......................................................... 28
7.18 Delivery of Certain Documents...................................... 29
ARTICLE VIII - CLOSING.................................................... 29
8.01 Closing............................................................ 29
8.02 Conveyance; Sublease............................................... 29
8.03 Possession and Risk of Loss........................................ 29
8.04 Seller's Delivery of Documents at Closing.......................... 29
8.05 Buyers' Delivery of Documents and Purchase Price at Closing........ 30
8.06 Certain Payments and Prorations.................................... 31
ARTICLE IX - CONDITIONS TO CLOSING........................................ 32
9.01 Conditions to the Obligations of Seller and Buyers................. 32
9.02 Additional Conditions to the Obligation of Buyers.................. 33
9.03 Additional Conditions to the Obligation of Seller.................. 33
ARTICLE X - SURVIVAL; INDEMNIFICATION..................................... 34
10.01 Survival........................................................... 34
10.02 Idemnification by Seller........................................... 34
10.03 Idemnification by Buyers........................................... 34
10.04 Procedures......................................................... 35
10.05 Exclusivity........................................................ 35
ARTICLE XI - TERMINATION.................................................. 35
11.01 Grounds for Termination............................................ 35
11.02 Effect of Termination.............................................. 36
ARTICLE XII - MISCELLANEOUS............................................... 36
12.01 Notices............................................................ 36
12.02 Amendments, Etc.................................................... 37
12.03 No Waivers; Remedies Cumulative.................................... 38
12.04 Expenses........................................................... 38
12.05 Successors and Assigns............................................. 38
12.06 Joint and Several Liability........................................ 38
12.07 Counterparts; Effectiveness........................................ 38
12.08 Entire Agreement................................................... 38
12.09 Severability....................................................... 38
12.10 Captions........................................................... 38
12.11 Arbitration........................................................ 39
12.12 Bulk Sales Laws.................................................... 39
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12.13 Governing Law...................................................... 39
Schedule 1.01A Assumed Contracts and Certain Consents
Schedule 1.01B Owned Facilities and Certain Bonds
Schedule 1.01C Leased Facilities
Schedule 1.01D Leased Facilities As to Which Buyers Shall Have Been
Assigned Option to Purchase
Schedule 1.01E Real Property Description and Certain Permitted Liens
Schedule 2.03(a) Certain Assumed Liabilities
Schedule 2.07 Allocation Schedule
Schedule 2.08(c) Promissory Note Principal Amounts
Schedule 2.11 Subsidy Reduction Upon Certain Sublease Terminations
Schedule 2.12 Subsidy Reduction
Schedule 3.04 Seller Litigation
Schedule 3.08 Licensure
Schedule 3.10 Life Care Contracts
Schedule 3.16 Environmental Disclosure
Schedule 4.04 Buyer Litigation
Exhibit A Form of Assignment and Assumption Agreement
Exhibit B Form of Promissory Note
Exhibit C-1 Form of Deed of Trust, Assignment, Security Agreement and
Financing Statement (Fixture Filing)
Exhibit C-2 Form of Mortgage, Assignment, Security Agreement and
Financing Statement (Fixture Filing)
Exhibit D Form of Guaranty
Exhibit E Form of Receipt and Assumption Agreement
Exhibit F Form of Deeds
Exhibit G Form of ▇▇▇▇ of Sale and General Assignment
Exhibit H Form of Opinion of General Counsel to the Seller
Exhibit I Form of Pharmacy Partnership Agreement
Exhibit J Form of Pharmacy Management Agreement
Exhibit K Form of Rehab Partnership Agreement
Exhibit L Form of Rehab Management Agreement
Exhibit M Form of Accounting Services Agreement
Exhibit N Form of Opinion of House & ▇▇▇▇▇▇, P.A.
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FACILITY AGREEMENT
This FACILITY AGREEMENT, dated as of April 23, 1992, is made among
FIRST HEALTHCARE CORPORATION, a Delaware corporation (the "Seller"), and the
limited partnerships listed on the signature pages hereto (individually, a
"Buyer" and collectively, the "Buyers").
RECITALS
A. The Seller owns or, subject to certain purchase options, will
own the Owned Facilities (as defined below) and leases or subleases the Leased
Facilities (as defined below).
B. The Seller desires to sell to the Buyers, and the Buyers desire
to purchase from the Seller, the Seller's right, title and interest in and to
the Owned Facilities and the other Purchased Assets (as defined below), upon the
terms and subject to the conditions set forth in this Agreement.
C. The Seller desires to sublease to the Buyers, and the Buyers
desire to sublease from the Seller, the Leased Facilities, upon the terms and
subject to the conditions set forth in this Agreement and the Subleases (as
defined below).
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth in this
Agreement, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms. As used in this Agreement, the
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following terms shall have the following meanings:
"Accounting Services Agreements" has the meaning assigned to
that term in Section 8.04(p).
"Agreement" means this Facility Agreement, as it may be amended
or otherwise modified in accordance with Section 12.02.
"Allocation Schedule" has the meaning assigned to that term in
Section 2.07.
"Assignment and Assumption Agreements" has the meaning assigned
to that term in Section 2.03.
"Assumed Contracts" means, subject to Section 2.04, the leases,
licenses, contracts and agreements listed or otherwise described in Schedule
1.01A.
"Assumed Liabilities" has the meaning assigned to that term in
Section 2.03.
"Bethesda Sublease" has the meaning assigned to that term in
Section 2.01.
"Bills of Sale" has the meaning assigned to that term in Section
8.02.
"Bond-financed Owned Facilities" means the facilities listed in
Part B of Schedule 1.01B.
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"Bonds" means the bonds listed in Part B of Schedule 1.01B.
"Buyers" has the meaning assigned to that term in the preamble
to this Agreement.
"Buyer Loss" means any loss, damage, injury, liability, Tax,
fine, penalty, cost and expense (including reasonable attorneys' fees and
disbursements) incurred or suffered by the Buyers. When calculating the dollar
amount of any Buyer Loss, an allowance shall be made for any insurance proceeds
or other recovery from third parties received by the Buyers in connection with
such Buyer Loss. In addition, the dollar amount of any Buyer Loss shall be
calculated net of any United States federal income tax benefit from such Buyer
Loss utilized by the Buyers in the taxable year in which such Buyer Loss arises.
The amount of any such United States federal income tax benefit shall be equal
to the difference between (i) the overall United States federal income tax
liability of the Buyers including such Buyer Loss for such taxable year and (ii)
the overall United States federal income tax liability of the Buyers excluding
such Buyer Loss for such taxable year.
"Charlevoix Lease" has the meaning assigned to that term in
Section 2.01.
"Closing" has the meaning assigned to that term in Section
8.01.
"Closing Date" means the date on which the Closing occurs.
"Deeds" has the meaning assigned to that term in Section 8.02.
"Deposit" has the meaning assigned to that term in Section
2.05.
"Employee" means any Person who is employed by the Seller as
an employee of any Facility and who, as of 11:00 p.m. on the day immediately
preceding the Closing Date, is actively employed by the Seller or is on short-
term disability leave, authorized leave of absence, military service or lay-off
with recall rights as of the Closing Date, but excludes any Person who is on
long-term disability leave or unauthorized leave of absence on the Closing Date
or who has died, retired or otherwise terminated his or her employment on or
before the Closing Date.
"Employee Benefit Program" has the meaning assigned to that
term in Section 7.07.
"Employment Law" means any of the Worker Adjustment and
Retraining Notification Act, the rules and regulations promulgated under that
act, and any similar federal, state or local law (including any law pertaining
to severance pay), as supplemented or amended.
"Environmental Law" means any federal, state or local statute,
rule, regulation, ordinance, order, judgment, decree, injunction or common law
pertaining to the protection of human health or the environment, including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. (S)(S)9601-9675), the Toxic Substance Control Act (15 U.S.C. (S)(S)2601-
2671), the Hazardous Materials Transportation Act (49 U.S.C. (S)(S)1801-1813),
the Federal Water Pollution Control Act (33 U.S.C. (S)(S)1251-1387), the Clean
Air Act (42 U.S.C. (S)(S)7401-7671q), the Safe Drinking Water Act (42 U.S.C.
(S)(S)300f-300j-26), the Solid Waste Disposal Act (42 U.S.C. (S)(S)6901-6992k),
the Coastal Zone Management Act (16 U.S.C. (S)(S)1451-1464), and the
Occupational Safety and Health Act (29 U.S.C. (S)651 et seq.), and any similar
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federal, state or local law, as supplemented or amended.
"Escrow Account" has the meaning assigned to that term in
section 2.05.
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"Escrow" Agent" means Chicago Title Insurance Company, a
Missouri corporation, or an affiliate or agent of Chicago Title Insurance
Company or such other Person agreed to by the parties, and any successor.
"Event of Default" has the meaning assigned to that term in the
Promissory Notes.
"Excluded Assets" means the following assets whether or not
relating to or affecting any Facility: (a) all cash, bank accounts, profit-
sharing funds, pension funds and similar funds; (b) all accounts, notes and
other receivables (including all patient accounts and patient balances and other
accounts, notes and other receivables in respect of the ownership, lease, use
and operation of any Facility and the other Purchased Assets prior to the
Closing); (c) except as provided in Section 2.12, all rights to moneys and other
sums due and to become due from any governmental or regulatory authority in
respect of any cost report filed with respect to any Facility for any cost
reporting period ended on or prior to the Closing Date, whether by reason of an
adjustment in rates by such governmental or regulatory authority or otherwise;
(d) all personnel, employment and payroll records that relate to employees of
any Facility, except such records that are required by law to be kept at any
Facility; (e) all books, records, files and papers (whether in hard copy or
computer format) that are not used exclusively in, or that do not relate
exclusively to or exclusively affect, any Facility, including engineering
information, sales and promotional literature, manuals and data, sales and
purchase correspondence lists of suppliers, lists of patients and residents,
personnel and employment records, payroll records and information relating to
any Tax; (f) all Intellectual Property Rights; (g) all computers; (h) Purchased
Assets that are sold or otherwise disposed of in the ordinary course of the
operation of any Facility and not in vioLation of any provisions of this
Agreement from the date of this Agreement until the Closing Date; (i) any
license, permit or other governmental or regulatory authorization that relates
to or affects any Facility but is not assignable or transferable; (i) any Seller
Trade Name; and (k) any lease or license of, and any other contract or agreement
relating to or affecting, any Facility (1) if any consent by any Person is
required for the sale, assignment, transfer, conveyance or delivery of such
lease, license, contract or agreement and such consent is not obtained or (2) if
the sale, assignment transfer, conveyance or delivery of such lease, license,
contract or agreement is prohibited by law, contract or otherwise.
"Executive Committee" means the executive committee of the
board of directors of Hillhaven.
"Extended Review Period" has the meaning assigned to that term
in Section 7.10.
"Facilities" means the Owned Facilities and the Leased
Facilities.
"Facility Financial Statements" means (i) the unaudited Summary
of Financial Results of each Facility for the fiscal years ended May 31, 1990,
and May 31, 1991, respectively, (ii) the unaudited 1991 Operations Analysis for
each Facility for the fiscal year ended May 31, 1991, (iii) the unaudited 1990
Operations Analysis for each Facility for the fiscal year ended May 31, 1990,
and (iv) the unaudited monthly Operations Analyses for each Facility that are
provided to the Buyers pursuant to Section 5.02.
"First Lien Mortgage" has the meaning assigned to that term in
the applicable Mortgage.
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"General Partner" means Meadowbrook Manor of Kansas & Missouri,
Inc., a North Carolina corporation.
"Guarantors" means ▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
"Guaranty" has the meaning assigned to that term in Section
2.13.
"Hazardous Substance" means any hazardous, toxic, radioactive or
infectious substance, material, waste, pollutant or contaminant as defined,
listed or regulated under any Environmental Law, including asbestos and
petroleum oil and its fractions.
"Hillhaven" means The Hillhaven Corporation, a Nevada
corporation.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated under that act.
"Improvements" means all buildings, structures, facilities and
other improvements erected on, attached to or located in or upon any Real
Property, all building materials attached to or contained in such buildings,
structures, facilities or improvements, and all building equipment and fixtures
(including goods that are so related to such Real Property that an interest
therein arises under real estate law) located in or upon any Real Property or
attached to, contained in, or used exclusively in connection with, any such
buildings, structures, facilities or improvements.
"Indemnified Party" has the meaning assigned to that term in
Section 10.04.
"Indemnifying Party" has the meaning assigned to that term in
Section 10.04.
"Intellectual Property Rights" means all trademarks, service
marks, service names, registrations thereof or applications for registration
thereof, trade names, inventions, patents, patent applications, trade secrets,
technology, processes, know-how, proprietary data, formulae, research and
development data, computer software programs, copyrights, copyright
registrations, applications for copyright registration, and all similar types of
proprietary intellectual property rights.
"Inventory" means all central supplies, linen, housekeeping and
other supplies and all food used exclusively in the operation of any Facility
and located in or upon such Facility on the Closing Date.
"Leased Facilities" means the facilities listed in Schedule
1.01C.
"Leases" means the leases with respect to the Leased Facilities
that are referred to in, and attached as exhibits to, the Subleases.
"Lien" means, with respect to any asset, any mortgage, deed of
trust, financing statement, lien, pledge, charge, security interest (whether or
not perfected) or encumbrance of any kind in respect of such asset.
"Material Adverse Effect" means, with respect to any Facility, a
material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of such Facility.
"Mortgages" has the meaning assigned to that term in Section
2.09.
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"Mortgagee's Title Policy" means, with respect to each Owned
Facility, an American Land Title Association mortgagee's or lender's standard
coverage policy of title insurance issued by the Title Company in an amount
equal to the amount of the Purchase Price Balance allocated to such Owned
Facility, effective as of the Closing Date at ordinary premium rates without any
requirement for additional premiums or charges for endorsements (including
comprehensive or extended coverage endorsements), surveys or otherwise, insuring
that the lien and the security interest created by the Mortgage are a valid and
enforceable lien on and security interest in the Real Property and the
Improvements constituting such Owned Facility, subject to no Liens other than
the Permitted Liens.
"Operator" means any Person who obtains from the Buyers the
right to operate any of the Facilities after the Closing.
"Owned Facilities" means the facilities listed in Schedule
1.01B.
"Owner's Title Policy" means, with respect to each Owned
Facility, an American Land Title Association owner's standard coverage policy of
title insurance issued by the Title Company in an amount equal to the portion of
the Purchase Price allocated to the Real Property and the Improvements
constituting such Owned Facility, effective as of the Closing Date at ordinary
premium rates without any requirement for additional premiums or charges for
endorsements (including comprehensive or extended coverage endorsements),
surveys or otherwise, insuring that good and marketable title to the Real
Property and the Improvements constituting such Owned Facility is vested in the
Buyers, subject to no Liens other than the Permitted Liens.
"Permits" means all assignable or transferable licenses, permits
and other governmental or regulatory authorizations relating to or affecting any
Facility.
"Permitted Liens" means, with respect to any asset, (a) rights
reserved in federal patents or state or commonwealth deeds, (b) building or use
restrictions general to the city, district or other political subdivision in
which such asset is located, (c) applicable building, use and zoning rules and
regulations, (d) existing easements not inconsistent with the Buyers' intended
use of such asset, (e) general real estate taxes for the year of the Closing and
for subsequent years which, on the Closing Date, shall not yet be due and
payable, (f) printed exceptions set forth in an American Land Title Association
Owner's standard coverage policy of title insurance, (g) any Lien listed or
otherwise described in Part B of Schedule 1.01E, (h) any Lien created by any
First Lien Mortgage, (i) all other Liens, reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title defects and exceptions that pertain to such asset and
have been approved by the Buyers in writing, and (i) any extensions, renewals or
replacements of any of the foregoing Liens for the same or lesser amount whether
by reason of refinancing or otherwise.
"Person" means an individual, a corporation, a partnership, an
association, a trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Personal Property" means all furniture, furnishings, fixtures,
machinery and equipment owned by the Seller that is located in or upon or used
exclusively in connection with any Facility.
"Pharmacy Management Agreement" has the meaning assigned to that
term in Section 8.04(m).
"Pharmacy Partnership Agreement" has the meaning assigned to
that term in Section 8.04(l).
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"Post-Closing Tax Period" means any Tax period (or portion
thereof) ending after 5.00 p.m. on the Closing Date.
"Pre-Closing Tax Period" means any Tax period (or portion
thereof) ending at or before 5:00 p.m. on the Closing Date.
"Promissory Notes" has the meaning assigned to that term in
Section 2.08(c).
"Purchase Price" has the meaning assigned to that term in
Section 2.06.
"Purchase Price Balance" has the meaning assigned to that term
in Section 2.08(c).
"Purchased Assets" means the Seller's right, title and interest
in, to and under the Real Property, the Improvements, the Assumed Contracts, the
Inventory, the Permits, the Personal Property and the Records, but does not mean
the Seller's right, title or interest in, to or under the Excluded Assets.
"Real Property" means the tracts, lots, pieces or parcels of
land in respect of the Owned Facilities and more particularly described in Part
A of Schedule 1.01E.
"Receipt and Assumption Agreements" has the meaning assigned to
that term in Section 7.09.
"Records" means all documents, records and files exclusively
relating to or affecting any Facility, including all patient medical records.
"Rehab Management Agreement" has the meaning assigned to that
term in Section 8.04(o).
"Rehab Partnership Agreement" has the meaning assigned to that
term in Section 8.04(n).
"Release Premium" has the meaning assigned to that term in
Section 5.11.
"Rent" has the meaning assigned to that term in Section 2.10.
"Review Period" has the meaning assigned to that term in Section
7.10.
"Sedgwick Sublease" has the meaning assigned to that term in
Section 2.01.
"Seller" has the meaning assigned to that term in the preamble
to this Agreement.
"Seller Loss" means all loss, damage, injury, liability, Tax,
fine, penalty, cost and expense (including reasonable attorneys' fees and
disbursements) incurred or suffered by the Seller. When calculating the dollar
amount of any Seller Loss, an allowance shall be made for any insurance proceeds
or other recovery from third parties received by the Seller in connection with
such Seller Loss. In addition, the dollar amount of any Seller Loss shall be
calculated net of any United States federal income tax benefit from such Seller
Loss utilized by the Seller in the taxable year in which such Seller Loss
arises. The amount of any such United States federal income tax benefit shall be
equal to
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the difference between (i) the overall United States federal income tax
liability of the Seller including such Seller Loss for such taxable year and
(ii) the overall United States federal income tax liability of the Seller
excluding such Seller Loss for such taxable year.
"Seller Trade Name" means any of the names "First, Healthcare,"
"Guardian Care," "Hillhaven," "Medicenter," "Medisave," "Northwest Health Care,"
and any similar name or combination of such names.
"Social Security Act" means the Social Security Act, as amended.
"Subleases" has the meaning assigned to that term in Section
2.10.
"Tax" means any net income, alternative or add-on minimum tax,
gross income, gross receipts, sales, use, ad valorem, franchise, capital, paid-
up capital, profits, green mail, license, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property, environmental or
windfall profit tax, custom, duty or other tax, governmental fee or other like
assessment or charge, together with any interest or any penalty, addition to tax
or additional amount imposed by any governmental authority.
"Title Company" means Chicago Title Insurance Company, a
Missouri corporation, or an affiliate or agent of Chicago Title Insurance
Company or such other Person agreed to by the parties, and any successor.
"Title Report" has the meaning assigned to that term in Section
7.10.
"Transaction Document" means any of this Agreement, the
Charlevoix Lease, the Bethesda Sublease, the Sedgwick Sublease, the Assignment
and Assumption Agreements, the Promissory Notes, the Mortgages, the Subleases,
the Guaranty, the Receipt and Assumption Agreements, the Deeds and the Bills of
Sale.
"Transferred Employee" means any Employee who commences
employment with the Buyers.
1.02 Accounting Terms. All accounting terms that are not specifically
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defined in this Agreement shall be construed in accordance with accounting
principles and practices consistent with those applied in the preparation of the
Facility Financial Statements.
1.03 Sections, Etc. Unless stated otherwise in this Agreement,
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references in this Agreement to Sections, Schedules and Exhibits are references
to Sections of and Schedules and Exhibits attached to this Agreement. Each
Schedule to this Agreement is by this reference incorporated in this Agreement.
1.04 Construction of Certain Provisions.
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(a) All recitals set forth in this Agreement are by this
reference incorporated in this Agreement.
(b) The term "consent" shall be construed as if followed by
the words "authorization or approval."
(c) The term "Purchased Assets" shall be construed as if
followed by the words "or any part thereof."
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(d) The terms "include", "including" and similar terms
shall be construed as if followed by the words "but not limited to."
(e) The words "reasonable attorneys' fees and
disbursements" shall be construed as if followed by the words "including
reasonable charges allocated for internal corporate counsel."
(f) The term "provisions," when used with respect to this
Agreement or any other Transaction Document, shall be construed as if preceded
by the words "terms, covenants, agreements, requirements, conditions and/or."
(g) Words of masculine, feminine or neuter gender shall
mean and include the correlative words of the other genders, and words importing
the singular number shall mean and include the plural number, and vice versa.
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(h) No inference in favor of, or against, any party shall
be drawn from the fact that such party has drafted any portion of this
Agreement.
ARTICLE II
TERMS OF PURCHASE AND SALE; SUBLEASE
2.01 Purchase and Sale. Upon the terms and subject to the conditions
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set forth in this Agreement, the Seller agrees to sell, assign, transfer, convey
and deliver, or cause to be sold, assigned, transferred, conveyed and delivered,
to the Buyers at the Closing, and the Buyers agree to purchase, assume and
accept from the Seller at the Closing, the Purchased Assets, free and clear of
all Liens other than the Permitted Liens. Notwithstanding anything to the
contrary set forth in this Section 2.01 or elsewhere in this Agreement, the
Seller and the Buyers acknowledge and agree that the sale, assignment, transfer,
conveyance and delivery of the Bond-financed Owned Facilities are subject to the
payment or prepayment and redemption of the related Bonds. The Seller agrees to
take all actions, and with respect to the Bonds pertaining to the Sedgwick
Convalescent Center, to cause Sedgwick Convalescent Center, Inc. to take all
actions, required to be taken by such parties under the documents pertaining to
the Bonds, in order to prepay and redeem the Bonds on their respective earliest
possible optional redemption dates, except the Bonds pertaining to Charlevoix
Nursing Center, which are not subject to optional redemption. Until such payment
or prepayment and redemption, (i) pursuant to a Lease, dated as of April 23,
1992, with respect to the Charlevoix Nursing Center (the "Charlevoix Lease"),
the Seller agrees to lease to the Buyer that is a party thereto, and such Buyer
agrees to lease from the Seller, certain Purchased Assets with respect to such
Facility, (ii) pursuant to a Sublease, dated as of April 23, 1992, with respect
to the Bethesda Nursing Center (the "Bethesda Sublease"), the Seller agrees to
sublease to the Buyer that is a party thereto, and such Buyer agrees to sublease
from the Seller, certain Purchased Assets with respect to such Facility; and
(iii) pursuant to a Sublease, dated as of April 23, 1992, with respect to the
Sedgwick Convalescent Center (the "Sedgwick Sublease), the Seller agrees to
sublease to the Buyer that is a party thereto, and such Buyer agrees to sublease
from the Seller, certain Purchased Assets with respect to such Facility. Such
Buyers shall pay to the Seller under the Charlevoix Lease, the Bethesda Sublease
and the Sedgwick Sublease rent in the amounts, at the times and on such other
terms as provided in Section 2.08 for the payment of the Purchase Price
allocated to the Purchased Assets with resect to such Bond-financed Owned
Facilities. Accordingly, such Buyers shall pay to the Seller at the Closing rent
in an amount equal to the portion of such Purchase Price to be paid as provided
in Section 2.08(b), and thereafter such Buyers shall pay to the Seller rent in
such amounts and at such times as if such Buyers had executed and delivered
Promissory Notes in the principal amounts set
-8-
forth in Schedule 2.08(c) with respect to such Bond-financed Owned Facilities
and bearing interest as provided in such Promissory Notes and Section 2.08(c).
Such Buyers shall receive a credit for payments of such rent against such
Buyers' obligations in respect of such Purchase Price and in respect of such
interest. As soon as reasonably practicable after the date of payment or
prepayment and redemption of the Bonds with respect to each Bond-financed Owned
Facility, upon the delivery of the applicable Deed, ▇▇▇▇ of Sale, Owner's Title
Policy, affidavit of nonforeign status, Promissory Note, Mortgage, Uniform
Commercial Code financing statements, evidence of required insurance,
Mortgagee's Title Policy, opinions of counsel and such other documents required
under this Agreement for the transfer of the Purchased Assets, the Seller shall
sell, assign, transfer, convey and deliver, or cause to be sold, assigned,
transferred, conveyed and delivered, to the applicable Buyer, and such Buyer
shall purchase, assume and accept from the Seller, the Purchased Assets with
respect to such Bond-financed Owned Facility, free and clear of all Liens other
than Permitted Liens.
2.02 Excluded Assets. Notwithstanding anything to the contrary set
---------------
forth in Section 2.01 or elsewhere in this Agreement or any other Transaction
Document, the Buyers acknowledge and agree that the Seller shall not have any
obligation to sell, assign, transfer, convey, deliver, lease or sublease, or
cause to be sold, assigned, transferred, conveyed, delivered, leased or
subleased, to the Buyers (a) the Excluded Assets or (b) any telephone facsimile
equipment located in or upon any Facility that is owned by Medisave Pharmacies,
Inc.
2.03 Assumption of Liabilities. Upon the terms and subject to the
-------------------------
conditions set forth in this Agreement, the Buyers agree, effective at the time
of the Closing, to assume the following obligations and liabilities
(collectively, the "Assumed Liabilities"):
(a) all obligations and liabilities listed or otherwise
described in Schedule 2.03(a); and
(b) all duties, obligations and liabilities of the Seller
under the Assumed Contracts (other than obligations or liabilities attributable
to any failure by the Seller to comply with the terms of the Assured Contracts
prior to the Closing).
At the Closing, the Seller and the Buyers shall enter into assignment and
assumption agreements, each substantially in the form of Exhibit A (the
"Assignment and Assumption Agreements").
2.04 Assignment of Contracts and Rights; No Adjustment of Purchase
-------------------------------------------------------------
Price or Rent or Termination of Agreement. Notwithstanding anything in this
-----------------------------------------
Agreement to the contrary, this Agreement shall not constitute an agreement to
assign any license, permit, governmental or regulatory authorization, lease,
contract, or other agreement, or any claim, right or benefit arising under or
resulting from any such license, permit, authorization, lease, contract or other
agreement, if an attempted assignment thereof, without the consent by any other
Person, would constitute a breach or other contravention of any such license,
permit, authorization, lease, contract or other agreement or would result in the
cancellation, termination, invalidity or unenforceability thereof or would in
any other way adversely affect the rights and benefits of the Seller or the
Buyers thereunder. Without limiting the generality of the foregoing, the Buyers
acknowledge and agree that (a) consents by other Persons may be required for the
sale, assignment, transfer, conveyance and delivery to the Buyers of certain of
the Assumed Contracts and claims, rights or benefits arising thereunder or
resulting therefrom and (b) no reduction in or other adjustment or modification
of the Purchase Price or the Rent or any terms of payment of the Purchase Price
or the Rent, and, subject to Section 9.01(c), no right to terminate this
Agreement or any of the other Transaction Documents, shall be made by reason of
(i) any failure or inability to obtain any such consents or (ii) the
cancellation, termination, invalidity or unenforceability of, or any other
adverse effect on the rights or benefits of the Seller or the Buyers under, any
of such Assumed Contracts.
-9-
2.05 Deposit. Immediately upon the execution and delivery of this
-------
Agreement, the Buyers shall pay to the Escrow Agent in cash or immediately
available funds, an amount (the "Deposit") equal to $150,000, which shall be
deposited in an interest-bearing escrow account (the "Escrow Account"). All
interest earned on the Deposit shall be for the benefit of the Buyers and shall
be held in the Escrow Account. At the Closing, the Deposit plus all accrued
interest on the Deposit shall be paid to the Seller as provided in Section
2.08(a), and an amount equal to the Deposit plus such interest shall be credited
and applied against the Purchase Price. If this Agreement is terminated, or if
the transactions contemplated by this Agreement are not consummated, by reason
of any willful failure of the Buyers to fulfill a condition to the performance
of the obligations of the Seller or to perform a covenant of this Agreement to
be performed by the Buyers, then the Deposit plus all accrued interest on the
Deposit shall be paid by the Escrow Agent to the Seller as a partial payment of
the liquidated damages specified in Section 11.02. If this Agreement is
otherwise terminated, or if the transactions contemplated by this Agreement are
otherwise not consummated, then the Deposit plus all accrued interest on the
Deposit shall be paid by the Escrow Agent to the Buyers.
2.06 Purchase Price. The purchase price (the "Purchase Price") for
--------------
the Purchased Assets is $38,500,000. The Buyers shall pay the Purchase Price to
the Seller as provided in Section 2.08.
2.07 Allocation of Purchase Price. The Purchase Price has been
----------------------------
allocated to and among the Purchased Assets as set forth in Schedule 2.07 (the
"Allocation Schedule"). Such allocation has been made in good faith negotiations
between the Seller and the Buyers, with knowledge of tax and other consequences
and with the Seller and the Buyers being represented by counsel and other
professional advisors. The Seller and the Buyers agree to report an allocation
of the Purchase Price among the Purchased Assets consistent with the Allocation
Schedule, and the Seller and the Buyers agree to act in accordance with the
Allocation Schedule in the preparation of financial statements and the filing of
all tax returns (including the filing of Form 8594 with their respective federal
income tax returns for the taxable year that includes the Closing Date) and in
the course of any tax audit, tax review or tax litigation relating thereto. Not
later than ten days prior to the filing of their respective Forms 8594 relating
to the transaction contemplated by this Agreement, the Seller and the Buyers
shall deliver a copy of such form to the other party.
2.08 Payment of Purchase Price. The Buyers shall pay the Purchase
-------------------------
Price to the Seller as follows:
(a) The Buyers shall instruct the Escrow Agent to pay the
Deposit plus all accrued interest on the Deposit, in cash or immediately
available funds, to the Seller at the Closing and, upon receipt by the Seller of
the Deposit plus such interest, an amount equal to the Deposit plus such
interest shall be credited and applied against the Purchase Price.
(b) The Buyers shall pay to the Seller at the Closing a
portion of the Purchase Price, in cash or immediately available funds, in an
amount equal to $3,850,000 less the amount credited and applied against the
Purchase Price pursuant to Section 2.08(a).
(c) The Buyers shall pay to the Seller the balance of the
Purchase Price (the "Purchase Price Balance"), plus interest thereon in
installments in accordance with the provisions of promissory notes each
substantially in the form of Exhibit B (the "Promissory Notes") in respect of
the Owned Facilities. The aggregate principal amount of the Promissory Notes
shall be equal to the Purchase Price Balance. The respective principal amounts
of the Promissory Notes shall be as set forth in Schedule 2.08(c). The Buyers
shall execute and deliver the Promissory Notes to the Seller at the Closing.
-10-
2.09 Security for Buyers' Obligations. The payment and performance of
--------------------------------
the Buyers' obligations under this Agreement and the Promissory Notes shall be
secured by deeds of trust, assignments, security agreements and financing
statements (fixture filings) or mortgages, assignments, security agreements and
financing statements (fixture filings) each substantially in the form of Exhibit
C-1 and C-2, respectively (the "Mortgages"), in respect of the Owned Facilities,
executed by the Buyers for the benefit of the Seller.
2.10 Subleases: Rent. Upon the terms and subject to the condition set
---------------
forth in this Agreement and the Subleases, dated as of April 23, 1992, with
respect to the Leased Facilities (the "Subleases"), the Seller agrees to
sublease to the respective Buyers that are a party thereto, and such Buyers
agree to sublease from the Seller, the land, improvements and any leased
personal property (other than the Excluded Assets) constituting the Leased
Facilities. The Buyers shall pay to the Seller under each SubLease rent
(collectively for all Subleases, the "Rent") for the related Leased Facility as
set forth in such Sublease.
2.11 Subsidy. In consideration for the sublease of the Leased
-------
Facilities by the Buyers from the Seller, the Seller shall pay to the Buyers as
a subsidy: (i) $4,300,000 during the initial twelve month period of the term
under the Subleases; (ii) $2,900,000 during the second twelve month period of
the term under the Subleases; and (iii) $1,600,000 during the third twelve month
period of the term under the Subleases. Such payments for each such period shall
be in substantially equal monthly installments, payable on the first day of each
month during such period, commencing for the initial period on the first day of
the month immediately following the month in which the Closing occurs. Such
payments shall be made to the Buyers at c/o Meadowbrook Manor of Kansas &
Missouri, Inc., Salem Center, Yadkin ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
or at such other place as the Buyers may specify in writing. If any Buyer is in
default in the payment of the Rent, then the Seller may reduce its monthly
subsidy payment by the aggregate amount of such Rent in default. In addition, if
any Sublease is terminated other than as a result of (i) a default caused solely
by the Seller or any affiliate of the Seller under the Lease referred to in such
Sublease, or (ii) the Buyers having entered into a replacement lease with the
lessor under such Lease, provided that on the commencement date of such
replacement lease such lessor unconditionally releases the Seller and all
affiliates of the Seller from all duties, obligations and liabilities arising
under or by reason of such Lease, or (iii) the Buyers or any other Person having
purchased the Leased Facility with respect to such Sublease, provided that upon
the consummation of such purchase the lessor of such Leased Facility
unconditionally releases the Seller and all affiliates of the Seller from all
duties, obligations and liabilities arising under or by reason of the Lease with
respect to such Leased Facility, then the Seller's monthly subsidy payment shall
be reduced by the percentage set forth in Schedule 2.11 with respect to the
Leased Facility to which such Sublease pertains.
2.12 Subsidy Reduction. The Seller and the Buyers agree that a
-----------------
portion of certain future increases in Medicaid per diem rates in the State of
Missouri shall accrue to the benefit of the Seller and reduce the monthly
subsidy to be paid by the Seller pursuant to Section 2.11.
The amount of the reduction shall be calculated as follows. For any
increase in any Missouri Medicaid per diem rate during the period February 12,
1992 through June 30, 1993, the Seller's monthly subsidy payments until the next
rate increase shall be reduced, but not below zero, by an amount equal to the
product obtained by multiplying (a) the amount by which such increased rate
exceeds 104 percent of the "base rate" for such period, times (b) the number of
-----
residents set forth in Part A of Schedule 2.12 to which such rate increase
applies, times (c) the number of days in the month during which such rate
-----
increase is effective. The base rate for such period for each Facility located
in Missouri shall be the Medicaid per diem rate for such Facility as of February
12, 1992, as set forth in Part B of Schedule 2.12 (the"Period I Base Rate"). The
number of residents set forth in
-11-
Part A of Schedule 2.12 shall be based on the census for the Facilities located
in Missouri as of February 12, 1992.
For any increase in any Missouri Medicaid per diem rate during the
period July 1, 1993 through June 30, 1994, the Seller's monthly subsidy payments
until the next rate increase shall be reduced, but not below zero, by an amount
equal to the product obtained by multiplying (a) the amount by which such
increased rate exceeds the "base rate" for such period, times (b) the number of
-----
residents set forth in Part A of Schedule 2.12 to which such rate increase
applies, times (c) the number of days in such month during which such rate
-----
increase is effective. The base rate for such period shall be the product
obtained by multiplying (a) 1.04 times the Period 1 Base Rate, times (b) the
----- -----
quotient of the Consumer Price Index - All items for All Urban Consumers for St.
Louis, Mo. (the "applicable CPI") for March 1993 divided by the applicable CPI
-------
for March 1992 (the "Period II Base Rate").
For any increase in any Missouri Medicaid per diem rate during the
period July 1, 1994 through June 30, 1995, the Seller's monthly subsidy payments
until the next rate increase shall be reduced, but not below zero, by an amount
equal to the product obtained by multiplying (a) the amount by which such
increased rate exceeds the "base rate" for such period, times (b) the number of
-----
residents set forth in Part A of Schedule 2.12 to which such rate increase
applies, times (c) the number of days in such month during which such rate
-----
increase is effective. The base rate for such period shall be the product
obtained by multiplying (a) the Period 11 Base Rate times (b) the quotient of
-----
the applicable CPI for June 1994 divided by the applicable CPI for June 1993.
If during the period February 12, 1992 through June 30, 1993, or
during the period July 1, 1993 through June 30, 1994, two or more increases in
any Missouri Medicaid per diem rate occur, then on the next July 1, the subsidy
reduction shall be recalculated as if the most recent rate increase had become
effective on such July 1.
Notwithstanding anything to the contrary set forth in this Section
2.12, any portion of any Missouri Medicaid per diem rate increase due to
governmental mandates, regulations, rules, laws or decisions (other than any
such rate increase resulting from any minimum wage increase that is not
expressly stated by the State of Missouri to have resulted in such rate
increase) that become effective after February 11, 1992 shall be excluded from
the calculation. In addition, if the State of Missouri imposes a provider-
specific tax (including license fees, donations or other similar arrangements)
on the Facilities prior to July 1, 1995 that results in a Medicaid per diem rate
increase, then the amount of such tax shall be deducted from the amount of any
subsidy reduction otherwise accruing to the benefit of the Seller. Further, if
in any month the amount of a subsidy reduction would exceed the Seller's subsidy
payment for such month but for the requirement in this Section 2.12 that subsidy
payments shall not be reduced below zero, such excess shall be carried forward
to subsequent months until used in full.
Examples of the subsidy reduction calculation are set forth in Part C
of Schedule 2.12 for illustrative purposes only.
2.13 Guaranty of Buyers' Obligations. The payment of 20% of the
-------------------------------
Buyers' aggregate obligations at any time outstanding under the Promissory
Notes, in respect of the rent under the Charlevoix Lease, the Bethesda Sublease
and the Sedgwick Sublease and in respect of the Rent shall be irrevocably,
absolutely and unconditionally guaranteed by a guaranty substantially in the
form of Exhibit D (the "Guaranty"), executed jointly and severally by the
Guarantors for the benefit of the Seller.
2.14 No Recourse. Except as provided in Section 7.06 and 10.02
-----------
notwithstanding anything in this Agreement to the contrary, the Buyers shall
have no recourse against the Seller for any default (other than any failure by
the Seller to comply with the terms of the Assumed Contracts to be
-12-
complied with by the Seller prior to the Closing) in respect of the Assumed
Contracts. Nothing in the preceding sentence shall affect the Buyers' rights in
respect of the Seller's representations, warranties and covenants contained in
this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller hereby represents and warrants to the Buyers that:
3.01 Corporate Existence and Power. The Seller is a corporation duly
-----------------------------
incorporated and validly existing under the laws of the State of Delaware. The
Seller has the corporate power and authority to carry on its business as such
business currently is being conducted. The Seller is duly qualified to do
business as a foreign corporation in the States of Kansas and Missouri.
3.02 Corporate Authorization. The execution, delivery and performance
-----------------------
by the Seller of this Agreement and the other Transaction Documents to which the
Seller is or is to be a party, and the consummation by the Seller of the
transactions contemplated by this Agreement and such other Transaction Documents
are within the Seller's corporate powers and have been, or on or before the
Closing Date will be, duly authorized by all necessary corporate action on the
part of the Seller. This Agreement constitutes, and each other Transaction
Document to which the Seller is to be a party when executed and delivered by the
Seller will constitute a valid and binding obligation of the Seller, enforceable
against the Seller in accordance with its terms.
3.03 Non-Contravention. The execution, delivery and performance by
-----------------
the Seller of this Agreement and the other Transaction Documents to which the
Seller is or is to be a party do not and will not: (a) require any consent by
the Seller's shareholders (other than the consent of the Executive Committee,
which consent has been obtained); (b) contravene or conflict with the
certificate of incorporation or the bylaws of the Seller; or (c) contravene or
conflict with or constitute a violation of any provision of any law, rule,
regulation, order, writ, judgment, injunction, decree or award that currently is
in effect and applicable to the Seller or any Facility.
3.04 Litigation. Except as set forth in Schedule 3.04 or otherwise
----------
disclosed to the Buyers in writing prior to the Closing, there is no action,
suit, legal or arbitration proceeding or, to the knowledge of the Seller,
administrative proceeding or investigation pending or, to the knowledge of the
Seller, threatened against or affecting any Facility or any of the other
Purchased Assets which reasonably would be expected to have a Material Adverse
Effect or which in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated by this Agreement.
3.05 Bankruptcy. No bankruptcy, insolvency or similar proceeding is
----------
pending or contemplated by or, to the knowledge of the Seller, against the
Seller.
3.06 Compliance with Laws. The Seller is not in violation of any law,
--------------------
rule, regulation or ordinance applicable to the operation of any Facility,
except for violations that have not had and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
3.07 Reporting Requirements. The Seller has filed, or caused to be
----------------------
filed, all reports (including all cost reports required to be filed pursuant to
Titles XVIII and XIX of the Social Security Act) required to be filed with any
governmental or regulatory authority prior to the date of this Agreement with
respect to any Facility, the failure to file which would reasonably be expected
to have a Material Adverse Effect.
-13-
3.08 License. The Facilities are licensed and contain the number of
-------
beds in service as described in Schedule 3.08.
3.09 Personal Funds of Residents. All personal funds of residents of
---------------------------
each Facility that have been deposited with such Facility have been deposited,
managed and accounted for by the Seller in accordance with applicable laws,
rules and regulations.
3.10 Life Care Contracts. Except as set forth in Schedule 3.10, the
-------------------
Seller is not a party to any life care contract with respect to any resident of
any Facility.
3.11 Admission Agreements and Patient Rolls. To the knowledge of the
--------------------------------------
Seller, the information set forth in the admission agreements and patient rolls
pertaining to residents of each Facility is true and correct in all material
respects as of the respective dates of such admission agreements and patient
rolls.
3.12 Facility Financial Statements. The Facility Financial Statements
-----------------------------
with respect to each Facility have been prepared in accordance with applicable
requirements of law and fairly present unaudited summaries of the results of
operations of such Facility for the periods ended on the respective dates of
such Facility Financial Statements (subject to normal year-end adjustments).
Although the Facility Financial Statements have not been prepared in accordance
with generally accepted accounting principles (as a result of the omission of,
among other things, footnotes, certain corporate expense allocations, federal
income tax and certain other reserves, and intercompany account eliminations,
none of which represents an omission of material items of revenue or expense
other than federal income tax expense, interest expense, management fees,
depreciation and amortization), the Facility Financial Statements with respect
to each Facility (a) have been prepared in accordance with the accounting
principles and practices used by the Seller at such Facility for all internal
financial accounting purposes consistently applied for all relevant periods and
(b) reflect accurately in all material respects information in the books and
records of the Seller for such Facility. The books and records of each Facility
include certain corporate expense allocations of cost items, including health
insurance and workers' compensation expenses and management fees, which may not
be representative of what an independent Person may be required to expend for
such items. As set forth in Section 7.11, the Seller expressly disclaims any
representations or warranties of any kind or character whatsoever, whether
express or implied, with respect to the effect on the business, assets,
condition (financial or otherwise) or results of operations of any Facility of
any enacted, published or reported laws, rules, regulations or judicial or
administrative decisions (whether having retroactive or prospective effect)
pertaining to matters of licensure, survey, reimbursement or private pay census.
3.13 Absence of Certain Changes. Since the date of the most recent
--------------------------
Facility Financial Statement with respect to each Facility, the Seller has
operated such Facility in the ordinary course consistent with past practices,
and there has not been a change in the operation of such Facility that would
reasonably be expected to have a Material Adverse Effect.
3.14 Collective Bargaining Agreements. The Seller is not a party to
--------------------------------
any collective bargaining agreement relating to any Facility or the employees of
any Facility or to any employment agreement with any such employees, except as
included in the Assumed Contracts.
3.15 Taxes. The Seller has, or on or prior to the Closing Date will
-----
have, paid all Taxes payable by the Seller, and all interest and penalties due
thereon, for the Pre-Closing Tax Period which will have been required to be paid
on or prior to the Closing Date, the nonpayment of which would result in a Lien
on any of the Purchased Assets or the Leased Facilities or would result in the
Buyers becoming liable therefor. The Seller has established, in accordance with
generally accepted accounting principles applied on a basis consistent with that
of preceding periods, adequate reserves
-14-
for the payment of all Tax liabilities, assessments, interest and penalties that
arise with respect to the Purchased Assets or the Leased Facilities or the
operation of any Facility that are payable by the Seller and that are incurred
in or attributable to the Pre-Closing Tax Period, the nonpayment of which would
result in a Lien on any of the Purchased Assets or the Leased Facilities or
would result in the Buyers becoming liable therefor.
3.16 Environmental Compliance. Except as set forth in Schedule 3.16
------------------------
or otherwise disclosed to the Buyers in writing prior to the Closing, no notice,
notification, demand, request for information, citation, summons or order has
been issued, no complaint has been filed, no penalty has been assessed and, to
the knowledge of the Seller, no investigation or review is pending or threatened
by any Person with respect to (a) any alleged violation by the Seller of any
Environmental Law in connections with the operation of any Facility, (b) any
alleged failure by the Seller to have any environmental permit, certificate,
license, approval, registration or authorization required in connection with the
operation of any Facility or (c) any use, generation, manufacture, treatment,
storage, recycling, transportation, disposal or release of any Hazardous
Substance at or from any Facility.
3.17 Finders' Fees. No investment banker, broker, finder or other
-------------
intermediary has been retained by or is authorized to act on behalf of the
Seller who might be entitled to any fee or commission from the Buyers upon
consummation of the transactions contemplated by this Agreement.
3.18 Third Party Consents. Except as set forth in Schedule 1.01A,
--------------------
there are no consents required from any party to the Assumed Contracts as a
result of the consummation of the transactions contemplated by this Agreement
that if not received by the Closing Date reasonably would be expected to have a
Material Adverse Effect.
3.19 No Default. The Seller is not in default under any Assumed
----------
Contract except for defaults that have not had and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
3.20 Schedules. The information contained in the Schedules pertaining
---------
to the Seller is true and correct in all material respects.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYERS
Each of the Buyers represents and warrants to the Seller that:
4.01 Partnership Existence and Power. Such Buyer is a limited
-------------------------------
partnership duly formed and validly existing under the laws of the State of
North Carolina. Such Buyer has the partnership power and authority to carry on
its business as such business currently is being conducted. Such Buyer, on or
before the Closing Date, will be duly qualified to do business as a foreign
limited partnership in the States of Kansas and Missouri.
4.02 Partnership Authorization, Etc. The execution, delivery and
------------------------------
performance by such Buyer of this Agreement and the other Transaction Documents
to which such Buyer is or is to be a party, and the consummation by such Buyer
of the transactions contemplated by this Agreement and the other Transaction
Documents to which such Buyer is or is to be a party, are within such Buyer's
partnership powers and have been, or on or before the Closing Date will be, duly
authorized by all necessary partnership action on the part of such Buyer. The
execution and delivery by the General Partner of this Agreement and the other
Transaction Documents to which such Buyer is or is to be a party are within the
General Partner's corporate powers and have been, or on or before the
-15-
Closing Date will be, duly authorized by all necessary corporate action on
the part of the General Partner. This Agreement constitutes, and each other
Transaction Document to which such Buyer is to be a party when executed and
delivered by such Buyer will be, a valid and binding obligation of such Buyer,
enforceable against such Buyer in accordance with its terms.
4.03 Non-Contravention. The execution, delivery and performance by
-----------------
such Buyer of this Agreement and the other Transaction Documents to which such
Buyer is or is to be a party do not and will not: (a) require any consent by any
limited partners in such Buyer (other than such consents which will be obtained
on or before the Closing Date); (b) contravene or conflict with the partnership
agreement or any other organizational documents of such Buyer; or (c) contravene
or conflict with or constitute a violation of any provision of any law, rule,
regulation, order, writ judgment, injunction, decree or award that currently is
in effect and applicable to such Buyer or the General Partner.
4.04 Litigation. Except as set forth in Schedule 4.04 or otherwise
----------
disclosed to the Seller in writing prior to the Closing, there is no action,
suit, legal or arbitration proceeding or, to the knowledge of such Buyer,
administrative proceeding or investigation pending or, to the knowledge of such
Buyer, threatened against or affecting such Buyer, the General Partner or any
limited partner in such Buyer which in any manner challenges or seeks to prevent
enjoin, alter or materially delay the transactions contemplated by this
Agreement.
4.05 Bankruptcy. No bankruptcy, insolvency or similar proceeding is
----------
pending or contemplated by or, to the knowledge of such Buyer, against such
Buyer or the General Partner.
4.06 Finders' Fees. No investment banker, broker, finder or other
-------------
intermediary has been retained by or is authorized to act on behalf of such
Buyer who might be entitled to any fee or commission from the Seller upon
consummation of the transactions contemplated by this Agreement.
4.07 Schedules. The information contained in the Schedules pertaining
---------
to such Buyer is true and correct in all material respects.
4.08 General Partner. The General Partner is the only general
---------------
partner in such Buyer.
ARTICLE V
CERTAIN COVENANTS OF SELLER
5.01 Operation of the Facilities. From the date of this Agreement
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until the Closing Date, the Seller shall operate each Facility in the ordinary
course consistent with past practice, use reasonable, diligent efforts to
preserve intact the business organizations and relationships of each facility
with third parties add, subject to the effect of compliance with any Employment
Law in connection with the termination of employment of the Employees
contemplated by Section 7.07. keep available the services of the present
employees of each Facility. Without limiting the generality of the preceding
sentence, until the Closing Date, the Seller:
(a) Will not sell, lease, license or otherwise dispose of
any of the Purchased Assets or the Leased Facilities, except (i) pursuant to
existing contracts or commitments, the Charlevoix Lease, the Bethesda Sublease,
the Sedgwick Sublease or the Subleases, or (ii) in the ordinary course
consistent with past practice;
(b) Will maintain the Inventory at customary levels
necessary to operate each facility in the ordinary course consistent with past
practice;
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(c) Will not take, or agree or commit to take, any action
that would make any representation or warranty of the Seller under this
Agreement inaccurate in any respect on, or as of any time prior to, the Closing
Date; and
(d) Will not omit to take, or agree or commit to omit to
take, any action necessary to prevent any representation or warranty of the
Seller under this Agreement from being inaccurate in any respect on, or as of
any time prior to, the Closing Date.
5.02 Access to Information. Until the Closing Date, upon reasonable
---------------------
notice from the Buyers to the Vice President of Acquisitions and Development of
the Seller, the Seller (a) shall give the Buyers and their counsel, financial
advisers, auditors and other authorized representatives reasonable access during
normal business hours to the offices, properties, books and records of each
Facility and (b) shall furnish to the Buyers and their counsel, financial
advisers, auditors and other authorized representatives, such financial and
operating data, including any unaudited monthly Operations Analyses that have
been prepared by the Seller after the date of this Agreement in the ordinary
course consistent with past practice for internal financial accounting purposes,
and other information relating to each Facility as such Persons may reasonably
request; provided that any investigation pursuant to this Section 5.02 shall be
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conducted in such manner as not to interfere unreasonably with the operation of
any Facility.
5.03 Notices of Certain Events. The Seller promptly shall notify the
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Buyers of:
(a) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in connection,
with the transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental
or regulatory authority in connection with the transactions contemplated by this
Agreement;
(c) any action, suit legal or arbitration proceeding or, to
the knowledge of the Seller, administrative proceeding or investigation
commenced or, to the knowledge of the Seller, threatened against, relating to or
invoking or otherwise affecting the Seller or any Facility that, if pending on
the date of this Agreement, would have been required to have been disclosed
pursuant to Section 3.04 or that relates to the consummation of the transactions
contemplated by this Agreement;
(d) the occurrence of any event that results in a breach of
any of the representations and warranties of the Seller in this Agreement or any
knowledge of the Seller that any such representations or warranties were
inaccurate when made; and
(e) the sale, lease, license or other disposition of any of
the Purchased Assets or the Leased Facilities having an aggregate book valve
that exceeds $10.000.
5.04 Taxes. The Seller timely shall pay all Taxes payable by the
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Seller that arise from or with respect to the Purchased Assets or the operation
of any Facility and that are incurred in or attributable to any Pre-Closing Tax
Period, the nonpayment of which would result in a Lien on any of the Purchased
Assets or the Leased Facilities or would result in the Buyers becoming liable
therefor.
5.05 Reporting Requirements. The Seller shall file, or caused to be
----------------------
filed, all reports (including all cost reports required to be filed pursuant to
Titles XVIII and XIX of the Social Security Act) required to be filed with any
governmental or regulatory authority with respect to the operation of any
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Facility on and prior to the Closing Date, the failure to file which would
reasonably be expected to have a Material Adverse Effect.
5.06 Government Surveys, Reports and Other Information. Except as
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otherwise provided in this Section 5.06, the Seller promptly shall furnish to
the Buyers:
(a) copies of the most recent survey reports prepared by
governmental and regulatory authorities and furnished to the Seller with respect
to each Facility, and ▇▇▇▇▇ of any updates with respect thereto;
(b) copies of the cost reports most recently filed by the
Seller with respect to each Facility pursuant to Titles XVIII and XIX of the
Social Security Act, and copies of any updates with respect thereto;
(c) the most recent patient census prepared by or on behalf
of the Seller with respect to each Facility and an update with respect thereto
dated not less than thirty days prior to the Closing Date;
(d) not less than 10 days prior to the Closing, a schedule
of all personal funds and properties that have been deposited with each Facility
by residents of such Facility;
(e) not less than 10 days prior to the Closing, a schedule
listing the names of all employees of each Facility and showing the title and
annual salary of each employee who is a salaried employee of such Facility and
the wage rate for each employee who is a non-salaried employee of such Facility;
(f) not less than 30 days prior to the Closing, a schedule
of accrued vacation benefits for the employees of each Facility;
(g) not less than 30 days prior to the Closing, a schedule
of accrued sick leave benefits for the employees of each Facility; and
(h) copies of the most recent ad valorem tax bills with
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respect to each Facility and any such bills received by the Seller prior to the
Closing.
5.07 Confidentiality. The Seller shall hold, and shall use
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reasonable, diligent efforts to cause its directors, officers, employees,
accountants, counsel, consultants, advisers and agents to hold, in confidence,
unless compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning the
Buyers or the Buyers' business furnished to the Seller pursuant to Section 6.04,
except to the extent that such information can be shown to have been (a)
previously known on a nonconfidential basis by the Seller, (b) developed
independently by the Seller, (c) in the public domain through no fault of the
Seller or (d) later lawfully acquired by the Seller from sources other than the
Buyers; provided that the Seller may disclose such information to its directors,
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officers, employees, accountants, counsel, consultants, advisers and agents in
connection with the transactions contemplated by this Agreement or in connection
with a determination of any matter relating to any Facility or its operations
during any period ending on or before the Closing Date or relating to the
Seller's rights and obligations under this Agreement and the other Transaction
Documents, so long as such Persons are informed by the Seller of the
confidential nature of such Information and are directed by the Seller to treat
such information confidentially. Notwithstanding anything in Section 6.04 or
elsewhere in this Agreement or any other Transaction Document to the contrary,
except following notice to and receipt of consent from the
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Buyers, the Seller shall not contact or communicate with any employee of the
Buyers regarding any matter relating to any Facility or its operations.
5.08 Non-Competition Agreement. Effective at the time of the Closing
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and provided each of the Buyers is not in default under any of the Transaction
Documents to which such Buyer is a Party, the Seller, Hillhaven and their
respective subsidiaries shall refrain from owning, leasing or operating any
skilled-nursing Facility within a fifteen mile radius of any Facility for a
period of five years from the Closing Date, provided that the Seller may
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continue to own, lease or operate its existing facilities commonly known as the
Hearthstone Facility and the Villa Ventura facility located in Topeka, Kansas
and Kansas City, Missouri, respectively, or any existing facility that the
Seller currently subleases to another Person. The Seller acknowledges that the
Buyers would be irreparably harmed by the breach of this Section 5.08 and that
there would be no adequate remedy at law to compensate the Buyers for such
breach. If the terms of this Section 5.08 are breached, the damages to the
Buyers shall be its actual damages, but in addition to any other remedy
available to the Buyers, they shall be entitled to an injunction restraining
such breach.
5.09 Further Encumbrances. The Seller shall not enter into any first
--------------------
Lien Mortgage without prior notice thereof to the Buyers. The debt of the Seller
secured by any First Lien Mortgage as of the Closing Date shall not exceed 90
percent of the amount of the Purchase Price allocated (as set forth in Schedule
2.07) to the Purchased Assets encumbered by such First Lien Mortgage and, except
for the debt secured by the First Lien Mortgages with respect to Indian Creek
Nursing Center and Indian ▇▇▇▇▇▇▇ Nursing Centers, respectively, shall be
prepayable, without, at any time by the Seller.
5.10 Payment of Certain Senior Debt. The Seller shall pay when due
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all debt of the Seller that is secured by any First Lien Mortgage. The Seller
shall promptly notify the Buyers if the Seller is in default with respect to the
payment of such debt, If and for so long as the Seller is in default with
respect to the payment of such debt, the Buyers may make payments under the
Promissory Note secured by the Mortgage that is junior to the First Lien
Mortgage securing such debt directly to the mortgagee of such First Lien
Mortgage, provided that such mortgagee shall have consented to such direct
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payment by the Buyers. The Buyers shall receive a credit for such direct
payments against their payment obligations under such Promissory Note.
5.11 Prepayments of Promissory Notes; Release Premium. As provided
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in the Promissory Notes and the Mortgages, so long as no Event of Default shall
have occurred and be continuing under any of the Promissory Notes, the Buyers
may prepay the unpaid principal amount of any Promissory Note, in whole or in
part plus accrued interest to the date of such prepayment on the principal
amount prepaid, plus any late charges then payable under such Promissory Note,
plus any costs and expenses then payable by the Buyers under such Promissory
Note; provided, that each partial prepayment shall be in a principal amount of
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not less than $5,000; provided, further, that upon prepayment in whole of the
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unpaid principal amount of such Promissory Note plus such accrued interest, late
charges and costs and expenses, the Buyers shall pay to the Seller a release
premium (the "Release Premium") in respect of such Promissory Note in an amount,
determined at the date of such prepayment, equal to five percent of the
principal amount of such Promissory Note that would then have been outstanding
if such Promissory Note had been timely paid in accordance with the regularly
scheduled required installment payments paid for in such Promissory Note without
regard to any prepayments made in respect of such Promissory Note. The Release
Premium in respect of any Promissory Note shall be applied first to any costs
and expenses then payable by the Buyers under any other Promissory Notes, second
to any late charges then payable under such other Promissory Notes, and then to
the principal of such other Promissory Notes plus accrued interest thereon as
agreed to by the Seller and the Buyers, or, if the Seller and the Buyers cannot
agree, then to such principal and accrued interest determined by the Seller in
its sole discretion as to one-half of
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the Release Premium and to such principal and accrued interest determined by the
Buyers their sole discretion as to one-half of the Release Premium. Each partial
prepayment of any Promissory Note shall be applied first to any costs and
expenses then payable by the Buyers under such Promissory Note, second to any
late charges then payable under such Promissory Note, third to interest then
accrued on such Promissory Note, and then to the principal installments under
such Promissory Note in the inverse order of their maturities without deferral
or limitation of the intervening installments of principal or interest.
5.12 Release of Mortgages. If the entire unpaid principal amount of
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any Promissory Note shall be prepaid and all of the other amounts and the
Release Premium with respect to such Promissory Note shall be paid in accordance
with the Mortgage securing such Promissory Note, then the Seller agrees that all
rights under such Mortgage shall terminate and the property subject to such
Mortgage shall become wholly released and cleared of the lien, security
interest, conveyance and assignment evidenced by such Mortgage; provided that
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the Mortgage with respect to ▇▇▇▇▇▇▇ House Healthcare shall not be terminated
and the property subject to such Mortgage shall not be released and so cleared
unless all Promissory Notes and such other amounts as provided in the Mortgages
shall have been paid in full.
ARTICLE VI
CERTAIN COVENANTS OF BUYERS
6.01 Conduct. Until the Closing Date, the Buyers shall not (a) take,
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or agree or commit to take, any action that would make any representation or
warranty of the Buyers under this Agreement inaccurate in any respect on, or as
of any time prior to, the Closing Date or (b) on"' to take, or agree or commit
to omit to take, any action necessary to prevent any representation or warranty
of the Buyers under this Agreement from being inaccurate in any respect on, or
as of any time prior to, the Closing Date.
6.02 Notices of Certain Events. Each of the Buyers promptly shall
-------------------------
notify the Seller of:
(a) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental
or regulatory authority in connection with, or otherwise affecting, the
transactions contemplated by this Agreement;
(c) any action, suit, legal or arbitration proceeding or,
to the knowledge of such Buyer, administrative proceeding or investigation
commenced or, to the knowledge of such Buyer, threatened against, relating to or
involving or otherwise affecting such Buyer, the General Partner or any limited
partner in such Buyer that, if pending on the date of this Agreement, would have
been required to have been disclosed pursuant to Section 4.04 or that relates to
the consummation of the transactions contemplated by this Agreement; and
(d) the occurrence of any event that results in a breach of
any of the representations and warranties of the Buyers in this Agreement or any
knowledge of the Buyers that any such representations or warranties were
inaccurate when made.
6.03 Confidentiality. Prior to the Closing Date and after any
---------------
termination of this Agreement, the Buyers shall, hold, and shall, use
reasonable, diligent efforts to cause the General
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Partner and the respective directors, or officers, employees, accountants,
counsel, consultants, advisers and agents of the Buyers and the General Partner
to hold, in confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of law, all confidential
documents and information concerning any Facility or the Seller furnished to the
Buyers, the General Partner or the Buyers' other affiliates in connection with
the transactions contemplated by this Agreement, except to extent that such
information can be shown to have been (a) previously known on a nonconfidential
basis by the Buyers, (b) developed independently by the Buyers, (c) in the
public domain through no fault of the Buyers or the General Partner or (d) later
lawfully acquired by the Buyers from sources other than the Seller; provided
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that the Buyers may disclose such information to the General Partner and the
respective directors, officers employees, accountants, counsel, consultants,
advisers and agents of the Buyers and the General Partner in connection with the
transactions contemplated by this Agreement, and to the Buyers' lenders in
connection with obtaining financing for the transactions contemplated by this
Agreement, so long as such Persons are informed by the Buyers of the
confidential nature of such information and are directed by the Buyers to treat
such information confidentially. If this Agreement is terminated, then the
Buyers shall, and shall use reasonable, diligent efforts to cause the General
Partner and the respective directors, officers, employees, accountants, counsel,
consultants, advisers and agents of the Buyers and the General Partner to,
destroy or deliver to the Seller, upon request, all documents and other
materials, and all copies thereof, that are obtained by the Buyers or on their
behalf from the Seller in connection with this Agreement and that are subject to
such confidence. Notwithstanding anything in Section 5.02 or elsewhere in this
Agreement or any other Transaction Document to the contrary, except following
notice to and receipt of consent from the Vice President of Acquisitions and
Development of the Seller, the Buyers shall not contact or communicate with the
administrator of any Facility, the director of nursing for any Facility, any
Employee, any other employee of the Seller or any resident of any Facility
regarding the transactions contemplated by this Agreement.
6.04 Access. On and after the Closing Date, upon reasonable notice
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from the Seller to the Buyers, the Buyers shall give the Seller and the Seller's
agents and other authorized representatives reasonable access during normal
business hours to the Buyers' properties, books, records, employees, accountants
and auditors to the extent necessary to permit the Seller to determine any
matter relating to any Facility or its operations during any period ending on or
before the Closing Date (including the verification of any amounts owing by the
Buyers to the Seller under Section 7.08) or relating to the Sellers rights and
obligations under this Agreement and the other Transaction Documents; provided
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that such access by the Seller shall not unreasonably interfere with the conduct
of the business of the Buyers.
6.05 Removal of Signs, Etc. As soon as possible within a period not
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to exceed sixty days after the Closing Date, the Buyers (at the Buyers' sole
cost and expense) shall remove from each Facility all signs that contain any
Seller Trade Name and shall remove or obliterate any Seller Trade Name that
otherwise appears on any of the other Purchased Assets.
6.06 Licenses Etc. The Buyers shall use reasonable, diligent efforts
------------
to obtain all licenses and permits that are required to consummate the
transactions contemplated by this Agreement.
6.07 Application of Certain Proceeds. The Buyers shall apply all
-------------------------------
proceeds from the sale or the refinancing of any Owned Facility either to prepay
the Promissory Notes or for the operations (including the payment of income
taxes) of the Facilities.
6.08 Books, Records, Etc. As soon as reasonably practicable within a
-------------------
period not to exceed sixty days after the Closing Date, the Buyers, at its sole
cost and expense, shall deliver to the Seller all books, records, files and
papers that constitute Excluded Assets and that are located in or upon any
Facility on the Closing Date.
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ARTICLE VII
CERTAIN COVENANT OF SELLER AND BUYERS
7.01 Diligent Efforts; Further Assurances. Subject to the terms and
------------------------------------
conditions of this Agreement, each of the Seller and the Buyers shall use realm,
diligent efforts to take, or cause to be taken, all actions and to do, or cause
to be done, all things (including all filings required under the HSR Act)
necessary or desirable under applicable laws, rules and regulations to
consummate the transactions contemplated by this Agreement. Each of the Seller
and the Buyers shall execute and deliver such other documents, certificates,
agreements and other writings and to take such other actions as may be necessary
or desirable in order to consummate or implement expeditiously the transactions
contemplated by this Agreement.
7.02 Certain Fillings. The Seller and the Buyers Shall cooperate
----------------
with each other (a) in determining whether any action by or in respect of, or
filing (including any filing required under the HSR Act) with, any governmental
or regulatory authority is required, or any actions, waivers or consents are
required to be obtained from parties to any material contracts, in connection
with the consummation of the transactions contemplated by this Agreement and (b)
in taking such actions or making any such filings, furnishing information
required in connection therewith and seeking timely to obtain any such actions,
waivers or consents. Each of the Seller and the Buyers shall pay one-half of all
filing fees required in connection with any filings under the HSR Act.
7.03 Public Announcements. The Seller and the Buyers agree to
--------------------
consult with each other before issuing any press release or making any public
statement with respect to this Agreement or the transactions contemplated by
this Agreement and, except as may be required by applicable law or any listing
agreement with any national securities exchange, neither the Seller nor the
Buyers shall issue any such press release or make any such public statement
prior to such consultation and without the prior written consent of the other
party as to the form and content of such press release or public statement.
7.04 Cooperation as to Taxes. The Seller and the Buyers agree to
-----------------------
furnish or cause to be furnished to each other, upon request, as promptly as
practicable, such information and assistance relating to the Purchased Assets
and the Leased Facilities as is reasonably necessary for the filing of all Tax
returns, and the making of any election related to Taxes, and the preparation
for any audit by any taxing authority, and the prosecution or defense of any
claim, suit or proceeding relating to any Tax return. The Seller and the Buyers
shall cooperate with each other in the conduct of any audit or other proceeding
related to Taxes involving any Facility.
7.05 Allocation of Taxes.
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(a) All real property taxes, personal property taxes and
similar ad valorem obligations levied with respect to the Purchased Assets and
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the Leased Facilities for a taxable period which includes (but does not end on)
the Closing Date shall be apportioned between the Seller and the Buyers as of
the Closing Date based on the number of days of such taxable period included in
the Pre-Closing Tax Period and the number of days of such taxable period
included in the Post-Closing Tax Period. The Seller shall be liable for, and
shall pay or reimburse the Buyers for the payment of, the proportionate amount
of such taxes that is attributable to the Pre-Closing Tax Period, and the Buyers
shall be liable for, and shall pay or reimburse the Seller for the payment of,
the proportionate amount of such taxes that is attributable to the Post-Closing
Tax Period. Any amount to be paid or reimbursed by the Seller or the Buyers
pursuant to this Section 7.05(a) may be reflected as an appropriate credit in
any closing statement at the Closing. In the event that either the Seller or the
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Buyers shall make any payment for which the Seller or the Buyers, as the case
may be, are entitled to reimbursement under this Section 7.05(a), the other
party shall make such reimbursement promptly but in no event later than thirty
day, after the presentation of a statement setting forth the amount of
reimbursement to which the presenting party is entitled together with such
supporting evidence as is reasonably necessary to calculate the amount of
reimbursement.
(b) To the extent permitted by applicable law, each of the
Seller and the Buyers timely shall pay one-half of the aggregate of (i) all
transfer, documentary, sales, use, excise and other similar Taxes assessed upon
or with respect to the sale, assignment, transfer, conveyance and delivery of
the Purchased Assets and the sublease of the Leased Facilities to the Buyers,
and (ii) all recording and filing fees with respect to any Transaction Document
and any related financing statements and otherwise with respect to the sale,
assignment, transfer, conveyance and delivery of the Purchased Assets and the
sublease of the Leased Facilities to the Buyers.
7.06 Allocation of Other Charges. Except as otherwise expressly
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provided in this Agreement or in any other Transaction Document, all operating
income and expenses relating to the operation of the Facilities for any period
prior to the Closing Date shall be the income and expenses of the Seller, and
all operating income and expenses relating to the operation of the Facilities
for any period from and after the Closing Date shall be the income and expenses
of the Buyers. All charges, deposits and prepaid amounts for gas, oil, heat,
electricity, other fuel, light, power, water, sewer service, telephone service
and all other utilities and services used in, upon or about any Facility or
charged against any Facility for a period which includes (but does not end on)
the Closing Date shall be apportioned between the Seller and the Buyers as of
the Closing Date based on the number of days of such period which occur prior to
the Closing Date and the number of days of such period which occur on and after
the Closing Date. The apportionment of such charges, deposits and prepaid
amounts between the Seller and the Buyers shall be based upon the most recently
available statement of such charges, debts and prepaid amounts, subject to
adjustment, if necessary, within thirty days following receipt of the current
statement of such charges, deposits and prepaid amounts. The Seller shall be
liable for, and shall pay or shall reimburse the Buyers for the payment of, the
proportionate amount of such charges that is attributable to the period which
occurs prior to the Closing Date, and the Buyers shall be liable for, and shall
pay or shall reimburse the Seller for the payment of, the proportionate amount
of such charges, deposits and prepaid amounts that is attributable to the period
which occurs on and after the Closing Date. Any amount to be paid or reimbursed
by the Seller or the Buyers pursuant to this Section 7.06 may be reflected as an
appropriate credit in any closing statement at the Closing. In the event that
either the Seller or the Buyers shall make any payment for which the Seller or
the Buyers, as the case may be, are entitled to reimbursement under this Section
7.06, the other party shall make such reimbursement promptly but in no event
later than thirty days after the presentation of a statement setting Forth the
amount of reimbursement to which the presenting party is entitled together with
such supporting evidence as is reasonable necessary to calculate the amount of
reimbursement.
7.07 Employees.
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(a) Effective as of 11:00 p.m. on the day immediately
preceding the Closing Date, the Seller shall terminate the employment of all of
the Employees and, with respect to salaries and wages, no later than the normal
pay period and with respect to other employment benefits, within a reasonable
time after the Closing Date, shall pay to the Employees all salaries, wages and
other employment benefits due for period prior to 11:01 p.m. on the day
immediately preceding the Closing Date. The Seller timely shall pay to all
applicable governmental and regulatory authorities all employment-related Taxes
due with respect to the Employees for periods prior to 11:01 p.m. on the day
immediately preceding the Closing Date. The Buyers shall not take or omit to
take, and shall not
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permit any Operator to take or to omit to take, any action that would subject
the Seller to any Seller Loss arising from or by reason of any violation or
alleged violation of any Employment Law.
(b) After the Closing, the Seller shall retain for each
Transferred Employee (i) all liabilities and obligations arising under any group
life, accident, medical, dental or disability plan or similar arrangement
(whether or not insured) to the extent that such liability or obligation relates
to claims incurred (whether or not reported) at or prior to 11:00 p.m. on the
day immediately proceeding the Closing Date and (ii) all liabilities and
obligations arising under any workers' compensation arrangement to the extent
such liability or obligation relates to occurrences that take place at or prior
to 11:00 p.m. on the day immediately preceding the Closing Date.
(c) From and after 11:01 p.m. on the day immediately
preceding the Closing Date, the Buyers shall, or shall cause each Operator to,
continuously offer for each eligible (as determined by the insurance carrier)
Transferred Employee insurance polices or other similar arrangements
(individually, an "Employee Benefit Program" and collectively, the "Employee
Benefit Programs") offering individual or group life, accident, medical, dental
and disability insurance; provided that medical insurance may be offered through
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individual policies not part of any group Employee Benefit Program. The Buyers'
Employee Benefit Program or, where appropriate, any Operator's Employee Benefit
Program shall be responsible with respect to each eligible (as determined by the
insurance carrier Transferred Employee who accepts such offer for all
liabilities and obligations arising under each such Employee Benefit Program to
the extent that such liability or obligation relates to claims incurred at any
time after 11:00 p.m. on the day immediately preceding the Closing Date. In
addition, the Buyers shall be, and shall cause each Operator to be, responsible
with respect to each Transferred Employee for all liabilities and obligations
arising under any workers' compensation arrangement to the extent such liability
or obligation relates to occurrences that take place at any time after 11:00
p.m. on the day immediately preceding the Closing Date.
(d) Effective at 11:01 p.m. on the day Immediately
preceding the Closing Date, the Buyers shall, or shall cause each Operator to,
(i)offer to each eligible (as determined by the insurance carrier) Transferred
Employee the insurance coverage offered in the Employee Benefit Programs and
(ii) offer to make such coverage immediately available to each eligible (as
determined by the insurance carrier) Transferred Employee under the Employee
Benefit Programs. The Buyers shall, and shall cause each Operator to, recognize
all service of each Transferred Employee with the Seller for purposes of
eligibility to participate in the Employee Benefit Programs in which such
eligible Transferred Employee is enrolled by the Buyers or such Operator,
effective at 11:01 p.m. on the day immediately preceding the Closing Date.
7.08 Receivables. The Buyers shall assume responsibility for all
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▇▇▇▇▇▇▇▇ and the collection of all accounts in respect of the ownership, use and
operation of each Facility and the other Purchased Assets by the Buyer after the
Closing. The Seller shall retain all of its right, title and interest in and to
all accounts, notes and other receivables in respect of the ownership, use and
operation of each Facility and the other Purchased Assets prior to the Closing,
and the Seller shall retain responsibility for the collection of all such
receivables. Within 15 days after the Closing Date, the Seller shall furnish to
the Buyers a list of all accounts, notes and other receivables in respect of the
ownership, use and operation of each Facility and the other Purchased Assets
prior to the Closing. All payments that may be received by the Buyers with
respect to any of the Excluded Assets shall be received in trust for the benefit
of the Seller, shall be segregated from other funds and property of the Buyers
and shall immediately be delivered to the Seller in the same form as so
received, with any necessary endorsements. Any payment received by the Buyer
within the period of sixty days immediately following the Closing Date in
respect of the ownership, use or operation of any Facility shall be deemed to be
a payment with respect to an Excluded Asset, unless such payment is expressly
designated by the payor or obligor as a payment in respect of the ownership, use
and operation of
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such Facility after the Closing or unless no receivable to which such Payment
may relate is set forth in the list of receivables furnished by the Seller to
the Buyers pursuant to this Section 7.06. The Buyers shall maintain at each
Facility, or at such other location in Advance, North Carolina, as shall be
specified in writing to the Seller, all of the books, records and other
documents and materials pertaining to each Facility and the other Purchased
Assets.
7.09 Patient Trust Funds. As soon as practicable after the Closing,
-------------------
the Seller shall furnish to the Buyers an accounting of all personal funds of
residents of the Facilities which are held by the Seller in a custodial
capacity. Such accounting shall set forth the name of each resident for whom
such funds are held and the amount held by the Seller on behalf of such resident
and shall be certified by an officer of the Seller. As soon as practicable after
the Closing, the Seller, in accordance with all applicable laws, rules and
regulations, shall transfer all such funds to a bank account designated by the
Buyers, and the Buyers shall execute and deliver to the Seller receipt and
assumption agreements each substantially in the form of Exhibit E (the "Receipt
and Assumption Agreements"), pursuant to which the Buyers shall Acknowledge
receipt of, and shall assume the Seller's fiduciary, custodial and other
obligations and liabilities with respect to, such funds. The Seller and the
Buyers acknowledge and agree that, upon the transfer of such funds by the Seller
to the bank account designated by the Buyers, the Seller shall be relieved of
all fiduciary, custodial and other obligations and liabilities with respect to
such funds.
7.10 Preliminary Commitment for Title Insurance. Not less than
------------------------------------------
twenty days prior to the Closing, the Seller shall furnish to the Buyers a
preliminary commitment for title insurance (the "Title Report") issued by the
Title Company with respect to the Real Property and the Improvements. The Title
Report shall be accompanied by copies of all documents referred to in the Title
Report. The Buyers shall have ten days (the "Review Period") following receipt
of the Title Report within which to give notice to the Seller that the Buyers
have disapproved any exception to title (other than any Permitted Lien) shown by
the Title Report If any supplement or amendment to the Title Report is issued
and show's any additional exception to title (other than any Permitted Lien),
and if the Review Period has expired, the Buyers shall have ten days from the
date of receipt of such supplement or amendment to the Title Report (the
"Extended Review Period") within which to give to the Seller notice of
disapproval of such additional exception to title. If the Buyers fail to give
notice of disapproval to the Seller within the Review Period or the Extended
Review Period, as the case may be, then the Buyers shall conclusively be deemed
to have approved the status of title shown by the Title Report and any
supplement or amendment to the Title Report. If the Buyers give to the Seller
notice of disapproval within the Review Period or the Extended Review Period, as
the case may be, then, at the Buyers' sole option, the Buyers either (a) may
terminate this Agreement by giving written notice of termination to the Seller
and the Escrow Agent within the Review Period or the Extended Review Period, as
the case may be, whereupon all funds, documents and instruments deposited in
escrow by the Buyers shall be returned to the Buyers and all funds, documents
and instruments deposited in escrow by the Seller shall be returned to the
Seller or (b) may provisionally accept title to the Real Property and the
improvements subject to removal of any disapproved exception to title, in which
case the Seller shall use reasonable, diligent efforts to cause the removal of
the disapproved exception prior to the Closing. In the event the Seller does not
cause the removal of such disapproved exception prior to the Closing, the Buyers
either (i) may terminate this Agreement by giving written notice of termination
to the Seller or (ii) may waive its previous disapproval of the status of title,
whereupon (subject to satisfaction or waiver of the conditions set forth in
Article IX) the transaction contemplated by this Agreement shall be consummated
as scheduled and the Buyers shall take title to the Real Property and the
Improvements subject to the previously disapproved exception to title.
7.11 Condition of Purchased Assets and Leased Facilities; Disclaimer
---------------------------------------------------------------
of Warranties. The Buyers acknowledge and agree that they are sophisticated
-------------
purchasers possessing such knowledge and experience in financial matters and the
operation of nursing centers or health care facilities
-25-
(including the retroactive and prospective effect of enacted, published or
reported laws, rules, regulations and judicial and administrative decisions
pertaining to matters of licensure, survey, reimbursement and private pay
census) that they are capable of evaluating the merits and risks of the
transactions contemplated by this Agreement and the other Transaction Documents.
The Buyers acknowledge and agree that this Agreement provides to the Buyers
sufficient opportunity to conduct their own inspection and investigation of each
Facility, the Inventory and the Personal Property, and of public records
pertaining to the Seller, each Facility and any of the other Purchased Assets.
By accepting the Deeds and the ▇▇▇▇ of Sale, by entering into the Charlevoix
Lease, the Bethesda Sublease and the Sedgwick Sublease, and by entering into the
Subleases, the Buyers shall have approved the physical condition of each
Facility, the Inventory and the Personal Property and shall have accepted and
purchased the Owned Facilities, the Inventory and the Personal Property and
shall have accepted and leased or subleased the Bond-financed Owned Facilities
and the Leased Facilities, "AS IS, WHERE IS and WITH ALL FAULTS." The Buyers
----- ----- -- ---------------
acknowledge and agree that the Seller shall have no liability for, and that the
Buyers shall have no recourse against the Seller for, any defect or deficiency
of any kind whatsoever (whether patent or latent and whether discovered or
discoverable by the Seller or the Buyers) in any Facility, the Inventory or the
Personal Property. The Buyers further acknowledge and agree that, EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN ARTICLE III, IN THE DEEDS,
IN THE ▇▇▇▇ OF SALE AND IN THE SUBLEASES, THE SELLER HAS NOT MADE AND DOES NOT
MAKE, AND THE SELLER HEREBY EXPRESSLY DISCLAIMS, ANY OTHER REPRESENTATIONS OR
WARRANTIES OF ANY KIND AND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED,
WITH RESPECT TO THE PURCHASED ASSETS OR THE LEASED FACILITIES, INCLUDING THE
IMPLIED WARRANTIES OF MERCHANTABILITY, HABITABILITY OR FITNESS FOR A PARTICULAR
PURPOSE AND REPRESENTATIONS OR WARRANTIES WITH RESPECT TO (A) THE EXISTENCE OR
ABSENCE OF ANY HAZARDOUS SUBSTANCE IN, ON, UNDER OR AFFECTING ANY OF THE
PURCHASED ASSETS OR THE LEASED FACILITIES, (B) THE COMPLIANCE OF ANY OF THE
PURCHASED ASSETS OR THE LEASED FACILITIES, INCLUDING THEIR USE OR OPERATION,
WITH ANY ENVIRONMENTAL LAW, (C) THE ASSIGNABILITY OR TRANSFERABILITY OF ANY OF
THE ASSUMED CONTRACTS OR THE PERMITS, AND (D)THE EFFECT ON THE BUSINESS, ASSETS,
CONDITION (FINANCIAL OR OTHERWISE) OR RESULTS OF OPERATIONS OF ANY FACILITY OF
ANY ENACTED, PUBLISHED OR REPORTED LAWS, RULES, REGULATIONS OR JUDICIAL OR
ADMINISTRATIVE DECISIONS (WHETHER HAVING RETROACTIVE OR PROSPECTIVE EFFECT)
PERTAINING TO MATTERS OF LICENSURE, SURVEY, REIMBURSEMENT OR PRIVATE PAY CENSUS.
7.12 Inspection. The Buyers shall have until May 20, 1992 (June 1,
----------
1992 with respect to environmental matters) (a) to conduct or cause to be
conducted such inspections and investigations of the Purchased Assets and the
Leased Facilities as the Buyers desire and (b) to give notice to the Seller that
the Buyers have disapproved any aspect of any physical condition of any Facility
or any of the other Purchased Assets. If the Buyers fail to give notice of
disapproval to the Seller on or before such date, as applicable, then the Buyers
shall conclusively be deemed to have approved the physical condition of the
Facilities and the other Purchased Assets. If the Buyers give to the Seller
notice of disapproval on or before such date in respect of any aspect of the
physical condition of any Facility or any of the other Purchased Assets, then,
at the Seller's sole option and without any obligation to do so, the Seller may
repair or otherwise correct to the reasonable satisfaction of the Buyers such
disapproved aspect of the physical condition of such Facility or such other
Purchased Asset, whereupon the Buyers shall conclusively be deemed to have the
condition of the Facilities and the other Purchased Assets. If the Buyers give
to the Seller notice of disapproval on or before such date in respect of any
aspect of the physical condition of such Facility or any of the other Purchased
Assets and the Seller does not elect to repair or otherwise correct such
disapproved aspect of the physical condition of such Facility or such other
Purchased Asset to the reasonable satisfaction of the Buyers, then, at the
Buyers sole option, the Buyers either (i) may terminate this Agreement by giving
written notice of termination to the Seller and the Escrow Agent on or before
May 25, 1992 (June 5, 1992 with respect to environmental matters), whereupon all
funds, documents and instruments
-26-
deposited in escrow by the Buyers shall be returned to the Buyer: and all funds
documents and instruments deposited in escrow by the Seller shall be returned to
the Seller or (ii) may waive their previous disapproval, whereupon (subject to
satisfaction or waiver of the conditions set forth in Article IX) the
transactions contemplated by this Agreement shall be consummated as scheduled
and the Buyers shall acquire the Purchased Assets and sublease the Leased
Facilities subject to the previously disapproved physical condition. Each of the
Seller and the Buyers shall pay one-half of the aggregate costs and expenses of
any environmental assessments obtained by the Buyers with respect to the
Purchased Assets and the Leased Facilities up to $100,000, and all such costs
and expenses in excess of $100,000, and all such costs and expenses of any
inspections and investigations of the Purchased Assets and the Leased
Facilities, shall be paid by the Buyer.
7.13 Destruction of or Damage to Facilities.
--------------------------------------
(a) Within five days after the destruction of or any
material damage to any Facility by fire or other casualty or any other cause
prior to the Closing Date, the Seller shall give to the Buyers notice of such
destruction or damage.
(b) If any Facility is destroyed or damaged prior to the
Closing Date and the cost to replace, repair or restore the destroyed or damaged
portion of such Facility would equal or exceed twenty-five percent of the
insurable value of such Facility, then the Buyers may:
(i) terminate this Agreement by giving written
notice of termination to the Seller within twenty days after receipt
by the Buyers from the Seller of notice of such destruction or damage,
whereupon this Agreement shall terminate; or
(ii) accept such Facility as so destroyed or
damaged plus an assignment at the Closing by the Seller to the Buyer:
of the proceeds of property and casualty insurance paid or payable in
respect of such destruction or damage, whereupon (subject to
satisfaction or waiver of the conditions set forth in Article IX) the
transactions contemplated by this Agreement shall be consummated as
scheduled and the Buyers shall accept such assignment of insurance
proceeds and shall accept and take title to or sublease such Facility,
as the case may be.
(c) If any Facility is damaged prior to the Closing Date
and the cost to replace, repair or restore the damaged portion of such Facility
would be less than twenty-five percent of the insurable value of such Facility,
then the Seller, in its discretion, may replace, repair or restore the destroyed
or damaged portion of such Facility prior to the Closing Date, whereupon
(subject to satisfaction or waiver of the conditions set forth in Article IX)
the transactions contemplated by this Agreement shall be consummated as
scheduled. If any Facility is damaged prior to the Closing Date, and the cost to
replace, repair or restore the damaged portion of such Facility would be less
than twenty-five percent of the insurable value of such Facility, and the Seller
does not replace, repair or restore the destroyed or damaged portion of such
Facility prior to the Closing Date, then the Buyers may:
(i) terminate this Agreement by giving written
notice of termination to the Seller, whereupon this Agreement shall
terminate; or
(ii) accept such Facility as so damaged plus an
assignment at the Closing by the Seller to the Buyers of the proceeds
of property and casualty insurance paid or payable in respect of such
damage, whereupon (subject to satisfaction or waiver of the conditions
set forth in Article IX) the transactions contemplated by this
Agreement shall be consummated as scheduled and the Buyers shall
accept such
-27-
assignment of insurance proceeds and shall accept and take title or
sublease such Facility, as the case may be.
(d) Notwithstanding anything to the contrary set forth in
this Section 7.13, the Seller and the Buyers acknowledge and agree that the
provisions of this Section 7.13 are Sect to the provisions of the Leases,
agreements relating to the Bond-financed Owned Facilities and other documents
that govern matters relating to the destruction of or damage to certain of the
Facilities and the application of insurance proceeds.
7.14 Consents. Each of the Seller and the Buyers shall use
--------
reasonable, diligent efforts to obtain all consents that are required for, or
that are reasonably requested by the Seller or the Buyers in connection with,
the consummation of the transactions contempLated by this Agreement. If
requested by the Buyers, the Seller shall use reasonable, diligent efforts to
obtain estoppel certificates or the equivalent from the lessor under any Lease
or from any party to any financing documents pertaining to any Facility. Each of
the Seller and the Buyers shall pay one-half of all costs and expenses,
including the reasonable Fees and disbursements of attorneys other than the
respective counsel for the Seller and the Buyers, incurred in connection with
obtaining such consents.
7.15 Inventory. Prior to the Closing, the Seller and the Buyers
---------
agree to perform, together, an inventory count of the Personal Property and the
personal property located in or upon or used exclusively in connection with the
Leased Facilities. The costs and expenses incurred in connection with such
inventory count shall be paid by the party incurring such cost or expense.
7.16 Schedules and Exhibits. If any Schedule or Exhibit is not
----------------------
attached to this Agreement at the date hereof, then the Seller or the Buyers, as
appropriate, shall prepare such Schedules and Exhibits as soon as practicable.
When the form and substance of such Schedules and exhibits have been agreed to
by the Seller and the Buyers, such Schedules and Exhibits shall be attached to
this Agreement. If such Schedules and Exhibits are not attached to this
Agreement by May 20, 1992, or such other date in respect of a particular
Schedule or Exhibit as may be mutually agreed upon in writing by the Seller and
Buyers, then the Seller or the Buyers may terminate this Agreement by giving
written notice of such termination to the other party within two business days
of such date. The Seller and the Buyers hereby agree that Schedule 2.07 may be
attached to this Agreement at any time prior to the Closing Date.
7.17 Financing. The Buyers agree to use reasonable, diligent efforts
---------
to obtain, on terms reasonably acceptable to the Buyers, financing for the
portion of the Purchase Price payable at Closing. The Buyers shall have until
April 30, 1992, to obtain from a financial institution or other lender a
commitment to provide such financing. On May 1, 1992, the Buyers shall give to
the Seller written notice stating whether the Buyers have obtained or have
failed to obtain such commitment. If the Buyers fail to give such written notice
to the Seller on May 1, 1992, or if the Buyers give to the Seller such written
notice stating that the Buyers have Failed to obtain such commitment on or
before April 30, 1992, then either the Seller or the Buyers may terminate this
Agreement by giving written notice of notice to the other party to this
Agreement not later than May 2, 1992 whereupon all funds, documents and
instruments deposited in escrow by the Buyers shall be returned to the Buyers
and an funds, documents and instruments deposited in escrow by the Seller shall
be returned to the Seller. If neither the Seller nor the Buyers gives written
notice of termination to the other party to this Agreement pursuant to this
Section 7.17 on or before May 2, 1992, then (subject to the satisfaction or
waiver of the conditions set forth in Article IX) the transactions contemplated
by this Agreement shall be consummated as scheduled.
-28-
7.18 Delivery of Certain Documents. On the date of this Agreement,
-----------------------------
the Seller and the Buyers shall deliver to the other party the following
properly executed and acknowledged documents: the Charlevoix Lease, the Bethesda
Sublease, the Sedgwick Sublease and the Subleases.
ARTICLE VIII
CLOSING
8.01 Closing. The consummation of the purchase and sale of the
-------
Purchased Assets, the lease or sublease of the Bond-financed Owned Facilities,
the assumption of the Assumed Liabilities and the sublease of the Leased
Facilities under this Agreement, the Charlevoix Lease, the Bethesda Sublease,
the Sedgwick SubLease and the Subleases (the "Closing") shall take place
simultaneously at the offices of ▇▇▇▇▇ & ▇▇▇▇▇ at Seattle, Washington, or at
such other place or on such other date as the Seller and the Buyers may agree in
writing. Subject to the expiration of all notice periods applicable under the
Employment Laws in connection with the termination of the employment of the
Employees as contemplated by Section 7.07(a), the Closing shall take place on
the first day of the calendar month immediately following the calendar month in
which the Seller and the Buyers shall have received all consents of all
governmental and regulatory authorities and an other Persons required for the
execution and delivery of this Agreement and the other Transaction Documents and
the consummation of the transactions contemplated by this Agreement and the
other Transaction Documents, or on such other date as the Seller and the Buyers
may agree in writing; provided that in no event shall the Closing take place
--------
prior to June 1, 1992 or later than July 31, 1992.
8.02 Conveyance; Sublease. At the Closing, the Seller shall convey
--------------------
to the Buyers the Real Property and the Improvements by deeds substantially in
the form of Exhibit F (the "Deeds"), subject to no Liens other than the
Permitted Liens. At the Closing, the Seller shall convey to the Buyers the
Inventory, the Permits, the Personal Property and the Records by bills of sale
and general assignments each substantially in the form of Exhibit G (the "Bills
of Sale"), subject to no Liens other than the Permitted Liens. At the Closing,
the Seller shall lease or sublease to the Buyers the Bond-financed Owned
Facilities by the Charlevoix Lease, the Bethesda Sublease and the Sedgwick
Sublease. At the Closing, the Seller shall sublease to the Buyers the Leased
Facilities by the Subleases. Any Liens to be discharged by the Seller may be
paid out of the Purchase Price at the Closing.
8.03 Possession and Risk of Loss. Possession of the Purchased Assets
---------------------------
and the Leased Facilities shall pass to the Buyers at the Closing. The Seller
shall bear the risk of loss of the Purchased Assets and the Leased Facilities
prior to the Closing. The Buyers shall bear the risk of loss of the Purchased
Assets and the Leased Facilities from and after the Closing.
8.04 Seller's Delivery of Documents at Closing. At the Closing, the
-----------------------------------------
Seller shall deliver or cause to be delivered to the Buyers the following
properly executed and, where appropriate, acknowledge documents:
(a) the Assignment and Assumption Agreements;
(b) the Deeds;
(c) the Bills of Sale;
(d) a binding commitment of the Title Company to issue the
Owner's Title Policy;
(e) originals or copies of the Assumed Contracts-and the
Permits;
-29-
(f) an affidavit of nonforeign status required pursuant to
section 1445 of the Internal Revenue Code, as amended;
(g) a certificate signed by the President or a Vice
President of the Seller, dated the Closing Date, certifying that the
representations and warranties of the Seller contained in this Agreement and in
any certificate or other writing delivered by the Seller pursuant to this
Agreement are true on and as of the Closing Date, as if made on and as of the
Closing Date, with only such exceptions as would not in the aggregate reasonably
be expected to have a Material Adverse Effect;
(h) certified copies of the resolutions of the board of
directors of the Seller approving and authorizing the execution, delivery and
performance by the Seller of this Agreement and the Subleases and the
consummation of the transactions contemplated thereby;
(i) an affidavit of the Seller with respect to mechanics'
and materialmen's liens;
(j) estoppel certificates from the lessors under the
Leases, in form and substance reasonably satisfactory to the Buyers;
(k) a written opinion of General Counsel to the Seller,
dated the Closing Date, substantially in the form of Exhibit H;
(l) a pharmacy partnership agreement, dated as of the
Closing Date, substantially in the form of ExhIbit I (the "Pharmacy Partnership
Agreement");
(m) a pharmacy management agreement dated as of the Closing
Date, substantially in the form of Exhibit J (the "Pharmacy Management
Agreement;
(n) a partnership agreement relating to rehab services,
dated as of the Closing Date, substantially in the form of Exhibit K (the "Rehab
Partnership Agreement");
(o) a management agreement relating to rehab services,
dated as of the Closing Date, substantially in the form of Exhibit L (the "Rehab
Management Agreement");
(p) accounting and data processing services agreements,
dated as of the Closing Date, each substantially in the form of Exhibit M (the
"Accounting Services Agreements"); and
(q) such other documents as may be reasonably required by
the Title Company.
8.05 Buyers' Delivery of Documents and Purchase Price at Closing. At
-----------------------------------------------------------
the Closing, the Buyers shall deliver or cause to be delivered to the Seller
cash or immediately available funds in an amount equal to $3,850,000 and the
Rent due on the Closing Date, and the following properly executed and, where
appropriate, acknowledged documents:
(a) the Assignment and Assumption Agreements;
(b) the Promissory Notes;
(c) the Mortgages;
-30-
(d) Uniform Commercial Code financing statements naming the
Buyers, as debtors, and the Seller, as secured party, in appropriate forms for
filing in all jurisdictions as shall be necessary or appropriate to perfect the
security interest created by the Mortgages;
(e) written evidence of the insurance required by the
Mortgages, the charlevoix Lease, the Bethesda Sublease, the Sedgwick Sublease
and the Subleases;
(f) a binding commitment of the Title Company to issue the
Mortgagee's Title Policy;
(g) a certificate signed by the President of the General
Partner in the Buyers, dated the Closing Date, certifying that the
representations and warranties of the Buyers contained in this Agreement and in
any certificate or other writing delivered by the Buyers pursuant to this
Agreement are true in all material respects on and as of the Closing Date, as if
made on and as of the Closing Date;
(h) a written opinion of House & ▇▇▇▇▇▇, P.A. counsel to
the Buyers, dated the Closing Date, substantially in the Form of Exhibit N;
(i) the Receipt and Assumption Agreements;
(j) the Guaranty;
(k) the Pharmacy Partnership Agreement;
(l) the Pharmacy Management Agreement;
(m) the Rehab Partnership Agreement;
(n) the Rehab Management Agreement;
(o) the Accounting Services Agreements; and
(p) a Kansas Real Estate Validation Questionnaire for the
Register of Deeds.
8.06 Certain Payments and Prorations. At the Closing:
-------------------------------
(a) the Seller shall pay all then unpaid Taxes that are to
be paid by the Seller on or prior to the Closing Date pursuant to Section 5.04;
(b) the Seller shall pay one-half of all then unpaid
transfer, documentary, sales, use, excise and similar Taxes which are assessed
upon or with respect to the sale, assignment, transfer, conveyance and delivery
of the Purchased Assets and the sublease of the Leased Facilities to the Buyers
and which are to be paid to the Seller on or prior to the Closing Date pursuant
to section 7.05(b);
(c) the Seller shall pay one-half of all recording and
filing fees with respect to any Transaction Document and any related financing
statement and otherwise with respect to the sale, assignment, transfer,
conveyance and delivery of the Purchased Assets and the sublease of the Leased
Facilities to the Buyers;
-31-
(d) the Seller shall pay all then unpaid charges that are
to be paid by the Seller on or prior to the Closing Date pursuant to Section
7.06;
(e) the Seller shall pay the premium for the Owner's Title
Policy at ordinary premium rates without any requirement for additional premiums
or charges for endorsements, surveys or of otherwise;
(f) the Seller shall pay any additional premiums or charges
for any endorsements (including any comprehensive or extended coverage
endorsements) or surveys that it requests in connection with the Mortgagee's
Title Policy;
(g) the Seller shall pay one-half of the Escrow Agent's
fees;
(h) the Buyers shall pay one-half of ad then unpaid
transfer, documentary, sales, use, excise and similar Taxes which are assessed
upon or with respect to the sale, assignment transfer, conveyance and delivery
of the Purchased Assets and the sublease of the Leased Facilities to the Buyers
and which are to be paid by the Buyers on or prior to the Closing Date pursuant
to SectIon 7.05(b);
(i) the Buyers shall pay one-half of all recording and
filing fees with respect to any Transaction Document and any related financing
statements and otherwise with respect to the sale, assignment, transfer,
conveyance and delivery of the Purchased Assets and the sublease of the Leased
Facilities to the Buyers;
(j) the Buyers shall pay all then unpaid charges, and shall
reimburse the Seller for the payment of any and all deposits and prepaid
amounts, that are to be paid or reimbursed by the Buyers on or prior to the
Closing Date pursuant to Section 7.06;
(k) the Buyers shall pay the premium for the Mortgagee's
Title Policy at ordinary premium rates without any requirement for additional
premiums or charges for endorsements, surveys or otherwise;
(l) the Buyers shall pay any additional premiums or charges
for any endorsements (including any comprehensive or extended coverage
endorsements) or surveys that it requests in connection with the Owner's Title
Policy; and
(m) the Buyers shall pay one-half of the Escrow Agent's
fees.
ARTICLE IX
CONDITIONS TO CLOSING
9.01 Conditions to the Obligations of Seller and Buyers. The
--------------------------------------------------
respective obligations of the Seller and the Buyers to consummate the
transactions contemplated by this Agreement are subject to the satisfaction of
the following conditions:
(a) Any applicable waiting period under the HSR Act
relating to the transactions contemplated by this Agreement shall have expired
or early termination of such waiting period shall have been granted.
(b) No court, arbitrator or governmental or regulatory
authority shall have issued any order, and there shall not be any law, rule,
regulation or ordinance, restraining or prohibiting
-32-
the consummation of the transactions contemplated by this Agreement and no
proceeding challenging this Agreement or the transactions contemplated by this
Agreement or seeking to prohibit, alter, prevent or materially delay the Closing
shall have been instituted by any Person before any court, arbitrator or
governmental or regulatory authority and shall be pending.
(c) The Seller and the Buyers shall have received all
consents of any governmental or regulatory authority or any other Person
required for the execution and delivery of this Agreement, the Charlevoix Lease,
the Bethesda Sublease, the Sedgwick Sublease, the Subleases, the Deeds and the
consummation of the transactions contemplated by this Agreement.
(d) Any applicable notice period under any Employment Law
relating to the termination of the employment of the Employees contemplated by
Section 7.07 shall have expired.
9.02 Additional Conditions to the Obligation of Buyers. The
-------------------------------------------------
obligation of the Buyers to consummate the transactions contemplated by this
Agreement is further subject to the satisfaction of the Following conditions;
(a) The Seller shall have performed in all material
respects all of the Seller's obligations under this Agreement required to be
performed by the Seller at or prior to the Closing.
(b) The representations and warranties of the Seller
contained in this Agreement and in any certificate or other writing delivered by
the Seller pursuant to this Agreement shall be true on and as of the Closing
Date, as if made on and as of the Closing Date, with only such exceptions as
would not in the aggregate reasonably be expected to have a Material Adverse
Effect.
(c) The Buyers shall have received the documents required
by Section 8.04.
(d) The Buyers shall have received from the lessors under
the Leases in respect of the Leased Facilities listed in Schedule 1.01D the
option to purchase such Leased Facilities, provided, that any such option to
--------
purchase shall be expressly conditioned upon the unconditional release by such
lessor of the Seller and all affiliates of the Seller from all duties,
obligations and liabilities arising under or by reason of such Lease upon the
consummation of such purchase.
9.03 Additional Conditions to the Obligation of Seller. The
-------------------------------------------------
obligation of the Seller to consummate the transactions contemplated by this
Agreement is further subject to the satisfaction of the following conditions:
(a) The Buyers shall have performed in all material
respects all of the Buyers' obligations under this Agreement required to be
performed by the Buyers at or prior to the Closing.
(b) The representations and warranties of the Buyers
contained in this Agreement and in any certificate or other writing delivered by
the Buyers pursuant to this Agreement shall be true in all material respects on
and as of the Closing Date, as if made on and as of the Closing Date.
(c) The Seller shall have received cash or immediately
available funds in an amount equal to $3,850,000 and the Rent due on the Closing
Date, and the documents required by Section 8.05.
-33-
ARTICLE X
SURVIVAL; INDEMNIFICATION
10.01 Survival. The covenants set forth in Sections 2.01, 2.11, 2.12,
--------
2.14, 5.07, 5.09, 5.10, 5.11, 5.12, 6.03, 6.04, 6.05, 7.06, 7.08. 7.09, 7.11,
10.01, 10.02 10.03, 10.04, 10.05 and 12.11 and in the Assignment and Assumption
Agreements, the Receipt and Assumption Agreements and the Deeds shall survive
the Closing indefinitely. The covenants, representations and warranties set
forth in Sections 2.07, 3.09, 3.15, 5.04, 5.05, 7.04, 7.05 and 7.07 shall
survive the Closing until the expiration of all applicable statutory periods of
limitations (after giving effect to any waiver, mitigation or extension of any
such statutory periods of limitations). Except as otherwise provided therein,
the covenants, representations and warranties of the Buyers set forth in Section
6.07 and in the Charlevoix Lease, the Bethesda Sublease, the Sedgwick Sublease,
the Promissory Notes, the Mortgages and the Subleases shall survive the Closing
until all obligations, of the Buyers thereunder shall have been paid and
performed in full. The covenant of the Seller set forth in Section 5.08 shall
survive the Closing until the expiration of the period specified therein. All
of the other covenants, representations and warranties of the Seller and the
Buyers set forth in this Agreement or in any certificate or other writing
delivered pursuant to this Agreement or in connection with this Agreement shall
survive the Closing until the second anniversary of the Closing Date.
Notwithstanding anything to the contrary set forth in this Section 10.01 or
elsewhere in this Agreement or any other Transaction Document, any covenant,
representation or warranty in respect of which indemnity may be sought under
section 10.02 or Section 10.03 shall survive the time at which such cover
representation or warranty would otherwise terminate pursuant to the preceding
two sentences if notice of the incorrectness or breach of such covenant,
representation or warranty giving rise to such right to indemnity shall have
been given to the party against whom such indemnity may be sought prior to the
time at which such covenant, representation or warranty would otherwise
terminate pursuant to the preceding two sentences. Any such notice shall
describe the event, circumstance or state of facts giving rise to the claimed
incorrectness or breach of such covenant, representation or warranty and the
Section or Sections of this Agreement or any other Transaction Document upon
which such right to indemnity is based.
10.02 Indemnification by Seller. The Seller hereby indemnifies and
-------------------------
agrees to defend and hold harmless the Buyers, the General Partner and the
employees and agents of the Buyers, and their respective successors and assigns,
from and against any and all Buyer Losses arising from or by reason of: (a) any
incorrectness or breach of any of the representations, warranties or covenants
of the Seller set forth in this Agreement or in any certificate or other writing
delivered pursuant to this Agreement or in connection with this Agreement; or
(b) any obligation or liability relating to any Excluded Asset; or (c) the
Seller's ownership, lease, use, operation, disposition or loss of any of the
Purchased Assets or the Leased Facilities prior to the Closing Date, but
expressly excluding the condition of any of the Purchased Assets and any use,
generation, manufacture, treatment storage, recycling transportation, disposal,
spill, leak or release of any Hazardous Substance in, on or under any Facility
or any of the other Purchased Assets prior to the Closing; provided that the
--------
Seller shall not be liable under this Section 10.02 unless the aggregate amount
of the Buyer Losses with respect to all matters referred to in this Section
10.02 (determined without regard to any materially qualification contained in
any representation, warranty or covenant giving rise to the claim for indemnity
under this Agreement) exceeds $5,000 and then only to the extent of such excess.
10.03 Indemnification by Buyers. The Buyers hereby indemnify and
-------------------------
agree to defend and hold harmless the Seller and the directors, officers,
employees and agents of the Seller, and their respective successors and assigns,
from and against any and all Seller Losses arising from or by reason of: (a) any
incorrectness or breach of any of the representations, warranties or covenants
of the Buyers set forth in this Agreement or in any certificate or other writing
delivered pursuant to this Agreement or in connection with this Agreement; (b)
any Assumed Liability; or (c) the ownership,
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sublease, use, operation, condition, disposition or loss of any of the Purchased
Assets or the Leased Facilities, or the conduct of the business at any Facility,
on and after the Closing Date, including the employment or performance of any
Transferred Employee and any use, generation, manufacture, treatment, storage,
recycling, transportation, disposal, split, leak or release of any Hazardous
Substance in, on or under any Facility or any of the other Purchased Assets
after the Closing; provided that the Buyers shall not be liable under this
--------
Section 10.03 unless the aggregate amount of the Seller Losses with respect to
all matters referred to in this Section 10.03 (determined without regard to any
materiality qualification contained in any representation, warranty or covenant
giving rise to the claim for indemnity under this Agreement) exceeds $5,000 and
then only to the extent of such excess.
10.04 Procedures. The party seeking indemnification under Section
----------
10.02 or Section 10.03 (the "Indemnified Party") shall give prompt notice to the
party against whom indemnity is sought (the "Indemnifying Party") of the
assertion of any claim, or the commencement of any suit, action or proceeding,
in respect of which indemnity may be sought under Section 10.02 or Section
10.03, as the case may be. Such notice shall be accompanied by copies of any
claim, process, legal pleading or other document received by the Indemnified
Party from any Person (other than the Indemnified Party's legal counsel)
relating to any such claim, suit, action or proceeding. The Indemnifying Party
may, and at the request of the Indemnified Party shall, participate in and
control the defense of any such claim, suit, action or proceeding at the
Indemnifying Party's own expense: The party controlling the defense of any such
claim, suit, action or proceeding shall be entitled to employ counsel in
connection with such defense, and any counsel so employed shall be reasonably
acceptable to the other party to this Agreement. The Indemnifying Party shall
not be liable be under Section 10.02 or Section 10.03 for any Buyer Loss or any
Seller Loss, as the case may be, in respect of which indemnity may be sought if
any claim, suit, action or proceeding in respect of which indemnity is sought
under this Agreement with respect to such Buyer Loss or Seller Loss is Settled
or Seller without the prior consent of the Indemnifying Party, which consent
shall not be unreasonably withheld.
10.05 Exclusivity. After the Closing, this ArtIcle X and the
-----------
provisions of the Charlevoix Lease, the Bethesda Sublease, the Sedgwick
Sublease, the Promissory Notes, the Mortgages, the Subleases and the Guaranty
shall provide the exclusive remedies for the incorrectness or breach of any
representation, warranty or covenant (other than those contained in Sections
5.07, 5.08 and 6.04) set forth in this Agreement or in any certificate or other
writing delivered pursuant to this Agreement or in connection with this
Agreement.
ARTICLE XI
TERMINATION
11.01 Grounds for Termination. This Agreement may be terminated at
-----------------------
any time prior to the Closing:
(a) by mutual written agreement of the Seller and the
Buyers;
(b) by the Seller or the Buyers pursuant to Section 7.16 or
if the Closing shall not have taken place on or before July 31, 1992;
(c) by the Buyers pursuant to Section 7.10, Section 7.12
Section 7.13 or Section 7.17;
(d) by the Seller or the Buyers if there shall be any
applicable law, rule, regulation or ordinance that makes the consummation of the
transactions contemplated by this Agreement illegal or otherwise prohibited or
if consummation of the transactions contemplated by this
-35-
Agreement would violate any non-appealable final order, decree or judgment of
any court or governmental or regulatory body having competent jurisdiction; or
(e) by the Seller or the Buyers if any of the conditions to
Closing shall not have been fulfilled or waived.
The party to this Agreement desiring to terminate this Agreement pursuant to
clause (b) clause (c) clause (d) or clause (e) of this Section 11.01 shall give
notice of such termination to the other party to this Agreement.
11.02 Effect of Termination. If this Agreement is terminated as
---------------------
permitted by Section 11.01, then such termination shall be without liability of
either party to this Agreement (or the General Partner or any shareholder,
director, officer, employee, agent, consultant or representative of such party)
to the other party to this Agreement; provided that if any termination of this
--------
Agreement or any other failure to consummate the transactions contemplated by
this Agreement, shall result from the willful failure of the Seller to fulfill a
condition to the performance of the obligations of the Buyers or to perform a
covenant of this Agreement to be performed by the Seller, then, in recognition
of the difficulty or impossibility of determining the amount of actual damages
that would be suffered by the Buyers, the Seller agrees to pay to the Buyers,
and the Buyers agree to accept from the Seller, as liquidated damages, and not
as a penalty, an aggregate amount equal to $250,000, and such termination or
other failure to consummate the transactions contemplated by this Agreement,
shall be willful failure liability of the Seller (or any shareholder, director,
officer, employee, agent, consultant or representative of the Seller) to the
Buyers; provided, further, that if any termination of this Agreement, or any
-------- -------
other failure to consummate the transaction contemplated by this Agreement,
shall result from the willful failure of the Buyers to fulfill a condition to
the performance of the obligations of the Seller or to perform a covenant of
this Agreement to be performed by the Buyers, then, in recognition of the
difficulty or impossibility of determining the amount of actual damages that
would be suffered by the Seller, the Buyers agree to pay to the Seller, and the
Seller agrees to accept form the Buyers, liquidated damages, and not as a
penalty, an aggregate amount equal to $250,000, and such termination or other
failure to consummate the transactions contemplated by this Agreement shall be
without further liability of the Buyers (or the General Partner or any employee,
agent consultant or representative of the Buyers) to the Seller. Each of the
Seller and the Buyers agree that the aggregate amount of $250,000 is a
reasonable estimate as of the date of this Agreement of the amount of damages
that would be suffered by either party to this Agreement if any termination of
this Agreement, or any other failure to consummate the transactions contemplated
by this Agreement, shall result from the willful failure of the other party to
fulfill a condition to performance or to perform a covenant of such other party
to be performed by such other party. The provisions of Section 12.04 shall any
failure to consummate the transactions contemplated by this Agreement, whether
by reason of any termination of this Agreement or otherwise.
ARTICLE XII
MISCELLANEOUS
12.01 Notices. Except as otherwise provided in this Agreement all
-------
notices, consents, requests and other communications to any party under or in
connection with this Agreement or the Promissory Notes shall be in writing and
shall be sent via personal delivery, via telephone facsimile transmission, via
certified or registered mail, return receipt requested, or via express courier
or delivery service, addressed to such party at such party's address or
telephone facsimile number set forth below or at such other address or telephone
facsimile number as shall be designated by such party in a written notice given
to each other party complying as to delivery with the terms of this Section
12.01:
-36-
if to the Seller, at:
c\o The Hillhaven Corporation
The Cornerstone Building
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Vice President
Acquisitions and Development
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
The Hillhaven Corporation
The Cornerstone Building
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Facsimile: (206) 75-4845 or (▇▇▇) ▇▇▇-▇▇▇▇
if to the Buyers, at:
▇/▇ ▇▇▇ ▇. ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
House & ▇▇▇▇▇▇. P.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
P.O. Drawer 25008
▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
An such notices, consents, requests and other communications shall be deemed
given (a) when given and receipted for (or upon the date of attempted delivery
when delivery is refused), if sent via personal delivery, via certified or
registered mail, return receipt requested, or via express courier or delivery
service or (b) when received, if sent via telephone facsimile transmission
(confirmation of such receipt via confirmed telephone facsimile transmission
being deemed receipt of any such notice, consent request or other communication
sent via telephone facsimile transmission).
12.02 Amendments, Etc. No amendment or waiver of any provision of
---------------
this Agreement or the Promissory Notes, nor consent to any departure by either
the Seller or the Buyers from any such provision shall in any event be effective
unless such amendment, waiver or consent is in a writing which specifically
refers to this Section 12.02 and which is signed by the Buyers and by the
-37-
Chief Executive Officer or the President of the Seller, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
12.03 No Waivers, Remedies Cumulative. No Failure by either party to
-------------------------------
this Agreement to exercise, and no delay by either party in exercising, any
right, power or privilege under this Agreement shall operate as a waiver of such
right, power or privilege, and no single or partial exercise of any such right,
power or privilege shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
provided in this Agreement and the other Transaction Documents shall be
cumulative and not exclusive of a,ny rights or remedies provided by law.
12.04 Expenses. Except as others provided in this Agreement, all
--------
costs and expenses incurred in connection with the negotiation, preparation,
execution and delivery of this Agreement and the other Transaction Documents
shall be paid by the party incurring such cost or expense.
12.05 Successors and Assigns. The provisions of this Agreement shall
----------------------
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that neither party may assign,
--------
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other party to this Agreement.
12.06 Joint and Several Liability. All obligations of the Buyers in
---------------------------
this Agreement shall be joint and several.
12.07 Counterparts; Effectiveness. This Agreement may be executed in
---------------------------
any number of counterparts and by different parties to this Agreement 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 Delivery of an executed counterpart of a signature page to this
Agreement via telephone facsimile transmission shall be effective as delivery of
a manually executed counterpart of this Agreement. This Agreement shall become
effective when each of the Seller and the Buyers shall have received a
counterpart of this Agreement executed by the other party to this Agreement.
12.08 Entire Agreement. This Agreement and the other Transaction
----------------
Documents constitute the entire agreement between the Seller and the Buyers with
respect to the subject matter of this Agreement and supersede all prior
agreements, understandings and negotiations, both written and oral, between the
Seller and the Buyers with respect to the subject matter of this Agreement. No
representation, inducement, promise, understanding, condition or warranty that
is not set forth in this Agreement or any other Transaction Document has been
made or relied upon by either the Seller or the Buyers. Neither this Agreement
nor any provision of this Agreement is intended to confer any rights or remedies
under this Agreement upon any Person other than the Seller, the Buyers and their
respective successors and permitted assigns.
12.09 Severability. Any provision of this Agreement that is
------------
prohibited or unenforceable in any jurisdiction shall be ineffective, as to such
jurisdiction, to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
12.10 Captions. The table of contents and the headings of the
--------
Articles, Sections, subsections, paragraphs and other divisions of this
Agreement are included for convenience of reference only, and shall not in any
way limit or affect the construction or interpretation of any provision of this
Agreement.
-36-
12.11 Arbitration. Any dispute or controversy arising out of or
-----------
relating to this Agreement, but excluding any dispute or controversy arising out
of or relating to any of the other Transaction Documents, shall be settled by
arbitration to be held in Kansas City, Missouri, in accordance with the rules of
the American Arbitration Association or its successor. The decision of the
arbitrator shall be conclusive and binding on the parties to the arbitration.
Judgment may be entered on the arbitrator's decision in any court having
jurisdiction and the Seller and the Buyers shall irrevocably consent to the
jurisdiction of the courts of the State of Washington or the federal courts of
the United States of America for the Western District of the State of Washington
for this purpose. The prevailing party in any arbitration shall be entitled to
recover from the nonprevailing party the costs and expenses of maintaining such
arbitration, including reasonable attorneys' fees and disbursements incurred
before such arbitration is commenced, during arbitration, and on appeal.
12.12 Bulk Sales Laws. The Seller and the Buyers hereby waive
---------------
compliance by the Seller with the provisions of the "bulk sales," "bulk
transfer" or similar laws of any state or other jurisdiction. The Seller agrees
to indemnify and hold the Buyers harmless against any and all claims, losses,
damages, liabilities, costs and expenses incurred by the Buyers as a result of
any failure to comply with any such "bulk sales," "bulk transfer" or similar
laws.
12.13 Governing Laws. This Agreements shall be deemed to be a
--------------
contract made under the laws of the State of Washington, and for all purposes
shall be governed by, and construed in all respects (including matters of
construction, validity and performance) in accordance with, the laws of the
State of Washington, without regard to the conflicts of law rules of such state.
-39-
IN WITNESS WHEREOF, the Seller and the Buyers have caused this
Agreement to be duly executed as of the date first above written.
FIRST HEALTHCARE CARE
By [SIGNATURE NOT LEGIBLE]
----------------------------
Title: Vice President of
Acquisitions and Development
MEADOWBROOK MANOR OF ▇▇▇▇▇▇▇ LIMITED
PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR OF JOPLIN LIMITED
PARTNERSHIP I
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR OF COUNCIL GROVE
LIMITED PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
-▇▇-
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ LIMITED
PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR OF ST. ▇▇▇▇▇▇▇
LIMITED PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR OF OVERLAND PARK
LIMITED PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR TERRACE OF
OVERLAND PARK LIMITED PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
-41-
MEADOWBROOK MANOR OF CHANUTE LIMITED
PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR OF SPRINGFIELD
LIMITED PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR OF TOPEKA LIMITED
PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR OF WICHITA LIMITED
PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
-▇▇-
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ LIMITED
PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR OF SEDGWICK LIMITED
PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR COLONIAL TERRACE
OF INDEPENDENCE LIMITED PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Patter
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR OF LARNED LIMITED
PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
-43-
MEADOWBROOK MANOR APARTMENTS OF
LARNED LIMITED PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR OF AVA LIMITED
PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR OF BUFFALO LIMITED
PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR OF CLINTON LIMITED
PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
-44-
MEADOWBROOK MANOR OF DES ▇▇▇▇▇ LIMITED
PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
--------------------------------
Title: President
MEADOWBROOK MANOR OF JEFFERSON LIMITED
PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
--------------------------------
Title: President
MEADOWBROOK MANOR OF ▇▇▇▇▇▇▇▇▇ LIMITED
PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
--------------------------------
Title: President
MEADOWBROOK MANOR OF JOPLIN LIMITED
PARTNERSHIP II
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
--------------------------------
Title: President
-▇▇-
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ LIMITED
PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR OF SHADY OAKS
LIMITED PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR OF CRANE LIMITED
PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR OF ▇▇▇▇▇▇▇▇▇▇ CITY
LIMITED PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
-▇▇-
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ OF
▇▇▇▇▇▇▇▇▇▇ CITY LIMITED PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR WORNALL OF KANSAS
CITY LIMITED PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR BLUE HILLS OF KANSAS
CITY LIMITED PARTNERSHIP I
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
-▇▇-
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ OF
▇▇▇▇▇▇▇▇▇▇ CITY LIMITED PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR WORNALL OF KANSAS
CITY LIMITED PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
MEADOWBROOK MANOR BLUE HILLS OF KANSAS
CITY LIMITED PARTNERSHIP
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By [SIGNATURE NOT LEGIBLE]
___________________________
Title: President
Schedule 1.01B
to
Facility Agreement
Owned Facilities and Certain Bonds
PART A
------
Owned Facilities
Facility Name and Location
--------------------------
▇▇▇▇▇▇▇ House Healthcare (445)
Ballwin, Missouri
Columbia House Healthcare (446)
Columbia, Missouri
Country Club Home (809)
Council Grove, Kansas
Green ▇▇▇▇▇▇▇ Nursing Center (861)
Haysville, Kansas
▇▇▇▇▇▇▇ Holiday Home (857)
Larned, Kansas
▇▇▇▇▇▇▇ Holiday Apartments (858)
Larned, Kansas
Hillhaven-Topeka (838)
Topeka, Kansas
Hillhaven-Wichita (844)
Wichita, Kansas
Indian Creek Nursing Center (895)
Overland Park, Kansas
Indian ▇▇▇▇▇▇▇ Nursing Center (896)
Overland Park, Kansas
Medicenter-Springfield (834)
Springfield, Missouri
Tradition House Healthcare (260)
Joplin, Missouri
-1- SCHEDULE 1.01B
Schedule 1.01B
to
Facility Agreement
Owned Facilities and Certain Bonds
PART B
------
Bond-Financed Owned Facilities
Facility Name and Location Related Bonds
-------------------------- -------------
Bethesda Nursing Center (803)* City of Chanute, Kansas Industrial
Chanute, Kansas Development Revenue Bonds (Hillhaven
Project) Series 1983
Charlevoix Nursing Center (823)* The Industrial Development Authority of
St. ▇▇▇▇▇▇▇, Missouri St. ▇▇▇▇▇▇▇ County, Missouri, Industrial
Development Revenue Bonds (Hillhaven
Project) Series ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (833)* City of Sedgwick, Kansas Industrial
Sedgwick, Kansas Development Revenue Bonds (Nursing Home
Facility) Series A, 1974, and City of
Sedgwick, Kansas, Industrial Development
Revenue Bonds (Sedgwick Convalescent
Center, Inc. Tenant) Series A, 1978
* Sale is subject to the payment or prepayment and redemption of the related
Bonds. See Section 2.01 of the Facility Agreement.
-2- SCHEDULE 1.01B
Schedule 1.01C
to
Facility Agreement
Leased Facilities
Facility Name and Location
--------------------------
Colonial Terrace-Independence (845)
Independence, Kansas
Colonial Lodge-Independence (846)
Independence, Kansas
Crestview Healthcare (251)
Ava, Missouri
Hickory Lane Care Center (253)
Buffalo, Missouri
Sycamore View Healthcare (254)
Clinton, Missouri
Des ▇▇▇▇▇ Health Care (255)
Des ▇▇▇▇▇, Missouri
Hillside Healthcare (256)
Jefferson, Missouri
Marceline Healthcare (257)
Marceline, Missouri
Joplin House Healthcare (259)
Joplin, Missouri
Lakeview Health Care Center (261)
Lamar, Missouri
Shady Oaks Health Care Center (262)
Thayer, Missouri
Crane Health Care Center (263)
Crane, Missouri
Table Rock Health Care Center (265)
▇▇▇▇▇▇▇▇▇▇ City, Missouri
Table Rock Health Care Center Residential Project (266)
Kimberling Cit, Missouri
Wornall Health Care Center (819)
Kansas City, Missouri
-1- SCHEDULE 1.01C
Facility Name and Location
--------------------------
Blue Hills Living Center (843)
Kansas City, Missouri
Blue Hills Centre (860)
Kansas City, Missouri
-2- SCHEDULE 1.01C
Schedule 1.01D
to
Facility Agreement
List of Leased Facilities
As to Which Buyers Shall Have Been Assigned
Option to Purchase
Facility Name and Location
--------------------------
Crestview Healthcare (251)
Ava, Missouri
Hickory Lane Care Center (253)
Buffalo, Missouri
Sycamore View Healthcare (254)
Clinton, Missouri
Des ▇▇▇▇▇ Health Care (255)
Des ▇▇▇▇▇, Missouri
Hillside Healthcare (256)
Jefferson, Missouri
Marceline Healthcare (257)
Marceline, Missouri
Joplin House Healthcare (259)
Joplin, Missouri
Lakeview Health Care Center (261)
Lamar, Missouri
Shady Oaks Health Care Center (262)
Thayer, Missouri
SCHEDULE 1.01D
Schedule 1.01E
to
Facility Agreement
Part A
Real Property
Legal Description
for
Tradition House Healthcare (260)
(Joplin, Missouri)
Beginning at the intersection of the South line of Twenty-eighth Street and the
West line of ▇▇▇▇▇▇▇ Avenue, if extended, thence South and parallel with the
West line of ▇▇▇▇▇▇▇ Avenue, if extended, 535 feet, more or less, to a point 135
feet South of the North line of the Southeast Quarter (SE1/4) of the Southwest
Quarter (SW1/4) of Section 15, Township 27, Range 33, thence West parallel with
the North line of said Southeast Quarter of the Southwest Quarter a distance of
325 feet, thence North and parallel with the West line of ▇▇▇▇▇▇▇ Avenue, if
extended, to the South line of Twenty-eight Street, thence Easterly and on the
South line of Twenty-eighth Street to the point of beginning, the same being
part of Miscellaneous Tracts Four (4) and Five (5) in Section 15, Township 27,
Range 33, and all of Lots Numbered One (1), Two (2), Three (3) and Four (4) and
a portion of Lot Numbered Five (5) in BRIARCLIFF ADDITION, SECOND PLAT, to the
City of ▇▇▇▇▇▇, ▇▇▇▇▇▇ County, Missouri, according to the recorded Plat thereof.
SCHEDULE 1.01E
Schedule 1.01E
to
Facility Agreement
Part A
Real Property
Legal Description
for
Clayton House Healthcare (445)
(Ballwin, Missouri)
PARCEL 1: A tract of land in Section 13, Township 45 North, Range East, St.
Louis County, Missouri, and described as follows: Beginning at the point on the
North line of ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ feet wide, from which point the intersection of
the west line of said Section 19 with said North line of ▇▇▇▇▇▇▇ Road bears
South 84 degrees 31 minutes west 12.07 feet: thence North 0 degrees 52 minutes
East, along a line parallel with and 12.00 feet East, measured perpendicular to
the west line of said Section 19, 941.71 feet to a point: thence south __
degrees 59 minutes west 12.00 feet to a point on the west line of said Section
19; thence North 0 degrees 51 minutes East, along the west line of said Section
19, 198.82 feet to a point; thence South 89 degrees 07 minutes 30 seconds East
475.04 feet to a point; thence South __degrees__minutes 30 second West 1191.57
east to a point on said North __ of ▇▇▇▇▇▇▇ Road: thence South 84 degrees 51
minutes West, along said North line of ▇▇▇▇▇▇▇ Road, 465.73 feet to the point of
beginning.
PARCEL 2: The East Twelve (12) feet of the following described tract: A tract
of land in Section 24, Township 45 North, Range 4 East, and Section 19, Township
45 North, Range 5 East, St. Louis County, Missouri, and described as follows:
Beginning at a point on the North line of ▇▇▇▇▇▇▇ Road, 60 feet wide, distant
North __ degrees 51 minutes East 12.07 feet from the intersection of the West
line of said Section 19 with the North line of said ▇▇▇▇▇▇▇ Road; thence South
84 degrees 51 minutes West 368.70 feet to a point; thence South 65 degrees 45
minutes 48 seconds west 141.25 feet to a point on the East line of Old ▇▇▇▇▇
Mill Road (40 feet wide); thence South 1 degree 55 minutes 57 seconds Est 35.66
feet to a point; thence North 14 degrees 33 minutes 06 seconds East, 419.59 feet
to a point; thence North 8 degrees 50 minutes 51 seconds East, 144.25 feet to a
point; thence North 14 degrees 32 minutes 50 seconds West, 350.15 feet to a
point; thence North 89 degrees 58 minutes 30 seconds East 484.16 feet to a
point; thence North 0 degrees 52 minutes East 11.56 feet to a point; thence __
89 degrees 59 minutes East 12.00 feet to a point; thence South __ degrees, 52
minutes West 941.72 feet to the point of beginning.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. & ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. (Parcel 1)
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇. (Parcel 2)
SECHDULE 1.0
Schedule 1.01E
to
Facility Agreement
Part A
Real Property
Legal Description
for
Columbia House Healthcare (446)
Columbia, Missouri
TRACT SIX (6) OF WHITE GATE COMMUNITY AS SHOWN BY THE PLAT RECORDED IN PLAT BOOK
7, PAGE 15, RECORDS OF ▇▇▇▇▇ COUNTY, MISSOURI.
SCHEDULE 1.01E
Schedule 1.01E
to
Facility Agreement
Part A
Real Property
Legal Description
for
Bethesda Nursing Center (803)
(Chanute, Kansas)
Beginning at a point on the West line of the NE 1/4 of Section 29, Township 27
South, Range 18 East of the 6th P.M., 50 feet North of the Southwest corner or
said NE 1/4; thence North, along the West line of said quarter, a distance of
623.4 feet; thence South 88 degrees 45' East, a distance of 137.2 feet to the
West side of Lafayette Avenue; thence S 01 degrees 16' West a distance of 27.63
feet to the South side of Twelfth Street; thence S 88 degrees 51' E a distance
of 187.0 feet to the Northeast corner of ▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇ ▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇ Second
Addition; thence South 1 degree 16' W a distance of 604.05 feet to the North
Right of Way line of Fourteenth Street; thence N 87 degrees 15'10" W along the
North Right-of-way line, a distance of 310.54 feet to the point of beginning,
subject to any part thereof in street, road or highway, now in and a part of the
City of Chanute, Neosho County, Kansas.
SCHEDULE 1.01E
Schedule 1.01E
to
Facility Agreement
Part A
Real Property
Legal Description
for
Country Club Home (809)
(Council Grove, Kansas)
▇▇▇▇ ▇, ▇, ▇, ▇, ▇, ▇, ▇, ▇, ▇, 10, 11, 12, 13, 14, 15, 42, 43, 44, 45, 46, 47,
48, 49 and 50, West Highland Addition to the City of Council Grove; and vacated
Kansas Street lying adjacent to its Lots 1 15, both inclusive and Lots 48, 49,
and 50, in said subdivision; and tract of land in Section 15, Township 16, Range
8, described as follows: Beginning at a point being the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ Addition to the City of Council Grove, and thence proceeding in
a Westerly direction and extending the South boundary line of said Lot 50, 285.5
feet; thence in a Northerly direction parallel with the West line of said ▇▇▇ ▇▇
▇▇▇ ▇▇▇ ▇ ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ Addition to the City of Council Grove, 234.81
feet; thence an Easterly direction 285.5 feet to a point designated as the
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ Addition to the City of Council Grove;
thence in a Southerly direction along the West line said ▇▇▇ ▇ ▇▇▇ ▇▇▇ ▇▇ ▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ Addition to the City of Council Grove to the point of beginning,
all in ▇▇▇▇▇▇ County, Kansas.***
SCHEDULE 1.03E
Schedule 1.01E
to
Facility Agreement
Part A
Real Property
Legal Description
for
Charlevoix Nursing Center (823)
(St. ▇▇▇▇▇▇▇, Missouri)
A tract of land in ▇▇▇ ▇▇. ▇▇ in Block 9 of ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇ Survey of the
St. ▇▇▇▇▇▇▇ Commons, Township 46 North, Range 5 East, more particularly
described as follows: Beginning at an iron pipe at the intersection of the South
right-of-way line of Boonslick Road, 60 feet wide, with the common lot line of
▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇'▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇, ▇▇▇▇▇ 9, ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇'▇ Survey;
thence South 59 degrees 28' West, 203.00 feet to the place of beginning of the
tract herein described; thence South 59 degrees 28' West, along the Southern
right-of-way of Boonslick Road, 13.83 feet to an iron pipe; thence continuing
along the Southern right-of-way of Boonslick Road South 73 degrees 45' West
170.88 feet to an iron pipe; thence continuing along the Southern right-of-way
of Boonslick Road South 81 degrees 51' West, 241.19 feet to an iron pipe; thence
leaving said Southern right-of-way the following bearings and distances: South 8
degrees 07' West, 391.29 feet to an iron pipe; on the Northern right-of-way line
of Interstate Highway 70; thence South 65 degrees 35' East, along said right-of-
way line 376.36 feet to an iron pipe; thence North 13 degrees 35' 30" East,
590.03 feet to an iron pipe; thence North 11 degrees 01' 30" West, 59.57 feet to
the place of beginning of the tract herein described.
SCHEDULE 1.01E
Schedule 1.01E
to
Facility Agreement
Part A
Real Property
Legal Description
for
Sedgwick Convalescent Center (833)
Sedgwick, Kansas
TRACT 1:
Lots Forty-five (45), Forty-seven (47) and Forty-nine (49) on Seventh Street in
▇▇▇▇'▇ Addition to the City of Sedgwick, Kansas as shown by the recorded plat
thereof.
TRACT 2:
Lots Thirty-nine (39), Forty-one (41) and Forty-three (43) on Seventh Street in
▇▇▇▇'▇ Addition to the City of Sedgwick, Kansas, as shown by the recorded plat
thereof.
TRACT 3:
All of Block "F" on Eight Street, ▇▇▇▇'▇ Addition to the City of Sedgwick,
Kansas, and Lots Fifty-one (51), Fifty-three (53), Fifty-five (55), Fifty-seven
(57), Fifty-nine (59), Sixty-one (61), Sixty-three (63), Sixty-five (65), Sixty-
seven (67) and Sixty-nine (69) on Seventh Street, in ▇▇▇▇'▇ Addition to the City
of Sedgwick, Kansas.
SCHEDULE 1.01E
Schedule 1.01E
to
Facility Agreement
Part A
Real Property
Legal Description
for
Medicenter-Springfield (834)
(Springfield, Missouri)
THE EAST ONE-HALF (E 1/2) OF LOTS FIFTY-THREE (53) AND FIFTY-FOUR (54), EXCEPT
THE SOUTH SEVENTY-SIX (76) FEET OF LOT FIFTY-FOUR (54) LATOKA HEIGHTS SUB-
DIVISION, IN SPRINGFIELD, ▇▇▇▇▇▇ COUNTY, MISSOURI ACCORDING TO THE RECORDED PLAT
THEREOF.
SCHEDULE 1.01E
Schedule 1.01E
to
Facility Agreement
Part A
Real Property
Legal Description
for
Hillhaven-Topeka (838)
Topeka, Kansas
The South 6 1/4 feet of Lot 221, all of Lots 223, 225, 227, 229, 231, 233, 235
and ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇'▇ ADDITION, and ▇▇▇▇ ▇▇▇, ▇▇▇, ▇▇▇, ▇▇▇, 234,
236, 238, 240 and the North 6 1/4 feet of ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, formerly
▇▇▇▇▇▇ Avenue, ▇▇▇▇▇▇ PLACE ADDITION, all in the City of Topeka, Shawnee County,
Kansas, together with that part of the vacated alley lying adjacent to said
lots.
SCHEDULE 1.01E
Schedule 1.01E
to
Facility Agreement
Part A
Real Property
Legal Description
for
Hillhaven-Wichita (844)
Wichita, Kansas
Parcel 1:
All of Lot 5, on Topeka Avenue, in ▇▇▇▇▇▇'▇ Addition to the City of Wichita,
Sedgwick County, Kansas.
Parcel 2:
All of ▇▇▇▇ ▇, ▇, ▇, ▇, ▇▇, ▇▇, ▇▇, ▇▇, 18, 20 and 22 on Topeka Avenue, in Clio
Addition to the City of Wichita, Sedgwick County, Kansas, together with the west
10 feet of the vacated alley adjacent to Lots 2, 4, 20 and 22, as vacated by
Ordinance No. 30-686 and by Ordinance No. 30-222.
SCHEDULE 1.01E
Schedule 1.01E
to
Facility Agreement
Part A
Real Property
Legal Description
for
▇▇▇▇▇▇▇ Holiday Home (857)
(Larned, Kansas)
TRACT 1: All of Blocks Seven (7) and Eight (8), of the Larned Community
Development Corporation Addition No. 3 to the City of ▇▇▇▇▇▇, Pawnee County,
Kansas, LESS AND EXCEPT TRACT 2 described below.
TRACT 2: A tract situate in Block Seven (7) and Eight (8), a portion of vacated
▇▇▇▇ ▇▇▇▇▇▇ situate between said Blocks 7 and 8 and the vacated alley of Block
7, Larned Community Development Corporation Addition No. 3, to the City of
▇▇▇▇▇▇, Pawnee County, Kansas, described as follows: Commencing at the Southeast
corner (SEc) of Block 6, L.C.D.C. No. 3, for a point of beginning, thence North
along the East line of Block 8, 257.00 feet to a point; thence West parallel
with the South line of Block 8, 81.00 feet to a point; thence North parallel
with the East line of Block 8, 43.00 feet to a point; thence West parallel with
the South line of Block 8, 142.00 feet to a point; thence North parallel with
the East line of Block 7, 180.00 feet to a point on the South right of way of
the alley through Block 7; thence West along the South alley right of way,
343.59 feet to a point on the East right of way of ▇▇▇▇▇▇ Avenue; thence South
along the East right of way of ▇▇▇▇▇▇ Avenue, 480.00 feet to a point at the
Southwest corner (SWc) of Block 8; thence East along the South boundary of Block
8, 565.51 feet to the point of beginning.
SCHEDULE 1.01E
Schedule 1.01E
to
Facility Agreement
Part A
Real Property
Legal Description
for
▇▇▇▇▇▇▇ Holiday Apartments (858)
(Larned, Kansas)
TRACT 1: All of Blocks Seven (7) and Eight (8), of the Larned Community
Development Corporation Addition No. 3 to the City of ▇▇▇▇▇▇, Pawnee County,
Kansas, LESS AND EXCEPT TRACT 2 described below.
TRACT 2: A tract situate in Block Seven (7) and Eight (8), a portion of vacated
▇▇▇▇ ▇▇▇▇▇▇ situate between said Blocks 7 and 8 and the vacated alley of Block
7, Larned Community Development Corporation Addition No. 3, to the City of
▇▇▇▇▇▇, Pawnee County, Kansas, described as follows: Commencing at the
Southeast corner (SEc) of Block 8, L.C.D.C. No. 3, for a point of beginning,
thence North along the East line of Block 8, 257.00 feet to a point; thence West
parallel with the South line of Block 8, 81.00 feet to a point; thence North
parallel with the East line of Block 8, 43.00 feet to a point; thence West
parallel with the South line of Block 8, 142.00 feet to a point; thence North
parallel with the East line of Block 7, 180.00 feet to a point on the South
right of way of the alley through Block 7; thence West along the South alley
right of way, 343.59 feet to a point on the East right of way of ▇▇▇▇▇▇ Avenue;
thence South along the East right of way of ▇▇▇▇▇▇ Avenue, 480.00 feet to a
point at the Southwest corner (SWc) of Block 8; thence East along the South
boundary of Block 8, 565.51 feet to the point of beginning.
SCHEDULE 1.01E
Schedule 1.01E
to
Facility Agreement
Part A
Real Property
Legal Description
for
Green ▇▇▇▇▇▇▇ Nursing Center (861)
(Haysville, Kansas)
▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇ ▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ Addition, Haysville, Sedgwick
County, Kansas.
SCHEDULE 1.01E
Schedule 1.01E
to
Facility Agreement
Part A
Real Property
Legal Description
for
Indian Creek Nursing Center (895)
(Overland Park, Kansas)
All that part of Tract 4, ▇▇▇▇▇▇▇ 103, a subdivision of land now the City of
Overland Park, ▇▇▇▇▇▇▇ County, Kansas, more particularly described as follows:
Beginning at the Northwesterly corner of said Tract 4; thence North 68 degrees
31 minutes 24 seconds East, along the Northerly line of said Tract 4, a distance
of 319.37 feet; thence South 60 degrees minutes 31 seconds East, along the
Northerly line of said Tract 4 distance of 269.12 feet, to the Northeasterly
corner thereof; the South 2 degrees 07 minutes 20 seconds East, along the East
line o: said Tract 4, a distance of 558.60 feet, to a point on the Easterly
extension of the centerline of a 15 foot water line easement to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇. ▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, as filed in Volume 1032 Page 879 in the Office
of the Register of Deeds of ▇▇▇▇▇▇▇ County Kansas; thence South 88 degrees 58
minutes 59 seconds West, along centerline and its extension of said 15 foot
water line easement, distance of 340.43 feet, to a point on the Westerly line of
said Tract 4; thence Northwesterly, along the Westerly line of said Tract 4,
said line being on a curve to the left, having a radius of 11.56, feet, a
central angle of 3 degrees 47 minutes 22 seconds and whose initial tangent
bearing is Northwest 19 degrees 59 minutes 55 seconds West, a distance of 103.17
feet, to a point of tangency; thence N 23 decrees 47 minutes 17 seconds West,
along the Westerly line of said Tract 4, a distance of 260 feet to a point of
curvature; the: Northwesterly, along the Westerly line of said Tract 4, said
line being on a curve to the right, having a radius of 1,270 feet and central
angle of 4 degrees 19 minutes, a distance of 95.68 feet; thence North 10 degrees
11 minutes 36 seconds West, along the Westerly line of said Tract 4, a distance
of 75,82 feet; thence Northwesterly, along the Westerly line of said Tract 4,
said line being on a curve to the right, having a radius of 1,260 feet, a
central angle of 3 degrees 48 minutes 44 seconds, and whose initial tangent
bearing is North 16 degrees 04 minutes West, a distance of 83.84 feet, to the
point of beginning.
SCHEDULE 1.01E
Schedule 1.01E
to
Facility Agreement
Part A
Real Property
Legal Description
for
Indian ▇▇▇▇▇▇▇ Nursing Center (896)
(Overland Park, Kansas)
TRACT I:
The South 350 feet of the West 350 feet of the Northeast 1/4 of the Northwest
1/4 of Section 8, Township 13, Range 25, in the City of Overland Park, in
▇▇▇▇▇▇▇ County, Kansas, together with the easements described in Tract III.
TRACT II:
All that part of the West 1/2 of the Northeast 1/4 of the Northwest 1/4 of
Section 8, Township 13, Range 25, in the City of Overland Park, ▇▇▇▇▇▇▇ County,
Kansas, described as follows: Beginning at a point on the West line of said 1/4,
1/4 Section, said point being North 0 degrees 0 minutes 54 Seconds West a
distance of 400 feet from the Southwest corner of said 1/4, 1/4 Section; thence
North 0 degrees 0 minutes 54 seconds West along the West line of said 1/4, 1/4
Section a distance of 491.18 feet; thence North 89 degrees 59 minutes 06 seconds
East a distance of 36.02 feet to a point on the Westerly line of a roadway
easement granted in Miscellaneous Book 205, at Page 88 and Misc. Book 206, at
Page 414; thence Southeasterly along a curve to the right, the initial tangent
having a bearing of South 56 degrees 37 minutes 35 seconds East, having a radius
of 588.88 feet; a distance of 152.55 feet; thence along a curve to the right,
tangent
SCHEDULE 1.01E
to the last mentioned curve having a radius of 856.50 feet, a distance of 131.30
feet; thence along a curve to the right, tangent to the last mentioned curve,
having a radius of 1407.50 feet, a distance of 98.26 feet; thence along a curve
to the right, tangent to the last mentioned curve, having a radius of 384.26
feet, a distance or 127.43 feet; thence South 10 degrees East a distance of 14
feet; thence along a curve to the left having the last described course as a
tangent, having a radius of 343.50 feet, a distance of 72.36 feet to a point 400
feet North of the South line of said 1/4, 1/4 Section thence South 80 degrees
(deeded) 89 degrees (measured) 53 minutes 59 seconds West and parallel to the
South line of said 1/4, 1/4 Section a distance of 346.03 feet to the point of
beginning; and also the North 50 feet of the South 400 feet of the West 350 feet
of the West 1/2 of the Northeast 1/4 of the Northwest 1/4 of Section 8, Township
13, Range 25, in the City of Overland Park, ▇▇▇▇▇▇▇ County, Kansas, together
with the easements described in Tract III.
TRACT III:
Permanent easements and right-of-way for ingress and egress and for signs
appurtenant to the aforesaid premises, as recorded in Misc. Book 204, at Page
88, as File No. 847494, over the following described property:
All that part of the Northeast 1/4 of the Northwest 1/4 of Section 8 Township
13, Range 25, now in the City of Overland Park, ▇▇▇▇▇▇▇ County, Kansas, more
particularly described as follows: Beginning a point on the North line of the
Northeast 1/4 of the Northwest 1/4 of said Section 8 and 65 feet East of the
Northwest corner thereof; thence South 0 degrees 04 minutes 08 seconds East,
along a line perpendicular to the North line of the Northeast 1/4 of said
Section 8, a distance of 40 feet to the true point of beginning of subject
tract; thence North 89 degrees 55 minutes 52 seconds East, a distance of 20
feet; thence South 0 degrees 04 minutes 08 seconds East, a distance of 25 feet;
thence Northwesterly to the true point of beginning of subject tract, and all
that part of the Northeast 1/4 of the Northwest 1/4 of Section 8, Township 13,
Range 25, now in the City of Overland Park, ▇▇▇▇▇▇▇ County, Kansas, more
particularly described as follows: Beginning at a point on the North line of the
Northeast 1/4 of the Northwest 1/4 of said Section 8 and 155 feet East of the
Northwest corner thereof; thence South 0 degrees 04 minutes 08 seconds East,
along a line perpendicular to the North line of the Northeast 1/4 of the
Northwest 1/4 of said Section 8 a distance of 40 feet, to the true point of
beginning of subject tract thence South 89 degrees 55 minutes 52 seconds West, a
distance of 20 feet; thence South 0 degrees 04 minutes 08 seconds East, a
distance of 25 feet; thence Northeasterly, to the true point of beginning of
subject tract; and permanent easements for roadway, utility services and the
right of ingress and egress, as recorded in Misc. Book 205, at Page 88, as File
No. 849273, and in Misc. Book 206, at Page 414, as File No. 852253, over the
following described property:
A strip of land 50 feet in width across a part of the Northeast quarter of the
Northwest quarter of Section 8, Township 13, Range 25
SCHEDULE 1.01E
now in the City of Overland Park, ▇▇▇▇▇▇▇ County, Kansas, lying 25 feet on each
side of the following described centerline: Beginning at a point on the North
line of the Northeast quarter of the Northwest quarter of said Section 8 and 110
feet East of the Northwest corner thereof; thence South 0 degrees 04 minutes 08
seconds East, along a line perpendicular to the North line of the Northeast
quarter of the Northwest quarter of said Section 8, a distance of 110 feet to a
point of curvature; thence southerly and Southwesterly, along a curve to the
right having a radius of 818.5 feet, a distance of 316.99 feet; thence
Southeasterly, along a curve to the right having a radius of 613.88 feet and
whose initial tangent bearing is South 56 degrees 37 minutes 35 seconds East, a
distance of 159.03 feet, to a point of compound curvature; thence Southeasterly
along a curve to the right having a radius of 881.50 feet, a distance of 135.13
feet, to a point of compound curvature; thence Southeasterly along a curve to
the right having a radius of 1432.5 feet, a distance of 100.01 feet, to a point
of compound curvature; thence Southeasterly and southerly along a curve to the
right having a radius of 409.26 feet, a distance of 135.72 feet; to a point of
tangency; thence South 10 degrees 00 minutes East, a distance of 14 feet, to a
point of curvature; thence southerly and southeasterly, along a curve to the
left having a radius of 318.50 feet, a distance of 266.83 feet ... and ...
Beginning at a point on the West line of the Northeast quarter of the Northwest
quarter of said Section 8 an 375 feet North of the South line of the Northeast
quarter of the Northwest quarter of said Section 8; thence easterly, along a
line 375 feet North of and parallel to the South line of the Northeast quarter
of the Northwest quarter of said Section 8, a distance of 385.90 feet; and a
strip of land 10 feet wide adjacent to and parallel with the West line of the
entire tract of land described the above easement for roadway purposes.
SCHEDULE 1.01E
Schedule 2.03(a)
to
Facility Agreement
Certain Assumed Liabilities
All obligations and liabilities for any and all services and all goods
(including, but not limited to, perishable and nonperishable food, central
supplies, linen, housekeeping and other supplies) that are ordered by or on
behalf of the Seller in the ordinary course prior to the Closing Date for
provision to, or use in connection with the operation of, any of the Facilities,
and which are provided or received at such Facilities after the Closing Date.
SCHEDULE 2.03(A)
[Schedule 2.07 - Allocation Schedule]
Schedule 2.08(c)
to
Facility Agreement
Promissory Note Principal Amounts
Promissory Notes (as identified
by the respective Owned Facilities) Principal Amounts
----------------------------------- -----------------
Bethesda Nursing Center (803) $ 922,500.00*
Chanute, Kansas
Charlevoix Nursing Center (823) 1,617,300.00**
St. ▇▇▇▇▇▇▇, Missouri
▇▇▇▇▇▇▇ House Healthcare (445) 7,760,700.00
Ballwin, Missouri
Columbia House Healthcare (446) 2,340,000.00
Columbia, Missouri
Country Club Home (809) 2,700,000.00
Council Grove, Kansas
Green ▇▇▇▇▇▇▇ Nursing Center (861) 4,131,000.00
Haysville, Kansas
▇▇▇▇▇▇▇ Holiday Home/Apartments (857/858) 1,597,500.00
Larned, Kansas
Hillhaven-Topeka (838) 3,591,000.00
Topeka, Kansas
Hillhaven-Wichita (844) 513,000.00
Wichita, Kansas
Indian Creek Nursing Center (895) 1,516,500.00
Overland Park, Kansas
Indian ▇▇▇▇▇▇▇ Nursing Center (896) 1,516,500.00
Overland Park, Kansas
_________________________
* Initially, to be paid by the applicable Buyer as Rent pursuant to the
Bethesda Sublease. See Section 2.01 of the Facility Agreement.
** Initially, to be paid by the applicable Buyer as Rent pursuant to the
Charlevoix Lease. See Section 2.01 of the Facility Agreement.
-1- SCHEDULE 2.08(C)
Medicenter-Springfield (834) 4,050,000.00
Springfield, Missouri
Sedgwick Convalescent Center (833) 990,000.00***
Sedgwick, Kansas
Tradition House Healthcare (260) 1,404,000.00
Joplin, Missouri
_________________________
***Initially, to be paid by the applicable Buyer as Rent pursuant to the
Sedgwick Sublease. See Section 2.01 of the Facility Agreement
-2- SCHEDULE 2.08(C)
Schedule 2.11
to
Facility Agreement
Subsidy Reduction Upon Certain Sublease Terminations
Facility Name and Location Percentage Subsidy Reduction
-------------------------- ----------------------------
Crestview Healthcare (251) 4.92 %
Ava, Missouri
Hickory Lane Care Center (253) 3.28
Buffalo, Missouri
Des ▇▇▇▇▇ Health Care (255) 4.10
Des ▇▇▇▇▇, Missouri
Hillside Healthcare (256) 8.20
Jefferson, Missouri
▇▇▇▇▇▇▇▇▇ Healthcare (257) 6.97
▇▇▇▇▇▇▇▇▇, Missouri
Lakeview Health Care Center (261) 4.43
Lamar, Missouri
Shady Oaks Health Care Center (262) 2.46
Thayer, Missouri
Crane Health Care Center (263) 1.64
Crane, Missouri
Table Rock Health Care Center (265) 5.75
▇▇▇▇▇▇▇▇▇▇ City, Missouri
Table Rock Health Care Center
Residential Project (266) 3.28
▇▇▇▇▇▇▇▇▇▇ City, Missouri
Wornall Health Care Center (819) 32.82
Kansas City, Missouri
Blue Hills Living Center/Centre (843/860) 22.15
Kansas City, Missouri
SCHEDULE 2.11
Schedule 2.12
to
Facility Agreement
Subsidy Reduction
PART A
------
Census as of 02/12/92
Facility Name and Location Census
-------------------------- ------
Crestview Healthcare (251) 64.0
Ava, Missouri
Hickory Lane Care Center (253) 53.0
Buffalo, Missouri
Sycamore View Healthcare (254) 80.6
Clinton, Missouri
Des ▇▇▇▇▇ Health Care (255) 37.8
Des ▇▇▇▇▇, Missouri
Hillside Healthcare (256) 47.3
Jefferson, Missouri
▇▇▇▇▇▇▇▇▇ Healthcare (257) 17.9
▇▇▇▇▇▇▇▇▇, Missouri
Joplin House Healthcare (259) 67.8
Joplin, Missouri
Tradition House Healthcare (260) 71.3
Joplin, Missouri
Lakeview Health Care Center (261) 56.8
Lamar, Missouri
Shady Oaks Health Care Center (262) 74.0
Thayer, Missouri
Crane Health Care Center (263) 64.0
Crane, Missouri
Table Rock Health Care Center (265) 64.3
▇▇▇▇▇▇▇▇▇▇ City, Missouri
Clayton House Healthcare (445) 97.7
Ballwin, Missouri
-1- SCHEDULE 2.12
Facility Name and Location Census
-------------------------- ------
Columbia House Healthcare (446) 101.8
Columbia, Missouri
Wornall Health Care Center (819) 49.0
Kansas City, Missouri
Charlevoix Nursing Center (823) 85.4
St. ▇▇▇▇▇▇▇, Missouri
Medicenter-Springfield (834) 71.5
Springfield, Missouri
Blue Hills Centre (860) 55.5
Kansas City, Missouri
-2- SCHEDULE 2.12
Schedule 2.12
to
Facility Agreement
Subsidy Reduction
PART B
------
Missouri Medicaid Per Diem Rate
Facility Name and Location Medicaid Per Diem Rate
-------------------------- ----------------------
Crestview Healthcare (251) $35.60
Ava, Missouri
Hickory Lane Care Center (253) 36.97
Buffalo, Missouri
Sycamore View Healthcare (254) 41.62
Clinton, Missouri
Des ▇▇▇▇▇ Health Care (255) 46.04
Des ▇▇▇▇▇, Missouri
Hillside Healthcare (256) 48.60
Jefferson, Missouri
▇▇▇▇▇▇▇▇▇ Healthcare (257) 43.62
▇▇▇▇▇▇▇▇▇, Missouri
Joplin House Healthcare (259) 40.45
Joplin, Missouri
Tradition House Healthcare (260) 40.72
Joplin, Missouri
Lakeview Health Care Center (261) 35.60
Lamar, Missouri
Shady Oaks Health Care Center (262) 39.14
Thayer, Missouri
Crane Health Care Center (263) 55.56
Crane, Missouri
Table Rock Health Care Center (265) 54.81
▇▇▇▇▇▇▇▇▇▇ City, Missouri
Clayton House Healthcare (445) 56.98
Ballwin, Missouri
-1- SCHEDULE 2.12
Facility Name and Location Medicaid Per Diem Rate
-------------------------- ----------------------
Columbia House Healthcare (446) $47.83
Columbia, Missouri
Wornall Health Care Center (819) 56.98
Kansas City, Missouri
Charlevoix Nursing Center (823) 56.98
St. ▇▇▇▇▇▇▇, Missouri
Medicenter-Springfield (834) 54.15
Springfield, Missouri
Blue Hills Centre (860) 56.98
Kansas City, Missouri
-2- SCHEDULE 2.12
Schedule 2.12 - Subsidy Reduction
PART C
------
Schedule 3.04
to
Facility Agreement
Seller Litigation
1. Joplin House Healthcare (259). The facility received a letter
-----------------------------
from the lawyer of a resident alleging that the resident suffered head and
facial injuries while being transferred from an Arjo Century Tub. The lawyer
indicated an intent to make a formal demand in the matter.
2. Tradition House Healthcare (260). A lawsuit was filed in ▇▇▇▇▇▇
--------------------------------
County on July 20, 1990, by the children of a deceased former resident of the
facility. The children allege that the former resident's death was wrongful due
to failure of the attending physician and the Seller to provide proper care for
the former resident's diabetic condition.
3. Clayton House Healthcare (445). A lawsuit was filed in the
------------------------------
Circuit Court for St. Louis County in April of 1990 by the wife and children of
a deceased former resident who suffered from Alzheimer's disease and died as a
result of a fall. The wife and children allege that the former resident's death
was wrongful due to the negligent failure of the Seller to restrain and monitor
the former resident.
4. Columbia House Healthcare (446). A lawsuit was filed on April
-------------------------------
16,1992, by a resident of the facility who was allegedly injured while being
transported by a driver employed by the facility.
5. Sedgwick Convalescent Center (833). Pursuant to an annual survey
----------------------------------
performed in February of 1992 by the State of Kansas on behalf of the federal
government, the facility received a Level A deficiency with respect to its
ability to meet the care needs of individual residents. Upon subsequent re-
survey, the State removed the Level A deficiency.
6. Blue Hills Living Center (843). The facility received a letter
------------------------------
from the lawyer of a resident of the facility who was allegedly injured in an
automobile accident occurring while an employee of the facility was attempting
to take the resident to a medical appointment using the employee's car. The
lawyer requested the resident's medical records.
7. Hillhaven Convalescent Center - Wichita (844). A lawsuit was
---------------------------------------------
filed in Sedgwick County on January 6. 1992, by a delivery person who claims to
be suffering from health problems resulting from an incident in which he
allegedly was splashed with and inhaled potassium hydroxide while delivering
food to the facility.
8. Blue Hills Centre (860). A lawsuit was filed in ▇▇▇▇▇▇▇ County on
-----------------------
July 30, 1991, by a resident of the facility who alleges she suffered injuries
(broken hips) as a result of the Seller's negligence.
9. Blue Hills Centre (860). A lawsuit was filed in ▇▇▇▇▇▇▇ County on
-----------------------
March 4, 1991, by the general contractor who constructed the facility. The
general contractor alleges that NME Properties Corporation and Hillhaven
Properties. Ltd. acted wrongfully in claiming structural problems and making
only a partial payment.
-1- SCHEDULE 3.04
10. Blue Hills Centre (860). A complaint was filed with the EEOC by a
-----------------------
former employee of the facility alleging that the former employee suffered
discrimination due to his race.
11. Green ▇▇▇▇▇▇▇ Nursing Center (861). A complaint was filed with
----------------------------- ----
the EEOC by a former employee of the facility alleging that the former employee
suffered discrimination at the facility due to her age and gender.
12. Indian ▇▇▇▇▇▇▇ Nursing Center (896). A complaint was filed with
------------------------------ ----
the EEOC by a former employee of the facility who claims she was constructively
discharged in January of 1991 as a result of being sexually harassed by another
employee at the facility. The EEOC is currently investigating the claim.
13. All Facilities. There are a total of 117 workers' compensation
--------------
claims outstanding for a total incurred of $1,657,606.
14. Certain Facilities. The following items reflect matters regarding
------------------
which the Seller has been contacted by a lawyer, but which reasonably are not
expected to have a Material Adverse Effect.
a. Hillside Healthcare (256). On or near September 1,1990, the
-------------------------
Seller received a letter from a lawyer requesting medical records of a resident
who is dissatisfied with the care the resident received at the facility.
b. Hillside Healthcare (256). On or near August 4,1991, the
-------------------------
Seller received a letter from a lawyer regarding a resident who suffered a hip
injury at the facility.
c. Hillhaven - Wichita (844). On or near April 16, 1991, the
-------------------------
Seller received a letter from a lawyer requesting medical records of a resident.
▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ Nursing Center (861). On or near November 15,
----------------------------------
1990, the Seller received a letter from a lawyer alleging that the Seller did
not care for a now deceased former resident in a timely manner.
-2- SCHEDULE 3.04
Schedule 3.08 - Licensure
Schedule 3.10
to
Facility Agreement
Life Care Contracts
None.
SCHEDULE 3.10
Schedule 4.04
to
Facility Agreement
Buyer Litigation
None.
SCHEDULE 4.04
Exhibit A
to
Facility Agreement
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of
[____________________], 1992 (this "Agreement"), is made between FIRST
HEALTHCARE CORPORATION, a Delaware corporation (the "Seller"), and
[______________________], a North Carolina limited partnership (the "Buyer").
RECITALS
A. The Seller and the Buyer and affiliates of the Buyer have entered
into a Facility Agreement, dated as of April 23, 1992 (the "Facility
Agreement").
B. The execution and delivery of this Agreement by the Seller and
the Buyer is a condition precedent to the respective obligations of the Seller
and the Buyer and such Affiliates to consummate the transactions contemplated by
the Facility Agreement
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements set forth in this Agreement, and for other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the Seller and
the Buyer, the Seller and the Buyer agree as follows:
1. The Seller hereby sells, assigns, transfers and conveys to the
Buyer the Seller's right, title and interest in, to and under, and hereby
delegates to the Buyer the Seller's duties and obligations under, (a) the
leases, licenses, contracts and agreements listed or otherwise described in
Schedule 1 (individually, an "Assumed Contract" and collectively, the "Assumed
Contracts") and (b) the obligations and liabilities listed or otherwise
described in Schedule 2 (all such obligations and liabilities, together with all
duties, obligations and liabilities of the Seller under the Assumed Contracts
(other than obligations or liabilities attributable to any failure by the Seller
to comply with the provisions of the Assumed Contracts prior to the date of this
Agreement), being individually an "Assumed Liability" and collectively the
"Assumed Liabilities".
2. The Buyer hereby accepts the sale, assignment, transfer and
conveyance of the Seller's right, title and interest in, to and under, and the
delegation of the Seller's duties and obligations under, the Assumed Contracts
and the Assumed Liabilities. The Buyer hereby assumes the Assumed Contracts and
the Assumed Liabilities. The Buyer hereby further agrees to pay, perform and
discharge promptly and fully when due the Assumed Liabilities and timely to
perform and observe the covenants, agreements, terms and conditions of the
Assumed Contracts on the Seller's part to be performed and observed on or after
the date of this Agreement in the same manner and with the same force and effect
as if the Buyer had originally executed the Assumed Contracts in the place and
stead of the Seller.
3. Notwithstanding anything in this Agreement to the contrary, (i)
this Agreement shall not constitute a sale, assignment, transfer, conveyance or
delegation of any Assumed Contract or any duty, obligation or liability under
any Assumed Contract, if an attempted
-1- EXHIBIT A
assignment thereof, without the consent of any third party, would constitute a
breach or other contravention of such Assumed Contract or would result in the
cancellation, termination, invalidity or unenforceability of such Assumed
Contract or would in any other way adversely affect the rights and benefits of
the Seller or the Buyer under such Assumed Contract, and (ii) this Agreement
shall not affect the respective rights and obligations of the Seller and the
Buyer under Sections 10.02 and 10.03 of the Facility Agreement.
4. If any action or proceeding is commenced to enforce or interpret
this Agreement, the prevailing party shall be entitled to recover from the non-
prevailing party the costs and expenses of maintaining such action or
proceeding, including reasonable attorneys' fees and disbursements (including
reasonable charges allocated for internal corporate counsel) incurred before
such action or proceeding is commenced, before trial, at trial, after trial and
on appeal, whether the action or proceeding is at law, in equity or in a
bankruptcy case or proceeding.
5. This Agreement shall be binding upon, and shall inure to the
benefit of, the Seller, the Buyer and their respective successors and assigns.
6. This Agreement may be executed in any number of counterparts and
by different parties to this Agreement in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same Agreement. Delivery of an
executed counterpart of a signature page to this Agreement via telephone
facsimile transmission shall be effective as delivery of a manually executed
counterpart of this Agreement.
7. The Buyer hereby irrevocably submits to the jurisdiction of any
court of the State of Washington or any federal court of the United States of
America for any district of the State of Washington, and any appellate court
from any of such courts, in any action or proceeding arising from or by reason
of, or otherwise relating to, this Agreement, and the Buyer hereby irrevocably
agrees that all claims in respect of such action or proceeding may be heard and
determined in such court of the State of Washington or in such federal court of
the United States of America for any district of the State of Washington. The
Buyer, to the fullest extent permitted by applicable law, hereby irrevocably
waives the defense of an inconvenient forum to the maintenance of such action or
proceeding. The Buyer agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Section 7 shall affect the right of the Seller to serve legal process in any
other manner permitted by law or shall affect the right of the Seller to bring
any action or proceeding against the Buyer or the Buyer's property in the courts
of any other jurisdictions.
8. Each of the Seller and the Buyer hereby irrevocably waives all
right to trial by jury in any action, proceeding or counterclaim (whether based
upon contract, tort or otherwise) arising from or by reason of or relating to
this Agreement or any actions of the Seller or the Buyer in the negotiation,
administration, performance or enforcement of this Agreement
9. This Agreement shall be deemed to be a contract made under the
laws of the State of Washington, and for all purposes shall be governed by, and
construed in all respects (including matters of construction, validity and
performance) in accordance with, the laws of the State of Washington, without
regard to the conflicts of law rules of such state.
-2- EXHIBIT A
IN WITNESS WHEREOF, the Seller and the Buyer have caused this
Agreement to be duly executed as of the date first above written.
FIRST HEALTHCARE CORPORATION [NAME OF THE BUYER]
By MEADOWBROOK MANOR OF KANSAS
& MISSOURI, INC.,
General Partner
By____________________
Title:___________________
By ____________________
Title:_____________________
-3- EXHIBIT A
Schedule 1
to
Assignment and Assumption Agreement
Assumed Contracts
-----------------
[Reserved.]
EXHIBIT A
Schedule 2
to
Assignment and Assumption Agreement
Certain Assumed Liabilities
---------------------------
1. All obligations and liabilities for any and all services and all goods
(including, but not limited to, perishable and nonperishable food,
central supplies, linen, housekeeping and other supplies) that are
ordered by or on behalf of the Seller in the ordinary course prior to
the date of this Agreement for provision to, or use in connection with
the operation of, the [name of Facility] located in [__________,
____________] (the "Facility"), and which are provided or received at
the Facility after the date of this Agreement.
2. [Reserved.]
EXHIBIT A
CONSENT AND RELEASE
The undersigned hereby acknowledges notice of, and hereby consents to
the terms and provisions of, the foregoing Assignment and Assumption Agreement,
dated as of [________________], 1992 (the "Assignment"), between FIRST
HEALTHCARE CORPORATION, a Delaware corporation (the "Seller"), and
[_____________________], a North Carolina limited partnership (the "Buyer"). The
undersigned hereby releases the Seller and all subsidiaries and other affiliates
of the Seller from all duties, obligations and liabilities arising under or by
reason of the Assigned Agreement (as defined below) on and after the date of the
Assignment.
For the purposes of this Consent and Release, the term "Assigned
Agreement" means that certain [_____________________], dated [as of]
[__________________], 19[____], between the Seller and the undersigned, as the
same has been supplemented, amended or otherwise modified.
DATED: [____________], 1992
[NAME OF CONSENTING PARTY]
By _____________________________
Title: ______________________
EXHIBIT A
Exhibit B
to
Facility Agreement
PROMISSORY NOTE
$[______________]/1/ Tacoma, Washington
[________], 1992/2/
FOR VALUE RECEIVED, the undersigned, [________________], a North Carolina
limited partnership (the "Maker"), HEREBY PROMISES TO PAY to the order of FIRST
HEALTHCARE CORPORATION, a Delaware corporation (the "Payee"), the principal sum
of [_________________________________ and /100] Dollars
($[_________________])/3/, plus interest, on the terms set forth below.
1. Interest. The unpaid principal sum of this Promissory Note shall bear
--------
interest, from the date of this Promissory Note until such principal sum is paid
in full, at the rates of interest per annum (the "Regular Rate") equal to:
(a) Nine percent (9%) per annum from [________], 1992/4/, to
[_________] 199[__]/5/; and
(b) Eleven percent (11%) per annum from [________], 199[_____]/6/, to
[___________], 199[___]/7/;
provided that any amount of principal of this Promissory Note that is not paid
--------
when due (whether at stated maturity, by acceleration or otherwise) shall bear
interest, from the date on which such amount is due until such amount is paid in
full, payable on demand, at a rate per annum (the "Default Rate") equal at all
times to the sum of the Regular Rate plus five percent (5%) per annum.
2. Repayment and Interest The Maker shall pay the principal of, and the
----------------------
interest on, this Promissory Note in consecutive monthly installments of
principal and interest as follows:
_______________________
/1/ Insert the appropriate principal amount from Schedule A attached hereto.
/2/ Insert the Closing Date.
/3/ Insert the appropriate principal amount from Schedule A attached hereto.
/4/ Insert the Closing Date.
/5/ Insert the first day of the 42nd month following the month in which the
Closing occurs.
/6/ Insert the first day of the 42nd month following the month in which the
Closing occurs.
/7/ Insert the first day of the 84th month following the month in which the
Closing occurs.
-1- EXHIBIT B
(a) consecutive monthly installments of principal and interest in the
amount of [____________] and [____]/100] Dollars
($[__________________])/8/, payable on the first day of each calendar
month, commencing on [________________], 1992/9/, and ending on
[______________], 199[____]/10/; and
(b) consecutive monthly installments of principal and interest in the
amount of [____________] and [____]/100] Dollars
($[__________________])/11/, payable on the first day of each calendar
month, commencing on [________________], 199[____]/12/, and ending on
[_________________], 199[____]/13/;
provided that the final installment on [___________________], 199[____]/14/,
--------
shall be in the amount necessary to pay in full the then unpaid principal amount
of this Promissory Note plus all interest then accrued on this Promissory Note.
3. Application of Payments. Except as otherwise expressly provided in
-----------------------
this Promissory Note, each payment under this Promissory Note, at the option of
the Payee, may be applied first to any costs and expenses payable by the Maker
under this Promissory Note, then to any late charges payable under this
Promissory Note, then to interest then accrued, and then to principal.
4. Prepayments: Release Premium. So long as no Event of Default shall
----------------------------
have occurred and be continuing, the Maker may prepay the unpaid principal
amount of this Promissory Note, in whole or in part, plus accrued interest to
the date of such prepayment on the principal amount prepaid, plus any late
charges then payable under this Promissory Note, plus any costs and expenses
then payable under this Promissory Note; provided that each partial prepayment
--------
shall be in a principal amount of not less than $5,000; provided, further that
-------- -------
upon prepayment in whole of the unpaid principal amount of this Promissory Note
plus such accrued interest, late charges and costs and expenses the Maker shall
pay to First Healthcare Corporation, a Delaware corporation, a release premium
(the "Release Premium") in an amount, determined at the date of such prepayment,
equal to five percent of the principal amount of this Promissory Note that would
then have been outstanding if this Promissory Note had been timely paid in
accordance with the regularly scheduled required installment payments provided
for in Section 2 without regard to any prepayments. The Release Premium shall be
applied as provided in the Mortgage (as defined below). Each partial prepayment
of this Promissory Note shall be applied first to any costs and expenses then
payable by the Maker under this Promissory Note, second to any late charges then
payable under this Promissory Note, third to interest then accrued on this
Promissory Note, and then to the principal installments under this Promissory
Note in the inverse order of their maturities without deferral or limitation of
the intervening installments of principal or interest.
_______________________
/8/ Compute on the basis of a 30-year amortization schedule.
/9/ Insert the first day of the month immediately following the month in which
the Closing occurs.
/10/ Insert the first day of the 42nd month following the month in which the
Closing occurs.
/11/ Compute on the basis of a 30-year amortization schedule.
/12/ Insert the first day of the 43rd month following the month in which the
Closing occurs.
/13/ Insert the first day of the 84th month following the month in which the
Closing occurs.
/14/ Insert the first day of the 84th month following the month in which the
Closing occurs.
-2- EXHIBIT B
5. Late Charge. If any installment of principal or interest is not paid
-----------
within ten days after such installment becomes due and payable, then the Maker
shall pay a late charge, with respect to each such delinquent installment, equal
to the lesser of (a) five percent of the amount of such delinquent installment
or (b) $500.00. The Maker acknowledges that the actual damages that the Payee
would incur due to the Maker's late payment are impossible to determine
accurately and that such late charge is a reasonable estimate of such actual
damages.
6. Payments and Computations.
-------------------------
(a) All payments under this Promissory Note shall be payable in
lawful money of the United States of America, to the Payee at ▇.▇. ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Accounting, or at such
other place as the Payee may specify in writing from time to time. Whenever any
payment to be made under this Promissory Note is stated to be due on a day when
banks are required or authorized to close in Raleigh, North Carolina, or Tacoma,
Washington, such payment may be made on the next succeeding day on which banks
are not so required or authorized to close, and such extension of time shall in
such case be included in the computation of payment of interest.
(b) All computations of interest shall be made by the Payee on the
basis of a year of 360 days, in each case for the actual number of days
(including the first day, but excluding the last day) occurring in the period
for which such interest is payable.
(c) Whenever the computation of a period of time from a specified
date to a later specified date is required by this Promissory Note, the word
"from" shall mean "from and including" and each of the words "to" and "until"
shall mean "to but excluding."
7. Security. This Promissory Note and payment of the sums evidenced
--------
by this Promissory Note are secured by a [Mortgage,] [Deed of Trust,]
Assignment, Security Agreement and Financing Statement (Fixture Filing), dated
of even date with this Promissory Note (said agreement, as it may be
supplemented, amended or otherwise modified from time to time, being the
"Mortgage"), executed and delivered by the Maker to the Payee.
8. Guaranty. Payment of twenty percent (20%) of the Makers total
--------
obligations at any time outstanding under this Promissory Note in respect of
principal, interest and any late charges, has been jointly and severally
guaranteed by ▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (together, the "Guarantors"),
pursuant to a Guaranty, dated of even date with this Promissory Note, for the
benefit of the Payee.
9. Events of Default; Remedies. If any of the following events
---------------------------
("Events of Default") shall occur and be continuing:
(a) The Maker shall fail to pay any principal of, or interest
on, this Promissory Note within ten days alter the same becomes due and payable;
or
(b) The Maker shall fail to pay any other sum (whether for
premium, fees, expenses or otherwise) under this Promissory Note, the Mortgage
or the Facility Agreement (as defined below) when and as the same become due and
payable, whether on any stated due date, at maturity or upon acceleration, and
such failure shall remain unremedied for ten days after written notice of such
failure shall have been given to the Maker by the Payee; or
(c) Any representation or warranty made by the Maker (or any
general partner in the Maker or any officers of any general partner in the
Maker) or any Guarantor under or in connection
-3- EXHIBIT B
with any Transaction Document (as defined in the Facility Agreement) shall prove
to have been incorrect in any material respect when made; or
(d) The Maker shall fail at any time to obtain, provide,
maintain or keep in force the insurance policies required by the Mortgage; or
(e) The Maker shall fail to perform or observe any other
provision contained in any Transaction Document on the Maker's part to be
performed or observed a such failure shall remain unremedied beyond the
applicable grace period for such provision or, if no such grace period is
applicable, if such failure shall remain unremedied for thirty days after
written notice of such failure shall have been given to the Maker by the Payee;
or
(f) The Maker shall fail to pay any principal of or premium or
interest on any indebtedness (but excluding indebtedness evidenced by this
Promissory Note) of the Maker in an aggregate principal amount of at least
$100,000 at any one time outstanding, when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period,
if any, specified in any agreement or instrument relating to such indebtedness;
or any other event shall occur or condition shall exist under any agreement or
instrument relating to any such indebtedness and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such indebtedness; or any such indebtedness
shall be declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), redeemed, purchased or defeased,
or an offer to prepay, redeem, purchase or defease such indebtedness shall be
required to be made, in each case prior to the stated maturity thereof; or
(g) The Maker shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Maker seeking to adjudicate it
a bankrupt or insolvent, or seeking liquidation, winding up, reorganization
arrangement, adjustment protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such proceeding shall
remain undismissed or unstayed for a period of sixty days, or any of the actions
sought in such proceeding (including, but not limited to, the entry of an order
for relief against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or for any substantial part of its property)
shall occur; or the Maker shall take any action to authorize any of the actions
set forth above in this subparagraph (g); or
(h) Any judgment or order for the payment of money in excess of
$250,000 shall be rendered against the Maker and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order or (ii) them shall be any period of ten consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(i) Any of the events referred to in subsections (f) through (h)
above shall occur with respect to any Guarantor (and, for the purposes of this
subsection (i), each reference to the Maker in subsections (f) through (h) above
shall mean and be a reference to "any Guarantor," the reference to "$100,000" in
subsection (f) above shall mean and be a reference to "$1,000,000," and the
reference to "$250,000" in subsection (h) above shall mean and be a reference to
"$1,000,000"); or
-4- EXHIBIT B
(j) Any of the events referred to in subsections (f) through (h)
above shall occur with respect to any general partner in the Maker and, for
purposes of this subsection (j), each reference to "the Maker" in subsections
(f) through (h) above shall mean and be a reference to "any general partner in
the Maker"; or
(k) Any other Transaction Document to which the Maker is a party,
alfer delivery of such other Transaction Document to the Payee, shall for any
reason cease to be valid and binding on the Maker, or the Maker shall so state
in writing; or
(l) The Mortgaged Property (as defined in the Mortgage) or any
interest in the Mortgaged Property shall be the subject of a "transfer" (as
defined in the Mortgage); or
(m) The Maker shall abandon the Mortgaged Property or shall cease to
do business or shall terminate its business for any reason whatsoever; or
(n) The Mortgaged Property shall be taken, attached or sequestered on
execution or other process of law in any action against the Maker; or
(o) Any event shall occur or condition shall exist which constitutes
a default by the Maker under any lease or sublease or agreement to lease or
sublease between the Maker, as lessee or sublessee, and the Payee or any
subsidiary or affiliate of the Payee, as lessor or sublessor, in respect of real
or personal property, and such event or condition shall continue after the
applicable grace period, if any, specified in such lease or agreement of lease;
or
(p) Any event shall occur or condition shall exist which constitutes
a default by any Buyer (as defined in the Facility Agreement) under any purchase
or sale agreement, lease or sublease or agreement to lease or sublease,
promissory note, mortgage, deed of trust or other instrument or agreement
between such Buyer and the Payee or any subsidiary or affiliate of the Payee,
and such event or condition shall continue alter the applicable grace period, if
any, specified in such instrument or document;
then, and in any such event, the Payee, by notice to the Maker, may declare the
entire unpaid balance of this Promissory Note (including the entire principal
balance of this Promissory Note and all accrued and unpaid interest on this
Promissory Note and all other sums payable under this Promissory Note) to be
immediately due and payable, and upon any such declaration the entire unpaid
balance of this Promissory Note shall become and be immediately due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Maker. anything in this Promissory Note or
any other Transaction Document to the contrary notwithstanding; provided that in
--------
the event of an actual or deemed entry of an order for relief with respect to
the Maker or any Guarantor under the United States Bankruptcy Code, as amen, or
under any present or future law or statute of the United States of America or of
any state or other jurisdiction thereof relevant to bankruptcy. insolvency or
other relief of debtors, the entire unpaid balance of this Promissory Note
automatically shall become and be immediately due and payable, without
presentment demands protest or further notice of any kind, all of which are
hereby expressly waived by the Maker, anything in this Promissory Note or any
other Transaction Document to the contrary notwithstanding.
10. Costs and Expenses. The Maker hereby agrees to pay all costs and
------------------
expenses (whether or not any action or proceeding is instituted, and including,
but not limited to, reasonable attorneys' fees and disbursements, whether
incurred or expended before, during or after any action, proceeding or appeal is
instituted) incurred by the Payee in connection with or incidental to (a) any
Event of Default
-5- EXHIBIT B
or (b) the exercise or enforcement by or on behalf of the Payee of any of its
rights or remedies or the Maker's obligations under this Promissory Note, the
Mortgage or any other Transaction Document. Reasonable attorneys' fees and
disbursements shall include reasonable charges allocated for internal corporate
counsel.
11. No Waivers; Remedies Cumulative. Acceptance by the Payee of any
-------------------------------
payment after the occurrence of an Event of Default shall not be deemed a waiver
or a cure of such Event of Default, and acceptance by the Payee of any payment
less than any amount then due shall be deemed an acceptance on account only. No
right or remedy of the Payee under this Promissory Note is intended to be
exclusive of any other right or remedy, and each and every such right or remedy
shall be cumulative and continuing, shall be in addition to every other right or
remedy provided under this Promissory Note or any other Transaction Document or
now or hereafter existing at law or in equity, and may be exercised from time to
time and as often as may be deemed expedient by the Payee. No delay by the Payee
in exercising, and no omission by the Payee to exercise, any right or remedy
under this Promissory Note or any other Transaction Document upon the occurrence
of an Event of Default shall impair such exercise or be construed to be a waiver
of, or an acquiescence in, such Event of Default or any other then existing or
thereafter occurrIng Event of Default. No single or partial exercise by the
Payee of any right or remedy under this Promissory Note or any other Transaction
Document shall preclude any other or further exercise of such right or remedy or
the exercise of any other right or remedy.
12. Limitation on Interest. Notwithstanding any other provisions of this
----------------------
Promissory Note or any other Transaction Document to the contrary, no provision
of this Promissory Note or any other Transaction Document shall require the
payment or permit the collection of interest, fees or charges in excess of the
maximum rate permitted by applicable law.
13. Construction of Certain Provisions.
----------------------------------
(a) This Promissory Note is the Promissory Note referred to in, and
is entitled to the benefits of, the Facility Agreement, dated as of April 23,
1992 (said agreement, as it may be supplemented, amended or otherwise modified
from time to time, being the "Facility Agreement"), among the Payee and the
Maker and the other Buyers, including but not limited to Section 5.10 of the
Facility Agreement.
(b) For the purposes of this Promissory Note, the term "indebtedness"
shall mean (i) indebtedness for borrowed money, (ii) obligations evidenced by
bonds, debentures, notes or other similar instruments, (iii) obligations to pay
the deferred purchase price of property or services, (iv) indebtedness created
or arising under any conditional sale or other title retention agreement with
respect to property, (v) obligations as lessee under leases which shall have
been or should be, in accordance with generally accepted accounting principles,
recorded as capital leases, (vi) obligations (contingent or otherwise) under
acceptance, letter-of-credit or similar facilities, (vii) obligations in respect
of interest rate swap agreements, currency swap agreements and other similar
agreements designed to hedge against fluctuations in interest rates or foreign
exchange rates and (viii) obligations under direct or indirect guaranties in
respect of, and obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of the types referred to in any of clauses (i)
through (vii) above.
(c) For the purpose of this Promissory Note, the term "Payee" shall
mean the original payee under this Promissory Note and any subsequent holder of
this Promissory Note.
-6- EXHIBIT B
14. Amendments, Etc. No amendment or waiver of any provision of this
---------------
Promissory Note, nor consent to any departure by the Maker from any such
provision, shall in any event be effective unless such amendment, waiver or
consent is in a writing which specifically refers to Section 12.02 of the
Facility Agreement and which is signed by the Maker and by the Chief Executive
Officer or the President of the Payee, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
15. Consent to Jurisdiction. The Maker hereby irrevocably submits to the
-----------------------
jurisdiction of any court of the State of Washington or any federal court of the
United States of America for any district of the State of Washington, and any
appellate court from any of such courts, in any action or proceeding arising
from or by reason of, or otherwise relating to, this Promissory Note, and the
Maker hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such court of the State of Washington
or in such federal court of the United States of America for any district of the
State of Washington. The Maker, to the fullest extent permitted by applicable
law, hereby irrevocably waives the defense of an inconvenient forum to the
maintenance of such action or proceeding. The Maker agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Section 15 shall affect the right of the Payee to serve
legal process in any other manner permitted by law or shall affect the right of
the Payee to bring any action or proceeding against the Maker or the Maker's
property in the courts of any other jurisdictions.
16. Waiver of Jury Trial. The Maker, and the Payee by accepting this
--------------------
Promissory Note, hereby irrevocably waive all right to trial by jury in any
action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) arising from or by reason of or relating to this Promissory Note or
any actions of the Payee in the negotiation, administration, performance or
enforcement of this Promissory Note.
17. Governing Law. This Promissory Note shall be governed by, and
-------------
construed in all respects (including matters of construction, validity and
performance) in accordance with, the laws of the State of Washington, without
regard to the conflicts of law rules of such state.
18. Oral Agreements Unenforceable. ORAL AGREEMENTS OR ORAL COMMITMENTS
----------------------------- -----------------------------------
TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT
------------------------------------------------------------------------------
ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
----------------------------------------
IN WITNESS WHEREOF, the Maker has executed this Promissory Note on the date
first above written.
[NAME OF THE MAKER]
By MEADOWBROOK MANOR OF KANSAS
& MISSOURI, INC.,
General Partner
By_____________________
Title:_______________
-7- EXHIBIT B
Schedule A
Principal Amounts of Promissory Notes
-------------------------------------
in Respect of Each Owned Facility/*/
------------------------------------
Facility Name and Location Principal Amounts
-------------------------- -----------------
▇▇▇▇▇▇▇ House Healthcare (445) $7,760,700
Ballwin, Missouri
Tradition House Healthcare (260) 1,404,000
Joplin, Missouri
Country Club Home (809) 2,700,000
Council Grove, Kansas
Green ▇▇▇▇▇▇▇ Nursing Center (861) 4,131,000
Haysville, Kansas
Indian Creek Nursing Center (895) 1,516,500
Overland Park, Kansas
Indian ▇▇▇▇▇▇▇ Nursing Center (896) 1,516,500
Overland Park, Kansas
Medicenter-Springfield (834) 4,050,000
Springfield, Missouri
Hillhaven-Topeka (838) 3,591,000
Topeka, Kansas
Hillhaven-Wichita (844) 513,000
Wichita, Kansas
Columbia House Healthcare (446) 2,340,000
Columbia, Missouri
▇▇▇▇▇▇▇ Holiday Home/Apartments (857/858) 1,597,500
Larned, Kansas
___________________
/*/ Excluding the Bond-financed Owned Facilities.
EXHIBIT B
Exhibit C-1
to
Facility Agreement
DEED OF TRUST,
ASSIGNMENT, SECURITY AGREEMENT
AND
FINANCING STATEMENT (FIXTURE FILING)
(Name of the Facility)
(Facility No.[____])
Dated as of [________ ____], 1992
By
[NAME OF GRANTOR],
as the Grantor
to
▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
as the Trustee
and to
FIRST HEALTHCARE CORPORATION,
as the Beneficiary
EXHIBIT C-1
TABLE OF CONTENTS
-----------------
Page
----
RECITALS............................................................. 1
Land....................................................... 3
Improvements; Facility..................................... 3
Personal Property.......................................... 4
Contract Interests......................................... 4
After Acquired Property.................................... 4
Proceeds, Etc.............................................. 5
ARTICLE I - Representations and Warranties of the Grantor............ 5
1.01 Warranty of Title.......................................... 5
1.02 Non-Agricultural Use....................................... 5
1.03 Certificates and Permits................................... 5
ARTICLE II - Covenants of the Grantor................................ 5
2.01 Payment of Obligations..................................... 5
2.02 Good Standing; Etc......................................... 6
2.03 Security Agreement......................................... 6
2.04 Further Assurances......................................... 6
2.05 Protection of Lien; Defense of Action...................... 7
2.06 Repair and Maintenance..................................... 7
2.07 Compliance with Laws....................................... 7
2.08 Use........................................................ 7
2.09 Zoning; Title Matters...................................... 8
2.10 Insurance.................................................. 8
(a) Property and Casualty Insurance....................... 8
(b) Liability Insurance................................... 8
(c) Forms of Policies..................................... 9
(d) Transfer of Title..................................... 9
(e) Amounts of Coverage................................... 9
2.11 Damage and Destruction..................................... 9
2.12 Condemnation............................................... 10
2.13 Liens...................................................... 10
2.14 Taxes and Other Charges.................................... 11
2.15 Tax Deposits............................................... 11
2.16 Inspection................................................. 12
2.17 Maintenance of Records..................................... 12
2.18 Grantor's Certificates..................................... 12
2.19 Prepayments; Release Premium............................... 12
2.20 Reporting Requirements..................................... 13
ARTICLE III - Assignment of Rents and Other Sums..................... 14
3.01 Assignment................................................. 14
3.02 Right to Collect........................................... 15
3.03 Revocation of Right to Collect; Etc........................ 15
-i- EXHIBIT C-1
ARTICLE IV - Additional Advances; Expenses; Indemnity................ 16
4.01 Additional Advances and Disbursements...................... 16
4.02 Other Expenses............................................. 16
4.03 Indemnity.................................................. 16
ARTICLE V - Transfer of the Mortgaged Property....................... 17
5.01 Transfer of the Mortgaged Property......................... 17
ARTICLE VI - Defaults and Remedies................................... 17
6.01 Events of Default.......................................... 17
6.02 Remedies................................................... 19
6.03 Expenses................................................... 21
6.04 Rights Pertaining to Sales................................. 22
6.05 Application of Proceeds.................................... 23
6.06 Additional Provisions as to Remedies....................... 24
6.07 Waiver of Rights and Defenses.............................. 25
ARTICLE VII - Defeasance; Provisions as to Trustee................... 25
7.01 Defeasance................................................. 25
7.02 Reconveyance............................................... 25
7.03 Trustee's Resignation...................................... 26
7.04 Exculpation................................................ 26
ARTICLE VIII - Additional Provisions................................. 27
8.01 Construction of Certain Provisions......................... 27
8.02 Limitation on Interest..................................... 28
8.03 Lease...................................................... 28
8.04 Amendments, Etc............................................ 28
8.05 Notices.................................................... 28
8.06 No Merger.................................................. 30
8.07 Severability............................................... 30
8.08 Obligations of Grantor..................................... 30
8.09 Successors and Assigns..................................... 30
8.10 No Waiver.................................................. 30
8.11 Attorneys' Fees............................................ 30
8.12 Consent to Jurisdiction.................................... 30
8.13 Waiver of Jury Trial....................................... 31
8.14 Applicable Law............................................. 31
Schedule A - Land
Schedule B - Permitted Exceptions
Schedule C - Affiliates
-ii- EXHIBIT C-1
DEED OF TRUST,
ASSIGNMENT, SECURITY AGREEMENT
AND
FINANCING STATEMENT (FIXTURE FILING)
([Name of the Facility])/1/
(Facility No. [____])/2/
THIS DOCUMENT SECURES FUTURE ADVANCES AND IS GOVERNED BY SECTION 443.055
OF THE REVISED STATUTES OF MISSOURI
This DEED OF TRUST, ASSIGNMENT, SECURITY AGREEMENT AND FINANCING
STATEMENT (FIXTURE FILING), dated as of[_________ ___], 1992 (this "Deed of
Trust"), is made by [_____________________], a North Carolina limited
partnership whose address is ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as
the grantor under this Deed of Trust (the "Grantor"), to ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, a
resident of ▇▇▇▇▇▇▇ County, Missouri, as the trustee under this Deed of Trust
(the "Trustee"), and to FIRST HEALTHCARE CORPORATION, a Delaware corporation
("First Healthcare") whose address is The Cornerstone Building, ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ as the beneficiary under this Deed of Trust
(the "Beneficiary").
RECITALS
A. The Beneficiary, as seller, and the Grantor and the Affiliates
(as defined below), jointly and severally as buyers (the "Buyers"), have entered
into a Facility Agreement, dated as of [______________ ___], 1992 (said Facility
Agreement, as it may be supplemented, amended or otherwise modified from time to
time, being the "Facility Agreement").
B. Pursuant to the terms and subject to the conditions set forth in
the Facility Agreement, the Beneficiary has agreed to permit the Grantor to
defer the payment of a portion of the purchase price for the properties (real,
personal and mixed) that constitute the Mortgaged Property (as defined below)
and that are the subject of the Facility Agreement, in a principal amount not to
exceed [________________] and [____]/100 Dollars ($[__________]).
C. Pursuant to the terms of the Facility Agreement, the Grantor has
executed and delivered to the order of the Beneficiary a Promissory Note, dated
[____________ ___], 1992,/3/ in the stated principal sum of [_______________]
and [_____]/100 Dollars ($[_______________]) (said Promissory Note, as it may be
supplemented, amended, extended, renewed or otherwise modified from time to
time, being the "Promissory Note"), evidencing the obligation of the Grantor to
pay the deferred portion of the purchase price in respect of the Mortgaged
Property.
____________________________
/1/ Insert the name of the Facility.
/2/ Insert the number assigned to the Facility.
/3/ Insert the Closing Date.
-1- EXHIBIT C-1
D. The total of the indebtedness and liabilities to be secured by
this Deed of Trust equals the sum of the following (such indebtedness and
liabilities or the instruments evidencing the same, as applicable, being
collectively referred to in this Deed of Trust as the "Obligations"):
(1) the principal amount of [___________________] and
[______]/100 Dollars ($[__________])(the "Purchase Price Balance");
plus
(2) interest on the unpaid principal amount of the Purchase
Price Balance at a rate of interest per annum (the "Regular Rate")
equal to:
(a) nine percent (9%) per annum from [______________],
1992,/4/ to [_____________], 199[__];/5/ and
(b) eleven percent (11%) per annum from [_______________],
199[__],/6/ to the date on which the Purchase Price Balance is
paid in full;
and at a rate per annum (the "Default Rate") equal at all times to the
sum of the Regular Rate plus five percent (5%) per annum; plus
(3) all other amounts that are or become payable by the Grantor
and all other obligations of the Grantor under the Facility Agreement,
the Promissory Note and this Deed of Trust;
[E./7/ The lien of this Deed of Trust is junior to the lien of the
[______________],/8/ dated [as of] [______________________], 19[___] (the "First
Lien Mortgage"), made by [________________]/9/ to [_______________]/10/ securing
the payment of a Promissory Note, dated [___________], 19[___] (the "First Lien
Promissory Note"), in the stated principal amount of $[________________]. The
obligations evidenced by the First Lien Promissory Note and secured by the First
Lien Mortgage are and remain the obligations of the Beneficiary.]
____________________________
/4/ Insert the Closing Date.
/5/ Insert the last day of the forty-first calendar month immediately
following the calendar month in which the Closing occurs.
/6/ Insert the first day of the forty-second calendar month immediately
following the calendar month in which the Closing occurs.
/7/ Include this recital if this Deed of Trust is to be subordinate and
inferior to any existing mortgage or deed of trust in respect of the Mortgaged
Property.
/8/ Insert the title of the existing mortgage or deed of trust to which
this Deed of Trust is to be subordinate and inferior.
/9/ Insert the name of the mortgagor or grantor under the First Lien
Mortgage.
/10/ Insert the name of the mortgagee or beneficiary under the First Lien
Mortgage.
-2- EXHIBIT C-1
[F./11/ All of the Obligations have a scheduled maturity of not later
than [____________ ____], 199[___]./12/]
G. The execution and delivery of this Deed of Trust by the Grantor
is a condition precedent to the obligation of the Beneficiary to consummate the
transactions contemplated by the Facility Agreement.
H. The rules of construction set forth in Section 8.01 shall be
applicable for all purposes of this Deed of Trust.
NOW, THEREFORE, for and in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Grantor, and to secure the punctual payment by the Grantor
when due (whether at stated maturity, by acceleration or otherwise) of the
Obligations and the performance and observance of all other covenants,
obligations and liabilities of the Grantor under the Facility Agreement, the
Promissory Note and this Deed of Trust, the Grantor does hereby GRANT, BARGAIN,
SELL MORTGAGE, WARRANT, CONVEY, ALIEN, REMISE, RELEASE, ASSIGN, PLEDGE,
HYPOTHECATE, TRANSFER, SET OVER, DELIVER and CONFIRM unto the Trustee, IN TRUST,
WITH FULL POWER OF SALE AND RIGHT OF ENTRY AND POSSESSION, each and all of the
following described properties, rights, interests and privileges and all of the
Grantor's estate, right, title and interest in, to and under, or derived from,
the following described properties, rights, interests and privileges (all of
such properties, rights, interests and privileges being collectively referred to
in this Deed of Trust as the "Mortgaged Property"):
Land. All those certain lots, pieces and parcels of land more
----
particularly described in SCHEDULE A, and all of the reversions and
remainders in and to said land and the tenements, hereditaments,
easements, rights-of-way or use, rights (including alley, drainage,
mineral, water, oil and gas rights), privileges, royalties and
appurtenances to said land, now or hereafter belonging or in anywise
appertaining to said land, including any such right, title or interest
in, to or under any agreement or right granting, conveying or
creating, for the benefit of said land, any easement, right or license
in any way affecting other property and in, to or under any streets,
ways, alleys, vaults, gores or strips of land adjoining any portion of
said land, or in or to the air space over said land, all rights of
ingress and egress by motor vehicles to parking facilities on or
within said land, and all claims or demands of the Grantor, either at
law or in equity, in possession or expectancy, of, in or to the same
(all of the foregoing being collectively referred to in this Deed of
Trust as the "Land");
Improvements; Facility. All buildings, structures, facilities and
----------------------
other improvements now or hereafter erected on, attached to or located
in or upon the Land, and all building materials of every kind and
nature now or hereafter located on the Land or attached to, contained
in, or used in connection with, any such buildings, structures,
facilities or other improvements, and all appurtenances and additions
thereto and betterments, renewals, substitutions and replacements
thereof, owned by the Grantor or in which the Grantor has or shall
acquire an interest (all of the foregoing being collectively
_____________________________
/11/ Include this recital if required by applicable law.
/12/ Insert the first day of the eighty-fourth calendar month immediately
following the calendar month in which the Closing occurs.
-3- EXHIBIT C-1
referred to in this Deed of Trust as the "Improvements," and the Land
and the Improvements being together referred to in this Deed of Trust
as the "Facility"):
Personal Property. All machinery, equipment, furniture,
-----------------
furnishings, fixtures, chattels and other items of personal property,
and all appurtenances and additions thereto and betterments, renewals,
substitutions and replacements thereof, owned by the Grantor or in
which the Grantor has or shall acquire an interest, wherever situated,
and now or hereafter located on, attached to, contained in or used in
connection with the Land, the Improvements or the Contract Interests,
or placed on any part thereof although not attached thereto (all of
the foregoing being collectively referred to in this Deed of Trust as
the "Personal Property"), including all partitions, screens, awnings,
shades, blinds, curtains, draperies, carpets, rugs, furniture and
furnishings, heating, lighting, plumbing, ventilating, air
conditioning, refrigerating, gas, steam, electrical, incinerating
and/or compacting plants, systems, fixtures and equipment, elevators,
escalators, ranges, vacuum and other cleaning systems, call systems,
switchboards, sprinkler systems and other fire prevention and
extinguishing apparatus and materials, motors, machinery, pipes,
ducts, conduits, dynamos, engines, compressors, generators, boilers,
stokers, furnaces, pumps, tanks, appliances, equipment, utensils,
tools, implements, fittings and fixtures and all permits, licenses,
franchises, certificates and other rights and privileges obtained in
connection with the Mortgaged Property;
Contract Interests. All the leases, lettings and licenses of, and
------------------
all other contracts and agreements (including all patient care
agreements, life care contracts, admission agreements and other
contracts and agreements with residents, patients and other persons
pertaining to the care of residents or patients) affecting, the Land,
the Improvements, the Personal Property and/or any other property or
rights mortgaged or otherwise conveyed or encumbered by this Deed of
Trust, or any part thereof, now or hereafter entered into, and all
supplements, amendments, modifications, additions, extensions and
renewals thereof, and all right, title and interest of the Grantor
therein and thereunder, including cash and securities deposited
thereunder or pursuant thereto, the right to receive and collect the
rents, proceeds, issues and profits due and to become due and payable
thereunder or pursuant thereto and the rights to enforce, whether at
law or in equity or by any other means, all provisions and options
thereof (all of the foregoing being collectively referred to in this
Deed of Trust as the "Contract Interests");
After Acquired Property. Any and all moneys and other every kind
-----------------------
and nature, which may from time to time be subjected to the lien of
this Deed of Trust by the Grantor, through a supplement to this Deed
of Trust or otherwise, or by any other person, or which may come into
the possession of or be subject to the control of the Trustee or the
Beneficiary, it being the intention and agreement of the Grantor that
all property hereafter acquired or constructed by the Grantor shall
forthwith upon acquisition or construction thereof by the Grantor and
without any act or deed by the Grantor be subject to the lien and
security interest of this Deed of Trust as if such property were now
owned by the Grantor and were specifically described in this Deed of
Trust and conveyed or encumbered by or pursuant to this Deed of Trust,
and the Trustee and the Beneficiary are hereby authorized to receive
any and all such property as and for additional security under this
Deed of Trust (all of the foregoing being collectively referred to in
this Deed of Trust as the "After Acquired Property"); and
-4- EXHIBIT C-1
Proceeds, Etc. All unearned premiums (whether accrued, accruing
-------------
or to accrue) under insurance policies now or hereafter obtained by
the Grantor, all proceeds of the conversion (whether voluntary or
involuntary) of the Mortgaged Property into cash or other liquidated
claims (excluding proceeds of title insurance, but including proceeds
of hazard and other insurance), and all judgments, damages, awards,
settlements and compensation (including interest thereon) heretofore
or hereafter made to the present and all subsequent owners of the
Land, the Improvements, the Personal Property, the Contract Interests
and/or any other property or rights encumbered or conveyed by this
Deed of Trust for any injury thereto or decrease in the value thereof
for any reason, or by any governmental or other lawful authority for
the taking by eminent domain, condemnation or otherwise of all or any
part thereof, including awards for any change of grade of streets;
TO HAVE AND TO HOLD, subject to the matters listed or otherwise
described in SCHEDULE B (the "Permitted Exceptions"), all and singular the
Mortgaged Property, whether now owned or leased or hereafter acquired and
whether now or hereafter existing, together with all the rights, privileges and
appurtenances thereunto belonging, unto the Trustee and the Beneficiary forever,
for the uses and purposes set forth in this Deed of Trust.
AND the Grantor covenants and agrees with the Trustee and the
Beneficiary as follows:
ARTICLE I
Representations and Warranties of the Grantor
---------------------------------------------
1.01 Warranty of Title. (a) The Grantor has and will have good,
-----------------
marketable and insurable fee simple title to the Facility, free and clear of all
liens, charges and encumbrances of every kind and character, subject only to the
Permitted Exceptions; (b) the Grantor owns and will own all of the other
Mortgaged Property, free and clear of all liens, charges and encumbrances of
every kind and character, subject only to the Permitted Exceptions; (c) the
Grantor hereby warrants and will forever warrant and defend such title and the
validity, enforceability and priority of the lien and security interest of this
Deed of Trust against the claims of all persons whomsoever; (d) the Grantor has
and will have full power and lawful authority to encumber and convey the
Mortgaged Property as provided in this Deed of Trust; and (e) this Deed of Trust
is and will remain a valid and enforceable lien on, and security interest in,
the Mortgaged Property, subject only to the Permitted Exceptions.
1.02 Non-Agricultural Use. The Mortgaged Property is not used
--------------------
principally for agricultural or farming purposes.
1.03 Certificates and Permits. The Grantor has and will maintain
------------------------
in effect all necessary certificates, licenses, authorizations, registrations,
permits and/or approvals necessary for the operation of the Facility as a
[_________]-bed [[skilled] [intermediate] care] [nursing] facility and for the
conduct of the Grantor's business at the Facility.
ARTICLE 11
Covenants of the Grantor
------------------------
2.01 Payment of Obligations. The Grantor will punctually pay the
----------------------
Obligations when due, and will perform and observe all of its other obligations
under this Deed of Trust, the Promissory Note, the Facility Agreement and each
other document or instrument to which the Grantor is a party and that relates to
any of the Facility Agreement, the Promissory Note or any security for the
obligations of the Grantor under the Facility Agreement or the Promissory Note
(this Deed of Trust, the Promissory
-5- EXHIBIT C-1
Note, the Facility Agreement and such other documents and instruments, in each
case as the same may be supplemented, amended or otherwise modified from time to
time, being sometimes referred to in this Deed of Trust individually as a
"Transaction Document" and collectively as the "Transaction Documents").
2.02 Good Standing; Etc. The Grantor will maintain in good standing
------------------
its partnership existence, franchises, rights and privileges under the law of
the jurisdiction of its formation and its right to transact business in the
jurisdiction in which the Facility is located. Subject to and without limitation
of Sections 2.19 and 5.01, the Grantor, without the prior consent of the
Beneficiary, will not sell, lease or otherwise dispose of (whether directly or
indirectly, or by operation of law, or in one transaction or a series of
transactions) all or substantially all of its assets. Subject to and without
limitation of Section 2.19 and 5.01, the Beneficiary may withhold its consent to
any proposed disposition of all or substantially all of the Grantor's assets for
no reason or any reason. The Grantor, without at least thirty days prior notice
to the Beneficiary and compliance with the provisions of Section 2.04, will not
change its name, identity or legal structure.
2.03 Security Agreement. The Grantor hereby further grants to the
------------------
Beneficiary a security interest in all of the Grantor's right, title and
interest in, to and under the following, whether now owned or hereafter acquired
(collectively, the "Collateral"): (a) the Personal Property; (b) the Contract
Interests; (c) the After Acquired Property; and (d) all proceeds of any and all
of the foregoing Collateral, including proceeds which constitute property of the
types included in the Personal Property, the Contract Interests and the After
Acquired Property and, to the extent not otherwise included, all cash, all
unearned premiums (whether accrued, accruing or to accrue) under insurance
policies now or hereafter obtained by the Grantor, all proceeds of the
conversion (whether voluntary or involuntary) of any of the Mortgaged Property
into cash or other liquidated claims (including proceeds of hazard and other
insurance), and all judgments, damages, awards, settlements and compensation
(including interest thereon) heretofore or hereafter made to the present and all
subsequent owners of the Land, the Improvements, the Personal Property, the
Contract Interests and/or any other property or rights encumbered or conveyed by
this Deed of Trust for any injury thereto or decrease in the value thereof for
any reason, or by any governmental or other lawful authority for the taking by
eminent domain, condemnation or otherwise of all or any part thereof, including
awards for any change of grade of streets. The Trustee and the Beneficiary shall
have, in addition to all rights and remedies provided in the Transaction
Documents, all of the rights and remedies of a "secured party" under the Uniform
Commercial Code in effect in the jurisdiction in which the Facility is located.
This Deed of Trust constitutes and shall be deemed to be a "security agreement"
for all purposes of said Uniform Commercial Code. Notwithstanding any provision
in this Section 2.03 or elsewhere in this Deed of Trust to the contrary, this
Deed of Trust shall not be construed to create a lien on or a security interest
in any patient accounts or any other accounts constituting any right of the
Grantor to payment for goods sold or leased or for services rendered which is
not evidenced by an instrument or chattel paper.
2.04 Further Assurances. Promptly upon request by the Trustee or the
------------------
Beneficiary, the Grantor will (a) correct any defect, error or omission that may
be discovered in the contents of, or in the execution, acknowledgment or
recordation of, this Deed of Trust or any other Transaction Document, and (b)
do, execute, acknowledge and deliver any and all such further acts, deeds,
conveyances, mortgages, deeds of trust, assignments, estoppel certificates,
financing statements and continuations thereof, notices of assignment,
transfers, certificates, assurances and other documents and instruments as the
Trustee or the Beneficiary may require from time to time in order to effectuate
the purposes of this Deed of Trust and to perfect and maintain the validity,
effectiveness and priority of the lien and security interest created by this
Deed of Trust.
-6- EXHIBIT C-1
2.05 Protection of Lien; Defense of Action. If any action or
-------------------------------------
proceeding is instituted against the Grantor with respect to any right, title or
interest in or to the Mortgaged Property or with respect to the lien, security
interest, validity or priority of this Deed of Trust, or if any such right,
title, interest, lien, security interest, validity, effectiveness or priority is
otherwise challenged or attacked, then the Grantor promptly will notify the
Trustee and the Beneficiary of such action, proceeding, challenge or attack,
diligently will endeavor to cure any defect that may be developed or claimed,
and will take all necessary and proper steps for the defense of such action or
proceeding, including the employment of counsel, the prosecution or defense of
litigation and, subject to the prior written approval of the Beneficiary, the
compromise, release or discharge of any and all adverse claims. The Trustee and
the Beneficiary, or either of them (whether or not named as a party to such
action or proceeding), are hereby authorized and empowered (but shall not be
obligated) to take such additional steps (including the employment of counsel,
the prosecution or defense of litigation, the compromise, release or discharge
of such adverse claims, the purchase of any tax title and the removal of prior
liens and security interests) as they may deem necessary or proper for the
defense of any such action or proceeding or the protection of such right, title,
interest, lien, security interest, validity, effectiveness or priority. The
Grantor, on demand, shall pay all costs and expenses (including reasonable
attorneys' fees and disbursements) incurred by either of the Trustee or the
Beneficiary in connection with the foregoing matters. All such costs and
expenses of the Trustee and/or the Beneficiary, until paid by the Grantor, shall
be part of the Obligations and shall be secured by this Deed of Trust.
2.06 Repair and Maintenance. The Grantor will operate and maintain the
----------------------
Facility and the Personal Property in good order, repair and operating
condition, and promptly will make all repairs, renewals, replacements, additions
and improvements to the Facility and the Personal Property that are necessary to
ensure that the Facility and the Personal Property shall not in any way be
diminished or impaired as part of the security under this Deed of Trust. The
Grantor will keep the Facility fully equipped and will replace all worn-out or
obsolete Personal Property with fixtures or personal property comparable to such
Personal Property when new and, without the prior consent of the Beneficiary,
will not remove any Personal Property from the Facility unless such Personal
Property is replaced by the Grantor with fixtures or personal property of equal
suitability and value when new, owned by the Grantor free and clear of any lien
or security interest (other than the Permitted Exceptions and the lien and
security interest created by this Deed of Trust). No part of the Improvements
shall be removed, demolished or structurally or materially altered (including an
alteration which impairs the value of the Improvements), nor shall any new
building, structure, facility or other improvement be constructed on the Land
without the prior consent of the Beneficiary. The Grantor, without the prior
consent of the Beneficiary, will not cause or allow the Mortgaged Property to be
misused or wasted or to deteriorate.
2.07 Compliance with Laws. The Grantor promptly will comply with, and
--------------------
will cause the Facility to be maintained, used and operated at all times in
accordance with, any and all present and future laws, rules, regulations,
ordinances and requirements (including any and all licensing, accrediting and
insurance requirements) applicable to the Grantor or the Facility. The Grantor
promptly will notify the Beneficiary of any alleged noncompliance by the Grantor
or the Facility with any such laws, rules, regulations, ordinances or
requirements, and of any action or proceeding initiated under or with respect to
any of such laws, rules, regulations, ordinances or requirements.
2.08 Use. The Grantor will not use or occupy the Facility, or permit
---
the Facility to be used or occupied, in any manner which violates any applicable
law, rule, regulation, ordinance or order, or which constitutes a public or
private nuisance or which makes void, voidable or cancellable, or increases the
premium of, any insurance then in force with respect to the Facility. Without
limiting the generality of the preceding sentence, the Grantor will use and
occupy the Facility, or cause the Facility to be used and occupied, as and for
a[n] [[skilled] [intermediate] care] [nursing] facility and for no other
principal use unless agreed to in writing by the Beneficiary. The Grantor shall
at all times
-7- EXHIBIT C-1
maintain in full force and effect all registrations, qualifications, licenses
and other authorizations and approvals required to use and occupy the Facility
as and for a [__________]-bed [[skilled] [intermediate] care] [nursing]
facility. Notwithstanding any other provision in this SECTION 2.08 or elsewhere
in this Deed of Trust or any other Transaction Document to the contrary, the
Grantor, without the prior consent of the Beneficiary, will not permit any
person other than the Grantor to operate the Facility, whether pursuant to any
lease, any management agreement or otherwise; provided that, without the
--------
prior consent of the Beneficiary, the Grantor may permit Meadowbrook Healthcare
Services Incorporated, a North Carolina corporation, or any wholly-owned
subsidiary of Meadowbrook Healthcare Services Incorporated, to operate the
Facility pursuant to a management agreement with the Grantor.
2.09 Zoning; Title Matters. The Grantor, without the prior consent
---------------------
of the Beneficiary, will not (a) initiate or support any zoning reclassification
of the Facility, seek any variance under existing zoning ordinances applicable
to the Facility or use or permit the use of the Facility in a manner which would
result in such use becoming a non-conforming use under applicable zoning
ordinances, (b) supplement, amend or otherwise modify any of the Permitted
Exceptions, (c) impose any restrictive covenants upon the Facility, (d) execute
or file any subdivision plat affecting the Facility or consent to the annexation
of the Facility to any municipality or (e) permit or suffer the Facility to be
used by the public or any person in such manner as might make possible a claim
of adverse usage or possession or of any implied dedication or easement.
2.10 Insurance.
---------
(a) Property and Casualty Insurance. The Grantor will keep the
-------------------------------
Improvements and the Personal Property insured for the benefit of the Trustee
and the Beneficiary as follows: (i) against damage or loss by fire and such
other hazards (including lightning, windstorm, hail, explosion, riot, riot
attending a strike, civil commotion, flood, earthquake, vandalism, malicious
mischief, aircraft, vehicle and smoke) as are covered by the broadest form of
"all-risk" coverage as is available from time to time in the jurisdiction in
which the Facility is located, in an amount not less than the full insurable
value (as defined below) of the Improvements and the Personal Property; (ii)
rent or business interruption or use and occupancy insurance on an actual loss
sustained basis; (iii) against damage or loss from sprinkler system leakage and
boilers, boiler tanks, heating and air conditioning equipment, pressure vessels,
auxiliary piping, mechanical and electrical equipment and such similar apparatus
as is commonly insured under a comprehensive definition of insured object, on
such basis and in such amounts as shall be reasonably required by the
Beneficiary; and (iv) during the period of any permitted construction, repair,
restoration or replacement of the Facility, against damage or loss and such
other hazards as are covered by a standard all-risk builder's risk policy with
extended coverage, including coverage against collapse, written on a completed
value basis, for an amount at least equal to the full insurable value of the
Improvements and the Personal Property. The Grantor shall ensure that any
contractor performing any permitted construction, repair, restoration or
replacement of the Facility shall procure and maintain at all times insurance
equal to that required of the Grantor and that such contractor also shall comply
with all statutory and regulatory requirements related to workers' compensation.
(b) Liability Insurance. The Grantor shall procure and maintain
-------------------
commercial public liability insurance covering the Grantor, the Trustee and the
Beneficiary against claims for bodily injury and death and property damage
occurring in, on or about or resulting from the Facility, or any street, drive,
sidewalk, curb or passageway adjacent to the Facility, in standard form and with
such insurance company or companies and in such amounts as may be acceptable to
the Beneficiary in its reasonable judgement, which insurance shall include
blanket contractual liability coverage that insures contractual liability under
any indemnification of the Trustee or the Beneficiary by the Grantor in the
Facility Agreement the Promissory Note, this Deed of Trust or any other
Transaction Document (but
-8- EXHIBIT C-1
such coverage or the amount of such coverage shall in no way limit such
indemnification). In addition to the commercial public liability insurance
required by the preceding sentence, the Grantor also shall procure and maintain
employer's liability, automobile, personal injury and professional liability
coverage in amounts of $1,000,000 primary coverage and $5,000,000 excess
coverage.
(c) Forms of Policies. All insurance required under this
-----------------
Section 2.10 shall be fully paid for and nonassessable and shall contain such
provisions, endorsements and expiration dates, as the Beneficiary shall from
time to time reasonably request, and shall be in such form and amounts, and be
issued by such insurance companies, as shall be approved by the Beneficiary in
its reasonable judgment. Without limiting the generality of the preceding
sentence, all such policies shall have endorsed thereon, in form acceptable to
the Beneficiary, the New York Standard Mortgagee Clause, or the local
equivalent, without contribution, in the name of the Trustee and the
Beneficiary, and a waiver of subrogation endorsement. Each such policy shall
provide that it will not be cancelled, amended or materially altered (including
by reduction in the scope or limits of coverage) without at least thirty days
prior notice to the Beneficiary. The Grantor shall deliver, or cause to be
delivered, to the Beneficiary (i) duplicate original policies evidencing the
insurance required under this Section 2.10, (ii) receipts evidencing payment of
all premiums on such policies and (iii) at least thirty days prior to the
expiration of each such policy, a duplicate original renewal policy with
evidence satisfactory to the Beneficiary of payment of all premiums on such
policy. In lieu of the duplicate original policies required by this Section 2.10
to be delivered to the Beneficiary, the Grantor may deliver original
certificates from the issuing insurance company or companies, evidencing that
such policies are in full force and effect and containing information which, in
the Beneficiary's reasonable judgment, is sufficient to allow the Beneficiary to
determine whether such policies comply with the requirements of this Section
2.10, the Grantor shall not carry separate or additional insurance concurrent in
form or contributing in the event of loss with that required under this Section
2.10, unless endorsed in favor of the Trustee and the Beneficiary in accordance
with the requirements of this Deed of Trust and otherwise approved by the
Beneficiary in all respects.
(d) Transfer of Title. In the event of foreclosure of this
-----------------
Deed of Trust or other transfer of title or assignment of the Mortgaged Property
in extinguishment in whole or in part, of the Obligations, all right, title and
interest of the Grantor in and to all policies of insurance required under this
Section 2.10 or otherwise then in force with respect to the Mortgaged Property
and all proceeds payable thereunder and unearned premiums thereof shall
immediately vest in the purchaser or other transferee of the Mortgaged Property.
(e) Amounts of Coverage. For the purposes of this
-------------------
Section 2.10, the term "full insurable value" shall mean the cost of replacing
the improvements and the Personal Property, exclusive of the cost of
excavations, foundations, and footings, as determined from time to time (but not
less often than once every three years) by the insurance company or companies
holding such insurance or by an appraiser, engineer, architect or contractor
proposed by the Grantor and approved by said insurance company or companies and
the Beneficiary. All deductibles shall be commercially reasonable and, in any
event, subject to the prior written approval of the Beneficiary or the
Beneficiary's designee.
2.11 Damage and Destruction. In the event the Facility is damaged,
----------------------
lost or destroyed, (a) the Grantor promptly shall notify the Beneficiary of such
event (b) the Grantor, unless otherwise instructed by the Beneficiary, promptly
shall commence and diligently pursue to completion the restoration, replacement
or rebuilding of the Facility as nearly as possible to its value, condition and
character immediately prior to such damage, loss or destruction, regardless of
whether the insurance proceeds, if any, shall be sufficient for the purpose or
shall be otherwise applied by the Beneficiary as provided in this Deed of Trust,
(c) the Beneficiary may, but shall not be obligated to, make proof of loss
-9- EXHIBIT C-1
if not made promptly by the Grantor and settle, adjust or compromise any claims
for damage, loss or destruction (and the Grantor hereby authorizes and empowers
the Beneficiary to make any such proof of loss, settlement, adjustment or
compromise, and the Grantor hereby authorizes and directs each insurance company
concerned to make payment for any such damage, loss or destruction directly to
the Beneficiary) and (d) the Beneficiary shall have the right to apply the
insurance proceeds, first, to reimburse the Trustee and the Beneficiary for all
reasonable costs and expenses, including attorneys fees and disbursements,
incurred in connection with the collection of such proceeds, and, second, at the
option of the Beneficiary, (i) to pay all or any part of the Obligations then
due in the order and manner determined by the Beneficiary in its sole
discretion, (ii) to cure any then current default under this Deed of Trust, or
(iii) to repair, restore or replace, in whole or in part, the portion of the
Facility so damaged, lost or destroyed. Notwithstanding anything in this Deed of
Trust or at law or in equity to the contrary, no insurance proceeds that are
paid to the Beneficiary as provided in this Deed of Trust shall be deemed trust
funds, and the Beneficiary shall be entitled to dispose of such proceeds as
provided in this Deed of Trust. The Grantor expressly assumes all risk of loss,
including a decrease in the use, enjoyment or value, of the Mortgaged Property
from any casualty whatsoever, whether or not insurable or insured against.
2.12 Condemnation. The Grantor, immediately upon obtaining knowledge
------------
of any pending or threatened proceeding for the condemnation of the Facility or
of any right of eminent domain, or of any other proceeding arising out of injury
or damage to the Facility (including a change in grade of any street), will
notify the Beneficiary of the pendency or threat of such proceeding. The
Beneficiary may participate in such proceeding, and the Grantor from time to
time will execute and deliver to the Beneficiary all instruments requested by
the Beneficiary to permit such participation. The Grantor shall diligently
prosecute such proceeding, deliver to the Beneficiary copies of all papers
served in connection with such proceeding and consult and cooperate with the
Beneficiary and the Beneficiary's attorneys and agents in the prosecution and
defense of such proceeding; provided that the Grantor shall not settle such
--------
proceeding without the prior consent of the Beneficiary. The Grantor hereby
assigns to the Beneficiary all proceeds of condemnation awards, all proceeds of
sale in lieu of condemnation, and all proceeds of all judgments, decrees and
awards for injury or damage to the Mortgaged Property. The Grantor shall execute
and deliver such further assignments of such proceeds as the Beneficiary may
request and hereby authorizes the Beneficiary to collect and receive any and all
such proceeds, to give receipts and acquittances therefor, and to appeal from
any such judgment, decree or award. The Beneficiary shall in no event be liable
or responsible for any failure to collect, or to exercise diligence in the
collection of, any of such proceeds. The Beneficiary shall have the right to
apply any such proceeds, first, to reimburse the Trustee and the Beneficiary for
all costs and expenses, including reasonable attorneys' fees and disbursements
incurred in connection with the proceeding in question or the collection of such
proceeds and, second, as provided in Section 2.11 in respect of the application
of insurance proceeds held by the Beneficiary. Notwithstanding anything in this
Deed of Trust or at law or in equity to the contrary, none of the proceeds that
are paid to the Beneficiary as provided in this Section 2.12 shall be deemed
trust funds, and the Beneficiary shall be entitled to dispose of such proceeds
as provided in this Deed of Trust. Notwithstanding any condemnation, taking or
other proceeding that causes injury to or a decrease in value of the Facility
(including a change in grade of any street), the Grantor shall continue to pay
the Obligations as provided in the Promissory Note.
2.13 Liens. The Grantor, without the prior consent of the
-----
Beneficiary, will not create, assume or suffer to exist any deed of trust,
mortgage, voluntary or involuntary lien, whether statutory, constitutional or
contractual (except for the lien for ad valorem taxes on the Mortgaged Property
-- -------
which are not yet due and payable), security interest encumbrance or charge, or
conditional sale or other title retention document against or covering the
Mortgaged Property, prior to, on a parity with or subordinate to the lien of
this Deed of Trust, other than the Permitted Exceptions and other than
-10- EXHIBIT C-1
purchase money security interests in personal property (other than replacement
fixtures and personal property pursuant to Section 2.06) acquired or held by the
Grantor in the ordinary course of business to secure the purchase price of such
property so long as no such purchase money security interest shall extend to or
cover any property other than the personal property being acquired and so long
as the aggregate principal amount of the indebtedness at any one time
outstanding secured by the purchase money security interests permitted by this
SECTION 2.13 shall not otherwise be prohibited by the terms of any Transaction
Document and shall not exceed the lesser of eighty percent of the cost of such
personal property or the then fair value of such personal property. The Grantor
will pay, bond or otherwise discharge, from time to time when the same shall
become due, all lawful claims and demands of mechanics, materialmen, laborers
and others which, if unpaid, might result in, or permit the creation of, a lien
on the Mortgaged Property, or on the rents, proceeds, issues and profits due or
to become due and payable under or pursuant to any of the Mortgaged Property.
Except as otherwise provided in this Section 2.13, the Beneficiary may withhold
its consent to any proposed deed of trust, mortgage, lien, security interest,
encumbrance, charge, or conditional sale or other title retention document for
no reason or any reason.
2.14 Taxes and Other Charges. The Grantor will pay when due, and
-----------------------
before any penalty, interest or cost for nonpayment thereof may be added
thereto, all taxes, assessments, vault, water and sewer rents, rates, charges
and assessments, levies, permits, inspection and license fees and other
governmental and quasi-governmental charges, general and special, ordinary and
extraordinary, foreseen and unforeseen, heretofore or hereafter assessed, levied
or otherwise imposed against or upon, or which may become a lien upon, the
Mortgaged Property or the rents, proceeds, issues and profits due or to become
due and payable under or pursuant to the Mortgaged Property or arising in
respect of the occupancy, use or possession of the Mortgaged Property. The
Grantor will promptly pay all income, franchise and other taxes owing by the
Grantor, together with any interest or penalties thereon.
2.15. Tax Deposits. Following any failure by the Grantor to pay when
------------
due any real property tax or personal property tax required to be paid by the
Grantor under Section 2.14, and without limiting the obligations of the Grantor
under Section 2.14, if required by the Beneficiary, the Grantor, at its sole
cost and expense, shall deposit with such service or financial institution as
the Beneficiary shall designate, monthly on the first day of each calendar
month, one/twelfth of the aggregate annual amount of the real property and
personal property taxes required to be paid by the Grantor under SECTION 2.14.
In addition, if required by the Beneficiary, the Grantor also shall deposit with
such service or financial institution a sum of money which, together with the
monthly installments required under the preceding sentence, will be sufficient
to make each of the payments of such real property and personal property taxes
at least three days before such payments are due. If the amount of any such
payments is not ascertainable at the time any such deposit is required to be
made pursuant to this Section 2.15, then the deposit shall be made on the basis
of the Beneficiary estimate of such amount, and, when such amount is fixed for
the then-current year the Grantor promptly shall deposit any deficiency with
such service or financial institution. All funds deposited with such service or
financial institution pursuant to this Section 2.15, until applied as provided
below, shall Constitute additional security for the Obligations, shall be held
by such service or financial institution in a separate interest-bearing account
and, provided that no Event of Default (as defined below) shall have occurred
and be continuing, such funds and any interest earned thereon shall be applied
in payment of the amounts of such real property and personal property taxes
prior to their becoming delinquent to the extent that such service or financial
institution shall have such funds on hand; provided that neither the Beneficiary
--------
nor such service or financial Institution shall have any obligation to use such
funds to pay any installment of such real property or personal property taxes
prior to the last day on which payment thereof may be made without penalty or
interest. The Grantor shall be responsible for furnishing to the Beneficiary
bills or invoices for such real property and personal property taxes in
sufficient time to pay
-11- EXHIBIT C-1
the same before any penalty or interest attaches, and neither the Beneficiary
nor such service or financial institution shall have any responsibility (for
payment of such real property or personal property taxes in the absence of such
bills or invoices. If an Event of Default shall have occurred and be continuing,
or if the Obligations shall be accelerated as provided in this Deed of Trust or
the Promissory Note, then all funds deposited with such service or financial
institution under this SECTION 2.15 and any interest earned thereon, at the
Beneficiary's option, may be applied to the Obligations in the order and manner
determined by the Beneficiary or to cure such Event of Default or otherwise as
provided in this SECTION 2.15. Upon an assignment or other transfer of this Deed
of Trust the Beneficiary shall thereupon be completely released from all
liability with respect to such deposits, and the Grantor or the owner of the
Mortgaged Property shall look solely to such service or financial institution or
the assignee or transferee with respect to such deposits. The preceding sentence
shall apply to each transfer of such deposits to a new assignee or transferee. A
permissible transfer of record title to the Facility automatically shall
transfer to the new owner the beneficial interest in any deposits made under
this SECTION 2.15. Upon full payment and satisfaction of this Deed of Trust or,
at the Beneficiary's option, at any prior time, the balance of deposited amounts
and any interest earned thereon in the possession of such service or financial
institution shall be paid over to the record owner of the Facility, and no other
person shall have any right or claim to such deposited amounts or interest in
any event.
2.16 Inspection. Upon reasonable notice from the Beneficiary or the
----------
Trustee to the Grantor, the Grantor will allow the Trustee or the Beneficiary or
its authorized representatives, at all reasonable times, to enter upon and
inspect the Mortgaged Property and the books and records with respect to the
operations of the Mortgaged Property.
2.17 Maintenance of Records. The Grantor shall keep and maintain
----------------------
complete and accurate books and records in accordance with sound accounting
principles with respect to all operations of or transactions involving the
Mortgaged Property.
2.18 Grantor's Certificates. The Grantor, within ten days after
----------------------
request by the Beneficiary, shall furnish to the Beneficiary a written
statement, duly acknowledged, certifying to the Beneficiary and/or any proposed
assignee of this Deed of Trust as to (a) the amount of the Obligations then
owing, (b) the terms of payment and maturity date of the Obligations, (c) the
date to which interest has been paid under the Promissory Note and (d) whether
any offsets or defenses exist against the Obligations and, if any are alleged to
exist, a detailed description thereof.
2.19 Prepayments; Release Premium. So long as no Event of Default
----------------------------
shall have occurred and be continuing, the Grantor may prepay the unpaid
principal amount of the Promissory Note, in whole or in part, plus accrued
interest to the date of such prepayment on the principal amount prepaid, plus
any late charges then payable under the Promissory Note, plus any costs and
expenses then payable by the Grantor under the Promissory Note; provided that
--------
each partial prepayment shall be in a principal amount of not less than Five
Thousand and No/100 Dollars ($5,000.00); provided, further that upon prepayment
-------- -------
in whole of the unpaid principal amount of the Promissory Note plus accrued
interest to the date of such prepayment plus the amount of any late charges then
payable under the Promissory Note plus any costs and expenses then payable by
the Grantor under the Promissory Note, the Grantor shall pay to First Healthcare
a release premium (the "Release Premium") in an amount determined at the date of
such prepayment equal to five percent of the amount of the Purchase Price
Balance that would then have been outstanding if the Purchase Price Balance had
ben timely paid in accordance with the regularly scheduled required installment
payments provided for in the Promissory Note without regard to any prepayments
made in respect of the Promissory Note. The Release Premium shall be applied
first to any costs and expenses then payable by the Grantor or any Affiliate
under any Related Promissory Note (as defined below), second to any late charges
then payable under any Related Promissory Note, and then to the principal of any
Related Promissory Note
-12- EXHIBIT C-1
and accrued interest thereon as agreed to by the Grantor and First Healthcare,
or, if the Grantor and First Healthcare cannot agree, then to such principal and
accrued interest determined by the Grantor in its sole discretion as to fifty
percent of the Release Premium and in the order and to such principal and
accrued interest determined by First Healthcare in its sole discretion as to
fifty percent of the Release Premium. Each partial prepayment shall be applied
first to any costs and expenses then payable by the Grantor under the Promissory
Note, second to any late charges then payable under the Promissory Note, third
to interest then accrued, and then to the principal installments under the
Promissory Note in the inverse order of their maturities without deferral or
limitation of the intervening installments of principal or interest. For the
purposes of this Deed of Trust, the term "Related Promissory Note" means any of
the promissory notes made by one or more of the persons listed or otherwise
described in SCHEDULE C (the persons listed or otherwise described in SCHEDULE C
being sometimes referred to in this Deed of Trust individually as an
"Affiliate" and collectively as the "Affiliates") to the order of First
Healthcare and evidencing the obligation of such Affiliate or Affiliates to pay
a portion of the purchase price for the properties (real, personal and mixed)
that are the subject of the Facility Agreement.
2.20 Reporting Requirements. So long as the Promissory Note shall
----------------------
remain unpaid, the Grantor shall furnish to the Beneficiary:
(a) as soon as possible and in any event within five days after
the occurrence of each Event of Default and each event which, with the giving of
notice or lapse of time, or both, would constitute an Event of Default
continuing on the date of such statement, a statement of the chief financial
officer of the general partner in the Grantor setting forth details of such
Event of Default or event and the action which the Grantor has taken and
proposes to take with respect thereto;
(b) as soon as available and in any event within sixty days
alter the end of each of the first three quarters of each fiscal year of the
Grantor, a balance sheet of the Grantor as of the end of such quarter and
statements of income and expense and of cash flow of the Grantor for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding period of the preceding fiscal year, all in
reasonable detail and duly certIfied (subject to year-end audit adjustments) by
the chief financial officer of the general partner in the Grantor as having been
prepared in accordance with sound accounting principles and practices
consistently applied and as fairly presenting the financial condition of the
Grantor as of the respective dates of such financial statements and the results
of the operations of the Grantor for the periods ended on such dates, together
with a certificate of said officer stating that no Event of Default, or event
which, with the giving of notice or the lapse of time, or both, would constitute
an Event of Default has occurred and is continuing or, if an Event of Default or
such an event has occurred and is continuing, a statement as to the nature
thereof and the action which the Grantor has taken and proposes to take with
respect thereto;
(c) as soon as available and in any event within sixty days
after the end of each quarter of each fiscal year of the Grantor, a balance
sheet for the Facility as of the end of such quarter and statements of income
and expense and of cash flow for the Facility for the period commencing at the
end of the previous fiscal year and ending with the end of such quarter, setting
forth in each case in comparative form the corresponding figures for the
corresponding period of the preceding fiscal year, all in reasonable detail and
duly certified (subject to year-end audit adjustments) by the chief financial
officer of the general partner in the Grantor as having been prepared in
accordance with sound accounting principles and practices consistently applied
and as fairly presenting the financial condition of the Facility as of the
respective dates of such financial statements and the results of the operations
of the Facility for the periods ended on such dates;
-13- EXHIBIT C-1
(d) as soon as available and in any event within one-hundred
twenty days after the end of each fiscal year of the Grantor, a balance sheet of
the Grantor as of the end of such fiscal year and statements of income and
expense and of cash flow of the Grantor for such fiscal year, accompanied by a
report and an opinion of independent certified public accountants of recognized
standing or, if such report and opinion are not available, duly certified by the
chief financial officer of the general partner in the Grantor as having been
prepared in accordance with generally accepted accounting principles and
practices consistently applied and as fairly presenting the financial condition
of the Grantor as of the end of such fiscal year and the results of the
operations of the Grantor for such fiscal year;
(e) as soon as available and in any event within ninety days
alter the end of each fiscal year of the Grantor, a certificate of the chief
financial officer of the general partner in the Grantor stating that no Event of
Default, or event which, with the giving of notice or the lapse of time, or
both, would constitute an Event of Default, has occurred and is continuing or,
if an Event of Default or such an event has occurred and is continuing, a
statement as to the nature thereof and the action which the Grantor has taken
and proposes to take with respect thereto;
(f) as soon as available and in any event within sixty days
after the end of each quarter of each fiscal year of the Grantor, detailed
operational statistics for the Facility pertaining to occupancy rates, patient
or resident mix and patient or resident rates by type for the period commencing
at the end of the previous fiscal year and ending with the end of such quarter;
(g) promptly and in any event within thirty days after the
sending or filing thereof, copies of all cost reports (including all cost
reports filed pursuant to Titles XVIII and XIX of the Social Security Act, as
amended) and all amendments thereto required to be flied with any governmental
or regulatory authority in respect of the Facility, in each case duly certified
by an authorized officer of the general partner in the Grantor as being accurate
and complete and as having been prepared in accordance with applicable
governmental and regulatory requirements;
(h) promptly and in any event within thirty days after receipt
thereof by the Grantor, a copy of each survey prepared by any governmental or
regulatory authority with respect to the Facility, together with a copy of any
related plan of correction;
(i) promptly after the sending or filing thereof, copies of all
proxy statements, financial statements and reports which the Grantor sends to
its partners, and copies of all regular, periodic and special reports, and all
registration statements, that the Grantor files with the Securities and Exchange
Commission or any governmental authority which may be substituted therefor, or
with any national securities exchange; and
(j) such other information respecting the business, properties,
operations or condition (financial or otherwise) of the Grantor and the
Affiliates as the Beneficiary may from time to time reasonably request, in each
case certified by an appropriate officer of the general partner in the Grantor.
ARTICLE III
Assignment of Rents and Other Sums
----------------------------------
3.01 Assignment. The Grantor hereby bargains, sells, assigns,
----------
transfers and sets over to the Beneficiary, absolutely and not as additional
security for the payment of the Obligations, all rents, proceeds, issues and
profits due and to become due and payable under or pursuant to or to be derived
from the Mortgaged Property, or the use and occupation of the Mortgaged
Property, including
-14- EXHIBIT C-1
all rents, royalties, revenues, rights, deposits (including security deposits)
and benefits accruing to the Grantor under all leases and all other contracts
and agreements (including all patient care agreements, life care contracts,
admission agreements and other contracts and agreements with residents, patients
and other persons pertaining to the care of residents or patients) now or
hereafter covering the Mortgaged Property, whether before or after foreclosure
or during the full period of redemption, if any, and the right to receive the
same and apply them against the Obligations or against the Grantor's other
obligations under this Deed of Trust, together with all contracts, bonds, leases
and other documents and agreements (including all patient care agreements, life
care contracts, admission agreements and other contracts and agreements with
residents, patients and other persons pertaining to the care of residents or
patients) evidencing the same now or hereafter in effect and all rights of the
Grantor thereunder. Nothing contained in the preceding sentence shall be
construed to bind the Beneficiary to the performance of any of the provisions of
any such contract, bond, lease or other document or agreement or otherwise to
impose any obligation upon the Beneficiary (including any liability under a
covenant of quiet enjoyment contained in any lease or under applicable law in
the event that any tenant shall have been joined as a party defendant in any
action to foreclose this Deed of Trust and shall have been foreclosed of all
right, title and interest and all equity of redemption in the Mortgaged
Property), except that the Beneficiary shall be accountable for any money
actually received by the Beneficiary pursuant to such assignment The assignment
of said rents, proceeds, issues and profits, and of the aforesaid rights with
respect thereto and to the contracts, bonds, leases and other documents and
agreements evidencing the same is intended to be and is an absolute present
assignment from the Grantor to the Beneficiary and not merely the passing of a
security interest. The Grantor will, as and when requested from time to time by
the Beneficiary, execute, acknowledge and deliver to the Beneficiary, in form
approved by the Beneficiary, one or more general or specific assignments of the
lessor's interest under any lease, contract or agreement (including any patient
care agreement, life care contract, admission agreement and other contract or
agreement with any resident, patient or other person pertaining to the care of
residents or patients) now or hereafter affecting the Mortgaged Property.
Notwithstanding any provision in this Section 3.01 or elsewhere in this Deed of
Trust to the contrary, this Deed of Trust shall not be construed to constitute
an assignment of any patient accounts or any other accounts constituting any
right of the Grantor to payment for goods sold or leased or for services
rendered which is not evidenced by an instrument or chattel paper.
3.02 Right to Collect. So long as there shall exist no Event of
----------------
Default, and except as otherwise expressly provided in this Deed of Trust, the
Grantor shall have the right and license to collect, as the same shall accrue,
the rents, proceeds, issues and profits due and to become due and payable under
or pursuant to or to be derived from the Mortgaged Property or the use and
occupation of the Mortgaged Property. The Grantor agrees to hold the same in
trust and to use the same in payment of the Obligations, taxes, assessments,
levies, fees, charges and insurance premiums payable under this Deed of Trust
and all other charges on or against the Mortgaged Property.
3.03 Revocation of Right to Collect; Etc. Upon the occurrence of any
-----------------------------------
Event of Default, (i) the right and license set forth in Section 3.02 may be
revoked by the Beneficiary, and thereafter the Trustee or the Beneficiary shall
have the right and authority to exercise any of the rights or remedies referred
to or set forth in Article VI and (ii) the Grantor shall promptly pay to the
Trustee or the Beneficiary (A) all prepayments and security or other deposits
paid to the Grantor pursuant to any contract, bond, lease or other document or
agreement assigned under this Deed of Trust and (B) all charges for services or
facilities or for escalation which were paid pursuant to any such contract,
bond, lease or other document or agreement to the extent allocable to any period
from and after the occurrence of such Event of Default. If the Grantor is not
required by this Deed of Trust to surrender possession of the Mortgaged Property
upon the occurrence of an Event of Default, then the Grantor shall pay monthly
in advance to the Trustee or the Beneficiary, on the entry by the Trustee or the
Beneficiary into possession pursuant to Article VI, or to any receiver appointed
to collect said rents,
-15- EXHIBIT C-1
proceeds, issues and profits, the fair and reasonable rental value for the use
and occupation of the Mortgaged Property or such part thereof as may be in the
possession of the Grantor. Upon a default in any such payment, the Grantor will
vacate and surrender such possession to the Trustee, the Beneficiary or such
receiver and, upon a default in vacating and surrendering the same, may be
evicted by summary or any other available proceedings.
ARTICLE IV
Additional Advances; Expenses; Indemnity
----------------------------------------
4.01 Additional Advances and Disbursements. The Grantor agrees that,
-------------------------------------
if the Grantor fails to pay or perform any obligation of the Grantor under this
Deed of Trust (including the obligation to procure and maintain the insurance at
the limits of coverage required by Section 2.10), then the Trustee or the
Beneficiary shall have the right, but not the obligation, in the Grantor's name
or otherwise, and without notice to the Grantor, to pay or perform, or to cause
the payment or performance of, such obligation and, for such purpose, the
Grantor expressly grants to the Trustee and the Beneficiary, in addition and
without prejudice to any other rights and remedies under this Deed of Trust the
right to enter upon and take possession of the Mortgaged Property to such extent
and as often as the Trustee or the Beneficiary may deem necessary or desirable
to prevent or remedy any failure by the Grantor to pay or perform such
obligation. No such payment or performance by the Trustee or the Beneficiary
shall be deemed to have cured such default by the Grantor or any Event of
Default with respect thereto. All sums so paid, and all expenses incurred, by
the Trustee or the Beneficiary in connection with such payment or performance
shall be deemed obligations owing by the Grantor to the Trustee or the
Beneficiary and shall bear interest, from the date paid or incurred until
repaid, at the Default Rate provided for in the Promissory Note. The amount of
all such payments and expenses, and all such interest thereon, shall be part of
the Obligations and shall be secured by this Deed of Trust. This Deed of Trust
secures future advances or future obligations. This Deed of Trust is governed by
the provisions of Section 443.055 of the Revised Statutes of Missouri. The total
amount of the Obligations that may be secured by this Deed of Trust is
$[_______________].
4.02 Other Expenses. The Grantor, on demand, will pay or reimburse
--------------
the Trustee or the Beneficiary for the payment of, any costs or expenses
(including reasonable attorneys' fees and disbursements) incurred or expended in
connection with or incidental to (a) any Event of Default or (b) the exercise or
enforcement by or on behalf of the Trustee or the Beneficiary of any of its
rights or remedies or the Grantor's obligations under any Transaction Document.
4.03 Indemnity. The Grantor agrees to indemnify and hold harmless the
---------
Trustee and the Beneficiary from and against any and all claims, demands,
losses, liabilities, suits, obligations, fines, damages, judgments, penalties,
charges, costs and expenses (including reasonable attorneys' fees and
disbursements) which may be imposed on, incurred or paid by or asserted against
the Trustee or the Beneficiary by reason or on account of, or in connection
with, (a) any Event of Default, (b) the exercise by the Trustee or the
Beneficiary of any of its rights and remedies, or the performance of any of its
duties, under this Deed of Trust or (c) any accident, injury, death or damage to
any person (including any employee of the Grantor) or property occurring in, on
or about the Facility or any street, drive, sidewalk, curb or passageway
adjacent to the Facility, but excepting claims, demands, losses, liabilities,
suits, obligations, fines, damages, judgments, penalties, charges, costs and
expenses resulting from the willful misconduct or gross negligence of the
Trustee or the Beneficiary. Any amount payable to the Trustee or the Beneficiary
under this Section 4.03 shall be deemed a demand obligation, shall be part of
the Obligations and shall be secured by this Deed of Trust.
-16- EXHIBIT C-1
ARTICLE V
Transfer of the Mortgaged Property
----------------------------------
5.01 Transfer of the Mortgaged Property. The Grantor acknowledges
----------------------------------
that the continuous ownership of the Mortgaged Property by the Grantor is of a
material nature to the transaction contemplated by, and the Beneficiary's
agreement to create the Obligations under, the Transaction Documents. The
Grantor agrees that, except as otherwise provided in any Transaction Document,
the Grantor will not, directly or indirectly, sell, grant, convey, assign or
otherwise transfer (collectively, a "transfer"), or permit any transfer of, the
Mortgaged Property or any legal or beneficial interest in the Mortgaged
Property, by operation of law or otherwise, without the prior consent of the
Beneficiary. For the purposes of this Deed of Trust, but without limiting the
foregoing, a transfer of the legal or beneficial ownership, directly or
indirectly, of thirty-three percent or more of the issued and outstanding stock
of any class of stock of any corporate general ▇▇▇▇ in the Grantor,
substantially all of the assets of the Grantor or thirty-three percent or more
of the capital or profits of the Grantor or of any general partner in the
Grantor, shall be deemed a transfer of the Mortgaged Property or an interest in
the Mortgaged Property; provided that a transfer of the legal or beneficial
--------
ownership of thirty-three percent or more of the issued and outstanding stock of
any class of stock of any corporate general partner in the Grantor or thirty-
three percent or more of the capital or profits of the Grantor or of any general
partner in the Grantor shall not be deemed a transfer of the Mortgaged Property
or an interest in the Mortgaged Property if such transfer is to any Affiliate,
to ▇▇▇ ▇. ▇▇▇▇▇▇, to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, to any heir or devisee of Don G. Angel or
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or to the trustee of any living trust of Don G. Angel or ▇▇▇▇▇▇
▇. ▇▇▇▇▇ Upon the occurrence of any transfer of the Mortgaged Property or any
legal or beneficial interest in the Mortgaged Property, by operation of law or
otherwise, without the prior consent of the Beneficiary, the Beneficiary may
elect to declare the Obligations, together with any other sums secured by this
Deed of Trust, immediately due and payable. The Beneficiary may withhold its
consent to any proposed transfer for no reason or any reason, including the
failure of the prospective transferee of the Mortgaged Property to reach an
agreement in writing with the Beneficiary increasing the interest payable on the
Obligations to such rate as the Beneficiary shall request Any transfer or
attempted transfer contrary to the provisions of this Article V shall be void.
ARTICLE VI
Defaults and Remedies
---------------------
6.01 Events of Default. The term "Event of Default" shall mean the
-----------------
occurrence of any of the following events:
(a) The Grantor shall fail to pay any principal of, or interest
on, the Promissory Note within ten days alter the same becomes due and payable;
or
(b) The Grantor shall fail to pay any of the other Obligations
(whether for principal, interest, premiums, fees, expenses or otherwise) when
and as the same become due and payable, whether on any stated due date, at
maturity or upon acceleration, and such failure shall remain unremedied for ten
days after written notice of such failure shall have been given to the Grantor
by the Beneficiary; or
(c) Any representation or warranty made by the Grantor (or any
general partner in the Grantor or any officers of any general partner in the
Grantor) under or in connection with any Transaction Document shall prove to
have been incorrect in any material respect when made; or
(d) The Grantor shall fail at any time to obtain, provide,
maintain or keep in force the insurance policies required by Section 2,10; or
-17- EXHIBIT C-1
(e) The Grantor shall fail to perform or observe any other
provision contained in any Transaction Document on the Grantor's part to be
performed or observed if such failure shall remain unremedied beyond the
applicable grace period for such provision or, if no such grace period is
applicable, if such failure shall remain unremedied for thirty days after
written notice of such failure shall have been given to the Grantor by the
Beneficiary; or
(f) The Grantor shall fail to pay any principal of or premium
or interest on any indebtedness (but excluding indebtedness evidenced by the
Promissory Note) of the Grantor in an aggregate principal amount of at least
$100,000 at any one time outstanding, when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period,
if any, specified in any agreement or instrument relating to such indebtedness;
or any other event shall occur or condition shall exist under any agreement or
instrument relating to any such indebtedness and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such indebtedness; or any such indebtedness
shall be declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), redeemed, purchased or defeased,
or an offer to prepay, redeem, purchase or defease such indebtedness shall be
required to be made, in each case prior to the stated maturity thereof; or
(g) The Grantor shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Grantor seeking to adjudicate
it a bankrupt or insolvent or seeking liquidation, winding up, reorganization,
arrangement adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such proceeding shall
remain undismissed or unstayed for a period of sixty days, or any of the actions
sought in such proceeding (including the entry of an order for relief against,
or the appointment of a receiver, trustee, custodian or other similar official
for, it or for any substantial part of its property) shall occur; or the Grantor
shall take any action to authorize any of the actions set forth above in this
subsection (g); or
(h) Any judgment or order for the payment of money in excess of
$250,000 shall be rendered against the Grantor and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be any period of ten consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(i) Any of the events referred to in subsections (f) through
(h) of this Section 6.01 shall occur with respect to any Guarantor (such term
being used in this Deed of Trust as such term is defined in the Facility
Agreement) and, for the purposes of this subsection (i), each reference to "the
Grantor" in subsections (f) through (h) above shall mean and be a reference to
"any Guarantor", the reference to "$100,000" in subsection (f) above shall mean
and be a reference to "$1,000,000", and the reference to "$250.000" in
subsection (h) above shall mean and be a reference to "$1,000,000"; or
(j) Any of the events referred to in subsections (f) through
(h) of this Section 6.01 shall occur with respect to any general partner in the
Grantor and, for the purposes of
-18- EXHIBIT C-1
this subsection (j), each reference to "the Grantor" in subsections (f) through
(h) above shall mean and be a reference to "any general partner in the Grantor";
or
(k) Any other Transaction Document to which the Grantor is a
party, after delivery of this Deed of Trust or such other Transaction Document
to the Beneficiary, shall for any reason cease to be valid and binding on the
Grantor, or the Grantor shalL so state in writing; or
(l) The Mortgaged Property or any interest in the Mortgaged
Property shall be the subject of a 'transfer,' as that term is defined in
SECTION 5.01; or
(m) The Grantor shall abandon the Mortgaged Property or shall
cease to do business or shall terminate its business for any reason whatsoever:
or
(n) The Mortgaged Property shall be taken, attached or
sequestered on execution or other process of law in any action against the
Grantor; or
(o) Any event shall occur or condition shall exist which
constitutes a default by the Grantor under any lease or agreement to lease
between the Grantor, as lessee or sublessee, and the Beneficiary or any
subsidiary or affiliate of the Beneficiary, as lessor or sublessor, in respect
of real or personal property, and such event or condition shall continue after
the applicable grace period, if any, specified in such lease or agreement to
lease; or
(p) Any event shall occur or condition shall exist which
constitutes a default by any Affiliate under any purchase or sale agreement
lease or agreement to lease, promissory note, mortgage, deed of trust or other
instrument or agreement between such Affiliate and the Beneficiary, or any
subsidiary or affiliate of the Beneficiary, and such event or condition shall
continue after the applicable grace period, if any, specified in such instrument
or agreement.
6.02 Remedies. Upon the occurrence of any one or more Events of
--------
Default, the Trustee or the Beneficiary may (but shall not be obligated to), in
addition to any rights or remedies available to it under any Transaction
Document take such action personally or by its agents or attorneys, with or
without entry, and without notice, demand, presentment or protest (each and all
of which are hereby waived by the Grantor), as the Trustee or the Beneficiary
deems necessary or advisable to protect and enforce its rights and remedies
against the Grantor and in and to the Mortgaged Property, including the
following actions, each of which may be pursued concurrently or otherwise, at
such time and in such order as the Trustee or the Beneficiary may determine, in
its sole discretion, without impairing or otherwise affecting any other rights
or remedies of the Trustee or the Beneficiary:
(a) Declare the entire balance of the Obligations (including the
entire principal balance thereof, all accrued and unpaid interest and any
premium thereon and all other such sums secured by this Deed of Trust) to be
immediately due and payable, and upon any such declaration the entire unpaid
balance of the Obligations shall become and be immediately due and payable,
without presentment demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Grantor, anything in this Deed of Trust or
any other Transaction Document to the contrary notwithstanding; provided that in
--------
the event of an actual or deemed entry of an order for relief with respect to
the Grantor or any guarantor referred to in subsection (i) of Section 6.01 or
any general partner in the Grantor under the United States Bankruptcy Code, as
amended, or under any present or future law or statute of the United States of
America or of any state or other jurisdiction thereof relevant to bankruptcy,
insolvency or other relief of debtors, the entire unpaid balance of the
Obligations automatically shall become and be immediately due and payable,
without presentment,
-19- EXHIBIT C-1
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Grantor, anything in this Deed of Trust or any other Transaction
Document to the contrary notwithstanding; or
(b) Institute a proceeding or proceedings for the complete
foreclosure of this Deed of Trust under any applicable provision of law; or
(c) Institute a proceeding or proceedings for the partial
foreclosure of this Deed of Trust under any applicable provision of law for the
portion of the Obligations then due and payable, subject to the lien of this
Deed of Trust continuing unimpaired and without loss of priority so as to secure
the balance of the Obligations not then due and payable; or
(d) To the extent permitted by applicable law, sell the
Mortgaged Property, and all estate, right, title, interest, claim and demand of
the Grantor in the Mortgaged Property, and all rights of redemption of the
Mortgaged Property, at one or more sales, as an entirety or in parcels, with
such elements of real and/or personal property (and, to the extent permitted by
applicable law, may elect to deem all of the Mortgaged Property to be real
property for purposes of such sale or sales), and at such time and place and
upon such terms as the Trustee or the Beneficiary may deem expedient, or as may
be required by applicable law, and in the event of a sale, by foreclosure or
otherwise, of less than all of the Mortgaged Property, this Deed of Trust shall
continue as a lien and security interest on the remaining portion of the
Mortgaged Property; or
(e) Institute an action, suit or proceeding in equity for the
specific performance of any of the provisions contained in this Deed of Trust or
any other Transaction Document; or
(f) ▇▇▇ and recover a judgment on the Obligations, as the same
become due and payable, or on account of any Event of Default; or
(g) Apply for the appointment of a receiver, custodian,
trustee, liquidator or conservator of the Mortgaged Property, to be invested
with the fullest powers permitted under applicable law, as a matter of right and
without regard to or the necessity to disprove the adequacy of the security for
the Obligations or the solvency of the Grantor or any other person liable for
the payment of the Obligations, and the Grantor and each other person so liable
waives or shall be deemed to have waived such necessity and consents or shall be
deemed to have consented to such appointment; or
(h) Enter upon the Mortgaged Property, and exclude the Grantor
and the Grantor's agents and servants wholly from the Mortgaged Property,
without liability for trespass, damages or otherwise, and take possession of all
books, records and accounts relating to the Mortgaged Property, and the Grantor
agrees to surrender possession of the Mortgaged Property and of such books,
records and accounts to the Trustee or the Beneficiary on demand after the
occurrence of any Event of Default; and the Trustee or the Beneficiary may use,
operate, manage, preserve, control and otherwise deal with the Mortgaged
Property and such books, records and accounts and may conduct the business of
the Facility, either personally or by its superintendents, managers, agents,
servants, attorneys or receivers, without interference from the Grantor; and
upon each such entry, and from time to time thereafter, the Trustee or the
Beneficiary, at the expense of the Grantor and the Mortgaged Property, without
interference by the Grantor, may (i) maintain and restore the Mortgaged Property
by purchase, repair or construction, (ii) insure or reinsure the Mortgaged
Property, (iii) make all necessary or proper repairs, renewals, replacements,
alterations, additions, betterments and improvements to and on the Mortgaged
Property, (iv) complete the construction of the improvements and, in the course
of such completion, make such changes in the contemplated or completed
-20- EXHIBIT C-1
improvements as the Trustee or the Beneficiary may deem advisable and (v) in
every such case in connection with the foregoing have the right to exercise all
rights and powers of the Grantor with respect to the Mortgaged Property, either
in the Grantor's name or otherwise, including the right to make, cancel, enforce
or modify leases and subleases, obtain and evict tenants and subtenants on such
terms as the Trustee or the Beneficiary shall deem advisable; or
(i) With or without the entrance upon or taking possession of
the Mortgaged Property, collect and receive all rents, proceeds, issues and
profits due and to become due and payable under or pursuant to or derived from
the Mortgaged Property, and after deducting therefrom all costs and expenses of
every character incurred by the Trustee or the Beneficiary in collecting the
same and in using, operating, managing, preserving and controlling the Mortgaged
Property, and otherwise in exercising the rights of the Trustee or the
Beneficiary under subsection (h) of this Section 6.02, including all amounts
necessary to pay taxes, assessments, levies, fees, insurance premiums and other
charges in connection with the Mortgaged Property, as well as reasonable
compensation for the services of the Trustee, the Beneficiary and their
respective attorneys, agents and employees, apply the remainder as provided in
Section 6.05; or
(j) Release any portion of the Mortgaged Property for such
consideration as the Trustee or the Beneficiary may require without, as to the
remainder of the Mortgaged Property, in any way impairing or affecting the lien
or priority of this Deed of Trust, or improving the position of any subordinate
lienholder with respect thereto, except to the extent that the Obligations shall
have been reduced by the actual monetary consideration, if any, received by the
Trustee or the Beneficiary for such release, and may accept by assignment,
pledge or otherwise any other property in place thereof as the Trustee or the
Beneficiary may require without being accountable for so doing to any other
lienor; or
(k) Take all actions permitted under the Uniform Commercial
Code of the jurisdiction in which the Facility is located; or
(l) Take any other action, or pursue any other right or remedy,
as the Trustee or the Beneficiary may have under applicable law, and the Grantor
does hereby grant the same to the Trustee and the Beneficiary.
In the event that the Trustee or the Beneficiary shall exercise any of the
rights or remedies set forth in subsections (h) and (i) of this Section 6.02,
neither the Trustee nor the Beneficiary shall be deemed to have entered upon or
taken possession of the Mortgaged Property except upon the exercise of its
option to do so, evidenced by its demand and overt act for such purpose, nor
shall the Trustee or the Beneficiary be deemed a mortgagee in possession by
reason of such entry or taking possession. Neither the Trustee nor the
Beneficiary will be liable to account for any action taken pursuant to any such
exercise other than for rents and payments on patient accounts actually received
by the Trustee or the Beneficiary, nor liable for any loss sustained by the
Grantor resulting from any failure to let the Mortgaged Property, or from any
other act or omission of the Trustee or the Beneficiary except to the extent
such loss is caused by the willful misconduct or bad faith of the Trustee or the
Beneficiary. The Grantor hereby consents to, ratifies and confirms the exercise
by either the Trustee or the Beneficiary of said rights and remedies, and
appoints each of the Trustee and the Beneficiary as the Grantor's attorney-in-
fact, which appointment shall be deemed to be coupled with an interest and is
irrevocable, for such purposes.
6.03 Expenses. In any proceeding to foreclose this Deed of Trust or
--------
to enforce any other remedy of the Trustee or the Beneficiary under this Deed of
Trust or any other Transaction Document, there shall be allowed and included as
an addition to and a part of the Obligations in the
-21- EXHIBIT C-1
decree for sale or other judgment or decree all expenditures and expenses
(including reasonable attorneys' fees and disbursements) which may be paid or
incurred in connection with the exercise by the Trustee or the Beneficiary of
any of its rights and remedies provided or referred to in SECTION 6.02 and the
same shall be secured by this Deed of Trust.
6.04 Rights Pertaining to Sales. The following provisions shall
--------------------------
apply to any sale or sales of the Mortgaged Property under or by virtue of this
ARTICLE VI:
(a) The Beneficiary or the Trustee may conduct any number of
sales from time to time. The power of sale set forth in Section 6.02(d) shall
not be exhausted by any one or more such sales as to any part of the Mortgaged
Property which shall not have been sold, nor by any sale which is not completed
or is defective in the opinion of the Trustee or the Beneficiary, until the
Obligations shall have been paid in full.
(b) Any sale may be postponed or adjourned by public
announcement at the time and place appointed for such sale or for such postponed
or adjourned sale without further notice.
(c) After each sale, the Trustee shall execute and deliver to
the purchaser or purchasers at such sale a good and sufficient instrument or
instruments granting, conveying, assigning and transferring all right, title and
interest of the Grantor in and to the property and rights sold and shall receive
the proceeds of said sale or sales and apply the same as provided in this Deed
of Trust. The Trustee is hereby appointed the true and lawful attorney-fact of
the Grantor, which appointment is irrevocable and shall be deemed to be coupled
with an interest, in the Grantor's name and stead, to make all necessary
conveyances, assignments, transfers and deliveries of the property and rights so
sold, and for that purpose the Trustee may execute all necessary instruments of
conveyance, assignment transfer and delivery, and may substitute one or more
persons with like power, the Grantor hereby ratifying and confirming all that
said attorney or such substitute or substitutes shall lawfully do by virtue
thereof. Nevertheless, the Grantor, if requested by the Trustee, shall ratify
and confirm any such sale or sales by executing and delivering to the Trustee or
such purchaser or purchasers all such instruments as may be advisable, in the
judgment of the Trustee or the Beneficiary, for the purposes designated in such
request.
(d) Any and all statements of fact or other recitals made in any
of the instruments referred to in subsection (c) of this Section 6.04 given by
the Trustee or the Beneficiary as to nonpayment of the Obligations, or as to the
occurrence of any Event of Default, or as to the Beneficiary having declared all
or any of the Obligations to be due and payable, or as to the request to sell,
or as to notice of time, place and terms of sale and of the property or rights
to be sold having been duly given, or as to the refusal, failure or inability to
act of the Trustee, or as to the appointment of any substitute or successor
Trustee, or as to any other act or thing having been duly done by the Trustee or
the Beneficiary, shall be taken as prima facie evidence of the truth of the
----- -----
facts so stated and recited. The Trustee or the Beneficiary may appoint or
delegate any one or more persons as agent to perform any act or acts necessary
or incident to any sale so held, including the posting of notices and the
conduct of sale.
(e) The receipt of the Trustee or the Beneficiary for the
purchase money paid at any such sale, or the receipt of any other person
authorized to give the same, shall be sufficient discharge therefor to any
purchaser of any property or rights sold as aforesaid, and no such purchaser, or
its representatives, grantees or assigns, after paying such purchase price and
receiving such receipt, shall be bound to see to the application of such
purchase price or any part thereof upon or for any trust or purpose of this Deed
of Trust or, in any manner whatsoever, be answerable for any loss,
-22- EXHIBIT C-1
misapplication or nonapplication of any such purchase money, or part thereof, or
be bound to inquire as to the authorization, necessity, expediency or regularity
of any such sale.
(f) Any such sale or sales shall operate to divest all of the
estate, right, title, interest, claim and demand whatsoever, whether at law or
in equity, of the Grantor in and to the properties and rights so sold, and shall
be a perpetual bar both at law and in equity against the Grantor and any and all
persons claiming or who may claim the same, or any part thereof, by, through or
under the Grantor to the fullest extent permitted by applicable law.
(g) Upon any such sale or sales, the Beneficiary may bid for
and acquire the Mortgaged Property and, in lieu of paying cash therefor, may
make settlement for the purchase price by crediting against the Obligations the
amount of the bid made therefor, after deducting therefrom the expenses of the
sale, the cost of any enforcement proceeding under this Deed of Trust and any
other sums which the Trustee or the Beneficiary is authorized to deduct under
the terms of this Deed of Trust, to the extent necessary to satisfy such bid.
(h) In the event that the Grantor, or any person claiming by,
through or under the Grantor, shall transfer or refuse or fail to surrender
possession of the Mortgaged Property after any sale of the Mortgaged Property,
then the Grantor or such person shall be deemed a tenant at sufferance of the
purchaser at such sale, subject to eviction by means of forcible entry and
detainer proceedings, or subject to any other right or remedy available under
this Deed of Trust or under applicable law.
(i) Upon any such sale, the Trustee, the Beneficiary or any
public officer acting under execution or order of court shall not be required to
have present or constructively in its possession any or all of the Mortgaged
Property.
(j) In the event of any sale referred to in this SECTION 6.04,
all of the Obligations, if not previously due and payable, immediately thereupon
shall become due and payable, notwithstanding anything to the contrary contained
in this Deed of Trust or any other Transaction Document
(k) In the event a foreclosure under this Deed of Trust shall
be commenced by the Trustee, the Trustee or the Beneficiary may, at any time
before the sale of the Mortgaged Property, abandon or direct the Trustee to
abandon the sale, and may institute suit for the collection of the Obligations
and for the foreclosure of this Deed of Trust, or in the event that the Trustee
or the Beneficiary should institute a suit for collection of the Obligations,
and for the foreclosure of this Deed of Trust, the Beneficiary may at any time
before the entry of final judgment in said suit dismiss the same and require the
Trustee to sell the Mortgaged Property in accordance with the provisions of this
Deed of Trust.
6.05 Application of Proceeds. The purchase money, proceeds or avails
-----------------------
of any sale referred to in Section 6.04, together with any other sums that may
be held by the Trustee or the Beneficiary under this ARTICLE VI or any other
provision of this Deed of Trust, except as expressly provided in this Deed of
Trust or under applicable law to the contrary, shall be applied as follows:
First: To the payment of the costs and expenses of any such
-----
sale, including compensation to the Trustee, the Beneficiary and their agents
and counsel, and of any judicial proceeding in which such sale may be made, and
of all expenses (including reasonable attorneys' fees and disbursements),
liabilities and advances made or incurred by the Trustee or the Beneficiary
under this Deed of Trust, together with interest thereon as provided in this
Deed of Trust, and all taxes,
-23- EXHIBIT C-1
assessments and other charges, except any taxes, assessments or other charges
subject to which the Mortgaged Property shall have been sold.
Second: To the payment in full of the Obligations (including
------
principal, interest, premium and fees in such order as the Beneficiary may
elect).
Third: To the payment of any other sums secured by this Deed
-----
of Trust or required to be paid by the Grantor pursuant to any provision of this
Deed of Trust or any other Transaction Document.
Fourth: To the extent permitted by applicable law, to be set
------
aside by the Trustee or the Beneficiary as adequate security in its judgment for
the payment of sums which would have been paid by application under clauses
First through Third above to the Trustee or the Beneficiary, arising out of an
----- -----
obligation or liability with respect to which the Grantor has agreed to
indemnify the Trustee or the Beneficiary, but which sums are not yet due and
payable or liquidated.
Fifth: To the payment of the surplus, if, any, to whomsoever
-----
may be lawfully entitled to receive the same.
6.06 Additional Provisions as to Remedies.
------------------------------------
(a) No right or remedy of the Trustee or the Beneficiary under
this Deed of Trust is intended to be exclusive of any other right or remedy, and
each and every such right or remedy shall be cumulative and continuing, shall be
in additIon to every other right or remedy given under this Deed of Trust or any
other Transaction Document or now or hereafter existing at law or in equity, and
may be exercised from time to time and as often as may be deemed expedient by
the Trustee or the Beneficiary.
(b) No delay or omission by the Trustee or the Beneficiary to
exercise any right or remedy under this Deed of Trust upon an Event of Default
shall impair such exercise, or be construed to be a waiver of any such Event of
Default or an acquiescence in any such Event of Default.
(c) The failure, refusal or waiver by the Trustee or the
Beneficiary of its right to assert any right or remedy under this Deed of Trust
upon any Event of Default or other occurrence shall not be construed as waiving
such right or remedy upon any other or subsequent Event of Default or other
occurrence.
(d) Neither the Trustee nor the Beneficiary shall have any
obligation to pursue any rights or remedies it may have under any other
agreement prior to pursuing its rights or remedies under this Deed of Trust or
any other Transaction Document.
(e) The Trustee and the Beneficiary may resort to any security
given by this Deed of Trust or any other security now given or hereafter
existing to secure the Obligations, in whole or in part in such portions and in
such order as the Trustee or the Beneficiary may deem advisable, and no such
action shall be construed as a waiver of any of the liens, rights or benefits
granted under this Deed of Trust.
(f) Acceptance of any payment after the occurrence of an Event
of Default shall not be deemed a waiver or a cure of such Event of Default, and
acceptance of any payment less than any amount then due shall be deemed an
acceptance on account only.
-24- EXHIBIT C-1
(g) In the event that the Trustee or the Beneficiary shall have
proceeded to enforce any right or remedy under this Deed of Trust by
foreclosure, sale, entry or otherwise, and such proceeding shall be
discontinued, abandoned or determined adversely for any reason, then the
Grantor, the Trustee and the Beneficiary shall be restored to their former
positions and rights under this Deed of Trust with respect to the Mortgaged
Property, subject to the lien and security interest of this Deed of Trust.
6.07 Waiver of Rights and Defenses. To the full extent the Grantor
-----------------------------
may do so, the Grantor agrees with the Beneficiary as follows:
(a) The Grantor will not at any time insist on, plead, claim or
take the benefit or advantage of any statute or rule of law now or hereafter in
force providing for any appraisement, valuation, stay, extension, moratorium or
redemption, or of any statute of limitations, and the Grantor, for itself and
its successors and assigns, and for any and all persons ever claiming an
interest in the Mortgaged Property, hereby waives and releases all rights of
redemption, valuation, appraisement, notice of intention to mature or declare
due the whole of the Obligations, and all rights to a marshaling of the assets
of the Grantor, including the Mortgaged Property, or to a sale in inverse order
of alienation, in the event of foreclosure of the lien and security interest
created under this Deed of Trust.
(b) Regardless of consideration, and without the necessity for
any notice to or consent by the holder of any subordinate lien, encumbrance,
right, title or interest in or to the Mortgaged Property, the Beneficiary may
release any person at any time liable for the payment of the Obligations or any
portion of the Obligations or any part of the security held for the Obligations
and may extend the time of payment or otherwise modify the terms of this Deed of
Trust and/or any other Transaction Document, including a modification of the
interest rate payable on the principal balance of the Promissory Note, without
in any manner impairing or affecting this Deed of Trust or the lien and security
interest of this Deed of Trust or the priority of this Deed of Trust, as so
extended and modified, as security for the Obligations over any such subordinate
lien, encumbrance, right, title or interest. The Beneficiary may resort for the
payment of the Obligations to any other security held by the Beneficiary in such
order and manner as the Beneficiary, in its discretion, may elect. The
Beneficiary may take action to recover all or any portion of the Obligations or
to enforce any covenant in this Deed of Trust or any other Transaction Document
without prejudice to the right of the Beneficiary thereafter to foreclose this
Deed of Trust.
ARTICLE VII
Defeasance; Provisions as to Trustee
------------------------------------
7.01 Defeasance. If the Obligations shall be paid in full as they
----------
become due and payable, then and (subject to Section 7.02) in that event only
all rights under this Deed of Trust shall terminate and the Mortgaged Property
shall become wholly released and cleared of the lien, security interest,
conveyance and assignment evidenced by this Deed of Trust. In such event, the
Beneficiary, at the request and the sole cost and expense of the Grantor, shall
promptly deliver to the Grantor, in recordable form, all such documents as shall
be necessary to release the Mortgaged Property from the lien, security interest,
conveyance and assignment evidenced by this Deed of Trust; provided that nothing
--------
in this Section 7.01 shall be construed to require the Grantor to pay any
attorneys' fees or expenses incurred by the Beneficiary in connection with the
preparation and delivery of such documents.
7.02 Reconveyance. If the entire unpaid principal amount of the
------------
Promissory Note shall be prepaid and all of the other Obligations and the
Release Premium shall be paid pursuant to Section 2.19. then all rights under
this Deed of Trust shall terminate and the Mortgaged Property shall
-25- EXHIBIT C-1
become wholly released and cleared of the lien, security interest, conveyance
and assignment evidenced by this Deed of Trust. In such event, the Beneficiary
and the Trustee, at the request of the Grantor, shall promptly deliver to the
Grantor, in recordable form, all such documents as shall be necessary to release
the Mortgaged Property from the lien, security interest, conveyance and
assignment evidenced by this Deed of Trust; provided that nothing in this
--------
Section 7.02 shall be construed to require the Grantor to pay any attorneys'
fees or expenses incurred by the Beneficiary or the Trustee in connection with
the preparation and delivery of such documents.
7.03 Trustee's Resignation. The Trustee may resign by an instrument
---------------------
in writing addressed to the Beneficiary, or the Trustee may be removed at any
time with or without cause by an instrument in writing executed by the
Beneficiary. In case of the death, resignation, removal or disqualification of
the Trustee or if for any reason the Beneficiary shall deem it desirable to
appoint a substitute or successor trustee to act instead of the Trustee named in
this Deed of Trust or instead of any substitute or successor Trustee, then the
Beneficiary shall have the right and is hereby authorized and empowered to
appoint a successor Trustee, or a substitute Trustee, without other formality
than appointment and designation in writing executed by the Beneficiary and
recorded in the real estate records of the county where the Mortgaged Property
is located, and the authority conferred by this Section 7.03 shall extend to the
appointment of other successor and substitute Trustees successively until the
Obligations have been paid in full or until the Mortgaged Property is sold under
this Deed of Trust. Such appointment and designation by the Beneficiary shall be
full evidence of the right and authority to make the same and of all facts
therein recited. Any such appointment executed on behalf of the Beneficiary by
an officer of the Beneficiary shall be conclusively presumed to be executed with
authority and shall be valid and sufficient without proof of any action by the
board of directors or any superior officer of the Beneficiary. Upon the making
of such appointment and designation, all of the estate and title of the Trustee
in the Mortgaged Property shall vest in the named successor or substitute
Trustee, and the named successor or substitute Trustee shall thereupon succeed
to and shall hold, possess and execute all the rights, powers, privileges,
immunities and duties conferred upon the Trustee in this Deed of Trust. Upon the
written request of the Beneficiary or of the successor or substitute Trustee,
the Trustee ceasing to act shall execute and deliver an instrument transferring
to such successor or substitute Trustee all of the estate and title in the
Mortgaged Property of the Trustee so ceasing to act, together with all the
rights, powers, privileges, immunities and duties conferred upon the Trustee in
this Deed of Trust, and shall duly assign, transfer and deliver any of the
properties and moneys held by said Trustee under this Deed of Trust to said
successor or substitute Trustee. All references in this Deed of Trust to the
Trustee shall be deemed to refer to the Trustee (including any successor or
substitute appointed and designated as provided in this Deed of Trust) from time
to time acting under this Deed of Trust The Grantor hereby ratifies and confirms
any and all acts which the Trustee or its successor or successors, substitute or
substitutes, in this trust, shall do lawfully by virtue of this Deed of Trust.
7.04 Exculpation. The Trustee shall not be liable for any error of
-----------
judgment or act done by the Trustee in good faith, or be otherwise responsible
or accountable under any circumstances whatsoever, except for the Trustee's
gross negligence or willful misconduct. The Trustee shall have the right to rely
on any instrument, document or signature authorizing or supporting any action
taken or proposed to be taken by the Trustee under this Deed of Trust, believed
by the Trustee in good faith to be genuine. All moneys received by the Trustee,
until used or applied as provided in this Deed of Trust, shall be held in trust
for the purposes for which they were received, but need not be segregated in any
manner from any other moneys (except to the extent required by law), and the
Trustee shall be under no liability for interest on any moneys received by it
under this Deed of Trust.
-26- EXHIBIT C-1
ARTICLE VIII
Additional Provisions
---------------------
8.01 Construction of Certain provisions. The following rules of
----------------------------------
construction shall be applicable for all purposes of this Deed of Trust:
(a) All references in this Deed of Trust to Articles,
Sections and Schedules are references to Articles and Sections of and Schedules
attached to this Deed of Trust, unless stated otherwise in this Deed of Trust
(b) The cover page of, and all recitals set forth in, and all
Schedules to, this Deed of Trust are by this reference incorporated in this Deed
of Trust.
(c) The table of contents and the captions of the Articles,
Sections, subsections, paragraphs and other divisions of this Deed of Trust are
included for convenience of reference only, and shall not in any way limit or
affect the construction or interpretation of any provisions of this Deed of
Trust.
(d) Each of the terms "Mortgaged Property" and "Facility"
shall be construed as if followed by the phrase "or any part thereof."
(e) The term "Obligations" shall be construed as if followed
by the phrase "or any other sums secured hereby, or any part thereof."
(f) The term "indebtedness" shall mean (i) indebtedness for
borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other
similar instruments, (iii) obligations to pay the deferred purchase price of
property or services (iv) indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property, (v)
obligations as lessee under leases which shall have been or should be, in
accordance with generally accepted accounting principles, recorded as capital
leases, (vi) obligations (contingent or otherwise) under acceptance, letter-of-
credit or similar facilities, (vii) obligations in respect of interest rate swap
agreements, currency swap agreements and other similar agreements designed to
hedge against fluctuations in interest rates or foreign exchange rates and
(viii) obligations under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of the types referred to in any of clauses (i) through (vii) above.
(g) The terms "include", "including" and similar terms shall
be construed as if followed by the phrase "but not limited to."
(h) The term "provisions," when used with respect to this Deed
of Trust or any other Transaction Document shall be construed as if preceded by
the phrase "terms, covenants, agreements, requirements, conditions and/or."
(i) The term "person" shall include natural persons, firms,
partnerships, corporations and any other public and private legal entities.
(j) The term "lease" shall mean "tenancy, subtenancy, lease or
sublease" and the term "lessee" shall mean "tenant, subtenant, lessee or
sublessee."
-27- EXHIBIT C-1
(k) The phrase "sound accounting principles and practices"
shall mean generally accepted accounting principles and practices consistently
applied, but permitting, with respect to the preparation of financial
statements, the omission of footnotes and federal and state income tax reserves,
none of which omissions shall represent an omission of material items of revenue
or expense other than federal and state income tax expense.
(l) Except with respect to Sections 2.02, 2.13 and 5.01, the
term "consent of the Beneficiary" shall be construed as if followed by the
phrase", which consent shall not be unreasonably withheld."
(m) The words "reasonable attorneys fees and disbursements"
shall include reasonable charges allocated for internal corporate counsel.
(n) Words of masculine, feminine or neuter gender shall mean
and include the correlative words of the other genders, and words importing the
singular number shall mean and include the plural number, and vice versa.
---- -----
(o) No inference in favor of, or against any party shall be
drawn from the fact that such party has drafted any portion of this Deed of
Trust.
8.02 Limitation on Interest. Notwithstanding any other provisions of
----------------------
this Deed of Trust or any other Transaction Document to the contrary, no
provision of this Deed of Trust or any other Transaction Document shall require
the payment or permit the collection of interest, fees or charges in excess of
the maximum rate permitted by applicable law.
8.03 Lease. The Trustee leases the Mortgaged Property to the
-----
Grantor, until either this Deed of Trust is released or the Mortgaged Property
is sold under the above provisions; on the following terms and conditions: The
Grantor and every person claiming or possessing the Mortgaged Property through
or under the Grantor shall pay rent during the term at the rate of one cent per
month, payable monthly upon demand, and shall without demand surrender peaceable
possession of the Mortgaged Property to the Trustee, successors and assigns of
the Trustee, or purchasers of the Mortgaged Property under any foreclosure sale,
within ten days after the sale date.
8.04 Amendments, Etc. No amendment or waiver of any provision of
---------------
this Deed of Trust, nor consent to any departure by the Grantor from any such
provision, shall in any event be effective unless such amendment, waiver or
consent is in a writing which specifically refers to this Section 8.04 and which
is signed by the Grantor and by the Chief Executive Officer or the President of
the Beneficiary and, to the extent required by applicable law, by the Trustee;
provided that any such waiver or consent shall be effective only in the specific
--------
instance and for the specific purpose for which given; provided, further, that
-------- -------
the Trustee shall not sign any amendment or waiver without the consent of the
Beneficiary.
8.05 Notices. Except as otherwise provided in this Deed of Trust or
-------
required by applicable law, all notices, consents, requests and other
communications to any party under or in connection with this Deed of Trust shall
be in writing and shall be sent via personal delivery, via telephone facsimile
transmission, via certified or registered mail, return receipt requested, or via
express courier or delivery service, addressed to such party at such party's
address or telephone facsimile number set forth below or at such other address
or telephone facsimile number as shall be designated
-28- EXHIBIT C-1
by such party in a written notice given to each other party complying as to
delivery with the terms of this SECTION 8.05:
if to the Grantor, at:
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
with a copy to:
House & ▇▇▇▇▇▇, P.A
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
P.O. Drawer 25008
Winston-Salem, North Carolina 27114-5008
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
if to the Beneficiary, at:
The Cornerstone Building
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Vice President -
Acquisitions and Development
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
with a copy to:
The Hillhaven Corporation
The Cornerstone Building
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇ or (▇▇▇)▇▇▇-▇▇▇▇
if to the Trustee, at:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Gage & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇.
All such notices, consents, requests and other communications shall be deemed
given (a) when given and receipted for (or upon the date of attempted delivery
when delivery is refused), if sent via personal delivery, via certified or
registered mail, return receipt requested, or via express courier or delivery
service or (b) when received, if sent via telephone facsimile transmission
(confirmation of such receipt
-29- EXHIBIT C-1
via confirmed telephone facsimile transmission being deemed receipt of any such
notice, request or other communication sent via telephone facsimile
transmission).
8.06 No Merger. If both the lessor's and the lessee's interest under
---------
any lease which constitutes a part of the Mortgaged Property shall at any time
become vested in any one person, this Deed of Trust and the lien and security
interest created by this Deed of Trust shall not be destroyed or terminated by
the application of the doctrine of merger and, in such event, the Trustee and
the Beneficiary shall continue to have and enjoy all of the rights and
privileges of the Trustee and the Beneficiary under this Deed of Trust as to
each separate estate. Upon the foreclosure of the lien created by this Deed of
Trust, any leases then existing shall not be destroyed or terminated by
application of the doctrine of merger or as a matter of law or as a result of
such foreclosure unless the Trustee or the Beneficiary or any purchaser at a
foreclosure sale shall so elect by notice to the lessee in question.
8.07 Severability. Any provision of this Deed of Trust that is
------------
prohibited or unenforceable in any jurisdiction shall be ineffective, as to such
jurisdiction, to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Deed of Trust or affecting the
validity or enforceability of such provision in any other jurisdiction.
8.03 Obligations of Grantor. Time is of the essence with respect to
----------------------
all of the Grantor's covenants and agreements under this Deed of Trust and all
of such covenants and agreements shall run with the land. All obligations of the
Grantor under this Deed of Trust shall be performed and satisfied by or on
behalf of the Grantor at the Grantor's sole cost and expense.
8.09 Successors and Assigns. The provisions of this Deed of Trust
----------------------
shall be binding upon the Grantor and the successors and assigns of the Grantor,
including successors in interest of the Grantor in and to all or any part of the
Mortgaged Property, and shall inure to the benefit of the Trustee and the
Beneficiary and the respective substitutes, successors, transferees and assigns
of the Trustee and the Beneficiary. All references in this Deed of Trust to the
Grantor, the Trustee or the Beneficiary shall be construed as including all of
such other persons with respect to the person to which reference is made. Where
two or more persons have executed this Deed of Trust, the obligations of such
persons shall be joint and several except to the extent the context clearly
indicates otherwise.
8.10 No Waiver. No provision in Article I or Section 2.05 or
---------
elsewhere in this Deed of Trust shall be construed as a waiver by the Grantor of
any warranty of the Beneficiary under the deed, dated the date of the Promissory
Note, made by the Beneficiary to the Grantor with respect to the Facility, nor
shall any such provision be construed to require the Grantor to pay any costs
and expenses (including reasonable attorneys' fees and disbursements) incurred
by the Beneficiary in connection with the defense of any warranty of the
Beneficiary under such deed.
8.11 Attorneys' Fees. If any action or proceeding is commenced to
---------------
enforce or interpret this Deed of Trust the prevailing party shall be entitled
to recover from the non-prevailing party the costs and expenses of maintaining
such action or proceeding, including reasonable attorneys' fees and
disbursements incurred before such action or proceeding is commenced, before
trial, at trial, after trial and on appeal, whether the action or proceeding is
at law, in equity or in a bankruptcy case or proceeding.
8.12 Consent to Jurisdiction. The Grantor hereby irrevocably submits
-----------------------
to the jurisdictiOn of any court of the State of Washington or any federal court
of the United States of America for any district of the State of Washington, and
any appellate court from any of such courts, in any action or proceeding arising
from or by reason of, or otherwise relating to, this Deed of Trust, and the
-30- EXHIBIT C-1
Grantor hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such court of the State of Washington
or in such federal court of the United States of America (for any district of
the State of Washington. The Grantor, to the fullest extent permitted by
applicable law, hereby irrevocably waives the defense of an inconvenient forum
to the maintenance of any such action or proceeding in such court of the State
of Washington or in such federal court of the United States of America (for any
district of the State of Washington. The Grantor hereby irrevocably appoints
House & ▇▇▇▇▇▇, P.A. (the "Process Agent"), as the Grantor's agent to receive on
behalf of the Grantor and its property service of copies of the summons and
complaint and any other process which may be served in any such action or
proceeding. Such service may be made by mailing or delivering a copy of such
process to the Grantor in care of the Process Agent at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, P.O. Drawer 25008, Winston-Salem, North Carolina 27114-5008, and the
Grantor hereby irrevocably authorizes and directs the Process Agent to accept
such service on the Grantor's behalf. As an alternative method of service, the
Grantor also irrevocably consents to the service of any and all process in any
such action or proceeding by the mailing of copies of such process to the
Grantor at its address specified in Section 8.05. The Grantor agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Section 8.12 shall affect the right of the
Beneficiary to serve legal process in any other manner permitted by law or shall
affect the right of the Beneficiary to bring any action or proceeding against
the Grantor or the Grantor's property in the courts of any other jurisdictions.
8.13 Waiver of Jury Trial. Each of the Grantor and the Beneficiary
--------------------
hereby irrevocably waives all right to trial by jury in any action, proceeding
or counterclaim (whether based upon contract, tort or otherwise) arising from or
by reason of or relating to this Deed of Trust or any actions of the Grantor or
the Beneficiary in the negotiation, administration, performance or enforcement
of this Deed of Trust.
8.14 Applicable Law. This Deed of Trust shall be governed by, and
--------------
construed in accordance with, the laws of the State of Missouri.
IN WITNESS WHEREOF, the Grantor has executed this Deed of Trust as of
the date first above written.
[NAME OF THE GRANTOR]
By MEADOWBROOK MANOR OF KANSAS & MISSOURI, INC.,
General Partner
By __________________________________
Title: ___________________________
-31- EXHIBIT C-1
STATE OF ________________)
)SS.
COUNTY OF _______________)
On this ____ day of _____________, 1992, before me, the undersigned, a
Notary Public within and for said County and State, personally appeared
______________________, to me personally known, who being by me duly sworn, did
say that he is the [Vice] President of Meadowbrook Manor of Kansas & Missouri,
Inc., a North Carolina corporation and the general partner of
__________________'a North Carolina limited partnership, that the seal (if any)
affixed to the foregoing instrument is the corporate seal of said corporation,
that said instrument was signed and sealed on behalf of said corporation by
authority of its Board of Directors, and said __________________ acknowledged
said instrument to be the free act and deed of said limited partnership and the
free act and deed of said corporation as general partner of said limited
partnership.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal at my office in _____________________, the day and year last above
written.
_________________________________________________
Notary Public in and for
Said County and State
_________________________________________________
(Type or stamp the Notary's name below his or her
signature.)
My Commission Expires:
________________________
-32- EXHIBIT C-1
Schedule A
to
Deed of Trust,
Assignment, Security Agreement
and
Financing Statement (Fixture Filing)
([Name of the Facility)/13/
(Facility No. [___])/14/
Land
----
[RESERVED.]
____________________________________
/13/ Insert the name of the Facility.
/14/ Insert the number assigned to the Facility.
-1- EXHIBIT C-1
Schedule B
to
Deed of Trust.
Assignment, Security Agreement
and
Financing Statement (Fixture Filing)
([Name of the Facility)/15/
(Facility No. [____]/16/
Permitted Exceptions
--------------------
[Reserved.]
----------------------------------
/15/ Insert the name of the Facility.
/16/ Insert the number assigned to the Facility.
-1- EXHIBIT C-1
Schedule C
to
Deed of Trust,
Assignment, Security Agreement
and
Financing Statement (Fixture Filing)
([Name of the Facility)/17/
(Facility No. [___]/18/
Affiliates/19/
----------
1. Meadowbrook Manor of ▇▇▇▇▇▇▇ Limited Partnership, a North Carolina limited
partnership.
2. Meadowbrook Manor of Joplin Limited Partnership I, a North Carolina limited
partnership.
3. Meadowbrook Manor of Council Grove Limited Partnership, a North Carolina
limited partnership.
4. Meadowbrook Manor of Haysville Limited Partnership, a North Carolina
limited partnership.
5. Meadowbrook Manor of St ▇▇▇▇▇▇▇ Limited Partnership, a North Carolina
limited partnership.
6. Meadowbrook Manor of Overland Park Limited Partnership, a North Carolina
limited partnership.
7. Meadowbrook Manor Terrace of Overland Park Limited Partnership, a North
Carolina limited partnership.
8. Meadowbrook Manor of Chanute Limited Partnership, a North Carolina limited
partnership.
9. Meadowbrook Manor of Springfield Limited Partnership, a North Carolina
limited partnership.
10. Meadowbrook Manor of Topeka Limited Partnership, a North Carolina limited
partnership.
11. Meadowbrook Manor of Wichita Limited Partnership, a North Carolina limited
partnership.
12. Meadowbrook Manor of Columbia Limited Partnership, a North Carolina limited
partnership.
13. Meadowbrook Manor of Sedgwick Limited Partnership, a North Carolina limited
partnership.
14. Meadowbrook Manor Colonial Terrace of Independence Limited Partnership, a
North Carolina limited partnership.
------------------------
/17/Insert the name of the Facility.
/18/Insert the number assigned to the Facility.
/19/Delete the name of the Grantor from this Schedule C and, to the extent
required, re-number the list of Affiliates.
-1- EXHIBIT C-1
15. Meadowbrook Manor Colonial Lodge of Independence Limited Partnership, a
North Carolina limited partnership.
16. Meadowbrook Manor of ▇▇▇▇▇▇ Limited Partnership, a North Carolina limited
partnership.
17. Meadowbrook Manor Apartments of Lamed Limited Partnership, a North Carolina
limited partnership.
18. Meadowbrook Manor of Ava Limited Partnership, a North Carolina limited
partnership.
19. Meadowbrook Manor of Buffalo Limited Partnership, a North Carolina limited
partnership.
20. Meadowbrook Manor of Clinton Limited Partnership, a North Carolina limited
partnership.
21. Meadowbrook Manor of Des ▇▇▇▇▇ Limited Partnership, a North Carolina
limited partnership.
21 Meadowbrook Manor of Jefferson Limited Partnership, a North Carolina limited
partnership.
23. Meadowbrook Manor of ▇▇▇▇▇▇▇▇▇ Limited Partnership, a North Carolina
limited partnership.
24. Meadowbrook Manor of Joplin Limited Partnership II, a North Carolina
limited partnership.
25. Meadowbrook Manor of ▇▇▇▇▇ Limited Partnership, a North Carolina limited
partnership.
26. Meadowbrook Manor of Shady Oaks Limited Partnership, a North Carolina
limited partnership.
27. Meadowbrook Manor of Crane Limited Partnership, a North Carolina limited
partnership.
28. Meadowbrook Manor of ▇▇▇▇▇▇▇▇▇▇ City Limited Partnership, a North Carolina
limited partnership.
29. Meadowbrook Manor Residential of ▇▇▇▇▇▇▇▇▇▇ City Limited Partnership, a
North Carolina limited partnership.
30. Meadowbrook Manor Wornall of Kansas City Limited Partnership, a North
Carolina limited partnership.
31. Meadowbrook Manor Blue Hills of Kansas City Limited Partnership I, a North
Carolina limited partnership.
32. Meadowbrook Manor Blue Hills of Kansas City Limited Partnership II, a North
Carolina limited partnership.
-2- EXHIBIT C-1
Exhibit C-2
to
Facility Agreement
MORTGAGE.
ASSIGNMENT, SECURITY AGREEMENT
AND
FINANCING STATEMENT (FIXTURE FILING)
(Name of the Facility)
(Facility No. [____])
Dated as of [________] ___]. 1992
By
[NAME OF MORTGAGOR].
as the Mortgagor
to
FIRST HEALTHCARE CORPORATION,
as the Mortgagee
EXHIBIT C-2
TABLE OF CONTENTS
-----------------
Page
----
RECITALS................................................................ 1
Land...................................................... 3
Improvements; Facility.................................... 3
Personal Property......................................... 3
Contract Interests........................................ 4
After Acquired Property................................... 4
Proceeds. Etc............................................. 4
ARTICLE I - Representations and Warranties of the Mortgagor............. 5
1.01 Warranty of Title......................................... 5
1.02 Non-Agricultural Use...................................... 5
1.03 Certificates and Permits.................................. 5
ARTICLE II - Covenants of the Mortgagor................................. 5
2.01 Payment of Obligations.................................... 5
2.02 Good Standing; Etc........................................ 5
2.03 Security Agreement........................................ 6
2.04 Further Assurances........................................ 6
2.05 Protection of Lien; Defense of Action..................... 6
2.06 Repair and Maintenance.................................... 7
2.07 Compliance with Laws...................................... 7
2.08 Use....................................................... 7
2.09 Zoning; Title Matters..................................... 8
2.10 Insurance................................................. 8
(a) Property and Casualty Insurance....................... 8
(b) Liability Insurance................................... 8
(c) Forms of Policies..................................... 8
(d) Transfer of Title..................................... 9
(e) Amounts of Coverage................................... 9
2.11 Damage and Destruction.................................... 9
2.12 Condemnation.............................................. 10
2.13 Liens..................................................... 10
2.14 Taxes and Other Charges................................... 11
2.15 Tax Deposits.............................................. 11
2.16 Inspection................................................ 12
2.17 Maintenance of Records.................................... 12
2.18 Mortgagor's Certificates.................................. 12
2.19 Prepayments; Release Premium.............................. 12
2.20 Reporting Requirements.................................... 13
-i- EXHIBIT C-2
ARTICLE III - Assignment of Rents and Other Sums ...................... 14
3.01 Assignment.............................................. 14
3.02 Right to Collect........................................ 15
3.03 Revocation of Right to Collect; Etc..................... 15
ARTICLE IV - Additional Advances; Expenses; Indemnity................. 15
4.01 Additional Advances and Disbursements................... 15
4.02 Other Expenses.......................................... 16
4.03 Indemnity............................................... 16
ARTICLE V - Transfer of the Mortgaged Property....................... 16
5.01 Transfer of the Mortgaged Property...................... 16
ARTICLE VI - Defaults and Remedies.................................... 17
6.01 Events of Default....................................... 17
6.02 Remedies................................................ 19
6.03 Expenses................................................ 21
6.04 Rights Pertaining to Sales.............................. 21
6.05 Application of Proceeds................................. 22
6.06 Additional Provisions as to Remedies.................... 23
6.07 Waiver of Rights and Defenses........................... 24
ARTICLE VII - Defeasance............................................... 24
7.01 Defeasance.............................................. 24
7.02 Release................................................. 25
ARTICLE VIII - Additional Provisions.................................... 25
8.01 Construction of Certain Provisions...................... 25
8.02 Limitation on Interest.................................. 26
8.03 Appointment of Mortgagee................................ 26
8.04 Amendments. Etc......................................... 26
8.05 Notices................................................. 26
8.06 No Merger............................................... 27
8.07 Severability............................................ 28
8.06 Obligation of Mortgagor................................. 28
8.09 Successors and Assigns.................................. 28
8.10 No Waiver............................................... 28
8.11 Consent to Jurisdiction................................. 28
8.12 Applicable Law.......................................... 29
Schedule A - Land
Schedule B - Permitted Exceptions
Schedule C - Affiliates
ii EXHIBIT C-2
MORTGAGE,
ASSIGNMENT, SECURITY AGREEMENT
AND
FINANCING STATEMENT (FIXTURE FILING)
([Name of the Facility)/1/
(Facility No. [___])/2/
This MORTGAGE, ASSIGNMENT, SECURITY AGREEMENT AND FINANCING STATEMENT
(FIXTURE FILING), dated as of [___________ ____], 1992 (this "Mortgage"), is
made by [______________], a North Carolina limited partnership whose address is
▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ as the mortgagor under this
Mortgage (the "Mortgagor"), to FIRST HEALTHCARE CORPORATION, a Delaware
corporation ("First Healthcare") whose address is The Cornerstone Building, ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as the mortgagee under this Mortgage
(the "Mortgagee").
RECITALS
A. The Mortgagee, as seller, and the Mortgagor and the Affiliates
(as defined below), jointly and severally as buyers (the "Buyers"), have entered
into a Facility Agreement, dated as of [_________ ____], 1992 (said Facility
Agreement, as it may be supplemented, amended or otherwise modified from time to
time, being the "Facility Agreement").
B. Pursuant to the terms and subject to the conditions set forth in
the Facility Agreement, the Mortgagee has agreed to permit the Mortgagor to
defer the payment of a portion of the purchase price for the properties (real,
personal and mixed) that constitute the Mortgaged Property (as defined below)
and that are the subject of the Facility Agreement, in a principal amount not to
exceed [____________ ] and [___]/100 Dollars ($[___________])
C. Pursuant to the terms of the Facility Agreement, the Mortgagor
has executed and delivered to the order of the Mortgagee a Promissory Note,
dated [_______________], 1992,/3/ in the stated principal sum of[___________]
and [___]/100 Dollars ($[______________]) (said Promissory Note, as it may be
supplemented, amended, extended, renewed or otherwise modified from time to
time, being the "Promissory Note"), evidencing the obligation of the Mortgagor
to pay the deferred portion of the purchase price in respect of the Mortgaged
Property.
D. The total of the indebtedness and liabilities to be secured by
this Mortgage equals the sum of the following (such indebtedness and liabilities
or the instruments evidencing the same, as applicable, being collectively
referred to in this Mortgage as the "Obligations"):
(1) the principal amount of [____________________] and [____]/100
Dollars ($[________________]) (the "Purchase Price Balance"); plus
-----------------------------
/1/ Insert the name of the Facility.
/2/ Insert the name of the Facility.
/3/Insert the Closing Date.
-1- EXHIBIT C-2
(2) interest on the unpaid principal amount of the Purchase
Price Balance at a rate of interest per annum (the "Regular Rate")
equal to;
(a) nine percent (9%) per annum from [___________
________], 1992/4/, to [_________ ___] 199__]/5/, and
(b) eleven percent (11%) per annum from [________ ___],
199[___]/6/, to the date on which the Purchase Price Balance is paid
in full;
and at a rate per annum (the "Default Rate") equal at all times to the sum
of the Regular Rate plus five percent (5%) per annum; plus
(3) all other amounts that are or become payable by the Mortgagor and
all other obligations of the Mortgagor under the Facility Agreement, the
Promissory Note and this Mortgage;
[(E./7/ The lien of this Mortgage is junior to the lien of the
[____________]/8/ dated [as of] [_____________], 19[__] (the
"First Lien Mortgage"), made by [_____________]/9/ to
[__________]/10/ securing the payment of a Promissory Note, dated [________
____], 19[__] (the "First Lien Promissory Note"), in the stated principal amount
of $[_________,___], The obligations evidenced by the First Lien Promissory Note
and secured by the First Lien Mortgage are and remain the obligations of the
Mortgagee.)
(F,/11/ All of the Obligations have a scheduled maturity of not later than
[___________], 199[__]/12/.)
-----------------------
/4/ Insert the Closing Date.
/5/ Insert the last day of the forty-first calendar month immediately
following the calendar month in which the Closing occurs.
/6/ Insert the first day of the forty-second calendar month immediately
following the calendar month if, which the Closing occurs.
/7/ Include this recital if this Mortgage is to be subordinate and
inferior to any existing mortgage in respect of the Mortgaged Property.
/8/ Insert the title of the existing mortgage to which this Mortgage is to
be subordinate and inferior.
/9/ Insert the name of the mortgagor under the First Lien Mortgage.
/10/ Insert the name of the mortgagee under the First Lien Mortgage.
/11/ Include this recital of required by applicable law.
/12/ Insert the first day of the eighty-fourth calendar month immediately
following the calendar month in which the Closing occurs.
-2- EXHIBIT C-2
G. The execution and delivery of this Mortgage by the Mortgagor is a
condition precedent to the obligation of the Mortgagee to consummate the
transactions contemplated by the Facility Agreement.
I. The rules of construction set forth in Section 8.01 shall be
applicable for all purposes of this Mortgage.
NOW, THEREFORE, for and in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Mortgagor, and to secure the punctual payment by the
Mortgagor when due (whether at stated maturity, by acceleration or otherwise) of
the Obligations and the performance and observance of all other covenants,
obligations and liabilities of the Mortgagor under the Facility Agreement, the
Promissory Note and this Mortgage, the Mortgagor does hereby GRANT, BARGAIN,
SELL MORTGAGE, WARRANT, CONVEY, ALIEN, REMISE, RELEASE, ASSIGN, PLEDGE,
HYPOTHECATE, TRANSFER, SET OVER, DELIVER and CONFIRM unto the Mortgagee, each
and all of the following described properties, rights, interests and privileges
and all of the Mortgagor's estate, right, title and interest in, to and under,
or derived from, the following described properties, rights, interests and
privileges (all of such properties, rights, interests and privileges being
collectively referred to in this Mortgage as the "Mortgaged Property"):
Land. All those certain lots, pieces and parcels of land more
----
particularly described in Schedule A, and all of the reversions and
remainders in and to said land and the tenements, hereditaments,
easements, right-of-way or use, rights (including alley, drainage,
mineral, water, oil and gas rights), privileges, royalties and
appurtenances to said land, now or hereafter belonging or in anywise
appertaining to said land, including any such right, title or interest
in, to or under any agreement or right granting, conveying or
creating, for the benefit of said land, any easement, right or license
in any way affecting other property and in, to or under any streets,
ways, alleys, vaults, gores or strips of land adjoining any portion of
said land, or in or to the air space over said land, all rights of
ingress and egress by motor vehicles to parking facilities on or
within said land, and all claims or demands of the Mortgagor, either
at law or in equity, in possession or expectancy, of, in or to the
same (all of the foregoing being collectively referred to in this
Mortgage as the "Land");
Improvements; Facility. All buildings, structures, facilities and
----------------------
other improvements now or hereafter erected on, attached to or located
in or upon the Land, and all building materials of every kind and
nature now or hereafter located on the Land or attached to, contained
in, or used in connection with, any such buildings, structures,
facilities or other improvements, and all appurtenances and additions
thereto and betterments, renewals, substitutions and replacements
thereof, owned by the Mortgagor or in which the Mortgagor has or shall
acquire an interest (all of the foregoing being collectively referred
to in this Mortgage as the "Improvements," and the Land and the
Improvements being together referred to in this Mortgage as the
"Facility");
Personal Property. All machinery, equipment furniture,
-----------------
furnishings, fixtures, chattels and other items of personal property,
and all appurtenances and additions thereto and betterments, renewals,
substitutions and replacements thereof, owned by the Mortgagor or in
which the Mortgagor has or shall acquire an interest, wherever
situated, and now or hereafter located on, attached to, contained in
or used in connection with the Land, the Improvements or the Contract
Interests, or placed on any part thereof although not attached thereto
(all of the foregoing being collectively referred
-3- EXHIBIT C-2
to in this Mortgage as the "Personal Property"), including all
partitions, screens, awnings, shades, blinds, curtains, draperies,
carpets, rugs, furniture and furnishings, heating, lighting, plumbing,
ventilating, air conditioning, refrigerating, gas, steam, electrical,
incinerating and/or compacting plants, systems, fixtures and
equipment, elevators, escalators, ranges, vacuum and other cleaning
systems, call systems, switchboards, sprinkler systems and other fire
prevention and extinguishing apparatus and materials, motors,
machinery, pipes, ducts, conduits, dynamos, engines, compressors,
generators, boilers, stokers, furnaces, pumps, tanks, appliances,
equipment, utensils, tools, implements. Writings and fixtures and all
permits, licenses, franchises, certificates and other rights and
privileges obtained in connection with the Mortgaged Property;
Contract Interests. All the leases, lettings and licenses of,
------------------
and all other contracts and agreements (including all patient care
agreements, life care contracts, admission agreements and other
contracts and agreements with residents, patients and other persons
pertaining to the care of residents or patients) affecting, the Land,
the Improvements, the Personal Property and/or any other property or
rights mortgaged or otherwise conveyed or encumbered by this Mortgage,
or any part thereof, now or hereafter entered into, and all
supplements, amendments, modifications, additions, extensions and
renewals thereof, and all right, title and interest of the Mortgagor
therein and thereunder, including cash and securities deposited
thereunder or pursuant thereto, the right to receive and collect the
rents, proceeds, issues and profits due and to become due and payable
thereunder or pursuant thereto and the rights to enforce, whether at
law or in equity or by any other means, all provisions and options
thereof (all of the foregoing being collectively referred to in this
Mortgage as the "Contract Interests");
After Acquired Property. Any and all moneys and other property,
-----------------------
of every kind and nature, which may from time to time be subjected to
the lien of this Mortgage by the Mortgagor, through a supplement to
this Mortgage or otherwise, or by any other person, or which may come
into the possession of or be subject to the control of the Mortgagee,
it being the intention and agreement of the Mortgagor that all
property hereafter acquired or constructed by the Mortgagor shall
forthwith upon acquisition or construction thereof by the Mortgagor
and without any act or deed by the Mortgagor be subject to the lien
and security interest of this Mortgage as a such property were now
owned by the Mortgagor and were specifically described in this
Mortgage and conveyed or encumbered by or pursuant to this Mortgage,
and the Mortgagee is hereby authorized to receive any and all such
property as and for additional security under this Mortgage (all of
the foregoing being collectively referred to in this Mortgage as the
"After Acquired Property"); and
Proceeds, Etc. All unearned premiums (whether accrued, accruing
or to accrue) under insurance policies now or hereafter obtained by
the Mortgagor, all proceeds of the conversion (whether voluntary or
involuntary) of the Mortgaged Property into cash or other liquidated
claims (excluding proceeds of title insurance, but including proceeds
of hazard and other insurance), and all judgments, damages, awards,
settlements and compensatIon (including interest thereon) heretofore
or hereafter made to the present and all subsequent owners of the
Land, the Improvements, the Personal Property, the Contract Interests
and/or any other property or rights encumbered or conveyed by this
Mortgage for any injury thereto or decrease in the value thereof for
any reason, or by any governmental or other lawful authority for the
taking by eminent domain,
-4- EXHIBIT C-2
condemnation or otherwise of all or any part thereof, including awards
for any change of grade of streets;
TO HAVE AND TO HOLD, subject to the matters listed or otherwise
described in Schedule B (the "Permitted Exceptions"), all and singular the
Mortgaged Property, whether now owned or leased or hereafter acquired and
whether now or hereafter existing, together with all the rights, privileges and
appurtenances thereunto belonging, unto the Mortgagee forever, for the uses and
purposes set forth in this Mortgage.
AND the Mortgagor covenants and agrees with the Mortgagee as follows:
ARTICLE I
Representations and Warranties of the Mortgagor
-----------------------------------------------
1.01 Warranty of Title. (a) The Mortgagor has and will have good,
-----------------
marketable and insurable fee simple title to the Facility, free and clear of all
liens, charges and encumbrances of every kind and character, subject only to the
Permitted Exceptions; (b) the Mortgagor owns and will own all of the other
Mortgaged Property, free and clear of all liens, charges and encumbrances of
every kind and character, subject only to the Permitted Exceptions; (c) the
Mortgagor hereby warrants and will forever warrant and defend such title and the
validity, enforceability and priority of the lien and security interest of this
Mortgage against the claims of all persons whomsoever; (d) the Mortgagor has and
will have full power and lawful authority to encumber and convey the Mortgaged
Property as prided in this Mortgage; and (e) this Mortgage is and will remain a
valid and enforceable lien on, and security interest in, the Mortgaged Property,
subject only to the Permitted Exceptions.
1.02 Non-Agricultural Use. The Mortgaged Property is not used
--------------------
principally for agricultural or farming purposes.
1.03 Certificates and Permits. The Mortgagor has and will maintain
------------------------
in effect all necessary certificates, licenses, authorizations, registrations,
permits and/or approvals necessary for the operation of the Facility as a
[___________]-bed [skilled] [intermediate care] [nursing] facility and for the
conduct of the Mortgages business at the Facility.
ARTICLE II
Covenants of the Mortgagor
--------------------------
2.01 Payment of Obligations. The Mortgagor will punctually pay the
----------------------
Obligations when due, and will perform and observe all of its other obligations
under this Mortgage, the Promissory Note, the Facility Agreement and each other
document or instrument to which the Mortgagor is a party and that relates to any
of the Facility Agreement the Promissory Note or any security for the
obligations of the Mortgagor under the Facility Agreement or the Promissory Note
(this Mortgage, the Promissory Note, the Facility Agreement and such other
documents and instruments, in each case as the same may be supplemented, amended
or otherwise modified from time to time, being sometimes referred to in this
Mortgage individually as a "Transaction Document" and collectively as the
"Transaction Documents").
2.02 Good Standing; Etc. The Mortgagor will maintain in good standing
------------------
its partnership existence, franchises, rights and privileges under the law of
the jurisdiction of its formation and its right to transact business in the
jurisdiction in which the Facility is located. Subject to and without limitation
of Sections 2.19 and 5.01, the Mortgagor, without the prior consent of the
Mortgagee, will not sell, lease or otherwise dispose of (whether directly or
indirectly, or by operation of law, or in one transaction
-5- EXHIBIT C-2
or a series of transactions) all or substantially all of its assets. Subject to
and without limitation of Sections 2.19 and 5.01, the Mortgagee may withhold its
consent to any proposed disposition of all or substantially all of the Mortgagee
assets for no reason or any reason. The Mortgagor, without at least thirty days
prior notice to the Mortgagee and compliance with the provisions of Section
2.04, will not change its name, identity or legal structure.
2.03 Security Agreement. The Mortgagor hereby further grants to the
------------------
Mortgagee a security interest in all of the Mortgagor's right, title and
interest in, to and under the following, whether now owned or hereafter acquired
(collectively, the "Collateral"): (a) the Personal Property; (b) the Contract
Interests; (c) the After Acquired Property; and (d) all proceeds of any and all
of the foregoing Collateral, including proceeds which constitute property of the
types included in the Personal Property, the Contract Interests and the After
Acquired Property and, to the extent not otherwise included, all cash, all
unearned premiums (whether accrued, accruing or to accrue) under insurance
policies now or hereafter obtained by the Mortgagor, all proceeds of the
conversion (whether voluntary or involuntary) of any of the Mortgaged Property
into cash or other liquidated claims (including proceeds of hazard and other
insurance), and all judgments, damages, awards, settlements and compensation
(including interest thereon) heretofore or hereafter made to the present and all
subsequent owners of the Land, the Improvements, the Personal Property, the
Contract Interests and/or any other property or rights encumbered or conveyed by
this Mortgage for any injury thereto or decrease in the value thereof for any
reason, or by any governmental or other lawful authority for the taking by
eminent domain, condemnation or otherwise of all or any part thereof, including
awards for any change of grade of streets. The Mortgagee shall have, in addition
to all rights and remedies provided in the Transaction Documents, all of the
rights and remedies of a "secured party" under the Uniform Commercial Code in
effect in the jurisdiction in which the Facility is located. This Mortgage
constitutes and shall be deemed to be a "security agreement" for all purposes of
said Uniform Commercial Code. Notwithstanding any provision in this section 2.03
or elsewhere in this Mortgage to the contrary, this Mortgage shall not be
construed to create a lien on or a security interest in any patient accounts or
any other accounts constituting any right of the Mortgagor to payment for goods
sold or leased or for services rendered which is not evidenced by an instrument
or chattel paper.
2.04 Further Assurances. Promptly upon request by the Mortgagee, the
------------------
Mortgagor will (a) correct any defect, error or omission that may be discovered
in the contents of, or in the execution, acknowledgment or recordation of, this
Mortgage or any other Transaction Document and (b) do, execute, acknowledge and
deliver any and all such further acts, deeds, conveyances, mortgages, deeds of
trust assignments, estoppel certificates, financing statements and continuations
thereof, notices of assignment, transfers, certificates, assurances and other
documents and instruments as the Mortgagee may require from time to time in
order to effectuate the purposes of this Mortgage and to perfect and maintain
the validity, effectiveness and priority of the lien and security interest
created by this Mortgage.
2.05 Protection of Lien; Defense of Action. If any action or
-------------------------------------
proceeding is instituted against the Mortgagor with respect to any right, title
or interest in or to the Mortgaged Property or with respect to the lien,
security interest, validity or priority of this Mortgage, or a any such right,
title, interest, lien, security interest validity, effectiveness or priority is
otherwise challenged or attacked, then the Mortgagor promptly will notify the
Mortgagee of such action, proceeding, challenge or attack, diligently will
endeavor to cure any defect that may be developed or claimed, and will take all
necessary and proper steps for the defense of such action or proceeding,
including the employment of counsel, the prosecution or
-6- EXHIBIT C-2
defense of litigation and, subject to the prior written approval of the
Mortgagee, the compromise, release or discharge of any and all adverse claims.
The Mortgagee (whether or not named as a party to such action or proceeding), is
hereby authorized and empowered (but shall not be obligated) to take such
additional steps (including the employment of counsel, the prosecution or
defense of litigation, the compromise, release or discharge of such adverse
claims, the purchase of any tax title and the removal of prior liens and
security interests) as it may deem necessary or proper for the defense of any
such action or proceeding or the protection of such right, title, interest,
lien, security interest, validity, effectiveness or priority. The Mortgagor, on
demand, shall pay all costs and expenses incurred by the Mortgagee in connection
with the foregoing matters. All such costs and expenses of the Mortgagee, until
paid by the Mortgagor, shall be part of the Obligations and shall be secured by
this Mortgage.
2.06 Repair and Maintenance. The Mortgagor will operate and maintain
the Facility and the Personal Property in good order, repair and operating
condition, and promptly will make all repairs, renewals, replacements, additions
and improvements to the Facility and the Personal Property that are necessary to
ensure that the Facility and the Personal Property shall not in any way be
diminished or impaired as part of the security under this Mortgage. The
Mortgagor will keep the Facility fully equipped and will replace all worn-out or
obsolete Personal Property with Fixtures or personal property comparable to such
Personal Property when new and, without the prior consent of the Mortgagee, will
not remove any Personal Property from the Facility unless such Personal Property
is replaced by the Mortgagor with Fixtures or personal property of equal
suitability and value when new, owned by the Mortgagor free and clear of any
lien or security interest (other than the Permitted Exceptions and the lien and
security interest created by this Mortgage). No part of the Improvements shall
be removed, demolished or structurally or materially altered (including an
alteration which impairs the value of the Improvements), nor shall any new
building, structure, facility or other improvement be constructed on the Land
without the prior consent of the Mortgagee. The Mortgagor, without the prior
consent of the Mortgagee, will not cause or allow the Mortgaged Property to be
misused or wasted or to deteriorate.
2.07 Compliance with Laws. The Mortgagor promptly will comply with,
--------------------
and will cause the Facility to be maintained, used and operated at all times in
accordance with, any and all present and future laws, rules, regulations,
ordinances and requirements (including any and all licensing, accrediting and
insurance requirements) applicable to the Mortgagor or the Facility. The
Mortgagor promptly will notify the Mortgagee of any alleged noncompliance by the
Mortgagor or the Facility with any such laws, rules, regulations, ordinances or
requirements, and of any action or proceeding initiated under or with respect to
any of such laws, rules, regulations, ordinances or requirements.
2.08 Use. The Mortgagor will not use or occupy the Facility, or permit
---
the Facility to be used or occupied, in any manner which violates any applicable
law, rule, regulation, ordinance or order, or which constitutes a public or
private nuisance or which makes void, voidable or cancelable, or increases the
premium of, any insurance then in force with respect to the Facility. Without
limiting the generality of the preceding sentence, the Mortgagor will use and
occupy the Facility, or cause the Facility to be used and occupied, as and for
a[n] ([skilled] [intermediate] care) [nursing] facility and for no other
principal use unless agreed to in writing by the Mortgagee. The Mortgagor shall
at all times maintain in full force and effect all registrations,
qualifications, licenses and other authorizations and approvals required to use
and occupy the Facility as and for a [_________]-bed ([skilled] [intermediate]
[care] [nursing] facility. Notwithstanding any other provision in this Section
2.08 or elsewhere in this Mortgage or any other Transaction Document to the
contrary, the Mortgagor, without the prior consent of the Mortgagee, will not
permit any person other than the Mortgagor to operate the Facility, whether
pursuant to any lease, any management agreement or otherwise; provided that,
--------
without the prior consent of the Mortgagee, the Mortgagor may permit Meadowbrook
Healthcare Services Incorporated, a North Carolina corporation, or any
wholly-owned subsidiary of Meadowbrook Healthcare Services Incorporated, to
operate the Facility pursuant to a management agreement with the Mortgagor.
-7- EXHIBIT C-2
2.09 Zoning; Title Matters. The Mortgagor, without the prior consent
---------------------
of the Mortgagee, will not (a) initiate or support any zoning reclassification
of the Facility, seek any variance under existing zoning ordinances applicable
to the Facility or use or permit the use of the Facility in a manner which would
result in such use becoming a non conforming use under applicable zoning
ordinances, (b) supplement, amend or otherwise modify any of the Permitted
Exceptions, (c) impose any restrictive covenants upon the Facility, (d) execute
or file any subdivision plat affecting the Facility or consent to the annexation
of the Facility to any municipality or (e) permit or suffer the Facility to be
used by the public or any person in such manner as might make possible a claim
of adverse usage or possession or of any implied dedication or easement.
2.10 Insurance.
---------
(a) Property and Casualty Insurance. The Mortgagor will keep the
-------------------------------
Improvements and the Personal Property insured for the benefit of the Mortgagee
as follows: (i) against damage or loss by fire and such other hazards (including
lightning, windstorm, hail, explosion, not, not attending a strike, civil
commotion, flood, earthquake, vandalism, malicious mischief, aircraft, vehicle
and smoke) as are covered by the broadest form of "all-risk" coverage as is
available from time to time in the jurisdiction in which the Facility is
located, in an amount not less than the full insurable value (as defined below)
of the Improvements and the Personal Property; (ii) rent or business
interruption or use and occupancy insurance on an actual loss sustained basis;
(iii) against damage or loss from sprinkler system leakage and boilers, boiler
tanks, heating and air conditioning equipment, pressure vessels, auxiliary
piping, mechanical and electrical equipment and such similar apparatus as is
commonly insured under a comprehensive definition of insured object on such
basis and in such amounts as shall be reasonably required by the Mortgagee; and
(iv) during the period of any permitted construction, repair, restoration or
replacement of the Facility, against damage or loss and such other hazards as
are covered by a standard all-risk builder's risk policy with extended coverage,
including coverage against collapse, written on a completed value basis, for an
amount at least equal to the fu11 insurable value of the Improvements and the
Personal Property. The Mortgagor shall ensure that any contractor performing any
permitted construction, repair, restoration or replacement of the Facility shall
procure and maintain at all times insurance equal to that required of the
Mortgagor and that such contractor also shall comply with all statutory and
regulatory requirements related to workers' compensation.
(b) Liability Insurance. The Mortgagor shall procure and
-------------------
maintain commercial public liability insurance covering the Mortgagor and the
Mortgagee against claims for bodily injury and death and property damage
occurring in, on or about or resulting from the Facility, or any street, drive,
sidewalk, curb or passageway adjacent to the Facility, in standard form and with
such insurance company or companies and in such amounts as may be acceptable to
the Mortgagee in its reasonable judgment, which insurance shall include blanket
contractual liability coverage that insures contractual liability under any
indemnification of the Mortgagee by the Mortgagor in the Facility Agreement, the
Promissory Note, this Mortgage or any other Transaction Document (but such
coverage or the amount of such coverage shall in no way limit such
indemnification). In addition to the commercial public liability insurance
required by the preceding sentence, the Mortgagor also shall procure and
maintain employer's liability, automobile, personal injury and professional
liability coverage in amounts of $1,000,000 primary coverage and $5,000,000
excess coverage.
(c) Forms of Policies. All insurance required under this Section
-----------------
2.10 shall be fully paid for and nonassessable and shall contain such
provisions, endorsements and expiration dates, as the Mortgagee shall from time
to time reasonably request, and shall be in such form and amounts, and be issued
by such insurance companies, as shall be approved by the Mortgagee in its
reasonable judgment Without limiting the generality of the preceding sentence,
all such policies shall have endorsed thereon, in form acceptable to the
Mortgagee, the New York Standard Mortgagee
-8- EXHIBIT C-2
Clause, or the local equivalent, without contribution, in the name of the
Mortgagee, and a waiver of subrogation endorsement. Each such policy shall
provide that it will not be cancelled, amended or materially altered (including
by reduction in the scope or limits of coverage) without at least thirty days
prior notice to the Mortgagee. The Mortgagor shall deliver, or cause to be
delivered, to the Mortgagee (i) duplicate original policies evidencing the
insurance required under this section 2.10, (ii) receipts evidencing payment of
all premiums on such policies and (iii) at least thirty days prior to the
expiration of each such policy, a duplicate original renewal policy with
evidence satisfactory to the Mortgagee of payment of all premiums on such
policy. In lieu of the duplicate original policies required by this section 2.10
to be delivered to the Mortgagee. the Mortgagor may deliver original
certificates from the issuing insurance company or companies, evidencing that
such policies are in full force and effect and containing information which, in
the Mortgagee's reasonable judgment, is sufficient to allow the Mortgagee to
determine whether such policies comply with the requirements of this Section
2.10. The Mortgagor shall not carry separate or additional insurance concurrent
in form or contributing in the event of loss with that required under this
section 2.10. unless endorsed in favor of the Mortgagee in accordance with the
requirements of this Mortgage and otherwise approved by the Mortgagee in all
respects.
(d) Transfer of Title. In the event of foreclosure of this
-----------------
Mortgage or extinguishment, in whole or in part of the Obligations, all right,
title and interest of the Mortgagor in and to all policies of insurance required
under this Section 2.10 or otherwise then in force with respect to the Mortgaged
Property and all proceeds payable thereunder and unearned premiums thereon shall
immediately vest in the purchaser or other transferee of the Mortgaged Property.
(e) Amounts of Coverage. For the purposes of this section 2.10,
-------------------
the term "full insurable value" shall mean the cost of replacing the
Improvements and the Personal Property, exclusive of the cost of excavations,
foundations and footings, as determined from time to time (but not less often
than once every three years) by the insurance company or companies holding such
insurance or by an appraiser, engineer, architect or contractor proposed by the
Mortgagor and approved by said insurance company or companies and the Mortgagee.
All deductibles shall be commercially reasonable and, in any event, subject to
the prior written approval of the Mortgagee or the Mortgagee's designee.
2.11 Damage and Destruction. In the event the Facility is damaged,
lost or destroyed, (a) the Mortgagor promptly shall notify the Mortgagee of such
event, (b) the Mortgagor, unless otherwise instructed by the Mortgagee, promptly
shall commence and diligently pursue to completion the restoration, replacement
or rebuilding of the Facility as nearly as possible to its value, condition and
character immediately prior to such damage, loss or destruction, regardless of
whether the insurance proceeds, if any, shall be sufficient for the purpose or
shall be otherwise applied by the Mortgagee as provided in this Mortgage, (c)
the Mortgagee may, but shall not be obligated to, make proof of loss if not made
promptly by the Mortgagor and settle, adjust or compromise any claims for
damage, loss or destruction (and the Mortgagor hereby authorizes and empowers
the Mortgagee to make any such proof of loss, settlement, adjustment or
compromise, and the Mortgagor hereby authorizes and directs each insurance
company concerned to make payment for any such damage, loss or destruction
directly to the Mortgagee) and (d) the Mortgagee shall have the right to apply
the insurance proceeds, first, to reimburse the Mortgagee for all reasonable
costs and expenses incurred in connection with the collection of such proceeds,
and, second, at the option of the Mortgagee, (i) to pay all or any part of the
Obligations then due in the order and manner determined by the Mortgagee in its
sole discretion, (ii) to cure any then current default under this Mortgage, or
(iii) to repair, restore or replace, in whole or in part, the portion of the
Facility so damaged, lost or destroyed. Notwithstanding anything in this
Mortgage or at law or in equity to the contrary, no insurance proceeds that are
paid to the Mortgagee
-9- EXHIBIT C-2
as provided in this Mortgage shall be deemed trust funds, and the Mortgagee
shall be entitled to dispose of such proceeds as provided in this Mortgage. The
Mortgagor expressly assumes all risk of loss, including a decrease in the use,
enjoyment or value, of the Mortgaged Property from any casualty whatsoever,
whether or not insurable or insured against.
2.12 Condemnation. The Mortgagor, immediately upon obtaining knowledge
------------
of any pending or threatened proceeding for the condemnation of the Facility or
of any right of eminent domain, or of any other proceeding arising out of injury
or damage to the Facility (including a change in grade of any street), will
notify the Mortgagee of the pendency or threat of such proceeding. The Mortgagee
may participate in such proceeding, and the Mortgagor from time to time will
execute and deliver to the Mortgagee all instruments requested by the Mortgagee
to permit such participation. The Mortgagor shall diligently prosecute such
proceeding, deliver to the Mortgagee copies of all papers served in connection
with such proceeding and consult and cooperate with the Mortgagee and the
Mortgagee's attorneys and agents in the prosecution and defense of such
proceeding; provided that the Mortgagor shall not settle such proceeding
--------
without the prior consent of the Mortgagee. The Mortgagor hereby assigns to the
Mortgagee all proceeds of condemnation awards, all proceeds of sale in lieu of
condemnation, and all proceeds of all judgments, decrees and awards for injury
or damage to the Mortgaged Property. The Mortgagor shall execute and deliver
such further assignments of such proceeds as the Mortgagee may request, and
hereby authorizes the Mortgagee to collect and receive any and all such
proceeds, to give receipts and acquittances therefor, and to appeal from any
such judgment, decree or award. The Mortgagee shall in no event be liable or
responsible for any failure to collect, or to exercise diligence in the
collection of, any of such proceeds. The Mortgagee shall have the right to apply
any such proceeds, first, to reimburse the Mortgagee for all costs and expenses
incurred in connection with the proceeding in question or the collection of such
proceeds and, second, as provided in section 2.11 in respect of the application
of insurance proceeds held by the Mortgagee. Notwithstanding anything in this
Mortgage or at law or in equity to the contrary, none of the proceeds that are
paid to the Mortgagee as provided in this section 2.12 shall be deemed trust
funds, and the Mortgagee shall be entitled to dispose of such proceeds as
provided in this Mortgage. Notwithstanding any condemnation, taking or other
proceeding that causes injury to or a decrease in value of the Facility
(including a change in grade of any street), the Mortgagor shall continue to pay
the Obligations as provided in the Promissory Note.
2.13 Liens. The Mortgagor, without the prior consent of the Mortgagee,
-----
will not create, assume or suffer to exist any deed of trust, mortgage,
voluntary or involuntary lien, whether statutory, constitutional or contractual
(except for the lien for ad valorem taxes on the Mortgaged Property which are
not yet due and payable), security interest, encumbrance or charge, or
conditional sale or other title retention document against or covering the
Mortgaged Property, prior to, on a parity with or subordinate to the lien of
this Mortgage, other than the Permitted Exceptions and other than purchase money
security interests in personal property (other than replacement fixtures and
personal property pursuant to Section 2.06) acquired or held by the Mortgagor in
the ordinary course of business to secure the purchase price of such property so
long as no such purchase money security interest shall extend to or cover any
property other than the personal property being acquired and so long as the
aggregate principal amount of the indebtedness at any one time outstanding
secured by the purchase money securIty interests permitted by this section 2.13
shall not otherwise be prohibited by the terms of any Transaction Document and
shall not exceed the lesser of eighty percent of the cost of such personal
property or the then fair value of such personal property. The Mortgagor will
pay, and or otherwise discharge, from time to time when the same shall become
due, all lawful claims and demands of mechanics, materialmen, laborers and
others which, a unpaid, might result in, or permit the creation of, a lien on
the Mortgaged Property, or on the rents, proceeds, issues and profits due or to
become due and payable under or pursuant to any of the Mortgaged Property.
Except as otherwise provided in this Section 2.13, the Mortgagee may withhold
its consent to any proposed deed of trust, mortgage,
-10- EXHIBIT C-2
lien, security interest, encumbrance, charge, or conditional sale or other title
retention document for no reason or any reason.
2.14 Taxes and Other Charges. The Mortgagor will pay when due, and
-----------------------
before any penalty, interest or cost for nonpayment thereof may be added
thereto, all taxes, assessments, vault, water and sewer rents, rates, charges
and assessments, levies, permits, inspection and license fees and other
governmental and quasi-governmental charges, general and special, ordinary and
extraordinary, foreseen and unforeseen, heretofore or hereafter assessed, levied
or otherwise imposed against or upon, or which may become a lien upon, the
Mortgaged Property or the rents, proceeds, issues and profits due or to become
due and payable under or pursuant to the Mortgaged Property or arising in
respect of the occupancy, use or possession of the Mortgaged Property. The
Mortgagor will promptly pay all income, franchise and other taxes owing by the
Mortgagor, together with any interest or penalties thereon.
2.15. Tax Deposits. Following any failure by the Mortgagor to pay when
------------
due any real property tax or personal property tax required to be paid by the
Mortgagor under Section 2.14, and without limiting the obligations of the
Mortgagor under section 2.14, if required by the Mortgagee, the Mortgagor, at
its sole cost and expense, shall deposit with such service or financial
institution as the Mortgagee shall designate, monthly on the first day of each
calendar month, one-twelfth of the aggregate annual amount of the real property
and personal property taxes required to be paid by the Mortgagor under Section
2.14. In addition, if required by the Mortgagee, the Mortgagor also shall
deposit with such service or financial institution a sum of money which,
together with the monthly installments required under the preceding sentence,
will be sufficient to make each of the payments of such real property and
personal property taxes at least three days before such payments are due, If the
amount of any such payments is not ascertainable at the time any such deposit is
required to be made pursuant to this Section 2.15, then the deposit shall be
made on the basis of the Mortgagee's estimate of such amount, and, when such
amount is fixed for the then-current year, the Mortgagor promptly shall deposit
any deficiency with such service or financial institution. All funds deposited
with such service or financial institution pursuant to this Section 2.15, until
applied as provided below, shall constitute additional security for the
Obligations, shall be held by such service or financial institution in a
separate interest,bearing account and, provided that no Event of Default (as
defined below) shall have occurred and be continuing, such funds and any
interest earned thereon shall be applied in payment of the amounts of such real
property and personal property taxes prior to their becoming delinquent, to the
extent that such service or financial institution shall have such funds on hand;
provided that neither the Mortgagee nor such service or financial institution
--------
shall have any obligation to use such funds to pay any installment of such real
property or personal property taxes prior to the last day on which payment
thereof may be made without penalty or interest The Mortgagor shall be
responsible for furnishing to the Mortgagee bills or invoice; for such real
property and personal property taxes in sufficient time to pay the same before
any penalty or interest attaches, and neither the Mortgagee nor such service or
financial institution shall have any responsibility for payment of such real
property or personal property taxes in the absence of such bills or invoices. If
an Event of Default shall have occurred and be continuing, or if the Obligations
shall be accelerated as provided in this Mortgage or the Promissory Note, then
all funds deposited with such soak or financial institution under this Section
2.15 and any interest earned thereon, at the Mortgagee's option, may be applied
to the Obligations in the order and manner determined by the Mortgagee or to
cure such Event of Default or otherwise as provided in this Section 2.15. Upon
an assignment or other transfer of this Mortgage, the Mortgagee shall thereupon
be completely released from all liability with respect to such deposits, and the
Mortgagor or the owner of the Mortgaged Property shall look solely to such
service or financial institution or the assignee or transferee with respect to
such deposit. The preceding sentence shall apply to each transfer of such
deposits to a new assignee or transferee. A permissible transfer of record title
to the Facility automatically shall transfer to the new owner the beneficial
interest in any
-11- EXHIBIT C-2
deposits made under this section 2.15. Upon full payment and satisfaction of
this Mortgage or, at the Mortgagee'S option, at any prior time, the balance of
deposited amounts and any interest earned thereon in the possession of such
service or financial institution shall be paid over to the record owner of the
Facility, and no other person shall have any right or claim to such deposited
amounts or interest in any event.
2.16 Inspection. Upon reasonable notice from the Mortgagee to the
----------
Mortgagor, the Mortgagor will allow the Mortgagee or its authorized
representatives, at all reasonable times, to enter upon and inspect the
Mortgaged Property and the books and records with respect to the operations of
the Mortgaged Property.
2.17 Maintenance of Records. The Mortgagor shall keep and maintain
----------------------
complete and accurate books and records in accordance with sound accounting
principles with respect to all operations of or transactions involving the
Mortgaged Property.
2.18 Mortgagor's Certificates. The Mortgagor, within ten days after
------------------------
request by the Mortgagee, shall furnish to the Mortgagee a written statement,
duly acknowledged, certifying to the Mortgagee and/or any proposed assignee of
this Mortgage as to (a) the amount of the Obligations then owing, (b) the terms
of payment and maturity date of the Obligations, (c) the date to which interest
has been paid under the Promissory Note and (d) whether any offsets or defenses
exist against the Obligations and, if any are alleged to exist, a detailed
description thereof.
2.19 Prepayments; Release Premium. So long no Event of Default shall
----------------------------
have occurred and be continuing, the Mortgagor may prepay the unpaid principal
amount of the Promissory Note, in whole or in part, plus accrued interest to the
date of such prepayment on the principal amount prepaid, plus any late charges
then payable under the Promissory Note, plus any costs and expenses then payable
by the Mortgagor under the Promissory Note; provided that each partial
--------
prepayment shall be in a principal amount of not less than Five Thousand and
NO/100 Dollars ($5,000.00); provided, further, that upon prepayment in whole of
-------- -------
the unpaid principal amount of the Promissory Note plus accrued interest to the
date of such prepayment plus the amount of any late charges then payable under
the Promissory Note plus any costs and expenses then payable by the Mortgagor
under the Promissory Note, the Mortgagor shall pay to First Healthcare a release
premium (the "Release Premium") in an amount, determined at the date of such
prepayment, equal to five percent of the amount of the Purchase Price Balance
that would then have been outstanding a the Purchase Price Balance had been
timely paid in accordance with the regularly scheduled required installment
payments provided for in the Promissory Note without regard to any prepayments
made in respect of the Promissory Note. The Release Premium shall be applied
first to any costs and expenses then payable by the Mortgagor or any Affiliate
under any Related Promissory Note (as defined below), second to any late charges
then payable under any Related Promissory Note, and then to the principal of any
Related Promissory Note and accrued interest thereon as agreed to by the
Mortgagor and First Healthcare, or, if the Mortgagor and First Healthcare cannot
agree, then to such principal and accrued interest determined by the Mortgagor
in its sole discretion as to fifty percent of the Release Premium and to such
principal and accrued interest determined by First Healthcare in its sole
discretion as to fifty percent of the Release Premium. Each partial prepayment
shall be applied first to any costs and expenses then payable by the Mortgagor
under the Promissory Note, second to any late charges then payable under the
Promissory Note, third to interest then accrued, and then to the principal
installments under the Promissory Note in the inverse order of their maturities
without deferral or limitation of the intervening installments of principal or
interest For the purposes of this Mortgage, the term "Related Promissory Note"
means any of the promissory notes made by one or more of the persons listed or
otherwise described in Schedule C (the persons listed or otherwise described in
Schedule C, and their respective successors and permitted assigns, being
sometimes referred to in this Mortgage individually as an
-12- EXHIBIT C-2
"Affiliate" and collectively as the "Affiliates") to the order of First
Healthcare and evidencing the obligation of such Affiliate or Affiliates to pay
a portion of the purchase price for the properties (real, personal and mixed)
that are the subject of the Facility Agreement.
2.20 Reporting Requirements. So long as the Promissory Note shall
----------------------
remain unpaid, the Mortgagor shall furnish to the Mortgagee:
(a) as soon as possible and in any event within five days after
the occurrence of each Event of Default and each event which, with the giving of
notice or lapse of time, or both, would constitute an Event of Default,
continuing on the date of such statement, a statement of the chief financial
officer of the general partner in the Mortgagor setting forth details of such
Event of Default or event and the action which the Mortgagor has taken and
proposes to take with respect thereto;
(b) as soon as available and in any event within sixty days
after the end of each of the first three quarters of each Fiscal year of the
Mortgagor, a balance sheet of the Mortgagor as of the end of such quarter and
statements of income and expense and of cash flow of the Mortgagor for the
period commencing at the end of the previous fiscal year and ending with the end
of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the preceding fiscal year,
all in reasonable detail and duly certified (subject to year-end audit
adjustments) by the chief financial officer of the general partner in the
Mortgagor as having been prepared in accordance with sound accounting principles
and practices consistently applied and as fairly presenting the financial
condition of the Mortgagor as of the respective dates of such financial
statements and the results of the operations of the Mortgagor for the periods
ended on such dates, together with a certificate of said officer stating that no
Event of Default, or event which, with the giving of notice or the lapse of
time, or both, would constitute an Event of Default, has occurred and is
continuing or, if an Event of Default or such an event has occurred and is
continuing, a statement as to the nature thereof and the action which the
Mortgagor has taken and proposes to take with respect thereto;
(c) as soon as available and in any event within sixty days
after the end of each quarter of each fiscal year of the Mortgagor, a balance
sheet for the Facility as of the end of such quarter and statements of income
and expense and of cash flow for the Facility for the period commencing at the
end of the previous fiscal year and ending with the end of such quarter, Setting
forth in each case in comparative form the corresponding figures for the
corresponding period of the preceding fiscal yew, all in reasonable detail and
duly certified (subject to year-end audit adjustments) by the chief financial
officer of the general partner in the Mortgagor as having been prepared in
accordance with sound accounting principles and practices consistently applied
and as fairly presenting the financial conditIon of the Facility as of the
respective dates of such financial statements and the results of the operations
of the Facility for the periods ended on such dates;
(d) as soon as available and in any event within one-hundred
twenty days after the end of each fiscal year of the Mortgagor, a balance sheet
of the Mortgagor as of the end of such fiscal year and statements of income and
expense and of cash flow of the Mortgagor for such fiscal year, accompanied by a
report and an opinion of independent certified public accountants of recognized
standing or, a such report and opinion are not available, duly certified by the
chief financial officer of the general partner in the Mortgagor as having been
prepared in accordance with generally accepted accounting principles and
practices consistently applied and as fairly presenting the financial condition
of the Mortgagor as of the end of such fiscal year and the results of the
operations of the Mortgagor for such fiscal year;
-13- EXHIBIT C-2
(e) as soon as available and in any event within ninety days
after the end of each fiscal year of the Mortgagor, a certificate of the chief
financial officer of the general partner in the Mortgagor stating that no Event
of Default, or event which, with the giving of notice or the lapse of time, or
both, would constitute an Event of Default, has occurred and is continuing or,
if an Event of Default or such an event has occurred and is continuing, a
statement as to the nature thereof and the action which the Mortgagor has taken
and proposes to take with respect thereto;
(f) as soon as available and in any event within sixty days
after the end of each quarter of each fiscal year of the Mortgagor, detailed
operational statistics for the Facility pertaining to occupancy rates, patient
or resident mix and patient or resident rates by type for the period commencing
at the end of the previous fiscal year and ending with the end of such quarter;
(g) promptly and in any event within thirty days after the
sending or filing thereof, copies of all cost reports (including all cost
reports filed pursuant to Titles XVIII and XIX of the Social Security Act, as
amended) and all amendments thereto required to be filed with any governmental
or regulatory authority in respect of the Facility, in each case duly certified
by an authorized officer of the general partner in the Mortgagor as being
accurate and complete and as having been prepared in accordance with applicable
governmental and regulatory requirements;
(h) promptly and in any event within thirty days after receipt
thereof by the Mortgagor, a copy of each survey prepared by any governmental or
regulatory authority with respect to the Facility, together with a copy of any
related plan of correction;
(i) promptly after the sending or filing thereof, copies of all
proxy statements, financial statements and reports which the Mortgagor sends to
its partners, and copies of all regular, periodic and special reports, and all
registration statements, that the Mortgagor files with the Securities and
Exchange Commission or any governmental authority which may be substituted
therefor, or with any national securities exchange; and
(j) such other information respecting the business, properties,
operations or condition (financial or otherwise) of the Mortgagor and the
Affiliates as the Mortgagee may from time to time reasonably request, in each
case certified by an appropriate officer of the general partner in the
Mortgagor.
ARTICLE III
Assignment of Rents and Other Sums
----------------------------------
3.01 Assignment. The Mortgagor hereby bargains, sells, assigns,
----------
transfers and sets over to the Mortgagee, absolutely and not as additional
security for the payment of the Obligations, all rents, proceeds issues and
profits due and to become due and payable under or pursuant to or to be derived
from the Mortgaged Property, or the use and occupation of the Mortgaged
Property, including all rents, royalties, revenues, rights, deposits (including
security deposits) and benefits accruing to the Mortgagor under all leases and
all other contracts and agreements (including all patient care agreements, life
care contracts, admission agreements and other contracts and agreements with
residents, patients and other persons pertaining to the care of residents or
patients) now or hereafter covering the Mortgaged Property, whether before or
after foreclosure or during the full period of redemption, if any, and the right
to receive the same and apply them against the Obligations or against the
Mortgagor's other obligations under this Mortgage, together with all contracts,
bonds, leases and other documents and agreements (including all patient care
agreements, life care contracts, admission agreements and other contracts and
agreements with residents, patients and other persons pertaining to the care of
residents or patients) evidencing the same now or hereafter in effect and all
rights of the
-14- EXHIBIT C-2
Mortgagor thereunder. Nothing contained in the preceding sentence shall be
construed to bind the Mortgagee to the performance of any of the provisions of
any such contract, bond, lease or other document or agreement or otherwise to
impose any obligation upon the Mortgagee (including any liability under a
covenant of quiet enjoyment contained in any lease or under applicable law in
the event that any tenant shall have been joined as a party defendant in any
action to foreclose this Mortgage and shall have been foreclosed of all right,
title and interest and all equity of redemption in the Mortgaged Property),
except that the Mortgagee shall be accountable for any money actually received
by the Mortgagee pursuant to such assignment. The assignment of said rents,
proceeds, issues and profits, and of the aforesaid rights with respect thereto
and to the contracts, bonds, leases and other documents and agreements
evidencing the same is intended to be and is an absolute present assignment from
the Mortgagor to the Mortgagee and not merely the passing of a security
interest. The Mortgagor will, as and when requested from time to time by the
Mortgagee, execute, acknowledge and deliver to the Mortgagee, in form approved
by the Mortgagee, one or more general or specific assignments of the lessor's
interest under any lease, contract or agreement (including any patient care
agreement, life care contract, admission agreement and other contract or
agreement with any resident, patient or other person pertaining to the cue of
residents or patients) now or hereafter affecting the Mortgaged Property.
Notwithstanding any provision in this section 3.01 or elsewhere in this Mortgage
to the contrary, this Mortgage shall not be construed to constitute an
assignment of any patient accounts or any other accounts constituting any right
of the Mortgagor to payment for goods sold or leased or for services rendered
which is not evidenced by an instrument or chattel paper.
3.02 Right to Collect. So long as there shall exist no Event of
----------------
Default, and except as otherwise expressly provided in this Mortgage, the
Mortgagor shall have the right and license to collect, as the same shall accrue,
the rents, proceeds, issues and profits due and to become due and payable under
or pursuant to or to be derived from the Mortgaged Property or the use and
occupation of the Mortgaged Property. The Mortgagor agrees to hold the same in
trust and to use the same in payment of the Obligations, taxes, assessments,
levies, fees, charges and insurance premiums payable under this Mortgage and all
other charges on or against the Mortgaged Property.
3.03 Revocation of Right to Collect; Etc. Upon the occurrence of any
-----------------------------------
Event of Default, (i) the right and license set forth in Section 3.02 may be
revoked by the Mortgagee, and thereafter the Mortgagee shall have the right and
authority to exercise any of the rights or remedies referred to or set forth in
ArtIcle VI and (ii) the Mortgagor shall promptly pay to the Mortgagee (A) all
prepayments and security or other deposits paid to the Mortgagor pursuant to any
contract, bond, lease or other document or agreement assigned under this
Mortgage and (B) all charges for services or facilities or for escalation which
were paid pursuant to any such contract, bond, lease or other document or
agreement to the extent allocable to any period from and after the occurrence of
such Event of Default if the Mortgagor is not required by this Mortgage to
surrender possession of the Mortgaged Property upon the occurrence of an Event
of Default, then the Mortgagor shall pay monthly in advance to the Mortgagee, on
the entry by the Mortgagee into possession pursuant to Article VI, or to any
receiver appointed to collect said rents, proceeds, issues and profits, the fair
and reasonable rental value for the use and occupation of the Mortgaged Property
or such part thereof as may be in the possession of the Mortgagor. Upon a
default in any such payment, the Mortgagor will vacate and surrender such
possession to the Mortgagee or such receiver and, upon a default in vacating and
surrendering the same, may be evicted by summary or any other available
proceedings.
ARTICLE IV
Additional Advances; Expenses: Indemnity
----------------------------------------
4.01 Additional Advances and Disbursements. The Mortgagor agrees that,
if the Mortgagor fails to pay or perform any obligation of the Mortgagor under
this Mortgage (including the
-15- EXHIBIT C-2
obligation to procure and maintain the insurance at the limits of coverage
required by Section 2.10), then the Mortgagee shall have the right, but not the
obligation, in the Mortgagor's name or otherwise, and without notice to the
Mortgagor, to pay or perform, or to cause the payment or performance of, such
obligation and, for such purpose, the Mortgagor expressly grants to the
Mortgagee, in addition and without prejudice to any other rights and remedies
under this Mortgage, the right to enter upon and take possession of the
Mortgaged Property to such extent and as often as the Mortgagee may deem
necessary or desirable to prevent or remedy any failure by the Mortgagor to pay
or perform such obligation. No such payment or performance by the Mortgagee
shall be deemed to have cured such default by the Mortgagor or any Event of
Default with respect thereto, All sums so paid, and all expenses incurred, by
the Mortgagee in connection with such payment or performance shall be deemed
obligations owing by the Mortgagor to the Mortgagee and shall bear interest,
from the date paid or incurred until repaid, at the Default Rate provided for in
the Promissory Note. The amount of all such payments and expenses, and all such
interest thereon, shall be part of the Obligations and shall be secured by this
Mortgage.
4.02 Other Expenses. The Mortgagor, on demand, will pay or reimburse
--------------
the Mortgagee for the payment of, any costs or expenses incurred or expended in
connection with or incidental to (a) any Event of Default or (b) the exercise or
enforcement by or on behalf of the Mortgagee of any of its rights or remedies or
the Mortgages obligations under any Transaction Document.
4.03 Indemnity. The Mortgagor agrees to indemnify and hold harmless
---------
the Mortgagee from and against any and all claims, demands, losses, liabilities,
suits, obligations, fines, damages, judgments, penalties, charges, costs and
expenses which may be imposed on, incurred or paid by or asserted against the
Mortgagee by reason or on account of, or in connection with, (a) any Event of
Default, (b) the exercise by the Mortgagee of any of its rights and remedies, or
the performance of any of its duties, under this Mortgage or (c) any accident,
injury, death or damage to any person (including any employee of the Mortgagor)
or property occurring in, on or about the Facility or any street, drive,
sidewalk, ▇▇▇▇ or passageway adjacent to the Facility, but excepting claims,
demands, losses, liabilities, suits, obligations, fines, damages, judgments,
penalties, charges, costs and expenses resulting from the willful misconduct or
gross negligence of the Mortgagee. Any amount payable to the Mortgagee under
this section 4.03 shall be deemed a demand obligation, shall be part of the
Obligations and shall be secured by this Mortgage.
ARTICLE V
Transfer of the Mortgaged Property
----------------------------------
5.01 Transfer of the Mortgaged Property. The Mortgagor acknowledges
----------------------------------
that the continuous ownership of the Mortgaged Property by the Mortgagor is of a
material nature to the transaction contemplated by, and the Mortgagee's
agreement to create the Obligations under, the Transaction Documents. The
Mortgagor agrees that, except as otherwise provided in any Transaction Document,
the Mortgagor will not, directly or indirectly, sell, grant, convey, assign or
otherwise transfer (collectively, a "transfer"), or permit any transfer of, the
Mortgaged Property or any legal or beneficial interest in the Mortgaged
Property, by operation of law or otherwise, without the poor consent of the
Mortgagee. For the purposes of this Mortgage, but without limiting the
foregoing, a transfer of the legal or beneficial ownership, directly or
indirectly, of thirty-three percent or more of the issued and outstanding stock
of any class of stock of
-16 EXHIBIT C-2
any corporate general partner in the Mortgagor, substantially all of the assets
of the Mortgagor or thirty-three percent or more of the capital or profits of
the Mortgagor or of any general partner in the Mortgagor, shall not be deemed a
transfer of the Mortgaged Property or an interest in the Mortgaged Property; if
such transfer is to any Affiliate, to ▇▇▇ ▇. ▇▇▇▇▇▇, to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, to any
heir or devisee of ▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or to the trustee of any
living trust of ▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇. Upon the occurrence of any
transfer of the Mortgaged Property or any legal or beneficial interest in the
Mortgaged Property, by operation of law or otherwise, without the prior consent
of the Mortgagee, the Mortgagee may elect to declare the ObligationS, together
with any other sums secured by this Mortgage, immediately due and payable. The
Mortgagee may withhold its consent to any proposed transfer for no reason or any
reason, including the failure of the prospective transferee of the Mortgaged
Property to reach an agreement in writing with the Mortgagee increasing the
interest payable on the Obligations to such rate as the Mortgagee shall request.
Any transfer or attempted transfer contrary to the provisions of this ArtIcle V
shall be void.
ARTICLE VI
Defaults and Remedies
---------------------
6.01 Events of Default. The term "Event of Default" shall mean the
-----------------
occurrence of any of the following events:
(a) The Mortgagor shall fail to pay any principal of, or
interest on, the Promissory Note within ten days after the same becomes due and
payable; or
(b) The Mortgagor shall fail to pay any of the other Obligations
(whether for premium, fees, expenses or otherwise) when and as the same become
due and payable, whether on any stated due date, at maturity or upon
acceleration, and such failure shall remain unremedied for ten days alter
written notice of such failure shall have been given to the Mortgagor by the
Mortgagee; or
(c) Any representation or warranty made by the Mortgagor (or any
general partner in the Mortgagor or any officers of any general partner in the
Mortgagor) under or in connection with any Transaction Document shall prove to
have been incorrect in any material respect when made; or
(d) The Mortgagor shall fail at any time to obtain, provide,
maintain or keep in force the insurance policies required by Section 2.10; or
(e) The Mortgagor shall fail to perform or observe any other
provision contained in any Transaction Document on the Mortgagor's part to be
performed or observed if such failure shall remain unremedied beyond the
applicable grace period for such provision or, if no such grace period is
applicable, a such failure shall remain unremedied for thirty days after written
notice of such failure shall have been given to the Mortgagor by the Mortgagee;
or
(f) The Mortgagor shall fail to pay any principal of or premium
or interest on any indebtedness (but excluding indebtedness evidenced by the
Promissory Note) of the Mortgagor in an aggregate principal amount of at least
$100,000 at any one time outstanding, when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period, a
any, specified in any agreement or instrument relating to such indebtedness; or
any other event shall occur or condition shall exist under any agreement or
instrument relating to any such indebtedness and shall continue after the
applicable grace period, a any, specified in such agreement or instrument, a the
effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such indebtedness or any
-17- EXHIBIT C-2
such indebtedness shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment), redeemed,
purchased or defeased, or an offer to prepay, redeem, purchase or defease such
indebtedness shall be required to be made, in each case prior to the stated
maturity thereof; or
(g) The Mortgagor shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Mortgagor seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of sixty days, or
any of the actions sought in such proceeding (including the entry of an order
for relief against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or for any substantial part of its property)
shall occur; or the Mortgagor shall take any action to authorize any of the
actions set forth above in this subsection (g); or
(h) Any judgment or order for the payment of money in excess of
$250,000 shall be rendered against the Mortgagor and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be any period of ten consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(i) Any of the events referred to in subsections (f) through (h)
of this Section 6.01 shall occur with respect to any Guarantor (such term being
used in this Mortgage as such term is defined in the Facility Agreement) and,
for the purposes of this subsection (i), each reference to the Mortgagor in
subsections (f) through (h) above shall mean and be a reference to "any
Guarantor", the reference to "$100.000" in subsection (f) above shall mean and
be a reference to "$1,000,000", and the reference to "$250.000" in subsection
(h) above shall mean and be a reference to "$1,000,000"; or
(j) Any of the events referred to in subsections (f) through (h)
of this section 6.01 shall occur with respect to any general partner in the
Mortgagor and, for the purposes of this subsection (j) each reference to "the
Mortgagor" in subsections (f) through (h) above shall mean and be a reference to
"any general partner in the Mortgagor"; or
(k) Any other Transaction Document to which the Mortgagor is a
party, after delivery of this Mortgage or such other Transaction Document to the
Mortgagee, shall for any reason cease to be valid and binding on the Mortgagor,
or the Mortgagor shall so state in writing; or
(l) The Mortgaged Property or any interest in the Mortgaged
Property shall be the subject of a "transfer," as that term is defined in
section 5.01; or
(m) The Mortgagor shall abandon the Mortgaged Property or shall
cease to do business or shall terminate its business for any reason whatsoever;
or
(n) The Mortgaged Property shall be taken, attached or
sequestered on execution or other process of law in any action against the
Mortgagor; or
-18- EXHIBIT C-2
(o) Any event shall occur or condition shall exist which
constitutes a default by the Mortgagor under any lease or agreement to lease
between the Mortgagor, as lessee or sublessee, and the Mortgagee or any
subsidiary or affiliate of the Mortgagee, as lessor or sublessor, in respect of
real or personal property, and such event or condition shall continue after the
applicable grace period, if any specified in such lease or agreement to lease;
or
(p) Any event shall occur or condition shall exist which
constitutes a default by any Affiliate under any purchase or sale agreement,
lease or agreement to lease, promissory note, mortgage, deed of trust or other
instrument or agreement between such Affiliate and the Mortgagee or any
subsidiary or affiliate of the Mortgagee, and such event or condition shall
continue after the applicable grace period, if any, specified in such instrument
or agreement.
6.02 Remedies. Upon the occurrence of any one or more Events of
--------
Default, the Mortgagee may (but shall not be obligated to), in addition to any
rights or remedies available to it under any Transaction Document, take such
action personally or by its agents or attorneys, with or without entry, and
without notice, demand, presentment or protest (each and all of which are hereby
waived by the Mortgagor), as the Mortgagee deems necessary or advisable to
protect and enforce its rights and remedies against the Mortgagor and in and to
the Mortgaged Property, including the following actions, each of which may be
pursued concurrently or otherwise, at such time and in such order as the
Mortgagee may determine, in its sole discretion, without impairing or otherwise
affecting any other rights or remedies of the Mortgagee:
(a) Declare the entire balance of the Obligations (including the
entire principal balance thereof, all accrued and unpaid interest and any
premium thereon and all other such sums secured by this Mortgage) to be
immediately due and payable, and upon any such declaration the entire unpaid
balance of the Obligations shall become and be immediately due and payable,
without presentment demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Mortgagor, anything in this Mortgage or any
other Transaction Document to the contrary notwithstanding; provided that in the
--------
event of an actual or deemed entry of an order for relief with respect to the
Mortgagor or any guarantor referred to in subsection (i) of Section 6.01 or any
general partner in the Mortgagor under the United States Bankruptcy Code, as
amended, or under any present or future law or statute of the United States of
America or of any state or other jurisdiction thereof relevant to bankruptcy,
insolvency or other relief of debtor's, the entire unpaid balance of the
Obligations automatically shall become and be immediately due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Mortgagor, anything in this Mortgage or any
other Transaction Document to the contrary notwithstanding; or
(b) Institute a proceeding or proceedings for the complete
foreclosure of this Mortgage under any applicable provision of law; or
(c) Institute a proceeding or proceedings for the partial
foreclosure of this Mortgage under any applicable provision of law for the
portion of the Obligations then due and payable, subject to the lien of this
Mortgage continuing unimpaired and without loss of priority so as to secure the
balance of the Obligations not then due and payable; or
(d) Institute an action, suit or proceeding in equity for the
Specific performance of any of the provisions contained in this Mortgage or any
other Transaction Document; or
(e) ▇▇▇ and recover a judgment on the Obligations, as the same
become due and payable, or on account of any Event of Default; or
-19- EXHIBIT C-2
(f) Apply for the appointment of a receiver, custodian, trustee,
liquidator or conservator of the Mortgaged Property, to be invested with the
fullest powers permitted under applicable law, as a mater of right and without
regard to or the necessity to disprove the adequacy of the security for the
Obligations or the solvency of the Mortgagor or any other person liable for the
payment of the Obligations, and the Mortgagor and each other person so liable
waives or shall be deemed to have waived such necessity and consents or shall be
deemed to have consented to such appointment; or
(g) Enter upon the Mortgaged Property, and exclude the Mortgagor
and the Mortgagors' agents and servants wholly from the Mortgaged Property,
without liability for trespass, damages or otherwise, and take possession of all
books, records and accounts relating to the Mortgaged Property, and the
Mortgagor agrees to surrender possession of the Mortgaged Property and of such
books, records and accounts to the Mortgagee on demand after the occurrence of
any Event of Default; and the Mortgagee may use, operate, manage, preserve,
control and otherwise deal with the Mortgaged Property and such books, records
and accounts and may conduct the business of the Facility, either personally or
by its superintendents, managers, agents, servants, attorneys or receivers,
without interference from the Mortgagor; and upon each such entry, and from time
to time thereafter, the Mortgagee, at the expense of the Mortgagor and the
Mortgaged Property, without interference by the Mortgagor, may (i) maintain and
restore the Mortgaged Property by purchase, repair or construction, (ii) insure
or reinsure the Mortgaged Property, (iii) make all necessary or proper repairs,
renewals, replacements, alterations, additions, betterments and improvements to
and on the Mortgaged Property, (iv) complete the construction of the
Improvements and, in the course of such completion, make such changes in the
contemplated or completed Improvements as the Mortgagee may deem advisable and
(v) in every such case in connection with the foregoing have the right to
exercise all rights and powers of the Mortgagor with respect to the Mortgaged
Property, either in the Mortgagor's name or otherwise, including the right to
make, cancel, enforce or modify leases and subleases, obtain and evict tenants
and subtenants on such terms as the Mortgagee shall deem advisable; or
(h) With or without the entrance upon or taking possession of
the Mortgaged Property, collect and receive all rents, proceeds, issues and
profits due and to become due and payable under or pursuant to or derived from
the Mortgaged Property, and after deducting therefrom all costs and expenses of
every character incurred by the Mortgagee in collecting the same and in using,
operating, managing, preserving and controlling the Mortgaged Property, and
otherwise in exercising the rights of the Mortgagee under subsection (g) of this
Section 6.02, including all amounts necessary to pay taxes, assessments, levies,
fees, insurance premiums and other charges in connection with the Mortgaged
Property, as well as reasonable compensation for the services of the Mortgagee
and its agents and employees, apply the remainder as provided in Section 6.05;
or
(i) Release any portion of the Mortgaged Property for such
consideration as the Mortgagee may require without, as to the remainder of the
Mortgaged Property, in any way impairing or affecting the lien or priority of
this Mortgage, or improving the position of any subordinate lienholder with
respect thereto, except to the extent that the Obligations shall have been
reduced by the actual monetary consideration, if any, received by the Mortgagee
for such release, and may accept by assignment, pledge or otherwise any other
property in place thereof as the Mortgagee may require without being accountable
for so doing to any other lienor; or
(j) Take all actions permitted under the Uniform Commercial Code
of the jurisdiction in which the Facility is located; or
-20- EXHIBIT C-2
(k) Take any other action, or pursue any other right or remedy,
as the Mortgagee may have under applicable law, and the Mortgagor does hereby
grant the same to the Mortgagee.
In the event that the Mortgagee shall exercise any of the rights or remedies set
forth in subsections (g) and (h) of this Section 6.02, the Mortgagee shall not
be deemed to have entered upon or taken possession of the Mortgaged Property
except upon the exercise of its option to do so, evidenced by its demand and
overt act for such purpose, nor shall the Mortgagee be deemed a mortgagee in
possession by reason of such entry or taking possession. The Mortgagee will not
be liable to account for any action taken pursuant to any such exercise other
than for rents and payments on patient accountS actually received by the
Mortgagee, nor liable for any loss sustained by the Mortgagor resulting from any
failure to let the Mortgaged Property, or from any other act or omission of the
Mortgagee except to the extent such loss is caused by the wilful misconduct or
bad faith of the Mortgagee. The Mortgagor hereby consents to, ratifies and
confirms the exercise by the Mortgagee of said rights and remedies, and appoints
the Mortgagee as the Mortgagor's attorney, in fact, which appointment shall be
deemed to be coupled with an interest and is irrevocable, for such purposes.
6.03 Expenses. In any suit to foreclose this Mortgage or to enforce
--------
any other remedy of the Mortgagee under this Mortgage or any other Transaction
Document, there shall be allowed and included as an addition to and a part of
the Obligations in the decree for sale or other judgment or decree all
expenditures and expenses which may be paid or incurred in connection with the
exercise by the Mortgagee of any of its rights and remedies prided or referred
to in section 6.02, and the same shall be secured by this Mortgage.
6.04 Rights Pertaining to Sales. The following provisions shall apply
--------------------------
to any sale or sales of the Mortgaged Property under or by virtue of this
Article VI, whether made under the power of sale granted in this Mortgage or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale:
(a) Any number of sales may be conducted from time to time.
(b) Any sale may be postponed or adjourned by public
announcement at the time and place appointed for such sale or for such postponed
or adjourned sale without further notice.
(c) After each sale, an officer of any court empowered to do so
shall execute and deliver to the purchaser or purchasers at such sale a good and
sufficient instrument or instruments granting, conveying, assigning and
transferring all right, title and interest of the Mortgagor in and to the
property and rights sold and shall receive the proceeds of said sale or sales
and apply the same as provided in this Mortgage. The Mortgagee is hereby
appointed the true and lawful attorney,in-fact of the Mortgagor, which
appointment is irrevocable and shall be deemed to be coupled with an interest,
in the Mortgagor's name and stead, to make all necessary conveyances,
assignments, transfers and deliveries of the property and rights so sold, and
for that purpose the Mortgagee may execute all necessary instruments of
conveyance, assignment, transfer and delivery, and may substitute one or more
persons with like power, the Mortgagor hereby ratifying and confirming all that
said attorney or such substitute or substitutes shall lawfully do by virtue
thereof. Nevertheless, the Mortgagor, a requested by the Mortgagee, shall ratify
and confirm any such sale or sales by executing and delivering to such purchaser
or purchasers all such instruments as may be advisable, in the judgment of the
Mortgagee, for the purposes designated in such request
-21- EXHIBIT C-2
(d) Any and all statements of fact or other recitals made in any
of the instruments referred to in subsection (c) of this section 6.04 given as
to nonpayment of the Obligations, or as to the occurrence of any Event of
Default, or as to the Mortgagee having declared all or any of the Obligations to
be due and payable, or as to the request to sell, or as to notice of time, place
and terms of sale and of the property or rights to be sold having been duly
given, or as to any other act or thing having been duly done, shall be taken as
prima facie evidence of the truth of the facts so stated and recited. The
----- -----
Mortgagee may appoint or delegate any one or more persons as agent to perform
any act or acts necessary or incident to any sale so held, including the posting
of notices and the conduct of sale.
(e) The receipt for the purchase money paid at any such sale
shall be sufficient discharge therefor to any purchaser of any property or
rights sold as aforesaid, and no such purchaser, or its representatives,
grantees or assigns, after paying such purchase price and receiving such
receipt, shall be bound to see to the application of such purchase price or any
part thereof upon or for any trust or purpose of this Mortgage or, in any manner
whatsoever, be answerable for any loss, misapplication or nonapplication of any
such purchase money, or part thereof, or be bound to inquire as to the
authorization, necessity, expediency or regularity of any such sale.
(f) Any such sale or sales shall operate to divest all of the
estate, right, title, interest, claim and demand whatsoever, whether at law or
in equity, of the Mortgagor in and to the properties and rights so sold, and
shall be a perpetual bar both at law and in equity against the Mortgagor and any
and all persons claiming or who may claim the same, or any part thereof, by,
through or under the Mortgagor to the fullest extent permitted by applicable
law.
(g) Upon any such sale or sales, the, Mortgagee may bid for and
acquire the Mortgaged Property and, in lieu of paying cash therefor, may make
settlement for the purchase price by crediting against the Obligations the
amount of the bid made therefor, after deducting therefrom the expenses of the
sale, the cost of any enforcement proceeding under this Mortgage and any other
sums which the Mortgagee is authorized to deduct under the terms of this
Mortgage, to the extent necessary to satisfy such bid.
(h) In the event that the Mortgagor, or any person claiming by,
through or under the Mortgagor, shall transfer or refuse or fail to surrender
possession of the Mortgaged Property after any sale of the Mortgaged Property,
then the Mortgagor or such person shall be deemed a tenant at sufferance of the
purchaser at such sale, subject to eviction by means of forcible entry and
detainer proceedings, or subject to any other right or remedy available under
this Mortgage or under applicable law.
(i) Upon any such sale, the Mortgagee or any public officer
acting under execution or order of court shall not be required to have present
or constructively in its possession any or all of the Mortgaged Property.
(j) In the event of any sale referred to in this section 6.04,
all of the Obligations a not previously due and payable, immediately thereupon
shall become due and payable, notwithstanding anything to the contrary contained
in this Mortgage or any other Transaction Document.
6.05 Application of Proceeds. The purchase money, proceeds or avails
-----------------------
of any sale referred to in Section 6.04, together with any other sums that may
be held by the Mortgagee under this Article VI or any other provision of this
Mortgage, except as expressly provided in this Mortgage or under applicable law
to the contrary, shall be applied as follows:
-22- EXHIBIT C-2
First: To the payment of the costs and expenses of any such
-----
sale, including compensation to the Mortgagee and its agents, and of any
judicial proceeding in which such sale may be made, and of all expenses,
liabilities and advances made or incurred by the Mortgagee under this Mortgage,
together with interest thereon as provided in this Mortgage, and all taxes,
assessments and other charges, except any taxes, assessments or other charges
subject to which the Mortgaged Property shall have been sold.
Second: To the payment in full of the Obligations (including
------
principal, interest, premium and fees in such order as the Mortgagee may elect).
Third: To the payment of any other sums secured by this Mortgage
-----
or required to be paid by the Mortgagor pursuant to any provision of this
Mortgage or any other Transaction Document.
Fourth: To the extent permitted by applicable law, to be set
------
aside by the Mortgagee as adequate security in its judgment for the payment of
sums which would have been paid by application under clauses First through Third
----- -----
above to the Mortgagee, arising out of an obligation or liability with respect
to which the Mortgagor has agreed to indemnify the Mortgagee, but which sums are
not yet due and payable or liquidated.
Fifth: To the payment of the surplus, if any, to whomsoever may
-----
be lawfully entitled to receive the same.
6.06 Additional Provisions as to Remedies.
------------------------------------
(a) No right or remedy of the Mortgagee under this Mortgage is
intended to be exclusive of any other right or remedy, and each and every such
right or remedy shall be cumulative and continuing, shall be in addition to
every other right or remedy given under this Mortgage or any other Transaction
Document or now or hereafter existing at law or in equity, and may be exercised
from time to time and as often as may be deemed expedient by the Mortgagee.
(b) No delay or omission by the Mortgagee to exercise any right
or remedy under this Mortgage upon an Event of Default shall impair such
exercise, or be construed to be a waiver of any such Event of Default or an
acquiescence in any such Event of Default.
(c) The failure, refusal or waiver by the Mortgagee of its right
to assert any right or remedy under this Mortgage upon any Event of Default or
other occurrence shall not be construed as waiving such right or remedy upon any
other or subsequent Event of Default or other occurrence.
(d) The Mortgagee shall not have any obligation to pursue any
rights or remedies it may have under any other agreement prior to pursuing its
rights or remedies under this Mortgage or any other Transaction Document.
(e) The Mortgagee may resort to any security given by this
Mortgage or any other security now given or hereafter existing to secure the
Obligations, in whole or in part in such portions and in such order as the
Mortgagee may deem advisable, and no such action shall be construed as a waiver
of any of the liens, rights or benefits granted under this Mortgage.
-23- EXHIBIT C-2
(f) Acceptance of any payment after the occurrence of an Event
of Default shall not be deemed a waiver or a cure of such Event of Default, and
acceptance of any payment less than any amount then due shall be deemed an
acceptance on account only.
(g) In the event that the Mortgagee shall have proceeded to
enforce any right or remedy under this Mortgage by foreclosure, sale, entry or
otherwise, and such proceeding shall be discontinued, abandoned or determined
adversely for any reason, then the Mortgagor and the Mortgagee shall be restored
to their former positions and rights under this Mortgage with respect to the
Mortgaged Property, subject to the lien and security interest of this Mortgage.
6.07 Waiver of Rights and Defenses. To the full extent the Mortgagor
-----------------------------
may do so, the Mortgagor agrees with the Mortgagee as follows:
(a) The Mortgagor will not at any time insist on, plead, claim
or take the benefit or advantage of any statute or rule of law now or hereafter
in force providing for any appraisement, valuation, stay, extension, moratorium
or redemption, or of any statute of limitations, and the Mortgagor, for itself
and its successors and assigns, and for any and all persons ever claiming an
interest in the Mortgaged Property, hereby waives and releases all rights of
redemption, valuation, appraisement, notice of intention to mature or declare
due the whole of the Obligations, and all rights to a marshaling of the assets
of the Mortgagor, including the Mortgaged Property, or to a sale in inverse
order of alienation, in the event of foreclosure of the lien and security
interest created under this Mortgage.
(b) Regardless of consideration, and without the necessity for
any notice to or consent by the holder of any subordinate lien, encumbrance,
right, title or interest in or to the Mortgaged Property, the Mortgagee may
release any person at any time liable for the payment of the Obligations or any
portion of the Obligations or any part of the security held for the Obligations
and may extend the time of payment or otherwise modify the terms of this
Mortgage and/or any other Transaction Document, including a modification of the
interest rate payable on the principal balance of the Promissory Note, without
in any manner impairing or affecting this Mortgage or the lien and security
interest of this Mortgage or the priority of this Mortgage, as so extended and
modified, as security for the Obligations over any such subordinate lien,
encumbrance, right, title or interest The Mortgagee may resort for the payment
of the Obligations to any other security held by the Mortgagee in such order and
manner as the Mortgagee, in its discretion, may elect. The Mortgagee may take
action to recover all or any portion of the Obligations or to enforce any
covenant in this Mortgage or any other Transaction Document without prejudice to
the right of the Mortgagee thereafter to foreclose this Mortgage.
ARTICLE VII
Defeasance
----------
7.01 Defeasance. If the Obligations shall be paid in full as they
----------
become due and payable, then and (subject to Section 7.02) in that event only
all rights under this Mortgage shall terminate and the Mortgaged Property shall
become wholly released and cleared of the lien, security interest, conveyance
and assignment evidenced by this Mortgage. In such event, the Mortgagee, at the
request of the Mortgagor, shall promptly deliver to the Mortgagor, in recordable
form, all such documents as shall be necessary to release the Mortgaged Property
from the lien, security interest, conveyance and assignment evidenced by this
Mortgage; provided that nothing in this Section 7.01 shall be construed to
--------
require the Mortgagor to pay any attorneys' fees or expenses incurred by the
Mortgagee in connection with the preparation and delivery of such documents.
-24- EXHIBIT C-2
7.02 Release. If the entire unpaid principal amount of the Promissory
-------
Note shall be prepaid and all of the other Obligations and the Release Premium
shall be paid pursuant to section 2.19, then all rights under this Mortgage
shall terminate and the Mortgaged Property shall become wholly released and
cleared of the lien, security interest, conveyance and assignment evidenced by
this Mortgage. In such event, the Mortgagee, at the request of the Mortgagor,
shall promptly deliver to the Mortgagor, in recordable form, all such documents
as shall be necessary to release the Mortgaged Property from the lien, security
interest, conveyance and assignment evidenced by this Mortgage; provided that
--------
nothing in this Section 7.02 shall be construed to require the Mortgagor to pay
any attorneys' fees or expenses incurred by the Mortgagee in connection with the
preparation and delivery of such documents.
ARTICLE VIII
Additional Provisions
---------------------
8.01 Construction of Certain Provisions. The following rules of
----------------------------------
construction shall be applicable for all purposes of this Mortgage:
(a) All references in this Mortgage to Articles, Sections and
Schedules are references to Articles and Sections of and Schedules attached to
this Mortgage, unless stated otherwise in this Mortgage.
(b) The cover page of, and all recitals set forth in, and all
Schedules to, this Mortgage are by this reference incorporated in this Mortgage.
(c) The table of contents and the captions of the Articles,
Sections, subsections, paragraphs and other divisions of this Mortgage are
included for convenience of reference only, and shall not in any way limit or
affect the construction or interpretation of any provisions of this Mortgage.
(d) Each of the terms "Mortgaged Property" and "Facility" shall
be construed as if followed by the phrase "or any part thereof."
(e) The term "Obligations" shall be construed as if followed by
the phrase "or any other sums secured hereby, or any part thereof."
(f) The term "indebtedness" shall mean (i) indebtedness for
borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other
similar instruments, (iii) obligations to pay the deferred purchase price of
property or services, (iv) indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property, (v)
obligations as lessee under leases which shall have been or should be, in
accordance with generally accepted accounting principles, recorded as capital
leases, (vi) obligations (contingent or otherwise) under acceptance, letter-of-
credit or similar facilities, (vii) obligations in respect of interest rate swap
agreements, currency swap agreements and other similar agreements designed to
hedge against fluctuations in interest rates or foreign exchange rates and
(viii) obligations under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of the types referred to in any of clauses (i) through (vii) above.
(g) The terms "include", "including" and similar terms shall be
construed as if followed by the phrase "but not limited to."
-25- EXHIBIT C-2
(h) The term "provisions," when used with respect to this
Mortgage or any other Transaction Document, shall be construed as if preceded by
the phrase "terms, covenants, agreements, requirements, conditions and/or."
(i) The term "person" shall include natural persons, firms,
partnerships, corporations and any other public and private legal entities.
(j) The term "lease" shall mean "tenancy, subtenancy, lease or
sublease" and the term "lessee" shall mean "tenant, subtenant, lessee or
sublease."
(k) The phrase "sound accounting principles and practices" shall
mean, generally accepted accounting principles and practices consistently
applied, but permitting, with respect to the preparation of financial
statements, the omission of footnotes and federal and state income tax reserves,
none of which omissions shall represent an omission of material items of revenue
or expense other than federal and state income tax expense.
(l) Except with respect to Section, 2.02. 2.13 and 5.01, the
term "consent of the Mortgagee" shall be construed as if followed by the phrase
", which consent shall not be unreasonably withheld."
(m) Words of masculine, feminine or neuter gender shall mean and
include the correlative words of the other genders, and words importing the
singular number shall mean and include the plural number, and vice versa.
----------
(n) No inference in favor of, or against, any party shall be
drawn from the fact that such party has drafted any portion of this Mortgage.
8.02 Limitation on Interest. Notwithstanding any other provisions of
----------------------
this Mortgage or any other Transaction Document to the contrary, no provision of
this Mortgage or any other Transaction Document shall require the payment or
permit the collection of interest, fees or charges in excess of the maximum rate
permitted by applicable law.
8.03 Appointment of Mortgagee. The Mortgagor hereby appoints the
------------------------
Mortgagee its attorney, in-fact, which appointment is irrevocable and shall be
deemed to be coupled with an interest, to execute, acknowledge, deliver and file
or record for and in the name of the Mortgagor any of the documents or
instruments referred to in Section 2.04 or in Section 6.04(c).
8.04 Amendments, Etc. No amendment or waiver of any provision of this
---------------
Mortgage, nor consent to any departure by the Mortgagor from any such provision,
shall in any event be effective unless such amendment, waiver or consent is in a
writing which specifically refers to this Section 8.04 and which is signed by
the Mortgagor and by the Chief Executive Officer or the President of the
Mortgagee; provided that any such waiver or consent stall be effective only in
--------
the specific instance and for the specific purpose for which given.
8.05 Notices. Except as otherwise provided in this Mortgage or
-------
required by applicable law, all notices, consents, requests and other
communications to any party under or in connection with this Mortgage shall be
in writing and shall be sent via personal delivery, via telephone facsimile
transmission, via certified or registered mail, return receipt requested, or via
express courier or delivery service, addressed to such party at such party's
address or telephone facsimile number set forth below
-26- EXHIBIT C-2
or at such other address or telephone facsimile number as shall be designated by
such party in a written notice given to each other party complying as to
delivery with the terms of this Section 8.05.
if to the Mortgagor, at:
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
with a copy to:
House & ▇▇▇▇▇▇. P.A
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
P.O. Drawer 25008
Winston-Salem, North Carolina 27114-5008
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
if to the Mortgagee, at:
The Cornerstone Building
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Vice President
Acquisitions and Development
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
with a copy to:
The Hillhaven Corporation
The Cornerstone Building
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇ or (▇▇▇)▇▇▇-▇▇▇▇.
All such notices, consents, requests and other communications shall be deemed
given (a) when given and receipted for (or upon the date of attempted delivery
when delivery is refused), a sent via personal delivery, via certified or
registered mall, return receipt requested, or via express courier or delivery
service or (b) when received, a sent via telephone facsimile transmission
(confirmation of such receipt via confirmed telephone facsimile transmission
being deemed receipt of any such notice, request or other communication sent via
telephone facsimile transmission).
8.06 No Merger. If both the lessor's and the lessee's interest under
---------
any lease which constitutes a part of the Mortgaged Property shall at any time
become vested in any one person, this Mortgage and the lien and security
interest created by this Mortgage shall not be destroyed or terminated by the
application of the doctrine of merger and, in such event, the Mortgagee shall
continue to have and enjoy all of the rights and privileges of the Mortgagee
under this Mortgage as to each separate estate. Upon the foreclosure of the lien
created by this Mortgage, any leases then existing shall not be destroyed or
terminated by application of the doctrine of merger or as a matter of law or
-27- EXHIBIT C-2
as a result of such foreclosure unless the Mortgagee or any purchaser at a
foreclosure sale shall so elect by notice to the lessee in question.
8.07 Severability. Any provision of this Mortgage that is prohibited
------------
or unenforceable in any jurisdiction shall be ineffective, as to such
jurisdiction, to the extent of Such prohibition or unenforceability without
invalidating the remaining provisions of this Mortgage or affecting the validity
or enforceability of such provision in any other jurisdiction.
8.08 Obligations of Mortgagor. Time is of the essence with respect to
------------------------
all of the Mortgagor's covenants and agreements under this Mortgage, and all of
Such covenants and agreements shall run with the land. All obligations of the
Mortgagor under this Mortgage shall be performed and satisfied by or on behalf
of the Mortgagor at the Mortgagor's sole cost and expense.
8.09 Successors and Assigns. The provisions of this Mortgage shall be
----------------------
binding upon the Mortgagor and the successors and assigns of the Mortgagor,
including successors in interest of the Mortgagor in and to all or any part of
the Mortgaged Property, and shall inure to the benefit of the Mortgagee and the
substitutes, successors, transferees and assigns of the Mortgagee. All
references in this Mortgage to the Mortgagor or the Mortgagee shall be construed
as including all of such other persons with respect to the person to which
reference is made. Where two or more persons have executed this Mortgage, the
obligations of such persons shall be joint and several except to the extent the
context clearly indicates otherwise.
8.10 No Waiver. No provision in Article I or Section 2.05 or elsewhere
---------
in this Mortgage shall be construed as a waiver by the Mortgagor of any warranty
of the Mortgagee under the deed, dated the date of the Promissory Note, made by
the Mortgagee to the Mortgagor with respect to the Facility, nor shall any such
provision be construed to require the Mortgagor to pay any costs and expenses
incurred by the Mortgagee in connection with the defense of any warranty of the
Mortgagee under such deed.
8.11 Consent to Jurisdiction. The Mortgagor hereby irrevocably submits
-----------------------
to the jurisdiction of any court of the State of Washington or any federal court
of the United States of America for any district of the State of Washington, and
any appellate court from any of such courts, in any action or proceeding arising
from or by reason of, or otherwise relating to, this Mortgage, and the Mortgagor
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such court of the State of Washington
or in such federal court of the United States of America for any district of the
State of Washington. The Mortgagor, to the fullest extent permitted by
applicable law, hereby irrevocably waives the defense of an inconvenient forum
to the maintenance of any such action or proceeding in such court of the State
of Washington or in such federal court of the United States of America for any
district of the State of Washington. The Mortgagor hereby irrevocably appoints
House & ▇▇▇▇▇▇, P.A (the "Process Agent"), as the Mortgagor's agent to receive
on behalf of the Mortgagor and its property service of copies of the summons and
complaint and any other process which may be served in any such action or
proceeding. Such service may be made by mailing or delivering a copy of such
process to the Mortgagor in care of the Process Agent at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, P.O. Drawer 25008, Winston-Salem, North Carolina 27114-5008, and the
Mortgagor hereby irrevocably authorizes and directs the Process Agent to accept
such service on the Mortgagor's behalf. As an alternative method of service, the
Mortgagor also irrevocably consents to the service of any and all process in any
such action or proceeding by the mailing of copies of such process to the
Mortgagor at its address specified in Section 8.05. The Mortgagor agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Section 8.11 shall affect the right of the
Mortgagee to serve legal process in any other manner
-28- EXHIBIT C-2
permitted by law or shall affect the right of the Mortgagee to bring any action
or proceeding against the Mortgagor or the Mortgagor's property in the courts of
any other jurisdictions.
8.12 Applicable Law. This Mortgage shall be governed by, and construed
--------------
in accordance with, the laws of the State of Kansas.
IN WITNESS WHEREOF, the Mortgagor has executed this Mortgage as of the
date first above written.
[NAME OF THE MORTGAGOR]
By MEADOWBROOK MANOR OF KANSAS & MISSOURI, INC.,
General Partner
By________________________________
Title:____________________________
STATE OF _______________ )
)ss.
COUNTY OF ______________ )
BE IT REMEMBERED, that on this ________ day of _________, 1992, before
me the undersigned, a Notary Public in and for said County and State aforesaid,
came ________________________ [vice] President of Meadowbrook Manor of Kansas &
Missouri, Inc., a corporation duly organized, incorporated and existing under
and by virtue of the laws of North Carolina, and the general partner of
_____________, a North Carolina limited partnership, who is personally known to
me to be such officer of such general partner, and who is personally known to me
to be the same person who executed, as such officer of such general partner, the
within instrument on behalf of said corporation and said limited partnership,
and such person duly acknowledged the execution of the same to be the act and
deed of sad corporation and of said limited partnership.
IN WITNESS WHEREOF, l have hereunto set my hand and affixed my
official seal at my office in ___________________,the day and year last above
written.
------------------------------------------
Notary Public in and for
Said County and State
------------------------------------------
(Type or stamp the Notary's name below his
or her signature.)
My Commission Expires:
--------------------------
-29- EXHIBIT C-2
Schedule A
to
Mortgage,
Assignment, Security Agreement
and
Financing Statement (Fixture Filing)
([Name of the Facility)/13/
(Facility No. [____])/14/
Land
----
[Reserved.]
---------------------------
/13/ Insert the name of the Facility.
/14/ Insert the number assigned to the Facility.
-1- EXHIBIT C-2
Schedule B
to
Mortgage.
Assignment, Security Agreement
and
Financing Statement (Fixture Filing)
([Name of the Facility)/15/
(Facility No. [___])16
Permitted Exceptions
--------------------
[Reserved.]
------------------------------
/15/ Insert the name of the Facility.
/16/ Insert the number assigned to the Facility.
-1- EXHIBIT C-2
Schedule C
to
Mortgage,
Assignment, Security Agreement
and
Financing Statement (Fixture Filing)
([Name of the Facility)/17/
(Facility No. [___])/18/
Affiliates/19/
----------
1. Meadowbrook Manor of ▇▇▇▇▇▇▇ Limited Partnership, a North Carolina limited
partnership.
2. Meadowbrook Manor of Joplin Limited Partnership I, a North Carolina limited
partnership.
3. Meadowbrook Manor of Council Grove Limited Partnership, a North Carolina
limited partnership.
4. Meadowbrook Manor of Haysville Limited Partnership, a North Carolina
limited partnership.
5. Meadowbrook Manor of St. ▇▇▇▇▇▇▇ Limited Partnership, a North Carolina
limited partnership.
6. Meadowbrook Manor of Overland Park Limited Partnership, a North Carolina
limited partnership.
7. Meadowbrook Manor Terrace of Overland Park Limited Partnership, a North
Carolina limited partnership.
8. Meadowbrook Manor of Chanute Limited Partnership, a North Carolina limited
partnership.
9. Meadowbrook Manor of Springfield Limited Partnership, a North Carolina
limited partnership.
10. Meadowbrook Manor of Topeka Limited Partnership, a North Carolina limited
partnership.
11. Meadowbrook Manor of Wichita Limited Partnership, a North Carolina limited
partnership.
12. Meadowbrook Manor of Columbia Limited Partnership, a North Carolina limited
partnership.
13. Meadowbrook Manor of Sedgwick Limited Partnership, a North Carolina limited
partnership.
14. Meadowbrook Manor Colonial Terrace of Independence Limited Partnership, a
North Carolina limited partnership.
-----------------------------
/17/ Insert the name of the Facility.
/18/ Insert the number assigned to the Facility.
/19/ Delete the name of the Mortgagor from this Schedule C and, to the
extent required, renumber the list of Affiliates.
-1- EXHIBIT C-2
15. Meadowbrook Manor Colonial Lodge of Independence Limited Partnership, a
North Carolina limited partnership.
16. Meadowbrook Manor of Lamed Limited Partnership, a North Carolina limited
Partnership.
17. Meadowbrook Manor Apartments of ▇▇▇▇▇▇ Limited Partnership, a North
Carolina limited partnership.
18. Meadowbrook Manor of Ava Limited Partnership, a North Carolina limited
partnership.
19. Meadowbrook Manor of Buffalo Limited Partnership, a North Carolina limited
partnership.
20. Meadowbrook Manor of Clinton Limited Partnership, a North Carolina limited
Partnership.
21. Meadowbrook Manor of Des ▇▇▇▇▇ Limited Partnership, a North Carolina
limited partnership.
22. Meadowbrook Manor of Jefferson Limited Partnership, a Noah Carolina limited
Partnership.
23. Meadowbrook Manor of ▇▇▇▇▇▇▇▇▇ Limited Partnership, a North Carolina
limited Partnership.
24. Meadowbrook Manor of Joplin Limited Partnership Il, a North Carolina
limited Partnership.
25. Meadowbrook Manor of ▇▇▇▇▇ Limited Partnership, a North Carolina limited
Partnership.
26. Meadowbrook Manor of Shady Oaks Limited Partnership, a North Carolina
limited Partnership.
27. Meadowbrook Manor of Crane Limited Partnership, a North Carolina limited
Partnership.
28. Meadowbrook Manor of ▇▇▇▇▇▇▇▇▇▇ City Limited Partnership, a North Carolina
limited partnership.
29. Meadowbrook Manor Residential of ▇▇▇▇▇▇▇▇▇▇ City Limited Partnership, a
North Carolina limited partnership.
30. Meadowbrook Manor Wornall of Kansas City Limited Partnership, a North
Carolina limited partnership.
31. Meadowbrook Manor Blue Hills of Kansas City Limited Partnership I, a North
Carolina limited partnership.
32. Meadowbrook Manor Blue Hills of Kansas City Limited Partnership II, a North
Carolina limited partnership.
-2- EXHIBIT C-2
Exhibit D
to
Facility Agreement
GUARANTY
This GUARANTY (this "Guaranty"), dated [___________],1992, made
jointly and severally by ▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ individually, a
"Guarantor" and collectively, the "Guarantors"), in favor of FIRST HEALTHCARE
CORPORATION, a Delaware corporation ("FHC").
PRELIMINARY STATEMENTS:
(1) FHC has entered into a Facility Agreement dated as of April 23,
1992 (said Agreement, as it may be amended or otherwise modified, being the
"Facility Agreement" the terms defined therein and not otherwise defined herein
being used herein as therein defined) with the limited partnerships listed in
schedule A attached hereto (individually, a "Buyer" and collectively, the
"Buyers").
(2) Pursuant to the Facility Agreement certain Buyers have executed
and delivered to FHC Promissory Notes aggregating $[___________] in principal
amount, and certain Buyers will execute and deliver to FHC Promissory Notes
aggregating the Purchase Price then due in respect of the Bond-financed Owned
Facilities (said Promissory Notes, as they may be supplemented amended,
extended, renewed or otherwise modified, being the "Promissory Notes").
(3) Pursuant to the Facility Agreement, certain Buyers have entered
into the Charlevoix Lease, the Bethesda Sublease and the Sedgwick Sublease with
FHC.
(4) Pursuant to the Facility Agreement certain Buyers, as subleases,
have entered into subleases with FHC, as sublessor, (said subleases, as they may
be supplemented, amended or otherwise modified, being the "Subleases").
(5) The Guarantors collectively own, directly or indirectly, 100% of
the issued and outstanding stock of the General Partner and own, directly or
indirectly, a 100% interest in each Buyer. The Guarantors are financially
interested in the well-being of the Buyers and will receive an economic benefit
from FHC's willingness to accept the Promissory Notes and to enter into the
Charlevoix Lease, the Bethesda Sublease, the Sedgwick Sublease and the
Subleases.
(6) It is a condition precedent to the obligation of FHC to
consummate the transactions contemplated by the Facility Agreement, the
Charlevoix Lease, the Bethesda Sublease, the Sedgwick Sublease and the Subleases
that the Guarantors shall have executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and for other, good
and valuable consideration the receipt and sufficiency of which are hereby
acknowledged by the Guarantors, the Guarantors hereby jointly and severally
agree as follows:
SECTION 1. Guaranty. The Guarantors hereby irrevocably and
--------
unconditionally guarantee the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of twenty percent (20%) of all of the
Buyers' aggregate obligations at any
-1- EXHIBIT D
time outstanding (a) under the Promissory Notes in respect of principal,
interest and any late charges, (b) under the Charlevoix Lease, the Bethesda
Sublease and the Sedgwick Sublease in respect of the rent thereunder, and (c)
under the Subleases in respect of the Rent (said twenty percent (20%) of said
obligations being the "Obligations"), and agree to pay all expresses (including
counsel fees and expenses, including reasonable charges allocated for internal
corporate counsel incurred by FHC in enforcing any rights under this Guaranty,
Without limiting the generality of the foregoing, the Guarantors' liability
shall extend to all amounts which constitute part of the Obligations and would
be owed by any Buyer under the Promissory Notes, the Charlevoix Lease, the
Bethesda Sublease, the Sedgwick Sublease or the Subleases but for the fact that
they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such Buyer.
SECTION 2. Guaranty Absolute. The Guarantors guarantee that the
-----------------
Obligations will be paid strictly in accordance with the terms of the Promissory
Notes, the Charlevoix Lease, the Bethesda Sublease, the Sedgwick Sublease and
the Subleases, respectively, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of FHC with respect thereto. The obligations of the Guarantors under this
Guaranty are independent of the Obligations, and a separate action or actions
may be brought and prosecuted against the Guarantors to enforce this Guaranty,
irrespective of whether any action is brought against any Buyer or whether any
Buyer is joined in any such action or actions. The liability of the Guarantors
under this Guaranty shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Facility
Agreement, the Promissory Notes or any other agreement or instrument relating
thereto;
(ii) any change in the time, manner or place of payment of, or in
any other term of, any of the Obligations, or any other amendment or waiver of
or any consent to departure from the Facility Agreement, the Promissory Notes,
the Charlevoix Lease, the Bethesda Sublease, the Sedgwick Sublease or the
Subleases;
(iii) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for any of the Obligations;
(iv) any manner of application of collateral, or proceeds thereof,
to any of the Obligations, or any manner of sale or other disposition of any
collateral for any of the Obligations or any other assets of any Buyer:
(v) any change, restructuring or termination of the partnership
structure or existence of any Buyer: or
(vi) any other circumstance which might otherwise constitute a
defense (other than payment) available to, or a discharge of, any Buyer or any
guarantor.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by FHC upon the insolvency, bankruptcy or reorganization
of any Buyer or otherwise, all as though such payment had not been made.
SECTION 3. Waiver. Each Guarantor hereby waives promptness,
------
diligence, notice of acceptance and any other notice with respect to any of the
Obligations and this Guaranty and
-2- EXHIBIT D
any requirement that FHC protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against any Buyer or any other person or entity or any collateral.
Without limiting the foregoing, it shall not be necessary for FHC (and each
Guarantor hereby waives any rights such Guarantor may have to require FHC), in
order to enforce payment by the Guaranty under this Guaranty, first to enforce
its rights against any, security that shall ever have been given to secure the
Obligations, including, but not limited to, its rights under the Mortgages.
SECTION 4. Waiver of Subrogation Rights. Each Guarantor hereby waives
----------------------------
all rights and claims that such Guarantor has or hereafter may have or acquire
(whether arising directly or indirectly, by operation of law, by contract or
otherwise) against any Buyer by reason of any payment to FHC pursuant to this
Guaranty, including, but not limited to, rights of exoneration, indemnity,
contribution reimbursement and subrogation.
SECTION 5. Consent to Jurisdiction. Each Guarantor hereby irrevocably
-----------------------
submits to the jurisdiction of any court of the State of Washington or any
federal court of the United States of America (or any district of the state of
Washington, and any appellate court from any of such courts, in any action or
proceeding arising out of or relating to this Guaranty, and each Guarantor
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such court of the State of Washington
or in such federal court of the United states of America for any district of the
state of Washington. Each Guarantor, to fullest extent permitted by applicable
law, hereby irrevocably waives the defense of an inconvenient forum to the
maintenance of such action or proceeding. Each Guarantor hereby irrevocably
appoints Don R. House (the "Process Agent") as his agent to receive on behalf of
such Guarantor and his property service of copies of the summons and complaint
and any other process which may be served in any such action or proceeding. Such
service may be made by mailing or delivering a copy of such process to such
Guarantor in care of the Process Agent at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇-
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and each Guarantor hereby irrevocably
authorizes and directs the Process Agent to accept such service on his behalf.
As an alternative of service, each Guarantor also irrevocably consents to the
service of any and all process in any such action or proceeding by the mailing
of copies of such process to such Guarantor at his address specified in Section
10 hereof. Each Guarantor agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Section 5 shall affect the right of FHC to serve legal process in any other
manner permitted by law or affect the right of FHC to bring any action or
proceeding against the Guarantors or their respective property in the courts of
any other jurisdictions.
SECTION 6. Representations and Warranties. Each Guarantor hereby
------------------------------
represents and warrants as follows:
(a) The execution, delivery and performance by such Guarantor
of this Guaranty do not contravene any law or contractual restriction binding on
or affecting such Guarantor or such Guarantor's property.
(b) No authorization, consent, approval or other action by,
and no notice to or filing, recording or registration with, any governmental
authority or regulatory body is required for the due execution, delivery and
performance by such Guarantor of this Guaranty.
-3- EXHIBIT D
(c) This Guaranty has been duly executed by such Guarantor and
is a valid and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms.
(d) There is no pending or, to the knowledge of such
Guarantor, threatened action or proceeding before any court governmental agency
or arbitrator against or affecting such Guarantor which purports to affect the
validity or enforceability of this Guaranty.
(e) Except as set forth in Schedule 6(e) attached hereto,
there is no pending or, to the knowledge of such Guarantor, threatened action or
proceeding before any court, governmental agency or arbitrator against or
affecting such Guarantor which, if determined adversely to such Guarantor, would
materially and adversely affect the financial condition of such Guarantor.
(f) The balance sheets of such Guarantor as of the end of the
two most recently completed calendar years, which have been furnished to FHC by
such Guarantor, fairly present the financial condition of such Guarantor as of
the respective dates of such balance sheets, and there are no liabilities,
direct or indirect, fixed or contingent, of such Guarantor as of the respective
dates of such balance sheets that are not reflected therein. Since the latest
date of such balance sheets, there have been no material adverse changes in the
financial condition of such Guarantor.
(g) There are no conditions precedent to the effectiveness of
this Guaranty that have not been sated or waived.
(h) Such Guarantor has, independently and without reliance
upon FHC and based on documents and information as he has deemed appropriate,
made his own credit analysis and decision to enter into this Guaranty.
SECTION 7. Affirmative Covenants. Each Guarantor covenants and agrees
---------------------
that, so long as any part of the Obligations shall remain unpaid, such Guarantor
will, unless FHC shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material respects
--------------------------
with all applicable laws, rules, regulations and orders, such compliance to
include, without limitation, paying before the same become delinquent all taxes,
assessments and governmental charges imposed upon such Guarantor or upon such
Guarantor's property, except to the extent contested in good faith.
(b) Reporting Requirements. Furnish to FHC (i) a: soon a
----------------------
available, and in any event within one-hundred twenty days after the end of each
calendar year, a balance sheet of such Guarantor as of the end of such calendar
year, certified by such Guarantor as fairly presenting the financial condition
of such Guarantor at the date of such balance sheet and a reflecting all
liabilities, direct or indirect, fixed or contingent, of such Guarantor at the
date of such balance sheet, and (ii) such other information respecting the
business, properties or financial condition of such Guarantor, in form and
substance satisfactory to FHC, as FHC may reasonably request.
(c) Net Worth. Together with the other Guarantor, maintain an
---------
excess of total assets over total liabilities of not less than $10,000,000.
-4- EXHIBIT D
(d) Equity Interest. Together with the other Guarantor or any
---------------
heir, devisee or trustee of any living trust of any Guarantor, own, directly or
indirectly, not less than sixty-seven percent of the issued and outstanding
stock having voting power of each corporate general partner in each Buyer and
maintain, directly or indirectly, a sixty-seven percent interest in the capital
or profits of each Buyer.
SECTION 8. Negative Covenants. Each Guarantor covenants and agrees
------------------
that, so long as any part of the Obligations shall remain unpaid, such Guarantor
will not, without the prior written consent of FHC, sell, assign, pledge,
transfer, convey or otherwise dispose of, or permit any Person in which such
Guarantor has an interest to sell, assign, pledge, transfer, convey or otherwise
dispose of, any shares of the stock of any general partner in any Buyer or of
any interest in any Buyer, except to the other Guarantor or to any Buyer or to
any heir, devisee or trustee of any living trust of any Guarantor.
SECTION 9. Amendments, Etc. No amendment or waiver of any provision
---------------
of this Guaranty, and no consent to any departure by any Guarantor from this
Guaranty, shall in any event be effective unless the same shall be in writing
and signed by the Chief Executive Officer or the President of FHC, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 10. Notices. All notices, consents, requests and other
-------
communications under or in connection with this Guaranty shall be in writing and
shall be sent via personal delivery, via telephone facsimile transmission, via
certified or registered mail, return receipt requested, or via express courier
or delivery service, addressed as set forth below or at such other address or
telephone facsimile number as shall be designated by a party in a written notice
given to each other party complying as to delivery with the terms of this
Section 10.
If to FHC, at:
c\o The Hillhaven Corporation
The Cornerstone Building
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Vice President - Acquisitions and Development
Facsimile: (▇▇▇)▇▇▇▇▇▇▇
with a copy to:
The Hillhaven Corporation
The Cornerstone Building
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇ or (▇▇▇)▇▇▇-▇▇▇▇
-5- EXHIBIT D
if to the Guarantors, at:
▇▇▇ ▇. ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
House & ▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
All such notices, consents, requests and other communications shall be deemed
given (a) when given and receipted for (or upon the date of attempted delivery
when delivery is refused), if sent via personal delivery, via certified or
registered mail, return receipt requested, or via express courier or delivery
service or (b) when received, if sent via telephone facsimile transmission
(confirmation of such receipt via confirmed telephone facsimile transmission
being deemed receipt of any such notice, consent, request or other communication
sent via telephone facsimile transmission).
SECTION 11. No Waiver; Remedies. No failure on the part of FHC to
-------------------
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 12. Continuing Guaranty: Assignment. This Guaranty is a
-------------------------------
continuing guaranty and shall (i) remain in full force and effect until payment
in full of (a) all obligations of the Buyers now or hereafter existing under the
Promissory Notes in respect of principal, interest and any late charges, (b) all
rent that the Buyers are now or hereafter obligated to pay under the Charlevoix
Lease, the Bethesda Sublease and the Sedgwick Sublease, (c) all the Rent that
the Buyers are now or hereafter obligated to Pay under the Subleases and (d) all
other amounts payable under the Guaranty, (ii) be binding upon each Guarantor
and such Guarantor's heirs, personal representatives, successors and assigns,
and (iii) inure to the benefit of, and be enforceable by, FHC and its
successors, transferees and assigns. Without limiting the generality of the
forgoing clause, (iii), FHC may assign or otherwise transfer all or any portion
of its rights under this Guaranty, the Promissory Notes, the Charlevoix Lease,
the Bethesda Sublease, the Sedgwick Sublease and the Subleases to any other
person or entity, and such other person or entity shall thereupon become vested
with all the benefits in respect thereof granted to FHC herein or otherwise.
SECTION 13. Waiver of Jury Trial. Each Guarantor, and FHC by accepting
--------------------
this Guaranty, hereby irrevocably waive all right to trial by jury in any
action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) arising from or by reason of or relating to this Guaranty, or any
actions of FHC in the negotiation, performance or enforcement of this Guaranty.
-6- EXHIBIT D
SECTION 14. Applicable Law. This Guaranty shall be governed by, and
--------------
construed in all respects (including matters of construction, validity and
performance) in accordance with, the laws of the State of Washington, without
regard to the conflicts of law rules of such state.
SECTION 15. Oral Agreements Unenforceable. ORAL AGREEMENTS OR ORAL
----------------------------- -----------------------
COMMITMENTS TO LOAN MONEY EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT
-------------------------------------------------------------------------------
OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
--------------------------------------------------
IN WITNESS WHEREOF, the Guarantors have duly executed and delivered
this Guaranty as of the date first above written.
------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇, individually
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, individually
-7- EXHIBIT D
Exhibit E
to
Facility Agreement
RECEIPT AND ASSUMPTION AGREEMENT
This RECEIPT AND ASSUMPTION AGREEMENT is made by [____________], a
North Carolina limited partnership (the "Buyer") to FIRST HEALTHCARE
CORPORATION, a Delaware corporation (the "Seller"), pursuant to, and as a
condition precedent to the obligation of the Seller to consummate the
transactions contemplated by, the Facility Agreement, dated as of April 23, 1992
(the "Facility Agreement"), among the Seller and the Buyer and affiliates of the
Buyer.
The Buyer hereby acknowledges receipt from the Seller of personal
funds of residents of the [name of Facility] located in [_________________,
_____________] (the "Facility"), in the aggregate amount of $[__________] (the
"Funds").
The Buyer hereby further acknowledges that the Funds have been
transferred to and deposited in Account No. [___________], in the name of
"[____________,]" with [Name of Bank] at its office at [ __________,
------------
__________], all in accordance with all laws, rules and regulations applicable
to the management and protection of personal funds of residents of the Facility.
In order to induce the Seller to consummate the transactions
contemplated by the Facility Agreement, the Buyer hereby assumes all of the
Seller's fiduciary, custodial and other obligations and liabilities with respect
to the Funds.
This Receipt and Assumption Agreement shall be binding upon the Buyer
and its successors and assigns, shall inure to the benefit of and be enforceable
by the Seller and its successors and assigns, and shall be governed by, and
construed in all respects in accordance with, the laws of the State of
Washington, without regard to the conflicts of law rules of such state.
IN WITNESS WHEREOF, the Buyer has executed this Receipt and Assumption
Agreement on [__________ ___], 1992.
[BUYER]
By MEADOWBROOK MANOR OF KANSAS &
MISSOURI, INC.,
General Partner
By______________________________
Title:________________________
EXHIBIT E
Exhibit G
to
Facility Agreement
▇▇▇▇ OF SALE AND GENERAL ASSIGNMENT
FIRST HEALTHCARE CORPORATION, a Delaware corporation (the "Seller")
having an address at The Cornerstone Building, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇ of ▇▇▇▇▇▇, State of Washington 98402, for good and valuable consideration
to it paid, the receipt and sufficiency of which are hereby acknowledged, and
pursuant to the Facility Agreement dated as of April 23, 1992 (the "Facility
Agreement," the terms defined therein and not otherwise defined herein being
used herein as therein defined), among the Seller and _____________ a North
Carolina limited partnership (the "Buyer"), having an address at
[_____________], [_______], County of [_________], State of [____________]
[_____________], and affiliates of the Buyer. has sold, assigned, transferred
and conveyed, and does by these presents sell, assign, transfer and convey, unto
the Buyer, as of the date set forth below (the "Closing Date"). the Seller's
right, title and interest in, to and under the following assets (collectively,
the "Purchased Assets"), "AS IS , WHERE IS and WITH ALL FAULTS", subject to the
----- -------- ---------------
Permitted Liens:
(a) all Inventory used exclusively in the operation of [name of
Facility] located in [_______, _____________] (the "Facility");
(b) all Permits relating to or affecting the Facility;
(c) all Personal Property located in or upon or used exclusively
in connection with the Facility; and
(d) all Records exclusively relating to or affecting the
Facility;
TO HAVE AND TO HOLD the Purchased Assets unto the Buyer and its successors and
assigns to and for its use forever. The Seller hereby warrants to the Buyer that
the Seller is the lawful owner of the Purchased Assets. that the Purchased
Assets are free and clear of all Liens other than the Permitted Liens, and that
the Seller has the right to sell the Purchased Assets subject to the terms and
conditions of the Facility Agreement.
This ▇▇▇▇ of Sale and General Assignment is delivered pursuant to the
Facility Agreement and shall be construed consistently with the Facility
Agreement. Without limiting the generality of the preceding sentence, the Seller
has not sold, assigned. transferred or conveyed, and does not sell, assign,
transfer or convey, unto the Buyer or its successors and assigns any of the
Sellers right, title or interest in, to or under any of the Excluded Assets.
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN
ARTICLE III OF THE FACILITY AGREEMENT AND IN THIS ▇▇▇▇ OF SALE AND GENERAL
ASSIGNMENT, THE SELLER HAS NOT MADE AND DOES NOT MAKE, AND THE SELLER HEREBY
EXPRESSLY DISCLAIMS, ANY OTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND OR
CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE
PURCHASED ASSETS, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY,
HABITABILITY, TENANT ABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND
REPRESENTATIONS OR WARRANTIES WITH RESPECT TO (A) THE EXISTENCE OR ABSENCE OF
ANY HAZARDOUS
-1- EXHIBIT G
SUBSTANCE IN, ON, UNDER OR AFFECTING ANY OF THE PURCHASED ASSETS, (B) THE
COMPLIANCE OF ANY OF THE PURCHASED ASSETS, INCLUDING ITS OR THEIR USE OR
OPERATION, WITH ANY ENVIRONMENTAL LAW. (C) THE ASSIGNABILITY OR TRANSFERABILITY
OF ANY OF THE PERMITS, AND (D) THE EFFECT ON THE BUSINESS, ASSETS, CONDITION
(FINANCIAL OR OTHERWISE) OR RESULTS OF OPERATIONS OF THE FACILITY OF ANY
ENACTED, PUBLISHED OR REPORTED LAWS, RULES, REGULATIONS OR JUDICIAL OR
ADMINISTRATIVE DECISIONS (WHETHER HAVING RETROACTIVE OR PROSPECTIVE EFFECT)
PERTAINING TO MATTERS OF LICENSURE, SURVEY, REIMBURSEMENT OR PRIVATE PAY CENSUS.
This ▇▇▇▇ of Sale and General Assignment shall be governed by, and
construed in accordance with, the laws of the State of Washington, without
regard to the conflicts of law rules of such state.
IN WITNESS WHEREOF, the Seller has caused this ▇▇▇▇ of Sale and
General Assignment to be executed and delivered by its duly authorized officer
on [____________ _____], 1992
FIRST HEALTHCARE CORPORATION
By_____________________________
Title:_______________________
[ADD ALL REQUIRED PROVISIONS FOR ATTESTATIONS,
SIGNATURES OF WITNESSES AND ACKNOWLEDGEMENTS]
-2- EXHIBIT G
Exhibit H
to
Facility Agreement
[Form of Opinion of General Counsel to the Seller]
[__________ ___],1992
The Limited Partnerships listed
in Schedule A attached hereto
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I am the General Counsel of First Healthcare Corporation, a Delaware
corporation (the "Seller"), in connection with the preparation, execution and
delivery of the Facility Agreement, dated as of April 23. 1992 (the
"Agreement"), among the Sellers and the limited partnerships listed in Schedule
A attached hereto (collectively. the "Buyers"). All capitalized terms that are
used in this letter without definition shall have the respective meanings
assigned to those terms in the Agreement.
In the course of my legal review relating to this letter. I have
examined or caused to be examined:
(a) the Agreement;
(b) the Assignment and Assumption Agreements listed in Schedule
B attached hereto;
(c) the Deeds listed in Schedule C attached hereto;
(d) the Bills of Sale listed in Schedule D attached hereto;
(e) the Charlevoix Lease, the Bethesda Sublease and the Sedgwick
Sublease listed in Schedule E attached hereto; the Subleases listed in Schedule
F attached hereto;
(g) the certificate of incorporation of the Seller, and all
amendments thereto;
(h) the bylaws of the Seller, and all amendments thereto;
(i) certificate of authorization, or the equivalent, dated
[_________ __], 1992, issued with respect to the Seller by the Secretary of
State of the State of Kansas; and
(j) certificate of authorization, or the equivalent, dated
[_________ __], 1992, issued with respect to the Seller by the Secretary of
State of the State of Missouri.
EXHIBIT H
[______________]
________ ___, 1992
Page 2
In addition, I have examined or caused to be examined, the originals
or copies, certified or otherwise identified to my satisfaction, of resolutions
of the Board of Directors of the Seller and of such other documents, corporate
records, certificates of public authorities and other documents and instruments
as I have deemed necessary or advisable for the purpose of rendering the
opinions expressed in this letter, for the purposes of this letter, the
documents and instruments referred to in clauses (a) through (f) abode are
sometimes referred to in this letter individually as a "Transaction Document"
and collectively as the "Transaction Documents."
I have assumed without independent verification:
(a) the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents, instruments and certificates
submitted to me as originals, and the exact conformity with the executed
originals of all documents, instruments and certificates submitted to me as
copies;
(b) that the execution, delivery and performance of each document,
instrument and certificate submitted to me has been duly authorized by all
necessary action (corporate, partnership and otherwise) on the part of all
persons and entities (other than the Seller) that are signatories thereto;
(c) that each document, instrument and certificate submitted to me
has been duly executed and delivered, pursuant to all requisite power and
authority (corporate and otherwise"). by or on behalf of all persons and
entities (other than the Seller) that are signatories thereto; and
(d) that each Transaction Document to which any Buyer is a party
constitutes a legal, valid and binding obligation of such Buyer, enforceable
against such Buyer in accordance with its terms.
As to questions of fact material to my opinions, I have relied without
independent verification solely upon the documents, instruments and certificates
submitted to me. Whenever my opinion relates to my "knowledge," by the use of
terms such as "to my knowledge," my opinion is based solely upon the Transaction
Documents and information obtained by making inquiries of officers of the Seller
who are actively involved in the management and operation of the facilities.
I am qualified to practice law in the State of California and do not
express any opinions in this letter concerning any laws other than the laws of
the State of California, the general corporation laws of the state of Delaware,
and the federal laws of the United States of America.
Based upon and subject to the foregoing, and further subject to the
qualifications set forth below, I am of the opinion that:
1. The Seller is a corporation, duty incorporated and validly
existing under the laws of the State of Delaware. The Seller has the corporate
power and authority to execute and deliver, and to perform its obligations
under, each of the Transaction Documents. The Seller is duly licensed or
qualified to transact business as a foreign corporation in the States of Kansas
and Missouri.
EXHIBIT H
[______________]
________ ___, 1992
Page 3
2. The execution and delivery by the Seller of, and the performance
by the Seller of its obligations under, each Transaction Document have been duly
authorized by all necessary corporate action on the part of the Seller. Each
TransactIon Document has been duly executed and delivered on behalf of the
Seller by an authorized officer of the Seller. Each Transaction Document
constitutes a valid and binding obligation of the Seller, enforceable against
the Seller in accordance with its terms.
3. Neither the execution and delivery by the Seller of. nor the
performance by the Seller of its obligations under, the Transaction Documents
conflicts with, or results in the breach of, or constitutes a default under any
provisions of the certificate of incorporation of the Seller, the bylaws of the
Seller or, to my knowledge, any agreement, instrument, judgment, order, award or
decree to which the Seller is a party or by which the Seller is bound.
4. Except for [________________], all of which have been obtained or
made, no authorization, consent or approval by, and no filing, registration or
qualification with, any governmental authority or other person or entity is
necessary for the due execution and delivery by the Seller of the Transaction
Documents.
5. To my knowledge, except as set forth in Schedule 3.04 of the
Agreement, there is no action, suit, legal proceeding. arbitration proceeding,
administrative proceeding or investigation pending or threatened against or
affecting any facility or any of the other Purchased Assets before any court,
any arbitrator or any governmental body, agency or official which, if determined
or resolved adversely to the Seller, would reasonably be expected to have a
Material Adverse Effect or which in any manner challenges or seeks to prevent,
enjoin, alter or materially delay the transactions contemplated by the
Agreement.
6. To my knowledge, no bankruptcy, insolvency or similar proceeding
is pending against or contemplated by the Seller.
The opinions expressed ate are subject to the following
qualifications:
A. The enforceability of obligations and the availability of
remedies are subject to and may be limited by (i) bankruptcy. insolvency,
reorganization, arrangement, fraudulent transfer, moratorium and similar laws
affecting creditors' rights generally and (ii) general principles of equity
(including, but not limited to, concepts of materiality, reasonableness, good
faith and fair dealing and principles that may limit the availability of
specific performance or injunctive or other equitable relief) whether such
enforceability of obligations or availability of remedies is considered in a
proceeding in equity or at law.
B. I express no opinion as to:
(1) whether the Seller has, or at any time had, any right, title
or interest in or to all or any portion of the Purchased Assets or the Leased
Facilities;
(2) any provisions in the Transaction Documents insofar as they
purport to provide that any party (A) may have rights to indemnification, (B)
may have rights to the payment or reimbursement of attorneys' fees except to the
extent that a court determines that such fees are
EXHIBIT H
[______________]
________ ___, 1992
Page 4
reasonable, (C) may have rights to the payment of any sum as liquidated damages,
(D) may exercise sets or similar rights or (E) waives any right or defense;
(3) any provisions of the "bulk sales," "bulk transfer" or
similar laws of any state or other jurisdiction; and
(4) Section 5.08 of the Agreement.
This letter is furnished to you at the request of the Seller pursuant
to Section 8.04(k) of the Agreement and is solely for your benefit and for the
purpose of the consummation of the transactions contemplated by the Agreement.
This letter may not be relied upon or used by, and no copy of this letter may be
furnished to, any other person or entity or for any other purpose without my
express, prior written consent. I disclaim any obligation to update this letter
or otherwise to advise you of any matters (including, but not limited to, any
subsequently enacted, published or reported laws, rules, regulations or judicial
decisions having retroactive effect) which may come to my attention after the
date of this letter and which affect any of the opinions expressed in this
letter.
Very truly yours,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
General Counsel
First Healthcare Corporation
EXHIBIT H
Exhibit M
to
Facility Agreement
ACCOUNTING SERVICES AGREEMENT
This ACCOUNTING SERVICES AGREEMENT (the "Agreement") dated as of
_________, 1992, between First Healthcare Corporation, a Delaware corporation
("Vendor"), and _____________, a North Carolina limited partnership ("Owner").
WITNESSETH:
-----------
WHEREAS, pursuant to that certain Facility Agreement dated as of April
__, 1992 (the "Facility Agreement"), amoung Vendor, as Seller, and the parties
referenced therein, including Owner, as Buyers, Seller has agreed, inter alia to
----- ----
[sell/sublease/lease] to Owner that certain [skilled nursing/retirement]
facility known as ____________ (the "Facility"); and
WHEREAS, Vendor has accounting systems and procedures in place to
provide certain accounting services with respect to the Facility; and
WHEREAS, Owner desires to engage Vendor to provide certain accounting
services with respect to the Facility pursuant to the terms and conditions set
forth herein.
NOW THEREFORE, for and in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Retention of Vendor. Owner hereby retains Vendor to provide
-------------------
certain accounting services in connection with the Facility under the terms and
conditions set forth herein.
2. Responsibilities of Vendor. During the Term, as defined below,
--------------------------
Vendor shall provide the following accounting services to Owner in connection
with the operation of the Facility:
A. Accounts Payable. Vendor shall provide accounts payable
----------------
processing services with respect in accounts payable generated from operations
of the Facility. Such accounts payable accounting services shall include
processing accounts payable batch terminal input, maintaining history files and
accounts payable distribution reports and vendor reports and distributing annual
1099's (where applicable) and checks. Vendor shall provide Owner with (i)
printouts showing distribution of expenses to Vendor's standard chart of
accounts, and (ii) all computer printouts it generates with respect to the
Facility. Vendor shall not be responsible for reconciling bank accounts.
B. Payroll. Vendor shall provide payroll processing services
-------
with respect to employees of the Facility. Such payroll processing services
shall include processing payroll input, maintaining payroll history files,
distributing payroll registers and payroll checks and providing information for
Owner to prepare quarterly tax reports and annual W-2's.
C. Accounts Receivable. Vendor shall establish an electronic
-------------------
billing service (but not with respect to Medicaid agency ▇▇▇▇▇▇▇▇) which shall
provide accounts receivable processing services with respect to the Facility.
Such accounts receivable accounting services shall include processing accounts
receivable input, maintaining files, preparing accounts receivable aging and
-1- EXHIBIT M
distributing reports. It is expressly understood that Vendor is not responsible
for collecting accounts receivable.
3. Term. The term of this Agreement (the "Term") shall commence on
----
the date [Vendor transfers title to the facility to Owner/the sublease between
Vendor and Owner with respect to the Facility commences] and shall continue for
a period of six months, unless earlier terminated as herein provided.
Notwithstanding anything to the contrary contained herein: (A) Vendor shall be
entitled to terminate this Agreement at any time upon 30 days' prior written
notice to Owner; and (B) Owner shall be entitled to terminate this Agreement at
any time upon 30 days' prior written notice to Owner.
4. Fees. For services performed hereunder, Owner shall pay to
----
Vendor the following:
A. Start-Up Fee. Owner shall pay to Vendor a one-time start-up
------------
fee in the amount of $1,000.
B. Monthly Fee. Owner shall pay to Vendor a monthly fee equal
-----------
to [$1,000/$750]. Upon 30 days' prior written notice as set forth in Section
3(B), Owner shall be entitled to terminate services provided pursuant to this
Agreement, and upon the effectiveness of any such termination, Owner's
obligation to pay the monthly fee with respect to the Facility shall also
terminate. If the services of Vendor hereunder commence or terminate other than
on the first day of a month, compensation set forth in this Section 4(B) shall
be prorated for the number of days for which services are actually rendered with
respect to the Facility.
C. Expense Reimbursement. Owner shall reimburse Vendor for the
---------------------
following items:
(i) Overnight or other expedited mailing or delivery
service costs in excess of first class regular mail; and
(ii) Cost of check stock, if any.
D. Late Charges. Owner shall pay to Vendor, to the extent
------------
permitted by applicable law, interest on any amount owing to Vendor under this
Agreement which is not paid when due, for any period for which any of the same
is overdue (without regard to any grace period), at a rate equal to the lesser
of (i) four percent in excess of the rate announced from time to time by Chase
Manhattan Bank, N.A. as its prime or reference rate, as such rate may change
from time to time, and (ii) the maximum rate of the interest permitted by
applicable law.
E. Method of Payment. Owner shall pay the amount set forth in
-----------------
Section 4(a) concurrently with the execution of this Agreement. Owner shall pay
the amounts set forth in Sections 4(B) and (C) monthly, in arrears, no later
than the tenth day of the month following the month during which such amounts
were earned or expenses incurred. Owner shall pay any amounts owing pursuant to
Section 4(D) upon Vendor's demand.
5. Proprietary Interest. The systems, methods, procedures and
--------------------
controls employed by Vendor, including, without limitation, any operating
manuals and computer software developed by Vendor, and any written materials or
brochures developed by Vendor to document the same, are to remain the property
of Vendor, and Owner shall not, at any time, utilize, distribute, copy or
otherwise employ or acquire any such materials or brochures without Vendor's
prior written consent, which Vendor may withhold in its sole discretion.
-2- EXHIBIT M
6. No Guaranty of Profitability. Owner acknowledges that Vendor
----------------------------
does not guarantee that the Facility will be profitable.
7. Default. Either party may terminate this Agreement in the event
-------
of any of the following events ("Events of Default") by or with respect to the
party:
(A) By Vendor. With respect to Vendor, the following shall
---------
constitute Events of Default hereunder:
(i) Vendor shall fail to keep, observe or perform any
material agreement, term or provision of this Agreement, and such failure shall
continue for a period of seven days after notice thereof shall have been given
to Vendor by Owner, which notice shall specify the event or events constituting
the failure; provided, however, that Vendor shall not be deemed to be in
-------- -------
violation of this Agreement, and no Event of Default shall have occurred, if
Vendor is prevented from performing any of its obligations hereunder for any
reason beyond its control, including, without limitation, strikes, shortages,
war, acts of God, lack of Owner's financial resources, or any statute,
regulation or rule of federal, state or local government or agency thereof; or
(ii) Vendor shall apply for or consent to the appointment
of a receiver, trustee or liquidator of Vendor or of all or a substantial part
of its assets, file a voluntary petition in bankruptcy, or admit in writing its
inability to pay its debts as they become due, make a general assignment for the
benefit of creditors, file a petition or an answer seeking reorganization or
arrangement with creditors or taking advantage of any insolvency law; or an
order, judgment or decree shall be entered by a court of competent jurisdiction,
on the application of a creditor, adjudicating Vendor a bankrupt or insolvent or
approving a petition seeking reorganization of Vendor, or appointing a receiver,
trustee or liquidator of Vendor or of all or a substantial part of its assets,
and such order shall remain undismissed, undischarged or unbonded for a period
of 60 days.
(B) By Owner. With respect to Owner, the following shall
--------
constitute Events of Default hereunder:
(i) Owner shall fail to make or cause to be made any
payment to Vendor required to be made hereunder, and such failure shall continue
for a period of ten days after notice thereof shall have been given to Owner;
(ii) Owner shall fail to keep, observe or perform any
other agreement, term or provision of this Agreement and such default shall
continue for a period of 30 days after notice thereof shall have been given to
Owner by Vendor, which notice shall specify the event or events constituting the
default; or
(iii) Owner shall default under any provision set forth in
any Transaction Documents, as that term is defined in the Facility Agreement.
(iv) Owner shall be dissolved or shall apply for a consent
to the appointment of a receiver, trustee or liquidator of Owner or of all or a
substantial part of its assets, file a voluntary petition in bankruptcy, or
admit in writing its inability to pay its debts as they become due, make a
general assignment for the benefit of creditors, file, or have filed against it,
a petition or an answer seeking reorganization or arrangement with creditors or
taking advantage of any insolvency law; or an order, judgment or decree shall be
entered by a court of competent jurisdiction, on the application of a creditor,
adjudicating Owner a bankrupt or insolvent or approving a petition seeking
reorganization of Owner, or appointing a receiver, trustee or liquidator of
Owner or of all or a substantial
-3- EXHIBIT M
part of its assets and such order shall remain undismissed undischarged or
unbonded for a period of 60 days.
8. Remedies Upon Default.
---------------------
A. Remedies of Vendor. Upon the occurrence of an Event of
------------------
Default by Owner and at any time thereafter, Vendor may, in its discretion, do
any one or more of the following: (i) terminate this Agreement, remove its
hardware, software, manuals and other items owned by Vendor from the Facility
and declare all sums earned but unpaid to the date of termination to be
immediately due and payable; or (ii) exercise any other right or remedy
available to its under applicable law, including without limitation the right to
recover damages for the breach hereof.
B. Remedies of Owner. Upon the occurrence of any Event of
-----------------
Default by Vendor and at any time thereafter, Owner may, in its discretion, do
any one or more of the following: (i) terminate this Agreement, whereupon Vendor
shall remove its hardware, software, manuals and other items owned by Vendor
from the Facility, and neither party shall have any further obligation
whatsoever under this Agreement; or (ii) exercise any other right or remedy
available to it under applicable law, including without limitation the right to
recover damages for the breach hereof; provided, however, that Owner shall
-------- -------
immediately pay to Vendor all amounts due and owing to Vendor through the date
of termination.
C. Rights Cumulative; No Waiver, Limitation. No right or
----------------------------------------
remedy herein conferred upon or reserved to either of the parties hereto is
intended to be exclusive of any other right or remedy, and each and every right
and remedy shall be cumulative and in addition to any other right or remedy
given hereunder, or now or hereafter legally existing. The failure of either
party hereto to insist at any time upon the strict observance or performance of
any of the provisions of this Agreement or to exercise any right or remedy as
provided in this Agreement shall not impair any such right or remedy or be
constructed as a waiver or relinquishment thereof with respect to subsequent
defaults. Every right and remedy given by this Agreement to the parties hereof
may be exercised from time to time and as often as may be deemed expedient by
the parties hereto, as the case may be. Notwithstanding anything to the contrary
contained in this Agreement, in no event shall either party be liable to the
other for any incidental or consequential damages, loss of profits or any
exemplary or punitive damages regardless of the circumstances from which such
damages arise arising out of any breach of this Agreement.
9. Miscellaneous.
-------------
A. Disclaimer of Employment of Facility Employees. No person
----------------------------------------------
employed by the Owner will be an employee of Vendor, and Vendor shall have no
liability for payment of their wages, payroll taxes and other expenses of
employment. All such persons shall be employees of the Owner.
B. Relationship of the Parties; Disclaimer of Liability;
-----------------------------------------------------
Indemnification. The relationship of Vendor to Owner shall be that of an
---------------
independent contractor, and all acts performed by Vendor pursuant to this
Agreement during the Term shall be deemed to be performed in its capacity as an
independent contractor. Vendor shall not be liable for any loss, expense, cost
or liability incurred by or asserted against Owner, unless such loss, expense,
cost or liability results from the gross negligence or willful misconduct of
Vendor. Owner shall indemnify and hold Vendor harmless from and against any and
all loss, expense, cost or liability arising from or related to the Facility;
provided, however, that Owner shall not be obligated to indemnify Vendor for any
-------- -------
loss, expense, cost or liability which results from Vendor's gross negligence or
willful misconduct.
-4- EXHIBIT M
C. Employee Non-solicitation. Recognizing the unique services
-------------------------
provided by employees of Vendor, during the Term and for a period of two years
after termination of the Agreement, Owner shall not directly or indirectly
solicit or employ any accounting or finance employees of Vendor based in Tacoma,
Washington to become employees of Owner without Vendor's prior written consent
which Vendor may withhold in its sole discretion.
D. Assignment; Binding Effect. This Agreement shall not be
--------------------------
assigned by either party. Notwithstanding the foregoing, either party may assign
its rights and obligations hereunder to an entity controlling, controlled by or
under common control with such party. This Agreement shall be binding upon and
inure to the benefit of the permitted successors and assigns of the parties.
E. Notices. All notices required or permitted hereunder shall
-------
be given in writing and shall be personally delivered or be sent by registered
or certified mail, postage prepaid, to the following addresses or at such other
places as either party shall designate in writing:
If to Vendor: FIRST HEALTHCARE CORPORATION
c/o The Hillhaven Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Senior Vice President and
Chief Financial Officer
With copies to: THE HILLHAVEN CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
If to Owner: __________________________
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇
With copies to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
P.O. Drawer 25008
Winston-Salem, North Carolina 27114-5006
Notices shall be deemed effective upon receipt.
F. Entire Agreement. This Agreement contains the entire
----------------
agreement between the parties with respect to the subject matter hereof and
shall supersede all prior understandings, agreements, or arrangements, oral or
written, between the parties.
G. Amendment. This Agreement shall not be modified or amended
---------
except by written instrument signed by both of the parties.
H. Captions. The captions and headings used herein are for
--------
convenience of reference only and shall not be construed in any manner to limit
or modify any of the terms hereof.
I. Attorney's Fees. In the event either party brings an action
---------------
to enforce this Agreement, the prevailing party in such action shall be entitled
to recover from the other all costs incurred in connection therewith, including
reasonable attorney's fees. Reasonable attorney's fees shall include reasonable
charges allocated for internal counsel.
-5- EXHIBIT M
J. Severability. In the event one or more of the provisions of
------------
this Agreement is deemed to be invalid, illegal or unenforceable in any respect
under applicable law, the validity, legality and enforceability of the remaining
provisions hereof shall not in any way be impaired thereby.
K. Authorization for Agreement. Each of its parties represents
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and warrants to the other as follows:
(i) The execution, delivery and performance of this
Agreement (a) are within the corporate or partnership powers of the respective
parties, (b) have been duly authorized by all necessary corporate or partnership
action, and (c) do not and will not (1) require any consent or approval by
stockholders or partners or (2) violate any provision of any law, rule,
regulation, order, writ, judgment, decree or award presently in effect having
applicability to the parties or the articles of incorporation, bylaws or
partnership agreement of the parties.
(ii) This Agreement constitutes the valid and binding
obligations of Owner and Vendor, enforceable in accordance with its terms.
L. Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall be an original, but all of which together
shall constitute but one and the same instrument.
M. Governing Law. This Agreement shall be governed by and
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construed in accordance with the laws of the State of Washington.
N. Quality of Service. Notwithstanding anything herein to the
------------------
contrary, Vendor represents and warrants that the quality of the services it is
obligated to provide hereunder shall at all times be equal to the quality of the
services that it provides with respect to other facilities which it operates.
IN WITNESS WHEREOF, the parties have each caused this Agreement to be
duly executed by its duly authorized officer, as of the date first above
written.
OWNER: ___________________________________________
By: Meadowbrook Manor of Kansas &
Missouri, Inc., Its general partner
By:________________________________
Its:____________________________
VENDOR: FIRST HEALTHCARE CORPORATION
By:________________________________________
Its:____________________________________
-6- EXHIBIT M
Exhibit N
to
Facility Agreement
[Form of Opinion of House & ▇▇▇▇▇▇, P.A.]
[_________], 1992
First Healthcare Corporation
c/o The Hillhaven Corporation
The Cornerstone Building
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President of Acquisitions
and Development
Ladies and Gentlemen:
We have acted as counsel to the limited partnerships listed in
Schedule A attached hereto (collectively, the "Buyers") and to ▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (collectively, the "Guarantors"), in connection with the
preparation, execution and delivery of the Facility Agreement dated as of April
23, 1992 (the "Agreement"), among First Healthcare Corporation, a Delaware
corporation (the "Seller"), and the Buyers. All capitalized terms that are used
in this letter without definition shall have the respective meanings assigned to
those terms in the Agreement.
In the course of our legal review relating to this letter, we
have examined:
(a) the Agreement;
(b) the Assignment and Assumption Agreements listed in Schedule
B attached hereto;
(c) the Promissory Notes listed in Schedule C attached hereto;
(d) the Mortgages listed in Schedule D attached hereto;
(e) the Charlevoix Lease, the Bethesda Sublease and the Sedgwick
Sublease listed in Schedule E attached hereto;
(f) the Subleases listed in Schedule F attached hereto;
(g) the Guaranty, dated [_____________ ____], 1992, made by the
Guarantors in favor of the Seller;
EXHIBIT N
First Healthcare Corporation
[______________], 1992
Page 2
(h) the Form UCC-1 financing statements listed in Schedule G
attached hereto (collectively, the "Financing Statements");
(i) the partnership agreement and the other organizational
documents of each Buyer, and all amendments thereto;
(j) a certificate of existence, or the equivalent, dated
[_____________ ____], 1992, issued with respect to each Buyer by the Secretary
of State of the State of North Carolina;
(k) a certificate of authorization, or the equivalent, dated
[____________________ ____], 1992, issued with respect to each Buyer by the
Secretary of State of the State of Kansas; and
(l) a certificate of authorization, or the equivalent, dated
[_____________________ ____], 1992, issued with respect to each Buyer by the
Secretary of State of the State of Missouri.
In addition, we have examined the originals or copies, certified
or otherwise identified to our satisfaction, of resolutions of the Board of
Directors of the General Partner in each Buyer, of partnership resolutions of
each Buyer, and of such other documents, records, certificates of public
authorities and other documents and instruments as we have deemed necessary or
advisable for the purpose of rendering the opinions expressed in this letter.
For the purposes of this letter, the documents and instruments referred to in
clauses (a) through (g) above are sometimes referred to in this letter
individually as a "Transaction Document" and collectively as the "Transaction
Documents."
We have assumed without independent verification:
(a) the genuineness of all signatures, the legal capacity of
natural persons, the authenticity of all documents, instruments and certificates
submitted to us as originals, and the exact conformity with the executed
originals of all documents, instruments and certificates submitted to us as
copies;
(b) that the execution, delivery and performance of each
document, instrument and certificate submitted to us has been duly authorized by
all necessary action (corporate, partnership and otherwise) on the part of all
persons and entities (other than the General Partner and the Buyers) that are
signatories thereto;
(c) that each document, instrument and certificate submitted to
us has been duly executed and delivered, pursuant to all requisite power and
authority (Corporate, Partnership and otherwise), by or on behalf of all persons
and entities (other than the General Partner and the Buyers) that are
signatories thereto; and
(d) that each Transaction Document to which the Seller is a
party constitutes a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms.
As to questions of fact material to our opinions, we have relied
without independent verification solely upon the documents, instruments and
certificates submitted to us. Whenever our opinion relates to our "knowledge,"
by the use of terms such as "to our knowledge," our opinion is
EXHIBIT N
First Healthcare Corporation
[______________], 1992
Page 3
based solely upon the Transaction Documents and information obtained by making
inquiries of officers of the General Partner in the Buyers, and of attorneys in
this firm who are actively involved in the legal representation of the Buyers.
We are qualified to practice law in the State of North Carolina
and do not express any opinions in this letter concerning any laws other than
the laws of the State of North Carolina and the federal laws of the United
States of America.
Based upon and subject to the foregoing, and further subject to
the qualifications set forth below, we are of the opinion that:
1. Each of the Buyers is a limited partnership, duly formed and
validly existing under the laws of the State of North Carolina. Each of the
Buyers has the power and authority to execute and deliver, and to perform its
obligations under, each of the Transaction Documents to which it is a party.
Based solely upon the certificates of authorization, or the equivalent, issued
by the Secretary of State of the States of Kansas and Missouri, respectively,
each of the Buyers is duly licensed or qualified to transact business as a
foreign limited partnership in the State of Kansas or Missouri, as appropriate.
2. The execution and delivery by each of the Buyers of, and the
performance by each of the Buyers of its obligations under, each of the
Transaction Documents to which it is a party have been duly authorized by all
necessary action on the part of such Buyer. Each of such Transaction Documents
has been duly executed and delivered by such Buyer. If each of such Transaction
Documents were governed by the local law's of the State of North Carolina, then
each such Transaction Document would constitute a valid and binding obligation
of such Buyer, enforceable against such Buyer in accordance with its terms.
3. The Guaranty has been duly executed and delivered by the
Guarantors. If the Guaranty were governed by the local laws of the State of
North Carolina, then the Guaranty would constitute a valid and binding
obligation of the Guarantors, enforceable against the Guarantors in accordance
with its terms.
4. Neither the execution and delivery by each of the buyers of,
nor the performance by such Buyer of its obligations under, any of the
Transaction Documents to which it is a party conflicts with, or results in the
breach of, or constitutes a default under, any provisions of the partnership
agreement of such Buyer or, to our knowledge, any agreement, instrument,
judgement, order, award or decree to which such Buyer is a party or by which
such Buyer or the General Partner is bound.
5. To our knowledge, neither the execution and delivery by the
Guarantors of, nor the performance by the Guarantors of their respective
obligations under, the Guaranty conflicts with, or results in the breach of, or
constitutes a default under, any agreement, instrument, judgement, order, award
or decree to which either of the Guarantors is a party or by which either of the
Guarantors is bound.
6. Except for the recording of the Mortgages and the filing of
the Financing Statements, and except for [___________], all of which have been
obtained or made, no authorization, consent or approval by, and no filing,
registration or qualification with, any governmental authority or
EXHIBIT N
First Healthcare Corporation
[______________], 1992
Page 4
other person or entity (including, but not limited to, any limited partner in
any Buyer) is necessary for the due execution and delivery by the Buyers or the
Guarantors of any of the Transaction Documents.
7. To our knowledge, except as set forth in Schedule 4.04 to
the Agreement or in Schedule 6(e) to the Guaranty, there is no action, suit,
legal proceeding, arbitration proceeding, administrative proceeding or
investigation pending or threatened against or affecting any Buyer, the General
Partner, any limited partner in any Buyer, or any Guarantor before any court,
any arbitrator or any governmental body, agency or official which in any manner
challenges or seeks to prevent, enjoin, after or materially delay the
transactions contemplated by the Agreement.
8. To our knowledge, no bankruptcy, insolvency or similar
proceeding is pending against or contemplated by the Buyers or the General
Partner.
9. Meadowbrook Manor of Kansas & Missouri, Inc., a North
Carolina corporation, is the only general partner in the Buyers.
The opinions expressed above are subject to the following
qualifications:
A. The enforceability of obligations and the availability of
remedies are subject to and may be limited by (i) bankruptcy, insolvency,
reorganization, arrangements, fraudulent transfer, moratorium and similar laws
affecting creditors' rights generally and (ii) general principles of equity
(including, but not limited to, concepts of materiality, reasonableness, good
faith and fair dealing and principles that may limit the availability of
specific performance or injunctive or other equitable relief) whether such
enforceability of obligations or availability of remedies is considered in a
proceeding in equity or at law.
B. The enforceability of obligations and the availability of
remedies under the Transaction Documents further may be limited by other laws
with respect to or affecting remedial or procedural provisions contained in the
Transaction Documents; provided that such other laws do not make the remedies or
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procedures afforded by the Transaction Documents inadequate for the practical
realization of the principal benefits intended to be provided by the Transaction
Documents.
C. We express no opinion as to:
(1) whether any Buyer has any right, title or interest in
or to the Mortgaged Property (as defined in the Mortgages);
(2) the priority of any liens, security interests or other
encumbrances or charges against or affecting the Mortgaged Property;
(3) any provisions in the Transaction Documents insofar as
they purport to provide that any party (A) may have rights to indemnification,
(B) may have rights to the payment or reimbursement of attorneys' fees except to
the extent that a court determines that such fees are reasonable, (C) may have
rights to the payment of any sum as liquidated damages, (D) may exercise sets or
similar rights or (E) waives any right or defense; and
EXHIBIT N
First Healthcare Corporation
[______________], 1992
Page 5
(4) any provisions of the "bulk sales," "bulk transfer" or
similar laws of any state or other jurisdiction.
This letter is furnished to you at the request of the Buyers
pursuant to Section 8.05(h) of the Agreement and is solely for your benefit and
for the purpose of the consummation of the transactions contemplated by the
Agreement. This letter may not be relied upon or used by, and no copy of this
letter may be furnished to, any other person or entity or for any other purpose
without our express, prior written consent. We disclaim any obligation to update
this letter or otherwise to advise you of any matters (including, but not
limited to, any subsequently enacted, published or reported laws, rules,
regulations or judicial decisions having retroactive effect) which may come to
our attention after the date of this letter and which affect any of the opinions
expressed in this letter.
Very truly yours,
EXHIBIT N