EXHIBIT 10.103
REGULATORY AGREEMENT
NURSING HOMES U.S. DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT
Office of Housing
Federal Housing Commissioner
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| Project Number | Mortgagee |
| 143-22014 PM/ALF/REF | Red Mortgage Capital, Inc., an Ohio corporation |
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| Amount of Mortgage Note | Date |
| $2,386,100.00 | As of January 1, 2002 |
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| Mortgage Recorded (State) | County | Date |
| California | Orange | January __, 2002 |
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| Book | Page |
| | |
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This Agreement entered into as of this 1st day of January, 2002, between
ACACIA VILLA, LLC, a Delaware limited liability company whose address is 000
Xxxxxxx Xxxxxx, Xxxxx X-0, Xxxxx Xxxx, Xxxxxxxxxx 00000 (jointly and severally,
hereinafter referred to as Lessee) and the undersigned FEDERAL HOUSING
COMMISSIONER, (hereinafter called Commissioner).
In consideration of the consent of the Commissioner to the leasing of the
aforesaid project by ARV ACACIA VILLA, L.P., a California limited partnership,
Mortgagor, and in order to comply with the requirements of the National Housing
Act and the Regulations adopted by the Commissioner pursuant thereto, Lessees
agree for themselves, their successors, heirs and assigns, that in connection
with the mortgaged property and the project operated thereon and so long as the
Contract of Mortgage Insurance continues in effect, and during such further
period of time as the Commissioner shall be the owner, holder or reinsurer of
the mortgage, or during any time the Commissioner is obligated to insure a
mortgage on the mortgaged property:
(1) The lease shall be subject and subordinate to the mortgage securing
the note or other obligation endorsed for insurance by the
commissioner;
(2) Lessee shall make payments under lease when due;
(3) Payments by the lessee to the lessor shall be sufficient to pay all
mortgage payments including payments to reserves for taxes, insurance,
etc., payments to the Reserve for Replacements, and to take care of
necessary maintenance. If at the end of any calendar year, or any
fiscal year if the project operates on the basis of a fiscal year,
payments under the lease have not been sufficient to take care of the
above
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Page 1 of 6 form HUD-92466-NHL (1/92)
Ref Handbook 4600.1
items, the lessor and lessee upon request in writing from the
Commissioner shall renegotiate the amounts due under the lease so that
such amounts shall be sufficient to take care of such items; the
Commissioner shall be furnished by the lessee, within thirty days
after being called upon to do so, with a financial report in form
satisfactory to the Commissioner covering the operations of the
mortgaged property and of the project;
(4) The lessee shall not sublease the project or any part thereof without
the consent of the Commissioner;
(5) The lessee shall at all times maintain in full force and effect a
license from the State or other licensing authority to operate the
project as a nursing home, but the owner shall not be required to
maintain such a license;
(6) Lessee shall maintain in good repair and condition any parts of the
project for the maintenance of which lessee is responsible under the
terms of the lease;
(7) Lessee shall not remodel, reconstruct, add to, or demolish any part of
the mortgaged property or subtract from any real or personal property
of the project;
(8) Lessee shall not use the project for any purpose except the operation
of a nursing home;
(9) If a default is declared by the Commissioner under the provisions of
Paragraph 10 of the Regulatory Agreement entered into by the
lessor-mortgagor and the Commissioner as of the 1st day of January,
2002, a copy of notice of default having been given to the lessee, the
lessee will thereafter make all future payments under the lease to the
Commissioner;
(10) The lease may be cancelled upon thirty days written notice by the
Commissioner given to the lessor and the lessee for a violation of any
of the above provisions unless the violation is corrected to the
satisfaction of the Commissioner within said thirty day period.
(11) The Commissioner must approve any change in or transfer of ownership
of the lessee entity, and any change in or transfer of the management
operation, or control of the project.
(12) The lessee shall not reduce or expand, allow to be reduced or
expanded, or cause the expansion or reduction of the bed capacity of
the project without the consent of
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Page 2 of 6 form HUD-92466-NHL (1/92)
Ref Handbook 4600.1
the Commissioner. Any change in the bed capacity shall violate this
Regulatory Agreement.
(13) The lessee shall not enter into any management contract involving the
project, unless such shall contain a provision that, in the event of
default under the Regulatory Agreement as recited in paragraph 9
(above) of this Agreement, the management agreement shall be subject
to termination without penalty upon written request of the
Commissioner. Upon such request the lessee shall immediately arrange
to terminate the contract within a period of not more than thirty (30)
days and shall make arrangements satisfactory to the Commissioner for
continuing proper management of the project.
(14) The mortgaged property, equipment, buildings, plans, offices,
apparatus, devices, books, contracts, records, documents, and other
papers relating thereto shall at all times be maintained in reasonable
condition for proper audit and subject to examination and inspection
at any reasonable time by the Commissioner or his duly authorized
agents. Lessee shall keep copies of all written contracts or other
instruments which affect the mortgaged property, all or any of which
may be subject to inspection and examination by the Commissioner or
his/her duly authorized agents.
(15) There shall be full compliance with the provisions of (1) any State or
local laws prohibiting discrimination in housing on the basis of race,
color, creed, or national origin; and (2) with the Regulations of the
Federal Housing Administration providing for non-discrimination and
equal opportunity in housing. It is understood and agreed that failure
or refusal to comply with any such provisions shall be a proper basis
for the Commissioner to take any corrective action he may deem
necessary including, but not limited to, the refusal to consent to a
further renewal of the lease between the mortgagor-lessor and the
lessee, the rejection of applications for FHA mortgage insurance and
the refusal to enter into future contracts of any kind with which the
lessee is identified; and further, if the lessee is a corporation or
any other type of business association or organization which may fail
or refuse to comply with the aforementioned provisions, the
Commissioner shall have a similar right of corrective action (1) with
respect to any individuals who are officers, directors, trustees,
managers, partners, associates or principal stockholders of the
lessee; and (2) with respect to any other type of business
association, or organization with which the officers, directors,
trustees, managers, partners, associates or principal stockholders of
the lessee may be identified.
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Page 3 of 6 form HUD-92466-NHL (1/92)
Ref Handbook 4600.1
(16) The lease is evidenced by a Memorandum of Lease attached hereto and
made a part hereof.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals on
the date first hereinabove written.
ACACIA VILLA, LLC
a Delaware limited liability company
By:
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Xxxx X. Xxxxxx
Manager
As of January 1, 2002
SECRETARY OF HOUSING AND URBAN
DEVELOPMENT ACTING BY AND
THROUGH THE FEDERAL HOUSING
COMMISSIONER
By:
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Authorized Agent
As of January 1, 2002
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Page 4 of 6 form HUD-92466-NHL (1/92)
Ref Handbook 4600.1
