Common use of Occupancy Covenant Clause in Contracts

Occupancy Covenant. Maintain or cause to be maintained an average occupancy for the Facility of not less than 75% (the “Occupancy Covenant”) commencing with the quarter ending December 31, 2015 (tested based on a trailing 1-calendar month basis), March 31, 2016 (tested based on a trailing 3-calendar month basis), June 30, 2016 (tested based on a trailing 6-calendar month basis), September 30, 2016 (tested based on a trailing 9-calendar month basis), and December 31, 2016 and each quarter thereafter during the Loan term (tested based on a trailing 12-calendar month basis). If the Occupancy Covenant is not achieved for any quarter during the term of the Loan for which it is tested, Borrower shall submit to Lender within thirty (30) days following such failure, a written plan of correction reasonably satisfactory to the Lender, detailing the Borrower’s plan to bring the Facility into compliance with the Occupancy Covenant. If the Facility fails to achieve the Occupancy Covenant for a second consecutive quarter, upon request by Lender, Borrower shall (1) promptly retain a marketing consultant satisfactory to the Lender to advise the Borrower regarding the Facility, (2) obtain and submit the recommendations or reports of such marketing consultant to Lender within thirty (30) days following the engagement of the marketing consultant, and (3) promptly implement the recommendations of the foregoing marketing consultant. Notwithstanding any provision herein to the contrary, Lender agrees that failure of the Facility to achieve the Occupancy Covenant shall not, in and of itself, constitute an Event of Default so long as Borrower provides Lender with evidence satisfactory to Lender that a marketing plan submitted to and approved by Lender is being timely implemented to correct the non-compliance.

Occupancy Covenant. Maintain or cause to be maintained an average occupancy for the Facility (based upon a proforma capacity of 89 units) of not less than 75% (the “Occupancy Covenant”) commencing with for the quarter ending December 31, 2015 15 months after the Closing Date and thereafter during the term of the Loan (tested provided that the first test shall be based on a trailing 1-calendar month basis), March 31, 2016 (tested based on upon a trailing 3-month calendar month basis), June 30, 2016 (tested based on the second test upon a trailing 6-month calendar month basis), September 30, 2016 (tested based on the third test upon a trailing 9-month calendar month basis), and December 31, 2016 and each quarter thereafter during the Loan term (tested based on subsequent test upon a trailing 12-calendar month basisperiod). If the Occupancy Covenant is not achieved for any quarter during the term of the Loan for which it is tested, Borrower shall submit to Lender within thirty (30) days following such failure, a written plan of correction reasonably satisfactory to the Lender, detailing the Borrower’s plan to bring the Facility into compliance with the Occupancy Covenant. If the Facility fails to achieve the Occupancy Covenant for a second consecutive quarter, upon request by Lender, Borrower shall (1) promptly retain a marketing consultant satisfactory to the Lender to advise the Borrower regarding the Facility, (2) obtain and submit the recommendations or reports of such marketing consultant to Lender within thirty (30) days following the engagement of the marketing consultant, and (3) promptly implement the recommendations of the foregoing marketing consultant. Notwithstanding any provision herein to the contrary, Lender agrees that failure of the Facility to achieve the Occupancy Covenant shall not, in and of itself, constitute an Event of Default so long as Borrower provides Lender with evidence satisfactory to Lender that a marketing plan submitted to and approved by Lender is being timely implemented to correct the non-compliance.