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Exhibit 10.5
FOURTH AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT
(MASTER AGREEMENT)
SUNRISE EAST ASSISTED LIVING LIMITED PARTNERSHIP AND OTHER
SUBSIDIARIES OF SUNRISE ASSISTED LIVING, INC.
AS BORROWERS
BANK OF AMERICA, N.A.
AS ADMINISTRATIVE AGENT
FLEET NATIONAL BANK, AS SYNDICATION AGENT
AND LASALLE BANK NATIONAL ASSOCIATION
AND ALLFIRST BANK AS CO-AGENTS
BANC OF AMERICA SECURITIES LLC
AS SOLE LEAD ARRANGER AND BOOK MANAGER
$265,000,000 REVOLVER TRANCHE
JUNE 13, 2001
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS....................................................... 3
SECTION 1.1 CERTAIN DEFINED TERMS..................................... 3
SECTION 1.2 ACCOUNTING TERMS AND OTHER DEFINITIONAL PROVISIONS........ 23
ARTICLE II BORROWING........................................................ 24
SECTION 2.1 THE LOAN.................................................. 24
SECTION 2.2 PROCEDURE FOR ADVANCES.................................... 26
SECTION 2.3 FEES...................................................... 26
SECTION 2.4 INTEREST RATE MATTERS..................................... 27
COMPUTATION OF INTEREST AND FEES.......................................... 32
SECTION 2.6 THE LETTER OF CREDIT FACILITY............................. 32
SECTION 2.7 PERMITTED COSTS........................................... 34
SECTION 2.8 REQUISITIONS DEMONSTRATING EXPENSES....................... 34
SECTION 2.9 CO-BORROWER OBLIGATIONS................................... 35
SECTION 2.10 AGREEMENT AMONG BORROWERS................................. 36
SECTION 2.11 BENEFITS TO BORROWERS..................................... 36
SECTION 2.12 GUARANTY.................................................. 37
SECTION 2.13 LIMITED GUARANTY OF ACCOMMODATOR CREDIT FACILITY.......... 40
ARTICLE III COLLATERAL...................................................... 40
SECTION 3.1 COLLATERAL................................................ 40
SECTION 3.2 ELIGIBLE PROJECTS......................................... 41
SECTION 3.3 ASSIGNMENT OF OWNERSHIP INTERESTS......................... 41
SECTION 3.4 GUARANTIES................................................ 41
SECTION 3.5 COLLATERAL FOR OBLIGATIONS................................ 41
SECTION 3.6 COSTS..................................................... 42
ARTICLE IV GENERAL FINANCING PROVISIONS..................................... 42
SECTION 4.1 CONDITIONS PRECEDENT TO CREDIT FACILITY CLOSING AND
ADDITION OF DEEDS OF TRUST.............................. 42
SECTION 4.2 CONDITIONS PRECEDENT TO DETERMINING AVAILABILITY UNDER
BORROWING BASE OR MAKING AN ADVANCE UNDER THE LOAN...... 49
SECTION 4.3 CONDITIONS UNDER WHICH AN ELIGIBLE PROJECT IS A COMPLETED
FACILITY................................................ 50
SECTION 4.4 LIENS; SETOFF............................................. 51
SECTION 4.5 PAYMENT AND PERFORMANCE OF OBLIGATIONS.................... 51
SECTION 4.6 PAYMENTS TO OTHERS FOR THE ACCOUNT OF THE BORROWERS....... 51
SECTION 4.7 PREPAYMENT................................................ 52
SECTION 4.8 ASSIGNMENTS............................................... 52
SECTION 4.9 LIABILITY OF THE LENDERS.................................. 52
SECTION 4.10 STORED MATERIALS.......................................... 53
SECTION 4.11 LIMITATIONS ON ADVANCES OR READVANCES..................... 53
SECTION 4.12 FEASIBILITY STUDIES....................................... 53
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ARTICLE V REPRESENTATIONS AND WARRANTIES.................................... 54
SECTION 5.1 EXISTENCE/GOOD STANDING................................... 54
SECTION 5.2 POWER AND AUTHORITY....................................... 54
SECTION 5.3 BINDING AGREEMENTS........................................ 54
SECTION 5.4 LITIGATION................................................ 54
SECTION 5.5 NO CONFLICTING AGREEMENTS................................. 55
SECTION 5.6 FINANCIAL INFORMATION..................................... 55
SECTION 5.7 NO DEFAULT................................................ 55
SECTION 5.8 TAXES..................................................... 56
SECTION 5.9 PLACE(S) OF BUSINESS AND LOCATION OF COLLATERAL........... 56
SECTION 5.10 TITLE TO PROPERTIES....................................... 56
SECTION 5.11 MARGIN STOCK.............................................. 56
SECTION 5.12 ERISA..................................................... 56
SECTION 5.13 GOVERNMENTAL CONSENT...................................... 57
SECTION 5.14 FULL DISCLOSURE........................................... 57
SECTION 5.15 BUSINESS NAMES AND ADDRESSES.............................. 57
SECTION 5.16 LICENSES AND CERTIFICATIONS............................... 57
SECTION 5.17 OPERATING AGREEMENTS AND MANAGEMENT CONTRACTS............. 58
SECTION 5.18 PARTICIPATION AGREEMENTS AND RESIDENT AGREEMENTS.......... 58
SECTION 5.19 COMPLIANCE WITH LAWS...................................... 59
SECTION 5.20 PRESENCE OF HAZARDOUS MATERIALS OR HAZARDOUS MATERIALS
CONTAMINATION........................................... 59
SECTION 5.21 NATURE OF CREDIT FACILITY; USURY; DISCLOSURES............. 59
SECTION 5.22 COMPLIANCE WITH ZONING.................................... 60
SECTION 5.23 PLANS AND SPECIFICATIONS.................................. 60
SECTION 5.24 BUILDING PERMITS; OTHER PERMITS........................... 60
SECTION 5.25 UTILITIES................................................. 60
SECTION 5.26 ACCESS; ROADS............................................. 60
SECTION 5.27 OTHER LIENS............................................... 61
SECTION 5.28 DEFAULTS.................................................. 61
SECTION 5.29 SURVIVAL; UPDATES OF REPRESENTATIONS AND WARRANTIES....... 61
SECTION 5.30 ACCOUNTS.................................................. 61
SECTION 5.31 DEVELOPMENT OF ELIGIBLE PROJECTS.......................... 62
ARTICLE VI CONDITIONS OF LENDING............................................ 62
SECTION 6.1 NO DEFAULT................................................ 62
SECTION 6.2 OPINION OF COUNSEL FOR THE BORROWERS...................... 62
SECTION 6.3 APPROVAL OF COUNSEL FOR THE LENDERS....................... 62
SECTION 6.4 SUPPORTING DOCUMENTS...................................... 62
SECTION 6.5 FINANCING DOCUMENTS....................................... 63
SECTION 6.6 INSURANCE................................................. 63
SECTION 6.7 SECURITY DOCUMENTS........................................ 63
SECTION 6.8 JOINDER AGREEMENT......................................... 63
ARTICLE VII AFFIRMATIVE COVENANTS OF BORROWER............................... 64
SECTION 7.1 FINANCIAL STATEMENTS...................................... 64
SECTION 7.2 TAXES AND CLAIMS.......................................... 65
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SECTION 7.3 LEGAL EXISTENCE........................................... 65
SECTION 7.4 CONDUCT OF BUSINESS AND COMPLIANCE WITH LAWS.............. 65
SECTION 7.5 USE OF PROCEEDS........................................... 66
SECTION 7.6 INSURANCE................................................. 66
SECTION 7.7 FLOOD INSURANCE........................................... 68
SECTION 7.8 MAINTENANCE OF PROPERTIES................................. 68
SECTION 7.9 MAINTENANCE OF THE COLLATERAL............................. 69
SECTION 7.10 OTHER LIENS, SECURITY INTERESTS, ETC...................... 69
SECTION 7.11 DEFENSE OF TITLE AND FURTHER ASSURANCES................... 69
SECTION 7.12 SUBSEQUENT OPINION OF COUNSEL AS TO RECORDING REQUIREMENTS 69
SECTION 7.13 BOOKS AND RECORDS......................................... 69
SECTION 7.14 COLLECTIONS............................................... 70
SECTION 7.15 NOTICE TO ACCOUNT DEBTORS AND ESCROW ACCOUNT.............. 70
SECTION 7.16 BUSINESS NAMES............................................ 70
SECTION 7.17 ERISA..................................................... 70
SECTION 7.18 CHANGE IN MANAGEMENT...................................... 71
SECTION 7.19 MANAGEMENT................................................ 71
SECTION 7.20 SURVEYS................................................... 71
SECTION 7.21 INSPECTIONS; COOPERATION; PAYMENT OF INSPECTING ENGINEER.. 72
SECTION 7.22 VOUCHERS AND RECEIPTS..................................... 72
SECTION 7.23 PAYMENTS FOR LABOR AND MATERIALS.......................... 72
SECTION 7.24 CORRECTION OF CONSTRUCTION DEFECTS........................ 73
SECTION 7.25 FEES AND EXPENSES; INDEMNITY.............................. 73
SECTION 7.26 GOVERNMENTAL SURVEYS OR INSPECTIONS....................... 73
SECTION 7.27 COST REPORTS.............................................. 73
SECTION 7.28 UPDATED APPRAISALS........................................ 73
SECTION 7.29 NOTIFICATION OF CERTAIN EVENTS, EVENTS OF DEFAULT AND
ADVERSE DEVELOPMENTS.................................... 74
SECTION 7.30 COMPLIANCE WITH ENVIRONMENTAL LAWS........................ 75
SECTION 7.31 HAZARDOUS MATERIALS; CONTAMINATION........................ 75
SECTION 7.32 PARTICIPATION IN REIMBURSEMENT PROGRAMS................... 76
SECTION 7.33 POOL STATUS............................................... 76
SECTION 7.34 SUBORDINATION OF DISTRIBUTIONS AND MANAGEMENT FEES........ 76
SECTION 7.35 DEPOSITORY BANK........................................... 76
SECTION 7.36 COPIES OF NOTICES......................................... 77
SECTION 7.37 COMMENCEMENT OF OCCUPANCY................................. 77
SECTION 7.38 REMOVAL OF ELIGIBLE PROJECT FROM BORROWING BASE........... 77
ARTICLE VIII NEGATIVE COVENANTS OF BORROWER................................. 77
SECTION 8.1 BORROWINGS................................................ 77
SECTION 8.2 DEEDS OF TRUST AND PLEDGES................................ 78
SECTION 8.3 SALE OR TRANSFER OF ASSETS................................ 78
SECTION 8.4 OTHER LIENS; TRANSFERS; "DUE-ON-SALE"; ETC................ 78
SECTION 8.5 ADVANCES AND LOANS........................................ 78
SECTION 8.6 CONTINGENT LIABILITIES.................................... 78
SECTION 8.7 LICENSES.................................................. 78
SECTION 8.8 ERISA COMPLIANCE.......................................... 79
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SECTION 8.9 TRANSFER OF COLLATERAL.................................... 79
SECTION 8.10 SALE OF ACCOUNTS OR RECEIVABLES........................... 79
SECTION 8.11 AMENDMENTS; TERMINATIONS.................................. 79
SECTION 8.12 PROHIBITION ON HAZARDOUS MATERIALS........................ 80
SECTION 8.13 SUBSIDIARIES.............................................. 80
SECTION 8.14 DISTRIBUTIONS TO PARTNERS OR MEMBERS...................... 80
SECTION 8.15 MERGERS OR ACQUISITIONS................................... 80
SECTION 8.16 PARTNERSHIP INTERESTS..................................... 81
SECTION 8.17 IMPAIRMENT OF SECURITY.................................... 81
SECTION 8.18 CONDITIONAL SALES......................................... 81
SECTION 8.19 CHANGES TO PLANS AND SPECIFICATIONS....................... 81
SECTION 8.20 CONSTRUCTION CONTRACT; CONSTRUCTION MANAGEMENT............ 81
ARTICLE IX EVENTS OF DEFAULT................................................ 81
SECTION 9.1 FAILURE TO PAY AND/OR PERFORM THE OBLIGATIONS............. 81
SECTION 9.2 BREACH OF REPRESENTATIONS AND WARRANTIES.................. 82
SECTION 9.3 FAILURE TO COMPLY WITH COVENANTS.......................... 82
SECTION 9.4 FAILURE TO COMPLY WITH BOOKS AND RECORDS.................. 82
SECTION 9.5 OTHER DEFAULTS............................................ 82
SECTION 9.6 DEFAULT UNDER OTHER FINANCING DOCUMENTS................... 82
SECTION 9.7 RECEIVER; BANKRUPTCY...................................... 82
SECTION 9.8 JUDGMENT.................................................. 83
SECTION 9.9 EXECUTION; ATTACHMENT..................................... 83
SECTION 9.10 DEFAULT UNDER OTHER BORROWINGS............................ 83
SECTION 9.11 DEFAULT UNDER ACCOMMODATOR CREDIT FACILITY................ 83
SECTION 9.12 MATERIAL ADVERSE CHANGE................................... 83
SECTION 9.13 IMPAIRMENT OF POSITION.................................... 83
SECTION 9.14 CHANGE IN STATUS OR OWNERSHIP............................. 84
SECTION 9.15 ZONING.................................................... 84
SECTION 9.16 CHANGE IN MANAGEMENT...................................... 84
SECTION 9.17 LICENSES.................................................. 84
SECTION 9.18 DAMAGE TO IMPROVEMENTS.................................... 84
SECTION 9.19 DISCLOSURE OF CONTRACTORS................................. 85
SECTION 9.20 MECHANIC'S LIEN........................................... 85
SECTION 9.21 SURVEY MATTERS............................................ 85
SECTION 9.22 GENERAL CONTRACTOR DEFAULT................................ 85
SECTION 9.23 COMPLIANCE WITH LAW....................................... 85
SECTION 9.24 FAILURE TO COMMENCE OCCUPANCY............................. 85
ARTICLE X RIGHTS AND REMEDIES UPON DEFAULT.................................. 86
SECTION 10.1 DEMAND; ACCELERATION...................................... 86
SECTION 10.2 FURTHER ADVANCES; IMMEDIATE ACCELERATION.................. 86
SECTION 10.3 SPECIFIC RIGHTS WITH REGARD TO COLLATERAL................. 86
SECTION 10.4 PERFORMANCE BY LENDERS.................................... 88
SECTION 10.5 REMEDIES ON DEFAULT....................................... 88
SECTION 10.6 UNIFORM COMMERCIAL CODE AND OTHER REMEDIES................ 89
SECTION 10.7 RECEIVER OR OTHER COURT ORDER............................. 90
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SECTION 10.8 NO CONDITIONS PRECEDENT TO EXERCISE OF REMEDIES........... 90
SECTION 10.9 REMEDIES CUMULATIVE AND CONCURRENT........................ 90
SECTION 10.10 STRICT PERFORMANCE........................................ 90
ARTICLE XI MISCELLANEOUS.................................................... 91
SECTION 11.1 NOTICES................................................... 91
SECTION 11.2 CONSENTS AND APPROVALS.................................... 92
SECTION 11.3 REMEDIES, ETC. CUMULATIVE................................. 92
SECTION 11.4 NO WAIVER OF RIGHTS BY THE LENDERS........................ 92
SECTION 11.5 ENTIRE AGREEMENT.......................................... 93
SECTION 11.6 SURVIVAL OF AGREEMENT; SUCCESSORS AND ASSIGNS............. 93
SECTION 11.7 EXPENSES.................................................. 93
SECTION 11.8 COUNTERPARTS.............................................. 94
SECTION 11.9 GOVERNING LAW............................................. 94
SECTION 11.10 MODIFICATIONS............................................. 94
SECTION 11.11 ILLEGALITY................................................ 94
SECTION 11.12 GENDER, ETC............................................... 94
SECTION 11.13 HEADINGS.................................................. 94
SECTION 11.14 WAIVER OF TRIAL BY JURY................................... 95
SECTION 11.15 NO WARRANTY BY LENDERS.................................... 95
SECTION 11.16 LIABILITY OF THE LENDERS.................................. 95
SECTION 11.17 LICENSE OF TRADENAME...................................... 96
SECTION 11.18 NO PARTNERSHIP............................................ 96
SECTION 11.19 THIRD PARTIES; BENEFIT.................................... 96
SECTION 11.20 CONDITIONS; VERIFICATION.................................. 96
SECTION 11.21 SIGNS; PUBLICITY.......................................... 97
SECTION 11.22 TIME OF ESSENCE........................................... 97
SECTION 11.23 REPLACEMENT NOTE.......................................... 97
FORM OF NOTE ............................................................... 106
FORM OF BORROWING BASE REPORT............................................... 107
CURRENT BORROWING BASE REPORT............................................... 108
PLACES OF BUSINESS.......................................................... 109
FORM OF JOINDER AGREEMENT................................................... 113
SURVEY REQUIREMENTS......................................................... 120
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EXHIBIT 10.5
FOURTH AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT
(MASTER REVOLVER AGREEMENT)
THIS FOURTH AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT (the
"Agreement") is made this 13th of June, 2001, by and among SUNRISE EAST ASSISTED
LIVING LIMITED PARTNERSHIP, a Virginia limited partnership ("SEAL"), SUNRISE
SEAL, L.L.C., a Virginia limited liability company ("Sunrise SEAL"), SUNRISE
HUNTCLIFF ASSISTED LIVING LIMITED PARTNERSHIP, a Georgia limited partnership,
SUNRISE STERLING CANYON ASSISTED LIVING LIMITED PARTNERSHIP, a California
limited partnership, SUNRISE WESTMINSTER ASSISTED LIVING, L.L.C., a Colorado
limited liability company, SUNRISE PARMA ASSISTED LIVING, L.L.C., a Virginia
limited liability company, SUNRISE XXXXXXXX ASSISTED LIVING, L.L.C., a Virginia
limited liability company, SUNRISE EDINA ASSISTED LIVING, L.L.C., a Minnesota
limited liability company, SUNRISE WESTON ASSISTED LIVING LIMITED PARTNERSHIP, a
Massachusetts limited partnership, SUNRISE NORTHSHORE ASSISTED LIVING LIMITED
PARTNERSHIP, a Florida limited partnership, SUNRISE CHESTERFIELD ASSISTED
LIVING, L.L.C., a Missouri limited liability company, SUNRISE CLAREMONT ASSISTED
LIVING, L.P., a California limited partnership, SUNRISE XXXX ASSISTED LIVING,
L.L.C., a Michigan limited liability company, SUNRISE RANCHO CUCAMONGA ASSISTED
LIVING, L.L.C., a Virginia limited liability company, SUNRISE PACIFIC PALISADES
ASSISTED LIVING, L.P., a California limited partnership, SUNRISE WEST HARTFORD
ASSISTED LIVING, L.L.C., a Connecticut limited liability company, SUNRISE TFE
ACQUISITIONS, L.L.C., a Virginia limited liability company, SUNRISE ARLINGTON,
MA ASSISTED LIVING, L.L.C., a Virginia limited liability company, and SUNRISE
MARLBORO ASSISTED LIVING, L.L.C., a New Jersey limited liability company
(collectively, the "Original Borrowers") and SUNRISE BATON ROUGE ASSISTED
LIVING, L.L.C., a Louisiana limited liability company, SUNRISE BLOOMINGDALE
ASSISTED LIVING, L.L.C., an Illinois limited liability company, SUNRISE
FARMINGTON HILLS ASSISTED LIVING, L.L.C., a Michigan limited liability company,
SUNRISE NEW ORLEANS ASSISTED LIVING, L.L.C., a Louisiana limited liability
company, SUNRISE OAKLAND ASSISTED LIVING LIMITED PARTNERSHIP, a California
limited partnership, SUNRISE RIVERSIDE ASSISTED LIVING, L.P., a California
limited partnership and SUNRISE WILTON ASSISTED LIVING, L.L.C., a Connecticut
limited liability company (collectively, the "Additional Borrowers",
collectively with the Original Borrowers and any other Additional Borrowers, as
hereinafter defined, the "Borrowers"), and BANK OF AMERICA, N.A., as
administrative agent (the "Administrative Agent") for itself and for FLEET
NATIONAL BANK, as syndication agent (the "Syndication Agent"), LASALLE BANK
NATIONAL ASSOCIATION AND ALLFIRST BANK, as co-agents (the "Co-Agents") and
certain additional lenders who are or shall be from time to time participating
as lenders hereunder pursuant to the Agency Agreement, as hereinafter defined
(collectively with the Administrative Agent, the "Lenders").
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RECITALS
A. The Original Borrowers obtained from the Lenders a revolving credit
facility in the original maximum principal sum of $400,000,000 (the "Original
Credit Facility"). The Original Credit Facility is evidenced by a Second
Amended, Restated, Consolidated and Increased Master Promissory Note dated July
29, 1999, as amended by the Amendment to Second Amended, Restated and Increased
Master Promissory Note dated March 14, 2000 (collectively, the "Original Note").
B. Advances and readvances under the Credit Facility have been governed by
the terms and conditions of the Third Amended and Restated Financing and
Security Agreement by and among the Original Borrowers and the Administrative
Agent on behalf of the Lenders dated March 14, 2000 (the "Original Financing
Agreement").
C. The Borrowers, the Accommodator Borrowers (as hereinafter defined) and
the Guarantor have applied to the Lenders to reduce the maximum principal sum of
the Credit Facility from $400,000,000 to $265,000,000 and to make available to
the Accommodator Borrowers a revolving credit facility in the maximum principal
sum of $20,000,000 to finance the construction of assisted living facilities
acquired by Qualified Intermediaries (as hereinafter defined) as replacement
properties in tax deferred exchanges using the proceeds from sales of former
Eligible Projects and other Facilities originally owned by Wholly Owned
Subsidiaries of SALI.
D. The Borrowers and the Guarantor (as hereinafter defined) have also
applied to the Lenders to modify certain terms and conditions of the Original
Financing Agreement and of the Third Amended and Restated Guaranty of Payment
Agreement dated March 14, 2000 executed by the Guarantor for the benefit of the
Lenders (the "Original Guaranty") and the Lenders have agreed on the condition,
among others that the Original Financing Agreement and the Original Guaranty be
amended and restated in their entirety.
E. Except as otherwise set forth herein, advances or readvances of the
Loan may be made to the Borrowers for the general business purposes of the
Borrowers, including, but not limited to, financing the construction or purchase
of assisted living facilities or independent living facilities and the repayment
of advances to the Borrowers previously made by SALI or its Affiliates.
F. The Borrowers and the Lenders have agreed to amend the terms of
repayment of the indebtedness evidenced by the Original Note pursuant to that
certain Third Amended, Restated, Consolidated and Increased Master Promissory
Note of even date herewith (the "Note").
G. The Lenders have agreed to make available the Credit Facility upon the
condition, among others, that this Agreement amending and restating the Original
Financing Agreement be executed and delivered to the Administrative Agent.
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AGREEMENTS
NOW, THEREFORE, in consideration of the premises, the mutual agreements
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrowers and the
Administrative Agent, on behalf of the Lenders, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms.
As used herein, the terms defined in the Preamble and Recitals hereto
shall have the respective meanings specified therein, and the following terms
shall have the following meanings:
"Account", individually, and "Accounts", collectively, mean with respect
to any and all Facilities, all presently existing or hereafter acquired or
created accounts, accounts receivable, health care insurance receivables,
contract rights, notes, drafts, instruments, acceptances, chattel paper, leases
and writings evidencing a monetary obligation or a security interest in or a
lease of goods, all rights to payment of a monetary obligation or other
consideration under present or future contracts arising out of or relating to
any and all Facilities (including, without limitation, all rights to receive the
payment of money or other consideration from, or on behalf of, any private pay
patient), or by virtue of property that has been sold, leased, licensed,
assigned or otherwise disposed of, services rendered or to be rendered, loan and
advances made or other considerations given, by or set forth in, or arising out
of, any present or future chattel paper, note, draft, lease, acceptance,
writing, bond, insurance policy, instrument, document or general intangible, and
all extensions and renewals of any thereof, all rights under or arising out of
present or future contracts, agreements which gave rise to any or all of the
foregoing, including all commercial tort claims, other claims or causes of
action now existing or hereafter arising in connection with or under any
agreement or document or by operation of law or otherwise, all collateral
security of any kind (including real property mortgages) Supporting Obligations,
letter-of-credit rights and letters of credit given by any person with respect
to any of the foregoing, including, without limitation, all rights to receive
payment of money or other consideration from, or on behalf of, any private pay
patient, all rights to receive payments under all Resident Agreements, and all
third-party payor contracts (including Medicare and Medicaid to the extent
permitted by Law), including, but not limited to, the Veterans Administration,
Participation Agreements, and any and all depository accounts (other than
resident trust accounts) into which the proceeds of all or any portion of such
accounts may be now or hereafter deposited, and all proceeds (cash and non-cash)
of the foregoing.
"Account Debtor" means any Person who is obligated on a Receivable and
"Account Debtors" mean all Persons who are obligated on the Receivables.
"Act of Bankruptcy" means the filing of a petition in bankruptcy under the
Bankruptcy Code or the other commencement of a proceeding under any other
applicable law concerning insolvency, reorganization or bankruptcy, now or
hereafter in effect.
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"Additional Borrower" shall have the meaning set forth in the definition
of Joinder Agreement.
"Accommodator Agency Agreement" means that certain Agency Agreement of
even date herewith by and among the Administrative Agent and the other
Accommodator Lenders, as the same may be amended, restated or substituted from
time to time.
"Accommodator Borrowers" means the Borrowers and the Additional Borrowers
each as defined under the Accommodator Financing Agreement.
"Accommodator Credit Facility" means the revolving credit facility in the
maximum principal sum of $20,000,000 (or such larger amount as may be agreed to
by the Accommodator Lenders) made available by the Accommodator Lenders to the
Accommodator Borrowers and guaranteed by the Guarantor.
"Accommodator Eligible Project" means an "Eligible Project" as defined in
the Accommodator Financing Agreement.
"Accommodator Facility Committed Amount" shall mean the "Credit Facility
Committed Amount" as defined in the Accommodator Financing Agreement.
"Accommodator Financing Agreement" means the Financing and Security
Agreement of even date herewith between the Accommodator Borrowers and the
Administrative Agent on behalf of the Accommodator Lenders.
"Accommodator Financing Documents" means, collectively, the Accommodator
Notes, the Accommodator Financing Agreement and all other documents evidencing
or securing the Accommodator Credit Facility.
"Accommodator Lenders" means those of the Administrative Agent and the
other Lenders who agree to make available any part of the Accommodator Credit
Facility, pursuant to the terms of the Accommodator Agency Agreement of even
date herewith.
"Accommodator Note" or "Accommodator Notes" means one or more of the
individual promissory notes issued by an Accommodator Borrower payable to the
Administrative Agent in its capacity as agent for the Accommodator Lenders to
evidence the Accommodator Credit Facility.
"Administrative Agent" means Bank of America, N.A., its successors and
assigns.
"Affiliate" means an entity in which SALI or another entity which SALI
controls, holds an ownership interest equal to or greater than twenty-five
percent (25%).
"Agency Agreement" means that certain Third Amended and Restated Agency
Agreement of even date herewith by and among the Administrative Agent and the
other Lenders, as the same may be further amended, restated or substituted from
time to time.
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"Agency Agreements" means collectively, the Accommodator Agency Agreement
and the Agency Agreement.
"Agreement" means this Fourth Amended and Restated Financing and Security
Agreement and all amendments, extensions, restatements, substitutions and
supplements hereto which may from time to time become effective in accordance
with the provisions of Section 11.10 (Modifications).
"Appraised Value" means the appraised value of a Facility as stabilized,
as reviewed by the Administrative Agent.
"Acquisition Project" means a Facility purchased by a Borrower from a
party which is not an Affiliate as a Completed Facility.
"Applicable Interest Rate" means (a) the Eurodollar Rate or (b) the Base
Rate.
"Applicable Margin" means the applicable rate per annum added, as set
forth in Section 2.4(c)(iii) (Applicable Interest Rates), to the Eurodollar Base
Rate.
"Architect" means the architect named in the Architect's Contract, if any,
and its successors and permitted assigns.
"Architect's Contract" means the architect's agreement by and between any
of the Borrowers, as owner, or SDI as agent for any Borrower, and the architect
for the particular Facility, or any contract for architectural services relating
to the development of the Land and/or the construction of the Improvements for
all of the Facilities made by any of the Borrowers and an architect and approved
in writing by the Administrative Agent, as the same may be amended from time to
time with the prior written approval of the Administrative Agent.
"Banking Day" means any day that is not a Saturday, Sunday or banking
holiday in the Commonwealth of Virginia and a day on which banks are open for
the transaction of business in U.S. Dollar deposits in London, England.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C. 101
et seq.
"Base Rate" means greater of (a) the Prime Rate per annum or (b) the
Federal Funds Rate plus fifty (50) basis points per annum.
"Base Rate Loan" means any Loan for which interest is to be computed with
reference to the Base Rate.
"Borrowing Base" means at any time an amount equal to the lesser of (a)
the aggregate dollar amounts of the Deed of Trust Lien Amounts for each of the
Eligible Projects or, in cases where an appraisal is obtained pursuant to
Section 7.28 (Updated Appraisals), the lesser of the Deed of Trust Lien Amount
or 75% of the Appraised Value of such Eligible Project; or (b) (i) for Eligible
Projects constructed or being constructed by a Borrower, the aggregate dollar
amount equal to 80% of the Costs Incurred to Date for each Pool A Project, 60%
of the Costs Incurred to Date for each Pool B Project, 40% of the Costs Incurred
to Date for each Pool C Project and 0%
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of the Costs Incurred to Date for each Pool D Project or (ii) for Acquisition
Projects which were owned by a Borrower for less than twelve (12) months as of
the date the Eligible Project is added to the Borrowing Base the aggregate
dollar amount equal to 80% of the Purchase Price for each Pool A Project, 60% of
the Purchase Price for each Pool B Project, 40% of the Purchase Price for each
Pool C Project and 0% of the Purchase Price for each Pool D Project; provided
that for Acquisition Projects owned by a Borrower longer than twelve (12) months
the Borrowing Base for such an Acquisition Project shall be the Deed of Trust
Lien Amount for any Pool A Project, 75% of the Deed of Trust Lien Amount for any
Pool B Project, 50% of the Deed of Trust Lien Amount for any Pool C Project and
0% of the Deed of Trust Lien Amount for any Pool D Project. Any Accommodator
Eligible Project included in the Borrowing Base will be treated as an Eligible
Project which was constructed by a Borrower.
"Borrowing Base Deficiency" shall have the meaning set forth in Section
2.1 (The Loan).
"Borrowing Base Report" shall have the meaning set forth in Section 2.1
(The Loan).
"Chattel Paper" means a writing or writings which evidence both a monetary
obligation and a security interest in or lease of specific goods; any returned,
rejected or repossessed goods covered by any such writing or writings and all
proceeds (in any form including, without limitation, accounts, contract rights,
documents, chattel paper, instruments and general intangibles) of such returned,
rejected or repossessed goods; and all proceeds (cash and non-cash) of the
foregoing.
"Collateral" means all of the Borrowers' Accounts, Equipment, General
Intangibles, documents, Chattel Paper, Instruments and Inventory, all right,
title and interest of the Borrowers in and to the Operating Agreements and
Management Contracts (including, without limitation, the Management Agreement),
Resident Agreements, physician contracts, Participation Agreements, the Licenses
(whether or not designated with initial capital letters), and all other
management contracts, operating agreements, service agreements and any other
agreements pertaining to the Eligible Projects as that term is defined herein
and in the Uniform Commercial Code as presently adopted and in effect in the
Commonwealth of Virginia, and shall also cover, without limitation, (i) any and
all property specifically included in those respective terms in this Agreement
or in the Financing Documents, (ii) all right, title and interest of the
Borrowers in and to Leases or subleases, rents, royalties, issues, profits,
revenues, earnings, income or other benefits of the Property, or arising from
the use or enjoyment of the Property, or from any lease or other use and
occupancy agreement pertaining to the Property, (iii) all right, title and
interest of the Borrowers under all construction, architectural and design
contracts and plans and specifications, (iv) any and all property and/or
collateral described in any of the Security Documents, including, without
limitation, this Agreement, the Deeds of Trust and the Pledge, Assignment and
Security Agreements, (v) any and all bank accounts or other deposit accounts of
the Borrowers wherever located, and (vi) all proceeds (cash and non-cash,
including, without limitation, insurance proceeds), of the foregoing.
"Collateral Assignments" means collectively the Collateral Assignment of
Licenses, Participation Agreements and Resident Agreements dated entered into
between the Borrowers and the Administrative Agent from time to time in
connection with each Facility Closing and the Collateral Assignment of Operating
Agreements and Management Contracts dated entered into
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among the Borrowers, the Management Company and the Administrative Agent from
time to time in connection with each Facility Closing.
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with any of the Borrowers within the
meaning of Section 414(b) or (c) of the Internal Revenue Code of 1986, as
amended and the regulations promulgated or issued thereunder.
"Completed Facility" means an Eligible Project which has met the
conditions set forth in Section 4.3 (Conditions Under Which an Eligible Project
is a Completed Facility).
"Completion Date" shall mean the date which is eighteen (18) months from
the recordation of the Deed of Trust on such Facility or upon the earlier
issuance of an occupancy permit.
"Construction Contract" or "Construction Contracts" shall mean
individually or collectively the general contractor's agreements by and between
any of the Borrowers as owner, or SDI as agent for any Borrower, and a general
contractor for the development of any of the Land and/or the construction of any
of the Improvements and approved in writing by the Administrative Agent, as the
same may be amended from time to time pursuant to Section 8.19 (Changes to Plans
and Specifications), or otherwise with the prior written approval of the
Administrative Agent.
"Convertible Debt" means the $150,000,000 convertible subordinated notes
of SALI due June 15, 2002.
"Core Property" means a Facility which is any one of several design
prototypes developed by SALI and its Wholly Owned Subsidiaries (other than
Karrington Operating Company, Inc.) during the years of operation under the
"Sunrise" tradename, which Facilities are located in a Metropolitan Area in
which SALI or its Affiliates own or manage at least two (2) such Facilities and
which has also not been designated as a Non-Core Property.
"Costs Incurred to Date" means as to an Eligible Project actual costs
expended by or on behalf of any of the Borrowers under a Total Development
Budget and reported to the Administrative Agent through the requisition process
as verified by the Administrative Agent pursuant to the provisions of this
Agreement; provided, however, no cost overruns not otherwise covered by a
contingency category in the Total Development Budget will be included in the
definition of Costs Incurred to Date without the Administrative Agent's prior
written consent.
"Credit Facility" means the revolving line of credit in a maximum
principal sum at any one time outstanding equal to the Credit Facility Committed
Amount and the Letter of Credit Facility.
"Credit Facility Closing" shall mean the date on which the documents
evidencing and securing the Credit Facility as modified in connection herewith,
are executed and delivered to the Administrative Agent.
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"Credit Facility Committed Amount" means $265,000,000 or such larger
amount which the Lenders may from time to time severally commit to lend to the
Borrowers pursuant to the terms of Agency Agreement and the Note.
"Debt Service" means for any period of determination an amount equal to
either (i) if the Eligible Project is not an Acquisition Project, the lesser of
(a) the Deed of Trust Lien amount or (b) 80% of an Eligible Project's Costs
Incurred to Date (if the Facility was constructed or is being constructed by a
Borrower or its Affiliate) or (ii) its Deed of Trust Lien Amount if the Eligible
Project is an Acquisition Project, in either case multiplied by a mortgage
constant of 10%.
"Deed of Trust" or "Deeds of Trust" means, individually or collectively, a
Deed of Trust, Assignment and Security Agreement, a Mortgage, Assignment and
Security Agreement, an Indemnity Deed of Trust, Assignment and Security
Agreement or an Indemnity Mortgage, Assignment and Security Agreement or
comparable security documents covering Property and securing the Obligations as
the same may be from time to time amended, modified, restated or substituted.
"Deed of Trust Lien Amount" means the dollar amount of the first priority
Lien created by a Deed of Trust on any Borrower's fee simple interest in an
Eligible Project or on any Borrower's leasehold interest in a Qualified Ground
Lease, the lien amount being the lesser of (i) 75% of such Eligible Project's
Appraised Value, or (ii) (a) for any Eligible Project which is not a Completed
Facility or which was constructed by a Borrower or an Affiliate and has been
open less than twelve (12) months, 80% of such Eligible Project's Total
Development Budget or (b) for any Eligible Project which is an Acquisition
Project, (i) if owned for less than twelve (12) months the lesser of (aa) 80% of
its Purchase Price or (bb) 75% of its appraised value or (ii) 75% of its
appraised value if owned for more than twelve (12) months or (c) for any
Acquisition Project or for a Completed Facility open more than twelve (12)
months such lesser dollar amount as the Borrowers elect to designate with the
consent of the Lenders holding 66.67% of the pro rata shares of the Credit
Facility Committed Amount. Anything to the contrary herein notwithstanding, if a
Borrower certifies to the Administrative Agent's satisfaction that there is a
surplus in a Total Development Budget of an Eligible Project under construction
and the Borrowers advise that there will be no further requests for verification
of additional Costs Incurred to Date for such Eligible Project, the Borrowers
may elect a one-time reduction of the Deed of Trust Lien Amount for such
Eligible Project. Thereafter, such adjusted Deed of Trust Lien Amount will be
used in the calculations of the Borrowing Base, Debt Service and other purposes
provided in this Agreement.
"Default" means, with respect to each Financing Document, a default which,
with the giving of notice or the passage of time, or both, would constitute an
Event of Default.
"Development Fee" shall have the meaning set forth in Section 2.1 (The
Loan).
"EBITDA" means earnings before interest, federal and state income taxes,
depreciation, amortization, and any other non-cash and one-time, non-recurring
charges consented to by the Administrative Agent in its sole discretion
(provided that the consent of Lenders holding at least 66.67% of the pro rata
shares of the Loan shall be required for adding back charges in excess of
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$5,000,000 in the aggregate in any one rolling four (4) quarter period, but
after an imputed Replacement Reserve and a Management Fee equal to the greater
of 5% of gross revenues or the actual Management Fee paid to the Management
Company. Earnings shall include the gain from any sale of an open, operating
Facility owned by SALI or an Affiliate of SALI up to but not exceeding an
aggregate of twenty-five (25) of such sales in any twelve (12) month period of
which not more than twenty (20) may be Core Properties; provided, however that
other one-time non-recurring gains will not be included in EBITDA. Gains from
sales of Non-Core Properties shall not be included in EBITDA. Gains from sales
of Core Properties shall be included in EBITDA only if they are recognized
ratably over the longer of (i) four (4) fiscal quarters or (ii) such longer
period as shall be required by GAAP, provided, however, if GAAP requires that
such gain be recognized in fewer than four (4) quarters, for purposes of this
definition of EBITDA, the gain must be calculated ratably over four (4)
quarters. In the event that any advances are made to or any investments are made
in any entity or entities whose financial statements are not consolidated with
those of the Guarantor where said advance or investment is in excess of the
entity's original project capital funding agreement among the entity's owners,
relates to the Guarantor's or its Wholly Owned Subsidiary's obligation to fund
all or a portion of the entity's debt service payments, and/or
(i) where said obligation to advance or invest is made to
cause the entity to remain in compliance with its financial covenants;
(ii) where said obligation to invest or advance is made in
order to cure an event of non-compliance or an event of default on the
part of the entity (including the Guarantor's or its Wholly Owned
Subsidiary's obligations relating thereto); or
(iii) where said obligation to advance is to fund an operating
loss of a Facility in excess of the pro forma budget for such Facility.
then any such amounts, net of such advances or investments which have been
returned, in excess of $15,000,000 for the immediately preceding four (4)
quarters shall be subtracted from EBITDA.
"EBITDAR" means EBITDA plus Rent Expense.
"Eligible Borrower" means Wholly Owned Subsidiary, including any former
Accommodator Borrower of which 100% of the ownership interests have been
purchased by SALI or a Wholly Owned Subsidiary and is or becomes a party to this
Agreement as the owner of or tenant under a Qualified Ground Lease for an
Eligible Project.
"Eligible Project" means any location in the United States where (a) an
Eligible Borrower proposes to construct or has constructed a Facility (unless
the Lenders also authorize inclusion of one or more Facilities acquired by a
Borrower); (b) the Administrative Agent has received and reviewed an as-built
and as-stabilized appraisal of the Facility and a Phase I Environmental
Assessment of the Property and found them acceptable; (c) using the services of
a consulting engineer selected by the Administrative Agent, the Administrative
Agent has received, reviewed and found to be acceptable the Plans and
Specifications and the Total Development Budget for
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the proposed Facility; (d) the Administrative Agent has received a pro forma
operating budget acceptable to the Administrative Agent; (e) a first lien Deed
of Trust has been recorded on the Property; (f) other documentation necessary to
perfect a lien on the Collateral in favor of the Lenders has been executed and
delivered to the Administrative Agent and recorded, if required; (g) a
commitment for a mortgagee title insurance policy has been issued for the
benefit of the Lenders and (h) construction has commenced or will commence
within sixty (60) days of the recordation of the applicable Deed of Trust. Each
acceptable pro forma operating budget provided pursuant to (d) for an Eligible
Project to be constructed or under construction must demonstrate that the
Facility can satisfy the criteria for a Pool A Project.
"Enforcement Costs" means all expenses, charges, costs and fees whatsoever
(including, without limitation, attorney's fees and expenses) of any nature
whatsoever paid or incurred by or on behalf of the Lenders in connection with
(a) the collection or enforcement of any or all of the Obligations, (b) the
preparation of or changes to this Agreement, the Note, the Security Documents
and/or any of the other Financing Documents, (c) the creation, perfection,
collection, maintenance, preservation, defense, protection, realization upon,
disposition, sale or enforcement of all or any part of the Collateral,
including, without limitation, those sums paid or advanced, and costs and
expenses, more specifically described in Section 7.11 (Defense of Title and
Further Assurance), Section 7.25 (Fees and Expenses; Indemnity), Section 10.4
(Performance by Lenders) and Xxxxxxx 00.0 (Xxxxxxxx) , (x) the monitoring,
administration, processing, servicing of any or all of the Obligations and/or
the Collateral (e) post-judgment enforcement or collection actions, and (f)
bankruptcy proceedings of any Borrower or the Guarantor.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Equipment" shall mean all equipment, machinery, furniture and fixtures
and supplies of every nature, presently existing or hereafter acquired or
created and wherever located, together with all accessions, additions, fittings,
accessories, special tools, and improvements thereto and substitutions therefor
and all parts and equipment which may be attached to or which are necessary for
the operation and use of such personal property, whether or not the same shall
be deemed to be affixed to real property, and all rights under or arising out of
present or future contracts relating to the foregoing and all proceeds (cash and
non-cash) of the foregoing.
"Eurodollar Base Rate" means for any Interest Period with respect to any
Eurodollar Loan, the per annum interest rate rounded upward, if necessary, to
the nearest 1/100 of 1%, appearing on Telerate Page 3750 (or any successor page)
as the London interbank offered rate for deposits in Dollars at or about 11:00
a.m. (London time) on the date that is two (2) Eurodollar Business Days prior to
the first day of such Interest Period for a term comparable to such Interest
Period. If for any reason such rate is not available, the term "Eurodollar Base
Rate" shall mean, for any Eurodollar Loan for any Interest Period therefor, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two (2) Eurodollar
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one rate is
specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest
1/100 of 1%).
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"Eurodollar Business Day" means any Business Day on which dealings in
United States Dollar deposits are carried out on the London interbank market and
on which commercial banks are open for domestic and international business
(including dealings in Dollar deposits) in London, England.
"Eurodollar Loan" means any advance under the Loan for which interest is
to be computed with reference to the Eurodollar Rate.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Loan, (a) the Applicable Margin, plus (b) the per annum rate of
interest calculated pursuant to the following formula:
Eurodollar Base Rate
--------------------
1.00 - Reserve Percentage
"Event(s) of Default" shall mean the occurrence of any one or more of the
events specified in ARTICLE IX (EVENTS OF DEFAULT) or in the Deeds of Trust and
the continuance of such event beyond the applicable grace and/or cure periods
therefor, if any, set forth in ARTICLE IX (EVENTS OF DEFAULT).
"Expense Payments" shall have the meaning set forth in Section 10.4
(Performance by Lenders).
"Facility" and "Facilities" mean, individually or collectively, an
assisted living facility or independent living facility owned by one of the
Borrowers.
"Facility Closing" shall have the meaning set forth in Section 4.1
(Conditions Precedent to Credit Facility Closing).
"Federal Funds Rate" means for any day of determination, the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day) by the Federal Reserve Bank for the
next preceding Business Day) by the Federal Reserve Bank of Richmond or, if such
rate is not so published for any day that is a Business Day, the average of
quotations for such day on such transactions received by the Administrative
Agent from three (3) federal funds brokers of recognized standing selected by
the Administrative Agent.
"Financing Documents" means at any time collectively and includes this
Agreement, the Note, the Deeds of Trust, the Guaranty Agreement, the Performance
Guaranty, any Joinder Agreements, the Management Fee Subordination Agreements,
the Security Documents, the Interest Rate Protection Documents, the Letter of
Credit Documents and any other instrument, agreement or document previously,
simultaneously or hereafter executed and delivered by any of the Borrowers
and/or any other Person, singly or jointly with another Person or Persons,
evidencing, securing, guarantying or in connection with any of the Obligations
and/or in connection with this Agreement, the Note and/or any of the Security
Documents, as the same may from time to time be amended, restated, supplemented
or otherwise modified.
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"Fixed Charge Coverage Ratio" means starting after the first resident
takes occupancy in any given Facility (regardless of whether a Borrower then
owned the Facility or when the Facility was added to the Borrowing Base), such
Facility shall maintain a ratio of EBITDA for the Facility to Debt Service for a
Facility with 77 units or fewer, equal to not less than 0.6 to 1.0 as of the end
of the third (3rd) full fiscal quarter, a ratio of not less than 1.0 to 1.0 as
of the end of the fourth (4th) full fiscal quarter and a ratio of not less than
1.25 to 1.0 as of the end of each of the fifth (5th) full fiscal quarter and
thereafter and for a Facility with 78 units or more, a ratio equal to not less
than 0.6 to 1.0 as of the end of the third (3rd) full fiscal quarter, a ratio
equal to not less than 1.0 to 1.0 as of the end of the fourth (4th) full fiscal
quarter, a ratio of note less than 1.15 to 1.0 as of the end of the fifth (5th)
full fiscal quarter and a ratio of not less than 1.25 to 1.0 as of the end of
the sixth (6th) full fiscal quarter and thereafter, measured thereafter as of
the end of each full fiscal quarter on a rolling four-quarter basis. For
Acquisition Projects, EBITDA will be calculated on an actual basis using such
Facility's most recent four (4) fiscal quarter operating results.
"Force Majeure" shall mean events occasioned by strikes, lock-outs, labor
unrest war or civil disturbance, materials shortages, unavailability of
materials, fire, natural disaster or acts of God which cause a delay in any
Borrower's performance of an obligation; provided, however, that such Borrower
must give Notice to the Administrative Agent within ten (10) days after such
Borrower knew of or should have known of the occurrence of an event which it
believes to constitute an event of Force Majeure.
"Funded Debt" of the Guarantor, at any time means the sum at such time of
(a) indebtedness for borrowed money (including specifically but without limiting
the generality of the foregoing, the Convertible Debt), (b) any obligations in
respect of letters of credit, banker's or other acceptances or similar
obligations issued or created for the account of the Guarantor, (c) lease
obligations which have been or should be, in accordance with GAAP, capitalized
on the books of the Guarantor, (d) all liabilities secured by any property owned
by the Guarantor to the extent attached to the Guarantor's interest in such
property, even though the Guarantor has not assumed or become liable for the
payment thereof, and in the case of the Guarantor (e) (i) amounts payable by the
Guarantor under any terminated or defaulted interest rate protection products or
which remain outstanding or (ii) take-out commitments (excluding a refinancing
or a commitment of a third party) or purchase contracts including the deferred
purchase price of property or services in each instance if the Guarantor does
not control the incurring obligation, (f) (i) the amount of any guaranty of
indebtedness for borrowed money or (ii) other debt owed by Persons other than
the Guarantor which is in default and for which the creditor is pursuing payment
by the Guarantor, (g) any obligation of the Guarantor or a Commonly Controlled
Entity to a Multiemployer Plan (h) any synthetic lease obligations, (i) any
other lease expenses for rented real property will be accounted for as debt
based on eight (8) times annualized lease payments (provided, however, that so
long as the Guarantor or any Affiliate shall continue to own a 50% interest in
the Facility located in Severna Park, Maryland known as "Sunrise of Severna
Park", lease expenses for Sunrise of Severna Park will be accounted for as debt
based on four times the annualized lease payments rather than eight times the
annualized lease payments and (j) other amounts considered to be debt by all of
the following: the Administrative Agent, the Syndication Agent and the
Documentation Agent in a dollar amount to be mutually agreed upon by the
Administrative Agent and the Guarantor; but excluding trade and other accounts
payable in the ordinary course of business in accordance with customary trade
terms and which are not
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overdue (as determined in accordance with customary trade practices) or which
are being disputed in good faith by the Guarantor and for which adequate
reserves are being provided on the books of the Guarantor in accordance with
GAAP, all of the above whether recourse or non-recourse, secured or unsecured.
For purposes of the definition of Material Adverse Change in this Agreement, the
term "Guarantor" as used in this definition of Funded Debt shall be deemed to
read "Person".
"GAAP" shall mean generally accepted accounting principles in effect in
the United States of America from time to time.
"General Contractor" or "General Contractors" shall mean individually or
collectively the general contractors named in the Construction Contracts and its
or their respective successors and permitted assigns.
"General Intangibles" shall mean any and all general intangibles of every
nature, whether presently existing or hereafter acquired or created arising out
of or relating to any or all of the Facilities, including without limitation all
books, correspondence, credit files, records, computer programs, computer tapes,
cards and other papers and documents in the possession or control of the
Borrowers claims (including without limitation all claims for income tax and
other refunds), choses in action, judgments, patents, patent licenses,
trademarks (excluding the "Sunrise", "Dignity Home Care", "Respect Home Care" or
"Karrington" trademark or tradename), trademark licenses (excluding any license
to any of the Borrowers for the "Sunrise," "Reminiscence", "Dignity Home Care",
"Respect Home Care" or "Karrington" trademarks or tradenames), licensing
agreements, rights in intellectual property, goodwill, as that term is defined
in accordance with GAAP (including all goodwill of the Borrowers' business
symbolized by, and associated with, any and all trademarks, trademark licenses,
copyrights and/or service marks), royalty payments, contractual rights, rights
as lessee under any lease of real or personal property, literary rights,
copyrights, service names, service marks, logos, trade secrets, all amounts
received as an award in or settlement of a suit in damages, deposit accounts,
interests in joint ventures or general or limited partnerships, all Licenses,
construction permits, Operating Agreements and Management Contracts,
Participation Agreements and Resident Agreements, and all proceeds (cash and
non-cash) of the foregoing.
"Governmental Authority or Authorities" shall mean any nation or
government, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantor" means Sunrise Assisted Living, Inc., a Delaware corporation.
"Guaranty Agreement" means the Fourth Amended and Restated Master Guaranty
of Payment Agreement by SALI of even date herewith.
"Hazardous Materials" means any flammable explosives, radioactive
materials, hazardous waste, toxic substances or related materials, including,
without limitation, asbestos, polychlorinated biphenyls, urea-formaldehyde,
radon, and any substance defined as or included in the definition of (a) any
"hazardous waste" as defined by the Resource Conservation Recovery Act of 1976,
as amended from time to time, and regulations promulgated thereunder; (b) any
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"hazardous substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time, and
regulations promulgated thereunder; (c) any "toxic substance" as defined by the
Toxic Substances Control Act, as amended from time to time, and regulations
promulgated thereunder; (d) any hazardous or infectious medical waste including,
but not limited to, cultures and stocks of infectious agents and associated
biologicals, pathological wastes, human and animal blood specimens and blood
products, anatomical materials, blood, blood-soiled articles, contaminated
materials, microbiological laboratory wastes, sharps, chemical wastes,
infectious wastes, chemotherapeutic wastes, and radioactive wastes; (e) any
substance, the presence of which on any property now or hereafter owned,
operated or acquired by any of the Borrowers is prohibited or regulated under
any applicable Federal or state laws or regulations; and (f) any other
substance, pollutant, contaminant, chemical, or industrial toxic hazardous
substance or waste, including without limitation hazardous materials, which by
law is prohibited or is otherwise regulated as a hazardous material.
"Hazardous Materials Contamination" shall mean the contamination by,
release or spill of (whether presently existing or occurring after the date of
this Agreement), Hazardous Materials of or on any property owned, operated or
controlled by any of the Borrowers, or for which any of the Borrowers, has
responsibility, including, without limitation, improvements, facilities, soil,
ground water, air or other elements on, or of, any property now or hereafter
owned, operated or acquired by any of the Borrowers, and any other contamination
by Hazardous Materials for which any of the Borrowers is, or is claimed to be,
responsible.
"Home Healthcare Provider" means any Affiliate of SALI or of the Sunrise
Foundation which is licensed as a home health care provider in any state in
which assistance with tasks of daily living provided to a person must be
provided by a home healthcare provider licensed in such state.
"Hydric Soils" shall mean any soil category upon which building would be
prohibited or restricted under applicable governmental requirements (including,
without limitation, those imposed by the U.S. Army Corps of Engineers based upon
its guidelines as to, among other things, soil, vegetation and effect on the
ecosystem).
"Improvements" shall have the meaning given to that term in each Deed of
Trust.
"Inspecting Engineer" shall mean such person or firm as the Administrative
Agent may from time to time appoint or designate for purposes related to the
inspection of the progress of the development of any of the Land and the
construction of any of the Improvements, conformity of construction with the
applicable Plans and Specifications, and for such other purposes as the
Administrative Agent may from time to time deem appropriate or as may be
required by the terms of this Agreement.
"Instruments" means any and all notes, notes receivable, drafts,
acceptances, and similar instruments or documents, both now owned or hereafter
created or acquired arising out of or relating to the Facility (or any part
thereof).
"Interest Expense" shall have the meaning set forth in the Guaranty.
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"Interest Period" means as to any Eurodollar Loan, the period commencing
on and including the date such Eurodollar Loan is made (or on the effective date
of the Borrowers' election to convert any Base Rate Loan to a Eurodollar Loan in
accordance with the provisions of this Agreement) and ending on and including
the day which is seven (7) days, one (1) month, two (2) months or three (3)
months thereafter, as selected by the Borrowers in accordance with the
provisions of this Agreement, and thereafter, each period commencing on the last
day of the then preceding Interest Period for such Eurodollar Loan and ending on
and including the day which is seven (7) days, one (1) month, two (2) months or
three (3) months thereafter, as selected by the Borrowers in accordance with the
provisions of this Agreement; provided, however that:
(a) the first day of any Interest Period shall be a
Eurodollar Business Day;
(b) if any Interest Period would end on a day that shall
not be a Eurodollar Business Day, such Interest Period shall be extended to the
next succeeding Eurodollar Business Day unless such next succeeding Eurodollar
Business Day would fall in the next calendar month, in which case, such Interest
Period shall end on the next preceding Eurodollar Business Day; and
(c) no Interest Period shall extend beyond the Revolving
Credit Expiration Date.
"Interest Rate Election Notice" has the meaning described in Section
2.4(d)(v) (Selection of Interest Rates).
"Interest Rate Protection" means any or all of the interest rate
protection agreements that have been or may from time to time be entered into
between the Borrowers and the Administrative Agent or another Lender in
connection with the Credit Facility.
"Interest Rate Protection Documents" means the documents evidencing and
governing the Interest Rate Protection at any time and from time to time.
"Interest Reserve" shall have the meaning set forth in Section 2.1 (i)
(The Loan).
"Inventory" means any and all inventory of the Borrowers and all right,
title and interest of the Borrowers in, and to, all of its now owned and
hereafter acquired goods, merchandise and other personal property furnished
under any contract of service or intended for sale or lease arising out of or
relating to any and all Facilities, including, without limitation, all supplies
of any kind, nature or description which are used or consumed in the Borrowers'
business and all documents of title or documents representing the same and all
proceeds (cash and non-cash) and products of the foregoing.
"Joinder Agreement" means a Joinder Agreement in the form attached hereto
as EXHIBIT E executed by an Additional Borrower to acknowledge its joinder as a
party to this Agreement and the Note as a co-borrower jointly and severally
liable for the Obligations pursuant to and in connection with its delivery of a
Deed of Trust and other Security Documents in connection with a new Eligible
Project.
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"Klaassens" means Xxxx X. Xxxxxxxx and Xxxxxx X. Xxxxxxxx.
"Land" shall mean the land described in the applicable Deed of Trust.
"Laws" means all ordinances, statutes, rules, regulations, orders,
injunctions, writs or decrees of any Governmental Authority or any court or
similar entity established by any thereof.
"Lease" has the meaning set forth in a Deed of Trust.
"Lender Tax" means any present or future tax, levy, cost or charge of any
nature imposed by any Governmental Authority, excluding taxes on or measured by
the net income of any Lender imposed by any jurisdiction in which the principal
or relevant lending office of such Lender is located.
"Letter of Credit" and "Letters of Credit" shall have the meanings
described in Section 2.7 (The Letter of Credit Facility).
"Letter of Credit Agreement" means the collective reference to each letter
of credit application and agreement substantially in the form of the
Administrative Agent's or other applicable Lender's then standard form of
application for letter of credit or such other form as may be approved by the
Lender, executed and delivered by the Borrower in connection with the issuance
of a Letter of Credit, as the same may from time to time be amended, restated,
supplemented or modified and "Letter of Credit Agreements" means all of the
foregoing in effect at any time and from time to time.
"Letter of Credit Documents" means any and all drafts under or purporting
to be under a Letter of Credit, any Letter of Credit Agreement, and any other
instrument, document or agreement executed and/or delivered by the Borrower or
any other Person under, pursuant to or in connection with a Letter of Credit or
any Letter of Credit Agreement.
"Letter of Credit Facility" means the facility established by the Lenders
pursuant to Section 2.7 (The Letter of Credit Facility).
"Letter of Credit Fee" and "Letter of Credit Fees" have the meanings
described in Section 2.7 (The Letter of Credit Facility).
"Letter of Credit Obligations" means all Obligations of the Borrower with
respect to the Letters of Credit and the Letter of Credit Agreements.
"Letter of Credit Right" means a right to payment or performance under a
letter of credit, whether or not the beneficiary has demanded or is at the time
entitled to demand payment or performance.
"Licenses" means any and all licenses, certificates of need, operating
permits, franchises, and other licenses, authorizations, certifications,
permits, or approvals, other than construction permits, issued by, or on behalf
of, any Governmental Authority now existing or at any time hereafter issued,
with respect to the acquisition, construction, renovation, expansion, leasing,
management, ownership and/or operation of any and all Facilities, accreditation
of any Facility,
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and/or the participation or eligibility for participation in any third party
payment or reimbursement programs to the extent any of the Borrowers are
participating in such programs (but specifically excluding any and all
Participation Agreements to the extent required by law), any and all operating
licenses issued by any state Governmental Authority, any and all pharmaceutical
licenses and other licenses related to the purchase, dispensing, storage,
prescription or use of drugs, medications, and other "controlled substances,"
any and all licenses relating to the operation of food or beverage facilities or
amenities, if any, and any and all certifications and eligibility for
participation in Medicare, Medicaid, Blue Cross and/or Blue Shield, or any of
the Managed Care Plans, private insurer, employee assistance programs or other
third party payment or reimbursement programs as the same may from time to time
be amended, renewed, restated, reissued, restricted, supplemented or otherwise
modified.
"Lien" means any mortgage, deed of trust, deed to secure debt, grant,
pledge, security interest, assignment, encumbrance, judgment, lien or charge of
any kind, whether perfected or unperfected, avoidable or unavoidable, consensual
or non-consensual, including, without limitation, any conditional sale or other
title retention agreement, filed or unfiled tax liens, any lease in the nature
thereof, and the filing of or agreement to give any financing statement under
the Uniform Commercial Code of any jurisdiction.
"Liquid Assets" means cash, cash equivalents and readily marketable
securities for purposes of any covenant under the Financing Documents, Liquid
Assets held by the Borrowers to satisfy the requirements of Section 8.14
(Distribution to Partners or Members) shall be included.
"Liquidation Costs" shall have the meaning set forth in Section 10.6
(Uniform Commercial Code and Other Remedies).
"Loan" shall have the meaning set forth in Section 2.1 (The Loan).
"Major Subcontractor" means a subcontractor under a subcontract in an
amount of $100,000 or more pertaining to any Facility.
"Managed Care Plans" means any health maintenance organization, preferred
provider organization, individual practice association, competitive medical
plan, or similar arrangement, entity, organization, or Person.
"Management Agreement" means any and all Management Agreements entered
into or to be entered into by and between any of the Borrowers and the
Management Company relating to the management of the Facilities, as the same may
from time to time be amended, restated, supplemented or otherwise modified.
"Management Company" means XXXXX, its successors and assigns and any other
Person which may become the manager of the Facilities.
"Management Fees" shall have the meaning set forth in Section 7.19
(Management).
"Management Fee Subordination Agreement" shall have the meaning set forth
in Section 7.19 (Management).
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"Material Adverse Change" means a significant adverse change in a Person's
financial position or capacity including but not limited to significant adverse
changes in (a) liquidity, (b) gross revenues, (c) total expenses, (d) such
Person's net worth, or (e) ability to meet payment obligations under such
Person's Funded Debt, the Obligations and/or contingent liabilities.
"Material Lease" has the meaning set forth in a Deed of Trust.
"Metropolitan Area" means a city and/or the counties or parishes
surrounding such city which are generally accepted as being suburbs of such city
as determined in the reasonable judgment of the Administrative Agent.
"Minimum Occupancy Requirement" means for a Facility with 77 units or
fewer, a minimum Resident Occupancy of (A) 50% by the ninth (9th) Operating
Month, (B) 70% by the twelfth (12th) Operating Month and (C) 85% by the
fifteenth (15th) Operating Month and thereafter and means for a Facility with 78
units or more, a minimum Resident Occupancy of (A) 45% by the ninth (9th)
Operating Month, (B) 65% by the twelfth (12th) Operating Month, (C) 80% by the
fifteenth (15th) Operating Month and (D) 85% by the eighteenth (18th) Operating
Month and thereafter.
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Operating Income" means total operating revenue less total operating
expenses (excluding interest, federal and state income taxes, depreciation and
amortization) but including a management fee to the Management Company of the
higher of five percent (5%) of gross revenues or the actual management fee for
the period in question as shown in financial information provided by the
Borrowers.
"Non-Core Property" means a Facility which is not a Core Property and
which is listed as a Non-Core Property by the Borrowers on a written list
submitted to and approved by the Administrative Agent. Any Facility must appear
on such list in advance of its sale to be considered on Non-Core Property for
purposes of this Agreement.
"Note" shall have the meaning set forth in Section 2.1 (The Loan).
"Notice" shall mean a written communication delivered as specified in
Section 11.1 (Notices).
"Obligations" means all present and future debts, obligations, and
liabilities, whether now existing or contemplated or hereafter arising, of the
Borrowers to the Administrative Agent or any Lender under, arising pursuant to,
in connection with and/or on account of the provisions of this Agreement, the
Note, each Joinder Agreement, the Deeds of Trust, each Security Document, and
any of the other Financing Documents, including, without limitation, the
principal of, and interest on, the Note, late charges, Enforcement Costs, and
other prepayment penalties (if any), Letter of Credit Fees or fees charged with
respect to any guaranty of any Letter of Credit, any indebtedness to the
Administrative Agent or other Lender or Lenders who make available the Interest
Rate Protection arising out of such Interest Rate Protection pursuant to the
Interest Rate Protection Documents, any obligations of the Accommodator
Borrowers under the
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Accommodator Credit Facility and also means all other present and future
indebtedness, liabilities and obligations, whether now existing or contemplated
or hereafter arising, of the Borrowers to the Lenders in connection with the
Credit Facility of any nature whatsoever regardless of whether such debts,
obligations and liabilities be direct, indirect, primary, secondary, joint,
several, joint and several, fixed or contingent, and any and all renewals,
extensions and rearrangements of any such debts, obligations and liabilities.
"Operating Agreements and Management Contracts" means any and all
contracts and agreements previously, now or at any time hereafter at any time
entered into by any of the Borrowers with respect to the acquisition,
construction or renovation of a significant nature, expansion, ownership,
operation, maintenance, use or management of any or all of the Facilities or
otherwise concerning the operations and business of any or all of the
Facilities, including, without limitation, any and all service and maintenance
contracts, any employment contracts, any and all management agreements, any and
all consulting agreements, laboratory servicing agreements, pharmaceutical
contracts, physician, other clinician or other professional services provider
contracts, resident agreements, food and beverage service contracts, and other
contracts for the operation and maintenance of, or provision of services to, a
Facility, as the same may from time to time be amended, restated, supplemented,
renewed, or modified.
"Operating Month" means a full calendar month after the first resident
takes occupancy in a Facility (regardless of whether the Facility was owned by a
Borrower or included in the Borrowing Base at the time of such occurrence).
"Operating Reserve" shall mean a reserve in an amount approved by the
Administrative Agent included in each Total Development Budget to cover the
costs of leasing up a Facility and initial operating deficits.
"Outstanding Letter of Credit Obligations" has the meaning described in
Section 2.7 (The Letter of Credit Facility).
"Participation Agreements" means any and all third party payor
participation or reimbursement agreements now or at any time hereafter existing
for the benefit of any of the Borrowers relating to rights to payment or
reimbursement from, and claims against, private insurers, Managed Care Plans,
material employee assistance programs, Blue Cross and/or Blue Shield, federal,
state and local Governmental Authorities, including without limitation, Medicare
and Medicaid, and other third party payors, as the same may from time to time be
amended, restated, extended, supplemented or modified.
"Performance Guaranty" means, individually or collectively, any Guaranty
of Performance which has been or may in the future be executed and delivered by
the Guarantor in connection with any Facility Closing.
"Permitted Liens" means: (a) Liens for Taxes which are not delinquent or
which the Administrative Agent has determined in the exercise of its sole and
absolute discretion (i) are being diligently contested in good faith and by
appropriate proceedings, (ii) the applicable Borrower has the financial ability
to pay, with all penalties and interest, at all times without materially and
adversely affecting such Borrower, and (iii) are not, and will not be with
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appropriate filing, the giving of notice and/or the passage of time, entitled to
priority over any Lien of the Lenders; (b) deposits or pledges to secure
obligations under workers' compensation, social security or similar laws, or
under unemployment insurance in the ordinary course of business; (c) Liens in
favor of the Lenders pursuant to the Credit Facility or the Interest Rate
Protection; (d) judgment Liens to the extent the entry of such judgment does not
constitute an Event of Default under the terms of this Agreement or result in
the sale of, or levy of execution on, any of the Collateral; (e) Liens approved
by the Administrative Agent which have been created to secure permitted
subordinated debt on a junior lien basis; and (f) such other Liens, if any, as
are identified as Permitted Encumbrances as defined in the Deed of Trust.
"Person" shall mean and include an individual, a corporation, a
partnership, a limited liability company, a joint venture, a trust, an
unincorporated association, any Governmental Authority or any other entity.
"Plans and Specifications" shall mean any and all plans and specifications
prepared in connection with the development of the Land and/or the construction
of the Improvements for any Eligible Project and which are approved in writing
by the Administrative Agent, including but not limited to, the plans and
specifications prepared by the Architect, a copy of which have been initialed by
the applicable Borrower, or SDI as agent for such Borrower, and the
Administrative Agent for identification and delivered to the Administrative
Agent.
"Pledge, Assignment and Security Agreement" means the various Pledge
Assignment and Security Agreements executed in connection with a Facility
Closing by the partners or members of each of the Borrowers in favor of the
Administrative Agent, pursuant to which such owners of the Borrower have pledged
and assigned all of their respective interests in such Borrower to the Lenders
as additional security for the Credit Facility.
"Pool A Project" means any Eligible Project for which, when the Borrowing
Base is computed at the end of a reporting period, (a) either (i) construction
has been on-going for not more than eighteen (18) months or (ii) it is a
Completed Facility not later than eighteen (18) months after the date on which
the applicable Deed of Trust was executed; or (b) after it is a Completed
Facility or for any Acquisition Project, meets the Minimum Occupancy Requirement
and Fixed Charge Coverage Ratio Requirement.
"Pool B Project" means any Eligible Project which, when the Borrowing Base
is computed at the end of any reporting period, does not meet the definition of
a Pool A Project.
"Pool C Project" means any Eligible Project which, when the Borrowing Base
is computed at the end of two or more consecutive reporting periods, does not
meet the definition of a Pool A Project.
"Pool D Project" means any Facility which, when the Borrowing Base is
computed at the end of any fiscal quarter is not maintaining a minimum Fixed
Charge Coverage ratio of .75 to 1.0 and which has been operating for four (4)
full fiscal quarters or longer.
"Post Default Rate" means the interest rate on the Note in the absence of
an Event of Default plus three percent (3%) per annum.
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"Primary Borrower" means SEAL or another Borrower or a Person designated
as an attorney-in-fact for the Borrowers designated as such from time to time by
the Borrowers by written notice to the Administrative Agent.
"Prime Rate" means the floating and fluctuating per annum prime commercial
lending rate of interest of the Administrative Agent, as established and
declared by the Administrative Agent at any time or from time to time. The Prime
Rate shall be adjusted automatically, without notice, as of the effective date
of any change in such prime commercial lending rate. The Prime Rate does not
necessarily represent the lowest rate of interest charged by the Administrative
Agent or the other Lenders to borrowers.
"Property" means collectively the "Property" as that term is defined in
each of the Deeds of Trust.
"Purchase Price" means the gross purchase cost to a Borrower of an
Acquisition Project.
"Qualified Ground Lease" means (i) any lease (a) which is a direct ground
lease (or indirect ground lease, so long as each ground lease in the chain of
title meets the following criteria) granted by the fee owner of real property,
(b) which may be transferred and/or assigned without the consent of the Lessor
(or as to which the lease expressly provides that (i) such lease may be
transferred and/or assigned with the consent of the lessor and (ii) such consent
shall not be unreasonably withheld or delayed), (c) which has a remaining term
(including any renewal terms exercisable at the sole option of the lessee) of at
least 50 years, (d) under which no material default has occurred and is
continuing, (e) with respect to which a security interest may be granted without
the consent of the lessor, and (f) which contains lender protection provisions
reasonably acceptable to the Administrative Agent including, without limitation,
provisions to the effect that (A) the lessor shall notify the Administrative
Agent of the occurrence of any default by the lessee under such lease and shall
afford the Administrative Agent the right to cure such default, and (B) in the
event that such lease is terminated, the Administrative Agent shall have the
option to enter into a new lease having terms substantially identical to those
contained in the terminated lease. Upon the submission to the Administrative
Agent of a written request for approval of the lender protection provisions and
other terms of a proposed Qualified Ground Lease, the Administrative Agent may
waive any non-compliances with the foregoing which it considers in its
reasonable judgment not to be material and adverse with respect to the
eligibility of the Facility subject to the Qualified Ground Lease, and shall use
its best efforts to accept or reject such proposal within five (5) Banking Days,
and shall accept or reject such proposal within ten (10) Banking Days, in each
case following receipt of such request.
"Receivables" means all of the Borrowers' now or hereafter owned, acquired
or created Accounts, Chattel Paper, Contract Rights, General Intangibles and
Instruments, and all cash and noncash proceeds and products thereof.
"Rent Expense" means the actual rent expense incurred by the Borrower, the
Guarantor or any Affiliate as a tenant under leases with respect to any
Facility.
"Replacement Reserves" means $250 per year per bed in each Facility
(whether or not such Facility is stabilized).
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"Reportable Event" shall mean any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder.
"Requisition" or "Requisitions" shall have the meaning set forth in
Section 2.9 (Requisitions Demonstrating Expenses).
"Reserve Percentage" means, at any time, the then current maximum rate for
which reserves (including any basic, special, supplemental, marginal and
emergency reserves) are required to be maintained by member banks of the Federal
Reserve System under Regulation D of the Board of Governors of the Federal
Reserve System against "Eurocurrency liabilities", as that term is defined in
Regulation D. Without limiting the effect of the foregoing, the Reserve
Percentage shall reflect any other reserves required to be maintained by such
member banks with respect to (i) any category of liabilities which includes
deposits by reference to which the Eurodollar Rate is to be determined, or (ii)
any category of extensions of credit or other assets which include Eurodollar
Loans. The Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Percentage.
"Resident Agreements" means any and all contracts, authorizations,
agreements and/or consents executed by, or on behalf of any resident or other
person seeking services from any Borrower pursuant to which such Borrower
provides or furnishes health or assisted living care and related services at any
and all of the Facilities, including the consent to treatment, assignment of
payment of benefits by third party, as the same may from time to time be
amended, restated, supplemented or modified.
"Resident Occupancy" means the number of residents who are in occupancy at
a Facility and paying fees pursuant to a resident agreement divided by the pro
forma resident occupancy for such Facility as contained in the pro forma
operating budget of an Eligible Facility.
"Revolving Credit Expiration Date" means June 13, 2004 or any date to
which it may be extended from time to time pursuant to the terms of Section 2.6
(Extensions).
"Revolving Credit Termination Date" means the earlier of (a) the Revolving
Credit Expiration Date, or (b) the date on which the Credit Facility is
terminated pursuant to Section 10.5 (Remedies on Default).
"SALI" means Sunrise Assisted Living, Inc., a Delaware corporation.
"SALII" means Sunrise Assisted Living Investments, Inc., a Virginia
corporation.
"XXXXX" means Sunrise Assisted Living Management, Inc., a Virginia
corporation, formerly known as Sunrise Terrace, Inc.
"SDI" means Sunrise Development, Inc., a Virginia corporation.
"Security Documents" means, collectively, any assignment, including,
without limitation, any Pledge, Assignment and Security Agreement, the
Collateral Assignments and any assignment, pledge agreement, security agreement,
mortgage, deed of trust (including the Deeds of Trust), leasehold mortgage,
leasehold deed of trust, deed to secure debt, financing statement,
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initial transaction statement and any similar instrument, document or agreement
under or pursuant to which a Lien is now or hereafter granted to, or for the
benefit of, the Lenders on any collateral to secure the Obligations, as the same
may from time to time be amended, restated, supplemented or otherwise modified.
"Settlement Payment" means any settlement payment due to the
Administrative Agent or other Lender or Lenders who provided Interest Rate
protection to the Borrowers.
"Stabilized Facility" means an Eligible Project with a Resident Occupancy
of at least 85% and a ratio of Net Operating Income to Debt Service of not less
than 1.25 to 1.00 measured for two consecutive fiscal quarters.
"Stored Materials" shall have the meaning set forth in Section 4.10
(Stored Materials).
"Supporting Obligation" means a letter of credit right, secondary
obligation or obligation of a secondary obligor or that supports the payment or
performance of an account, chattel paper, a document, a general intangible, an
instrument or investment property.
"Survey" means a plat of the Land for any Facility which complies with the
survey requirements set forth on Exhibit F attached hereto.
"Tangible Net Worth" shall have the meaning set forth in Section 3.2 of
the Guaranty.
"Taxes" means all taxes and assessments whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, of every character
(including all penalties or interest thereon), which at any time may be
assessed, levied, confirmed or imposed by any Governmental Authority on any of
the Borrowers or any of their properties or assets or any part thereof or in
respect of any of their franchises, businesses, income or profits.
"Total Development Budget" means the development, construction and opening
operating expense budget for an Eligible Project as reviewed and approved by the
Administrative Agent.
"Unused Commitment Amount" shall have the meaning set forth in Section 2.3
(Fees).
"Unused Line Fee" shall have the meaning set forth in Section 2.3 (Fees).
"Wholly Owned Subsidiary" or "Wholly Owned Subsidiaries" means one or more
subsidiaries 100% owned by SALI or a Borrower or by any Wholly Owned Subsidiary
of SALI or a Borrower which is or has been created for the sole purpose of
acquiring or constructing and owning and operating a Facility which is included
in the Borrowing Base.
Section 1.2 Accounting Terms and Other Definitional Provisions
Unless otherwise defined in this Agreement, as used in this Agreement and
in any certificate, report or other document made or delivered pursuant hereto,
accounting terms not otherwise defined in this Agreement, and accounting terms
only partly defined in this Agreement, to the extent not defined, shall have the
respective meanings given to them under
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GAAP. Unless otherwise defined in this Agreement, all terms used in this
Agreement which are defined by the Virginia Uniform Commercial Code shall have
the same meanings as assigned to them by the Virginia Uniform Commercial Code
unless and to the extent varied by this Agreement. The words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, Section, subsection, schedule and exhibit references are references
to sections or subsections of, or schedules or exhibits to, as the case may be,
this Agreement unless otherwise specified. As used in this Agreement, the
singular number shall include the plural, the plural the singular and the use of
the masculine, feminine or neuter gender shall include all genders, as the
context may require. Reference to any one or more of the Financing Documents and
any of the Financing Documents shall mean the same as the foregoing may from
time to time be amended, restated, substituted, extended, renewed, supplemented
or otherwise modified.
ARTICLE II
BORROWING
Section 2.1 The Loan
(a) The Lenders agree to lend to the Borrowers pursuant to the
terms and conditions of this Agreement from the date hereof until the Revolving
Credit Termination Date, and the Borrowers, jointly and severally, agree to
borrow on a revolving basis from the Lenders from time to time the principal
amount (the "Loan") not to exceed at any time outstanding the lesser of (i) the
Credit Facility Committed Amount, or (ii) the Borrowing Base minus the aggregate
face amount of all Letters of Credit outstanding.
(b) The obligation of the Borrowers to repay the Loan shall be
evidenced by the Third Amended and Restated Master Promissory Note of even date
herewith (as further amended, restated, substituted, extended, renewed and
otherwise modified from time to time, the "Note") payable to the Administrative
Agent in the form attached hereto as EXHIBIT A. The Note shall bear interest and
shall be repaid by the Borrowers in the manner and at the times set forth in
Section 2.4 (Interest Rate Matters).
(c) The conditions precedent for making an advance under the
Loan shall be as set forth in this Agreement. Sums borrowed and repaid may be
readvanced under the terms and conditions of this Agreement. Advances shall be
made by the Lenders on a pro rata basis based on their pro rata shares of the
Credit Facility Committed Amount.
(d) No advances may be made or be outstanding under the Credit
Facility and no Letters of Credit may be issued until and during such times as
there are at least six (6) Eligible Projects in the Borrowing Base. The
Borrowers will prepare a Borrowing Base Report (each a "Borrowing Base Report")
in the form attached hereto as EXHIBIT B which must also be certified by the
Borrowers listing for each of the Eligible Projects (i) the applicable Deed of
Trust Lien Amount, (ii) the Costs Incurred to Date, and (iii) its status as of
the most recent reporting date as a Pool A, Pool B, Pool C or Pool D Project
within thirty (30) days after the end of each month. The Borrowing Base Report
will be based on the outcome of the requisition procedures hereinafter
described, appraisals obtained by the Administrative Agent
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and other information on the Eligible Projects provided by the Borrowers or
obtained by the Administrative Agent. The Borrowing Base shall be computed based
on the Borrowing Base Report most recently prepared by the Borrowers and
reviewed and accepted by the Administrative Agent. In the event the Borrowers
shall fail to furnish other current reports or information as reasonably
required by the Administrative Agent pursuant to the Financing Documents, or in
the event the Administrative Agent believes that a Borrowing Base Report is no
longer accurate, the Administrative Agent may, in its reasonable discretion
exercised from time to time and without limiting its other rights and remedies
under the Financing Documents, upon notice to the Borrowers and the expiration
of a cure period of five (5) Banking Days, designate any Eligible Project as a
Pool D Project or suspend the making of or limit advances under the Loan. The
Borrowing Base shall be subject to reduction as a result of the following
events: (i) the release of an Eligible Project from the lien of the applicable
Deed of Trust, (ii) by the change of any Eligible Project's status as a Pool A
or B Project to a Pool B or C Project or a Pool A, B or C Project to a Pool D
Project respectively, as determined by the Administrative Agent quarterly, or
(iii) the change in appraised value of an Eligible Project pursuant to Section
7.28 (Updated Appraisals). The Borrowing Base shall be subject to increase as a
result of the following events: (i) addition of Eligible Projects, (ii) increase
in the Costs Incurred to Date as determined by the Administrative Agent
quarterly, or (iii) the change of an Eligible Project's status as a Pool B, C or
D Project to a Pool A Project as determined by the Administrative Agent
quarterly. The Borrowers may request and the Requisite Lenders (as defined in
the Agency Agreement) may in their sole discretion agree to include as an
Eligible Project a Completed Facility which a Borrower has acquired which meets
the conditions precedent to including a Completed Facility as an Eligible
Project.
(e) The Borrowers shall furnish to the Administrative Agent
such schedules, certificates, lists, records, reports, information and documents
as required by the Administrative Agent from time to time so that the
Administrative Agent may, in its reasonable discretion, determine the Borrowing
Base.
(f) If at any time the aggregate principal amount of the Loan
outstanding and the Outstanding Letter of Credit Obligations exceeds the
Borrowing Base, a borrowing base deficiency ("Borrowing Base Deficiency") shall
exist. Each time a Borrowing Base Deficiency exists, the Borrowers shall within
three (3) Banking Days of notice thereof from the Administrative Agent either
pay the amount and/or add Eligible Projects to increase the Borrowing Base to an
amount which is at least equal to the aggregate principal amount outstanding
under the Loan and the Outstanding Letter of Credit Obligations.
(g) The current Borrowing Base Report is attached hereto as
EXHIBIT C.
(h) As of the date hereof the Borrower has designated and the
Administrative Agent have accepted certain Facilities into the Borrowing Base as
Eligible Projects. This Agreement shall govern the procedures for verification
by the Administrative Agent of Costs Incurred to Date on each Eligible Project
other than an Acquisition Project. This Agreement shall also govern the terms,
conditions and procedures under which Eligible Projects may be added to the
Borrowing Base.
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(i) The Borrower will give notice to the Administrative
Agent in writing in advance of its intention to add a particular Facility as an
Eligible Project under the Credit Facility. Each Total Development Budget for an
Eligible Project shall include an interest reserve (the "Interest Reserve"), an
Operating Reserve, a hard cost contingency reserve of not less than five percent
(5%) of the total budgeted construction costs and a development fee payable to
SDI (the "Development Fee") each in amounts acceptable to the Administrative
Agent and shall demonstrate to the Administrative Agent's satisfaction in its
sole discretion that the Eligible Project will be designated as a Pool A
Project.
(j) Such notice shall include the status of the Facility
as a Construction Project, a Completed Project and/or an Acquisition Project.
Section 2.2 Procedure for Advances
(a) The Administrative Agent will make advances from time to
time upon receipt of written request from the Borrowers in the form designated
by the Administrative Agent, provided that after giving effect to the Borrowers'
request, the outstanding principal balance of the Loan would not exceed the
lesser of the Credit Facility Committed Amount or the Borrowing Base minus the
aggregate face amounts of all Letters of Credit outstanding. Each advance under
the Loan shall be in an amount of not less than $1,000,000, and in increments of
$250,000 in excess thereof. Advances or the renewal of a Interest Period shall
be requested by the Borrowers orally or in writing by 10:00 A.M. (Eastern Time)
three (3) Banking Days prior to the Banking Day on which the funds will be
advanced. The Borrowers shall advise the Administrative Agent at the time of
such notice which Interest Period they are selecting or whether they are
selecting the Base Rate. The Administrative Agent shall have no obligation to
make any advance if at the time such advance is requested and/or is proposed to
be funded, there exists an Event of Default or an event which upon notice or
lapse of time or both would constitute an Event of Default under the Financing
Documents.
(b) In addition, if the Administrative Agent has reason to
believe a Default or an Event of Default has occurred, the Borrowers hereby
irrevocably authorize the Lenders to make advances of the Loan at any time and
from time to time, without further request from or notice to the Borrowers,
which the Lenders, in their sole and absolute discretion, deem necessary or
appropriate to protect the Lenders' interests under this Agreement or otherwise,
including, without limitation, advances of the Loan made to cover interest on
the Loan, fees, and/or Enforcement Costs, prior to, on, or after the termination
of this Agreement, regardless of whether the aggregate amount of the advances of
the Loan which the Lenders may make hereunder exceeds the Credit Facility
Committed Amount. The Lenders shall have no obligation whatsoever to make any
advance under this subsection and the making of one or more advances under this
subsection shall not obligate the Lenders to make other similar advances. Any
such advances will be evidenced by the Note secured by the Collateral and the
Deeds of Trust.
Section 2.3 Fees
The Borrowers shall pay to the Administrative Agent the following fees:
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(a) Unused Line Fee. The Borrowers shall pay to the
Administrative Agent for the benefit of the Lenders beginning on the date set
forth below a quarterly revolving credit facility fee (the "Unused Line Fee") in
an amount equal to twenty-five (25) basis points per annum of the average daily
unused and undisbursed portion of the Loan. The accrued and unpaid portion of
the Unused Line Fee shall be paid by the Borrower to the Administrative Agent as
of the Credit Facility Closing Date and on the first day of each fiscal quarter
and on the Revolving Credit Termination Date.
(b) Appraisal Fees. Upon the receipt of an appraiser's
invoice from the Administrative Agent, the Borrowers shall pay the fee of the
appraiser for an Eligible Project or for any Facility appraised at the request
of the Borrowers whether or not a Facility Closing is completed for such
Facility.
Section 2.4 Interest Rate Matters and Payments
(a) Lender Tax Adjustment. Each payment made by the
Borrowers under the Note shall either (i) be exempt from, and be made without
reduction by reason of, any Lender Tax or (ii) to the extent that any such
payment shall be subject to any Lender Tax, be accompanied by an additional
payment by the Borrowers of such amount as may be necessary so that the net
amount received by each Lender (after deducting all applicable Taxes) is the
same as such Lender would have received had such payment not been subject to
such Lender Tax. Upon any payment of Lender Tax by the Borrowers, the Borrowers
shall promptly (and in any event within 30 days) furnish to the Administrative
Agent and applicable Lender such tax receipts, certificates an other evidence of
such payment as the Borrowers may have or the Administrative Agent or the
applicable Lender may reasonably request.
(b) Inability to Determine Eurodollar Base Rate. In the
event that the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that, by reason of circumstances affecting the
London interbank market, quotation of Eurodollar Base Rates for any portion of
the Note are not being provided in the relevant amounts or for the relevant
maturities for the purpose of determining a Eurodollar Base Rate for any portion
of the principal sum, the Administrative Agent will give notice of such
determination to the Borrowers and each Lender at least one day prior to the
date of an advance or any subsequent Interest Period for the Loan. If any such
notice is given, no Lender shall have any obligation to make any advance or
maintain any principal sum outstanding at a Eurodollar Base Rate. Until the
earlier of the date any such notice has been withdrawn by the Administrative
Agent or the date when the Lenders and the Borrowers have mutually agreed upon
an alternate method of determining the rates of interest payable on the Loan, as
the case may be, the Borrowers shall not have the right to have additional
advances or maintain any portion of the Credit Facility at a Eurodollar Base
Rate, whereupon the Lenders and the Borrowers shall mutually agree upon an
alternate method of determining the rates of interest payable on the Loan or
such Lender's portion of the principal outstanding under the Note shall be
immediately due and payable.
(c) Applicable Interest Rates.
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(i) Each advance under the Loan shall bear
interest at either the Base Rate or the Eurodollar Rate, as selected
and specified by the Borrowers in an Interest Rate Election Notice
furnished to the Administrative Agent in accordance with the
provisions of Section 2.4(d) (Selection of Interest Rates), or as
otherwise determined in accordance with the provisions of this
Section 2.4 (Interest Rate Matters), and as may be adjusted from
time to time in accordance with the provisions of Section 2.4(b)
(Inability to Determine Eurodollar Base Rate).
(ii) Notwithstanding the foregoing, following the
occurrence and during the continuance of an Event of Default, at the
option of the Administrative Agent, the Loan and all other
Obligations shall bear interest at the Post-Default Rate.
(iii) The Applicable Margin for (i) Eurodollar
Loans shall be two hundred (200) basis points per annum, and (ii)
Base Rate Loans shall be zero (0) basis points per annum.
(d) Selection of Interest Rates.
(i) The Borrowers may select the initial
Applicable Interest Rate or Applicable Interest Rates to be charged
on portions of the Loan.
(ii) From time to time after the date of this
Agreement as provided in this Section, by a proper and timely
Interest Rate Election Notice furnished to the Administrative Agent
in accordance with the provisions of Section 2.4(d)(v) (Selection of
Interest Rates) , the Borrowers may select an initial Applicable
Interest Rate or Applicable Interest Rates for any portion of the
Loan or may convert the Applicable Interest Rate and, when
applicable, the Interest Period, for any existing advance under the
Loan to any other Applicable Interest Rate or, when applicable, any
other Interest Period.
(iii) The Borrowers' selection of an Applicable
Interest Rate and/or an Interest Period, the Borrowers' election to
convert an Applicable Interest Rate and/or an Interest Period to
another Applicable Interest Rate or Interest Period, and any other
adjustments in an interest rate are subject to the following
limitations:
(aa) the Borrowers shall not at any time
select or change to an Interest Period that extends beyond the
Revolving Credit Expiration Date;
(bb) except as otherwise provided in
Section 2.4(e) (Indemnity), no change from the Eurodollar Rate to
the Base Rate shall become effective on a day other than a Business
Day and
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on a day which is the last day of the then current Interest Period,
no change of an Interest Period shall become effective on a day
other than the last day of the then current Interest Period, and no
change from the Base Rate to the Eurodollar Rate shall become
effective on a day other than a day which is a Eurodollar Business
Day;
(cc) any Applicable Interest Rate
change for any portion of the Loan to be effective on a date on
which any principal payment on account of the Loan is scheduled to
be paid shall be made only after such payment shall have been made;
(dd) no more than six (6) different
Eurodollar Rates may be outstanding at any time and from time to
time, provided that not more than one (1) may be a seven (7) day
Interest Period;
(ee) the first day of each Interest Period
shall be a Eurodollar Business Day;
(ff) as of the effective date of a
selection, there shall not exist an Event of Default; and
(gg) the minimum principal amount of a
Eurodollar Loan shall be One Million Dollars ($1,000,000).
(iv) If a request for an advance under the Loan is
not accompanied by an Interest Rate Election Notice or does not
otherwise include a selection of an Applicable Interest Rate and, if
applicable, an Interest Period, or if, after having made a selection
of an Applicable Interest Rate and, if applicable, an Interest
Period, the Borrowers fail or are not otherwise entitled under the
provisions of this Agreement to continue such Applicable Interest
Rate or Interest Period, the Borrowers shall be deemed to have
selected the Base Rate as the Applicable Interest Rate until such
time as the Borrowers have selected a different Applicable Interest
Rate and specified an Interest Period in accordance with, and
subject to, the provisions of this Section.
(v) The Administrative Agent will not be obligated
to make advances of the Loan, to convert the Applicable Interest
Rate on Loans to another Applicable Interest Rate, or to change
Interest Periods, unless the Administrative Agent shall have
received an irrevocable written or telephonic notice (an "Interest
Rate Election Notice") from the Borrowers specifying the following
information:
(aa) the amount to be borrowed or
converted;
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(bb) a section of the Base Rate or the
Eurodollar Rate;
(cc) the length of the Interest Period if
the Applicable Interest Rate selected is the Eurodollar Rate; and
(dd) the requested date on which such
election is to be effective.
Any telephonic notice must be confirmed in writing within three (3)
Business Days. Each Interest Rate Election Notice must be received by the
Administrative Agent not later than 12:00 noon (Eastern Standard Time) on the
Business Day of any requested borrowing or conversion in the case of a selection
of the Base Rate and not later than 12:00 noon (Eastern Standard Time) on the
third Business Day before the effective date of any requested borrowing or
conversion in the case of a selection of the Eurodollar Rate.
(e) Indemnity. The Borrowers jointly and severally agree
to indemnify and reimburse the Administrative Agent and to hold the
Administrative Agent harmless from any loss, cost (including administrative
costs) or expense which the Administrative Agent may sustain or incur as a
consequence of (a) a default by the Borrowers in payment when due of the
principal amount of or interest on any Eurodollar Loan, (b) the failure of the
Borrowers to make, or convert the Applicable Interest Rate of any portion of the
Loan after the Borrowers have given a request for an advance or an Interest Rate
Election Notice, (c) the failure of the Borrowers to make any prepayment of a
Eurodollar Loan after the Borrowers have given notice of such intention to make
such a prepayment, and/or (d) the making by the Borrowers of a prepayment of a
Eurodollar Loan on a day which is not the last day of the Interest Period for
such Eurodollar Loan, breakage costs calculated by the Administrative Agent,
including, without limitation, any such loss or expense arising from the
reemployment of funds obtained by the Administrative Agents to maintain any
Eurodollar Loan or from fees payable to terminate the deposits from which such
funds were obtained. This agreement and covenant of the Borrowers shall survive
termination or expiration of this Agreement and payment of the other
Obligations.
(f) Payment of Interest.
(i) Unpaid and accrued interest on any portion of
the Loan which consists of a Base Rate Loan shall be paid monthly,
in arrears, on the first day of each calendar month, commencing on
the first such date after the date of this Agreement, and on the
first day of each calendar month thereafter, and at maturity
(whether by acceleration, declaration, extension or otherwise).
(ii) Notwithstanding the foregoing, any and all
unpaid and accrued interest on any Base Rate Loan converted to a
Eurodollar Loan or prepaid shall be paid immediately upon such
conversion and/or prepayment, as appropriate.
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(iii) Unpaid and accrued interest on any
Eurodollar Loan shall be paid monthly and on the last Business Day
of each Interest Period for such Eurodollar Loan and at maturity
(whether by acceleration, declaration, extension or otherwise);
provided, however that any and all unpaid and accrued interest on
any Eurodollar Loan prepaid prior to expiration of the then current
Interest Period for such Eurodollar Loan shall be paid immediately
upon prepayment.
(g) Illegality. Notwithstanding any other provision of
the Financing Documents to the contrary, in the event that it shall become
unlawful for any Lender to obtain funds in the London interbank market or for
such Lender to maintain the Loan at the Eurodollar Base Rate, then, by written
notice to the Borrowers and to the Administrative Agent, such Lender may declare
that advances will not thereafter be made or the Loan maintained by such Lender
hereunder at the Eurodollar Base Rate, whereupon the rate of interest payable on
the Loan or such Lender's portion of the principal outstanding under the Note
shall be calculated at the Base Rate.
(h) Increased Costs and Reduced Return.
(i) If any event shall occur (whether in the form
of a reserve requirement (not included in the definition of the
Eurodollar Base Rate), exchange control regulations, governmental
charges, compliance with any guideline or request from any central
bank or other Governmental Authority, changes in the London
interbank market or the position of any Lender in such market or
otherwise) and the result of any such event is, in such Lender's
reasonable judgment, to increase the costs which such Lender
determines are attributable to its making or maintaining the Loan at
the Eurodollar Base Rate in excess of those costs already in effect
as of June 1, 2001, or its obligation to make available the Loan at
the Eurodollar Base Rate or to reduce the amount of any sum received
or receivable by such Lender under the Note, then, within ten (10)
days after demand by such Lender, Borrowers hereby agree to pay to
such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduction.
(ii) In addition to any amounts payable pursuant
to Section (i), if any Lender shall have determined that the
applicability of any law, rule, regulation or guideline adopted
pursuant to or arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital
Standards," or the adoption after the date hereof of any other law,
rule, regulation or guideline regarding capital adequacy, or any
change in any of the foregoing or in the enforcement or
interpretation or administration of any of the foregoing by any
court or any central bank or other Governmental Authority, charged
with the enforcement or interpretation or administration thereof, or
compliance by such Lender (or any lending office of such Lender) or
such Lender's
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holding company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's capital or on
the capital of such Lender's holding company, if any, as a
consequence of its making or maintaining the Loan or its incurring
any obligations under this Agreement to a level below that which
such Lender or such Lender's holding company could have achieved but
for such applicability, adoption, change or compliance (taking into
consideration such Lender's policies and the policies of such
Lender's holding company with respect to capital adequacy) by an
amount deemed by such Lender to be material, then, upon demand by
such Lender, the Borrowers hereby agree to pay to such Lender from
time to time such additional amount or amounts as will compensate
such Lender or such Lender's holding company for any such reduction
suffered.
(i) Notice of Amounts Payable to Lenders. If any
Lender shall seek payment of any amounts from Borrowers pursuant to this Section
or under Section 2.4 (Interest Rate Matters), it shall notify the Borrowers and
the Administrative Agent of the amount payable by the Borrowers to such Lender
hereunder. A certificate of such Lender seeking payment setting forth in
reasonable detail the factual basis for and the computation of the amount
specified, shall be conclusive and binding on all parties for all purposes,
absent manifest error, as to the amounts owned. The Borrowers' obligations under
this Section shall survive the termination of this Agreement and the repayment
of the Obligations.
Section 2.5 Computation of Interest and Fees
All applicable fees and interest shall be calculated on the basis of a
year of 365 days for the actual number of days elapsed pursuant to the terms of
the Note and interest shall be payable monthly in arrears.
Section 2.6 Extensions
The Borrowers may request that the Administrative Agent and the Lenders,
in their sole discretion, agree to extend the Revolving Credit Expiration Date
one or more times for a period of twelve (12) months each.
Section 2.7 The Letter of Credit Facility
(a) Letters of Credit. Subject to and upon the
provisions of this Agreement, and as a part of the Credit Facility Committed
Amount, the Borrowers may, upon the prior approval of the Administrative Agent,
obtain standby letters of credit (as the same may from time to time be amended,
supplemented or otherwise modified, each a "Letter of Credit" and collectively
the "Letters of Credit") from any Lender selected by the Borrowers from time to
time until the Banking Day preceding the Revolving Credit Termination Date. Each
Letter of Credit shall be issued for a business purpose of any Borrower, any
Accommodator Borrower, SALI or any Affiliate, provided that one or more
Borrowers is a co-obligor with SALI or any Affiliate for the Obligations arising
under such Letter of Credit and executes the applicable
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Letter of Credit Application to evidence such liability. The Borrower will not
be entitled to obtain a Letter of Credit hereunder unless (a) after giving
effect to the request, the outstanding principal balance of the Loan and of the
Letter of Credit Obligations would not exceed the lesser of (i) the Credit
Facility Amount, or (ii) the most current Borrowing Base and (b) the sum of the
aggregate face amount of the then outstanding Letters of Credit (including the
face amount of the requested Letter of Credit) does not exceed Ten Million
Dollars ($10,000,000).
(b) Letter of Credit Fees. Prior to or simultaneously
with the opening of each Letter of Credit, the Borrower shall pay to the
Administrative Agent or the other issuing Lender for the benefit of all the
Lenders, a letter of credit fee (each a "Letter of Credit Fee" and collectively
the "Letter of Credit Fees") in an amount equal to one hundred fifty (150) basis
points per annum of the amount of the Letter of Credit and a facing fee of 1/8th
of 1% of the amount of the Letter of Credit for the benefit of the issuing
Lender only. The Letter of Credit Fee but not the facing fee will be pro-rated
if the initial term of a Letter of Credit is less than twelve (12) months. Such
Letter of Credit Fees shall be paid upon the opening of the Letter of Credit and
upon each anniversary thereof, if any. In addition, the Borrower shall pay to
the Lender any and all additional issuance, negotiation, processing, transfer or
other fees to the extent and as and when required by the provisions of any
Letter of Credit Agreement; such additional fees are included in and a part of
the "Fees" payable by the Borrower under the provisions of this Agreement.
(c) Terms of Letters of Credit. Each Letter of Credit
shall (a) be opened pursuant to a Letter of Credit Agreement, and (b) expire on
a date not later than the Banking Day preceding the Revolving Credit Expiration
Date; provided, however, if any Letter of Credit does have an expiration date
later than the Banking Day preceding the Revolving Credit Termination Date, as
of the Banking Day preceding the Revolving Credit Termination Date an advance of
the Loan shall be made by the Lender in the face amount of such Letter of Credit
(or Letters of Credit) and the proceeds thereof shall be deposited in an account
titled in the name of the Administrative Agent as trustee for the Borrower. The
proceeds of the trustee account referred to in the immediately preceding
sentence shall be held as collateral for the Letter of Credit (or Letters of
Credit) and in the event of a draw under the Letter of Credit (or Letters of
Credit), used to pay any such draw. The aggregate face amount of all Letters of
Credit at any one time outstanding and issued by the Administrative Agent or any
other Lender pursuant to the provisions of this Agreement, plus the amount of
any unpaid Letter of Credit Fees accrued or scheduled to accrue thereon, and
less the aggregate amount of all drafts issued under or purporting to have been
issued under such Letters of Credit that have been paid by the Administrative
Agent or any other Lender, is herein called the "Outstanding Letter of Credit
Obligations".
(d) Procedure for Letters of Credit. The Borrower shall
give the Administrative Agent written notice at least three (3) Banking Days
prior to the date on which a Letter of Credit is requested to be opened of their
request for a Letter of Credit. Such notice shall specify if a Lender other than
the Administrative Agent is requested to be the issuing bank for such Letter of
Credit shall be accompanied by a duly executed and delivered Letter of Credit
Agreement. Upon receipt of the Letter of Credit Agreement and the Letter of
Credit Fee, the Administrative Agent or other issuing Lender shall process such
Letter of Credit Agreement
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in accordance with its customary procedures and open such Letter of Credit on
the Banking Day specified in such notice.
Section 2.8 Permitted Costs
Advances under the Borrowing Base shall be made available by the Lenders
pursuant to a Borrowing Base Report issued quarterly by the Administrative Agent
or more frequently in the Administrative Agent's discretion and certified by the
Borrowers in accordance with the terms of this Agreement. That portion of the
Borrowing Base composed of Costs Incurred to Date shall be related to
expenditures for each Eligible Facility described in the applicable Total
Development Budget. Each Total Development Budget may include the cost of (i)
the acquisition by the Borrowers of the Land which is the site of such Facility,
(ii) the construction on the Premises of a Facility containing residential units
and common facilities (iii) marketing, staffing and similar pre-opening expenses
and (iv) an Operating Reserve. Unless otherwise agreed to by the Administrative
Agent and to the extent specifically permitted by the Administrative Agent, the
process of verification of Requisitions shall confirm the payment by any of the
Borrowers of the following costs and expenses related to the development of the
Premises and the construction of the Improvements and no others may be included
in a Total Development Budget: (i) the payment of interest when due without
further authorization or consent of the Borrowers; (ii) the actual cost of the
Land and all labor, services, materials, supervision, construction fees and the
like reasonably incurred by any of the Borrowers in connection with the
construction upon the Land of the Improvements in accordance with the Plans and
Specifications; (iii) for the actual cost of pre-opening expenses, marketing
expenses and operations of the Facility to the extent of operating deficits;
(iv) for the actual cost of commitment fees, extension fees, appraisal fees,
closing or settlement costs, fees of attorneys, engineers, architects and
accountants, insurance and bond premiums, ad valorem real estate taxes and other
costs directly related to the development of the Land and the construction,
marketing, initial start-up operating of the Improvements and (v) for the
Development Fee and other pre-opening fees.
Section 2.9 Requisitions Demonstrating Expenses
Verification of the Borrowers' Costs Incurred to Date will be administered
by the Administrative Agent's Real Estate Loan Administration Group.
Requisitions for each Eligible Project shall be submitted by the Borrowers from
time to time setting forth costs incurred by or on behalf of the Borrowers shall
be in the form approved by the Administrative Agent (each a "Requisition"
collectively, the "Requisitions") signed by Xxxxx X. Xxxx, Xxxxx Xxxxx,
Xxxxxxxxx X. X. Xxxxxx or Xxx Xxxxxxxx on behalf of the Borrowers and approved
by the Architect, showing the percentage of completion and setting forth in
trade breakdown form and in such detail as may be required by the Administrative
Agent the amounts expended and/or costs incurred for work done and necessary
materials incorporated in the Improvements. The Requisition shall also show the
percentage of completion of each line item on the applicable Borrower's cost
breakdown approved by the Administrative Agent. The Borrowers shall submit with
each Requisition a statement that the work completed to the date of such
Requisition is of quality consistent with the applicable Plans and
Specifications. In addition, at the time of delivery of each Requisition by the
Borrowers, the Borrowers shall furnish to the Administrative Agent such
additional information (such as paid receipts, invoices, statements of accounts,
etc.)
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as the Administrative Agent may reasonably require to assure that amounts shown
in the Requisition have been paid by or on behalf of the Borrowers. Requisitions
verified by the Real Estate Loan Administration Group during the course of a
fiscal quarter will be included in the calculation of the next Borrowing Base
Report.
Section 2.10 Co-Borrower Obligations
Each Person included in the term "Borrowers", including each Additional
Borrower, hereby covenants and agrees with the Administrative Agent on behalf of
the Lenders as follows:
(a) The Obligations include all present and future
indebtedness, duties, obligations, and liabilities, whether now existing or
contemplated or hereafter arising, of any one or more of the Additional
Borrowers or the Existing Borrowers in connection with the Loan.
(b) Reference in this Agreement and the other Financing
Documents to the "Borrowers" or otherwise with respect to any one or more of the
Persons now or hereafter included in the definition of "Borrowers" shall mean
each and every such Person and any one or more of such Persons, jointly and
severally, unless the context requires otherwise.
(c) For administrative convenience, each Person included
in the term "Borrowers" hereby irrevocably appoints the Primary Borrower as the
Borrowers' attorney-in-fact, with power of substitution (with the prior written
consent of the Administrative Agent in the exercise of its sole and absolute
discretion), in the name of the Primary Borrower or in the name of any of the
Borrowers or otherwise to take any and all actions with respect to this
Agreement, the other Financing Documents, the Obligations and/or the Collateral
(including, without limitation, the proceeds thereof) as the Primary Borrower
may so elect from time to time, including, without limitation, actions to (i)
request advances under the Loan, and direct the Administrative Agent to disburse
or credit the proceeds of any advance under the Loan directly to an account of
the Primary Borrower, any one or more of such Persons or otherwise, which
direction shall evidence the making of such advance and shall constitute the
acknowledgment by each such Person of the receipt of the proceeds of the Loan,
(ii) enter into, execute, deliver, amend, modify, restate, substitute, extend
and/or renew this Agreement, any Additional Borrower Joinder Supplement, any
other Financing Documents, security agreements, mortgages, deposit account
agreements, instruments, certificates, waivers, letter of credit applications,
releases, documents and agreements from time to time, and (iii) endorse any
check or other item of payment in the name of such Person or in the name of the
Primary Borrower. The foregoing appointment is coupled with an interest, cannot
be revoked without the prior written consent of the Administrative Agent, and
may be exercised from time to time through the Primary Borrower's duly
authorized officer, officers or other Person or Persons designated by the
Primary Borrower to act from time to time on behalf of the Primary Borrower.
(d) Each Person included in the term "Borrowers" hereby
irrevocably authorizes the Administrative Agent to make advances to any one or
more or to all of such Persons, pursuant to the provisions of this Agreement
upon the written, oral or telephonic request any one or more of the Persons who
is from time to time a Responsible Officer of a Borrower under the provisions of
the most recent certificate of corporate resolutions and/or
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incumbency of the Person included in the term "Borrowers" on file with the
Administrative Agent and also upon the written, oral or telephone request of any
one of the Responsible Officers.
(e) The Administrative Agent assumes no responsibility
or liability for any errors, mistakes, and/or discrepancies in the oral,
telephonic, written or other transmissions of any instructions, orders, requests
and confirmations between the Administrative Agent and any one or more of the
Persons included in the term "Borrowers", any advance under the Loan or any
other transaction in connection with the provisions of this Agreement except
those resulting from the Administrative Agent's gross negligence or willful
misconduct.
Section 2.11 Agreement Among Borrowers
Without implying any limitation on the joint and several nature of the
Obligations, the Administrative Agent agrees that, notwithstanding any other
provision of this Agreement, the Persons included in the term "Borrowers" may
create reasonable inter-company indebtedness between or among the Persons
included in the term "Borrowers" with respect to the allocation of the benefits
and proceeds of the advances under this Agreement. The Persons included in the
term "Borrowers" agree among themselves, and the Administrative Agent consents
to that agreement, that each such Person shall have rights of contribution from
all of the such Persons to the extent such Person incurs Obligations in excess
of the proceeds of the Loan received by, or allocated to purposes for the direct
benefit of, such Person. All such indebtedness and rights shall be, and are
hereby agreed by the Persons included in the term "Borrowers" to be, subordinate
in priority and payment to the indefeasible repayment in full in cash of the
Obligations, and, unless the Administrative Agent agrees in writing otherwise,
shall not be exercised or repaid in whole or in part until all of the
Obligations have been indefeasibly paid in full in cash. Each Person included in
the term "Borrowers" agrees that all of such inter-company indebtedness and
rights of contribution are part of the Collateral and secure the Obligations.
Each Person included in the term "Borrowers" hereby waives all rights of
counterclaim, recoupment and offset between or among themselves arising on
account of that indebtedness and otherwise. Unless otherwise consented to in
writing by the Administrative Agent, no Person included in the term "Borrowers"
shall evidence the inter-company indebtedness or rights of contribution by note
or other instrument, and shall not secure such indebtedness or rights of
contribution with any Lien or security.
Section 2.12 Benefits to Borrowers
Each Person included in the term "Borrowers" hereby represents and
warrants to the Administrative Agent that each of them will derive benefits,
directly and indirectly, from each advance under the Loan, both in their
separate capacity and as a member of the integrated group to which each such
Person belongs and because the successful operation of the integrated group is
dependent upon the continued successful performance of the functions of the
integrated group as a whole, because (i) the terms of the consolidated financing
provided under this Agreement are more favorable than would otherwise be
obtainable by such Persons individually, and (ii) the additional administrative
and other costs and reduced flexibility associated with individual financing
arrangements which would otherwise be required if obtainable would substantially
reduce the value to such Persons of the financing.
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Section 2.13 Guaranty
(a) Each Person included in the term "Borrowers" hereby
unconditionally and irrevocably, guarantees to the Administrative Agent:
(i) the due and punctual payment in full (and not
merely the collectibility) by the other Persons included in the term
"Borrowers" of the Obligations, including unpaid and accrued
interest thereon, in each case when due and payable, all according
to the terms of this Agreement, the Note and the other Financing
Documents;
(ii) the due and punctual payment in full (and not
merely the collectibility) by the other Persons included in the term
"Borrowers" of all other sums and charges which may at any time be
due and payable in accordance with this Agreement, the Note or any
of the other Financing Documents;
(iii) the due and punctual performance by the
other Persons included in the term "Borrowers" of all of the other
terms, covenants and conditions contained in the Financing
Documents;
(iv) all the other Obligations of the other
Persons included in the term "Borrowers";
(b) The obligations and liabilities of each Person
included in the term "Borrowers" as a guarantor under this Section shall be
absolute and unconditional and joint and several, irrespective of the
genuineness, validity, priority, regularity or enforceability of this Agreement,
the Note or any of the Financing Documents or any other circumstance which might
otherwise constitute a legal or equitable discharge of a surety or guarantor.
Each Person included in the term "Borrowers" in its capacity as a guarantor
expressly agrees that the Administrative Agent may, in its sole and absolute
discretion, without notice to or further assent of such Borrower and without in
any way releasing, affecting or in any way impairing the joint and several
obligations and liabilities of such Person as a guarantor hereunder:
(i) waive compliance with, or any defaults under,
or grant any other indulgences under or with respect to any of the
Financing Documents;
(ii) modify, amend, change or terminate any
provisions of any of the Financing Documents;
(iii) grant extensions or renewals of or with
respect to this Agreement, the Note or any of the other Financing
Documents;
(iv) effect any release, subordination, compromise
or settlement in connection with this Agreement, the Note or any of
the other Financing Documents;
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(v) agree to the substitution, exchange, release
or other disposition of the Collateral or any part thereof, or any
other collateral for the Loan or to the subordination of any lien or
security interest therein;
(vi) make advances for the purpose of performing
any term, provision or covenant contained in this Agreement, the
Note or any of the other Financing Documents with respect to which
the Borrower shall then be in default;
(vii) make future advances pursuant to this
Agreement or any of the other Financing Documents;
(viii) assign, pledge, hypothecate or otherwise
transfer, the Obligations, the Note, any of the other Financing
Documents or any interest therein, all as and to the extent
permitted by the provisions of this Agreement;
(ix) deal in all respects with the other Persons
included in the term "Borrowers" as if this Section were not in
effect;
(x) effect any release, compromise or settlement
with any of the other Persons included in the term "Borrowers",
whether in their capacity as a Borrower or as a guarantor under this
Section or any other guarantor; and
(xi) provide debtor-in-possession financing or
allow use of cash collateral in proceedings under the Bankruptcy
Code, it being expressly agreed by all Persons included in the term
"Borrowers" that any such financing and/or use would be part of the
Obligations.
(c) The obligations and liabilities of each Person
included in the term "Borrowers", as guarantor under this Section shall be
primary, direct and immediate, shall not be subject to any counterclaim,
recoupment, set off, reduction or defense based upon any claim that such Person
may have against any one or more of the other Persons included in the term
"Borrowers", the Administrative Agent and/or any other guarantor and shall not
be conditional or contingent upon pursuit or enforcement by the Administrative
Agent of any remedies it may have against Persons included in the term
"Borrowers" with respect to this Agreement, the Note or any of the other
Financing Documents, whether pursuant to the terms thereof or by operation of
law. Without limiting the generality of the foregoing, the Administrative Agent
shall not be required to make any demand upon any of the Persons included in the
term "Borrowers", or to sell the Collateral or otherwise pursue, enforce or
exhaust its or their remedies against the Persons included in the term
"Borrowers" or the Collateral either before, concurrently with or after pursuing
or enforcing its rights and remedies hereunder. Any one or more successive or
concurrent actions or proceedings may be brought against each Person included in
the term "Borrowers" under this Section, either in the same action, if any,
brought against any one or more of the Persons included in the term "Borrowers"
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or in separate actions or proceedings, as often as the Administrative Agent may
deem expedient or advisable. Without limiting the foregoing, it is specifically
understood that any modification, limitation or discharge of any of the
liabilities or obligations of any one or more of the Persons included in the
term "Borrowers", any other guarantor or any obligor under any of the Financing
Documents, arising out of, or by virtue of, any bankruptcy, arrangement,
reorganization or similar proceeding for relief of debtors under federal or
state law initiated by or against any one or more of the Persons included in the
term "Borrowers", in their respective capacities as borrowers and guarantors
under this Section, or under any of the Financing Documents shall not modify,
limit, lessen, reduce, impair, discharge, or otherwise affect the liability of
each Borrower under this Section in any manner whatsoever, and this Section
shall remain and continue in full force and effect. It is the intent and purpose
of this Section that each Person included in the term "Borrowers" shall and does
hereby waive all rights and benefits which might accrue to any other guarantor
by reason of any such proceeding, and the Persons included in the term
"Borrowers" agree that they shall be liable for the full amount of the
obligations and liabilities under this Section regardless of, and irrespective
to, any modification, limitation or discharge of the liability of any one or
more of the Persons included in the term "Borrowers", any other guarantor or any
obligor under any of the Financing Documents, that may result from any such
proceedings.
(d) Each Person included in the term "Borrowers", as
guarantor under this Section, hereby unconditionally, jointly and severally,
irrevocably and expressly waives:
(i) presentment and demand for payment of the
Obligations and protest of non-payment;
(ii) notice of acceptance of this Section and of
presentment, demand and protest thereof;
(iii) notice of any default hereunder or under the
Note or any of the other Financing Documents and notice of all
indulgences;
(iv) notice of any increase in the amount of any
portion of or all of the indebtedness guaranteed by this Section;
(v) demand for observance, performance or
enforcement of any of the terms or provisions of this Agreement, the
Note or any of the other Financing Documents;
(vi) all errors and omissions in connection with
the Administrative Agent's administration of all indebtedness
guaranteed by this Section;
(vii) any right or claim of right to cause a
marshalling of the assets of any one or more of the other Persons
included in the term "Borrowers";
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(viii) any act or omission of the Administrative
Agent which changes the scope of the risk as guarantor hereunder;
and
(ix) All other notices and demands otherwise
required by law which such Person may lawfully waive.
(e) Within ten (10) days following any request of the
Administrative Agent to do so, each Person included in the term "Borrowers" will
furnish the Administrative Agent and such other persons as the Administrative
Agent may direct with a written certificate, duly acknowledged stating in detail
whether or not any credits, offsets or defenses exist with respect to this
Section.
Section 2.14 Limited Guaranty of Accommodator Credit Facility.
Each Person included in the Term "Borrowers" hereby unconditionally and
irrevocably guaranties to the Administrative Agent in its role as administrative
agent for the Accommodator Lenders the obligations of the Accommodator Borrowers
under the Accommodator Facility; provided, however, that recourse to the assets
of any of the Borrowers by the Accommodator Lenders shall be limited to any
excess proceeds from the exercise of the Lenders' remedies after payment in full
of all Obligations to the Lenders.
ARTICLE III
COLLATERAL
Section 3.1 Collateral
As security for the payment of any and all of the Obligations and for the
Borrowers' performance of, and compliance with, all of the terms, covenants,
conditions, stipulations and agreements contained in the Financing Documents,
the Borrowers hereby assign, grant and convey to the Lenders, and agree that the
Lenders shall have, to the extent permitted by law a perfected, continuing
security interest in, all of the Collateral. The Borrowers further agree that
the Lenders shall have in respect of the Collateral all of the rights and
remedies of a secured party under the Virginia Uniform Commercial Code and the
Uniform Commercial Code of those other states in which the Facilities are
located, whichever is applicable, and under other applicable Laws as well as
those provided in this Agreement. The Borrowers covenant and agree to execute
and deliver such financing statements and other instruments and filings as are
necessary in the opinion of the Administrative Agent to perfect such security
interest. Notwithstanding the fact that the proceeds of the Collateral
constitute a part of the Collateral, the Borrowers may not dispose of the
Collateral, or any part thereof, other than in the ordinary course of their
business or as otherwise may be permitted by this Agreement or other Security
Agreements. The Borrowers also assign, grant and convey any excess Collateral
after payment in full of the Obligations as additional collateral for the
obligations of the Accommodator Borrowers under the Accommodator Credit Facility
as security for their Guaranty set forth in Section 2.14 (Limited Guaranty of
Accommodator Credit Facility).
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Section 3.2 Eligible Projects
The Borrowers shall from time to time designate Facilities owned by any of
the Borrowers as Eligible Projects included in the Borrowing Base pursuant to
the terms hereof. The Facilities which are currently Eligible Projects are
listed on EXHIBIT C attached hereto and incorporated herein by reference or any
future Borrowing Base Report. The Credit Facility shall be secured by (a) the
first lien Deeds of Trust on the fee simple interests of the Borrowers in the
Eligible Projects or on the leasehold interests of Borrowers under Qualified
Ground Leases, (b) a first lien security interest in all fixtures, building
materials and all other machinery, equipment and other personalty used or
installed by the Borrowers or each of the premises of an Eligible Project or in
the Improvements constructed thereon, and (c) all of the other Collateral
relating to the Eligible Projects. The Borrowers may release an Eligible Project
from the lien of its Deed of Trust at any time provided no Event of Default has
occurred and is continuing and provided at least six (6) Eligible Projects
remain in the Borrowing Base upon payment of any Borrowing Base Deficiency which
would result from such release and certification that the remaining principal
sum outstanding does not exceed then current availability from the Eligible
Projects remaining in the Borrowing Base. In addition, the Borrowers may exclude
an Eligible Project from the calculation of the Borrowing Base without releasing
it from the lien of its Deed of Trust at anytime provided at least six (6)
Eligible Projects remain in the Borrowing Base; provided, however, that all
covenants and conditions set forth in this Agreement shall continue to apply to
such Eligible Project unless expressly otherwise agreed in writing by the
Administrative Agent or as otherwise provided in ARTICLE IX (Events of Default)
hereof. The Administrative Agent may in its sole discretion agree to include a
Facility occupied pursuant to a Qualified Ground Lease; provided, however, that
at no time shall Eligible Projects subject to Qualified Ground Leases, plus
Accommodator Eligible Projects subject to Qualified Ground Leases which are not
a Sunrise Qualified Ground Leases (as defined in the Accommodator Financing
Agreement) comprise more than twenty percent (20%) of the maximum availability
under the Borrowing Base under this Credit Facility at any one time.
Section 3.3 Assignment of Ownership Interests
The Obligations are further secured by one or more Pledge, Assignment and
Security Agreements, pursuant to which the owners of each of the Borrowers have
assigned to the Administrative Agent for the benefit of the Lenders one hundred
percent (100%) of all partnership or member interests in each of the Borrowers.
Section 3.4 Guaranties
The Obligations are the subject of the Guaranty Agreement and the
Performance Guaranty executed and delivered by the Guarantor in favor of the
Lenders.
Section 3.5 Collateral for Obligations
The Borrowers acknowledge that it is the intention of the Borrowers that
the Collateral and all the Deeds of Trust be security for all of the
Obligations, both those now existing and those hereafter created or incurred by
future loan, advances, extensions of credit or otherwise and
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whether or not currently contemplated by the Borrowers and/or the Lenders on or
about the date hereof.
Section 3.6 Costs
The Borrowers agree to pay on demand, to the fullest extent permitted by
applicable laws, all reasonable fees, commissions, costs, charges, travel
expenses and other expenses incurred by the Lenders, or any of them, in
connection with the taking, perfection, preservation, protection and/or release
of any security interest or lien on any of the Collateral or Deeds of Trust. The
foregoing notwithstanding, the Borrowers shall not be obligated to pay the
travel expenses of the Lenders with the exception of travel expenses incurred in
connection with any enforcement actions following the occurrence of an Event of
Default. If the Borrowers elect not to finance a Facility under this Credit
Facility or the Administrative Agent does not approve a Facility for inclusion
in the Borrowing Base, but the Administrative Agent or any of the other Lenders
have incurred costs in connection with reviewing such Facility for inclusion in
the Borrowing Base, including but not limited to appraisal fees, environmental
review fees or legal fees, all of such fees and expenses will be paid by the
Borrowers upon demand by the Administrative Agent.
ARTICLE IV
GENERAL FINANCING PROVISIONS
Section 4.1 Conditions Precedent to Credit Facility Closing and Addition
of Deeds of Trust
(a) Conditions Precedent to Credit Facility Closing and
Each Facility Closing. The following shall be conditions precedent to the Credit
Facility Closing or to the addition of an Additional Borrower and/or the
addition of an Eligible Project to the Borrowing Base (each a "Facility
Closing"):
(i) The Guaranty, this Agreement and the Note
shall have been properly executed and delivered to the
Administrative Agent.
(ii) The Administrative Agent shall have received
and approved a copy of each Borrower's fully executed Partnership
Agreement (if a limited partnership) or Operating Agreement and
Articles of Organization (if a limited liability company) and a
certified copy of the recorded Certificate of Limited Partnership
(if a limited partnership) or Articles of Organization (if a limited
liability company) or a certificate of no changes therein since the
closing on March 14, 2000. In connection with the addition of an
Additional Borrower, the Administrative Agent shall have received
and approved copies of all organizational documents, including
certified copies of all documents on record with the State in which
such entity is organized.
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(iii) The Administrative Agent shall have received
and approved a certificate executed by all of the general and
limited partners or members of the Borrowers authorizing the
execution and delivery of this Agreement or any other the Financing
Documents being delivered in connection herewith and consenting to
the Loan and related incumbency certificates and similar authority
certificates or resolutions of any Additional Borrower.
(iv) The Administrative Agent shall have received
and approved a current certificate of good standing or certificate
of fact from the State in which any Borrower is formed.
(v) The Administrative Agent shall have received
and approved an opinion of counsel for the Borrowers as to the
Borrowers' good standing, form, powers and authority and as to the
validity, binding effect and enforceability of the Financing
Documents and such an opinion shall be issued in connection with the
execution and delivery of each Joinder Agreement.
(vi) The Administrative Agent shall have received
and approved a properly and fully executed Joinder Agreement for any
Additional Borrower.
(vii) The Borrowers and the Accommodator Borrowers
shall have paid all fees then due pursuant to any fee letter between
the Administrative Agent and the Borrowers and/or the Guarantor.
(viii) The Accommodator Credit Facility shall have
closed.
(b) Conditions Precedent to Accepting an Eligible
Project:
(i) The Credit Facility Closing shall have been
completed.
(ii) The Administrative Agent shall have received
a certificate of authority to do business for the applicable
Borrower in each jurisdiction where a Facility is located (if
different from the state in which such Borrower was formed).
(iii) Unless it is an Acquisition Project or a
Completed Facility open more than twelve (12) months, the Total
Development Budget for such Eligible Project shall have been
reviewed and approved in writing by the Administrative Agent
consistent with the provision of Section 2.1 (The Loan).
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(iv) The Administrative Agent shall have received
a paid policy of title insurance (American Land Title Association
Standard Form "B" Loan Policy - Current Edition) covering the
Facility or a valid and enforceable commitment to issue the same,
together with such reinsurance agreements and direct access
agreements as may be required by the Administrative Agent and/or
endorsements to policies issued to the Administrative Agent in
connection with the Original Credit Facility, in the amount agreed
upon by the Administrative Agent (but in no event less than the Deed
of Trust Lien Amount) from a company satisfactory to the
Administrative Agent and which may be endorsed or assigned to the
successors and assigns of the Lenders and to additional Lenders
without additional cost, insuring the liens of the Deeds of Trust to
be valid first liens on the Property, free and clear of all defects,
exception and encumbrances except such as the Administrative Agent
and its counsel shall have approved but without a creditor's rights
exception and (unless otherwise agreed by the Administrative Agent)
containing affirmative insurance against mechanics liens.
(v) The Administrative Agent shall have received
advice, in form and substance and from a source satisfactory to the
Administrative Agent, to the effect that a search of the applicable
public records discloses no conditional sales contracts, chattel
mortgages, leases of personalty, financing statements or title
retention agreements filed or recorded against the Property except
such as the Administrative Agent shall have approved.
(vi) The Administrative Agent shall have received
all policies of insurance required by the terms hereof and by the
other Financing Documents to be in effect from a company or
companies and in form and amount satisfactory to the Administrative
Agent, including without limitation, flood insurance (in the amount
or evidence that flood insurance is not available or otherwise
required with respect to the Property) and earthquake insurance (if
required by the Administrative Agent), together with written
evidence, in form and substance satisfactory to the Administrative
Agent, that all fees and premiums due on account thereof have been
paid in full.
(vii) The Administrative Agent shall have
received, reviewed and accepted an appraisal of the Facility.
(viii) Unless it is an Acquisition Project or a
Completed Facility, the Administrative Agent shall have received
from the Borrowers a complete set of the Plans and Specifications
signed and sealed by the Architect, together with written evidence,
in form and substance satisfactory to the Administrative Agent, to
the effect that the Plans and Specifications are satisfactory to the
applicable Borrowers, the General Contractor, the Inspecting
Engineer and, to the extent required by
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applicable law or any effective restrictive covenant, have been
approved by all Governmental Authorities having or claiming
jurisdiction and by the beneficiary of any such restrictive
covenant, respectively.
(ix) Unless it is an Acquisition Project or a
Completed Facility, the Administrative Agent shall have received and
approved a fully executed copy of the applicable Construction
Contract, the Architect's Contract and a list of Major
Subcontractors as well as any information regarding the General
Contractor, the Architect and the Major Subcontractors which the
Administrative Agent has requested.
(x) The Administrative Agent shall have received
and approved a copy of a current Survey of the Land certified to the
Administrative Agent and to the title insurance company and any
recorded subdivision plat of the Land and otherwise complying with
the survey requirements set forth on EXHIBIT F attached hereto.
(xi) Unless it is an Acquisition Project or a
Completed Project, the Administrative Agent shall have received and
approved a site plan for the Improvements approved by all
appropriate Governmental Authorities.
(xii) Unless it is an Acquisition Project or a
Completed Project, the Administrative Agent shall have received from
the Borrowers written evidence, in form and substance satisfactory
to the Administrative Agent, from all Governmental Authorities
having or claiming jurisdiction to the effect that all building,
construction and other permits required in connection with the
development of the Land and the construction of the Improvements
have been validly issued, that all fees and bonds required in
connection therewith have been paid in full or posted, as the
circumstances may require, and that the Improvements meet zoning
requirements and all sewer and storm drain requirements.
(xiii) Unless it is an Acquisition Project or a
Completed Facility, the Administrative Agent shall have received and
approved a report setting forth a construction progress schedule in
form and substance satisfactory to the Administrative Agent, calling
for the completion of the Improvements by a date no later than the
Completion Date.
(xiv) Unless it is an Acquisition Project or a
Completed Facility, if construction work of any kind has commenced
upon the Land or materials have been placed or stored upon the Land
prior to the recordation of the Deed of Trust among the Land Records
where the Land is located, any mechanic's or materialman's Liens or
the same shall be fully insured against by the title insurance
company.
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(xv) Unless it is an Acquisition Project or a
Completed Facility, the Administrative Agent shall have received and
approved evidence that the applicable General Contractor carries
public liability and property damage insurance and workers'
compensation insurance in form and amounts and issued by companies
acceptable to the Administrative Agent.
(xvi) The Administrative Agent shall have received
and accepted a Phase I environmental audit of the applicable
Facility prepared by a person or firm acceptable to the
Administrative Agent.
(xvii) The Administrative Agent shall have
received evidence acceptable in all respects through certification
by the Architect or other source acceptable to the Administrative
Agent that the applicable Improvements do or, when constructed, will
comply with all legal requirements regarding access and facilities
for handicapped or disabled persons, including, without limitation
and to the extent applicable to assisted living facilities (or, if
applicable, independent living facilities), The Federal
Architectural Barriers Act (42 U.S.C.Section 4151 et seq.), The Fair
Housing Amendments Act of 1988 (42 U.S.C.Section 3601 et seq.), The
Americans With Disabilities Act of 1990 (42 U.S.C.Section 12101 et
seq.), The Rehabilitation Act of 1973 (29 U.S.C.Section 794) and any
applicable state statutes relating to access and facilities for
handicapped or disabled persons.
(xviii) Unless it is an Acquisition Project or a
Completed Facility, the Administrative Agent shall have received and
approved soil reports which shall (aa) demonstrate that the soil
conditions of the Land for the applicable Facility are suitable for
the construction of the Improvements and (bb) evidence to the
Administrative Agent's satisfaction that there are no Hydric Soils
on the Land.
(xix) The Administrative Agent shall have received
and approved copies of any executed Material Leases of the
applicable Property or of any portion thereof.
(xx) The Administrative Agent shall have received
and approved an opinion of local counsel for the Borrowers in the
jurisdiction where the applicable Facility is located that the
Financing Documents applicable to that Facility are in proper form
and enforceable in the context of a revolving credit facility of the
type represented by this Credit Facility and that the Loan is not
usurious, which opinion must also inform the Lenders (aa) of the
cost and timing of foreclosure; (bb) of any limitations on the
Lenders' right to obtain, or the amount of, a deficiency judgment;
and (cc) the existence of and details surrounding any
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redemption period enjoyed by the Borrower's following a sale at
foreclosure.
(xxi) At the Administrative Agent's sole option
the Administrative Agent shall have obtained the advice of its own
local counsel in the jurisdiction where the Facility is located on
the form and enforceability of any or all of the Financing Documents
at the Borrowers' expense.
(xxii) The Administrative Agent shall have
received and approved an opinion of counsel for the Borrowers that
all Licenses needed for the operation of the Facility have been
issued and describing such Licenses and the assignability thereof
under local laws or regulations. If the Eligible Project is not a
Completed Project and no License can be issued until the Eligible
Project is at or near completion, the licensing opinion shall
include a detailed explanation of the procedure for applying for and
obtaining the License and shall identify the entity that will apply
for and hold the License.
(xxiii) With regard to any Deed of Trust for a
Facility located in any state having such requirement, the
Administrative Agent shall have received evidence satisfactory to
the Administrative Agent that a Certificate of Need has been issued
for such Facility.
(xxiv) No Eligible Project may be added to the
Borrowing Base if the Deed of Trust Lien Amount which could be added
to the Borrowing Base thereby, plus the aggregate Deed of Trust lien
amounts of all other Eligible Projects would cause the Borrowing
Base to exceed the then applicable Credit Facility Committed Amount;
provided, however that in the case of an Eligible Project to be
constructed or under construction, such Eligible Project may be
added to the Borrowing Base if sufficient equity is contributed by
the Borrowers to permit the Facility to be completed within the
Credit Facility Committed Amount and if all of the equity is funded
prior to any advance of the Loan for such Eligible Project.
(xxv) In addition, no Eligible Project may be
added to the Borrowing Base if its Deed of Trust Lien Amount plus
the maximum aggregate Deed of Trust Lien Amounts of all other
Eligible Projects and the Aggregate Deed of Trust Lien Amounts of
all Accommodator Eligible Projects would cause the Borrowing Bases
of the Credit Facility and the Accommodator Credit Facility to
exceed the Credit Facility Committed Amount plus the Accommodator
Facility Committed Amount.
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(xxvi) The Administrative Agent shall have
received a pro forma Borrowing Base Certificate adding the new
Eligible Project.
(xxvii) The Administrative Agent shall have
received a properly and fully executed Joinder Agreement for any
Additional Borrower.
(xxviii) A Deed of Trust and all other Security
Documents and other Financing Documents required by the
Administrative Agent in connection with such Facility Closing shall
have been executed by the applicable Borrowers and all required
parties, delivered to the Administrative Agent and, if and as
required, recorded.
(c) Conditions Precedent to Accepting an Eligible
Project from the Accommodator Credit Facility. In connection with accepting as
an Eligible Project a Facility which has been in the Borrowing Base for the
Accommodator Credit Facility, the Administrative Agent may, in its discretion,
accept any due diligence items concerning the Facility which would be required
by subparagraphs (a) and (b) hereof but which was delivered to the
Administrative Agent in connection with the closing related to such Facility
under the Accommodator Credit Facility in satisfaction of the requirements of
subparagraphs (a) and (b) hereof. The foregoing notwithstanding, the following
additional requirements shall be satisfied in connection with the acceptance as
an Eligible Project of a Facility being transferred from the Accommodator Credit
Facility's borrowing base.
(i) The Administrative Agent shall have received
evidence satisfactory to it that SALII or another Wholly Owned
Subsidiary has acquired 100% of the ownership interest in the
applicable Accommodator Borrower.
(ii) Such Accommodator Borrower shall have
executed a Joinder Agreement.
(iii) The Administrative Agent shall have received
the authority certificates or resolutions described in subparagraph
(a)(iii).
(iv) The Administrative Agent, in its sole
discretion, shall have received any reports, certificates or
information it deems necessary to update earlier due diligence
deliveries.
(v) One or more agreements shall be executed by
such Accommodator Borrower and such other parties as the
Administrative Agent shall require and recorded as appropriate
consolidating the indebtedness evidenced by the applicable
Accommodator Note into the Note and modifying the applicable deed of
trust or mortgage and other security documents provided to the
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Accommodator Lenders to provide that they secure the Credit Facility
rather than the Accommodator Credit Facility.
(vi) The Administrative Agent shall have received
a title insurance commitment or endorsement to the title insurance
policy issued to the Accommodator Lenders to insure title for the
benefit of the Lenders.
(vii) The Administrative Agent shall have received
evidence that any Sunrise Qualified Ground Lease (as defined in the
Accommodator Financing Agreement) shall have been terminated and
merged into the Borrower's fee ownership of the Facility.
(viii) In connection with such Facility Closing,
the Lenders shall advance under the Loan at least enough funds to
pay down the Accommodator Credit Facility by the amount outstanding
under the applicable Accommodator Note.
Section 4.2 Conditions Precedent to Determining Availability Under
Borrowing Base or Making an Advance Under the Loan
The Lenders shall not be obligated to include any Requisition for an
individual Eligible Project in the calculation of the Borrowing Base or make any
advance under the Loan unless the conditions described in Section 4.1
(Conditions Precedent to Credit Facility Closing and Addition of Deeds of Trust)
and the following additional conditions shall have been satisfied with regard to
such Eligible Project to the Administrative Agent's satisfaction:
(a) The Administrative Agent shall have received a
monthly title report on each Eligible Project which is under construction from
the applicable title insurance company, indicating that since the last preceding
report, there has been no change in the status of title and no other exceptions
not theretofore approved by the Administrative Agent, if required by the terms
of the existing title insurance policy, the Administrative Agent shall have
received an endorsement which shall have the effect of advancing the effective
date of the policy to the date of the advance then being made and increasing the
coverage of the policy by an amount equal to the Requisition being verified if
the policy does not by its terms provide for such an increase.
(b) No Default or Event of Default shall have occurred
and be continuing under any Note or any of the other Financing Documents.
(c) None of the Improvements shall have been materially
damaged by fire or other casualty unless the Administrative Agent shall have
received or reasonably anticipates receiving proceeds of insurance sufficient in
the judgment of the Administrative Agent to effect a satisfactory restoration of
such Improvements in accordance with the terms of the applicable Deed of Trust.
(d) The Administrative Agent shall have received written
evidence, in form and substance satisfactory to the Administrative Agent, to the
effect that all
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work requiring inspection by Governmental Authorities having or claiming
jurisdiction has been duly inspected and approved by such authorities and by any
rating or inspection organization, bureau, association or office having or
claiming jurisdiction.
(e) The representations and warranties made in ARTICLE
III (COLLATERAL) shall be true and correct in all material respects on and as of
the date of the advance with the same effect as if made on such date.
(f) All terms and conditions of the Financing Documents
required to be met as of the date of the applicable advance shall have been met
to the complete satisfaction of the Administrative Agent.
(g) In the reasonable judgment of the Administrative
Agent, all work completed on the applicable Property at the time of the
application for an advance has been performed in a good and workmanlike manner
and all materials and fixtures usually furnished and installed at that stage of
construction have been furnished and installed and that all costs covered by the
Requisition have been paid by the Borrowers.
(h) The Administrative Agent shall have determined
whether each Eligible Project is a Pool A, Pool B, Pool C or Pool D Project.
(i) Before verifying any Requisition, the Administrative
Agent shall require the Borrowers to obtain from the applicable General
Contractor and if required by the applicable title insurance company from all
subcontractors and material suppliers acknowledgments of payment and releases of
liens and rights to claim liens for work performed or materials delivered
covered by such Requisition. All such acknowledgments and releases shall be in
form AIA Forms G706 and G706A.
(j) The Administrative Agent's Inspecting Engineer will
inspect work performed which is covered by each Requisition being verified.
Section 4.3 Conditions Under Which an Eligible Project is a Completed
Facility
The Administrative Agent shall verify that an Eligible Project is a
Completed Facility based on the satisfaction of the following additional
conditions and prior to inclusion in the Borrowing Base, all Acquisition
Projects shall also satisfy the following conditions:
(a) The Administrative Agent shall have received the
final "as built" Survey for the applicable Property.
(b) The Administrative Agent shall have received written
evidence from a qualified third party, in form and substance satisfactory to the
Administrative Agent, to the effect that the applicable Improvements have been
substantially completed in accordance with their Plans and Specifications
(except in the case of an Acquisition Project completed prior to a Borrower's
acquisition thereof).
(c) The Administrative Agent shall have received written
evidence, in form and substance satisfactory to the Administrative Agent, to the
effect that
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requisite certificates for permanent occupancy or completion of the Improvements
have been validly issued.
(d) For any recently Completed Facility, final waivers
of liens of the General Contractor, and if required by the applicable title
insurance company, subcontractors, laborers and material suppliers have been
furnished to the Administrative Agent or, as to any disputed lien or claim of
lien, a bond in form and substance acceptable to the Administrative Agent has
been provided or other arrangements satisfactory to the Administrative Agent
have been made.
The Administrative Agent shall have received a copy of an operating
License for the Facility or other evidence satisfactory to the Administrative
Agent that the Facility may be lawfully operated as contemplated by the
Financing Documents.
Section 4.4 Liens; Setoff
The Borrowers hereby grant to the Lenders a continuing lien and security
interest for all the Obligations upon any and all monies, securities, and other
property of the Borrowers and the proceeds thereof, now or hereafter held or
received by or in transit to, the Lenders, or any affiliate of any of the
Lenders, from or for any of the Borrowers, and also upon any and all deposits
(general or special) and credits of any of the Borrowers with any of the
Lenders, if any, at any time existing. During the continuance of any Event of
Default under this Agreement, each Lender is hereby authorized by any of the
Borrowers at any time and from time to time, without notice to the Borrowers, to
set off, appropriate and apply any or all items hereinabove referred to against
all Obligations then outstanding.
Section 4.5 Payment and Performance of Obligations
The payment and performance by the Borrowers of the Obligations shall be
absolute and unconditional, irrespective of any defense or any rights of
set-off, recoupment or counterclaim it might otherwise have against the Lenders,
or any of them, and the Borrowers shall pay absolutely net all of the
Obligations, free of any deductions and without abatement, diminution or
set-off; and until payment in full of all of the Obligations, the Borrowers: (a)
will not suspend or discontinue any payments provided for in the Note and (b)
will perform and observe all of its other agreements contained in this
Agreement, including (without limitation) all payments required to be made to
the Administrative Agent, and (c) will not terminate or attempt to terminate
this Agreement or any of the other Financing Documents to which any of the
Borrowers is a party for any cause.
Section 4.6 Payments to Others for the Account of the Borrowers
At the option of the Lenders and without any request from the Borrowers,
and without waiving any of its rights hereunder, the Lenders may elect to cure
or avoid any default by the Borrowers under the Financing Documents by applying
amounts due hereunder or advancing the Lenders' own funds to the satisfaction of
the conditions of the Financing Documents and any amounts so applied shall be
part of the Loan and shall be secured by the Deeds of Trust and the other
Collateral. The Administrative Agent agrees to endeavor to give the Borrowers
notice of any such payment or performing such act and the amount of any payment
whether prior to or
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contemporaneously with its making such payment or performance of such act;
provided, however, that failure to give such notice shall not constitute a
waiver by the Lenders of, or constitute a defense to, any of the rights of the
Lenders under this Agreement or the other Financing Documents, including
(without limitation) the right of the Lenders to repayment of the amount of such
payment.
Section 4.7 Prepayment
The Borrowers shall have the right to prepay the Loan in full or in part,
at any time and from time to time, upon five (5) days' prior written notice to
the Administrative Agent without premium or penalty. The foregoing
notwithstanding, in connection with any prepayment of a principal sum on any day
other than the last day of the Interest Period applicable thereto, the Borrowers
shall pay to the Administrative Agent upon request by the Administrative Agent,
such amount as shall be sufficient to compensate any of the Lenders for any and
all losses or expenses which such Lender may sustain or incur (including without
limitation, any such loss or expense arising from the redeployment of funds
obtained by such Lender). Unless an Event of Default has occurred, any partial
prepayment shall be applied first to such breakage costs, second to accrued and
unpaid interest and third to the outstanding principal balance of the Loan due
and owing at maturity. Sums borrowed and repaid may be readvanced. The
Borrowers' obligations under this Section shall survive the termination of this
Agreement and the repayment of the Obligations.
Section 4.8 Assignments
The Borrowers agree not to transfer, assign, pledge or hypothecate any
right or interest in any payment or advance due pursuant to this Agreement, or
any of the other benefits of this Agreement, without the prior written consent
of the Administrative Agent. Any assignment made or attempted by the Borrowers,
or any of them, without the prior written consent of the Administrative Agent
shall be void and of no effect. No consent by the Administrative Agent to an
assignment by the Borrowers shall release the Borrowers as the parties primarily
obligated and liable under the terms of this Agreement unless the Borrowers
shall be released specifically by the Administrative Agent in writing. No
consent by the Administrative Agent to an assignment shall be deemed to be a
waiver of the requirement of prior written consent by the Administrative Agent
with respect to each and every further assignment and as a condition precedent
to the effectiveness of such assignment.
Section 4.9 Liability of the Lenders
The Lenders shall in no event be responsible or liable to any person other
than the Borrowers for the disbursement of or failure to disburse the Loan
proceeds or any part thereof and neither the General Contractor nor any
subcontractor, laborer or material supplier shall have any right or claim
against the Lenders under this Agreement or the administration thereof. No
Lender shall be liable to the Borrowers for the failure of any other Lender to
fund its ratable portion of any advance pursuant to the Agency Agreement.
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Section 4.10 Stored Materials
The Administrative Agent will permit inclusion of construction materials
(the "Stored Materials") to be included in Requisitions prior to their
incorporation into the Improvements if they have been fully paid for by or on
behalf of the applicable Borrower. The Borrowers shall securely store or cause
to be securely stored any Stored Materials. If required by the Administrative
Agent for any Stored Materials not stored on the Property, the Borrowers will
execute additional documents to confirm that the Lenders have a perfected Lien
on such Stored Materials.
Section 4.11 Limitations on Advances or Readvances
The following additional limitations on availability under the Loan shall
also apply:
(a) Interest Reserve. Except as provided in Section 2.8
(Permitted Costs), after the earlier of the issuance of certificate of occupancy
for a Facility or the expiration of the Construction Phase, no further
availability under the Borrowing Base shall be given from the Interest Reserve
category in such Total Development Budget.
(b) Development Fee. Availability under the Borrowing
Base for the Development Fee for any Eligible Project other than an Eligible
Project originally financed as an Accommodator Eligible Project will be given
ratably with the first twelve (12) monthly Requisitions. For any Eligible
Project which was previously an Accommodator Eligible Project, the Lenders will
approve availability under the Borrowing Base for such portion of the
Development Fee as would have been accrued based on the number of months the
Facility has been under construction times one-twelfth (1/12th) of the
Development Fee for such Facility. The Development Fee shall not exceed five
percent (5%) of the Total Development Budget.
(c) Operating Reserve. No advances from the Operating
Reserve shall be made until both a certificate of occupancy has been issued by
the applicable governmental authorities and, if applicable to the Facility, an
operating License has been issued for the Facility by the appropriate
Governmental Authority or Authorities. Advances from the Operating Reserve shall
be for the sole purpose of paying Debt Service or net operating losses as shown
on a monthly financial report for such Facility prepared in accordance with the
requirements set forth in this Agreement, and certified by the Chief Financial
Officer, Executive Vice President or President of the Guarantor.
Section 4.12 Feasibility Studies.
The Borrowers and the Administrative Agent agree that a Borrower may
request that the Administrative Agent order a market feasibility study from an
appraiser or other third-party consultant for any proposed Facility under
consideration to become an Eligible Project. The Borrowers agree that such study
is for informational purposes only and that the Administrative Agent is not
warranting the accuracy, completeness or reliability of any such study and
indemnifies and holds harmless the Administrative Agent and the other Lenders
from any claims arising out of or relating to any feasibility study. The
Administrative Agent acknowledges that the Lenders shall not require that a
feasibility study be obtained on any Facility. Administrative Agent acknowledges
that the Borrowers may use a feasibility study to decide whether to proceed
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to have an Appraisal performed for a proposed Facility. However, the
Administrative Agent shall receive a copy of any such feasibility study and the
Borrowers shall pay the cost of each such study on demand by the Administrative
Agent, whether or not such Facility becomes an Eligible Project. The Borrowers
acknowledge that any Appraisal of the same Facility may or may not be performed
by the same party who performed any market feasibility study, in the
Administrative Agent's sole discretion.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to make available the Credit Facility, the Borrowers
represent and warrant to the Lenders that:
Section 5.1 Existence/Good Standing
Each Borrower is a limited partnership or a limited liability company duly
organized and existing and in good standing under the laws of the jurisdiction
of its formation, has the power to own its property and to carry on its business
as now being conducted, and is duly qualified to do business and is in good
standing in each jurisdiction in which each Facility owned by such Borrower is
located and in which the character of the properties owned by it therein or in
which the transaction of its business makes such qualification necessary.
Section 5.2 Power and Authority
Each Borrower has full power and authority to execute and deliver this
Agreement and each of the other Financing Documents executed and delivered by
it, to make the borrowing hereunder, and to incur the Obligations, all of which
have been duly authorized by all proper and necessary partnership action. No
consent or approval of partners or members of, or lenders to, the Borrowers, and
no consent or approval of any Governmental Authority or any third party payor on
the part of the Borrowers, is required as a condition to the validity or
enforceability of this Agreement or any of the other Financing Documents
executed and delivered by any of the Borrowers or to the payment or performance
by the Borrowers of the Obligations.
Section 5.3 Binding Agreements
This Agreement and each of the other Financing Documents executed and
delivered by the Borrowers have been properly executed by the Borrowers,
constitute valid and legally binding obligations of the Borrowers, and are fully
enforceable against the Borrowers in accordance with their respective terms.
Section 5.4 Litigation
There are no proceedings pending before any court or arbitrator or before
or by any Governmental Authority which, in any one case or in the aggregate,
will cause a Material Adverse Change in any of the Borrowers or affect the
authority of any of the Borrowers to enter into this Agreement or any of the
other Financing Documents executed and delivered by any of the Borrowers. There
is no pending revocation, suspension, termination, probation, restriction,
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limitation or non-renewal of any License, Participation Agreement or any similar
accreditation or approval organization or Governmental Authority for healthcare
providers, including, without limitation, the issuance of any provisional
License or other License with a term of less than twelve (12) months, as a
consequence of any sanctions imposed by any Governmental Authority, nor is there
any pending assessment of any civil or criminal penalties by any Governmental
Authority, the outcome of which, if determined adversely to any of the
Borrowers, could result in a Material Adverse Change in any of the Borrowers.
The Borrowers do not have any appeals regarding rates or reimbursements
currently pending or contemplated before any Governmental Authority or any
administrator of any third party payor or preferred provider program or referral
source, the outcome of which, if determined adversely to any of the Borrowers,
could result in a Material Adverse Change in any of the Borrowers. There are no
Medicare or Medicaid recoupments or recoupments of any other third party payor
being sought, requested or claimed, against any of the Borrowers, the outcome of
which, if determined adversely to any of the Borrowers could materially impair
any of the Borrowers' ability to pay the Obligations, except as otherwise
disclosed in writing to, and approved by, the Administrative Agent.
Section 5.5 No Conflicting Agreements
There is (a) no provision of any Borrower's partnership agreement,
articles of incorporation or operating agreement and no provision of any
existing mortgage, indenture, contract or agreement binding on any of the
Borrower or affecting its property, and (b) to the knowledge of the Borrowers no
provision of law or order of court binding upon any of the Borrowers, which
would conflict with or in any way prevent the execution, delivery, or
performance of the terms of this Agreement or of any of the other Financing
Documents executed and delivered by any of the Borrowers, or which would be
violated as a result of such execution, delivery or performance, or, if so, all
necessary consents have been obtained.
Section 5.6 Financial Information
All financial statements or information hereto furnished to the Lenders
with respect to the Borrowers, each Facility and the Guarantor is complete and
correct in all material respects and fairly presents the financial condition of
the Borrowers and the financial condition of the Facilities. There are no
liabilities, direct or indirect, fixed or contingent, of any of the Borrowers or
the Guarantor which are not reflected in the their respective financial
statements or in the notes thereto. There has been no Material Adverse Change in
the financial condition or operations of any of the Borrowers or the Guarantor
since the financial statements dated December 31, 2000 (and to the Borrowers'
and Guarantor's knowledge, no such Material Adverse Change is pending), and
neither any of the Borrowers nor the Guarantor has guaranteed the obligations
of, or made any investments in or advances to, any company, individual or other
entity, except as disclosed in such information.
Section 5.7 No Default
None of the Borrowers are in default under or with respect to any
obligation under any agreement to which such Borrower is a party in any respect
which could result in a Material Adverse Change. There is no Event of Default
hereunder.
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Section 5.8 Taxes
The Borrowers have filed or have caused to have been filed all federal,
state and local tax or informational returns which are required by law to be
filed, and has paid or caused to have been paid all Taxes as shown on such
returns or on any assessment received by them, to the extent that such Taxes
have become due, or which are required by law to be paid, unless and to the
extent only that such Taxes, assessments and governmental charges are currently
contested in good faith and by appropriate proceedings by the Borrowers and
adequate reserves therefor have been established as required under GAAP.
Section 5.9 Place(s) of Business and Location of Collateral
The Borrowers warrant that the address of the Borrowers' chief executive
office is as specified in EXHIBIT D attached hereto and made a part hereof and
that the address of each other place of business of any of the Borrowers, are as
disclosed in EXHIBIT D. The Collateral and all books and records pertaining to
the Collateral are and/or will be located at the addresses indicated on EXHIBIT
D. The Borrowers will immediately advise the Administrative Agent in writing of
the opening of any new place of business or the closing of any existing place of
business of any of the Borrowers, and of any change in the location of the
places where the Collateral, or any part thereof, or the books and records
concerning the Collateral, or any part thereof, are kept. EXHIBIT D may be
modified from time to time to add the locations of additional Facilities.
Section 5.10 Title to Properties
The Borrowers have good and marketable title to all of their properties,
including, without limitation, the Property and the Collateral. The Property and
the Collateral are free and clear of mortgages, pledges, liens, charges and
other encumbrances other than the Permitted Liens.
Section 5.11 Margin Stock
None of the proceeds of the Loan will be used, directly or indirectly, by
any of the Borrowers for the purpose of purchasing or carrying, or for the
purpose of reducing or retiring any indebtedness which was originally incurred
to purchase or carry, any "margin security" or "margin stock" within the meaning
of Regulation U (12 CFR ARTICLE 221), of the Board of Governors of the Federal
Reserve System (herein called "margin security" and "margin stock") or for any
other purpose which might make the transactions contemplated herein a "purpose
credit" within the meaning of said Regulation G or Regulation U, or cause this
Agreement to violate any other regulation of the Board of Governors of the
Federal Reserve System or the Securities Exchange Act of 1934 or the Small
Business Investment Act of 1958, as amended, or any rules or regulations
promulgated under any of such statutes.
Section 5.12 ERISA
With respect to any "pension plan", as defined in Section 3(2) of ERISA,
which plan is now or previously has been maintained or contributed to by any of
the Borrowers and/or by any Commonly Controlled Entity: (a) no "accumulated
funding deficiency" as defined in Code Section 412
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or ERISA Section 302 has occurred, whether or not that accumulated funding
deficiency has been waived; (b) no "reportable event" as defined in ERISA
Section 4043 has occurred; (c) no termination of any plan subject to Title IV of
ERISA has occurred; (d) neither any of the Borrowers nor any Commonly Controlled
Entity has incurred a "complete withdrawal" within the meaning of ERISA Section
4203 from any multiemployer plan; (e) neither any of the Borrowers nor any
Commonly Controlled Entity has incurred a "partial withdrawal" within the
meaning of ERISA Section 4205 with respect to any multiemployer plan; (f) no
multiemployer Plan to which any of the Borrowers or any Commonly Controlled
Entity has an obligation to contribute is in "reorganization" within the meaning
of ERISA Section 4241 nor has notice been received by any of the Borrowers or
any Commonly Controlled Entity that such a multiemployer plan will be placed in
"reorganization".
Section 5.13 Governmental Consent
Neither the nature of any of the Borrowers or of its business or
properties, nor any relationship between any of the Borrowers and any other
Person, nor any circumstance in connection with the making of the Loan, or the
offer, issue, sale or delivery of the Note is such as to require a consent,
approval or authorization of, or filing, registration or qualification with, any
Governmental Authority, on the part of any of the Borrowers, as a condition to
the execution and delivery of this Agreement or any of the other Financing
Documents, the borrowing of the principal amounts of the Loan or the offer,
issue, sale or delivery of the Note.
Section 5.14 Full Disclosure
The financial statements referred to in this ARTICLE V (REPRESENTATIONS
AND WARRANTIES) do not, nor does this Agreement, nor do any written statements
furnished by the Borrowers to the Administrative Agent in connection with the
making available of the Credit Facility, contain any untrue statement of fact or
knowingly omit a material fact necessary to make the statements contained
therein or herein not materially misleading. The Borrowers have not failed to
disclose any fact to the Administrative Agent in writing which materially
adversely affects or, will or could prove to materially adversely affect the
properties, business, prospects, profits or condition (financial or otherwise)
of any of the Borrowers or the ability of any of the Borrowers to perform this
Agreement or any of the other Financing Documents.
Section 5.15 Business Names and Addresses
The Borrowers have not conducted business under any name other than their
current names or tradenames or under the "Karrington" name and have not
conducted their business in any jurisdiction other than those listed on EXHIBIT
D. The Borrowers intend to operate the Facilities under the names set forth on
EXHIBIT D. The Borrowers shall promptly notify the Administrative Agent of any
change in the name of any Facility.
Section 5.16 Licenses and Certifications
The Borrowers further represent and warrant to the Lenders that, with
respect to any License they possess or have applied for, (a) no Default or Event
of Default has occurred or is continuing under the terms of any of the Licenses,
or any condition to the issuance, maintenance, renewal and/or continuance of any
License, (b) the Borrowers have paid all fees, charges and
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other expenses to the extent due and payable with respect to, and has provided
all information and otherwise complied with all material conditions precedent
to, the issuance, maintenance, renewal, and continuance of all Licenses, (c) the
Borrowers have not received any notice from any Governmental Authority relating
to any actual or pending suspension, revocation, restriction, or imposition of
any probationary use, of any License, nor has any License been materially
amended, supplemented, rescinded, terminated, or otherwise modified except as
otherwise disclosed in writing to, and approved by, the Administrative Agent,
(d) the Borrowers have not made any previous assignment of any of the Licenses
to any Person, and (e) no financing statement covering any of the Licenses is on
file in any public office except financing statements in favor of the Lenders.
Without implying any limitation to the other representations and warranties
contained in this Agreement, the Borrowers are not required by any applicable
Law of any state, county or city in which any of the Facilities is located to
obtain a certificate of need to operate any Facility as an assisted living
facility or, an independent living facility or has applied for and obtained such
Certificate(s) of Need. Licenses to operate are required in all states where the
Facilities are located and Certificates of Need are also required in the State
of New Jersey. In New York and Illinois, licenses must be held by a Home
Healthcare Provider.
Section 5.17 Operating Agreements and Management Contracts
The Borrowers have furnished to the Administrative Agent photocopies of
all material Operating Agreements and Management Contracts entered into with
respect to the Facilities, and all amendments, supplements and modifications
thereto including, without limitation, the Management Agreement. The Borrowers
further represent and warrant to the Lenders that (a) all of the material
Operating Agreements and Management Contracts are or will be at the time of
execution and delivery thereof valid and binding on the parties thereto and in
full force and effect, (b) no Default or Event of Default has occurred or is
continuing under the terms of any of the material Operating Agreements and
Management Contracts, and no party thereto has attempted or threatened to
terminate any such Management Contract or Operating Agreement, (c) the Borrowers
have not made any previous assignment of any Operating Agreements and Management
Contracts to any Person, and (d) no financing statement covering any of the
Operating Agreements and Management Contracts is on file in any public office,
except financing statements in favor of the Lenders in connection with the
Credit Facility.
Section 5.18 Participation Agreements and Resident Agreements
The Borrowers have furnished to the Administrative Agent, on or before the
Facility Closing, the Borrowers' form of Resident Agreement used with respect to
all Facilities and, if requested by the Administrative Agent after the
occurrence and during the continuance of a Default, copies of all current,
executed Resident Agreements for any or all of the Eligible Projects.
(a) The Borrowers further covenant to the Lenders that,
with respect to the Participation Agreements, if any, (i) to the best of their
knowledge, all Participation Agreements will be at the time of execution and
delivery thereof valid and binding on the parties thereto and in full force and
effect, and (ii) all Participation Agreements will provide for payment to the
applicable Borrower for services rendered to residents. The
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Borrowers represent and warrant that as of the date hereof it has not entered
into any Participation Agreement for any Facility.
(b) To the extent the Borrowers participates or will
participate in Medicare or Medicaid payment and reimbursement programs, the
Borrowers have complied and will comply with all notice and other requirements
under Title XVIII and Title XIX of the Social Security Act to enable the
Borrowers to participate in the Medicare and Medicaid payment and reimbursement
programs.
Section 5.19 Compliance with Laws
None of the Borrowers is in violation of any applicable laws of any
Governmental Authority pertaining to employment practices, health standards or
controls, environmental and occupational standards or controls or order of any
court or arbitrator, the violation of which, considered in the aggregate, would
result in a Material Adverse Change in any of the Borrowers. Each of the
Borrowers are in compliance with all accreditation standards and requirements to
which it is subject. Each of the Borrowers have obtained or will obtain all
Licenses necessary to the ownership of its property or to the conduct of its
activities which, if not obtained, could materially adversely affect the ability
of any of the Borrowers to conduct its activities of operating each Facility as
an assisted living facility, including, without limitation if and as required by
any Governmental Authorities for the dispensing, storage, prescription,
disposal, and use of drugs, medications and other "controlled substances" and
for the maintenance of cafeteria and other food and beverage facilities or
services or the condition (financial or otherwise) of any of the Borrowers.
Section 5.20 Presence of Hazardous Materials or Hazardous Materials
Contamination
None of the Borrowers has placed Hazardous Materials on any real property
owned, controlled or operated by any of the Borrowers or for which any of the
Borrowers are responsible except as described in the following sentence. To the
best of the Borrowers' knowledge, no Hazardous Materials are located on any real
property owned, controlled or operated by any of the Borrowers or for which any
of the Borrowers are responsible, except as disclosed in any Environmental
Warranty Agreement executed by a Borrower in connection with a Facility Closing
and except for reasonable quantities of necessary supplies for use by the
Borrowers in the ordinary course of its current line of business and stored,
used and disposed of in accordance with applicable Laws, and no property owned,
controlled or operated by any of the Borrowers has ever been used as a
manufacturing, storage, or dump site for Hazardous Materials nor is such
property affected by Hazardous Materials Contamination.
Section 5.21 Nature of Credit Facility; Usury; Disclosures
Each of the Borrowers is a business or commercial organization, and the
Credit Facility is being made solely for the purpose of carrying on or acquiring
a business or commercial enterprise. The rate or rates of interest charged on
the Note do not, and will not, violate any usury Law or interest rate
limitation. The Credit Facility is not subject to the federal Consumer Credit
Protection Act (15 U.S.C. Section 1601 et. seq.) nor any other federal or state
disclosure or
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consumer protection laws. The Credit Facility is being transacted solely for
business or commercial purposes and not for personal, family or household
purposes.
Section 5.22 Compliance with Zoning
The Borrowers represent and warrant that the anticipated use of each
Eligible Project complies with applicable zoning ordinances, regulations and
restrictive covenants affecting such Land, all use requirements of any
Governmental Authority having jurisdiction have been satisfied, and no violation
of any law or regulation exists with respect thereto.
Section 5.23 Plans and Specifications
The Borrowers represent and warrant that, to the extent required by
applicable law or any effective restrictive covenant, the Plans and
Specifications for each Eligible Project have been approved by all Governmental
Authorities having or claiming jurisdiction and by any beneficiary of any such
restrictive covenant.
Section 5.24 Building Permits; Other Permits
The Borrowers represent and warrant that all building, construction and
other permits necessary or required in connection with the development of the
applicable Land and the construction of the Improvements have been or, prior to
any advance under the Loan for an Eligible Project to be constructed or under
construction, will be, unless otherwise agreed to by the Administrative Agent,
validly issued and all fees and bonds required in connection therewith have been
paid or posted, as the circumstances may require.
Section 5.25 Utilities
The Borrowers represent and warrant that all utility services necessary
for the development of all the Land and the construction of the Improvements for
each Eligible Project and the operation thereof for their intended purpose are
or will be available at the boundaries of all the Land, including, without
limitation, telephone service, water supply, storm and sanitary sewer
facilities, natural gas (if available) and electric facilities.
Section 5.26 Access; Roads
The Borrowers represent and warrant that all roads and other accesses
necessary for the development of all the Land and the construction of all the
Improvements for all Eligible Projects and full utilization thereof for their
intended purposes have either been completed or the necessary rights of way
therefor have either been or will be acquired by the appropriate Governmental
Authorities or have been or will be dedicated to public use and accepted by such
Governmental Authorities and all necessary steps have been taken by the
Borrowers or such Governmental Authorities to assure the complete construction
and installation thereof by a date sufficient to ensure the timely completion of
the Improvements and in no event later than the Completion Date or such Eligible
Projects have access to a public road via a private road pursuant to recorded
easements satisfactory to the Administrative Agent.
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Section 5.27 Other Liens
The Borrowers represent and warrant that except as otherwise provided in
the Financing Documents, the Borrowers have made no contract or arrangement of
any kind the performance of which by the other party thereto would give rise to
a Lien on any Eligible Project.
Section 5.28 Defaults
The Borrowers represent and warrant that there is no default on the part
of any of the Borrowers under the Financing Documents and no event has occurred
and is continuing which, with notice or the passage of time, or both, would
constitute a default under the Note or any of the other Financing Documents.
Section 5.29 Survival; Updates of Representations and Warranties
All representations and warranties contained in or made under or in
connection with this Agreement and the other Financing Documents shall survive
the date of this Agreement and the Loan made hereunder. The Lenders acknowledge
and agree that any and all representations and warranties contained in, or made
under, or in connection with, this Agreement may be amended, changed or
otherwise modified by the Borrowers at any time and from time to time after the
date of this Agreement so as to accurately reflect the matters represented and
warranted therein; provided, that such amendments, changes and/or modifications
are disclosed in writing to the Administrative Agent. The Lenders shall have no
obligation to waive any Event of Default due to any present or future inaccuracy
of such representation or warranty or to agree to any amendment, change or
modification of any such representation or warranty.
Section 5.30 Accounts
With respect to all of the Borrowers' Accounts and to the best of the
Borrowers' knowledge (a) they are genuine, and in all respects what they purport
to be, and are not evidenced by a judgment, an instrument, or chattel paper
(unless such judgment has been assigned and such instrument or chattel paper has
been endorsed and delivered to the Administrative Agent); (b) they represent
undisputed, bona fide transactions completed in accordance with the terms and
provisions contained in the invoices relating thereto; (c) the services rendered
which resulted in the creation of the Accounts have been delivered or rendered
to and accepted by the Account Debtor; (d) the amounts shown on the Borrowers'
books and records, with respect thereto are actually and absolutely owing to the
Borrowers and are not contingent for any reason; (e) there are no set-offs,
counterclaims or disputes known by the Borrowers or asserted with respect
thereto, and the Borrowers have made no agreement with any Account Debtor
thereof for any deduction or discount of the sum payable thereunder except
regular discounts allowed by the Borrowers in the ordinary course of their
business for prompt payment; (f) there are no facts, events or occurrences known
to any of the Borrowers which in any way impair the validity or enforcement
thereof or tend to reduce the amount payable thereunder; (g) all Account Debtors
thereof, to the best of the Borrower's knowledge, have the capacity to contract;
(h) the services furnished giving rise thereto are not subject to any Liens
other than Permitted Liens; (i) the Borrowers have no knowledge of any fact or
circumstance which would impair the validity or collectibility thereof; and (j)
there are no proceedings or
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actions known to any of the Borrowers which are pending against any Account
Debtor which might result in any material adverse change in its financial
condition.
Section 5.31 Development of Eligible Projects
To the extent SDI is acting as development agent for any of the Eligible
Projects, the applicable Borrowers have entered into an oral agreement therefor
with SDI and all contracts entered into by SDI with respect thereto, including,
without limitation, the Architect's Contract and the Construction Contracts,
were executed by SDI with the knowledge and approval of and as agent for the
applicable Borrowers. In connection with such services as agent for any of the
Borrowers, SDI receives the Development Fee as and when payable pursuant to the
terms hereof.
ARTICLE VI
CONDITIONS OF LENDING
The making of any advance under the Loan is subject to the conditions set
forth in this Agreement and the following conditions precedent:
Section 6.1 No Default
No Event of Default and no event which, with the giving of notice or the
passage of time or both, would become an Event of Default has occurred and is
existing or would result from the making of the Loan or any advance thereunder
and all representations and warranties set forth herein or in the other
Financing Documents are true and correct, both before and after the making of
the Loan or any advance thereunder.
Section 6.2 Opinion of Counsel for the Borrowers
At the Credit Facility Closing and any Facility Closing the Lenders shall
receive a written opinion of counsel for the Borrowers and the Guarantor
satisfactory in all respects to the Administrative Agent.
Section 6.3 Approval of Counsel for the Lenders
All legal matters incident to the Loan and all documents necessary in the
opinion of the Administrative Agent to make the Loan or the addition of either
an Eligible Project to the Borrowing Base or to add such Deeds of Trust and
related Collateral shall be satisfactory in all material respects to counsel for
the Lenders.
Section 6.4 Supporting Documents
The Administrative Agent shall receive at the Facility Closing and in
connection with the subsequent granting of a Lien on an Eligible Project: (a) a
certificate of the general partner or managing member of each of the Borrowers,
in a form acceptable to the Administrative Agent in all respects, dated as of
the date hereof and certifying (i) that attached thereto is a true, complete and
correct copy of resolutions duly adopted by the partners or members of each of
the Borrowers authorizing the execution and delivery of this Agreement, the Note
and the other Financing Documents, the borrowing thereunder, and the performance
of the Obligations, and
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(ii) as to the incumbency and specimen signature of the authorized officer of
the general partner or managing member of the Borrowers executing this
Agreement, the Note and the other Financing Documents; (b) such other documents
as the Administrative Agent may reasonably require the Borrowers and/or the
partners or members of the Borrowers to execute, in form and substance
acceptable to the Administrative Agent; and (c) such additional information,
instruments, opinions, documents, certificates and reports as the Administrative
Agent may reasonably deem necessary.
Section 6.5 Financing Documents
All of the Financing Documents required by the Administrative Agent
whether at the Credit Facility Closing or any subsequent Facility Closing shall
be executed, delivered and, if deemed necessary by the Administrative Agent,
recorded, all at the sole expense of the Borrowers.
Section 6.6 Insurance
The Borrowers shall have satisfied the Administrative Agent that any and
all insurance required by this Agreement is in effect as of the date of this
Agreement or as of the date of the addition of a Deed of Trust and related
Collateral, and that, to the extent required by the Financing Documents, the
Lenders have been named as an insured lienholder.
Section 6.7 Security Documents
In order to perfect the lien and security interest created by this
Agreement, the Borrowers shall have executed and delivered to the Administrative
Agent all Security Documents (in form and substance acceptable to the
Administrative Agent in its sole discretion) deemed necessary by the
Administrative Agent, in a sufficient number of counterparts for recordation,
and, at the Borrowers' sole expense, shall record all such financing statements
and Security Documents, or cause them to be recorded, in all public offices
deemed necessary by the Administrative Agent.
Section 6.8 Joinder Agreement
In order to perfect the lien and security interest of the Lenders in the
Collateral related to the construction and operation of any Facility encumbered
by a Deed of Trust provided by an Additional Borrower, such Additional Borrower
shall execute and deliver to the Administrative Agent, a Joinder Agreement
joining in the Note as maker in this Agreement as co-borrower and in such
assignments of Collateral and such other Security Documents as the
Administrative Agent may require or shall execute Security Documents as the
Administrative Agent may require each in sufficient number of counterparts for
recordation, if required by the Administrative Agent, at the Borrowers' sole
expense. The Borrowers or the Administrative Agent shall record all financing
statements and other Security Documents, or cause them to be recorded, in all
public offices deemed necessary to the Administrative Agent.
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ARTICLE VII
AFFIRMATIVE COVENANTS OF BORROWER
Until payment in full and the performance of all of the Obligations
hereunder, the Borrowers shall:
Section 7.1 Financial Statements
Furnish to the Administrative Agent:
(a) Quarterly Statements. Not later than forty-five (45)
days after the close of each of the Borrowers' fiscal quarters internally
prepared, consolidated and consolidating financial statements of the Borrowers
and a balance sheet on a quarterly year-to-date basis and as of the close of
such period and an income and expense statement for such period and a Compliance
Certificate in the form of Exhibit G attached hereto, certified by the chief
financial officer of the Borrowers' general partner or managing member unless
such report is included in the quarterly report of the Guarantor; and
(b) Annual Statements. Not later than ninety (90) days
after the close of each of the Borrowers' fiscal years, (i) a copy of the
consolidated and consolidating annual financial statement of the Borrowers in
reasonable detail satisfactory to the Administrative Agent, internally prepared
in accordance with GAAP, which financial statement shall include a balance sheet
of the Borrowers, as at the end of such fiscal year and the related statements
of operations and retained earnings and cash flow statements for such fiscal
year in a format acceptable to the Administrative Agent and a Compliance
Certificate in the form of EXHIBIT G attached hereto, and (ii) the related
statements of operations and retained earnings and cash flows in a format
acceptable to the Administrative Agent; and
(c) Monthly Operating Reports. Beginning with the first
Operating Month, not later than thirty (30) days after the last day of each such
calendar month, operating statements for each Eligible Project for such month,
including an income and expense statement for such period and census and billing
reports with respect to each Eligible Project then operating for such period;
(d) Tax Returns. Not later than thirty (30) days after
the date of filing, the federal and state income tax returns for the Borrowers
for the year in question as well as any requests for extensions filed in
connection therewith; and
(e) Other Quarterly Reports. (i) Borrowing Base Reports
(as and when described in Section 2.1 (d) (The Loan), (ii) not later than
fifteen (15) days after the close of each of the Borrowers' fiscal quarters an
estimate of the occupancy numbers for each Eligible Project as of the end of
such quarters which report shall not be used to measure compliance with
covenants described in this Agreement but will assist the Administrative Agent
in evaluating additional Facilities proposed for inclusion in the Borrowing Base
and, (iii) in connection with each Borrowing Base Report, a report describing
each then Pool B, Pool C or Pool D Project, including its performance in the
preceding quarter and projected performance for subsequent quarters.
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(f) Guarantor Statements. Cause the Guarantor to furnish
such financial statements as are required pursuant to the terms of the Guaranty.
(g) Other Information. With reasonable promptness such
additional information, reports or statements as the Administrative Agent may
from time to time reasonably request.
(h) Certification. All required financial statements,
required pursuant to Sub-paragraphs (a) and (b) hereof shall include the
following certification:
"The undersigned as _____________ of ____________ certifies that the
financial information contained in the financial statement dated
_________, is true and complete as of this date. This statement is
provided to Bank of America, N.A. (the "Bank") as administrative
agent for certain Lenders for the purpose of obtaining credit or in
fulfillment of the terms and conditions of credit already provided.
Accordingly, it is intended that the Bank may rely on this
information".
Section 7.2 Taxes and Claims
Pay and discharge all taxes, assessments and governmental charges or
levies imposed upon it or any of its income or properties prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid, might
become a lien or charge upon any of its properties; provided, however, the
Borrowers shall not be required to pay any such tax, assessment, charge, levy or
claim, the payment of which is being contested in good faith and by proper
proceedings.
Section 7.3 Legal Existence
Maintain their existence as limited partnerships or limited liability
companies in good standing in the states of their formation and in each
jurisdiction where they are required to register or qualify to do business.
Section 7.4 Conduct of Business and Compliance with Laws
Do or cause to be done all things necessary to obtain, enter into,
preserve and to keep in full force and effect its material rights and its trade
names, patents, trademarks and Licenses, Participation Agreements, and Operating
Agreements and Management Contracts which are necessary for the operation of
each Facility as an adult assisted living facility (or independent living
facility, as applicable) as contemplated by the Borrowers, engage in and
continue to engage substantially only in the business of owning and operating an
adult assisted living facility (or independent living facility, as applicable)
and related services in compliance with all applicable laws of the state in
which the applicable Facility is located or any other Governmental Authority
having jurisdiction over such Facility, and comply with all applicable Laws,
including, without limitation, regulations issued under the Omnibus Budget
Reconciliation Act of 1987 (OBRA'87) (Xxx.X.Xx. 100-203), as amended, and
observe the valid requirements of Governmental Authorities, and perform the
terms of all Participation Agreements to which it is a party, the noncompliance
with or the nonobservance of which might materially interfere with the
performance of its Obligations or the proper or prudent conduct of its business
or the applicable Property. In addition, the Borrowers covenant and agree that
they will:
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(a) obtain and maintain in full force and effect all
Licenses necessary to the acquisition and/or ownership and/or operation of each
Facility including, without limitation, Licenses and other approvals related to
the storage, dispensation, use, prescription and disposal of drugs, medications
and other "controlled substances" and, to the extent offered by the Borrowers,
the maintenance of cafeteria and other food and beverage facilities or services;
(b) administer, maintain and operate (or will cause to
be administered, maintained and operated) each Facility as a revenue-producing
assisted living facility (or independent living facility, as applicable);
(c) to the extent the Borrowers participate in any such
programs, maintain and operate each Facility to meet the standards and
requirements and to provide healthcare of such quality and in such manner as
would enable the Borrowers to participate in, and provide services in connection
with, recognized medical and healthcare insurance programs;
(d) obtain, maintain and comply with all conditions for
the continuance of, all Licenses, including without limitation, Licenses which
may at any time be required by the state in which the applicable Facility is
located or other appropriate governmental entity, necessary or desirable for the
operation of each Facility as an adult assisted living facility (or independent
living facility, as applicable); and
(e) to the extent the Borrowers presently participate or
in the future will participate in such programs, obtain, maintain and comply
with all conditions for the continuance of certification from each applicable
Governmental Authority that the Borrowers meet all conditions for participation
in the Medicare and Medicaid programs.
Section 7.5 Use of Proceeds
Use the proceeds of the Loan for the purpose or purposes set forth in
Recital E above and Section 8.1 (Borrowings) and Section 8.14 (Distributions to
Partners or Members) and, without the prior written consent of the
Administrative Agent for no other purpose or purposes.
Section 7.6 Insurance
Provide or cause to be provided to the Administrative Agent and maintain
in full force and effect at all times during the term of the Loan, such policies
of insurance as may be required by the terms of the Financing Documents from a
company or companies, and in form and amounts satisfactory to the Administrative
Agent including, by way of example and not by way of limitation, at least the
following:
(a) During any period of construction in or on an
Eligible Project, "builder's risk" insurance, including, but not limited to,
vandalism and malicious mischief and collapse endorsements in amounts not less
than the replacement cost of the Improvements being constructed or of the
Property and naming the Administrative Agent on behalf of the Lenders as a loss
payee in the mortgagee clause thereof;
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(b) Casualty or physical damage insurance coverage for
each Eligible Project affording protection against loss or damage by fire or
other hazards covered by the standard all-risk fire and hazard insurance policy
with "extended coverage" endorsement and such other risks as shall be
customarily covered with respect to projects similar in construction, location
and use as the Property, or as the Administrative Agent may from time to time
otherwise require in amounts necessary to prevent the application of any
co-insurance provisions of any applicable policies up to an amount not less than
the greater of the full insurable value of the Improvements (as defined in the
Deed of Trust) or the aggregate principal amount of the Obligations; no policy
of insurance shall be written such that the proceeds thereof will produce less
than the minimum coverage required by this Section by reason of co-insurance
provisions or otherwise; the term "full insurable value" means the actual
replacement cost of the Property (as defined in the Deed of Trust) (excluding
foundation and excavation costs and costs of underground flues, pipes, drains
and other uninsurable items); and as to Eligible Projects naming the
Administrative Agent on behalf of the Lenders as loss payee in the mortgagee
clause thereof;
(c) General public liability insurance in amounts
usually carried by similar operations against claims for bodily injury or death
and property damage insurance for claims for damage to property (including loss
of use) occurring upon, in or about the Property naming the Administrative Agent
on behalf of the Lenders as loss payee thereunder, with such insurance to afford
protection to the limit of not less than $5,000,000 for the aggregate of all
occurrences during any given annual policy period for each Eligible Project;
(d) Workers' compensation insurance in accordance with
the requirements of applicable law or regulation naming the Administrative Agent
on behalf of the Lenders as loss payee thereunder;
(e) Business interruption insurance naming the Lenders
as additional insureds with respect to each Facility once a certificate of
occupancy has been issued for such Facility in an amount equal to at least
twelve (12) months' debt service on the applicable Loan; and
(f) To the extent that healthcare professionals are
employed by any of the Borrowers or the Management Company, medical liability,
malpractice and other healthcare professional liability insurance protecting the
Borrowers and its employees against claims arising from the professional
services performed by the Borrowers or the Management Company and their
employees with limits of (i) not less than One Million Dollars ($1,000,000.00)
with respect to injury or death for each person or occurrence, and (ii) not less
than Three Million Dollars ($3,000,000.00) in the aggregate for claims made for
injury or death in any one year, and an umbrella policy insuring against such
liability in an aggregate amount of Five Million Dollars ($5,000,000.00). In
addition, the Borrowers shall ensure that all healthcare providers with whom any
of the Borrowers contracts to provide services at any Facility are insured
against claims arising from such services with limits as set forth in clauses
(i) and (ii) above.
The Borrowers shall file with the Administrative Agent, upon its request,
a detailed list of the insurance then in effect and stating the names of the
insurance companies, the amounts and rates of the insurance, dates of the
expiration thereof and the properties and risks covered
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thereby. Each policy of insurance shall (A) be issued by one or more recognized,
financially sound and responsible insurance companies approved by the
Administrative Agent and which are qualified or authorized by the laws of the
state in which the applicable Facility is located to assume the risk covered by
such policy, (B) with respect to the insurance described under the preceding
subsections (a), (b) and (f) have attached thereto standard noncontributing,
non-reporting mortgagee clauses in favor of and entitling the Lenders without
contribution to collect any and all proceeds payable under such insurance, (C)
provide that such policy shall not be canceled or modified without at least
thirty (30) days prior written notice to the Administrative Agent, and (D)
provide that any loss otherwise payable thereunder shall be payable
notwithstanding any act of negligence of any of the Borrowers which might,
absent such agreement, result in a forfeiture of all or a part of such insurance
payment. Unless an escrow account has been established for insurance premiums
pursuant to the provisions of a Deed of Trust, the Borrowers shall promptly pay
all premiums when due on such insurance and, not less than ten (10) days prior
to the expiration date of each such policy, the Borrowers will deliver to the
Administrative Agent a renewal policy or policies marked "premium paid" or other
evidence of payment satisfactory to the Administrative Agent. The Borrowers will
immediately give the Administrative Agent notice of any cancellation of, or
change in, any insurance policy. The Lenders shall not, because of accepting,
rejecting, approving or obtaining insurance, incur any liability for (i) the
existence, nonexistence, form or legal sufficiency thereof, (ii) the solvency of
any insurer, or (iii) the payment of losses.
Section 7.7 Flood Insurance
If required by applicable law or regulation, provide or cause to be
provided to the Administrative Agent a separate policy of flood insurance in the
aggregate amount of the applicable Loan or the maximum limit of coverage
available with respect to the Property, whichever is the lesser, from a company
or companies satisfactory to the Administrative Agent and written in strict
conformity with the Flood Disaster Protection Act of 1973, as amended, and all
applicable regulations adopted pursuant thereto. In the event that flood
insurance is not required by applicable law or regulation to be provided in
connection with the applicable Loan or is not otherwise available with respect
to the Property, the Borrowers shall supply the Administrative Agent with
written evidence, in form and substance satisfactory to the Administrative
Agent, to that effect. Any such policy shall provide that the policy may not be
surrendered, canceled or substantially modified (including, without limitation,
cancellation for nonpayment of premiums) without at least thirty (30) days'
prior written notice to any and all insureds named therein, including the
Lenders.
Section 7.8 Maintenance of Properties
Keep its properties, whether owned in fee or otherwise, or leased,
including, without limitation, all of the Property, in good operating condition;
make all proper repairs, renewals, replacements, additions and improvements
thereto needed to maintain such properties in good operating condition; comply
with the provisions of all leases to which it is a party or under which it
occupies property so as to prevent any loss or forfeiture thereof or thereunder;
and comply with all laws, rules, regulations and orders applicable to its
properties or business or any part thereof.
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Section 7.9 Maintenance of the Collateral
Not permit anything to be done to the Collateral which may impair the
value thereof. Any of the Lenders or an agent designated by such Lender, shall
be permitted to enter the premises of any of the Borrowers and examine, audit
and inspect the Collateral at any reasonable time and from time to time without
notice. The Lenders shall not have any duty to, and the Borrowers hereby release
the Lenders from, all claims of loss or damage caused by the delay or failure to
collect or enforce any of the Accounts or Receivables or to preserve any rights
against any other party with an interest in the Collateral.
Section 7.10 Other Liens, Security Interests, etc.
Keep the Collateral and the Property free from all liens, security
interests and claims of every kind and nature, other than Permitted Liens;
provided, the Borrowers may lease office Equipment and other Equipment in the
used in normal course of its business for the operation of a Facility provided
the total implied cost of such leased Equipment at any Eligible Project shall
not exceed $75,000 at any one time.
Section 7.11 Defense of Title and Further Assurances
At its expense defend the title to the Collateral (or any part thereof),
and promptly upon request execute, acknowledge and deliver any financing
statement, renewal, affidavit, deed, assignment, continuation statement,
security agreement, certificate or other document the Administrative Agent may
reasonably require in order to perfect, preserve, maintain, protect, continue
and/or extend any lien or security interest granted to the Lenders under this
Agreement or any of the Security Documents and its priority. The Borrowers shall
pay to the Administrative Agent, on demand all taxes, costs and expenses
incurred by any of the Lenders, in connection with the preparation, execution,
recording and filing of any such document or instrument.
Section 7.12 Subsequent Opinion of Counsel as to Recording Requirements
Provide to the Administrative Agent a subsequent opinion of counsel as to
the filing, recording and other requirements with which any of the Borrowers
have complied to maintain the liens and security interests in favor of the
Lenders in the Collateral in the event that the Borrowers shall transfer its
principal place of business or the office where it keeps its records pertaining
to the Accounts and Receivables.
Section 7.13 Books and Records
Keep and maintain accurate books and records, make entries on such books
and records in form reasonably satisfactory to the Administrative Agent
disclosing the Lenders' assignment of, and security interest in and lien on, the
Collateral and all collections received by the Borrowers on its Accounts,
furnish to the Administrative Agent promptly upon request such information,
reports, contracts, invoices, lists of purchases of Inventory (showing names,
addresses and amount owing) and other data concerning Account Debtors and the
Borrowers' Accounts and Inventory and all contracts and collection(s) relating
thereto as the Administrative Agent may from time to time specify, unless the
Administrative Agent shall otherwise consent in writing, keep and maintain all
such books and records mentioned in (a) above only at the
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addresses listed in EXHIBIT D, and permit any person designated by any of the
Lenders to enter the premises of the Borrowers and examine, audit and inspect
the books and records at any reasonable time and from time to time.
Section 7.14 Collections
Until such time as the Administrative Agent shall notify the Borrowers of
the revocation of such privilege following an Event of Default, at its own
expense have the privilege for the account of and in trust for the Lenders of
collecting its Accounts and receiving in respect thereto all items of payment
and shall otherwise completely service all of the Accounts including (i) the
billing, posting and maintaining of complete records applicable thereto, and
(ii) the taking of such action with respect to such Accounts as the
Administrative Agent may reasonably request or in the absence of such request,
as the Borrowers may deem advisable; and in its discretion, grant, in the
ordinary course of business, to any Account Debtor, any rebate, refund or
adjustment to which the Account Debtor may be lawfully entitled, and may accept,
in connection therewith, the return of goods, the sale or lease of which shall
have given rise to an Account. The Administrative Agent may, at its option but
solely in accordance with applicable law, at any time or from time to time after
the occurrence of an Event of Default hereunder, revoke the collection privilege
given to the Borrowers herein by either giving notice of its assignment of, and
lien on the Collateral, subject to the provisions of Section 3.1 (Collateral),
to the Account Debtors or giving notice of such revocation to the Borrowers.
Section 7.15 Notice to Account Debtors and Escrow Account
In the event that (a) a Default or an Event of Default exists, or (b)
demand has been made for any or all of the Obligations, promptly upon the
request of the Administrative Agent in such form and at such times as reasonably
specified by the Administrative Agent, give notice of the Lenders' lien on the
Accounts to the Account Debtors requiring those Account Debtors which are
permitted by applicable law to make payments thereon directly to the
Administrative Agent.
Section 7.16 Business Names
Immediately notify the Administrative Agent of any change in the name or
names under which they conduct their business.
Section 7.17 ERISA
With respect to any pension plan which any of the Borrowers and/or any
Commonly Controlled Entity maintains or contributes to, either now or in the
future, that: (a) such bonding as is required under ERISA Section 412 will be
maintained; (b) as soon as practicable and in any event within 15 days after any
of the Borrowers or any Commonly Controlled Entity knows or has reason to know
that a "reportable event" has occurred or is likely to occur, the Borrowers will
deliver to the Administrative Agent a certificate signed by its chief financial
officer setting forth the details of such "reportable event"; (c) neither the
Borrowers nor any Commonly Controlled Entity will: (i) engage in or permit any
"prohibited transaction" (as defined in ERISA Section 406 or Code Section 4975)
to occur; (ii) cause any "accumulated funding deficiency" as defined in ERISA
Section 302 and/or Code Section 412; (iii) terminate any pension plan in a
manner which could result in the imposition of a lien on the property of the
Borrowers pursuant to ERISA Section 4068; (iv) terminate or
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consent to the termination of any multiemployer plan; (v) incur a complete or
partial withdrawal with respect to any multiemployer plan within the meaning of
ERISA Sections 4203 and 4205; and (d) within 15 days after notice is received by
any of the Borrowers or any Commonly Controlled Entity that any multiemployer
plan has been or will be placed in "reorganization" within the meaning of ERISA
Section 4241, the Borrowers will notify the Administrative Agent to that effect.
Upon the Administrative Agent's request, the Borrowers will deliver to the
Administrative Agent a copy of the most recent actuarial report, financial
statements and annual report completed with respect to any "defined benefit
plan", as defined in ERISA Section 3(35).
Section 7.18 Change in Management
There shall be no change of the Management Company for any Facility to any
manager other than XXXXX or another Wholly Owned Subsidiary without the prior
written consent of the Essential Lenders.
Section 7.19 Management
(a) Subject to the terms of any Management Fee Subordination Agreement by
and among a Borrower, XXXXX and the Administrative Agent, signed in connection
with a Facility Closing (individually or collectively, the "Management Fee
Subordination Agreement"), the Borrowers shall cause XXXXX to agree to
subordinate payment of any and all management fees under, or in connection with,
the Management Agreement (the "Management Fees") to payment of the Obligations,
in accordance with the terms and conditions of one or more subordination
agreements in form and content acceptable to the Administrative Agent in its
reasonable discretion, and not amend, restate, supplement, terminate, cancel or
otherwise modify any of the terms or conditions of such Management Agreement, in
any material respect, without the prior written consent of the Administrative
Agent, and (b) terminate the Management Agreement upon receipt of notice from
the Administrative Agent directing the Borrowers to terminate the Management
Agreement after the occurrence of an Event of Default, and, if requested to do
so by the Administrative Agent, enter into a management agreement for the
management of any Facility with an independent manager. The Management Agreement
shall be approved in writing by the Administrative Agent prior to execution. A
fully executed copy of the Management Agreement shall be delivered to the
Administrative Agent by the Borrowers promptly after it is signed.
Section 7.20 Surveys
Upon the Administrative Agent's request from time to time as construction
of a Facility progresses and upon the completion of the construction of the
Improvements, the Borrowers shall furnish the Administrative Agent with a Survey
with a current certification to the Administrative Agent by a registered land
surveyor licensed in the jurisdiction in which the Land is located. At any time
the Borrowers are required to furnish a Survey to the Administrative Agent
pursuant to the terms of this Agreement, the Borrower shall also furnish an
original print thereof to the title insurance company and such Survey shall not
be sufficient for the purposes of this Agreement unless and until the title
insurance company shall advise the Administrative Agent, by endorsement to the
title insurance policy or otherwise, that the Survey discloses no
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violations, encroachments or other variances from applicable set-backs or other
restrictions except such as the Administrative Agent and its counsel shall
approve.
Section 7.21 Inspections; Cooperation; Payment of Inspecting Engineer
The Borrowers shall permit the Lenders and their duly authorized
representatives (including, without limitation, the Inspecting Engineer) to
enter upon any of the Land, to inspect the Improvements and any and all
materials to be used in connection with the development of any of the Land
and/or the construction of the Improvements, to examine and make copies of all
detailed plans and shop drawings and similar materials as well as all records
and books of account maintained by or on behalf of the Borrowers relating
thereto and to discuss the affairs, finances and accounts pertaining to any
Facility and any of the Improvements with representatives of the Borrowers. The
Borrowers shall at all times cooperate and cause the General Contractor and each
and every one of its subcontractors and materialmen to cooperate with the
Lenders and their duly authorized representatives (including, without
limitation, the Inspecting Engineer) in connection with or in aid of the
performance of the Administrative Agent's or Lenders' functions under this
Agreement. The reasonable fees of any Inspecting Engineer engaged or employed by
the Administrative Agent in connection with or in aid of the performance of the
Administrative Agent's or the Lenders' functions under this Agreement shall be
paid by the Borrowers.
Section 7.22 Vouchers and Receipts
The Borrowers shall furnish to the Administrative Agent, promptly on
demand, any contracts, bills of sale, statements, receipted vouchers or
agreements pursuant to which any of the Borrowers has any claim of title to any
materials, fixtures or other articles delivered or to be delivered to the Land
or incorporated or to be incorporated into any of the Improvements. The
Borrowers shall furnish to the Administrative Agent, promptly on demand, a
verified written statement, in such form and detail as the Administrative Agent
may require, showing all amounts paid for labor and materials and all items of
labor and materials furnished or to be furnished for which payment has not been
made and the amounts to be paid therefor.
Section 7.23 Payments for Labor and Materials
The Borrowers shall pay when due all bills for services or labor performed
and materials supplied in connection with the development of the Land and the
construction of the Improvements. In the event any mechanics' lien or other lien
or encumbrance shall be filed or attached against the Property without the prior
written consent of the Administrative Agent in each instance, the Borrowers
covenant and agree that, within thirty (30) days after receipt of notice from
any source of the filing of such lien, the Borrowers will promptly discharge the
same by payment or filing bond or otherwise as permitted by law; and if the
Borrowers fail to do so, the Administrative Agent may, at its option, in
addition to, and not in limitation of, all other rights and remedies of the
Administrative Agent in the Event of Default by the Borrowers, and without
regard to the priority of said mechanics' lien or other lien or encumbrance, pay
the same, and all amounts expended by the Administrative Agent for such purpose
shall constitute loans to the Borrowers and shall be secured by the Deed of
Trust and the other Financing Documents,
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and be due and payable forthwith by the Borrowers to the Administrative Agent
with interest thereon at the Reimbursement Rate provided for in the Deed of
Trust.
Section 7.24 Correction of Construction Defects
Promptly following any demand by the Administrative Agent, the Borrowers
shall correct or cause the correction of any structural defects in the
Improvements and any material departures or deviations from the Plans and
Specifications, as determined by the Administrative Agent in its sole but
reasonable discretion, not approved in writing by the Administrative Agent.
Section 7.25 Fees and Expenses; Indemnity
Pay all reasonable fees, charges, costs and expenses required to satisfy
the conditions of the Financing Documents. The Borrowers shall hold the Lenders
harmless and indemnify the Lenders against all claims of brokers and "finders"
arising by reason of the execution and delivery of the Financing Documents or
the consummation of the transaction contemplated hereby.
Section 7.26 Governmental Surveys or Inspections
Furnish to the Administrative Agent upon its request, within thirty (30)
days of receipt thereof, copies of any and all annual surveys or inspections
performed by any Governmental Authority or accreditation or certification
organization with respect to any Facility.
Section 7.27 Cost Reports
Prepare and file all applicable cost reports to all third-party payors, if
any, to the extent required by any such third-party payor and, within thirty
(30) days thereafter, notify the Administrative Agent of any settlement of any
cost report disclosed to the Administrative Agent as being open or unsettled as
of the Closing Date to the extent any such cost report would have a materially
adverse effect on the Borrowers.
Section 7.28 Updated Appraisals
In addition, the Administrative Agent shall have the right but not the
obligation to require annual updated appraisals of any or all the Property and
the Facilities, which appraisals shall be prepared by an appraiser or appraisers
designated by the Administrative Agent and shall be in all respects reasonably
acceptable to the Administrative Agent which appraisals shall include, if deemed
necessary by the Administrative Agent, in its reasonable discretion, updated
discounted cash flow analysis, inspections of and commentary on the physical
status of the applicable Facility and an engineering review. The basis of the
appraisal calculations shown on such appraisal reports and all other aspects of
the appraisal reports must be satisfactory to the Administrative Agent in all
material respects. The release of such appraisal reports by the Administrative
Agent to the Borrowers shall be at the Administrative Agent's sole option if the
Borrowers have not paid the cost of such appraisal. If the Borrowers have paid
the cost of the appraisal, a copy of the appraisal will be provided to the
Borrowers upon their signing of the Administrative Agent's standard appraisal
release letter provided an Event of Default has not occurred and is not
continuing. The Borrowers shall reimburse the Administrative Agent upon
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demand for all costs and expenses incurred by any of the Lenders with respect to
the preparation and review of all future appraisals required pursuant to the
terms hereof, if either (i) such appraisal is required by law or banking
regulation, (ii) an event of default has occurred under the Financing Documents,
or (iii) the Administrative Agent has reason to believe a change in value has
occurred in the Facility being appraised due to an adverse change in the
Facility's occupancy status or operating performance.
Section 7.29 Notification of Certain Events, Events of Default and Adverse
Developments
Promptly give written notice to the Administrative Agent who will forward
a copy of the notice to the Lenders upon obtaining knowledge of the occurrence
of any of the following:
(a) any Event of Default under the Financing Documents;
(b) any event, development or circumstance whereby the
financial statements furnished under the Financing Documents fail in any
material respect to present fairly, in accordance with GAAP, the financial
condition and operational results of the Borrowers;
(c) any judicial, administrative or arbitral proceeding
pending against any of the Borrowers or any judicial or administrative
proceeding known by the Borrowers to have been threatened against any of them in
a written communication which threatened proceeding, if adversely decided, could
cause a Material Adverse Change in any of the Borrowers;
(d) the revocation, suspension, probation, restriction,
limitation or refusal to renew, or any administrative procedure then in process
for the revocation, suspension, probation, restriction, limitation, or refusal
to renew, of any License, or the decertification, revocation, suspension,
probation, restriction, limitation, or refusal to renew, or the pending,
decertification, revocation, suspension, probation, restriction, limitation, or
refusal to renew or any administrative procedure then in process for any
participation or eligibility in any third party payor program in which any of
the Borrowers elects to participate, including, without limitation, Medicare,
Medicaid or other private insurer programs or any accreditation of any of the
Borrowers, or the issuance or pending issuance of any License for a period of
less than twelve (12) months, as a consequence of sanctions imposed by any
Governmental Authority, or the assessment or pending assessment, of any civil or
criminal penalties by any Government Authority, any third party payor or any
accreditation organization or Person, which could materially adversely affect
the financial condition or operations of any of the Borrowers or an Affiliate
(present or prospective) as determined by the Administrative Agent, in its sole
but reasonable discretion;
(e) any action, including, but not limited to, the
filing of any certificate of need application if required by law, the amendment
of any facility license or certification, or the issuance of any new license or
certification for any Facility, under which any of the Borrowers proposes (i) to
develop a new facility or service and/or (ii) eliminate, materially expand or
materially reduce any service;
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(f) any actual contingent liability or a potential
contingent liability threatened or noticed in a written communication to any of
the Borrowers of $50,000 or more per Facility;
(g) any other development in the business or affairs of
the Borrower results in a Material Adverse Change; and
(h) in each case listed in clauses (a) through (g),
inclusive, of this Section describing in detail satisfactory to the
Administrative Agent the nature thereof and, in the case, if any, of
notification under clause (a), the action the Borrowers propose to take with
respect thereto or a statement that the Borrowers intend to take no action and
an explanation of the reasons for such inaction. In addition, the Borrowers will
furnish to the Administrative Agent immediately after receipt thereof copies of
all administrative notices material to Borrowers' business and operation of any
Facility and all responses by or on behalf of the Borrowers with respect to such
administrative notices.
Section 7.30 Compliance with Environmental Laws
If any Hazardous Materials are used, present or generated on any real
property owned or controlled by any of the Borrowers or for which any of the
Borrowers are responsible, such Borrower shall use, process, distribute, handle,
maintain, treat, store, dispose of and transport such substance in compliance
with all applicable laws, including, but not limited to, those regulating PCB's,
underground storage tanks, radon and medical waste tracking, as well as any laws
that are enacted after the date of this Agreement.
Section 7.31 Hazardous Materials; Contamination
(a) Give notice to the Administrative Agent within five (5) Banking Days
of any of the Borrowers' acquiring knowledge of the presence of any Hazardous
Materials on any property owned or controlled by any of the Borrowers or for
which any of the Borrowers is responsible or of any Hazardous Materials
Contamination with a full description thereof, except for reasonable quantities
of necessary supplies for use by the Borrowers in the ordinary course of their
current line of business and stored, used and disposed of in accordance with
applicable Laws; (b) promptly comply with any laws requiring special handling,
maintenance, servicing, removal, treatment or disposal of Hazardous Materials or
Hazardous Materials Contamination and provide the Administrative Agent upon
request with satisfactory evidence of such compliance; (c) provide the
Administrative Agent, within thirty (30) days after a demand by the
Administrative Agent, with a bond, letter of credit or similar financial
assurance evidencing to the Administrative Agent's satisfaction that funds are
available to pay the cost of removing, treating, and disposing of such Hazardous
Materials or Hazardous Materials Contamination and discharging any lien which
may be established as a result thereof on any property owned, operated or
controlled by any of the Borrowers or for which any of the Borrowers are
responsible; and (d) defend, indemnify and hold harmless the Lenders and each of
their agents, employees, trustees, successors and assigns from any and all
claims which may now or in the future (whether before or after the termination
of this Agreement) be asserted as a result of the presence of any Hazardous
Materials on any property owned, operated, controlled or managed
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by any of the Borrowers for which any of the Borrowers are responsible for any
Hazardous Materials Contamination.
Section 7.32 Participation in Reimbursement Programs
In the event any of the Borrowers elects to participate in any or all
plans and/or programs for third party payment and/or reimbursement, and the
revenues derived from a single plan or program exceed ten percent (10%) of the
gross revenues of the applicable Facility, such Borrower will continue its
participation in any and all such plans and/or programs for third party payment
and/or reimbursement from, and claims against, private insurers or programs for
payment and/or reimbursement from federal, state and local governmental agencies
and/or private or quasi-public insurers, including, without limitation, Managed
Care Plans, Medicaid and Medicare and the Veterans Administration (as determined
by the Borrowers in the good faith exercise of their prudent and commercially
reasonable business judgment). While participating in such plans, the Borrowers
shall comply with any and all rules, regulations, standards, procedures and
decrees necessary to maintain the Borrowers' participation in any such third
party payment or reimbursement program or plan.
Section 7.33 Pool Status
Any Eligible Project to be constructed or under construction must qualify
as a Pool A Project when it is added to the Borrowing Base; however, any
Completed Facility or Acquisition Project which is completed may be added to the
Borrowing Base as either a Pool A Project, a Pool B Project or a Pool C Project.
Section 7.34 Subordination of Distributions and Management Fees
Subordinate, and cause the partners or members of each of the Borrowers to
subordinate, all distributions of the Borrowers to principal and interest
payments on the Loan; provided, however, that the Borrowers may pay
distributions to partners or members of the Borrowers in accordance with Section
8.14 (Distributions to Partners or Members) prior to the occurrence of an Event
of Default and so long as the payment of any such distributions will not result
in the occurrence of an Event of Default. Subordinate the payment of management
fees with respect to each Facility pursuant to the terms of all Management Fee
Subordination Agreement (as the same may be modified from time to time) by and
among any of the Borrowers, the Administrative Agent and the Management Company.
Section 7.35 Depository Bank
The Borrowers shall maintain its primary operating accounts, including
those accounts containing the Liquid Assets, if any required pursuant to Section
8.14 (Distributions to Partners or Members) with the Administrative Agent or one
of the other Lenders; provided that such Lender shall agree that it will
exercise any right of set-off against such account to pay the Obligations
(unless the exercise of such right would prejudice other remedies of the Lenders
in any jurisdiction) prior to applying them to any other indebtedness owed to
such Lender and provided such Administrative Agent or other Lender pays
commercially competitive rates on the Borrowers' funds.
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Section 7.36 Copies of Notices
Promptly following the giving or receipt by any of the Borrowers of any
notice given to or received from the General Contractor or any subcontractor or
materialman with respect to the Property, if such notice concerns any default or
failure to perform by any party, or relates to any matter requiring the
Administrative Agent's or the Lenders' approval under this Agreement, the
Borrowers shall forward to the Administrative Agent copies of any such notice.
Section 7.37 Commencement of Occupancy
The first resident of a Completed Facility shall take occupancy within
sixty (60) days of the issuance of the occupancy permit for such Facility.
Section 7.38 Removal of Eligible Project from Borrowing Base
If the Borrowers elect either to exclude an Eligible Project from the
calculation of the Borrowing Base without releasing the Lien of the applicable
Deed of Trust or Lien on the related Collateral or to resume including such
Eligible Project in the calculation of the Borrowing Base (with the written
consent of the Administrative Agent), the Borrowers shall so notify the
Administrative Agent in writing in advance and shall immediately submit a
revised Borrowing Base Report. In connection with any such removal, the
Borrowers shall pay down the Credit Facility if a Borrowing Base Deficiency if
thereby created. During such time as an Eligible Project is excluded from the
Borrowing Base or classified as a Pool D Project, its Deed of Trust Lien Amount
will not be included in calculation of aggregate Deed of Trust Lien Amounts for
purposes of this Agreement or the Accommodator Credit Agreement; provided,
however, the Borrowers may not thereafter resume including it in the Borrowing
Base or change its designation from a Pool D Project without the prior written
consent of the Administrative Agent.
ARTICLE VIII
NEGATIVE COVENANTS OF BORROWER
Until payment in full and the performance of all of the Obligations,
without the prior written consent of the Administrative Agent as permitted
pursuant to the Agency Agreement, the Borrowers will not directly or indirectly:
Section 8.1 Borrowings
Create, incur, assume or suffer to exist any liability for borrowed money
other than the Credit Facility, Equipment leases permitted by the terms of this
Agreement or unsecured loan from Affiliates which are fully subordinated (either
by their terms or by separate written agreement) to the Credit Facility and
bearing interest at a rate no higher than that then applicable to the Credit
Facility; provided, however, so long as no Event of Default has occurred or will
occur upon the payment of interest on such indebtedness under the Financing
Documents, the Borrowers may make scheduled payments of interest on such debt
and may, with the prior written consent of the Administrative Agent, use
proceeds of the Loan to make payments on such loan from Affiliates if the loan
were for the purpose of financing the acquiring or constructing of an Eligible
Project.
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Section 8.2 Deeds of Trust and Pledges
Create, incur, assume or suffer to exist any deed of trust, mortgage,
pledge, Lien or other encumbrance of any kind upon, or any security interest in,
any of its property or assets, including the Collateral, whether now owned or
hereafter acquired.
Section 8.3 Sale or Transfer of Assets
Directly or indirectly enter into any arrangement whereby any of the
Borrowers shall sell, lease, transfer, assign or otherwise dispose of more than
$50,000 of assets in connection with any Eligible Project in any one year other
than (a) sales or other disposition of assets in the ordinary course of business
for value, provided the proceeds thereof are used to pay down the Loan or the
asset sold or disposed of is replaced by one of equal or greater value or (b)
the transfer of an Eligible Project or the sale of an Eligible Project in which
case the Borrowing Base will be reduced by the availability attributed to such
Facility.
Section 8.4 Other Liens; Transfers; "Due-on-Sale"; etc.
The Borrowers shall not, without the prior written consent of the
Administrative Agent, create or permit to be created or remain with respect to
any of the Property or any part thereof or income therefrom, any mortgage,
pledge, lien, encumbrance or charge, or security interest, or conditional sale
or other title retention agreement, whether prior or subordinate to the lien of
the Financing Documents, other than in connection with the Financing Documents
or as otherwise provided or permitted therein. Except for any grant, conveyance,
sale, assignment or transfer in the ordinary course of the Borrowers' business
and which is specifically conditioned upon the release of record of the lien of
the Deed of Trust and the other Financing Documents as to that portion of the
Property granted, conveyed, sold, assigned or transferred, the Borrowers shall
not, without the prior written consent of the Administrative Agent, make,
create, permit or consent to any conveyance, sale, assignment or transfer of any
of the Property or any part thereof, other than in connection with the Financing
Documents or as otherwise provided or permitted therein.
Section 8.5 Advances and Loans
Make loans or advances to any Person, including, without limitation,
Affiliates, partners and employees of the Borrowers.
Section 8.6 Contingent Liabilities
Assume, guarantee, endorse, contingently agree to purchase or otherwise
become liable upon the obligation of any Person, except by the endorsement of
negotiable instruments for deposit and collection or similar transactions in the
ordinary course of business.
Section 8.7 Licenses
Allow any Licenses, permit, right, franchise or privilege necessary for
the ownership or operation of any Facility for the purposes for which any
Facility is intended to be used to lapse, be suspended or be forfeited unless
solely due to administrative delay by the licensing authority.
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Section 8.8 ERISA Compliance
(a) Restate or amend any Plan established and maintained by the Borrowers
or any Commonly Controlled Entity and subject to the requirements of ERISA, in a
manner designed to disqualify such Plan and its related trusts under the
applicable requirements of the Code; (b) permit any partners of the Borrowers or
any Commonly Controlled Entity to materially adversely affect the qualified
tax-exempt status of any Plan or related trusts of the Borrowers or any Commonly
Controlled Entity under the Code; (c) engage in or permit any Commonly
Controlled Entity to engage in any Prohibited Transaction; (d) incur or permit
any Commonly Controlled Entity to incur any Accumulated Funding Deficiency,
whether or not waived, in connection with any Plan; (e) take or permit any
Commonly Controlled Entity to take any action or fail to take any action which
causes a termination of any Plan in a manner which could result in the
imposition of a lien on the property of the Borrowers or any Commonly Controlled
Entity pursuant to Section 4068 of ERISA; (f) fail to notify the Administrative
Agent that notice has been received of a "termination" (as defined in ERISA) of
any Multiemployer Plan to which any of the Borrowers or any Commonly Controlled
Entity has an obligation to contribute; (g) incur or permit any Commonly
Controlled Entity to incur a "complete withdrawal" or "partial withdrawal" (as
defined in ERISA) from any Multiemployer Plan to which any of the Borrowers or
any Commonly Controlled Entity has an obligation to contribute; or (h) fail to
notify the Administrative Agent that notice has been received from the
administrator of any Multiemployer Plan to which any of the Borrowers or any
Commonly Controlled Entity has an obligation to contribute that any such Plan
will be placed in "reorganization" (as defined in ERISA).
Section 8.9 Transfer of Collateral
Transfer, or permit the transfer, to another location of any of the
Collateral or the books and records related to any of the Collateral; provided,
however, that the Borrowers may transfer the Collateral or the books and records
related thereto to another location if the Borrowers shall have provided to the
Administrative Agent prior to such transfer an opinion of counsel addressed to
the Administrative Agent to the effect that the Lenders' perfected security
interest shall not be affected by such move or if it shall be affected, setting
forth the steps necessary to continue the Lenders' perfected security interest
together with the commencement of such steps by the Borrowers at their expense.
Section 8.10 Sale of Accounts or Receivables
Sell, discount, transfer, assign or otherwise dispose of any of its
Accounts or Receivables of any Facility, such as accounts receivable, notes
receivable, installment or conditional sales agreements or any other rights to
receive income, revenues or moneys, however evidenced.
Section 8.11 Amendments; Terminations
Amend or terminate or agree to amend or terminate any License, the
Management Agreement, or any participation agreement which exceeds 10% of the
gross revenue of the applicable Facility, or except in the ordinary course of
business any other Management Contracts and Operating Agreements which may have
been entered into by the Borrowers with respect to
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any Facility and which exceeds 10% of its gross revenue, or consent to or waive
any material provisions thereof.
Section 8.12 Prohibition on Hazardous Materials
Place, manufacture or store or permit to be placed, manufactured or
stored, any Hazardous Materials on any property owned, controlled or operated by
the Borrowers or any Wholly Owned Subsidiary or for which the Borrowers or any
Wholly Owned Subsidiary is responsible, except for reasonable quantities of
necessary supplies for use by the Borrowers or any Wholly Owned Subsidiary in
the ordinary course of its current line of business and stored, used and
disposed of in accordance with applicable Laws.
Section 8.13 Subsidiaries
Create or otherwise acquire any subsidiaries other than Wholly Owned
Subsidiaries which are Additional Borrowers.
Section 8.14 Distributions to Partners or Members
(a) Make any distributions of net operating income to
partners or members of any of the Borrowers unless no Event of Default exists,
and at such time or times as the Borrowers have on a consolidated basis, both
before and after the distribution, at least $5,000,000 in Liquid Assets plus, at
such time or times as ten (10) or more of the Eligible Projects are not a
Stabilized Facilities, the Borrowers shall have on a consolidated basis an
additional $5,000,000 in Liquid Assets; provided, however, that after deducting
the amount of such distribution from the EBITDA (the "Adjusted EBITDA") of the
Stabilized Facilities in the aggregate, the Borrowers' consolidated ratio of
Adjusted EBITDA to Debt Service for the Stabilized Facilities in the aggregate
shall not be less than 1.0 to 1.0. For the purposes of computing EBITDA and Debt
Service, the period measured shall be on a rolling four-quarters basis.
Distributions may be made only within thirty (30) days of the end of a fiscal
quarter.
(b) Make a distribution to partners or members of any of
the Borrowers from proceeds of the Loan as a repayment of equity in an Eligible
Project unless the Borrowers give advance written notice to the Administrative
Agent of the amount of such proposed distribution and the Administrative Agent
acknowledges in writing the availability of equity to make such a distribution.
(c) All distributions to partners or members in any
fiscal quarter shall be disclosed to the Lenders in the Compliance Certificate
for such period.
Section 8.15 Mergers or Acquisitions
Enter into any merger or consolidation or amalgamation, wind up or
dissolve itself (or suffer any liquidation or dissolution), or acquire all or
substantially all of the assets of any person, firm, joint venture or
corporation except to acquire a Wholly Owned Subsidiary.
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Section 8.16 Partnership Interests
Repurchase, redeem or retire any partnership or membership interest any of
in the Borrowers.
Section 8.17 Impairment of Security
The Borrowers shall take no action which shall impair in any manner the
value of any of the Property or the validity, priority or security of any Deed
of Trust.
Section 8.18 Conditional Sales
The Borrowers shall not incorporate in the Improvements any property
acquired under a conditional sales contract, or lease, or as to which the vendor
retains title or a security interest, without the prior written consent of the
Administrative Agent.
Section 8.19 Changes to Plans and Specifications
After review and approval of a Total Development Budget by the
Administrative Agent, the Borrowers shall not permit any change order increasing
the price of the Improvements for an Eligible Project by more than $50,000 for
any one change order or by more than 10% of the total hard cost portion of the
Total Development Budget in the aggregate or materially altering the scope of
the Improvements, without the prior written consent of the Administrative Agent
which consent will not be unreasonably withheld and provided such changes will
not cause the Facility not to qualify as a Pool A Project.
Section 8.20 Construction Contract; Construction Management
The Borrowers shall not execute any contract or agreement or become a
party to any arrangement for the construction of any Improvements or for
construction management services with respect to any Property without the prior
written consent of the Administrative Agent.
ARTICLE IX
EVENTS OF DEFAULT
The occurrence of one or more of the following events shall be "Events of
Default" under this Agreement, and the terms "Event of Default" shall mean,
whenever they are used in this Agreement, any one or more of the following
events:
Section 9.1 Failure to Pay and/or Perform the Obligations
The Borrowers shall fail to (a) make any payment of interest on the Note,
or (b) pay any of the other Obligations including but not limited to the Expense
Payments and Liquidation Costs and such failure continues for more than five (5)
calendar days after notice thereof by the Administrative Agent, except with
regard to payment of (a) any Borrowing Base Deficiency which shall be due as
provided in Section 2.1 (The Loan), and (b) amounts due at maturity for which no
notice or cure period shall be required to be given.
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Section 9.2 Breach of Representations and Warranties
Any material representation or warranty made in this Agreement or in any
report, certificate, opinion (including any opinion of counsel for the
Borrowers), financial statement or other instrument furnished in connection with
the Obligations or with the execution and delivery of any of the Financing
Documents, shall prove to have been false or misleading when made (or, if
applicable, when reaffirmed) in any material respect.
Section 9.3 Failure to Comply with Covenants
Default shall be made by the Borrowers in the due observance and
performance of any covenant, condition or agreement contained in ARTICLE VII
(AFFIRMATIVE COVENANTS OF BORROWER) (except for Section 7.8 (Maintenance of
Properties), Section 7.9 (Maintenance of the Collateral), Section 7.10 (Other
Liens, Security Interests, etc.), Section 7.17 (ERISA)) or in ARTICLE VIII
(NEGATIVE COVENANTS OF BORROWER).
Section 9.4 Failure to Comply with Books and Records
Default shall be made by the Borrowers in the due observance or
performance of Section 7.13 (Books and Records), which default shall remain
unremedied, and the Borrowers shall cure such default promptly, but in no event
more than ten (10) days after written notice thereof to the Borrowers by the
Administrative Agent.
Section 9.5 Other Defaults
Default shall be made by the Borrowers in the due observance or
performance of any other term, covenant or agreement other than as set forth in
this ARTICLE IX (EVENTS OF DEFAULT), which default shall remain unremedied for
more than thirty (30) days after written notice thereof to the Borrowers by the
Administrative Agent, unless the nature of the failure is such that (a) it
cannot be cured within the thirty (30) day period, and (b) the Borrowers
institute corrective action within the thirty (30) day period and (c) the
Borrowers diligently pursue such action and complete the cure within ninety (90)
days.
Section 9.6 Default Under Other Financing Documents
A default shall occur under any of the other Financing Documents, and such
default is not cured within any applicable grace period provided therein.
Section 9.7 Receiver; Bankruptcy
An Act of Bankruptcy occurs with respect to the Borrowers or any of the
Borrowers becomes generally unable to pay its debts as they become due;
provided, however, if a proceeding with respect to an Act of Bankruptcy is filed
or commenced against any of the Borrowers, the same shall not constitute an
Event of Default if such proceeding is dismissed within sixty (60) days from the
date of such Act of Bankruptcy.
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Section 9.8 Judgment
Any judgment against any of the Borrowers of $250,000 or more or any
attachment or other levy against any property of any of the Borrowers remain
unpaid, unstayed on appeal, undischarged, unbonded or undismissed for a period
of thirty (30) days after the same shall have been issued.
Section 9.9 Execution; Attachment
Any execution or attachment shall be levied against the Collateral, or any
part thereof, and such execution or attachment shall not be set aside,
discharged or stayed within thirty (30) days after the same shall have been
levied.
Section 9.10 Default Under Other Borrowings
(a) Default which continues beyond any applicable grace
period shall be made under any obligation of or guaranteed by any of the
Borrowers equal to or greater than $250,000, if the effect of such default is to
accelerate the maturity of such obligation or to permit the holder or obligee
thereof to cause such obligation to become due prior to its stated maturity.
(b) Default shall be made under any obligation equal to
or greater than $1,000,000 of a consolidated Affiliate, which is otherwise
non-recourse to the Borrowers if the holder or obligee of such obligation has
commenced action on any of the remedies available to it under the obligation.
Section 9.11 Default Under Accommodator Credit Facility.
Any default shall occur under the Accommodator Financing Documents.
Section 9.12 Material Adverse Change
If the Administrative Agent in its reasonable discretion determines that a
Material Adverse Change has occurred in the financial condition of any of the
Borrowers; provided, however, that such Default may be cured if only one
Borrower is affected, such Borrower owns only one Eligible Project and such
Eligible Project is excluded from the calculation of the Borrowing Base.
Section 9.13 Impairment of Position
If the Administrative Agent in its reasonable discretion determines that
an event has occurred which impairs the prospect of payment of the Obligations
and/or the value of the Facilities or the Collateral.
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Section 9.14 Change in Status or Ownership
Any of the Borrowers is dissolved, merged, consolidated or reorganized, or
any change occurs in the ownership of any of the Borrowers or any Subsidiary
without the prior written consent of the Administrative Agent.
Section 9.15 Zoning
Any change in any zoning ordinance or any other public restriction is
enacted, limiting or defining the uses which may be made of any of the Property
or a part thereof, such that the use of any of the Property, as specified
herein, would be in material violation of such restriction or zoning change
unless the Borrowers exclude the affected Eligible Project from the calculation
of the Borrowing Base.
Section 9.16 Change in Management
The Management Agreement is terminated without the prior written consent
of the Administrative Agent.
Section 9.17 Licenses
The involuntary, imposed or required revocation, suspension, probation,
restriction, limitation or refusal to renew, or the pending revocation,
suspension, probation, restriction, limitation, of, or refusal to renew, of any
License; other than in the ordinary course of business or to the extent that the
Borrowers deem such action to be, in the exercise of prudent business judgment,
in the best interest of Borrowers, the decertification, revocation, suspension,
probation, restriction, limitation, or refusal to renew, or the pending
decertification, revocation, suspension, probation, restriction, limitation, or
refusal to renew any participation or eligibility in any third party payor
program in which the Borrowers elect to participate, including, without
limitation, the Medicaid or Medicare programs; or the issuance or pending
issuance of any License for a period of less than twelve (12) months as a
consequence of any sanctions imposed by any Governmental Authority; or the
assessment or pending assessment, of any civil or criminal penalties by any
Governmental Authority, any third party payor or any accreditation organization
or person. Without limiting the generality of the foregoing, the failure of the
Borrowers to obtain an operating license for any Facility within sixty (60) days
of the issuance of the certificate of occupancy for such Facility.
Section 9.18 Damage to Improvements
At any time prior to the issuance of a certificate of occupancy or
completion therefor, any of the Improvements are substantially damaged or
destroyed by fire or other casualty and the Administrative Agent determines in
good faith that such Improvements cannot be restored and completed in accordance
with the terms and provisions of the Deed of Trust unless the Borrowers exclude
the affected Eligible Project from the Borrowing Base.
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Section 9.19 Disclosure of Contractors
The Borrowers shall fail to disclose to the Administrative Agent, upon
demand, the names of all persons with whom the Borrowers have contracted or
intends to contract for the construction of the Improvements or for the
furnishing of labor or materials therefor.
Section 9.20 Mechanic's Lien
A lien for the performance of work or the supply of materials which is
perfected against any of the Land remains unsatisfied or unbonded or for which
no other arrangements satisfactory to the Administrative Agent have been made
for a period of thirty (30) days after notice to the Borrowers from any source
of the filing of such Lien unless the Borrowers exclude the affected Eligible
Project from the Borrowing Base.
Section 9.21 Survey Matters
Any Survey required by the Lenders during the period of construction shows
any matters not approved by the Administrative Agent and such matters not
approved are not removed within 30 days after Notice thereof by the
Administrative Agent to the Borrowers unless the Borrower excludes the affected
Eligible Project from the Borrowing Base.
Section 9.22 General Contractor Default
The General Contractor shall have defaulted under any Construction
Contract, which default the Administrative Agent, in its sole discretion, shall
deem substantial, and the Borrowers, after thirty (30) days Notice from the
Administrative Agent, shall fail to commence exercising any resulting right or
remedy to which it may be entitled thereunder and diligently pursue such right
or remedy unless the Borrowers exclude the affected Eligible Project from the
Borrowing Base.
Section 9.23 Compliance with Law
The Borrowers fail to comply with any requirement of any Governmental
Authority having jurisdiction within the time required by such Governmental
Authority; or any proceeding is commenced or action taken to enforce any remedy
for a violation of any requirement of a Governmental Authority or any
restrictive covenant affecting the Property or any part thereof.
Section 9.24 Construction Abandonment.
The failure to continue construction of an Eligible Project, once
commenced for a period of thirty (30) days except for delays caused by Force
Majeure unless the Borrowers exclude the affected Eligible Project from the
Borrowing Base.
Section 9.25 Failure to Commence Occupancy
Any failure to comply with Section 7.37 (Commencement of Occupancy) unless
the Borrowers exclude the affected Eligible Project from the calculation of the
Borrowing Base.
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ARTICLE X
RIGHTS AND REMEDIES UPON DEFAULT
Section 10.1 DEMAND; ACCELERATION
THE OCCURRENCE OR NONOCCURRENCE OF AN EVENT OF DEFAULT UNDER THIS
AGREEMENT SHALL IN NO WAY AFFECT OR CONDITION THE RIGHT OF THE LENDERS TO DEMAND
PAYMENT AT ANY TIME OF ANY OF THE OBLIGATIONS WHICH ARE PAYABLE ON DEMAND
REGARDLESS OF WHETHER OR NOT AN EVENT OF DEFAULT HAS OCCURRED. Upon the
occurrence of an Event of Default, and in every such event and at any time
thereafter, the Administrative Agent may declare the Obligations due and
payable, without presentment, demand, protest, or any notice of any kind, all of
which are hereby expressly waived, anything contained herein or in any of the
other Financing Documents to the contrary notwithstanding.
Section 10.2 Further Advances; Immediate Acceleration
Following an Event of Default the Administrative Agent may from time to
time without notice to the Borrowers suspend, terminate or limit any further
advances under the Loan or other extensions of credit under this Agreement and
under any of the other Financing Documents. Further, upon the occurrence of an
Event of Default or Default specified in Section 9.7 (Receiver; Bankruptcy)
above, the unpaid principal amount of the Note (with accrued interest thereon)
and all other Obligations then outstanding, shall immediately become due and
payable without further action of any kind and without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived by the
Borrowers.
Section 10.3 Specific Rights With Regard to Collateral
Following an Event of Default, in addition to all other rights and
remedies provided hereunder or as shall exist at law or in equity from time to
time, the Administrative Agent may, without notice to the Borrowers and subject
to the terms of the Agency Agreement:
(a) assign any and all Operating Agreements and
Management Contracts to any Person designated by the Administrative Agent,
and/or exercise all rights and privileges of the Borrowers under such contracts
and agreements for the purpose of realizing on the Collateral and to the extent
and for the time required to realize the value of the Collateral;
(b) to the extent permitted by applicable law, assume
such management, operation and control of the Property to the extent and for the
time necessary to realize the value of the Collateral;
(c) cause the Borrowers to engage, contract with, and/or
hire qualified service, billing, collection and other such agents, organizations
and companies acceptable to the Administrative Agent to collect and/or realize
upon any or all of the Collateral and to remit the proceeds to the
Administrative Agent;
(d) subject to applicable state and federal laws
pertaining to resident confidentiality, request any Account Debtor obligated on
any of the Accounts to make
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payments thereon directly to the Administrative Agent to the extent permitted by
applicable law, with the Administrative Agent taking control of the cash and
non-cash proceeds thereof and/or direct the Borrowers to (and the Borrowers
shall) turn over to the Administrative Agent immediately following receipt all
payments with respect to the Collateral in the form received (with the addition
of all necessary endorsements) and not to deposit, negotiate or otherwise deal
with those payments;
(e) compromise, extend or renew any of the Collateral or
deal with the same as it may deem advisable;
(f) make exchanges, substitutions or surrenders of all
or any part of the Collateral;
(g) remove from any of the Borrowers' places of business
all books, records, ledger sheets, correspondence, invoices and documents,
relating to or evidencing any of the Collateral or without cost or expense to
the Lenders, make such use of the Borrowers' place of business as may be
reasonably necessary to administer, control and collect the Collateral;
(h) demand, collect, receipt for and give renewals,
extensions, discharges and releases of any of the Collateral;
(i) institute and prosecute legal and equitable
proceedings to enforce collection of, or realize upon, any of the Collateral;
(j) settle, renew, extend, compromise, compound,
exchange or adjust claims in respect of any of the Collateral or any legal
proceedings brought in respect thereof;
(k) endorse the name of any of the Borrowers upon any
items of payment relating to the Collateral or on any Proof of Claim in
Bankruptcy against an Account Debtor; and
(l) notify the Post Office authorities to change the
address for the delivery of mail to the Borrowers to such address or Post Office
Box as the Administrative Agent may designate and receive and open all mail
addressed to the Borrowers.
In addition, the Borrowers shall, following an Event of Default promptly,
upon request, execute and deliver to the Administrative Agent written
assignments, to the extent permitted by applicable law, in form and content
acceptable to the Administrative Agent, of specific Accounts or groups of
Accounts; provided, however, that the lien and/or security interest granted to
the Lenders under this Agreement shall not be limited in any way to or by the
inclusion or exclusion of Accounts within such assignments. Such Accounts shall
secure payment of the Obligations and are not sold to the Lenders whether or not
any assignment thereof, which is separate from this Agreement, is in form
absolute.
Following an Event of Default, the Lenders may also direct the Borrowers
to appoint a manager for any or all of the Facilities and enter into a
management agreement with one or more
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management companies approved by the Lenders, the terms of which agreement shall
be approved by the Lenders.
Section 10.4 Performance by Lenders
Following an Event of Default, the Administrative Agent without the
necessity of prior notice to or demand upon the Borrowers and without waiving or
releasing any of the Obligations or any Event of Default, may (but shall be
under no obligation to) at any time thereafter make such payment or perform such
act for the account and at the expense of the Borrowers, and may enter upon the
premises of the Borrower for that purpose and take all such action thereon as
the Administrative Agent may consider necessary or appropriate for such purpose.
The Administrative Agent will give the Borrowers notice, at least subsequently,
of any such performance by the Administrative Agent. All sums so paid or
advanced by the Administrative Agent and all costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses) incurred in
connection therewith (the "Expense Payments") together with interest thereon
from the date of payment, advance or incurring until paid in full at the
Post-Default Rate shall be paid by the Borrowers to the Administrative Agent on
demand and shall constitute and become a part of the Obligations.
Section 10.5 Remedies on Default
The Administrative Agent shall have the right, upon the happening of any
Event of Default, to terminate this Agreement by Notice from the Administrative
Agent to the Borrowers and, in addition to any rights or remedies available to
them under the Deed of Trust or any of the other Financing Documents, to enter
into possession of any of the Property and perform any and all work and labor
necessary to complete the development of such Land and the construction of the
Improvements thereon (whether or not in accordance with the Plans and
Specifications therefor) and to employ watchmen to protect the Property and the
Improvements. All sums expended by the Lenders for such purposes shall be deemed
to have been advanced to the Borrowers under the Note and shall be secured by
the Deeds of Trust and the Collateral. For this purpose, the Borrowers hereby
constitute and appoint the Lenders, or the Administrative Agent on behalf of the
Lenders, its true and lawful attorney-in-fact with full power of substitution to
complete work on any Eligible Project in the name of the Borrowers, and hereby
empowers said attorney or attorneys as follows:
(a) To use any funds of any of the Borrowers including
any balance which may be held in escrow and any funds which may remain
unadvanced under any of the Loan for the purpose of completing the development
of any of the Land and the construction of any of the Improvements, whether or
not in the manner called for in the Plans and Specifications;
(b) To make such additions and changes and corrections
to any of the Plans and Specifications which shall be necessary or desirable in
the judgment of the Administrative Agent to complete the development of any of
the Land and the construction of any of the Improvements;
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(c) To employ such contractors, subcontractors, agents,
architects and inspectors as shall be necessary or desirable for said purpose;
(d) To pay, settle or compromise all existing bills and
claims which are or may be liens against any of the Property, or may be
necessary or desirable for the completion of the work or the clearance of title
to any of the Property;
(e) To execute all applications and certificates which
may be required in the name of any of the Borrowers; and
(f) To do any and every act with respect to the
development of the Land and the construction of the Improvements which any of
the Borrowers may do in its own behalf.
It is understood and agreed that this power of attorney shall be deemed to
be a power coupled with an interest which cannot be revoked. Said
attorney-in-fact shall also have the power to prosecute and defend all actions
or proceedings in connection with the development of the Land and the
construction of the Improvements and to take such actions and to require such
performance as the Lenders may deem necessary.
Section 10.6 Uniform Commercial Code and Other Remedies
Upon the occurrence of an Event of Default (and in addition to all of its
rights, powers and remedies under this Agreement), the Lenders shall have all of
the rights and remedies of a secured party under the applicable Uniform
Commercial Code and other applicable laws, and the Lenders are authorized to
offset and apply to all or any part of the Obligations all moneys, credits and
other property of any nature whatsoever of the Borrowers now or at any time
hereafter in the possession of, in transit to or from, under the control or
custody of, or on deposit with, any of the Lenders; and upon demand by the
Administrative Agent, the Borrowers shall assemble the Collateral and make it
available to the Lenders, at a place designated by the Administrative Agent; and
the Lenders or their agents may enter upon the Borrowers' premises to take
possession of the Collateral, to remove it, to render it unusable, or to sell or
otherwise dispose of it.
Any written notice of the sale, disposition or other intended action by
the Lenders with respect to the Collateral which is sent by regular mail,
postage prepaid, to the Borrowers at the address set forth in ARTICLE IX (EVENTS
OF DEFAULT), or such other address of the Borrowers which may from time to time
be shown on the Lenders' records, at least ten (10) days prior to such sale,
disposition or other action, shall constitute reasonable notice to the
Borrowers. The Borrowers shall pay on demand all costs and expenses, including,
without limitation, attorney's fees and expenses, incurred by or on behalf of
the Lenders, or any of them, in preparing for sale or other disposition,
selling, managing, collecting or otherwise disposing of, the Collateral. All of
such costs and expenses (the "Liquidation Costs") together with interest thereon
from the date incurred until paid in full at the Post-Default Rate, shall be
paid by the Borrowers to the Administrative Agent on demand and shall constitute
and become a part of the Obligations. Any proceeds of sale or other disposition
of the Collateral will be applied by the Lenders to the payment of the
Liquidation Costs and Expense Payments, and any balance of such
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proceeds will be applied by the Lenders to the payment of the balance of the
Obligations in such order and manner of application as the Lenders may from time
to time in its sole discretion determine. After such application of the
proceeds, any balance shall be paid to the applicable Borrowers or to any other
party entitled thereto.
Section 10.7 Receiver or Other Court Order
Following an Event of Default, as a matter of right, following ten (10)
days notice and without regard to the adequacy of the security, and upon
application to a court of competent jurisdiction, the Lenders shall be entitled
to the immediate appointment of a receiver for all or any part of the
Collateral, and of the payments and proceeds thereof and therefrom, whether such
receivership be incidental to a proposed sale of the Collateral or otherwise,
and the Borrowers hereby consent to the appointment of such a receiver and to an
order of court directing that payments, including Medicare and Medicaid
payments, be made directly to the receiver. The Borrowers will pay to the
Beneficiary, upon demand, all expenses, including receiver's fees, attorney's
fees, costs and agents compensation, advanced by the Borrowers and incurred
pursuant to the provisions contained in this Section.
Section 10.8 No Conditions Precedent to Exercise of Remedies
The Borrowers shall not be relieved of any obligation by reason of the
failure of the Lenders to comply with any request of the Borrowers or of any
other person to take action to foreclose on the Property under the Deed of Trust
or otherwise to enforce any provision of the Financing Documents, or by reason
of the release, regardless of consideration, of all or any part of the Property,
or by reason of any agreement or stipulation between any subsequent owner of the
Property and the Lenders extending the time of payment or modifying the terms of
the Financing Documents without first having obtained the consent of the
Borrowers; and in the latter event, the Borrowers shall continue to be liable to
make payments according to the terms of any such extension or modification
agreement, unless expressly released and discharged in writing by the Lenders.
Section 10.9 Remedies Cumulative and Concurrent
No remedy herein conferred upon or reserved to the Lenders or the
Administrative Agent is intended to be exclusive of any other remedies provided
for in the Financing Documents, and each and every such remedy shall be
cumulative, and shall be in addition to every other remedy given hereunder, or
under the Financing Documents, or now or hereafter existing at law or in equity
or by statute. Every right, power and remedy given by the Financing Documents to
the Lenders or the Administrative Agent shall be concurrent and may be pursued
separately, successively or together against any or all of the Borrowers or the
Property or any part thereof, and every right, power and remedy given by the
Financing Documents may be exercised from time to time as often as may be deemed
expedient by the Lenders or the Administrative Agent.
Section 10.10 Strict Performance
No delay or omission of the Lenders or the Administrative Agent to
exercise any right, power or remedy accruing upon the happening of an Event of
Default shall impair any such right, power or remedy or shall be construed to be
a waiver of any such Event of Default or any
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acquiescence therein. No delay or omission on the part of the Lenders or the
Administrative Agent to exercise any option for acceleration of the maturity of
the Obligations, or any of them, or for foreclosure of the Deeds of Trust, or
any of them, following any Event of Default as aforesaid, or any other option
granted to the Lenders hereunder in any one or more instances, or the acceptance
by the Lenders of any partial payment on account of the Obligations shall
constitute a waiver of any such Event of Default and each such option shall
remain continuously in full force and effect.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Notices
All notices, certificates or other communications hereunder shall be
deemed given when delivered by hand or courier, or three (3) Banking Days after
being mailed by certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Administrative Agent BANK OF AMERICA, N.A.
or the Lenders: 0000 Xxxxxxxxx Xxxxx
Xxxxx Xxxxx
Mail Code MD2-600-03-02
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Senior Vice President
and
BANK OF AMERICA, N.A.
000 Xxxxx XxXxxxx Xxxxxx
Mail Code IL1-231-08-30
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxx
Vice President
with a courtesy copy to: Xxxxxxxx Xxxxxxx Xxxx & Valentine LLP
0000 Xxxxxxxxxxxxx Xxxxx
Xxxxx 000
XxXxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx Xxx Xxxxx, Esq.
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if to the Borrowers: c/o SUNRISE EAST ASSISTED LIVING
LIMITED PARTNERSHIP
c/o Sunrise Assisted Living Investments,Inc.
0000 Xxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Attention to each of the following
separately delivered or mailed:
Xxxxxx X. Xxxxxx, Esq.
Christian X.X. Xxxxxx
Xxxxx X. Xxxx
with a courtesy Xxxxx X. Xxxxxxx, Esquire
copy to: Watt, Tieder, Hoffar & Xxxxxxxxxx
0000 Xxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Section 11.2 Consents and Approvals
If any consent, approval, or authorization of any Governmental Authority
or of any Person having any interest therein, should be necessary to effectuate
any sale or other disposition of the Collateral, the Borrowers agree to execute
all such applications and other instruments, and to take all other action, as
may be required in connection with securing any such consent, approval or
authorization.
Section 11.3 Remedies, etc. Cumulative
Each right, power and remedy of the Lenders as provided for in this
Agreement or in any of the other Financing Documents or now or hereafter
existing at law or in equity or by statute or otherwise shall be cumulative and
concurrent and shall be in addition to every other right, power or remedy
provided for in this Agreement or in any of the other Financing Documents or now
or hereafter existing at law or in equity, by statute or otherwise, and the
exercise or beginning of the exercise by the Lenders of any one or more of such
rights, powers or remedies shall not preclude the simultaneous or later exercise
by the Lenders of any or all such other rights, powers or remedies. In order to
entitle the Lenders to exercise any remedy reserved to it herein, it shall not
be necessary to give any notice, other than such notice as may be expressly
required in this Agreement.
Section 11.4 No Waiver of Rights by the Lenders
No failure or delay by the Administrative Agent or the Lenders to insist
upon the strict performance of any term, condition, covenant or agreement of
this Agreement or of any of the other Financing Documents, or to exercise any
right, power or remedy consequent upon a breach thereof, shall constitute a
waiver of any such term, condition, covenant or agreement or of any such breach
or preclude the Administrative Agent or the Lenders from exercising any such
right, power or remedy at any later time or times. By accepting payment after
the due date of any amount payable under this Agreement or under any of the
other Financing Documents, neither the Administrative Agent nor the Lenders
shall be deemed to waive the right either to require
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prompt payment when due of all other amounts payable under this Agreement or
under any of the other Financing Documents, or to declare a default for failure
to effect such prompt payment of any such other amount.
Section 11.5 Entire Agreement
The Financing Documents shall completely and fully supersede all other
agreements, both written and oral, between the Lenders and any of the Borrowers
relating to the Obligations. Neither the Lenders nor the Borrowers shall
hereafter have any rights under such prior agreements but shall look solely to
the Financing Documents for definition and determination of all of their
respective rights, liabilities and responsibilities relating to the Obligations.
Section 11.6 Survival of Agreement; Successors and Assigns
All covenants, agreements, representations and warranties made by the
Borrowers herein and in any certificate, in the Financing Documents and in any
other instruments or documents delivered pursuant hereto shall survive the
making by the Lenders of the Loan and the execution and delivery of the Note,
and shall continue in full force and effect so long as any of the Obligations
are outstanding and unpaid. Whenever in this Agreement any of the parties hereto
is referred to, such reference shall be deemed to include the successors and
assigns of such party; and all covenants, promises and agreements by or on
behalf of the Borrowers which are contained in this Agreement shall inure to the
benefit of the respective successors and assigns of each of the Lenders, and all
covenants, promises and agreements by or on behalf of the Lenders which are
contained in this Agreement shall inure to the benefit of the permitted
successors and permitted assigns of the Borrowers, but this Agreement may not be
assigned by the Borrowers without the prior written consent of the Lenders.
Section 11.7 Expenses
The Borrowers agree to pay all reasonable out-of-pocket expenses of the
Lenders and Banc of America Securities LLC (excluding travel expenses but
including the reasonable fees and expenses of the legal counsel of the
Administrative Agent or any other Lender) in connection with the preparation of
this Agreement, the issuance of the Loan hereunder, the recordation of all
financing statements and such other instruments as may be required by the
Administrative Agent at the time of, or subsequent to, the execution of this
Agreement to secure the Obligations (including any and all recordation tax and
other costs and taxes incident to recording), the administration of the Credit
Facility (not otherwise contemplated by any fee paid by the Borrowers), any
future modification of the Financing Documents, the addition of Eligible
Projects to the Borrowing Base or the enforcement of any provision of this
Agreement and the collection of the Obligations. The Borrowers agree to
indemnify and save harmless the Lenders from any liability resulting from the
failure to pay any required recordation tax, transfer taxes, recording costs or
any other expenses incurred by the Lenders in connection with the Obligations.
The provisions of this Section shall survive the execution and delivery of this
Agreement and the repayment of the Obligations. The Borrowers further agree to
reimburse the Lenders upon demand for all reasonable out-of-pocket expenses
(including reasonable attorneys' fees and legal expenses and travel expenses)
incurred by the Lenders, or any of them, in enforcing any of the Obligations or
any security therefor or incurred in connection with any
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bankruptcy proceeding or in any post-judgment enforcement or collection action,
together with interest at the Post-Default Rate which agreement shall survive
the termination of this Agreement and the repayment of the Obligations.
Section 11.8 Counterparts
This Agreement may be executed in any number of counterparts all of which
together shall constitute a single instrument.
Section 11.9 Governing Law
This Agreement and all of the other Financing Documents shall be governed
by and construed in accordance with the laws of the Commonwealth of Virginia;
provided, however, any Deed of Trust and any financing statements covering
fixtures securing such Loan shall be governed by, and construed in accordance
with, the laws of the state in which the applicable Facility is located.
Section 11.10 Modifications
No modification or waiver of any provision of this Agreement or of any of
the other Financing Documents, nor consent to any departure by the Borrowers
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Administrative Agent, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on the Borrowers in any case shall entitle the Borrowers to
any other or further notice or demand in the same, similar or other
circumstance.
Section 11.11 Illegality
If fulfillment of any provision hereof or any transaction related hereto
or to any of the other Financing Documents, at the time performance of such
provision shall be due, shall involve transcending the limit of validity
prescribed by law, then ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity; and if any clause or provisions herein
contained other than the provisions hereof pertaining to repayment of the
Obligations operates or would prospectively operate to invalidate this Agreement
in whole or in part, then such clause or provision only shall be void, as though
not herein contained, and the remainder of this Agreement shall remain operative
and in full force and effect; and if such provision pertains to repayment of the
Obligations, then, at the options of the Lenders, all of the Obligations of the
Borrowers to the Lenders shall become immediately due and payable.
Section 11.12 Gender, etc.
Whenever used herein, the singular number shall include the plural, the
plural the singular and the use of the masculine, feminine or neuter gender
shall include all genders.
Section 11.13 Headings
The headings in this Agreement are for convenience only and shall not
limit or otherwise affect any of the terms hereof.
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Section 11.14 Waiver of Trial by Jury
THE BORROWER AND THE LENDERS HEREBY JOINTLY AND SEVERALLY WAIVE TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO WHICH ANY OF THEM MAY BE PARTIES, NOT
GOVERNED BY THE ARBITRATION PROVISIONS OF THE NOTE OR THE GUARANTIES ARISING OUT
OF OR IN ANY WAY PERTAINING TO (A) THIS AGREEMENT, (B) ANY OF THE FINANCING
DOCUMENTS, OR (C) THE COLLATERAL. THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY
JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING
CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT.
This waiver is knowingly, willingly and voluntarily made by the Borrowers
and the Lenders, and the Borrowers and the Lenders hereby represent that no
representations of fact or opinion have been made by any individual to induce
this waiver of trial by jury or to in any way modify or nullify its effect. The
Borrowers and the Lenders further represent that they have been represented in
the signing of this Agreement and in the making of this waiver by independent
legal counsel, selected of their own free will, and that they have had the
opportunity to discuss this waiver with counsel.
Section 11.15 No Warranty by Lenders
By accepting or approving anything required to be observed, performed or
fulfilled by the Borrowers or to be given to the Administrative Agent or the
Lenders pursuant to this Agreement, including, without limitation, any
certificate, balance sheet, statement of profit and loss or other financial
statement, Survey, receipt, appraisal or insurance policy, the Lenders shall not
be deemed to have warranted or represented the sufficiency, legality,
effectiveness or legal effect of the same, or of any term, provision or
condition thereof and any such acceptance or approval thereof shall not be or
constitute any warranty or representation with respect thereto by the Lenders.
Section 11.16 Liability of the Lenders
No Lender shall be liable for another Lender's failure to fund its ratable
share of any advance under the Loan. The Lenders shall not be liable for any
other act or omission by the Lenders, or any of them, pursuant to the provisions
of this Agreement in the absence of fraud or gross negligence. The Lenders shall
incur no liability to the Borrowers or any other party in connection with the
acts or omissions of any of the Lenders in reliance upon any certificate or
other paper believed by the Lenders to be genuine or with respect to any other
thing which the Lenders may do or refrain from doing, unless such act or
omission amounts to fraud or gross negligence. The Borrowers hereby agree that
the Lenders shall not be chargeable for any negligence, mistake, act or omission
of any accountant, examiner, agency or attorney employed by the Lenders, or any
of them, (except for the gross negligence or willful misconduct of any person,
corporation, partnership or other entity employed by any of the Lenders) in
making examinations, investigations or collections, or otherwise in perfecting,
maintaining, protecting or realizing upon any lien or security interest or any
other interest in the Collateral or other security for the Obligations. The
Borrowers, jointly and severally, shall indemnify, defend and hold the Lenders
and their successors and assigns harmless from and against any and all claims,
demands,
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suits, losses, damages, assessments, fines, penalties, costs or other expenses
(including reasonable attorney's fees and court costs) arising from or in
connection with this Agreement. Any indemnity provision for the benefit of the
Lenders set forth herein or in any of the Financing Documents shall extend to
any other lender who becomes a Lender under the Credit Facility. The provisions
of this Section shall survive the termination of the Credit Facility.
Section 11.17 License of Tradename
The Borrowers do hereby grant to each of the Lenders and their affiliates
and any trustee under a Deed of Trust and their management company a license to
use the name of any Borrower and the name "Sunrise", "Dignity Home Care",
"Respect Home Care" or "Karrington" and any marks associated therewith in the
operation of a Facility upon such Lender's or trustee's taking of possession or
taking over management of a Facility or acquiring title thereto at a foreclosure
sale which license shall be in effect for a period of thirty (30) months from
the date thereof. The Borrowers further agree that a third-party purchaser of a
Facility may continue to operate the Facility under the name of any Borrower
unless such Borrower objects in writing thereto.
Section 11.18 No Partnership
Nothing contained in this Agreement shall be construed in a manner to
create any relationship between the Borrowers and the Lenders other than the
relationship of borrower and lender and the Borrowers and the Lenders shall not
be considered partners or co-venturers for any purpose on account of this
Agreement.
Section 11.19 Third Parties; Benefit
All conditions to the obligation of the Lenders to make advances hereunder
are imposed solely and exclusively for the benefit of the Lenders and their
assigns and no other persons shall have standing to require satisfaction of such
conditions in accordance with their terms or be entitled to assume that the
Lenders will refuse to make advances in the absence of strict compliance with
any or all thereof and no other person shall, under any circumstances, be deemed
to be the beneficiary of such conditions, any or all of which may be freely
waived in whole or in part by the Administrative Agent at any time in the sole
and absolute exercise of its discretion pursuant to its agreements with the
Lenders. The terms and provisions of this Agreement are for the benefit of the
parties hereto and, except as herein specifically provided, no other person
shall have any right or cause of action on account thereof.
Section 11.20 Conditions; Verification
Any condition of this Agreement which requires the submission of evidence
of the existence or non-existence of a specified fact or facts implies as a
condition to the existence or non-existence, as the case may be, of such fact or
facts that the Lenders shall, at all times, be free independently to establish
to their satisfaction and in their absolute discretion such existence or
non-existence.
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Section 11.21 Signs; Publicity
At the Administrative Agent's request, but at the expense of the
Administrative Agent, the Borrowers shall place a sign acceptable to the
Borrowers at a location on each of the Eligible Projects under construction
satisfactory to the Administrative Agent, which sign shall recite, among other
things, that the Lenders are financing the development of the Land and the
construction of the Improvements. The Borrowers expressly authorize the
Administrative Agent to prepare and to furnish to the news media for publication
from time to time news releases with respect to the Credit Facility and each
Eligible Project, specifically to include but not limited to, releases detailing
the Administrative Agent's and the Lenders' involvement with the Credit Facility
and the financing of any Eligible Project, all subject to prior review by the
Borrowers.
Section 11.22 Time of Essence
Time shall be of the essence for each and every provision of this
Agreement of which time is an element.
Section 11.23 Replacement Note
In the event the Note or any Joinder Agreement is ever lost or destroyed,
the Borrowers covenant and agree that they will execute and deliver to the
Administrative Agent upon demand a replacement original thereof.
[SIGNATURES ON THE FOLLOWING PAGES]
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104
IN WITNESS WHEREOF, the parties hereto have signed and sealed this
Agreement on the day and year first above written.
WITNESS/ATTEST: SUNRISE EAST ASSISTED LIVING LIMITED
PARTNERSHIP, a Virginia limited
partnership
By: Sunrise Assisted Living Investments, Inc.,
General Partner
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE SEAL, L.L.C., a Virginia limited
liability company
By: Sunrise Development, Inc.,
Managing Member
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE HUNTCLIFF ASSISTED LIVING
LIMITED PARTNERSHIP, a Georgia limited
partnership
By: Sunrise Assisted Living Investments, Inc.,
General Partner
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE STERLING CANYON ASSISTED
LIVING LIMITED PARTNERSHIP, a California
limited partnership
By: Sunrise Assisted Living Investments, Inc.,
General Partner
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
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105
SUNRISE WESTMINSTER ASSISTED
LIVING, L.L.C., a Colorado limited
liability
company
By: Sunrise Assisted Living Investments, Inc.,
Sole Member
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE PARMA ASSISTED LIVING, L.L.C.,
a Virginia limited liability company
By: Sunrise Assisted Living Investments, Inc.,
Sole Member
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE XXXXXXXX ASSISTED LIVING,
L.L.C., a Virginia limited liability company
By: Sunrise Assisted Living Investments, Inc.,
Sole Member
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE EDINA ASSISTED LIVING, L.L.C.,
a Minnesota limited liability company
By: Sunrise Assisted Living Investments, Inc.,
Sole Member
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
99
000
XXXXXXX XXXXXX ASSISTED LIVING
LIMITED PARTNERSHIP, a Massachusetts
limited partnership
By: Sunrise Assisted Living Investments, Inc.,
General Partner
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE NORTHSHORE ASSISTED LIVING
LIMITED PARTNERSHIP, a Florida limited
partnership
By: Sunrise Assisted Living Investments, Inc.,
General Partner
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE CHESTERFIELD ASSISTED LIVING,
L.L.C., a Missouri limited liability
company
By: Sunrise Assisted Living Investments, Inc.,
Sole Member
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE CLAREMONT ASSISTED LIVING,
L.P., a California limited partnership
By: Sunrise Assisted Living Investments, Inc.,
General Partner
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
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107
SUNRISE XXXX ASSISTED LIVING,
L.L.C., a Michigan limited liability
company
By: Sunrise Assisted Living Investments, Inc.,
Sole Member
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE RANCHO CUCAMONGA ASSISTED LIVING,
L.L.C., a Virginia limited liability
company
By: Sunrise Development, Inc.,
Sole Member
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE PACIFIC PALISADES ASSISTED
LIVING, L.P., a California limited
partnership
By: Sunrise Assisted Living Investments, Inc.,
General Partner
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE WEST HARTFORD ASSISTED LIVING,
L.L.C., a Connecticut limited liability
company
By: Sunrise Assisted Living Investments, Inc.,
Sole Member
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
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108
SUNRISE TFE ACQUISITIONS ASSISTED LIVING,
L.L.C., a Virginia limited liability
company
By: Sunrise Development, Inc.,
Sole Member
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE ARLINGTON, MA ASSISTED LIVING,
L.L.C., a Virginia limited liability
company
By: Sunrise Assisted Living Investments, Inc.,
Sole Member
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE MARLBORO ASSISTED LIVING,
L.L.C., a New Jersey limited liability
company
By: Sunrise Cohasset Assisted Living Limited
Partnership, Sole Member
By: Sunrise Assisted Living Investments, Inc.,
Sole Member
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE BATON ROUGE ASSISTED LIVING,
L.L.C., a Louisiana limited liability company
By: Sunrise Assisted Living Investments, Inc.,
Sole Member
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
102
109
SUNRISE BLOOMINGDALE ASSISTED LIVING,
L.L.C., an Illinois limited liability
company
By: Sunrise Assisted Living
Investments, Inc., Sole Member
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE FARMINGTON HILLS ASSISTED LIVING,
L.L.C., a limited liability company
By: Sunrise Assisted Living
Investments, Inc., Sole Member
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE NEW ORLEANS ASSISTED LIVING,
L.L.C., a Louisiana limited liability
company
By: Sunrise Assisted Living
Investments, Inc., Sole Member
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE OAKLAND ASSISTED LIVING LIMITED
PARTNERSHIP, a California limited partnership
By: Sunrise Assisted Living Investments, Inc.,
its general partner
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
103
000
XXXXXXX XXXXXXXXX ASSISTED LIVING, L.P.,
a California limited partnership
By: Sunrise Assisted Living
Investments, Inc., its general
partner
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
SUNRISE WILTON ASSISTED LIVING, L.L.C., a
Connecticut limited liability company
By: Sunrise Assisted Living
Investments, Inc., Sole Member
By: /s/ Xxxxx X. Xxxx (SEAL)
------------------------- ----------------------------------
Xxxxx X. Xxxx
Vice President
WITNESS: BANK OF AMERICA, N.A.,
as Administrative Agent for the Lenders
By: /s/ Xxxxxxx X. Xxxxxxx (SEAL)
------------------------- ---------------------------------------
Xxxxxxx X. Xxxxxxx
Senior Vice President
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111
LIST OF EXHIBITS
A Form of Note
B Form of Borrowing Base Report
C Current Borrowing Base Report
D Places of Business
E Form of Joinder Agreement
F Survey Requirements
G Form of Compliance Certificate
105
112
EXHIBIT A
FORM OF NOTE
106
113
EXHIBIT B
FORM OF BORROWING BASE REPORT
107
114
EXHIBIT C
CURRENT BORROWING BASE REPORT
108
115
EXHIBIT D
PLACES OF BUSINESS
AS OF JUNE 13, 2001
The Borrowers' Chief Executive
Office and Principal Place of Business is:
0000 Xxxxxxxx Xxxxx
XxXxxx, XX 00000
Locations of Collateral:
0000 Xxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fairfax County
0000 Xxxxxxxx Xxxxx
XxXxxx, XX 00000
Xxxxxxx Xxxxxx
Sunrise of Northville
00000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX
Xxxxx Xxxxxx
Sunrise of Huntcliff
0000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxx
Xxxxxx County
Sunrise of Mount Xxxxxx
000 Xxxx Xxxxxxx Xxxxxx
Xx. Xxxxxx, XX
Westchester County
Sunrise of Wall Township
0000 Xxxxxxx Xxxx
Xxxxxxxx xx Xxxx, XX
Monmouth County
Sunrise of Smithtown
00 Xxxxx 000
Xxx Xxxxxx
Xxxxxxxxx, XX
Suffolk County
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000
Xxxxxxx xx Xxxxxxxxxxx
000 0xx Xxxxxx
Xxxxxxxxx Xxxxx, XX
DuPage County
Sunrise of Huntcliff Summit I
0000 Xxxxxxx Xxxx
Xxxxxxx, XX
Xxxxxx County
Sunrise of Sterling Canyon
00000 XxXxxx Xxxxxxx
Xxxxxxxx, XX
Los Angeles County
Sunrise of Flossmoor
00000 Xxxxx Xxxxxxxx'x Xxxxxxx
Xxxxxxxxx, XX
Xxxx Xxxxxx
Sunrise of Parma
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX
Xxxxxxxx Xxxxxx
Sunrise of Xxxxxxxx
000 XX Xxxxxxxxxx Xxxx.
Xxxxxxxx, XX
Xxxxxx County
Sunrise of Edina
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxx, XX
Hennepin County
Sunrise of Chesterfield
0000 Xxxxxxxx Xxxx
Xxxxxxxxxxxx, XX
St. Louis County
Sunrise of Xxxxxxxxxxx
Xxxxx Xxxxxxxx Xxxx.
Xxxxxxxxxxx, XX
Xxxxx Xxxxxx
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Sunrise of Weston
000 Xxxxx Xxxxxx
Xxxxxx, XX
Middlesex South County
Sunrise of Northshore
000 Xxxxx Xxxxx XX
Xx. Xxxxxxxxxx, XX
Pinellas County
Sunrise of Claremont
0000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx
Los Angeles County
Sunrise of Xxxx
0000 Xxxxxx Xxxx
Xxxx, XX
Oakland County
Sunrise at Alta Loma (Rancho Cucamonga)
0000 Xxxxxxxx Xxxx
Xxxxxx Xxxxxxxxx, XX 00000
San Bernardino County
Sunrise of Pacific Palisades
00000 Xxxx Xxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxx, XX 00000
Los Angeles County
Sunrise of West Hartford
00 Xxxxxxxx Xxxx
Xxxx Xxxxxxxx, XX 00000
Hartford County
Sunrise of Palos Park [(TFE Acquisitions)]
00000 XxXxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Xxxx County
Sunrise of Arlington
0000 Xxxxxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Middlesex County
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000
Xxxxxxx xx Xxxxxxxx
0 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, XX
Monmouth County
Sunrise of Oakland Hills
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, XX
Alameda County
Sunrise of Riverside
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX
Riverside County
Sunrise of Bloomingdale
000 X. Xxxx Xxxxxx
Xxxxxxxxxxxx, XX
DuPage County
Sunrise of Wilton
00 Xxxxxxx Xxxx
Xxxxxx, XX
Xxxx of Wilton
Sunrise of Farmington Hills
Twelve Mile Road
Farmington Hills, MI
Oakland County
Sunrise of Baton Rouge
0000 Xxxxxxxxx Xxx.
Xxxxx Xxxxx, XX
East Baton Rouge Parish
Sunrise of New Orleans
0000 Xx. Xxxxxxx Xxxxxx
Xxx Xxxxxxx, XX
Xxxxxxx Xxxxxx
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EXHIBIT E
FORM OF JOINDER AGREEMENT
JOINDER AGREEMENT
(___________, _______)
THIS JOINDER AGREEMENT (this "Agreement") is made this ___ day of
________, 200_ by ________________________________, a ____________________
organized under the laws of ______________, d/b/a "Sunrise of _____________"
(the "Additional Borrower") in favor of each of the Lenders under the Agency
Agreement (as hereinafter defined) and BANK OF AMERICA, N.A., as administrative
agent for the Lenders (the "Administrative Agent").
NOW, THEREFORE, for value received the undersigned agrees as follows:
1. Reference is hereby made to the Fourth Amended and Restated Financing
and Security Agreement dated June 13, 2001 (as amended, modified, restated,
substituted, extended and renewed at any time and from time to time, the
"Financing Agreement") by and among Sunrise East Assisted Living Limited
Partnership, Sunrise SEAL, L.L.C., certain other affiliated borrowing entities
(collectively, the "Borrower") and the Administrative Agent, who together with
certain additional lenders (collectively with the Administrative Agent, the
"Lenders") are participating in a bank group pursuant to the Agency Agreement
(as defined in the Financing Agreement. Capitalized terms not otherwise defined
in this Agreement shall have the meanings given to them in the Financing
Agreement.
2. Pursuant to the Financing Agreement, the Lenders have agreed to extend
to the Borrower a credit facility in the maximum principal amount of
$265,000,000 or such greater amount as the Lenders may from time to time commit
to lend pursuant to the Agency Agreement (the "Credit Facility") for the
purposes set forth in the Financing Agreement. The Loan and all other
obligations relating to the Credit Facility are evidenced by the Third Amended
and Restated Master Promissory Note dated June 13, 2001 made by the Borrower to
the Administrative Agent in the maximum principal amount of $265,000,000 (as
amended, restated or substituted from time to time, the "Note"). The Credit
Facility is subject to the terms and conditions of the Financing Agreement.
3. As a condition precedent to extending the Credit Facility to the
Borrower, the Lenders required that any Wholly Owned Subsidiary or any other
entity affiliated with the Borrower which owns a Facility to be encumbered with
a Deed of Trust to secure the Credit Facility execute this Agreement to evidence
its agreement to the terms of the Financing Documents as applicable.
4. The Additional Borrower hereby acknowledges, confirms and agrees that
on and as of the date of this Agreement, the Additional Borrower has or will
receive the benefit of certain advances made under the Credit Facility and has
granted a [Mortgage/Deed of Trust], Assignment and Security Agreement of even
date herewith (the "Deed of Trust") covering its Facility located in
_____________, ________ and known as "Sunrise of _________" (the "Property") to
secure the Obligations, and as such shall be liable, as provided in the
Financing
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Documents, for all Obligations (whether incurred or arising prior to, on, or
subsequent to the date hereof) and otherwise bound by all of the terms,
provisions and conditions of the Financing Documents. Without in any way
implying any limitation on any of the provisions of this Agreement, the
Additional Borrower (i) represents and warrants that all of the representations
and warranties contained in the Financing Documents are true and correct on and
as the date hereof as if made on and as of the date hereof, both before and
after giving effect to this Agreement, and that no Event of Default or Default
has occurred and is continuing or exists, or would occur or exist after giving
effect to this Agreement, (ii) promises to pay, jointly and severally with the
Borrower, all sums due or to become due under the Note and the other Financing
Documents, and acknowledges that this Agreement shall constitute an allonge or
other modification to the Note for the purposes of adding the Additional
Borrower as a Borrower, jointly and severally liable with all other Borrowers;
(iii) acknowledges, confirms and agrees that from and after the date hereof
Additional Borrower shall be liable for all Obligations under the Financing
Documents; and (iv) acknowledges, confirms and agrees that from and after the
date hereof the term Borrower as such term (or any similar or related term) is
used in the Note, Financing Agreement, this Agreement or any other Financing
Document shall include the Additional Borrower.
5. The Additional Borrower hereby represents and warrants to the
Administrative Agent and the Lenders that it will derive benefits, directly and
indirectly, from each advance of the Credit Facility, both in its individual
capacity and as a member of the integrated group of entities which together
comprise the Borrower, and the successful operation of the integrated group is
dependent upon the continued successful performance of the functions of the
integrated group as a whole. Additional Borrower acknowledges and agrees that
the terms of the consolidated financing provided under the Financing Agreement
are more favorable than would otherwise would be obtainable by the Additional
Borrower individually, and the Additional Borrower's additional administrative
and other costs and reduced flexibility associated with individual financing
arrangements which would otherwise be required if obtainable would substantially
reduce the value to the Additional Borrower of the financing.
6. For administrative convenience, the Additional Borrower hereby
irrevocably appoints Sunrise Assisted Living Investments, Inc. ("SALII") as the
Additional Borrower's attorney-in-fact, with power of substitution (with the
prior written consent of the Administrative Agent in the exercise of its sole
and absolute discretion), in the name of SALII or in the name of the Additional
Borrower or otherwise to take any and all actions with respect to the this
Agreement, the other Financing Documents, the Obligations and/or the Collateral
(including, without limitation, the proceeds thereof) as SALII may so elect from
time to time, including, without limitation, actions to (a) request advances
under the Credit Facility and direct the Administrative Agent to disburse or
credit the proceeds of any Loan directly to an account of SALII, any one or more
of the other entities comprising the Borrower, the Additional Borrower or
otherwise, which direction shall evidence the making of such Loan and shall
constitute the acknowledgement by the Borrower of the receipt of the proceeds of
such Loan, (b) enter into, execute, deliver, amend, modify, restate, substitute,
extend and/or renew this Agreement, any other Financing Documents, security
agreements, mortgages, deposit account agreements, instruments, certificates,
waivers, letter of credit applications, releases, documents and agreements from
time to time, and (c) endorse any check or other item of payment in the name of
the Additional Borrower or in the name of SALII. The foregoing appointment is
coupled with an
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121
interest, cannot be revoked without the prior written consent of the
Administrative Agent, and may be exercised from time to time through SALII's
duly authorized officer, officers or other Person or Persons designated by SALII
to act from time to time on behalf of SALII.
7. The Additional Borrower hereby irrevocably authorizes each of the
Lenders to make loans to any one or more of the entities comprising the Borrower
pursuant to the provisions of the Financing Agreement upon the written, oral or
telephone request any one or more of the Persons who is from time to time a
Responsible Officer of SALII under the provisions of the most recent certificate
of authorization and/or incumbency of SALII on file with the Administrative
Agent.
8. The Additional Borrower acknowledges that neither the Administrative
Agent nor any of the Lenders assumes any responsibility or liability for any
errors, mistakes, and/or discrepancies in the oral, telephonic, written or other
transmissions of any instructions, orders, requests and confirmations between
the Administrative Agent and SALII or the Administrative Agent and any of the
Lenders in connection with the Credit Facility or any other transaction in
connection with the provisions of this Agreement. The Additional Borrower
acknowledges that the Borrowers have agreed among themselves, and the
Administrative Agent and the Lenders have consented to that agreement, that each
Borrower shall have rights of contribution from all of the other of them to the
extent any Borrower incurs Obligations in excess of the proceeds of the loans
received by, or allocated to, or advanced for the direct benefit of, such
Borrower. The Additional Borrower acknowledges that all such indebtedness and
rights shall be subordinate in priority and payment to the indefeasible
repayment in full in cash of the Obligations, and, unless the Administrative
Agent agrees in writing otherwise, shall not be exercised or repaid in whole or
in part until all of the Obligations have been indefeasibly paid in full in
cash. The Additional Borrower agrees that all of such inter-company indebtedness
and rights of contribution are part of the Collateral and secure the
Obligations. The Additional Borrower hereby waives all rights of counterclaim,
recoupment and offset between or among the Borrowers arising on account of that
indebtedness and otherwise. The Additional Borrower shall not evidence the
inter-company indebtedness or rights of contribution by note or other
instrument, and shall not secure such indebtedness or rights of contribution
with any Lien or security.
9. Without in any way implying any limitation on any of the provisions of
this Agreement, the Financing Agreement, or any of the other Financing
Documents, the Additional Borrower hereby assigns, pledges and grants to the
Administrative Agent, for the ratable benefit of the Lenders as security for the
Obligations, and agrees that the Administrative Agent, for the ratable benefit
of the Lenders, shall have a perfected and continuing security interest in, and
Lien on, (a) all of the Additional Borrower's Accounts, Equipment, General
Intangibles, documents, Chattel Paper, Instruments and Inventory, all right
title and interest of the Additional Borrower in and to the Operating Agreements
and Management Contracts (including, without limitation, the Management
Agreement), Resident Agreements, Physician Contracts, Participation Agreements,
the Licenses (whether or not designated with initial capital letters), and all
other management contracts, operating agreements, service agreements and any
other agreements pertaining to the Property as those terms are defined in the
Uniform Commercial Code as presently adopted and in effect in the Commonwealth
of Virginia (b) any and all property specifically included in those respective
terms in the Financing Agreement or in the Financing Documents, (c) all right,
title and interest of the Additional Borrower in and to Leases or subleases,
rents, royalties, issue,
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122
profits, revenues, earnings, income or other benefits of the Property or arising
from the use or enjoyment of the Property, or from any lease or other use and
occupancy agreement pertaining to the Property, (d) all right, title and
interest of the Additional Borrower under all construction, architectural and
design contracts and plans and specifications, (e) any and all property and/or
collateral described in any of the Security Documents, including, without
limitation, the Financing Agreement and the Deed of Trust, (f) any and all bank
accounts or other deposit accounts of the Additional Borrower wherever located,
and (g) all proceeds (cash and non-cash, including, without limitation,
insurance proceeds), of the foregoing. The Additional Borrower further agrees
that the Administrative Agent, shall have in respect thereof all of the rights
and remedies of a secured party under the Uniform Commercial Code as well as
those provided in this Agreement, under each of the other Financing Documents
and under applicable Laws.
10. Without in any way implying any limitation on any of the provisions of
this Agreement, the Additional Borrower agrees to execute such financing
statements, instruments, and other documents as the Administrative Agent may
require.
11. Additional Borrower hereby covenants and agrees with the
Administrative Agent and the Lenders that the Obligations include all present
and future indebtedness, duties, obligations, and liabilities, whether now
existing or contemplated or hereafter arising, of the Borrower.
12. Without in any way implying any limitation on any of the provisions of
this Agreement, the Additional Borrower agrees to the provisions of this Section
12.
(a) Additional Borrower hereby unconditionally and irrevocably, guarantees
to the Administrative Agent and the Lenders:
(i) the due and punctual payment in full (and not merely the
collectibility) by the Borrower of the Obligations, including unpaid and
accrued interest thereon, in each case when due and payable, all according
to the terms of this Agreement, the Note and the other Financing
Documents;
(ii) the due and punctual payment in full (and not merely the
collectibility) by the Borrower of all other sums and charges which may at
any time be due and payable in accordance with this Agreement, the Note or
any of the other Financing Documents;
(iii) the due and punctual performance by the Borrower of all
of the other terms, covenants and conditions contained in the Financing
Documents; and
(iv) all the other Obligations of the Borrower.
(b) The obligations and liabilities of the Additional Borrower under this
Section 12 shall be absolute and unconditional, irrespective of the genuineness,
validity, priority, regularity or enforceability of this Agreement, the Note or
any of the Financing Documents or any other circumstance which might otherwise
constitute a legal or equitable discharge of a surety or guarantor. The
Additional Borrower expressly agrees that the Administrative Agent may, in its
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sole and absolute discretion, without notice to or further assent of the
Additional Borrower without in any way releasing, affecting or in any way
impairing the obligations and liabilities of the Additional Borrower hereunder:
(i) waive compliance with, or any defaults under, or grant any
other indulgences under or with respect to any of the Financing Documents;
(ii) modify, amend, change or terminate any provisions of any
of the Financing Documents;
(iii) grant extensions or renewals of or with respect to the
Credit Facility, the Note or any of the other Financing Documents;
(iv) effect any release, subordination, compromise or
settlement in connection with this Agreement, the Note or any of the other
Financing Documents;
(v) agree to the substitution, exchange, release or other
disposition of the Collateral or any part thereof, or any other collateral
for the Credit Facility or to the subordination of any lien or security
interest therein;
(vi) make advances for the purpose of performing any term,
provision or covenant contained in this Agreement, the Note or any of the
other Financing Documents with respect to which the Borrower shall then be
in default;
(vii) make future advances pursuant to the Financing Agreement
or any of the other Financing Documents;
(viii)assign, pledge, hypothecate or otherwise transfer the
Obligations, the Note, any of the other Financing Documents or any
interest therein, all as and to the extent permitted by the provisions of
this Agreement;
(ix) deal in all respects with any one or more entities
comprising the Borrower as if this Section 12 were not in effect;
(x) effect any release, compromise or settlement with any one
or more entities comprising the Borrower; and
(xi) provide debtor-in-possession financing or allow use of
cash collateral in proceedings under the Bankruptcy Code, it being
expressly agreed by the Additional Borrower that any such financing and/or
use would be part of the Obligations.
(c) The obligations and liabilities of the Additional Borrower, as
guarantor under this Section 12 shall be primary, direct and immediate, shall
not be subject to any counterclaim, recoupment, set off, reduction or defense
based upon any claim that Additional Borrower may have against any one or more
of the entities comprising the Borrower, the Administrative Agent and the
Lenders, and shall not be conditional or contingent upon pursuit or enforcement
by the
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Administrative Agent of any remedies it may have against the Borrower with
respect to this Agreement, the Note or any of the other Financing Documents,
whether pursuant to the terms thereof or by operation of law. Without limiting
the generality of the foregoing, the Administrative Agent shall not be required
to make any demand upon any one or more entities comprising the Borrower, or to
sell the Collateral or otherwise pursue, enforce or exhaust its remedies against
any one or more entities comprising the Borrower or the Collateral either
before, concurrently with or after pursuing or enforcing its rights and remedies
hereunder. Any one or more successive or concurrent actions or proceedings may
be brought against Additional Borrower under this Section 12, either in the same
action, if any, brought against the Borrower, or in separate actions or
proceedings, as often as the Administrative Agent may deem expedient or
advisable. Without limiting the foregoing, it is specifically understood that
any modification, limitation or discharge of any of the liabilities or
obligations of any one or more entities comprising the Borrower under any of the
Financing Documents, arising out of, or by virtue of, any bankruptcy,
arrangement, reorganization or similar proceeding for relief of debtors under
federal or state law initiated by or against such entities, in any capacity
under this Section 12, or under any of the Financing Documents, shall not
modify, limit, lessen, reduce, impair, discharge, or otherwise affect the
liability of the Additional Borrower under this Section 12, in any manner
whatsoever, and this Section 12 shall remain and continue in full force and
effect. It is the intent and purpose of this Section 12 that the Additional
Borrower shall and does hereby waive all rights and benefits which might accrue
to any one or more entities comprising the Borrower by reason of any such
proceeding, and the Additional Borrower agrees that it shall be liable for the
full amount of the obligations and liabilities under this Section 12 regardless
of any modification, limitation or discharge of the liability of any individual
Borrower under any of the Financing Documents, that may result from any such
proceedings.
(d) The Additional Borrower, as guarantor under this Section 12, hereby
unconditionally, irrevocably and expressly waives:
(i) presentment and demand for payment of the Obligations and
protest of non-payment;
(ii) notice of acceptance of this Section 12 and of
presentment, demand and protest thereof;
(iii) notice of any default hereunder or under the Note or any
of the other Financing Documents and notice of all indulgences;
(iv) notice of any increase in the amount of any portion of or
all of the indebtedness guaranteed by this Section 12;
(v) demand for observance, performance or enforcement of any
of the terms or provisions of this Section 12, the Note or any of the
other Financing Documents;
(vi) all errors and omissions in connection with the
Administrative Agent's administration of all indebtedness guaranteed by
this Section 12;
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(vii) any right or claim of right to cause a marshalling of
the assets of any one or more of the entities comprising the Borrower;
(viii) any act or omission of the Administrative Agent which
changes the scope of the risk as guarantor hereunder; and
(ix) all other notices and demands otherwise required by law
which Additional Borrower may lawfully waive.
(e) Within ten (10) days following any request of the Administrative Agent
so to do, the Additional Borrower will furnish the Administrative Agent and such
other persons as the Administrative Agent may direct with a written certificate,
duly acknowledged stating in detail whether or not any credits, off-sets or
defenses exist with respect to this Section 12.
13. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Virginia, without regard to
principles of choice of law.
14. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original for all purposes, and all of which shall
constitute, collectively, one agreement.
WITNESS the due execution hereof as of the day and year first written
above.
WITNESS OR ATTEST: ___________________________________
By: _______________________________
Its: _______________________________
____________________________ By: ____________________________(SEAL)
Xxxxx X. Xxxx
Vice President
BANK OF AMERICA, N.A.
____________________________ By:_____________________________(SEAL)
Name:
Title:
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EXHIBIT F
SURVEY REQUIREMENTS
1. Field Note Description. The Survey shall contain a certified metes and
bounds description complying with the following: (a) the beginning point shall
be established by a monument located at the beginning point, or by reference to
a nearby monument; (b) the sides of the Land shall be described by giving the
distances and bearings of each; (c) the distances, bearings, and angles shall be
taken from an instrument survey by a registered professional engineer or
registered professional land surveyor; (d) curved sides shall be described by
data including: length of arc, central angle, radius of circle for the arc and
chord distance, and bearing; (e) the description shall be a single perimeter
description of the entire Land, if and as instructed, there shall also be a
separate metes and bounds description of one or more constituent tracts out of
the Land; (f) the description shall include a reference to all streets, alleys,
and other rights-of-way that abut the Land, and the width of all rights-of-way
mentioned shall be given the first time these rights-of-way are referred to; (g)
for each boundary line abutting a street, road, alley or other means of access,
the description must, in calling the boundary line, state that the boundary line
and the right-of-way line are the same; (h) if the Land has been recorded on a
map or plat as part of an abstract or subdivision, reference to such recording
data shall be made; and (i) the total acreage and square footage of the Land
shall be certified.
2. Lot and Block Description. If the Land consists of one or more complete
lots or blocks included within a properly established recorded subdivision or
addition, then a lot and block description will be an acceptable substitute for
a metes and bounds description, provided that the lot and block description must
completely and properly identify the name or designation of the recorded
subdivision or addition and give the recording information therefor.
3. Map or Plat. The Survey shall also contain a certified map or plat
clearly showing the following: (a) the Land; (b) the relation of the point of
beginning of the Land to the monument from which it is fixed; (c) all easements,
streets, roads, alleys and rights-of-way on or abutting the Land, showing
recording information therefor by volume and page; (d) if the Land has been
recorded on a map or plat as part of an abstract or subdivision, all survey
lines must be shown, and all lot and block lines (with distances and bearings)
and numbers, must be shown; (e) the established building setback lines, if any,
including those by restrictive covenant, recorded plat and zoning ordinance
(identifying the source in each case, by volume and page reference if
applicable); (f) all easements appurtenant to said Land, with recording
information by volume and page; (g) the boundary lines of the street or streets
abutting the Land and the width of said streets and the width of the
rights-of-way therefor; (h) the distance from the nearest intersecting street or
road to the Land; (i) all structures and improvements on the Land (with
designation and dimensions of each party wall, if any) with horizontal lengths
of all sides and the relation thereof by distances to (1) all boundary lines of
the Land, (2) easements, (3) established building lines, and (4) street lines;
(j) the types of materials comprising the exterior walls and roofs of all
buildings; (k) all street addresses of improvements on the Land; (l) all curb
cuts, driveways, fences, sidewalks, xxxxxx and landscaping; (m) the number of
stories of all multistory structures; (n) the location, type and size of all
utility lines as they service the Land and Improvements (sewer, water, gas,
electric and telephone); (o) all encroachments and protrusions, if any, from or
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upon the Land or any improvements thereon or upon any easement, building setback
line or other restricted area, with exact measurements; (p) all parking and
paved areas, including the number of vehicles that may be parked; (q) all
distances, angles and other calls contained in the legal description; (r) the
location, type and size of all monuments, and as to each monument, indication
whether it was found or placed by the surveyor; (s) the boundaries of any flood
hazard area or flood plain area in which any part of the Land lies, with the map
number, date and source (governmental authority) of each flood map shown; (t)
all surface water bodies or courses; (u) the date of any revisions subsequent to
the initial survey prepared pursuant to these requirements; (v) a legend
explaining the meaning of all symbols used on the plat; and (w) the scale of all
distances and dimensions on the plat.
4. Certification. The certification for the property description and the
map or plat shall be addressed to Lender, Borrower and the Title Insurer, signed
by the surveyor (a registered professional land surveyor or registered
professional engineer), bearing current date, registration number, and seal, and
shall be in the following form or its substantial equivalent:
5. This is to certify to Sunrise _________Assisted Living, ________
("Borrower"), First American Title Insurance Company ("Title Insurer") and Bank
of America, N.A., as Administrative Agent (the "Administrative Agent"), on
behalf of the Lenders that this map or plat and the survey on which it is based
were made in accordance with "Minimum Standard Detail Requirements for ALTA/ACSM
Land Title Surveys" jointly established and adopted by ALTA, ACSM and NSPS in
1999, and pursuant to the Accuracy Standards as adopted by ALTA, NSPS and ACSM
and in effect on the date of this certification. The undersigned hereby
certifies that the Positional Uncertainties resulting from the survey
measurements made on the survey do not exceed the allowable Positional
Tolerance. The undersigned further certifies to Administrative Agent, Borrower
and the Title Insurer that (a) this survey is true and correct and was made on
the ground under my supervision as per the field notes shown hereon and
correctly shows the boundary lines and dimensions and area of the land indicated
hereon and each individual parcel thereof indicated hereon; (b) all monuments
shown hereon actually exist, and the location, size and type of such monuments
are correctly shown; (c) the subject property described in this survey is the
same land as described in the title commitment described below; (d) this survey
and the information, courses and distance shown on the survey are correct; (e)
this survey correctly shows the size, location and type of all buildings,
structures, other improvements and visible items on the subject property and
that all buildings and improvements are within the boundary lines and applicable
set back lines of the subject property; (f) this survey correctly shows the
location and dimensions of all alleys, streets, roads, rights-of-way, easements,
building setback lines and other matters of record of which the undersigned has
been advised affecting the subject property according to the legal description
in such easements and other matters (with instrument, book and page number
indicated); (g) there are no violations of zoning ordinances, restrictions or
other rules and regulations with reference to the location of the buildings and
improvements; (h) except as shown, there are no visible (1) improvements,
easements, rights-of-way, party walls, drainage ditches, streams, uses,
discrepancies or conflicts, (2) party walls or encroachments onto adjoining
premises, streets, or alleys by any of said buildings, structures or other
improvements, (3) encroachments onto the subject property by buildings,
structures or other improvements on adjoining premises, or (4) encroachments on
any easement, building setback lines or other restricted area by any buildings,
structures or other improvements on the subject property; (i) the distance from
the nearest intersecting street or road
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is as shown hereon; (j) the subject property abuts a dedicated public street or
road as shown hereon; (k) all utility services required for the operation of the
subject property either enter the subject property through adjoining public
streets, or this survey shows the point of entry and location of any utilities
that pass through or are located on the adjoining premises; (l) any discharge
into streams, rivers or other conveyance system is shown on this survey; (m) if
the subject property consists of two or more parcels having common boundaries,
those parcels are contiguous along the common boundaries; (n) except as shown,
no part of the property is located in a 100-year Flood Plain or in an identified
"flood prone area" as defined pursuant to the Flood Disaster Protection Act of
1973, as amended, as reflected by Flood Insurance Rate Map No. _________, Panel
#______________, dated __________, which such map panel covers the area in which
the property is situated; (o) no portion of the subject property lies within a
delineated wetlands area under federal, state or local law or policy; (p) except
as shown on this survey, the subject property does not serve any adjoining
premises for drainage, utilities, or ingress or egress; (q) the record
description of the subject property forms a mathematically closed figure; and
(r) the subject property has a tax map designation separate and distinct from
that of any other premises and the subject property is a separate, legally
subdivided parcel. The undersigned has received and examined a copy of the Title
Insurance Commitment No. __________ issued by the Title Insurer for the property
as well as a copy of each instrument listed therein, and the location of any
matter shown thereon, to the extent it can be located, has been shown on this
survey.
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EXHIBIT G
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate is delivered pursuant to (i) Section 7.1 of
the Fourth Amended and Restated Financing and Security Agreement dated as of
June 13, 2001 (together with all amendments and modifications, if any, from time
to time made thereto, the "Financing Agreement") between Sunrise East Assisted
Living Limited Partnership, Sunrise SEAL, L.L.C. and certain affiliated
borrowing entities (collectively, the "Borrowers") and Bank of America, N.A. as
Administrative Agent, and (ii) Section 3.1 of the Fourth Amended and Restated
Master Guaranty of Payment Agreement dated as of June 13, 2001 (together with
all amendments and modifications, if any, from time to time made thereto, the
"Guaranty") by Sunrise Assisted Living, Inc. ("Guarantor") and Bank of America,
N.A. as Administrative Agent. Unless otherwise defined, terms used herein
(including the attachments hereto) have the meanings provided in the Financing
Agreement.
BORROWER CERTIFICATE
The undersigned, one of the Borrowers as of the date hereof, hereby
certifies and warrants that:
1. It is authorized to execute this certificate on behalf of all Borrowers.
2. As of the (fiscal quarter) (fiscal year) ending as of ________________,
____:
(a) No Borrower was in default under any of the provisions of the
Financing Agreement during the period to which this Compliance
Certificate relates;
(b) As of the end of this reporting period: (i) the number of Eligible
Projects was ____ [minimum number required Six (6)].
(c) The attached Borrowing Base Report accurately represents the status
of each Eligible Project with regard to any and all applicable
covenants set forth in the Financing Agreement (including the ratio
of Net Operating Income to Debt Service for such reporting period
and the Minimum Occupancy Requirement and actual occupancy as of the
end of such reporting period).
(d) As of the end of this reporting period: (i) the amount of Liquid
Assets held by the Borrowers on a consolidated basis, after taking
into account any distributions ("Distributions") of net operating
income to partners or members of any of the Borrowers made less than
30 days prior to the end of such reporting period, is $____________
[minimum required $5,000,000 plus an additional $5,000,000 if 10 or
more Eligible Projects are not Stabilized Facilities]; (ii) if there
have been any Distributions, then the ratio of Adjusted EBITDA to
Debt Service (calculated on a rolling four-quarter basis), for the
Stabilized Facilities in the aggregate, is _____ [minimum required
1.0].
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SUNRISE EAST ASSISTED LIVING
LIMITED PARTNERSHIP, on behalf of all
Borrowers
By: Sunrise Assisted Living Investments, Inc.
its General Partner
By: ___________________________(SEAL)
Xxxxx X. Xxxx
Vice President
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GUARANTOR CERTIFICATE
The undersigned, being the duly elected, qualified and acting Chief
Financial Officer or Executive Vice President of the Guarantor, on behalf of the
Guarantor, hereby certifies and warrants that:
1. He is the Executive Vice President or Chief Financial Officer of the
Guarantor and that, as such, he is authorized to execute this certificate on
behalf of the Guarantor.
2. As of the (fiscal quarter) (fiscal year) ending as of ________________,
____:
(a) The Guarantor is not in default under any of the provisions of
the Guaranty;
(b) The Guarantor's Tangible Net Worth was $_______________ as
computed on Attachment 1 hereto;
(c) The Guarantor's ratio (on a consolidated basis with all
subsidiaries) of Funded Debt (as defined in the Guaranty) to
EBITDAR was ______ as computed on Attachment 2 hereto;
(d) The Guarantor's ratio (on a consolidated basis with all
subsidiaries) of EBITDAR to the sum of Interest Expense (as
defined in the Guaranty) and Rent Expense (as defined in the
Guaranty) was __________ as computed on Attachment 3 hereto;
(e) The value of the Guarantor's Minimum Liquid Assets was $_____
as computed on Attachment 4 hereto.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate, this ______ day of ______________, 200__.
SUNRISE ASSISTED LIVING, INC.
By: ___________________________(SEAL)
Christian X.X. Xxxxxx
Executive Vice President
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ATTACHMENT 1
Period Ending: ____________, 200_
Tangible Net Worth
1. net worth (defined by GAAP), plus the leasehold value associated with
the properties which are the subject of synthetic lease transactions
which are otherwise characterized as intangible assets $___________
less
2. (a) all intangible assets (except for deferred taxes recorded as
goodwill and except for the goodwill purchased in connection with the
acquisition of Karrington Health, Inc. in the amount of $32,000,000);
$___________
(b) write-up in book value of assets subsequent to most recent financial
statement; $_____________
(c) loan and advances to, or investments in, any person or entity (except: (i)
cash equivalents or deposit accounts at financial institutions; (ii)
mortgage revenue bonds issued by Bucks County, PA Industrial Development
Authority; and (iii) individual investments less than $2,500,000, but not
exceeding $10,000,000 in the aggregate); $________________
(d) advances or loan to, or receivables from, unconsolidated affiliates
(except subordinated debt or loan of unconsolidated subsidiaries and
affiliates of Guarantor which are parties to development and
management contracts with Sunrise Development, Inc. and Sunrise
Assisted Living Management, Inc.); $______________
Actual Tangible Net Worth = $_______________
Required Tangible Net Worth equal to the sum of :
(i) Guarantor's net worth as of March 31, 2001 $284,000,000
(ii) Guarantor's net income (if positive) for each quarter
subsequent to March 31, 2001 ___________ x 75% =
$____________
(iii) Net proceeds received by Guarantor of any equity capital
transaction during each quarter subsequent to March 31,
2001 x 85% = $____________
TOTAL $____________
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ATTACHMENT 2
Period Ending: ____________, 200_
Ratio of Funded Debt to EBITDAR
1. Funded Debt $_____________*
2. EBITDAR (as calculated on Attachment 3) $_____________
Actual Ratio: ____
Required Ratio:
Period Ending Maximum Ratio
------------- -------------
June 30, 2001 6.50 to 1.00
September 30, 2001 6.50 to 1.00
December 31, 2001 6.50 to 1.00
March 31, 2002 6.00 to 1.00
June 30, 2002 6.00 to 1.00
September 30, 2002 6.00 to 1.00
December 31, 2002 6.00 to 1.00
March 31, 2003 5.50 to 1.00
and thereafter
* "Funded Debt" means the sum of the following but shall exclude trade and other
accounts payable in the ordinary course of business in accordance with customary
trade terms and which are not overdue (as determined in accordance with
customary trade practices) or which are being disputed in good faith by the
Guarantor and for which adequate reserves are being provided on the books of the
Guarantor in accordance with GAAP:
(a) indebtedness for borrowed money (including the 5-1/2%
convertible subordinated notes issued by the Guarantor)
$____________
(b) obligations in respect of letters of credit, banker's or other
acceptances or similar obligations issued or created for the
account of the Guarantor $____________
(c) (i) lease obligations which have been or should be, in
accordance with GAAP, capitalized on the books of the
Guarantor, plus (ii) the product of Rent Expense (as defined
in the Guaranty), with respect to operating leases, multiplied
by eight (8) (except for Sunrise of Severna Park which is
multiplied by four (4) $____________
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(d) liabilities secured by any property owned by the Guarantor, to
the extent attached to the Guarantor's interest in such
property, even though Guarantor is not liable for the payment
thereof $____________
(e) (i) amounts payable by Guarantor under any terminated,
defaulted or outstanding interest rate protection products, or
(ii) take-out commitments (excluding a refinancing or a
commitment of a third party) or purchase contracts including
the deferred purchase price of property or services in each
instance if the Guarantor does not control the incurring
obligation $____________
(f) (i) the amount of any guaranty of indebtedness for borrowed,
or (ii) other debt owned by Persons other than the Guarantor
which is in default and for which the creditor is pursuing
payment by the Guarantor $____________
(g) any obligation of the Guarantor or a Commonly Controlled
Entity to a Multiemployer Plan $____________
(h) any synthetic lease obligations $____________,
(i) any other lease expenses for rented real property will be
accounted for as debt based on eight (8) times annualized
lease payments (provided, however, that so long as the
Guarantor or any Affiliate shall continue to own a 50%
interest in the Facility located in Severna Park, Maryland
known as "Sunrise of Severna Park", lease expenses for Sunrise
of Severna Park will be accounted for as debt based on four
(4) times the annualized lease payments rather than eight (8)
times the annualized lease payments) $____________
(j) other amounts considered to be debt by the Administrative
Agent, the Syndication Agent and the Documentation Agent in a
dollar amount to be mutually agreed upon by the Administrative
Agent and the Guarantor (excluding trade and other accounts
payable in the ordinary course of business in accordance with
customary trade terms which are not overdue or which are being
disputed in good faith by the Guarantor and for which adequate
reserves are being provided on the books of Guarantor in
accordance with GAAP) $____________
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ATTACHMENT 3
Period Ending: ____________, 200_
Ratio of EBITDAR to Interest Expense plus Rent Expense
1. EBITDAR $_____________ (calculated as follows)
Net Income* $_____________
Plus Interest $_____________
Plus Taxes $_____________
Plus Depreciation $_____________
Plus Amortization $_____________
Plus other non-cash
Items** $_____________
Plus Rent Expense $_____________ (actual rent expense incurred by
Borrower, Guarantor or any
Affiliate as a tenant under
leases for any senior living
facility)
Plus Actual
Management Fees $_____________ (equal to actual Management Fees)
Plus Gains from the
sale of open operating
Facilities (not to exceed
25 per 12 month
period of which not
more than 20 may be
Core Properties). $_____________
Minus Replacement
Reserve $_____________ ($250/year/bed for each Facility)
Minus Management
Fees $_____________ (equal to the greater of 5%
of gross revenues or actual
Management Fees)
Minus gains from
sales of Non-Core
Properties $_____________
Minus other
extraordinary
gains $_____________
2. Interest Expense $_____________ (actual interest expense
incurred by Guarantor and its
subsidiaries on all debt owed
to unaffiliated third
parties, including 5-1/2%
convertible subordinated
notes)
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3. Rent Expense $_____________
Interest Expense $_____________
Sum of Rent Expense
and Interest Expense $_____________
Actual Ratio: _____
Required Ratio: Not less than 2.25 to 1.00
*Net Income shall include gain from the sale of any Core Property provided such
gain is recognized ratably over the longer of (i) four (4) fiscal quarters or
(ii) such longer period as may be required by GAAP; provided, however, if GAAP
requires that such gain be recognized in fewer than four (4) quarters, for
purposes of this definition, the gain must be calculated ratably over four (4)
quarters. The Guarantor's financial statements shall disclose over what period
such gain is being recognized. Gain from the sale of any Non-Core Property shall
not be included in Net Income.
**Other non-cash and one-time non-recurring items which may be added back to
EBITDAR require the consent of the Administrative Agent and if they exceed
$5,000,000 in any year require consent of 66.67% of the Lenders by pro rata
shares of the Loan.
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ATTACHMENT 4
Period Ending: ____________, 200_
Minimum Liquid Assets
Value of unrestricted cash, cash equivalents and marketable securities
$_______________
Required Value: not less than the greater of (a) 90 days of Debt Service, or
(b) $25,000,000.
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