FORM OF TERM LOAN AGREEMENT
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TERM LOAN AGREEMENT
BETWEEN
[ ____________________________ ], AS BORROWER
AND
ELDERTRUST OPERATING LIMITED PARTNERSHIP, AS LENDER
_________, 1998
[ ____________ ] Township,
[ ____________ ] County, [ ____________ ]
[$---------------]
TABLE OF CONTENTS
Page
1. DEFINITIONS..............................................................1
1.2. Agreement.........................................................1
1.3. Assignments.......................................................1
1.4. Closing Date......................................................1
1.5. Collateral........................................................1
1.6. Deficiency........................................................2
1.7. Event of Default..................................................2
1.8. Governmental Authority...........................................2
1.9. Guaranty..........................................................2
1.10. Guarantor.........................................................2
1.11. Improvements......................................................2
1.12. Inspecting Architect/Engineer.....................................2
1.13. Land 2
1.14. Legal Requirements................................................3
1.15. Loan 3
1.16. Loan Documents....................................................3
1.17. Maturity Date.....................................................3
1.18. Mortgage..........................................................3
1.19. Note 3
1.20. Occupancy Stabilization...........................................3
1.21. Permitted Exceptions..............................................4
1.22. Project...........................................................4
1.23. Residential Living Agreement......................................4
1.24. Title Insurer.....................................................4
2. BACKGROUND; LOAN.........................................................4
2.1. Background........................................................4
2.2. Loan 4
2.3. Interest and Repayment............................................4
3. ADVANCE OF LOAN...........................................................5
3.1. Loan Advances.....................................................5
3.1.2. No Third-Party Benefit; No Liability; Lender's Waiver......5
3.2 Conditions Precedent to Funding...................................5
3.2.1. Loan Documents.............................................5
3.2.2. Other Documents............................................6
3.2.3. Section 3.1................................................9
3.2.4. Representations and Warranties.............................9
3.2.5. Performance and Compliance.................................9
3.3. Lender Advances Without Request...................................9
3.4. Prohibited Actions...............................................10
4. REPRESENTATIONS AND WARRANTIES...........................................10
4.1. Corporate Status.................................................10
4.2. Power and Authority..............................................10
4.3. Litigation and Labor Disputes....................................10
4.4. No Violation of Agreements or Laws...............................10
4.5. Consent..........................................................11
4.6. Names and Locations..............................................11
4.7. Tax Returns and Payments.........................................11
4.8. Compliance with ERISA............................................11
4.9. Financial Statements.............................................11
4.10. Disclosure.......................................................12
4.11. Permits and Approvals............................................12
4.12. Compliance; Zoning...............................................12
4.13. Title............................................................12
4.14. Utilities........................................................13
4.15. Roads............................................................13
4.16. Insurance........................................................13
4.17. No Default.......................................................13
4.18. Condemnation.....................................................14
4.19. Residential Living Agreement.....................................14
4.20. Environmental Concerns...........................................14
4.21. Governmental Authorities.........................................14
5. COVENANTS OF BORROWER....................................................14
5.1. Affirmative Covenants............................................14
5.1.1 Existence................................................14
5.1.2. Required Notices.........................................14
5.1.3. Copies of Notices........................................15
5.1.4. Payment of Debts, Taxes..................................15
5.1.5. Compliance...............................................15
5.1.6. Subcontracts.............................................15
5.1.7. Maintenance..............................................15
5.1.8. Authorized Persons.......................................16
5.1.9. Books and Records........................................16
5.1.10. Financial Statements.....................................16
5.1.11. Change in Circumstance...................................16
5.1.12. Additional Instruments...................................16
5.1.13. Indemnification..........................................17
5.2. Negative Covenants...............................................17
5.2.1. Amendment or Modification.................................17
5.2.2. Conveyance or Lease.......................................17
5.2.3. Assignment................................................17
5.2.4. Encumbrances..............................................17
5.2.5. Governing Documents.......................................18
5.2.6. Modification of Residential Living Agreements.............18
6. EVENTS OF DEFAULT AND REMEDIES...........................................18
6.1. Events of Default................................................18
6.2. Remedies.........................................................20
6.3. Remedies Cumulative; Waivers.....................................21
7. INSURANCE................................................................21
7.1. Coverage.........................................................21
7.2. Certificates; Notices............................................21
8. MISCELLANEOUS............................................................22
8.1. Lender's Discretion..............................................22
8.2. No Third Party Beneficiary.......................................22
8.3. No Joint Venture.................................................23
8.4. Reliance on Representations and Warranties.......................23
8.5. Assignment; Further Assurances...................................23
8.6. Notices..........................................................23
8.6.1. If to Lender:.............................................24
8.6.2. If to Borrower:...........................................24
8.7. Table of Contents; Headings......................................24
8.8. Time of the Essence..............................................25
8.9. Counterparts.....................................................25
8.10. Governing Law....................................................25
8.11. Severability.....................................................25
8.12. JURISDICTION; WAIVER OF JURY TRIAL...............................25
8.13. Survival.........................................................25
8.14. Controlling Document; Amendment..................................26
8.15. Extension of Maturity Date.......................................26
8.16. Modification of documents........................................26
8.17. Reimbursement of Expenses........................................26
FORM OF
TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT (this "Agreement"), is dated as of
______________, 1998, between [ ______________________ ], a ______________
corporation ("Borrower"), and ELDERTRUST OPERATING LIMITED PARTNERSHIP, a
Delaware limited partnership (together with its successors and assigns and/or
any subsequent holder of the Note (as defined below), "Lender").
1. DEFINITIONS
The following terms when used in this Agreement shall have the
respective meanings set forth below:
1.1. Affiliate: Affiliate of any Person means any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person (excluding any trustee under, or any committee with
responsibility for administering, any bankruptcy or similar insolvency plan). A
Person shall be deemed to be "controlled by" another Person if such other
Person possesses, directly or indirectly, power to vote 51% or more of the
securities (on a fully diluted basis) or other applicable equity interests
having ordinary voting power for the election of directors or managing general
partners.
1.2. Agreement: This Term Loan Agreement between Borrower and Lender,
as the same may be modified, amended, supplemented or assigned from time to
time.
1.3. Assignments: Collectively, the Assignment of Rents and Leases and
the Collateral Assignment of Agreements Affecting Real Estate, all as described
in Section 3.2.1. hereof, as the same be modified, amended, supplemented or
assigned from time to time.
1.4. Closing Date: The date of this Agreement.
1.5. Collateral: The real property and personal property pledged to
Lender to secure the Loan pursuant to the Mortgage and the Assignments
including, without limitation, the Land, the Improvements and all construction
materials stored by Borrower which are intended to become part of the
Improvements, and any and all products, replacements and proceeds of the
foregoing whether now owned or hereinafter acquired.
1.6. Deficiency: As defined in Section 3.1.3. below.
1.7. Event of Default: The occurrence of any event described in
Section _____ hereof.
1.8. Governmental Authority: The United States of America, the State
of _________ and any political subdivision (including, without limitation, the
Township of _________ and the County of _________) or regional division
thereof, and any agency, department, court, regulatory body, commission, board,
bureau or instrumentality of any of them which exercises jurisdiction over the
Land, the Project or Borrower.
1.9. Guaranty: The Guaranty, bearing even date herewith, by Guarantor,
the parent affiliate of Borrower, in favor of Lender, unconditionally
guaranteeing Borrower's obligations under the Loan Documents, as the same may
be modified, amended, supplemented or assigned from time to time.
1.10. Guarantor: [ ____________ ], a ___________ corporation.
1.11. Improvements: The improvements to be constructed on the Land,
consisting of an approximately [_____] square foot, _____ (___) story senior
assisted living facility containing, among other things, approximately __ units
and approximately __ beds, with paved parking, site improvements, and all the
fixtures, furnishings, machinery, equipment and other construction and
materials related thereto, to be built in accordance with and as more
particularly described in the Plans and Specifications together with all
Off-Site Improvements.
1.12. Inspecting Architect/Engineer: Any architect or engineer as
Lender may designate from time to time, including any employee of Lender.
1.13. Land: The approximately __________________________ acres of real
property owned in fee by Borrower, together with all easements and other rights
appurtenant thereto, located at _________, __________ Township, ______________,
____________, as more particularly described in Exhibit A to the Mortgage.
1.14. Legal Requirements: All applicable laws, statutes, ordinances,
rulings, regulations, codes, decrees, orders, judgments, conditions,
restrictions, approvals, permits and requirements of, from or by any
Governmental Authority, including, but not limited to, zoning, subdivision,
land development, land use, senior assisted living, environmental, building,
safety, health, housing and fire.
1.15. Loan: The amount of ________________ ($_________) to be advanced
by Lender to Borrower pursuant to this Agreement, and to be evidenced by the
Note and secured by, among other things, the Mortgage, the Assignments and the
Guaranty.
1.16. Loan Documents: This Agreement, the Note, the Mortgage, the
Assignments, the Guaranty and all other instruments, certificates, legal
opinions and documents executed and delivered by either or both of Borrower or
Lender in connection with the Loan, as the same may be modified, amended,
supplemented or assigned from time to time.
1.17. Maturity Date: The earlier of _______________, ____ or the date
on which the Loan is declared by Lender to be immediately due and payable.
1.18. Mortgage: The ____________, dated as of the date hereof, between
Borrower and Lender and any other mortgage, deed of trust or other agreement or
instrument executed by Borrower, as mortgagor, to Lender, as mortgagee,
granting a first lien and security interest in, among other things, (1) the
Land, (2) the Improvements, and (3) all personal property thereon and therein,
all as more fully set forth therein, all may be modified, amended, supplemented
or assigned from time to time.
1.19. Note: The Note from Borrower, as maker, to Lender, as payee,
bearing even date herewith evidencing the Loan hereunder, in an amount not to
exceed $__________, as the same may be modified, amended, supplemented or
assigned from time to time.
1.20. Occupancy Stabilization: Such time as the Project achieves an
occupancy level of 90% or more for three (3) consecutive months, as determined
in accordance with generally accepted accounting principles consistently
applied and approved by Lender.
1.21. Permitted Exceptions: The title exceptions identified in
Paragraph l of the Mortgage.
1.22. Project: The Land, together with the Improvements proposed to be
constructed and actually constructed thereon.
1.23. Residential Living Agreement: The residential living agreement
to be entered into with residents of the Project, the form of which is attached
hereto as Exhibit A.
1.24. Title Insurer: Commonwealth Land Title Insurance Company or such
other title insurance company as Lender may approve, which title insurance
company shall insure the lien and priority of the Mortgage in accordance with
Section 3.2.2.3. hereof.
2. BACKGROUND; LOAN
2.1. Background: Borrower is the owner in fee of the Land and desires
to borrow funds, to, among other things, carry on its operations during its
lease up and Occupancy Stabilization Phase.
2.2. Loan: Subject to the terms and conditions of this Agreement,
Lender shall lend to Borrower and Borrower shall borrow from Lender an amount
not to exceed in the aggregate ________________ ($_________). The Loan shall
not be of a revolving nature and any portion thereof paid in advance of
maturity shall not be readvanced by the Lender to the Borrower.
2.3. Interest and Repayment: The Loan will be evidenced by the Note,
will bear interest at the rate set forth in the Note, and will be repaid as set
forth in the Note. The outstanding principal balance of the Note, and all
accrued but unpaid interest and fees shall be due and payable in full on the
Maturity Date.
3. ADVANCE OF LOAN
3.1. Loan Advances. Subject to compliance by Borrower with the terms
and conditions of this Agreement, Lender shall advance, and Borrower shall be
obligated to borrow the total proceeds of the Loan at Closing.
3.1.1. Lender shall not make an advance of the Loan proceeds unless
and until each of the conditions precedent (such conditions being identified in
Section 3.2. hereof) is satisfied.
3.1.2. No Third-Party Benefit; No Liability; Lender's Waiver. All
conditions and requirements of this Agreement relating to the obligations of
Lender to make advances of the Loan are for the sole benefit of Lender, and no
other person or party shall have the right to rely on the satisfaction of such
conditions and requirements by Borrower as a condition precedent to Lender
making an advance of the Loan. Anything in this Agreement or any other
agreement made with respect to the Loan to the contrary notwithstanding, any
advance of the Loan or approval given by Lender, herein or therein, shall not
give rise to any liability or responsibility of Lender. Lender shall have the
right, in its sole discretion, to waive any condition or requirement as a
condition precedent to making an advance of the Loan.
3.2. Conditions Precedent to Funding. The obligation of Lender to lend
under this Agreement is subject to the fulfillment of each of the following
conditions:
3.2.1. Loan Documents. Borrower shall have executed and delivered (or
shall have caused to be executed and delivered) to Lender all of the Loan
Documents, in form and substance reasonably satisfactory to Lender, including,
without limitation, the following:
3.2.1.1. This Agreement.
3.2.1.2. The Note.
3.2.1.3. The Mortgage, which shall be recorded. 3.2.1.4. An Assignment
of Rents and Leases, which shall be recorded, assigning to Lender all existing
and future Residential Living Agreements for space in the Project and all
rents, issues and profits therefrom or otherwise relating to the Project.
3.2.1.5. A Collateral Assignment of Agreements Affecting Real Estate,
which shall be recorded, assigning to Lender all contracts between Borrower and
third parties in connection with the Project, including without limitation, any
agreements with design professionals, all agreements, allocations and rights
with all utility services serving the Project, all development agreements, and
all approvals, allocations, permits and licenses necessary for the improvement
or operation of the Project from any Governmental Authority.
3.2.1.6. UCC-l financing statements, to be filed in such public
offices as may be necessary to perfect Lender's lien against the Collateral.
3.2.1.7. The Guaranty.
3.2.2. Other Documents. Borrower shall have delivered to Lender such
other documents as Lender may require, each in form and substance reasonably
satisfactory to Lender, including, without limitation, the following:
3.2.2.1 Copies of all contracts then entered into with any
subcontractors. Each such contract shall be with a subcontractor reasonably
satisfactory in all respects to Lender.
3.2.2.2. A certified copy of each agreement with any Governmental
Authority or agency pertaining to the further development of the Project,
including any obligating Borrower to construct or install municipal
improvements, such as streets, roads, curbs, sidewalks, fire hydrants, street
lighting and the like, together with evidence reasonably satisfactory to Lender
relating to any financial security required in connection therewith. If no such
agreements exist and none is required, Borrower shall so certify in writing on
the Closing Date and provide evidence thereof reasonably satisfactory to
Lender.
3.2.2.3. A standard ALTA mortgagee's title insurance policy or a
marked-up binder representing the commitment of the Title Insurer to issue a
mortgagee's title insurance policy (on the 1970 ALTA form of loan policy, as
amended) insuring title to the Project in accordance with Sections 4.12.,
4.13., 4.14. and 4.15. hereof, and Lender's interest therein as a valid and
enforceable first lien, subject only to the Permitted Exceptions, and without
exception for (1) any liens for labor or materials, actual or inchoate, (2)
parties in possession, or (3) discrepancies or conflicts in boundary lines,
unrecorded easements, encroachments, area content or any other survey matters.
Such policy shall be in the full amount of the Loan, subject to a "pending
disbursements" clause providing for coverage in an amount equal to the
outstanding amount of the Loan from time to time. Such policy shall include
endorsements (including, without limitation, zoning and comprehensive
endorsements) as Lender may request and shall provide for such reinsurance as
Lender may require.
3.2.2.4. Evidence reasonably satisfactory to Lender in form and
substance that all required insurance for the Project is in full force and
effect with insurers satisfactory to Lender, and that all premiums have been
paid with respect thereto.
3.2.2.5. An ALTA/ACSM as built survey of the Project, prepared and
signed by a surveyor licensed in the state in which the Land is located and
approved by Lender, in its sole discretion, hereto and certified to Lender and
Title Insurer, together with a metes and bounds legal description of the Land
corresponding to the survey and a certification (which may be part of the
certification affixed to the survey) that the existing Improvements lie
entirely within the boundaries of the Land and do not violate any set back or
other applicable restrictions or Legal Requirements.
3.2.2.6. A certified copy of releases of liens executed by any
contractor, architect, each other design professional with whom Borrower has
had a direct agreement and each subcontractor claiming through or under any of
them, respectively, releasing any and all mechanics' or material suppliers'
liens or claims that any of them may have in connection with work performed or
materials supplied through the date of this Agreement, all in such form and
containing such provisions as may be required by Lender or Title Insurer, to be
recorded by Title Insurer prior to the commencement of any further work on the
Land and stamped with the original stamp of the office where such releases of
liens and claims are required to be filed if filing is required to make such
release effective and binding. A certified copy of waivers of liens executed by
any such contractor, architect or other design professional with whom Borrower
has had a direct agreement, respectively, waiving their respective rights, if
any, and any right of a subcontractor claiming through or under any of them, to
hereafter file or maintain any mechanics' or material suppliers' liens or
claims, all in such form and containing such provisions as may be required by
Lender or Title Insurer, to be recorded by Title Insurer prior to the
commencement of any further work on the Land and stamped with the original
stamp of the office where such waivers of liens are required to be filed if
filing is required to make such waiver effective and binding upon parties
claiming by, through or under such contractor, architect or any other design
professional with whom Borrower has had a direct agreement.
3.2.2.7. Evidence reasonably satisfactory to Lender that all
utilities, including water, electric, gas and telephone, and all storm and
sanitary sewer drainage facilities are available at the Land for utilization by
Borrower for the Project, and that the respective lines and treatment or
generating plants are of adequate size and capacity to service the Project
adequately, together with a copy of the agreement with each such utility
service and evidence of the cost thereof.
3.2.2.8. Evidence reasonably satisfactory to Lender that all roads,
sidewalks, sewers, sewage treatment and disposal facilities which are part of
the Project are dedicated to the appropriate Governmental Authority and are
being operated and maintained by such Governmental Authority.
3.2.2.9. Evidence reasonably satisfactory to Lender that (1) all
required approvals, allocations, certificates, authorizations, permits and
licenses have been obtained as of the date hereof from all appropriate
Governmental Authorities and have been validly and irrevocably obtained without
qualification, appeal or existence of unexpired appeal periods, (2) there is no
pending or threatened investigations, appeals, suits or other actions leading
to or threatening the revocation, suspension or qualification of any of such
permits or approvals, and (3) all necessary or required zoning variances or
special approvals necessary to carry out operations of the Project, as
constructed, have been obtained, and that any subdivided lot or parcel in
connection with the Premises has been duly recorded.
3.2.2.10. Evidence reasonably satisfactory to Lender that the Land
constitutes a separate lot for real estate tax and assessment purposes, and
that the enforcement of any of the rights or remedies of Lender under the Loan
Documents including, without limitation, the right to cause any of the Project,
or any part thereof, to be sold at judicial or non-judicial sale, shall not be
subject to or conditioned upon obtaining any governmental approvals (including,
without limitation, subdivision approval). All conditions pertaining to the
granting of any subdivision approval, if necessary, shall have been satisfied
in a manner acceptable to Lender prior to the Closing Date.
3.2.2.11. Certificate of Occupancy. Evidence reasonably satisfactory
to Lender that a permanent and unconditional certificate of occupancy or its
equivalent was issued for the Project by each of the appropriate Governmental
Authorities.
3.2.2.12. Financial Information. Evidence reasonably satisfactory to
Lender of (a) the rent roll evidencing each resident then under a Residential
Living Agreement for any unit at the Project and such other matters as Lender
may request, and (b) a current and projected operating statement showing the
income and expenses for the Project for the then current year and the
subsequent year.
3.2.2.13. A copy of Borrower's Certificate of Organization, as
amended, certified by the Secretary of the State of __________________.
3.2.2.14. A certificate of Borrower's secretary certifying to (a) a
copy of the resolutions adopted by Borrower authorizing this Agreement and the
transactions contemplated hereby and (b) an incumbency certificate containing
the signatures of the individuals executing the Loan Documents on behalf of the
Borrower.
3.2.2.15. An executed copy of Borrower's bylaws, as amended, certified
by the secretary of Borrower.
3.2.2.16. An originally executed counterpart of the consent of board
of directors of Borrower authorizing this Agreement and the transactions
contemplated hereby.
3.2.2.17. A certificate of good standing of Borrower from the
Secretary of the State of ___________.
3.2.2.18. The opinions of counsel engaged by Borrower and Guarantor
and reasonably satisfactory to Lender, dated the date hereof and addressed to
Lender, reasonably satisfactory to Lender and its counsel in form and
substance.
3.2.2.19. A copy of Guarantor's Certificate of Organization, as
amended, certified by the Secretary of the State of .
3.2.2.20. A certificate of Guarantor's secretary certifying to (a) a
copy of the resolutions adopted by Guarantor authorizing the Guaranty and the
transactions contemplated thereby and (b) an incumbency certificate containing
the signatures of the individuals executing the Guaranty on behalf of the
Guarantor.
3.2.2.21. An executed copy of Guarantor's bylaws, as amended,
certified by the secretary of the Guarantor.
3.2.2.22. An originally executed counterpart of the consent of all
members of Guarantor authorizing the Guaranty and the transactions contemplated
hereby.
3.2.2.23. A certificate of good standing of Guarantor from the
Secretary of the State of ___________.
3.2.2.24. A true and complete copy of a phase I environmental
assessment of the Project prepared by a duly licensed environmental consultant
approved by Lender, which assessment must be reasonably acceptable to Lender in
all respects.
3.2.3. Section 3.1. All of the conditions precedent set forth in
Section 3.1 hereof shall have been satisfied as of the date of Closing.
3.2.4. Representations and Warranties. All of the representations and
warranties contained in Article 4 hereof shall be true, correct and complete.
3.2.5. Performance and Compliance. Borrower shall have performed all
agreements and complied with all covenants and provisions of the Loan
Documents, which as of the time of the advance are to have been performed
and/or completed by Borrower, no Event of Default shall have occurred and
remain uncured and no event shall have occurred which, with the giving of
notice, the passage of time, or both, would become an Event of Default.
3.3. Lender Advances Without Request. Upon three (3) days prior
written notice to Borrower, Lender may, but is not obligated to, from time to
time make additional advances on behalf of Borrower (a) to itself to pay
interest on the payment dates when interest is due and owing in accordance with
the terms of the Note, or to pay itself other sums due Lender pursuant to this
Agreement or any of the Loan Documents, or (b) to taxing authorities or
insurers to pay taxes or insurance premiums when due. Any advance so made shall
be deemed to be an advance made to and received by Borrower, and shall be part
of the Borrower's obligations secured under the Loan Documents. Lender shall
notify Borrower when such an advance has been made.
3.4. Prohibited Actions. Borrower will not, without Lender's prior
written approval, knowingly take any action which would (i) relieve others
(including, without limitation, any contractor, architect or interior designer)
of any existing duty, liability or obligation to Borrower with respect to the
Project or impose such duty, liability or obligation, directly or indirectly,
upon Borrower, (ii) impair the quality of the Project in any material respect
or (iii) change the aesthetics of the Project in any material respect.
4. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender as of the date hereof and
at all times when this Agreement shall remain in effect or the Note shall
remain outstanding that:
4.1. Corporate Status. Borrower is a corporation duly formed, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Borrower has the power and authority to own its own property and
assets and to transact the business in which it is engaged. Borrower is not
required to qualify to do business in any state or jurisdiction except as set
forth on Exhibit F attached hereto.
4.2. Power and Authority. Borrower has the power and authority to
execute, deliver and perform, as the case may be, the terms and provisions of
this Agreement, the Note and the other Loan Documents, and Borrower has taken
all necessary action to authorize the execution, delivery and performance of
this Agreement, the borrowings hereunder, the liens granted upon the Collateral
pursuant hereto, the making and delivery of the Note and the other Loan
Documents. This Agreement, the Note and all of the other Loan Documents
constitute the authorized, valid and legally binding obligations of Borrower
enforceable in accordance with their respective terms.
4.3. Litigation and Labor Disputes. There are no actions, suits or
proceedings pending, or to the knowledge of Borrower, threatened, against or
affecting Borrower or the Project before any court or before any governmental
or administrative body or agency, which if determined adversely to Borrower,
individually or in the aggregate, would have a material adverse effect on
Borrower's business or properties or this Project. Borrower is not a party to
any labor dispute, which if determined adversely to Borrower would have a
material adverse effect on the Borrower's business or properties or this
Project.
4.4. No Violation of Agreements or Laws. Borrower is not in default
under the provisions of any agreement to which it is a party and Borrower is
not in violation of any applicable provision of law or any applicable
regulation of any governmental department, commission, board, bureau, agency or
instrumentality (including, without limitation, environmental laws and
regulations), which would have a material adverse effect on Borrower's business
or properties or this Project. Neither the execution and delivery of this
Agreement, the Note or any of the other Loan Documents, nor the consummation of
the transactions herein or therein contemplated, nor compliance with the terms
and provisions hereof or thereof, will violate any applicable provision of law
or any applicable regulation, or any order, writ, injunction or decree of any
court or governmental department, commission, board, bureau, agency or
instrumentality or will conflict or will be inconsistent with, or will result
in any breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to impose) any lien, charge or encumbrance upon any of the property
or assets of any Borrower (including the Project) pursuant to the terms of any
indenture, franchise, license, permit, mortgage, deed of trust, agreement or
other instrument to which Borrower is a party or by which Borrower may be
bound, or to which Borrower may be subject.
4.5. Consent. No consent, approval or other authorization of or by any
Governmental Authority is required in connection with the execution or delivery
by Borrower of this Agreement or any of the other Loan Documents, or compliance
with any of the provisions hereof or thereof, except for a certificate of
occupancy and such other licenses, permits, authorizations, consents and
approvals required for the operation of the completed Project which have been
obtained.
4.6. Names and Locations. Neither Borrower nor its predecessors
operates or does business, or, within the past five (5) years, has operated or
done business, under a fictitious, trade or assumed name, except the names set
forth on Exhibit F. All of the locations at which Borrower conduct its business
are listed on Exhibit F.
4.7. Tax Returns and Payments. Borrower has filed all tax returns
required by law to be filed by it and has paid all taxes, assessments and other
governmental charges levied upon it and any of its respective properties,
assets, income or franchises which are due and payable, other than those
presently payable without penalty or interest.
4.8. Compliance with ERISA. Borrower is in compliance with all
applicable provisions of ERISA.
4.9. Financial Statements. With respect to any financial statements
delivered by Borrower to Lender after the date of this Agreement, all such
financial statements shall have been prepared in accordance with generally
accepted accounting procedures applied on a consistent basis throughout the
period specified and present fairly in all material respects the financial
position of Borrower as of the date specified and the results of operations and
statements of cash flow for the period specified.
4.10. Disclosure. Neither this Agreement nor any other Loan Document
delivered to Lender by or on behalf of Borrower in connection with the
transactions contemplated by this Agreement contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained in this Agreement and in such other Loan Documents,
certificates or instruments not misleading and, at the time of the submission
to Lender of any Request for Advance or the funding of any advance, shall
contain, any untrue statement of any material fact or omit to state a material
fact necessary in order to make the statements containing therein not
misleading. There is no fact (other than matters of a general economic or
political nature which do not affect such Borrower uniquely) which materially
adversely affects or in the future may (so far as such Borrower can now
foresee) materially adversely affect the business, condition (financial or
otherwise), operations, properties or prospects of Borrower which has not been
set forth in this Agreement or in the other Loan Documents delivered to Lender
by or on behalf of Borrower specifically for use in connection with the
transactions contemplated by this Agreement.
4.11. Permits and Approvals. Each license, permit, authorization,
consent and approval obtained by Borrower and required by any Governmental
Authority in connection with the Project, including any zoning variances or
approvals in connection with any contemplated subdivision, has been paid in
full, is without restriction or modification, remains in full force and effect,
and is final and unappealable, all appeal periods therefrom having expired
without appeal taken, except for certificates of occupancy and such other
licenses, permits, authorizations, consents and approvals required for the
operation of the Project.
4.12. Compliance; Zoning. Borrower has complied with all Legal
Requirements and all recorded instruments affecting the Project. The zoning
classification for the Land is ____________. The use of the Land for the
Project complies in all material respects with all zoning and use-related Legal
Requirements.
4.13. Title. 4.13.1. Borrower holds good, indefeasible and marketable
fee simple title to the Land and existing Improvements, if any, free and clear
of all mortgages, deeds of trust, liens, encumbrances, ground rents, leases,
tenancies, licenses, security interests, covenants, conditions, restrictions,
rights of way, easements, encroachments and any other matters affecting title
except the Permitted Exceptions and the liens and encumbrances created in favor
of Lender pursuant to the Loan Documents. To the extent, if any, that the
Permitted Exceptions include any restrictions, covenants or conditions, the
construction or operation of the Improvements or Project will not violate any
such matters.
4.13.2. Borrower's right, title and interest in and to each of the
agreements, documents, contracts, permits, licenses and other materials
assigned to Lender pursuant to this Agreement or other Loan Documents is free
and clear of all liens, encumbrances, leases, licenses, covenants, conditions,
restrictions, security interests, other assignments, mechanics' liens, material
suppliers' liens and other matters affecting title. Borrower is permitted to
assign such agreements, documents, contracts, permits, licenses and other
materials pursuant to the terms thereof, or has obtained all necessary
approvals therefor (provided, that such permits and licenses are assigned to
Lender only to the extent permitted by law), and Borrower has no knowledge of
the existence of any default under or breach of any thereof.
4.14. Utilities. All utility services necessary for the operation of
the Project are available, and at the title lines of the Land (or, if they pass
through adjoining private land, in accordance with valid public or unencumbered
private easements which inure to the benefit of Borrower and run with the Land,
copies of which have been delivered to Lender and are set forth on the Survey
and in the Title Report of the Insurer) including, without limitation, public
sanitary sewer service, storm sewers, drainage, public water, electricity, gas
and telephone service. There is no moratorium, suspension, cessation,
limitation or conditions existing or to Borrower's knowledge threatened with
respect to the provisions of any such utility services.
4.15. Roads. The Land is located along a dedicated public street or
highway and all curb-cut and street opening permits or licenses required for
vehicular access to and from the Project to any adjoining public street or
highway, as well as all other required traffic-related permits and approvals,
have been obtained and paid for by Borrower and are in full force and effect.
All roads necessary for the full utilization of the Project for its intended
purposes are indicated on the Survey and have been completed.
4.16. Insurance. No notice has been received from any insurance
company which issued any of the insurance policies for the Project, or from any
of their agents, brokers or representatives, stating in effect that any such
policy (i) will not be renewed, (ii) will be renewed only at a higher premium
than is presently payable therefor, or (iii) will be renewed only with lesser
or less complete coverage than is presently provided.
4.17. No Default. No event has occurred and is continuing that is an
Event of Default or that would be an Event of Default with the giving of notice
or the passage of time or both.
4.18. Condemnation. There is no pending condemnation, expropriation,
eminent domain or similar proceeding affecting the Land or any portion thereof,
and Borrower has not received any written or oral notice of any thereof and has
no knowledge that any such proceeding is contemplated.
4.19. Residential Living Agreement. Attached hereto as Exhibit C is a
true and complete copy of the form of Residential Living Agreement in
substantially the form Borrower intends to execute the same with each of the
residents at the Project.
4.20. Environmental Concerns. All of the covenants, representations
and warranties of Borrower regarding environmental matters set forth in the
Mortgage are incorporated herein by reference and are hereby made as if set
forth herein in full, and such representations and warranties are true and
correct in all respects.
4.21. Governmental Authorities. Borrower has complied in all material
respects with all of the terms and conditions of each agreement with each
Governmental Authority in connection with the Project.
5. COVENANTS OF BORROWER
5.1. Affirmative Covenants. Borrower covenants and agrees that from
the date hereof and so long as this Agreement shall remain in effect or the
Note shall remain outstanding, Borrower shall:
5.1.1 Existence. Do or cause to be done all things necessary to
preserve and keep its corporate existence in full force and effect under the
laws of its state of formation and to remain qualified and licensed in all
jurisdictions in which such qualification or licensing is required for the
conduct of Borrower's business, including, without limitation, the state in
which the Land is located.
5.1.2. Required Notices. Give, or cause to be given, prompt written
notice to Lender of: (1) any action or proceeding instituted by or against
Borrower, Guarantor or the Project before any Governmental Authority, or any
such proceeding threatened against Borrower that would have a material adverse
affect on Borrower's business or properties, Guarantor or the Project; or (2)
any other action, event or condition of any nature which may have a material
adverse effect upon the business or assets of Borrower or Guarantor or which,
with notice or lapse of time or both, would constitute an Event of Default
under this Agreement or a default under any other material contract, instrument
or agreement to which Borrower is a party or by which Borrower or any of
Borrower's properties or assets may be bound or subject.
5.1.3. Copies of Notices. For matters that would have a material
adverse effect on the Project, forward to Lender copies of all notices given or
received by Borrower, promptly upon the giving or receipt of such notice, to or
from: (1) any insurer, (2) any claim of default, or relating to any work
stoppage, notice of violation or cease and desist order, strike, claim,
litigation, damage, loss or any other materially adverse condition,
circumstance or event and (3) in connection with any environmental matter under
Paragraph 25 of the Mortgage.
5.1.4. Payment of Debts, Taxes. Pay and discharge or cause to be paid
and discharged promptly all taxes, assessments and governmental charges or
levies imposed upon Borrower, its income or receipts, or any of its properties,
including but not limited to the Project, before the same shall become in
default, as well as all lawful claims for labor, materials and supplies or
otherwise which, if unpaid, might become a lien or charge upon such properties
or any part thereof, unless the same shall be contested by Borrower in good
faith by appropriate proceedings and Borrower shall have posted a bond or
escrow with Lender equal to such contested amount.
5.1.5. Compliance. Promptly and faithfully comply with, conform to and
obey, all present and future Legal Requirements applicable to Borrower, the
Land or the Project, all present and future requirements affecting title to the
Project, the Loan Documents, all Residential Living Agreements now or hereafter
entered into from time to time, any agreements with subcontractors, and all
other agreements and covenants to which Borrower is bound or subject which, the
failure to comply, conform or obey would have a material adverse result on
Borrower's business or properties or this Project. Borrower shall not agree to
any material modification or termination of any of the foregoing documents
without the prior approval of Lender in writing; provided, however, that
Borrower shall be permitted without the prior written consent of the Lender to
modify any Residential Living Agreement to the extent that the rates charged
thereunder are not materially reduced.
5.1.6. Subcontracts. Make available for inspection at all times by the
Lender copies of any such subcontracts and furnish to Lender, upon request,
copies of the same.
5.1.7. Maintenance. Cause the Improvements to be kept in good
condition and repair, and maintain the same in a clean and orderly manner, and
operate the same properly, efficiently and in compliance with all Legal
Requirements, except as would not have a material adverse effect on the
Project.
5.1.8. Authorized Persons. From time to time, at the request of
Lender, certify to Lender the names, signatures, and positions of all persons
authorized to make application for advances hereunder.
5.1.9. Books and Records. Keep, or cause to be kept, in accordance
with generally accepted accounting principles consistently applied, proper and
complete books of record and account concerning the financial affairs of
Borrower and the Project, and make such records available at the Project or in
Borrower's offices at all reasonable times for inspection by Lender. Borrower
agrees to maintain accounting records for the Improvements and the Project
separate from any other accounting records which Borrower may maintain.
Borrower agrees to maintain all such books and records for a period of two
years after the repayment in full of the Loan.
5.1.10. Financial Statements. So long as the Loan or any portion
thereof remains outstanding, deliver or cause to be delivered to Lender the
following: (a) as soon as available and in any event within forty-five (45)
days after the end of each calendar quarter, unaudited financial statements of
Borrower and of Guarantor for the calendar quarter then ended, prepared on a
basis consistent with the annual statements, and certified by the managing
member of Borrower and of Guarantor to be true and correct; and (b) as soon as
available and in any event within ninety (90) days after the end of each
calendar year of Borrower and of Guarantor, financial statements of Borrower
and of Guarantor, prepared in accordance with generally accepted accounting
principles, and including a balance sheet, a statement of income and expenses
for the year then ended and which, at Lender's request, shall be reviewed by a
nationally recognized certified public accounting firm or other independent
certified public accounting firm acceptable to Lender.
5.1.11. Change in Circumstance. Promptly notify Lender in writing of
any change in any fact or circumstance represented or warranted by Borrower
herein or in any other documents furnished to Lender in connection with this
Agreement.
5.1.12. Additional Instruments. Execute such additional instruments as
may be requested by Lender in order to carry out the intent of this Agreement
and to perfect or give further assurances of any of the rights granted or
provided for hereunder or under any of the Loan Documents.
5.1.13. Indemnification. Indemnify, defend and hold harmless Lender
and its officers, directors, employees and agents from and against any and all
liabilities, losses, claims, damages and expenses, including reasonable
attorneys' fees and expenses, of any kind or nature directly or indirectly
resulting from or arising out of the Loan, any of the Loan Documents or any act
or omission to act by Lender or its officers, directors, employees or agents in
connection therewith, including, without limitation, all claims for commissions
to any broker or intermediary, disputes between or among Borrower, any
subcontractors, material suppliers, purchasers and tenants, unless caused by
the gross negligence or willful malfeasance of Lender or by Lender's failure to
perform its covenants under the Loan Documents.
5.2. Negative Covenants. Borrower covenants and agrees that from the
date hereof and for so long as this Agreement shall remain in effect or the
Note shall remain outstanding, Borrower shall not:
5.2.1. Amendment or Modification. Except as permitted by Sections 3.6.
and 5.1.5. above, materially amend, vary, terminate or modify, or permit to be
materially amended, varied, terminated or modified, or waive or permit waiver
of compliance with any provisions or requirements of any of the agreements with
contractors or Governmental Authorities or any agreement or contract assigned
to Lender.
5.2.2. Conveyance or Lease. Except for the execution of permitted
Residential Living Agreements or other agreements entered into in the ordinary
course of business or as otherwise may be expressly permitted in the Loan
Documents (including assignments to Affiliates) sell, assign, transfer, convey,
lease, or otherwise dispose of the Land or the Project, or any part thereof or
interest or estate therein, either directly or indirectly by deed, merger,
stock, partnership or membership interest transfer or liquidation, or otherwise
permit ownership or control of the Land or the Project to be other than in
Borrower as constituted as of the date hereof.
5.2.3. Assignment. Assign this Agreement or any of the other Loan
Documents, except to an Affiliate.
5.2.4. Encumbrances. Create by mortgage, pledge, assignment, security
agreement or otherwise, or suffer to exist, any security interest, pledge,
lien, charge or other encumbrance upon the Land or the Project or any portion
thereof, except (1) the liens or security interests created pursuant to the
Loan Documents, (2) liens for taxes not yet due and payable, (3) mechanics' or
tax liens being contested by Borrower in appropriate proceedings with the
approval of Lender, a bond or escrow having been posted with Lender for the
full amount of such lien, (4) Residential Living Agreements with residents as
contemplated and permitted hereby, and (5) liens, on the real property
benefiting the Project.
5.2.5. Governing Documents. Amend, or permit to be amended, Borrower's
Certificate of Incorporation if such amendment would have a material adverse
effect on Lender's rights under this Agreement or under any of the other Loan
Documents.
5.2.6. Modification of Residential Living Agreements. Charge any
resident under a Residential Living Agreement materially less than the standard
charge for the applicable unit in accordance with the Schedule of Charges
attached hereto as Exhibit D, without, in each instance, obtaining Lender's
prior written approval, which approval shall not be unreasonably withheld.
6. EVENTS OF DEFAULT AND REMEDIES
6.1. Events of Default. The occurrence of any of the following shall
constitute an event of default ("Event of Default") hereunder:
6.1.1. The failure of Borrower to pay within seven (7) days of the
date due any installment of principal and/or interest due under the Note, or
any other monetary obligation under any of the Loan Documents;
6.1.2. The failure of Borrower to perform any term, covenant or
condition of this Agreement or of any other Loan Document (including, without
limitation, the Mortgage) (other than defaults which are separately and
expressly identified in this Section 6, which defaults shall not be included in
the operation of this Section 6.1.3.) and the continuation of such default for
more than thirty (30) days following the giving of notice of such default to
Borrower; provided, however, that such default shall not be deemed to be an
Event of Default if such default cannot reasonably be cured within such thirty
(30) day period, and Borrower shall have commenced to cure such default within
such thirty (30) day period and thereafter diligently and expeditiously
proceeds to cure the same, and Borrower shall submit to Lender, within such
thirty (30) day period, a detailed plan to cure such default satisfactory to
Lender, such thirty (30) day period shall be extended for so long as it shall
require Borrower in the exercise of due diligence to cure such default, it
being agreed that no such extension shall be for a period in excess of one
hundred and twenty (120) days. The rights to notice and a cure period granted
herein shall not be cumulative with any other rights to notice or a cure period
in any other Loan Document, any and all grace periods in any Loan Document
shall run concurrently and not successively, and the giving of notice or a cure
period pursuant to this paragraph shall satisfy any and all obligations of
Lender to grant any such notice or cure period pursuant to any of the Loan
Documents;
6.1.3. Any representation or warranty of Borrower hereunder or under
any of the other Loan Documents or other materials submitted to Lender in
connection with the Loan shall have been untrue or incorrect in any material
respect when made;
6.1.4. The appearance on any survey required or requested by Lender
pursuant to the provisions of this Agreement of any condition which materially
and adversely affects the Property not approved by Lender, and failure to
remove such condition after notice thereof by Lender to Borrower within thirty
(30) days after such notice, or if Lender agrees (which agreement shall not be
unreasonably withheld), such additional time as necessary to remove such
condition;
6.1.5. (a) The commencement by Borrower or Guarantor of a voluntary
case under any Chapter of the Bankruptcy Code (Title 11 of the United States
Code) as now or hereafter in effect, or the taking by Borrower or Guarantor of
any equivalent or similar action by the filing of a petition or otherwise under
any other federal or state law in effect at the time relating to bankruptcy or
insolvency; (b) the filing of a petition against Borrower or Guarantor under
any Chapter of the Bankruptcy Code (Title 11 of the United States Code) as now
or hereafter in effect, or the filing of a petition seeking any such equivalent
or similar relief against Borrower or Guarantor under any other federal or
state law in effect at the time relating to bankruptcy or insolvency, and the
failure of the Borrower or guarantor to obtain a dismissal of said petition
within sixty (60) consecutive days from the filing date of said petition; (c)
the making by Borrower or Guarantor of a general assignment for the benefit of
its or any of their creditors; (d) the appointment of a receiver, trustee,
custodian or similar officer for Borrower or Guarantor or for the property of
Borrower or Guarantor and the failure by Borrower or Guarantor to secure the
discharge of such receiver, trustee, custodian or similar officer within ninety
(90) consecutive days from the date of appointment; or (e) the admission in
writing by Borrower or Guarantor of any inability to pay debts generally as
they become due;
6.1.6. Any permit (including, without limitation, the Building
Permit), approval or agreement obtained from or issued by any Governmental
Authority is withdrawn, canceled, terminated, or modified to the material
detriment of Borrower or the Project, unless Borrower reinstates and confirms
in all respects the permit, approval, or agreement previously in effect within
a period of ten (10) days thereafter;
6.1.7. Any material breach of any environmental covenant, or if any
representation or warranty herein or in any other Loan Document regarding
environmental matters proves false in any material respect;
6.1.8. The occurrence of a default under and as defined in any other
Loan Document or a default by Borrower under any other Loan Document after the
expiration of any applicable notice and/or grace periods;
6.1.9. Any litigation or administrative proceeding shall commence
involving Borrower, this Agreement, any other Loan Document, or Borrower's
construction of the Improvements which, in Lender's sole judgment, has or may
have a material and adverse effect on the ability of Borrower to perform any of
its obligations under this Agreement or any other Loan Document, or to operate
and use the Improvements, or any part thereof, for the purposes intended, or
the value of the Collateral as security for the Note, and such litigation or
proceeding shall not have been terminated or dismissed or stayed within sixty
(60) days after the commencement thereof;
6.1.10 The creation or sufferance of any lien, mortgage, pledge or
other encumbrance on the Collateral (or any portion thereof), other than the
Permitted Exceptions or as otherwise expressly permitted under Section 5.2.5;
6.1.11. The occurrence of any Event of Default under and as defined in
the Guaranty; or
6.1.12. Any sale, assignment or transfer of the Collateral (or any
portion thereof) except in the ordinary course of business.
6.2. Remedies. Upon the occurrence of any Event of Default, Lender, in
addition to any other rights or remedies available at law or in equity, or
under any of the other Loan Documents, may exercise any or all of the following
rights and remedies as it, in its sole discretion, deems necessary or
desirable:
6.2.1. Declare immediately due and payable, without further notice or
demand, all monies advanced under this Agreement, the Note, the Mortgage or any
of the Loan Documents which are then unpaid, together with all interest then
accrued thereon and all other amounts then owing (including, without
limitation, the prepayment fee provided for under Section 3.3 of the Note), and
exercise all rights and remedies available under the Note, Mortgage and any of
the other Loan Documents at law, in equity or otherwise;
6.2.2. Enter upon the Land and take possession of the Land,
Improvements and Project, in connection with the sale of same pursuant to the
Mortgage and all materials, supplies, tools, equipment, facilities and
appliances located thereon, and proceed either in the name of Lender or in the
name of Borrower, as the attorney-in-fact of Borrower (which authority is
hereby granted by Borrower, is coupled with an interest, and is irrevocable),
as Lender shall elect, to repossess and operate the Project, in connection with
the preservation of its rights under the Loan Documents, at the cost and
expense of Borrower, pursuant to advances made on behalf of Borrower hereunder
or otherwise. Lender may enforce or cancel all contracts entered into by
Borrower or make other contracts which are in Lender's sole opinion advisable,
and Borrower shall be liable to pay Lender upon demand any amount or amounts
expended by Lender for such performance, together with any costs, charges, or
expenses incident thereto or otherwise incurred or expended by Lender or its
representatives on behalf of Borrower in connection with the Improvements, and
the amounts so expended shall be considered part of the Loan evidenced by the
Note and secured by the Mortgage and the Assignments, and shall bear interest
at the Default Rate specified in the Note to be payable by Borrower on such
indebtedness;
6.2.3. Terminate Lender's obligations under this Agreement, including
the obligation to make further advances (including advances requested prior to
such termination but not actually made at the time such termination occurs);
and
6.2.4. Institute appropriate proceedings for injunctive relief
(including specific performance of the obligations of Borrower hereunder and
under the other Loan Documents).
6.3. Remedies Cumulative; Waivers. All of the remedies herein given to
Lender or otherwise available at law or in equity to Lender shall be cumulative
and may be exercised separately, successively or concurrently. Failure to
exercise any one of the remedies herein provided shall not constitute a waiver
thereof by Lender, nor shall the use of any such remedies prevent the
subsequent or concurrent resort to any other remedy or remedies vested in
Lender by the Loan Documents or at law or in equity. To be effective, any
waiver by Lender must be in writing, and such waiver shall be limited in its
effect to the condition or default specified therein, and no such waiver shall
extend to any subsequent condition or default.
7. INSURANCE
7.1. Coverage. Borrower shall, from and after the date hereof and at
all times while this Agreement is in effect or the Note remains outstanding,
maintain at Borrower's expense insurance in amounts, with deductibles and with
companies reasonably satisfactory to Lender, and having such other terms and
provisions, all as described below or in Paragraph 5 of the Mortgage, including
but not limited to, a policy of extended coverage fire insurance, and a rental
curtailment or interruption insurance policy in an amount reasonably
satisfactory to Lender.
7.2. Certificates; Notices.
7.2.1. Borrower shall furnish to Lender duplicate copies of policies
of insurance or certificates of Borrower's insurance agent certifying to the
insurance required and including photocopies of all policies certified by such
agent to be correct, complete and current, as Lender may request (i) on or
before the Closing Date, (ii) upon the renewal or replacement of existing
coverage or the obtaining of additional coverage, and (iii) at any other time
upon the request of Lender.
7.2.2. Each insurance policy of Borrower shall name Lender as an
additional insured party and shall provide that all proceeds payable thereunder
shall be paid to Lender as loss payee or trustee for the beneficial owners
thereof. All policies shall be issued by companies acceptable to Lender and
having a Standard & Poors financial rating of AA or better and a size class
rating of XII or larger.
7.2.3. Each insurance policy of Borrower shall be on a non-reporting
and non-contributing form basis and shall contain a provision (i) requiring the
insurer to notify Lender, in writing and at least thirty (30) days in advance,
of any cancellation or material change in the policy, and (ii) stating that any
loss otherwise payable thereunder shall be payable notwithstanding any act or
neglect of the insureds and notwithstanding (a) the occupation or use of the
Project for purposes more hazardous than permitted by the terms of such policy,
(b) any change in title to or ownership of the Project, or (c) any provision of
the policy relieving the insurer thereunder of liability for any loss by reason
of the existence of other policies of insurance covering the Project against
the peril involved, whether or not collectible. The amount of insurance in all
cases shall be sufficient to prevent any co-insurance contribution on any loss.
8. MISCELLANEOUS
8.1. Lender's Discretion. If any condition of this Agreement requires
the submission of evidence of the existence or non-existence of a specified
fact or facts, or implies as a condition the existence or non-existence of such
fact or facts, Lender will, at all times, be free independently to establish to
its reasonable satisfaction and in its reasonable discretion such existence or
nonexistence. Where any matter herein requires the approval or consent of the
Lender, the giving or refusal to give such approval or consent shall be within
Lender's reasonable discretion, except as may be expressly stated otherwise.
Any waiver of any condition in connection with an advance by Lender, on any one
or more occasions, shall not constitute or be deemed to constitute a waiver of
any such other condition for that or for any other advance, and Lender may
strictly enforce all conditions hereof with respect to any advance.
8.2. No Third Party Beneficiary. The parties do not intend the
benefits of this Agreement to inure to any third party, nor shall this
Agreement be construed to make or render Lender liable to any purchaser,
materialman, contractor, subcontractor, laborer or other person for goods or
materials supplied or work or labor furnished or services rendered in
connection with the construction of the Improvements, or for debts or claims
accruing to any such persons against Borrower. Lender shall not be liable for
the manner in which any advance may be applied by Borrower. Notwithstanding
anything contained herein, in the Note or in any other Loan Document, or any
conduct or course of conduct by either or both of Borrower and Lender, before
or after the execution of this Agreement, this Agreement shall not be construed
as creating any right, claim or cause of action against Lender or any of its
officers, directors, agents or employees, in favor of any contractor,
subcontractor, design professional, supplier of labor or materials, or any of
their respective creditors, or any other person other than Borrower. Without
limiting the generality of the foregoing, advances made to any contractor,
subcontractor, design professional, supplier of labor or materials or other
creditor of Borrower, whether or not such advances are approved by Lender,
shall not be deemed a recognition by Lender of third party beneficiary status
of any such person. No part of the Loan will be at any time subject, or liable
to attachment or levy at the suit of any creditor of Borrower, or at the suit
of any contractor, subcontractor or material supplier, or any of their
creditors, and regardless of any other term, condition or provision hereof, no
such third party will have any status, right or entitlement hereunder.
8.3. No Joint Venture. Nothing contained in this Agreement or the
other Loan Documents shall create a partnership or joint venture or
principal-agent relationship between Borrower and Lender or between Lender and
any other party, or cause Lender to be liable in any way for the debts or
obligations of Borrower or any other party.
8.4. Reliance on Representations and Warranties. Lender shall be
entitled to rely upon the representations and warranties of Borrower set forth
in any of the Loan Documents without any investigation by Lender and
notwithstanding any investigation conducted by Lender or on its behalf before
or after the date hereof.
8.5. Assignment; Further Assurances.
8.5.1. The rights of Borrower hereunder shall not be assignable in any
respect without the prior written consent of Lender, which consent may be
granted or withheld in Lender's sole discretion; provided, however, that
Borrower shall be entitled to assign its rights hereunder to an Affiliate of
the Borrower upon written notice to Lender. If such assignment hereof is made
by Borrower pursuant to this Section 8.5.1., Lender shall be entitled to make
advances to such assignee and such advances shall be secured by the Mortgage
and the Assignments. In any case, Borrower shall remain liable for repayment of
all sums advanced hereunder before and after such assignment.
8.5.2. Without Borrower's consent or approval, this Agreement, the
Note and any of the other Loan Documents may be endorsed, assigned or
transferred in whole or in part by Lender, and interests in the Loan may be
participated by Lender and any such holder, assignee or participant thereof
shall succeed to and be possessed of the rights of Lender under all of the Loan
Documents to the extent so endorsed, transferred, participated or assigned.
8.5.3. Subject to the foregoing, this Agreement shall be binding upon,
and shall inure to the benefit of, Borrower and Lender and their respective
successors and assigns.
8.5.4. Borrower shall execute and deliver to Lender such documents,
instruments, certificates, assignments and other writings and do such other
acts as may be necessary (a) to evidence, preserve and/or protect the
Collateral at any time securing or intended to secure the Note, and/or (b) to
further and more effectively carry out the intents and purposes of this
Agreement and the other Loan Documents, as Lender may require from time to
time, in Lender's discretion.
8.6. Notices. All notices, approvals, consents requests, demands and
other communications with, to, from or upon the respective parties hereto shall
be in writing and shall be hand delivered or sent by guaranteed overnight
delivery service or by registered mail, return receipt requested, postage
prepaid, addressed as follows:
8.6.1. If to Lender:
ElderTrust Operating Limited Partnership
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a required copy (which shall not
constitute notice) to the following, but
only in connection with defaults hereunder:
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
8.6.2. If to Borrower:
__________________________________
__________________________________
__________________________________
__________________________________
With a required copy (which shall not
constitute notice) to the following, but
only in connection with defaults hereunder:
____________________________________________
____________________________________________
____________________________________________
____________________________________________
or to such other address as either party may designate from time to time by
notice to the other in the manner set forth herein. All such communications
shall be deemed to be given (i) if hand delivered or sent by guaranteed
overnight delivery service, on the day received, or (ii) if mailed, on the
second business day following deposit thereof in the U.S. Mail.
8.7. Table of Contents; Headings. The table of contents preceding this
Agreement and the headings preceding the text of the paragraphs of this
Agreement are used solely for convenience of reference and shall not affect the
meaning or interpretation of this Agreement.
8.8. Time of the Essence. All dates and times for performance set
forth herein or in any of the other Loan Documents (whether or not elsewhere so
stated) are of the essence.
8.9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed all original, but all of which
together shall constitute one and the same instrument.
8.10. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of __________, but not including the
choice of law provisions thereof.
8.11. Severability. Any provision in any of the Loan Documents that is
unenforceable or invalid in any jurisdiction shall, as to such jurisdiction, be
ineffective, but only to the extent of such unenforceability or invalidity of
and without affecting the remaining provisions thereof or affecting the
operation, enforceability or validity of such provision in any other
jurisdiction.
8.12. JURISDICTION; WAIVER OF JURY TRIAL. BORROWER HEREBY SUBMITS AND
CONSENTS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ____________ AND THE
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ___________ IN ANY AND ALL
ACTIONS OR PROCEEDINGS ARISING HEREUNDER OR PURSUANT HERETO, AND IRREVOCABLY
AGREES TO SERVICE OF PROCESS BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO
ITS ADDRESS SET FORTH HEREIN OR SUCH OTHER ADDRESS AS BORROWER MAY DIRECT BY
NOTICE TO LENDER. BORROWER IRREVOCABLY AS AN INDEPENDENT COVENANT WAIVES A JURY
TRIAL AND THE RIGHT THERETO IN ANY ACTION OR PROCEEDING BETWEEN BORROWER AND
LENDER, WHETHER HEREUNDER OR OTHERWISE.
8.13. Survival. All agreements, representations and warranties made in
this Agreement shall survive the making of each advance hereunder and shall
remain in full force and effect until the entire unpaid principal amount of the
Loan, together with accrued but unpaid interest thereon and all other amounts
due and payable by Borrower to Lender have been paid in full.
8.14. Controlling Document; Amendment. The provisions of this
Agreement (including the exhibits attached hereto) shall be deemed
complementary to the provisions of the other Loan Documents, but in the event
of conflict, the provisions hereof shall be deemed to modify and supersede the
conflicting provisions in such other Loan Documents and to control to the
extent enforceable under applicable law. Neither this Agreement nor any of the
other Loan Documents may be modified or amended except by a written agreement
executed by the party against whom enforcement thereof is sought.
8.15. Extension of Maturity Date. Subject to the terms and conditions
of this Section 8.15., Borrower shall have the right to request an extension of
the Maturity Date for up to ___ (__) additional twelve (12) month periods.
Borrower's request to extend the Maturity Date for each of such twelve (12)
month periods shall be approved by Lender provided each of the following
conditions precedent to each such extension shall have been satisfied to the
sole satisfaction of Lender: (i) Borrower's written request to extend the
Maturity Date shall have been received by Lender no later than 60 days prior to
the Maturity Date; (ii) each of the conditions set forth in Section 3.3. of
this Agreement shall have been satisfied; (iii) no Event of Default shall exist
under this Agreement or any other Loan Document and no event shall exist which
with the passage of time or the giving of notice, or both, would constitute an
Event of Default under this Agreement or any other Loan Document; and (iv)
Borrower shall have paid Lender an extension fee equal to ________ percent
(___%) of the original principal amount of the Loan (the "Extension Fee"). In
connection with any such extension permitted under this Section 8.15., the
interest rate under the Note shall be revised to equal the Three Year Treasury
Rate (as defined in the Note) on the date immediately preceding the applicable
extension period, plus ________ (___%). In the event the Maturity Date is not
extended in accordance with the terms of this Section 8.15., the Maturity Date
shall remain two years from date of closing.
8.16. Modification of Documents. In connection with any extension of
the Maturity Date in accordance with Section 8.15., Borrower shall
simultaneously execute and deliver (or cause to be executed and delivered by
the relevant party) such modifications and amendments to the Loan Documents,
opinions of counsel and "bringdowns" and endorsements to Lender's policy of
title insurance as Lender may request in its sole discretion.
8.17. Reimbursement of Expenses. Borrower shall reimburse Lender for
all reasonable costs and expenses incurred by Lender incurred after the closing
date in connection with the administration of the Loan, including, without
limitation, the reasonable fees and expenses (including travel, lodging and
similar expenses) of counsel and other professionals. The obligations of
Borrower under this Section 8.17. shall survive the termination of this
Agreement and the payment of the Note.
IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to
be duly executed as of the day and year set forth on the first page hereof.
BORROWER
[ --------------------------- ]
By:
Name:
Title:
LENDER
ELDERTRUST OPERATING LIMITED PARTNERSHIP
By: ElderTrust, General Partner
By:
---------------------------------------------------
Name:
Title:
EXHIBIT SCHEDULE
TERM LOANS
-------------------------------------------------------------------------------------------------------------------
Borrower Loan Amount Interest Rate Extension Rights
-------- ----------- ------------- ----------------
-------------------------------------------------------------------------------------------------------------------
1. Mifflin $5,164,000 Fixed at 400 basis points Right to one year extension
(Genesis) over 3-year Treasury
Bills as of the date of
the Term Loans
-------------------------------------------------------------------------------------------------------------------
2. Cooquina Place $4,577,000 Fixed at 400 basis points Right to one year extension
(Genesis) over 3-year Treasury
Bills as of the date of
the Term Loan
-------------------------------------------------------------------------------------------------------------------