CREDIT AND SECURITY AGREEMENT dated as of November 2, 2005 among ARC SUN CITY WEST, LLC, ARC ROSWELL, LLC, ARC VEGAS, LLC, ARC TUCSON, LLC, ARC OVERLAND PARK, LLC, ARC MINNETONKA, LLC, ARC DENVER MONACO, LLC and ARC TANGLEWOOD, L.P. collectively, as...
Exhibit
10.75
dated
as of November 2, 2005
among
ARC
SUN CITY WEST, LLC, ARC ROSWELL, LLC, ARC VEGAS, LLC,
ARC TUCSON, LLC, ARC OVERLAND PARK, LLC,
ARC MINNETONKA, LLC, ARC DENVER MONACO, LLC and ARC TANGLEWOOD, L.P.
ARC TUCSON, LLC, ARC OVERLAND PARK, LLC,
ARC MINNETONKA, LLC, ARC DENVER MONACO, LLC and ARC TANGLEWOOD, L.P.
collectively,
as Borrowers
and
XXXXXXX
XXXXX CAPITAL,
a
Division of Xxxxxxx Xxxxx Business Financial Services
Inc.,
as
Administrative Agent and as a Lender
and
THE
ADDITIONAL LENDERS
FROM
TIME TO TIME PARTY HERETO
 |
TABLE
OF CONTENTS
| Page | |||
| 1 | |||
|
Section
1.1
|
Certain
Defined Terms
|
1
|
|
|
Section
1.2
|
Accounting
Terms and Determinations
|
18
|
|
|
Section
1.3
|
Other
Definitional Provisions
|
18
|
|
|
Section
1.4
|
Funding
and Settlement Currency
|
19
|
|
|
Section
1.5
|
Borrowers
as Licensed Operators
|
19
|
|
|
ARTICLE
2 LOANS
|
19
|
||
|
Section
2.1
|
Term
Loan
|
19
|
|
|
Section
2.2
|
[Reserved.]
|
20
|
|
|
Section
2.3
|
Interest;
Interest Calculations and Certain Fees
|
20
|
|
|
Section
2.4
|
Notes
|
22
|
|
|
Section
2.5
|
Reserves
and Escrows
|
22
|
|
|
Section
2.6
|
General
Provisions Regarding Payment; Loan Account
|
24
|
|
|
Section
2.7
|
Maximum
Interest
|
25
|
|
|
Section
2.8
|
Taxes
|
26
|
|
|
Section
2.9
|
Capital
Adequacy
|
27
|
|
|
Section
2.10
|
Mitigation
Obligations
|
27
|
|
|
Section
2.11
|
Appointment
of Borrower Representative
|
28
|
|
|
Section
2.12
|
Release
of Liens as to Certain Projects
|
28
|
|
|
ARTICLE
3 REPRESENTATIONS AND WARRANTIES
|
30 | ||
|
Section
3.1
|
Existence
and Power
|
30
|
|
|
Section
3.2
|
Organization
and Governmental Authorization; No Contravention
|
30
|
|
|
Section
3.3
|
Binding
Effect
|
30
|
|
|
Section
3.4
|
Capitalization
|
31
|
|
|
Section
3.5
|
Financial
Information
|
31
|
|
|
Section
3.6
|
Litigation
|
32
|
|
|
Section
3.7
|
Ownership
of Property Generally
|
32
|
|
|
Section
3.8
|
No
Default
|
32
|
|
|
Section
3.9
|
Labor
Matters
|
33
|
|
|
Section
3.10
|
Regulated
Entities
|
33 | |
|
Section
3.11
|
Margin
Regulations
|
33
|
|
|
Section
3.12
|
Compliance
With Laws; Anti-Terrorism Laws
|
33
|
|
|
Section
3.13
|
Taxes
|
34
|
|
|
Section
3.14
|
Compliance
with ERISA
|
34
|
|
|
Section
3.15
|
Consummation
of Financing Documents; Brokers
|
35
|
|
|
Section
3.16
|
Related
Transactions
|
35
|
|
|
Section
3.17
|
Material
Contracts
|
35
|
|
|
Section
3.18
|
Compliance
with Environmental Requirements; No Hazardous Materials
|
36
|
|
|
Section
3.19
|
Intellectual
Property
|
37
|
|
|
Section
3.20
|
Solvency
|
37
|
|
|
Section
3.21
|
Full
Disclosure
|
38
|
|
|
Section
3.22
|
Interest
Rate
|
38
|
|
|
Section
3.23
|
Representations
and Warranties Incorporated from Financing Documents
|
38
|
|
|
Section
3.24
|
Subsidiaries.
There are no Subsidiaries of Borrowers
|
38
|
|
-i-
|
ARTICLE
4 AFFIRMATIVE COVENANTS
|
38
|
||
|
Section
4.1
|
Financial
Statements and Other Reports
|
38
|
|
|
Section
4.2
|
Payment
and Performance of Obligations
|
41
|
|
|
Section
4.3
|
Maintenance
of Existence; Single Purpose Entity Requirements
|
41
|
|
|
Section
4.4
|
Maintenance
of Property; Payment of Taxes; Insurance
|
41
|
|
|
Section
4.5
|
Compliance
with Laws
|
44
|
|
|
Section
4.6
|
Inspection
of Property, Books and Records
|
44
|
|
|
Section
4.7
|
Use
of Proceeds
|
44
|
|
|
Section
4.8
|
[Reserved]
|
44
|
|
|
Section
4.9
|
[Reserved]
|
44
|
|
|
Section
4.10
|
Environmental
Covenants
|
44
|
|
|
Section
4.11
|
Deferred
Maintenance
|
46
|
|
|
Section
4.12
|
Further
Assurances
|
46
|
|
|
Section
4.13
|
Litigation
|
47
|
|
|
Section
4.14
|
Intentionally
deleted
|
47
|
|
|
Section
4.15
|
Power
of Attorney
|
47
|
|
|
Section
4.16
|
Estoppel
Certificates
|
47
|
|
|
ARTICLE
5 NEGATIVE COVENANTS
|
48 | ||
|
Section
5.1
|
Debt
|
48 | |
|
Section
5.2
|
Liens
|
48 | |
|
Section
5.3
|
Contingent
Obligations
|
48
|
|
|
Section
5.4
|
Restricted
Distributions
|
48
|
|
|
Section
5.5
|
Restrictive
Agreements
|
49
|
|
|
Section
5.6
|
Payments
and Modifications of Subordinated Debt
|
49
|
|
|
Section
5.7
|
Consolidations,
Mergers and Sales of Assets
|
49
|
|
|
Section
5.8
|
Purchase
of Assets
|
49
|
|
|
Section
5.9
|
Transactions
with Affiliates
|
49
|
|
|
Section
5.10
|
Modification
of Organizational Documents
|
50
|
|
|
Section
5.11
|
Modification
of Certain Agreements
|
50
|
|
|
Section
5.12
|
Fiscal
Year
|
50
|
|
|
Section
5.13
|
Conduct
of Business
|
50
|
|
|
Section
5.14
|
Operating
Leases
|
51
|
|
|
Section
5.15
|
Lease
Payments
|
51
|
|
|
Section
5.16
|
Limitation
on Sale and Leaseback Transactions
|
51
|
|
|
Section
5.17
|
Compliance
with Anti-Terrorism Laws
|
51
|
|
|
ARTICLE
6 FINANCIAL COVENANTS
|
51 | ||
|
Section
6.1
|
Definitions
|
51
|
|
|
Section
6.2
|
[Reserved]
|
53
|
|
|
Section
6.3
|
[Reserved]
|
53
|
|
|
Section
6.4
|
[Reserved]
|
53
|
|
|
Section
6.5
|
Debt
Xxxxx Xxxxxxxx
|
00
|
|
|
Section
6.6
|
Evidence
of Compliance
|
54
|
|
|
Section
6.7
|
Financial
Covenant Default
|
54
|
|
-ii-
|
ARTICLE
7 CONDITIONS
|
55 | ||
|
Section
7.1
|
Conditions
to Closing
|
55 | |
|
Section
7.2
|
Searches.
|
55
|
|
|
Section
7.3
|
Certain
Post-Closing Obligations.
|
56
|
|
|
ARTICLE
8 REGULATORY MATTERS
|
56 | ||
|
Section
8.1
|
Representations
and Warranties Pertaining to Licensed Locations
|
56
|
|
|
Section
8.2
|
Representations
and Warranties Pertaining to Licensed Operators
|
57
|
|
|
Section
8.3
|
Covenants
Pertaining to Licensed Locations
|
61
|
|
|
Section
8.4
|
Covenants
Pertaining to Licensed Operators
|
61 | |
|
Section
8.5
|
Special
Notices to Administrative Agent
|
64
|
|
|
Section
8.6
|
Cure
of Healthcare Laws Violations
|
66
|
|
|
Section
8.7
|
Licensed
Operator; Manager
|
67
|
|
|
Section
8.8
|
Transfer
of Healthcare Permits and Operations
|
68
|
|
|
ARTICLE
9 REAL PROPERTY MATTERS
|
68 | ||
|
Section
9.1
|
Leases;
Resident Agreements
|
68
|
|
|
Section
9.2
|
Project
Use and Operation
|
70
|
|
|
Section
9.3
|
Casualty
Proceeds
|
71
|
|
|
Section
9.4
|
Borrowers'
Obligation to Rebuild and Use of Casualty Proceeds
Therefor
|
72
|
|
|
Section
9.5
|
Tax
Reduction Proceedings
|
73
|
|
|
Section
9.6
|
Commingling;
FIRPTA
|
73
|
|
|
Section
9.7
|
Representations
and Warranties
|
74
|
|
|
ARTICLE
10 SECURITY AGREEMENT
|
76 | ||
|
Section
10.1
|
Generally
|
76
|
|
|
Section
10.2
|
Covenants
Relating to Collateral
|
77
|
|
|
Section
10.3
|
UCC
Remedies
|
78
|
|
|
ARTICLE
11 EVENTS OF DEFAULT
|
79 | ||
|
Section
11.1
|
Events
of Default
|
79
|
|
|
Section
11.2
|
Acceleration
|
82
|
|
|
Section
11.3
|
[Reserved]
|
82
|
|
|
Section
11.4
|
Default
Rate of Interest
|
82
|
|
|
Section
11.5
|
Setoff
Rights
|
82
|
|
|
Section
11.6
|
Application
of Proceeds
|
82
|
|
|
Section
11.7
|
Waivers
|
83
|
|
|
Section
11.8
|
Injunctive
Relief
|
85
|
|
|
Section
11.9
|
Marshalling
|
86
|
|
|
ARTICLE
12 EXPENSES AND INDEMNITY
|
86 | ||
|
Section
12.1
|
Expenses
|
86
|
|
|
Section
12.2
|
Indemnity
|
86
|
|
-iii-
|
ARTICLE
13 ADMINISTRATIVE AGENT
|
87 | ||
|
Section
13.1
|
Appointment
and Authorization
|
87
|
|
|
Section
13.2
|
Administrative
Agent and Affiliates
|
88
|
|
|
Section
13.3
|
Action
by Administrative Agent
|
88
|
|
|
Section
13.4
|
Consultation
with Experts
|
88
|
|
|
Section
13.5
|
Liability
of Administrative Agent
|
88
|
|
|
Section
13.6
|
Indemnification
|
89
|
|
|
Section
13.7
|
Right
to Request and Act on Instructions
|
89
|
|
|
Section
13.8
|
Credit
Decision
|
90
|
|
|
Section
13.9
|
Collateral
Matters
|
90
|
|
|
Section
13.10
|
Agency
for Perfection
|
90
|
|
|
Section
13.11
|
Notice
of Default
|
91
|
|
|
Section
13.12
|
Successor
Administrative Agent
|
91
|
|
|
Section
13.13
|
Payment
and Sharing of Payment
|
92
|
|
|
Section
13.14
|
Right
to Perform, Preserve and Protect
|
93
|
|
|
Section
13.15
|
Additional
Titled Agents
|
93
|
|
|
Section
13.16
|
Amendments
and Waivers
|
94
|
|
|
Section
13.17
|
Assignments
and Participations
|
94
|
|
|
Section
13.18
|
Definitions
|
97
|
|
|
ARTICLE
14 MISCELLANEOUS
|
98 | ||
|
Section
14.1
|
Survival
|
98
|
|
|
Section
14.2
|
No
Waivers
|
98
|
|
|
Section
14.3
|
Notices
|
98
|
|
|
Section
14.4
|
Severability
|
99
|
|
|
Section
14.5
|
Amendments
and Waivers
|
100
|
|
|
Section
14.6
|
Credit
Party Assignments
|
100
|
|
|
Section
14.7
|
Headings
|
100
|
|
|
Section
14.8
|
Confidentiality
|
100
|
|
|
Section
14.9
|
Waiver
of Consequential and Other Damages
|
101
|
|
|
Section
14.10
|
GOVERNING
LAW; SUBMISSION TO JURISDICTION
|
101 | |
|
Section
14.11
|
WAIVER
OF JURY TRIAL
|
101
|
|
|
Section
14.12
|
Publication;
Advertisement
|
102
|
|
|
Section
14.13
|
Counterparts;
Integration
|
102
|
|
|
Section
14.14
|
No
Strict Construction
|
103
|
|
|
Section
14.15
|
Time
|
103
|
|
|
Section
14.16
|
Lender
Approvals
|
103
|
|
|
Section
14.17
|
[Reserved.]
|
103
|
|
|
Section
14.18
|
Waivers
|
103
|
|
|
Section
14.19
|
Release
of Administrative Agent and Lenders
|
103
|
|
|
ARTICLE
15 JOINT AND SEVERAL LIABILITY; GUARANTOR PROVISIONS
|
104 | ||
|
Section
15.1
|
Joint
and Several Obligations.
|
104
|
|
|
Section
15.2
|
Guarantor
Provisions.
|
108
|
|
-iv-
THIS
CREDIT AND SECURITY AGREEMENT
is dated
as of November 2, 2005 by and among ARC
SUN CITY WEST, LLC, a
Delaware
limited liability company, ARC
ROSWELL, LLC, a
Delaware
limited liability company, ARC
VEGAS, LLC, a
Delaware
limited liability company, ARC
TUCSON, LLC, a
Delaware
limited liability company, ARC
OVERLAND PARK, LLC, a
Delaware
limited
liability company, ARC
MINNETONKA, LLC, a
Delaware
limited liability company, ARC
DENVER MONACO, LLC,
a
Delaware limited liability company, and
ARC TANGLEWOOD, L.P., a
Delaware
limited partnership (each, individually as a Borrower, and collectively,
as
Borrowers), the financial institutions or other entities from time
to time
parties hereto, each as a Lender, and XXXXXXX
XXXXX CAPITAL, a division of Xxxxxxx Xxxxx Business Financial Services
Inc.,
individually as a Lender and as Administrative Agent.
RECITALS:
R-1. Borrowers
have requested that Lenders make available to Borrowers term financing
facilities as described herein.
R-2. Lenders
are willing to extend such credit to Borrowers under the terms and
conditions
herein set forth.
NOW,
THEREFORE,
in
consideration of the premises and the agreements, provisions and covenants
herein contained, Borrowers, Lenders and Administrative Agent agree
as
follows:
ARTICLE
1
Section
1.1 Certain
Defined Terms.
The
following terms have the following meanings:
"Account"
means
"account", as defined in Article 9 of the UCC.
"Administrative
Agent" means
Xxxxxxx Xxxxx, in its capacity as administrative agent for the Lenders
hereunder, as such capacity is established in, and subject to the provisions
of,
Article 10, and the successors of Xxxxxxx Xxxxx in such capacity.
"Affiliate" means
with
respect to any Person (a) any Person that directly or indirectly controls
such Person, (b) any Person which is controlled by or is under common
control with such controlling Person, and (c) each of such Person's (other
than, with respect to any Lender, any Lender's) officers or directors (or
Persons functioning in substantially similar roles) and the spouses,
parents, descendants and siblings of such officers, directors or other
Persons.
As used in this definition, the term "control" of
a
Person means the possession, directly or indirectly, of the power to
vote five
percent (5%) or more of any class of voting securities of such Person or to
direct or cause the direction of the management or policies of a Person,
whether
through the ownership of voting securities, by contract or
otherwise.
"Affiliated
Financing Documents"
means
any credit, loan, letter of credit or related documents which are,
by their
terms and by the terms of this Agreement, cross-defaulted with the
Financing
Documents, and for which a Credit Party hereunder is liable or contingently
liable for payment or as security for which a Credit Party hereunder
has
pledged, assigned or subjected any assets.
"Agreement" means
this
Credit and Security Agreement, as the same may be amended, supplemented,
restated or otherwise modified from time to time.
"Allocable
Amount"
shall
have the meaning given in Section
15.1(g).
"Allocated
Loan Amount"
means
the amount opposite each Project set forth below:
|
Project
Location
|
State
|
Allocated
Loan
Amount
|
|
Denver
|
CO
|
$11,247,289
|
|
Las
Vegas
|
NV
|
$7,252,350
|
|
Minnetonka
|
MN
|
$18,315,257
|
|
Overland
Park
|
KS
|
$9,772,234
|
|
Roswell
|
GA
|
$8,112,798
|
|
Sun
City West
|
AZ
|
$8,727,404
|
|
Tanglewood
|
TX
|
$13,951,555
|
|
Ventana
Canyon
|
AZ
|
$7,621,114
|
|
Total
|
$85,000,000
|
"Anti-Terrorism
Laws" means
any
Laws relating to terrorism or money laundering, including Executive
Order
No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the
Laws comprising or implementing the Bank Secrecy Act, and the Laws
administered
by OFAC.
"Asset
Disposition" means
any
sale, lease, license, transfer, assignment or other consensual disposition
by
any Borrower of any asset, but excluding dispositions of Inventory
in the
Ordinary Course of Business.
"Assignment
Agreement"
means an
agreement substantially in the form of Exhibit A
hereto.
"ARC"
means
American Retirement Corporation, a Tennessee corporation.
-2-
"Bankruptcy
Code" means
Title 11 of the United States Code entitled "Bankruptcy", as the same
may be
amended, modified or supplemented from time to time, and any successor
statute
thereto.
"Base
Rate" means
a
rate per annum (rounded upwards, if necessary, to the nearest 1/100
of
1%) equal to (a) the rate of interest which is identified and normally
published by Bloomberg Professional Service Page BBAM 1 as the offered rate
for loans in United States dollars for the period of one (1) month under
the caption British Bankers Association LIBOR Rates as of 11:00 a.m.
(London time) as adjusted on a daily basis and effective on the second full
Business Day after each such day (unless such date is not a Business
Day, in
which event the next succeeding Business Day will be used); divided
by
(b) the sum of one minus
the daily
average during the preceding month of the aggregate maximum reserve
requirement
(expressed as a decimal) then imposed under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor thereto) for
"Eurocurrency Liabilities" (as defined therein). If Bloomberg Professional
Service (or another nationally-recognized rate reporting source acceptable
to
Administrative Agent) no longer reports the LIBOR or Administrative Agent
determines in good faith that the rate so reported no longer accurately
reflects
the rate available to Administrative Agent in the London Interbank
Market or if
such index no longer exists or if Page BBAM 1 no longer exists or
accurately reflects the rate available to Administrative Agent in the
London
Interbank Market, Administrative Agent may select a replacement index
or
replacement page, as the case may be.
"Base
Rate Margin" means
two
percent (2.00%).
"Blocked
Person"
means
any Person: (a) listed in the annex to, or is otherwise subject to the
provisions of, Executive Order No. 13224, (b) a Person owned or
controlled by, or acting for or on behalf of, any Person that is listed
in the
annex to, or is otherwise subject to the provisions of, Executive Order
No. 13224, (c) a Person with which any Lender is prohibited from
dealing or otherwise engaging in any transaction by any Anti-Terrorism
Law,
(d) a Person that commits, threatens or conspires to commit or supports
"terrorism" as defined in Executive Order No. 13224, or (e) a Person
that is named a "specially designated national" or "blocked person"
on the most
current list published by OFAC or other similar list.
"Borrower"
and
"Borrowers"
mean the
entities described in the first paragraph of this Agreement and each
of their
respective successors and permitted assigns.
"Borrower
Representative"
means
ARC, in its capacity as Borrower Representative pursuant to the provisions
of
Section 2.11,
or any
successor Borrower Representative selected by Borrowers and approved
by
Agent.
"Business
Day"
means
any day except a Saturday, Sunday or other day on which either the
New York
Stock Exchange is closed, or on which commercial banks in Chicago and
New York
City are authorized by law to close.
-3-
"Capital
Lease"
of any
Person means any lease of any property by such Person as lessee which
would, in
accordance with GAAP, be required to be accounted for as a capital
lease on the
balance sheet of such Person.
"Capital
Replacement Reserve"
shall
have the meaning given in Section
2.5(d).
"Casualty
Proceeds"
shall
have the meaning given in Section
9.3(b).
"CCP"
shall
have the meaning given in Section
8.4b(xi).
"CERCLA"
means
the Comprehensive Environmental Response, Compensation and Liability
Act of
1980, 42 U.S.C.A. Β§ 9601 et. seq., as the same may be amended from time to
time.
"Closed
Period" means
the
period from the Closing Date through the twelfth (12th) full
calendar month following the Closing Date.
"Closing
Date"
means
the date of this Agreement.
"CMS"
means
the federal Centers for Medicare and Medicaid Services (formerly the
federal
Health Care Financing Administration), or any successor Governmental
Authority.
"Code"
means
the Internal Revenue Code of 1986.
"Collateral"
means
all property, now existing or hereafter acquired, mortgaged or pledged
to, or
purported to be subjected to a Lien in favor of, Administrative Agent,
for the
benefit of Administrative Agent and Lenders, pursuant to this Agreement
and the
Security Documents.
"Commitment
Annex"
means
Annex
A
to this
Agreement.
"Commitment
Expiry Date"
means
October 31, 2010.
"Compliance
Certificate"
means a
certificate, duly executed by a Responsible Officer of Borrower Representative,
appropriately completed and substantially in the form of Exhibit
C
hereto.
"CON" means
any
certificate of need or similar license which determines that there
is a need for
a healthcare facility at a particular location or within a certain
geographic
region and entitles the holder to use a Licensed Location for a purpose
permitted under Healthcare Laws.
"Contingent
Obligation"
means,
with respect to any Person, any direct or indirect liability of such
Person:
(a) with respect to any debt, lease, dividend or other obligation of
another Person (a "Third
Party Obligation") if
the purpose or intent of such Person incurring such liability, or the
effect
thereof, is to provide assurance to the obligee of such Third Party
Obligation
that such Third Party Obligation will be paid or discharged, or that
any
agreement relating thereto will be complied with, or that any holder
of such
Third Party Obligation will be protected, in whole or in part, against
loss with
respect thereto; (b) with respect to any undrawn portion of any letter of
credit issued for the account of such Person or as to which such Person
is
otherwise liable for the reimbursement of any drawing; (c) under any swap
contract or other derivative obligation; (d) to make take-or-pay or similar
payments if required regardless of nonperformance by any other party
or parties
to an agreement; or (e) for any obligations of another Person pursuant to
any Guarantee or pursuant to any agreement to purchase, repurchase
or otherwise
acquire any obligation or any property constituting security therefor,
to
provide funds for the payment or discharge of such obligation or to
preserve the
solvency, financial condition or level of income of another Person.
The amount
of any Contingent Obligation shall be equal to the amount of the obligation
so
Guaranteed or otherwise supported or, if not a fixed and determinable
amount,
the maximum amount so Guaranteed or otherwise supported.
-4-
"Controlled
Group"
means
all members of a group of corporations and all members of a group of
trades or
businesses (whether or not incorporated) under common control which,
together with any Borrower, are treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code or Section
4001(b) of ERISA.
"Covenant
Prepayment"
shall
have the meaning given in Section
6.7.
"Credit
Exposure"
means
any period of time during which any Loan or other Obligation remains
unpaid or
outstanding; provided,
however,
that no
Credit Exposure shall be deemed to exist solely due to the existence
of
contingent indemnification liability (other than liability in respect
of the
Affiliated Financing Documents), absent the assertion of a claim with
respect
thereto.
"Credit
Party"
means
any Guarantor under a Financing Document Guarantee, any Borrower and
any
Subsidiary of any Borrower, whether now existing or hereafter acquired
or
formed; and "Credit
Parties"
means
all such Persons, collectively.
"Debt"
of a
Person means at any date, without duplication, (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (c) all obligations
of such Person to pay the deferred purchase price of property or services,
except trade accounts payable arising and paid on a timely basis and
in the
Ordinary Course of Business, (d) all Capital Leases of such Person,
(e) all non-contingent obligations of such Person to reimburse any bank
or
other Person in respect of amounts paid under a letter of credit, banker's
acceptance or similar instrument, (f) all equity securities of such Person
subject to repurchase or redemption otherwise than at the sole option
of such
Person, (g) all obligations secured by a Lien on any asset of such Person,
whether or not such obligation is otherwise an obligation of such Person,
(h) "earnouts", purchase price adjustments, profit sharing arrangements,
deferred purchase money amounts and similar payment obligations or
continuing
obligations of any nature of such Person arising out of purchase and
sale
contracts; (i) all Debt of others Guaranteed by such Person;
(j) off-balance sheet liabilities and/or pension plan liabilities;
(k) obligations arising under non-compete agreements; and
(l) obligations arising under bonus, deferred compensation, incentive
compensation or similar arrangements, other than those arising in the
Ordinary
Course of Business.
-5-
"Debt
Service"
shall
have the meaning given in Section
6.1(a).
"Debt
Yield Covenant"
has the
meaning set forth in Section
6.5.
"Debt
Yield Ratio"
shall
have the meaning given in Section
6.1(a).
"Default"
means
any condition or event which with the giving of notice or lapse of
time or both
would, unless cured or waived, become an Event of Default.
"Environmental
Laws"
means
any present and future federal, state and local laws, statutes, ordinances,
rules, regulations, standards, policies and other governmental directives
or
requirements, as well as common law, pertaining to the environment,
natural
resources, pollution, health (including any environmental clean up
statutes and
all regulations adopted by any local, state, federal or other Governmental
Authority, and any statute, ordinance, code, order, decree, law rule
or
regulation all of which pertain to or impose liability or standards
of conduct
concerning medical waste or medical products, equipment or supplies),
safety or
clean-up that apply to any Borrower or the Project and relate to Hazardous
Materials, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C. Β§ 9601 et seq.), the
Resource Conservation and Recovery Act of 1976 (42 U.S.C. Β§ 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Β§ 1251 et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. Β§ 5101 et seq.), the Clean Air Act (42
U.S.C. Β§ 7401 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act
(7 U.S.C. Β§ 136 et seq.), the Emergency Planning and Community
Right-to-Know Act (42 U.S.C. Β§ 11001 et seq.), the Occupational Safety and
Health Act (29 U.S.C. Β§ 651 et seq.), the Residential Lead-Based Paint Hazard
Reduction Act (42 U.S.C. Β§ 4851 et seq.), any analogous state or local laws, any
amendments thereto, and the regulations promulgated pursuant to said
laws,
together with all amendments from time to time to any of the foregoing
and
judicial interpretations thereof.
"Environmental
Liens"
means
all Liens and other encumbrances imposed pursuant to any Environmental
Law,
whether due to any act or omission of Borrower or any other Person.
"ERISA"
means
the Employee Retirement Income Security Act of 1974, as the same may
be amended,
modified or supplemented from time to time, and any successor statute
thereto,
and any and all rules or regulations promulgated from time to time
thereunder.
"ERISA
Plan"
means
any "employee benefit plan", as such term is defined in
Section 3(3) of ERISA (other than a Multiemployer Plan), which any
Borrower maintains, sponsors or contributes to, or, in the case of
an employee
benefit plan which is subject to Section 412 of the Code or Title IV
of ERISA,
to which any Borrower or any member of the Controlled Group may have
any
liability, including any liability by reason of having been a substantial
employer within the meaning of Section 4063 of ERISA at any time during
the
preceding five (5) years, or by reason of being deemed to be a contributing
sponsor under Section 4069 of ERISA.
-6-
"Event
of Default"
has the
meaning set forth in Section
11.1.
"Exit
Fee"
shall
have the meaning given in Section
2.3(d).
"Excess
Cash Flow"
means
Net Operating Income minus
all
payments of principal and interest required under the Financing Documents,
minus
capitalized expenditures and reserves approved in advance by Administrative
Agent or as required by GAAP.
"FF&E"
shall
have the meaning given in Section
9.2(d).
"Financing
Documents"
means
this Agreement, any Notes, the Security Documents, any fee letter among
Xxxxxxx
Xxxxx and any of the Borrowers relating to the transactions contemplated
hereby,
any subordination or intercreditor agreement pursuant to which any
Debt (other
than any Subordinated Debt) and/or any Liens securing such Debt is
subordinated to all or any portion of the Obligations and all other
documents,
instruments and agreements contemplated herein or thereby and heretofore
executed, executed concurrently herewith or executed at any time and
from time
to time hereafter, as any or all of the same may be amended, supplemented,
restated or otherwise modified from time to time.
"Financing
Document Guarantee"
means
that certain Guaranty of Non-Recourse Carveouts Agreement executed
by ARC of
even date herewith, as well as any agreement that may exist from time
to time
pursuant to which any third party other than a Borrower shall Guarantee
the
Obligations of the Borrowers under this Agreement and/or the other
Financing
Documents.
"Fiscal
Year"
means
the fiscal year of Borrowers ending on December 31 of each calendar
year.
"GAAP"
means
generally accepted accounting principles set forth from time to time
in the
opinions and pronouncements of the Accounting Principles Board and
the American
Institute of Certified Public Accountants and statements and pronouncements
of
the Financial Accounting Standards Board (or agencies with similar
functions of
comparable stature and authority within the United States accounting
profession), which are applicable to the circumstances as of the date
of
determination.
"Governmental
Authority"
means
any nation or government, any state or other political subdivision
thereof, and
any agency, department or Person exercising executive, legislative,
judicial,
regulatory or administrative functions of or pertaining to government
and any
corporation or other Person owned or controlled (through stock or capital
ownership or otherwise) by any of the foregoing, whether domestic or
foreign.
-7-
"Governmental
Payor"
means
Medicare, Medicaid, TRICARE, and other state or federal health care
programs,
but specifically excluding Third Party Payors.
"Guarantee"
by any
Person means any obligation, contingent or otherwise, of such Person
directly or
indirectly guaranteeing any Debt or other obligation of any other Person
and,
without limiting the generality of the foregoing, any obligation, direct
or
indirect, contingent or otherwise, of such Person (a) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Debt or
other obligation (whether arising by virtue of partnership arrangements,
by
agreement to keep-well, to purchase assets, goods, securities or services,
to
take-or-pay, or to maintain financial statement conditions or otherwise),
or
(b) entered into for the purpose of assuring in any other manner the
obligee of such Debt or other obligation of the payment thereof or
to protect
such obligee against loss in respect thereof (in whole or in part),
provided,
however, that
the
term Guarantee shall not include endorsements for collection or deposit
in the
Ordinary Course of Business. The term "Guarantee"
used as
a verb has a corresponding meaning.
"Guarantor"
means
any Person that has executed or delivered, or shall in the future execute
or
deliver, any Financing Document Guarantee of any portion of the Obligations,
including, without limitation, ARC.
"Hazardous
Materials"
shall
mean petroleum and petroleum products and compounds containing them,
including
gasoline, diesel fuel and oil; explosives, flammable materials; radioactive
materials; polychlorinated biphenyls and compounds containing them;
lead and
lead-based paint; asbestos or asbestos-containing materials; underground
or
above-ground storage tanks, whether empty or containing any substance;
any
substance the presence of which on the Project is prohibited by any
Environmental Laws; toxic mold, or any similar substance that requires
special
handling due to environmental concerns; and any other material or substance
now
defined as a "hazardous substance," "hazardous material," "hazardous
waste,"
"toxic substance," "toxic pollutant," "contaminant," "pollutant" or
other words
of similar import within the meaning of any Environmental Law, including:
(a) any "hazardous substance" defined as such in (or for purposes
of) CERCLA, or any so-called "superfund" or "superlien" Law; (b) any
"pollutant or contaminant" as defined in 42 U.S.C.A. Β§ 9601(33); (c) any
material now defined as "hazardous waste" pursuant to 40 C.F.R. Part
260;
(d) any petroleum or petroleum by-products, including crude oil or any
fraction thereof; (e) natural gas, natural gas liquids, liquefied natural
gas, or synthetic gas usable for fuel; (f) any "hazardous chemical" as
defined pursuant to 29 C.F.R. Part 1910; (g) any toxic substances, wastes,
materials, pollutants or contaminants (including, without limitation,
asbestos,
polychlorinated biphenyls ("PCB's"), flammable explosives, radioactive
materials, infectious substances, materials containing lead-based paint
or raw
materials which include hazardous constituents); and (h) any other toxic
substance or contaminant that is subject to any Environmental Laws
or other past
or present requirement of any Governmental Authority.
"Hazardous
Materials Contamination"
means
contamination (whether now existing or hereafter occurring) of the
improvements, buildings, facilities, personalty, soil, groundwater,
air or other
elements on or of the relevant property by Hazardous Materials, or
any
derivatives thereof, or on or of any other property as a result of
Hazardous
Materials, or any derivatives thereof, generated on, emanating from
or disposed
of in connection with the relevant property.
-8-
"Healthcare
Laws"
means
all applicable Laws relating to the possession, control, warehousing,
marketing,
sale and distribution of pharmaceuticals, the operation of medical
or senior
housing facilities (such as, but not limited to, nursing homes, skilled
nursing
facilities, rehabilitation hospitals, intermediate care facilities
and adult
care facilities), patient healthcare, patient healthcare information,
patient
abuse, the quality and adequacy of medical care, rate setting, equipment,
personnel, operating policies, fee splitting, including without limitation,
(a) all federal and state fraud and abuse laws, including, without
limitation, the federal Anti-Kickback Statute (42 U.S.C. Β§1320a-7b(6)), the
Xxxxx Law (42 U.S.C. Β§1395n) , the civil False Claims Act (31 U.S.C. Β§3729
et seq.), (b) TRICARE; (c) HIPAA, (d) Medicare;
(e) Medicaid; (f) quality, safety and accreditation standards and
requirements of all applicable state laws or regulatory bodies; (g) all
laws, policies, procedures, requirements and regulations pursuant to
which
Healthcare Permits are issued; and (h) any and all other applicable health
care laws, regulations, manual provisions, policies and administrative
guidance,
each of (a) through (h) as may be amended from time to time.
"Healthcare
Permit"
means a
Permit (a) issued or required under Healthcare Laws applicable to the
business of any Borrower or any of its Subsidiaries or necessary in
the
possession, ownership, warehousing, marketing, promoting, sale, labeling,
furnishing, distribution or delivery of goods or services under Healthcare
Laws
applicable to the business of any Borrower or any of its Subsidiaries,
and/or
(b) issued or required under Healthcare Laws applicable to the ownership
of
a Licensed Location.
"HIPAA"
means
the Health Insurance Portability and Accountability Act of 1996, as
the same may
be amended, modified or supplemented from time to time, and any successor
statute thereto, and any and all rules or regulations promulgated from
time to
time thereunder.
"HIPAA
Compliant"
shall
mean that the applicable Person is in compliance in all material respects
with
each of the applicable requirements of the so-called "Administrative
Simplification" provisions of HIPAA, and is not and could not reasonably
be
expected to become the subject of any civil or criminal penalty, process,
claim,
action or proceeding, or any administrative or other regulatory review,
survey,
process or proceeding (other than routine surveys or reviews conducted
by any
government health plan or other accreditation entity) that could result in
any of the foregoing or that could reasonably be expected to adversely
affect
such Person's business, operations, assets, properties or condition
(financial
or otherwise), in connection with any actual or potential violation
by such
Person of the provisions of HIPAA.
"Indemnitees"
has the
meaning set forth in Section
12.2.
"Insurance
Premiums"
shall
have the meaning given in Section
2.5(c).
"Intercompany
Loans"
has the
meaning set forth in Section
2.11.
-9-
"Inventory"
means
"inventory", as defined in Article 9 of the UCC.
"JCAHO"
means
the Joint Commission on Accreditation of Healthcare Organizations.
"Joint
Liability Payment"
shall
have the meaning given in Section
15.1(g).
"Laws"
means
any and all federal, state, local and foreign statutes, laws, judicial
decisions, regulations, ordinances, rules, judgments, orders, decrees,
codes,
plans, injunctions, permits and governmental
restrictions (whether now or hereafter in effect), which are applicable
to any
Credit Party in any particular circumstance. "Laws"
includes, without limitation, Healthcare Laws.
"Leases"
means
the singular or collective reference to leases, subleases or other
arrangements
for occupancy of space within any Project or any part thereof now existing
or
hereafter executed; provided,
however,
that the
term "Leases"
as used
herein shall not
include
Resident Agreements; and provided,
further,
that use
of the term "Leases"
in any
Security Document shall
include
Resident Agreements even if Resident Agreements are, under applicable
Laws, not
governed as creating a landlord-tenant relationship (the intent being
that
Administrative Agent shall have, as part of the Security Documents,
a lien upon
and collateral assignment of all Leases and Resident Agreements).
"Lender"
means
each of (a) Xxxxxxx Xxxxx, (b) each other Person party hereto in its
capacity as a lender, (c) each other Person that becomes a party hereto as
Lender pursuant to Section
14.6,
and
(d) the respective successors of all of the foregoing, and "Lenders"
means
all of the foregoing.
"Licensed
Location"
means
any facility (a) from which a Borrower or any Subsidiary provides or
furnishes goods or services governed by Healthcare Laws, and (b) owned by a
Borrower or any Subsidiary from which any Person furnishes goods or
services
governed by Healthcare Laws, and includes, without limitation, any
business
location of a Borrower which is subject to any Healthcare Permit.
"Licensed
Operator"
means
the singular or collective (as the context requires) reference to the
following Persons: (a) any Borrower or any Subsidiary that is licensed
under Healthcare Laws to operate a Licensed Location, or is otherwise
providing
or furnishing goods or services governed by Healthcare Laws, or is
otherwise
providing or furnishing goods or services (other than the mere leasing
of a
Licensed Location as a lessor and the collection of rentals in connection
therewith) from a Licensed Location, (b) any Person with whom a
Borrower or any Subsidiary has contracted for management or other services
for a
Licensed Location, and/or (c) any Person to whom a Borrower has leased a
Licensed Location.
"Lien"
means,
with respect to any asset, any mortgage, lien, pledge, charge, security
interest
or encumbrance of any kind, or any other type of preferential arrangement
that
has the practical effect of creating a security interest, in respect
of such
asset. For the purposes of this Agreement and the other Financing Documents,
any
Borrower or any Subsidiary shall be deemed to own subject to a Lien
any asset
which it has acquired or holds subject to the interest of a vendor
or lessor
under any conditional sale agreement, Capital Lease or other title
retention
agreement relating to such asset.
-10-
"Litigation"
means
any action, suit or proceeding before any court, mediator, arbitrator
or
Governmental Authority.
"Loan
Account"
has the
meaning set forth in Section
2.6(b).
"Loan"
or
"Loans"
means
the Term Loan or Term Loans provided for herein.
"Management
Agreement"
has the
meaning set forth in Section
8.7(b).
"Manager"
has the
meaning set forth in Section 8.7(b).
"Material
Adverse Effect"
means,
with respect to any event, act, condition or occurrence of whatever
nature
(including any adverse determination in any litigation, arbitration,
or
governmental investigation or proceeding), whether singly or in conjunction
with
any other event or events, act or acts, condition or conditions, occurrence
or
occurrences, whether or not related (a) a material adverse change in, or a
material adverse effect upon, any of (i) the condition (financial or
otherwise), operations, business or properties of the Credit Parties
taken as a
whole, (ii) the rights and remedies of Administrative Agent or Lenders
under any Financing Document, or the ability of any Credit Party to
perform any
of its obligations under any Financing Document to which it is a party,
(iii) the legality, validity or enforceability of any Financing Document,
(iv) the existence, perfection or priority of any security interest granted
in any Financing Document; or (v) any Credit Party's or Licensed Operator's
ability to accept, admit and/or retain patients or residents or to
own or
operate any Licensed Location, (b) an impairment to the likelihood that
revenues in general will be collected and paid in the normal course
of a
Licensed Operator's or Borrowers' business and upon the same schedule
and with
the same frequency as such Licensed Operator's or Borrowers' recent
collections
history; (c) the imposition of a fine against or the creation of any
liability of any Credit Party or Licensed Operator to any Governmental
Authority
under any Healthcare Law in excess of $50,000.00; (d) a termination,
suspension or material limitation of any Healthcare Permits, (e) the
failure to satisfy any demand by any Governmental Authority to comply
with Law
or remediate any condition, or (f) termination by any third party of any
third party agreement required for the operation of any Project in
the manner
contemplated by this Agreement which agreement is not promptly replaced
by
Borrower on terms which are at least as favorable to the applicable
Borrower or
Borrowers in all material respects.
"Material
Contracts"
has the
meaning set forth in Section
3.17.
"Material
Lease"
means
any Lease other than a Permitted Lease.
"Maximum
Lawful Rate"
has the
meaning set forth in Section 2.7(b).
-11-
"Medicaid"
means
the medical assistance programs administered by state agencies and
approved by
CMS pursuant to the terms of Title XIX of the Social Security Act,
codified at
42 U.S.C. 1396 et
seq.
"Medicare"
means
the program of health benefits for the aged and disabled administered
by CMS
pursuant to the terms of Title XVIII of the Social Security Act, codified
at 42
U.S.C. 1395 et
seq.
"Xxxxxxx
Xxxxx"
means
Xxxxxxx Xxxxx Capital, a division of Xxxxxxx Xxxxx Business Financial
Services
Inc., and its successors.
"Multiemployer
Plan"
means a
multiemployer plan, that is intended to meet the definition set forth
in Section
4001(a)(3) of ERISA, to which any Borrower or any member of the Controlled
Group may have any liability.
"Net
Cash Proceeds"
means,
with respect to any transaction or event, an amount equal to the cash
proceeds
received by any Credit Party from or in respect of such transaction
or event
(including proceeds of any non-cash proceeds of such transaction),
minus
(a) any out-of-pocket expenses paid to a Person that are reasonably
incurred by such Credit Party in connection therewith, and (b) in the case
of an Asset Disposition, the amount of any Debt secured by a Lien on
the related
asset and discharged from the proceeds of such Asset Disposition and
any taxes
paid or reasonably estimated by the applicable Credit Party to be payable
by
such Person in respect of such Asset Disposition, provided,
however,
that if
the actual amount of taxes paid is less than the estimated amount,
the
difference shall immediately constitute Net Cash Proceeds.
"Net
Operating Income"
shall
have the meaning given in Section
6.1.
"Notes"
means
the Term Note or Term Notes provided for herein.
"Obligations"
means
all obligations, liabilities and indebtedness (monetary (including
post-petition
interest, whether or not allowed) or otherwise) of each Credit Party
under this Agreement or any other Financing Document, in each case
howsoever
created, arising or evidenced, whether direct or indirect, absolute
or
contingent, now or hereafter existing, or due or to become due.
"OFAC"
means
the U.S. Department of Treasury Office of Foreign Assets Control.
"OFAC
Lists"
means,
collectively, the Specially Designated Nationals and Blocked Persons
List
maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed. Reg.
49079
(Sept. 25, 2001) and/or any other list of terrorists or other restricted
Persons maintained pursuant to any of the rules and regulations of
OFAC or
pursuant to any other applicable Executive Orders.
"Operating
Expenses"
shall
have the meaning given in Section
6.1a(vi).
-12-
"Operating
Lease"
means
any lease of any Licensed Location to an Operating Lessee, and all
amendments
thereto and extensions thereof.
"Operating
Lessee"
means
any Person to whom any Borrower or any Subsidiary has leased a Licensed
Location.
"Operating
Revenue"
shall
have the meaning given in Section
6.1(a).
"Ordinary
Course of Business"
means,
in respect of any transaction involving any Credit Party, the ordinary
course of
such Credit Party's business, as conducted by such Credit Party in
accordance
with past practices.
"Organizational
Documents"
means,
with respect to any Person other than a natural person, the documents
by which
such Person was organized (such as a certificate of incorporation,
certificate
of limited partnership or articles of organization, and including,
without
limitation, any certificates of designation for preferred stock or
other forms
of preferred equity) and which relate to the internal governance of such
Person (such as by-laws, a partnership agreement or an operating, limited
liability or members agreement).
"Participation
Agreements"
shall
have the meaning given in Section
8.4(b)(x).
"Payment
Account"
means
the account specified on the signature pages hereof into which all
payments by
or on behalf of each Borrower to Administrative Agent under the Financing
Documents shall be made, or such other account as Administrative Agent
shall
from time to time specify by notice to Borrower Representative.
"Payment
Notification"
means a
written notification substantially in the form of Exhibit D
hereto.
"PBGC"
means
the Pension Benefit Guaranty Corporation and any Person succeeding
to any or all
of its functions under ERISA.
"Pension
Plan"
means
any ERISA Plan that is subject to Section 412 of the Code or Title
IV of
ERISA.
"Permits"
means
all governmental licenses, authorizations, provider numbers, supplier
numbers,
registrations, permits, certificates, franchises, qualifications,
accreditations, consents and approvals required under all applicable
Laws and
required in order to carry on its business as now conducted, including,
without
limitation, Healthcare Permits.
"Permitted
Contest"
means,
with respect to any tax obligation or other obligation allegedly or
potentially
owing from any Borrower to any governmental tax authority or other
third party,
a contest maintained in good faith by appropriate proceedings promptly
instituted and diligently conducted and with respect to which such
reserve or
other appropriate provision, if any, as shall be required in conformity
with
GAAP shall have been made on the books and records and financial statements
of
the applicable Borrower(s); provided,
however,
that
(a) compliance with the obligation that is the subject of such contest
is
effectively stayed during such challenge; (b) Borrowers' title to, and its
right to use, the Collateral is not adversely affected thereby and
Administrative Agent's Lien and priority on the Collateral are not
adversely
affected, altered or impaired thereby; (c) Borrowers have given prior
written notice to Administrative Agent of Borrowers' intent to so contest
the
obligation; (d) in the case of real estate taxes or assessments or
mechanic's, workmen's, materialmen's or other like Liens, Borrowers
have
obtained an endorsement, in form and substance satisfactory to Administrative
Agent, to the loan policy of title insurance issued to Administrative
Agent
insuring over any Lien created by such obligation, or Borrowers have
deposited
with Administrative Agent a bond or other security satisfactory to
Administrative Agent, in its reasonable discretion, against loss or
injury by
reason of such contest or the non-payment of such obligation or charge
(and if
such security is cash, Administrative Agent may, but shall not be obligated
to,
deposit the same in an interest-bearing account and interest accrued
thereon, if
any, shall be deemed to constitute a part of such security for purposes
of this
Agreement, but Administrative Agent (i) makes no representation or warranty
as to the rate or amount of interest, if any, which may accrue thereon
and shall
have no liability in connection therewith and (ii) shall not be deemed to
be a trustee or fiduciary with respect to its receipt of any such security
and
any such security may be commingled with other monies of Administrative
Agent);
(e) the Collateral or any part thereof or any interest therein shall not
be
in any danger of being sold, forfeited or lost by reason of such contest
by
Borrowers; (f) Borrowers have given Administrative Agent notice of the
commencement of such contest and upon request by Administrative Agent,
from time
to time, notice of the status of such contest by Borrowers and/or confirmation
of the continuing satisfaction of this definition; and (g) upon a final
determination of such contest, Borrowers shall promptly comply with
the
requirements thereof.
-13-
"Permitted
Leases"
means
each Lease listed on Schedule 1 and any Lease (other than any Resident
Agreement) for any portion of any Project that (a) is for demised
space of no more than 600 square feet, (b) is for a beauty parlor, xxxxxx
shop, rehabilitation center or other lawful use that is necessary or
consistent
with, and ancillary to, the operation of a senior housing facility,
and
(c) is terminable by Borrower upon not more than sixty (60) days'
notice.
"Permitted
Liens"
means:
(a) deposits or pledges of cash to secure obligations under workmen's
compensation, social security or similar laws, or under unemployment
insurance
(but excluding Liens arising under ERISA); (b) deposits or pledges of cash
to secure bids, tenders, contracts (other than contracts for the payment
of
money or the deferred purchase price of property or services), leases,
statutory
obligations, surety and appeal bonds and other obligations of like
nature
arising in the Ordinary Course of Business; (c) mechanic's, workmen's,
materialmen's or other like Liens arising in the Ordinary Course of
Business
with respect to obligations which are not due, or which are being contested
pursuant to a Permitted Contest; (d) Liens on Collateral, for taxes or
other governmental charges not at the time delinquent or thereafter
payable
without penalty or the subject of a Permitted Contest; (e) attachments,
appeal bonds, judgments and other similar Liens on Collateral other
than
Accounts, for sums not exceeding $25,000 in the aggregate arising in
connection
with court proceedings; provided,
however,
that the
execution or other enforcement of such Liens is effectively stayed
and the
claims secured thereby are the subject of a Permitted Contest; (f) those
matters which are set forth as exceptions to or subordinate matters
in the loan
title insurance policy accepted by Administrative Agent insuring the
lien of the
Security Documents; (g) Liens and encumbrances in favor of Administrative
Agent under the Financing Documents; and (h) Liens and encumbrances in
favor of the holders of the Affiliated Financing Documents.
"Person"
means
any natural person, corporation, limited liability company, professional
association, limited partnership, general partnership, joint stock
company,
joint venture, association, company, trust, bank, trust company, land
trust,
business trust or other organization, whether or not a legal entity,
and any
Governmental Authority.
"Project"
means
the singular reference to each respective portion of the Collateral
consisting
of the land, improvements and all other real and personal property
encumbered by
the lien of each respective mortgage, deed of trust, deed to secure
debt or
similar Security Document constituting a part of the Financing Documents.
"Projects"
means
all such Projects collectively.
"Pro
Rata Share"
means
(a) with respect to a Lender's right to receive payments of principal and
interest with respect to the Term Loans, the Term Loan Commitment
Percentage of such Lender, and (b) for all other purposes (including
without limitation the indemnification obligations arising under Section
13.6) with
respect to any Lender, the percentage obtained by dividing
(i) such Lender's then outstanding principal amount of the Term Loans,
by
(ii) the then outstanding principal amount of the Term Loans of all
Lenders.
-14-
"Release"
shall
have the meaning given in 42 U.S.C Β§ 9601 (22).
"Released
Parties"
shall
have the meaning given in Section
14.19.
"Releasing
Parties"
shall
have the meaning given in Section
14.19.
"Required
Lenders"
means,
subject to the provisions of Section
13.13(d),
at any
time Lenders holding sixty-six and two thirds percent (66 2/3%) or more of
the outstanding principal balance of the Term Loans (taken as a
whole).
"Resident
Agreements"
means
the singular or collective reference to all patient and resident care
agreements, admission agreements and service agreements which include
an
occupancy agreement and all amendments, modifications or supplements
thereto.
"Responsible
Officer"
means
any of the Chief Executive Officer, Chief Financial Officer or Managing
Member
of the applicable Borrower.
"Restricted
Distribution"
means as
to any Person (a) any dividend or other distribution (whether in cash,
securities or other property) on any equity interest in such Person (except
those payable solely in such Person's equity interests of the same
class),
(b) any payment on account of (i) the purchase, redemption,
retirement, defeasance, surrender, cancellation, termination or acquisition
of
any equity interests in such Person or any claim respecting the purchase
or sale
of any equity interest in such Person, or (ii) any option, warrant or other
right to acquire any equity interests in such Person, (c) any management
fees, salaries or other fees or compensation to an Affiliate of Borrower,
(d) any lease or rental payments to an Affiliate or Subsidiary of Borrower,
or (e) repayments of or debt service on loans or other indebtedness held by
an Affiliate of Borrower.
-15-
"Sale"
has the
meaning set forth in Section
2.12.
"Securitization"
has the
meaning set forth in Section
14.8.
"Security
Documents"
means
any agreement, document or instrument executed concurrently herewith
or at any
time hereafter pursuant to which one or more Credit Parties or any
other Person
either (a) Guarantees payment or performance of all or any portion of the
Obligations (including, without limitation, any Financing Documents
Guarantee),
and/or (b) provides, as security for all or any portion of the Obligations,
a Lien on any of its assets in favor of Administrative Agent for its
own benefit
and the benefit of the Lenders, as any or all of the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Solvent"
means,
with respect to any Person, that such Person (a) owns and will own assets
the fair saleable value of which are (i) greater than the total amount of
its liabilities (including Contingent Obligations), and (ii) greater than
the amount that will be required to pay the probable liabilities of
its then
existing debts as they become absolute and matured considering all
financing
alternatives and potential asset sales reasonably available to it;
(b) has
capital that is not unreasonably small in relation to its business
as presently
conducted or after giving effect to any contemplated transaction; and
(c) does not intend to incur and does not believe that it will incur debts
beyond its ability to pay such debts as they become due.
"Stated
Rate"
has the
meaning set forth in Section 2.7(b).
"Subordinated
Debt"
means
any Debt of Borrowers incurred pursuant to the terms of Subordinated
Debt
Documents.
"Subordinated
Debt Documents"
means
any documents evidencing and/or securing Debt governed by a Subordination
Agreement.
"Subordination
Agreement"
means
any agreement between Administrative Agent and another creditor of
Borrowers, as
the same may be amended, supplemented, restated or otherwise modified
from time
to time in accordance with the terms thereof, pursuant to which the
Debt owing
from any Borrower(s) and/or the Liens securing such Debt granted by any
Borrower(s) to such creditor are subordinated in any way to the Obligations
and the Liens created under the Security Documents, the terms and provisions
of
which such Subordination Agreements have been agreed to by and are
acceptable to
Administrative Agent in the exercise of its sole discretion.
-16-
"Subsidiary"
means,
with respect to any Person, (a) any corporation of which an aggregate of
more than 50% of the outstanding capital stock having ordinary voting
power to
elect a majority of the board of directors of such corporation (irrespective
of
whether, at the time, capital stock of any other class or classes of
such
corporation shall have or might have voting power by reason of the
happening of
any contingency) is at the time, directly or indirectly, owned legally or
beneficially by such Person or one or more Subsidiaries of such Person,
or with
respect to which any such Person has the right to vote or designate
the vote of
more than 50% of such capital stock whether by proxy, agreement, operation
of
law or otherwise, and (b) any partnership or limited liability company in
which such Person and/or one or more Subsidiaries of such Person shall
have an
interest (whether in the form of voting or participation in profits
or capital
contribution) of more than 50% or of which any such Person is a general
partner or may exercise the powers of a general partner. Unless the
context
otherwise requires, each reference to a Subsidiary shall be a reference
to a
Subsidiary of a Borrower.
"Substitute
Property"
has the
meaning set forth in Section
2.12.
"Taking"
shall
mean a condemnation or taking pursuant to the lawful exercise of the
power of
eminent domain.
"Taxes"
has the
meaning set forth in Section
2.5(b) and
2.8.
"Term
Loan"
has the
meaning set forth in Section
2.1.
"Term
Loan Commitment"
has the
meaning set forth in Section
2.1.
"Term
Loan Commitment Percentage"
means,
as to any Lender, (a) on the Closing Date, the percentage set forth
opposite such Lender's name on the Commitment Annex under the column
"Term
Loan Commitment Percentage"
(if such
Lender's name is not so set forth thereon, then, on the Closing Date,
such
percentage for such Lender shall be deemed to be zero), and (b) on any date
following the Closing Date, the percentage equal to the principal amount
of the
Term Loan held by such Lender on such date divided
by
the
aggregate principal amount of the Term Loan on such date.
"Term
Loan Note"
shall
have the meaning given in Section
2.4.
"Termination
Date"
means
the earlier to occur of (a) the Commitment Expiry Date, or (b) any
date on which Administrative Agent accelerates the maturity of the
Loans
pursuant to Section 11.2.
"Third
Party Payor" means Blue Cross and/or Blue Shield, private
insurers, managed care plans and any other Person or entity which
presently or
in the future maintains Third Party Payor Programs, but specifically
excluding
Governmental Payors.
"Third
Party Payor Programs" means all payment and reimbursement programs,
sponsored by a Third Party Payor, in which a Licensed Operator
participates.
-17-
"Transfer
Date"
has the
meaning set forth in Section
3.4(b).
"TRICARE"
means
the program administered pursuant to 10 U.S.C. Section 1071 e.
seq.),
Sections 1320a-7 and 1320a-7a of Title 42 of the United States Code
and the
regulations promulgated pursuant to such statutes.
"UCC"
means
the Uniform Commercial Code of the State of Illinois or of any other
state the
laws of which are required to be applied in connection with the perfection
of
security interests in any Collateral.
"United
States"
means
the United States of America.
Section
1.2 Accounting
Terms and Determinations.
Unless
otherwise specified herein, all accounting terms used herein shall
be
interpreted, all accounting determinations hereunder (including without
limitation determinations made pursuant to the exhibits hereto) shall be
made, and all financial statements required to be delivered hereunder
shall be
prepared on a consolidated basis in accordance with GAAP applied on
a basis
consistent with the most recent audited consolidated financial statements
of
each Borrower delivered to Administrative Agent and each of the Lenders
on or
prior to the Closing Date. If
at any
time any change in GAAP would affect the computation of any financial
ratio or
financial requirement set forth in any Financing Document, and Administrative
Agent or Borrowers shall so request, the Administrative Agent, in its
sole
discretion on behalf of Lenders, and Borrowers shall negotiate in good
faith to
amend such ratio or requirement to preserve the original intent thereof
in light
of such change in GAAP; provided,
however, that,
until so amended, (a) such ratio or requirement shall continue to be
computed in accordance with GAAP prior to such change therein, and
(b) Borrowers shall provide to the Administrative Agent and the Lenders
financial statements and other documents required under this Agreement
which
include a reconciliation between calculations of such ratio or requirement
made
before and after giving effect to such change in GAAP.
All
amounts used for purposes of financial calculations required to be
made herein
shall be without duplication.
Section
1.3 Other
Definitional Provisions.
References
in this Agreement to "Articles", "Sections", "Annexes", "Exhibits"
or
"Schedules" shall be to Articles, Sections, Annexes, Exhibits or Schedules
of or
to this Agreement unless otherwise specifically provided. Any term
defined
herein may be used in the singular or plural. "Include", "includes"
and
"including" shall be deemed to be followed by "without limitation".
Except as
otherwise specified or limited herein, references to any Person include
the
successors and assigns of such Person. References "from" or "through"
any date
mean, unless otherwise specified, "from and including" or "through
and
including", respectively. References to any statute or act shall include
all
related current regulations and all amendments and any successor statutes,
acts
and regulations. References to any statute or act, without additional
reference,
shall be deemed to refer to federal statutes and acts of the United
States.
References to any agreement, instrument or document shall include all
schedules,
exhibits, annexes and other attachments thereto. As used in this Agreement,
the
meaning of the term "material" or the phrase "in all material respects"
is
intended to refer to an act, omission, violation or condition which
reflects or
could reasonably be expected to result in a Material Adverse
Effect.
-18-
Section
1.4 Funding
and Settlement Currency.
Unless
otherwise specified herein, the settlement of all payments and fundings
hereunder between or among the parties hereto shall be made in lawful
money of
the United States and in immediately available funds.
Section
1.5 Borrowers
as Licensed Operators.
As
of the
Closing Date it is contemplated and intended that each Borrower shall
be the
Licensed Operator of the Project (which shall be a Licensed Location) owned
by such Borrower. Therefore, all references to "Licensed Operators"
shall be
deemed to refer to the applicable Borrower, and all covenants, representations
and warranties applicable to a Licensed Operator shall nonetheless
be deemed to
be direct covenants, representations and warranties of the applicable
Borrower,
even if such covenants, representations and warranties are, under the
terms of
this Agreement, contemplated to be undertaken or made indirectly through
an
Operating Lease.
ARTICLE
2
Section
2.1 Term
Loan.
(a) Term
Loan Amounts.
On the
terms and subject to the conditions set forth herein, the Lenders hereby
agree
to make to Borrowers on the Closing Date a term loan ("Term
Loan") in
an original principal amount equal to Eighty-Five Million Dollars ($85,000,000).
Each Lender's obligation to fund the Term Loan shall be limited to
such Lender's
Term Loan Commitment Percentage, and no Lender shall have any obligation
to fund
any portion of any Term Loan required to be funded by any other Lender,
but not
so funded. No Borrower shall have any right to reborrow any portion
of the Term
Loan that is repaid or prepaid from time to time.
(b) Scheduled
Repayments.
Payments
of interest only shall be paid on the Loan throughout the term of the
Loan;
provided,
however,
that if,
as of the six (6) month period ending on the last day of any month
beginning with the twenty-fourth (24th) full
calendar month following the Closing Date, the Debt Yield Ratio is
less than
eleven percent (11.00%), Borrowers shall commence paying principal
payments on
the Loan based on a twenty-five (25)-year mortgage-style amortization
schedule
at an assumed rate of 7.0%, beginning the following calendar month
and
continuing throughout the remainder of the term of the Loan. Notwithstanding
such required payments as set forth herein, the outstanding principal
amount of
the Term Loan shall become immediately due and payable in full on the
Termination Date.
-19-
(c) Mandatory
Prepayments.
There
shall become due and payable and Borrowers shall prepay the Term Loan
in an
amount equal to the following on the following dates:
(i) An
amount
equal to any Casualty Proceeds that Administrative Agent elects to
apply to the
Obligations in accordance with Section
9.3,
plus any
Casualty Proceeds that Administrative Agent elects to not apply to
the
Obligations in accordance with Section
9.3,
but only
if Borrowers fail to reinvest such Casualty Proceeds in replacement
assets
comparable to the assets giving rise to such Casualty Proceeds if such
reinvestment is permitted pursuant to the terms of Section 9.3;
and
(ii) An
amount
equal to any Covenant Prepayment required under Section
6.7,
on the
date provided for in Section
6.7.
(d) Optional
Prepayments.
Other
than mandatory prepayments under Sections
2.1(c)(i),
2.1(c)(ii) and
any
prepayment from the Sale of the Project located in Las Vegas, Nevada,
the Term
Loan may not be prepaid during the Closed Period. The Term Loan may
be prepaid
in full, but not in part, at any time after the expiration of the Closed
Period,
provided,
however,
that
Borrowers shall have given Administrative Agent at least thirty (30) days
prior written notice of the date of such prepayment together with an
appropriately completed Payment Notification.
(e) All
Prepayments.
Except as
this Agreement may specifically provide otherwise, all prepayments
of the Term
Loan shall be applied by Administrative Agent to the Obligations in
such order
and manner as Administrative Agent may elect.
Section
2.2 [Reserved.]
Section
2.3 Interest;
Interest Calculations and Certain Fees.
(a) Interest.
From and
following the Closing Date, the Loans and the other Obligations shall
bear
interest at the sum of the Base Rate plus the applicable Base Rate
Margin.
(b) Commitment
Fee.
Prior to
or contemporaneous with Borrowers' execution of this Agreement, Borrowers
have
or shall pay Administrative Agent, for its own account and not for
the benefit
of any other Lenders, a fee in an amount equal to One Million One Hundred
Thousand Dollars ($1,100,000).
(c) Arrangement
Fee.
Contemporaneous with Borrowers execution of this Agreement, Borrowers
shall pay
Administrative Agent, for its own account and not for the benefit of
any other
Lenders, a fee in an amount equal to Two Hundred Seventy-Five Thousand
Dollars
($275,000).
-20-
(d) Exit
Fee.
On the
Termination Date or upon any voluntary prepayment of the Term Loan
as permitted
hereunder or upon any mandatory prepayment of the Term Loan. Borrowers
shall pay
to Administrative Agent for the benefit of Lenders a fee (the "Exit
Fee") equal
to the Term Loan Commitment multiplied
by
the
Applicable Exit Fee Percentage. If any such prepayments are made, then
upon such
prepayment, Borrower shall pay to Administrative Agent the proportionate
amount
of the Exit Fee attributable to such prepayment; provided,
however,
that in
the event of a casualty or Taking and the application of any Casualty
Proceeds
therefrom to a prepayment of a portion of the Obligations, Borrower
shall not be
required to pay the Exit Fee allocable to such prepayment. The term
"Applicable
Exit Fee Percentage"
means:
two percent (2.0%) if the payment is made on or before the twenty-fourth
(24th) full
calendar month following the Closing Date; one percent (1.0%) if the
payment is made during or after the twenty-fifth (25th) full
calendar month following the Closing Date and before or during the
thirty-sixth
(36th) full
calendar month following the Closing Date; and one half of one percent
(.50%) if the payment is made during or after the thirty-seventh
(37th) full
calendar month following the Closing Date; provided,
however,
that if
the Termination Date occurs during the Closed Period, the Exit Fee
shall be an
amount equal to the sum of two percent (2.0%) multiplied
by
the Term
Loan Commitment plus
the
amount of interest which would have been due and payable from the Termination
Date through the end of the Closed Period, assuming a Base Rate equal
to the
Base Rate as of the Termination Date. Notwithstanding the foregoing,
if
(i) the Term Loan is repaid with the proceeds of a mortgage loan facility
provided by Xxxxxxx Xxxxx with respect to all of the Projects not previously
released from the Lien of the Financing Documents pursuant to Section
2.12
or
(ii) Xxxxxxx Xxxxx fails to deliver a term sheet with respect to providing
such mortgage loan facility within thirty (30) days after receipt from
Borrowers of a written request for a term sheet, the Applicable Exit
Fee
Percentage shall be reduced by one-half of one percent (.50%) with respect
to payments made from such refinancing proceeds.
e) Audit
Fees.
Borrowers shall pay to Administrative Agent, for its own account and
not for the
benefit of any other Lenders, all reasonable fees and expenses in connection
with audits of Borrowers' books and records, audits, valuations or
appraisals of
the Collateral, audits of Borrowers' compliance with applicable Laws
and such
other matters as Administrative Agent shall deem appropriate, which
shall be due
and payable on the first Business Day of the month following the date
of
issuance by Administrative Agent of a written request for payment thereof
to
Borrowers. Notwithstanding the foregoing, provided that no Event of
Default has
occurred and remains outstanding, Administrative Agent shall not charge
audit
fees in respect of any inspections or related actions unless such audit
shows
discrepancies exceeding 10%. Unless an Event of Default has occurred
and is then
continuing audits by Lender shall not be undertaken more frequently
than
annually.
(f) Wire
Fees.
Borrowers shall pay to Administrative Agent, for its own account and
not for the
account of any other Lenders, on written demand, any and all reasonable
fees,
costs or expenses which Administrative Agent pays to a bank or other
similar
institution (including, without limitation, any fees paid by Administrative
Agent to any other Lender) arising out of or in connection with
(i) the forwarding to Borrowers or any other Person on behalf of Borrowers,
by Administrative Agent, of proceeds of the Loans made by any Lender
to
Borrowers pursuant to this Agreement, and (ii) the depositing for
collection, by Administrative Agent, of any check or item of payment
received or
delivered to Administrative Agent on account of Obligations.
-21-
(g) Real
Property Inspection Fee.
Borrowers shall pay to Administrative Agent, for its own account and
not for the
benefit of any other Lenders, on the Closing Date, and on each anniversary
of
the Closing Date thereafter, a real property inspection fee of Two
Thousand
Dollars ($2,000) per Project per year.
(h) Late
Charges.
If
payments of principal (other than a final installment of principal
upon the
Termination Date), interest due on the Obligations, or any other amounts
due
hereunder or under the other Financing Documents are not timely made
and remain
overdue for a period of five (5) days, Borrowers, without notice or demand
by Administrative Agent, promptly shall pay to Administrative Agent,
for its own
account and not for the benefit of any other Lenders, as additional
compensation
to Administrative Agent in administering the Obligations, an amount
equal to
five percent (5%) of each delinquent payment.
(i) Computation
of Interest and Related Fees.
All
interest and fees under each Financing Document shall be calculated
on the basis
of a three hundred sixty (360)-day year for the actual number of days
elapsed.
The date of funding of Loan shall be included in the calculation of
interest.
The date of payment of a Loan shall be excluded from the calculation
of
interest. If a Loan is repaid on the same day that it is made, one
(1) day's interest shall be charged. Interest on all Loans is payable in
arrears on the first (1st) day of each month and on the maturity of such
Loans, whether by acceleration or otherwise.
(j) Automated
Clearing House Payments.
If an
Event of Default has occurred and Administrative Agent so elects, monthly
payments of interest and amortization shall be paid to Administrative
Agent by
Automated Clearing House debit of immediately available funds from
the financial
institution account designated by Borrower Representative in the Automated
Clearing House debit authorization executed by Borrowers or Borrower
Representative in connection with this Agreement, and shall be effective
upon
receipt. Borrowers shall execute any and all forms and documentation
necessary
from time to time to effectuate such automatic debiting. In no event
shall any
such payments be refunded to Borrowers.
Section
2.4 Notes.
The
portion of the Term Loan made by each Lender shall be evidenced, if
so requested
by such Lender, by a promissory note executed by Borrowers on a joint
and
several basis (a "Term
Loan Note") in
an original principal amount equal to such Lender's Pro Rata Share
of the Term
Loan Commitment.
Section
2.5 Reserves
and Escrows.
(a) Requirements.
Borrowers agree to establish and maintain all of the reserves and escrows
required in this Section
2.5.
All sums
so reserved or escrowed may be commingled with the general funds of
Administrative Agent and no such sums shall be deemed to be held in
trust for
the benefit of Borrowers. Interest at the rates available to Lender
for escrow
depository accounts shall accrue and be added to the funds held by
Lender
pursuant to Sections
2.5(b) and
2.5(c) hereunder.
No interest shall be payable on any other funds reserved or escrowed
hereunder.
All sums so reserved or escrowed shall be part of the Collateral and
shall stand
as additional security for all of the Obligations. If Administrative
Agent at
any time reasonably determines that the amount on deposit in any reserve
or
escrow is insufficient for its intended purposes, Borrowers shall,
within ten
(10) days following notice from Administrative Agent, deposit such
additional sums as may reasonably be required by Administrative Agent.
In the
event of any default by Borrowers under the terms of this Agreement
or any other
Financing Document, Administrative Agent may, at its discretion, apply
amounts
on hand in the reserves or escrows to cure such default. Upon demand
of
Administrative Agent, Borrowers shall replenish the applicable reserve
or escrow
to restore any sums so applied by Administrative Agent. Upon the occurrence
of
an Event of Default and/or the maturity of any portion of the Obligations,
the
moneys then remaining on deposit with Administrative Agent shall, at
Administrative Agent's option, be applied against the Obligations in
such order
and manner as Administrative Agent may elect or as may otherwise be
required
under this Agreement.
-22-
(b) Real
Property Taxes.
At the
time of and in addition to the monthly installments of principal and/or
interest
due under the Notes, Borrowers shall pay to Administrative Agent a
sum equal to
one-twelfth (1/12) of the amount estimated by Administrative Agent to be
sufficient (when aggregated with an initial deposit to be designated
by
Administrative Agent and paid by Borrowers to Administrative Agent
on the
Closing Date or otherwise upon demand of Administrative Agent) to pay at
least thirty (30) days before they become due and payable, all taxes,
assessments and other similar charges levied against any portion of
the
Collateral constituting real property (collectively, the "Taxes").
In the
event such real property or any portion thereof is part of a larger
tract for
purposes of taxation and assessments, Administrative Agent may require
the
Borrowers to have the real property taxed and assessed as a separate
parcel or
separate parcels, or, in the alternative, to make the deposits required
under
this section based upon the taxation and assessment of the larger tract.
So long
as no Event of Default exists hereunder, Administrative Agent shall
apply the
escrows sums to pay the Taxes. Except as provided in the preceding
sentence, the
obligation of Borrowers to pay the Taxes is not affected or modified
by the
provisions of this paragraph.
(c) Insurance
Premiums.
If an
Event of Default or failure to timely pay insurance premiums occurs,
then
Borrowers shall pay to Administrative Agent an initial deposit amount
which is
sufficient when aggregated with the monthly payment described below
to pay the
Insurance Premiums next becoming due and on the first (1st) day of each
calendar month thereafter a sum equal to one-twelfth (1/12) of the amount
estimated by Administrative Agent to be sufficient to pay at least
thirty
(30) days before they become due and payable all insurance premiums
and other similar charges in connection with the insurance required
to be
carried by Borrowers pursuant to this Agreement or the other Financing
Documents
(collectively, the "Insurance
Premiums").
So
long as no Event of Default exists hereunder, Administrative Agent
shall apply
the sums to pay the Insurance Premiums. Except as provided in the preceding
sentence, the obligation of Borrowers to pay the Insurance Premiums
is not
affected or modified by the provisions of this section. Notwithstanding
the
foregoing, if the insurance premiums are paid via a premium financing
arrangement to which Administrative Agent has given its written consent,
which
consent shall not be unreasonably withheld, then (i) the amount to be
escrowed with Administrative Agent at any given time in respect of
such
Insurance Premiums shall be three (3) months of payments under the premium
finance arrangement, (ii) Borrowers shall tender to Administrative Agent
each month (on such schedule as Administrative Agent shall reasonably
request) evidence that Borrowers (or the owner of the policy if the
Borrowers share in a blanket policy) has paid the applicable premium
finance amount due for the preceding month, and (iii) Administrative Agent
shall have no obligation to remit such escrowed sums in payment of
the premium
finance amounts.
-23-
(d) Capital
Replacement Reserve.
At the
time of and in addition to the monthly installments of principal and/or
interest
due under any of the Notes, Borrowers shall pay to Administrative Agent
monthly
deposits in the amount of $25 per bed at each Licensed Location (the
"Replacement
Minimum") to
be held by Administrative Agent in a capital replacement reserve ("Capital
Replacement Reserve").
So
long as no Event of Default has occurred and is then continuing, the
funds
contained in the Capital Replacement Reserve shall be utilized to pay
directly
or to reimburse Borrowers solely for capital improvements approved
in advance by
Administrative Agent in writing Subject to the foregoing, Administrative
Agent
shall release funds from the Capital Replacement Reserve for the actual
cost of
such approved capital improvements upon Borrowers' providing Administrative
Agent with paid receipts, lien waivers and other documentation deemed
reasonably
necessary by Administrative Agent with minimum draws of $25,000.00
which shall
occur no more frequently than once per month. Notwithstanding the foregoing,
Borrowers' obligation to make deposits shall be suspended so long as
no Event of
Default has occurred and is then continuing and Borrowers provide Administrative
Agent with satisfactory evidence, on an annual basis beginning
January 1, 2007, that Borrowers have expended during the preceding
calendar year for approved capital improvements at each Licensed Location
an
amount equal or greater than $300 per bed at each Licensed Location;
provided
that if
Borrowers do not satisfy said $300 per bed at each Licensed Location
requirement, then, no later than January 31 of the applicable year,
Borrowers shall pay to Administrative Agent an amount equal to the
amount by
which $300 per bed at each applicable Licensed Location exceeds the
amount
actually spent during such year at such Licensed Location which amount
shall be
held by Administrative Agent in the Capital Replacement Reserve.
Section
2.6 General
Provisions Regarding Payment; Loan Account.
(a) All
payments to be made by each Borrower under any Financing Document,
including
payments of principal and interest made hereunder and pursuant to any
other
Financing Document, and all fees, expenses, indemnities and reimbursements,
shall be made without set-off, recoupment or counterclaim, in lawful
money of
the United States and in immediately available funds. If any payment
hereunder
becomes due and payable on a day other than a Business Day, such payment
shall
be extended to the next succeeding Business Day and, with respect to
payments of
principal, interest thereon shall be payable at the then applicable
rate during
such extension (it being understood and agreed that, solely for purposes
of
calculating financial covenants and computations contained herein and
determining compliance therewith, if payment is made, in full, on any
such
extended due date, such payment shall be deemed to have been paid on
the
original due date without giving effect to any extension thereto).
Any payments
received in the Payment Account before noon (Chicago time) on any date
shall be deemed received by Administrative Agent on such date, and
any payments
received in the Payment Account after noon (Chicago time) on any date shall
be deemed received by Administrative Agent on the next succeeding Business
Day.
Any optional or mandatory prepayment of a Term Loan shall be accompanied
by
timely delivery to Administrative Agent of an appropriately completed
Payment
Notification, as provided in Section
2.1.
-24-
(b) Administrative
Agent shall maintain a loan account (the "Loan
Account") on
its books to record Loans and other extensions of credit made by the
Lenders
hereunder or under any other Financing Document, and all payments thereon
made
by each Borrower. All entries in the Loan Account shall be made in
accordance
with Administrative Agent's customary accounting practices as in effect
from
time to time. The balance in the Loan Account, as recorded in Administrative
Agent's books and records at any time shall be conclusive and binding
evidence
of the amounts due and owing to Administrative Agent by each Borrower
absent
clear and convincing evidence to the contrary; provided,
however,
that any
failure to so record or any error in so recording shall not limit or
otherwise
affect any Borrower's duty to pay all amounts owing hereunder or under
any other
Financing Document. Administrative Agent shall endeavor to provide
Borrowers
with a monthly statement regarding the Loan Account (but neither Administrative
Agent nor any Lender shall have any liability if Administrative Agent
shall fail
to provide any such statement). Unless any Borrower notifies Administrative
Agent of any objection to any such statement (specifically describing
the basis
for such objection) within thirty (30) days after the date of receipt
thereof, it shall be deemed final, binding and conclusive upon Borrowers
in all
respects as to all matters reflected therein.
Section
2.7 Maximum
Interest.
(a) In
no
event shall the interest charged with respect to the Notes (if any) or any
other obligations of any Borrower under any Financing Document exceed
the
maximum amount permitted under the laws of the State of Illinois or
of any other
applicable jurisdiction.
(b) Notwithstanding
anything to the contrary herein or elsewhere, if at any time the rate
of
interest payable hereunder or under any Note or other Financing Document
(the
"Stated
Rate") would
exceed the highest rate of interest permitted under any applicable
law to be
charged (the "Maximum
Lawful Rate"),
then
for so long as the Maximum Lawful Rate would be so exceeded, the rate
of
interest payable shall be equal to the Maximum Lawful Rate; provided,
however,
that if
at any time thereafter the Stated Rate is less than the Maximum Lawful
Rate,
each Borrower shall, to the extent permitted by law, continue to pay
interest at
the Maximum Lawful Rate until such time as the total interest received
is equal
to the total interest which would have been received had the Stated
Rate been
(but for the operation of this provision) the interest rate payable.
Thereafter, the interest rate payable shall be the Stated Rate unless
and until
the Stated Rate again would exceed the Maximum Lawful Rate, in which
event this
provision shall again apply.
-25-
(c) In
no
event shall the total interest received by any Lender exceed the amount
which it
could lawfully have received had the interest been calculated for the
full term
hereof at the Maximum Lawful Rate. If, notwithstanding the prior sentence,
any
Lender has received interest hereunder in excess of the Maximum Lawful
Rate,
such excess amount shall be applied to the reduction of the principal
balance of
the Loans or to other amounts (other than interest) payable hereunder, and
if no such principal or other amounts are then outstanding, such excess
or part
thereof remaining shall be paid to Borrowers.
(d) In
computing interest payable with reference to the Maximum Lawful Rate
applicable
to any Lender, such interest shall be calculated at a daily rate equal
to the
Maximum Lawful Rate divided by the number of days in the year in which
such
calculation is made.
Section
2.8 Taxes.
(a) All
payments of principal and interest on the Loans and all other amounts
payable
hereunder shall be made free and clear of and without deduction for
any present
or future income, excise, stamp, documentary, payroll, employment,
property or
franchise taxes and other taxes, fees, duties, levies, assessments,
withholdings
or other charges of any nature whatsoever (including interest and penalties
thereon) imposed by any taxing authority, excluding taxes imposed
on
or measured by Administrative Agent's or any Lender's net income by
the
jurisdiction under which Administrative Agent or such Lender is organized
or
conducts business (other than solely as the result of entering into
any of the
Financing Documents or taking any action thereunder) (all non-excluded
items being called "Taxes").
If any
withholding or deduction from any payment to be made by any Borrower
hereunder
is required in respect of any Taxes pursuant to any applicable Law,
then
Borrowers will: (i) pay directly to the relevant authority the full amount
required to be so withheld or deducted; (ii) promptly forward to
Administrative Agent an official receipt or other documentation satisfactory
to
Administrative Agent evidencing such payment to such authority; and
(iii) pay to Administrative Agent for the account of Administrative Agent
and Lenders such additional amount or amounts as is necessary to ensure
that the
net amount actually received by Administrative Agent and each Lender
will equal
the full amount Administrative Agent and such Lender would have received
had no
such withholding or deduction been required. If any Taxes are directly
asserted
against Administrative Agent or any Lender with respect to any payment
received
by Administrative Agent or such Lender hereunder, Administrative Agent
or such
Lender may pay such Taxes and Borrowers will promptly pay such additional
amounts (including any penalty, interest or expense) as is necessary in
order that the net amount received by such Person after the payment
of such
Taxes (including any Taxes on such additional amount) shall equal the
amount such Person would have received had such Taxes not been asserted
so long
as such amounts have accrued on or after the day which is two hundred
seventy
(270) days prior to the date on which Administrative Agent or such Lender
first made written demand therefor.
(b) If
any
Borrower fails to pay any Taxes when due to the appropriate taxing
authority or
fails to remit to Administrative Agent, for the account of Administrative
Agent
and the respective Lenders, the required receipts or other required
documentary
evidence, Borrowers shall indemnify Administrative Agent and Lenders
for any
incremental Taxes, interest or penalties that may become payable by
Administrative Agent or any Lender as a result of any such failure.
-26-
Section
2.9 Capital
Adequacy.
If
any
Lender shall reasonably determine that the adoption or taking effect
of, or any
change in, any applicable Law regarding capital adequacy, in each instance,
after the Closing Date, or any change after the Closing Date in the
interpretation, administration or application thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation,
administration or application thereof, or the compliance by any Lender
or any
Person controlling such Lender with any request, guideline or directive
regarding capital adequacy (whether or not having the force of law) of any
such Governmental Authority, central bank or comparable agency adopted
or
otherwise taking effect after the Closing Date, has or would have the
effect of
reducing the rate of return on such Lender's or such controlling Person's
capital as a consequence of such Lender's obligations hereunder to
a level below
that which such Lender or such controlling Person could have achieved
but for
such adoption, taking effect, change, interpretation, administration,
application or compliance (taking into consideration such Lender's
or such
controlling Person's policies with respect to capital adequacy) then from
time to time, upon written demand by such Lender (which demand shall
be
accompanied by a statement setting forth the basis for such demand
and a
calculation of the amount thereof in reasonable detail, a copy of which
shall be
furnished to Administrative Agent), Borrowers shall promptly pay to
such Lender
such additional amount as will compensate such Lender or such controlling
Person
for such reduction, so long as such amounts have accrued on or after
the day
which is two hundred seventy (270) days prior to the date on which such
Lender first made demand therefor.
Section
2.10 Mitigation
Obligations.
If
any
Lender requires compensation under Section 2.9,
or
requires any Borrower to pay any additional amount to any Lender or
any
Governmental Authority for the account of any Lender pursuant to Section
2.8,
then,
upon the written request of Borrower Representative,
such
Lender shall use reasonable efforts to designate a different lending
office for
funding or booking its Loans hereunder or to assign its rights and
obligations
hereunder (subject to the terms of this Agreement) to another of its
offices, branches or affiliates, if, in the judgment of such Lender,
such
designation or assignment (a) would eliminate or materially reduce amounts
payable pursuant to any such Section, as the case may be, in the future,
and
(b) would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender (as determined
in its sole
discretion). Without limitation of the provisions of Section
12.1,
Borrowers hereby agree to pay all reasonable costs and expenses incurred
by any
Lender in connection with any such designation or assignment.
-27-
Section
2.11 Appointment
of Borrower Representative.
Each
Borrower hereby designates Borrower Representative as its representative
and
agent on its behalf for the purposes of giving instructions with respect
to the
disbursement of the proceeds of the Loans, giving and receiving all
other
notices and consents hereunder or under any of the other Financing
Documents and
taking all other actions (including in respect of compliance with
covenants) on behalf of any Borrower or Borrowers under the Financing
Documents. Borrower Representative hereby accepts such appointment.
Notwithstanding anything to the contrary contained in this Agreement,
no
Borrower other than Borrower Representative shall be entitled to take
any of the
foregoing actions. The proceeds of each Loan made hereunder shall be
advanced to
or at the direction of Borrower Representative and if not used by Borrower
Representative in its business (for the purposes provided in this
Agreement) shall be deemed to be immediately advanced by Borrower
Representative to the appropriate other Borrower hereunder as an intercompany
loan (collectively, "Intercompany
Loans").
Administrative Agent and each Lender may regard any notice or other
communication pursuant to any Financing Document from Borrower Representative
as
a notice or communication from all Borrowers, and may give any notice
or
communication required or permitted to be given to any Borrower or
all Borrowers
hereunder to Borrower Representative on behalf of such Borrower or
all
Borrowers. Each Borrower agrees that each notice, election, representation
and
warranty, covenant, agreement and undertaking made on its behalf by
Borrower
Representative shall be deemed for all purposes to have been made by
such
Borrower and shall be binding upon and enforceable against such Borrower
to the
same extent as if the same had been made directly by such Borrower.
Section
2.12 Release
of Liens as to Certain Projects.
In
the
event a Project is the subject of a sale for cash to a bona fide third
party
purchaser (a "Sale") (excluding
any Guarantor or any Affiliate of any Guarantor or any investment fund
managed
by any Guarantor or any Affiliate of any Guarantor), at any time after
the
Closed Period (except with respect to the Project located in Las Vegas,
Nevada,
which Project may be sold pursuant hereto during the Closed Period),
Administrative Agent will cause the Liens of the Financing Documents
to be
released as to such Project; provided,
however,
that each
of the following conditions is satisfied, and provided,
further
that no
more than three (3) Projects will be so released under the terms of this
Section
2.12:
(a) Borrowers
shall have given Administrative Agent no less than thirty (30) days' prior
written notice of the proposed closing date of such Sale;
(b) unless
Administrative Agent consents to the closing of such Sale in its sole
and
absolute discretion, no Default or Event of Default shall have occurred
and be
continuing as of the date of the notice set forth in clause (a) or as of
the closing date of such Sale, and Administrative Agent shall have
received a
Compliance Certificate to that effect;
(c) after
giving effect to (i) such Sale and the release of such Project and either
(x) the prepayment which would result therefrom or (y) the addition of
the Substitute Property to the Collateral, in each case on a proforma
basis as
determined by Administrative Agent, and any additional prepayment together
with
the proportionate Exit Fee, the Projects and Borrowers will be in compliance
with all covenants and the proforma Debt Yield Ratio (as determined
by
Administrative Agent) is equal to or greater than the Debt Yield Ratio
before giving effect to such Sale (as determined by Administrative
Agent;
-28-
(d) Borrowers
shall have paid all costs and expenses incurred by Administrative Agent
in
connection with any request for a release pursuant to this Section
2.12;
(e) no
material adverse change (as determined by Administrative Agent) shall have
occurred with respect to any of the remaining Projects, Borrowers,
or any
Guarantor; and
(f) unless
otherwise approved by Administrative Agent in its sole and absolute
discretion,
either:
(i) Borrowers
shall make a payment to Administrative Agent in an amount equal to
one hundred
percent (100%) of the Allocated Loan Amount for the Project located in Las
Vegas, Nevada or one hundred ten percent (110%) of the Allocated Loan
Amount for all other Projects, which amount shall be applied as a prepayment
of
the outstanding principal balance of the Term Loan and to a pro rata
portion of
the Exit Fee allocable to such prepayment; or
(ii) Administrative
Agent approves the substitution of another assisted living facility
for the
Project subject to the Sale ("Substitute
Project"),
which
Substitute Project would upon satisfaction of the conditions below
would become
a Project. Administrative Agent's approval will not be unreasonably
withheld but
shall be conditioned upon satisfaction of each of the following
conditions:
(A) Administrative
Agent having received and being satisfied with (based upon Administrative
Agent's standards and procedures used in evaluating the Projects) its due
diligence review of the proposed Substitute Property, including without
limitation, receipt and approval of a property condition report, an
environmental site assessment, title and survey, an appraisal, financial
information and healthcare regulatory information; and
(B) the
completion of Administrative Agent's closing requirements with respect
to
accepting the proposed Substitute Project as Collateral, including,
without
limitation, the grant of a mortgage lien against the Substitute Project
in favor
of Administrative Agent, the issuance of loan title insurance covering
such
mortgage lien with such Schedule B exceptions as Administrative Agent
reasonably
approves and with such endorsements as Administrative Agent may reasonably
require, Loan Document amendments and reaffirmations, and legal opinions.
Administrative Agent will be deemed to have acted reasonably if Administrative
Agent disapproves any exception and requires any endorsement in a manner
consistent with its treatment of the other Projects.
-29-
ARTICLE
3
To
induce
Administrative Agent and Lenders to enter into this Agreement and to
make the
Loans and other credit accommodations contemplated hereby, each Borrower
hereby
represents and warrants to Administrative Agent and each Lender
that:
Section
3.1 Existence
and Power.
Each
Credit Party is an entity as specified on Schedule 3.1,
is duly
organized, validly existing and in good standing under the laws of
the
jurisdiction specified on Schedule 3.1,
has the
same legal name as it appears in such Credit Party's Organizational
Documents
and an organizational identification number (if any), in each case
as specified
on Schedule 3.1,
and has
all powers and all Permits necessary or desirable in the operation
of its
business as presently conducted or as proposed to be conducted, except
where the
failure to have such Permits could not reasonably be expected to have
a Material
Adverse Effect. Each Credit Party is qualified to do business as a
foreign
entity in each jurisdiction in which it is required to be so qualified,
which
jurisdictions, in the case of the Borrowers, as of the Closing Date
are
specified on Schedule 3.1,
except
where the failure to be so qualified could not reasonably be expected
to have a
Material Adverse Effect. No Borrower (a) has had, over the five
(5) year period preceding the Closing Date, any name other than its current
name, or (b) was incorporated or organized under the laws of any
jurisdiction other than its current jurisdiction of incorporation or
organization.
The
execution, delivery and performance by each Credit Party of the Financing
Documents to which it is a party are within its powers, have been duly
authorized by all necessary action pursuant to its Organizational Documents,
require no further action by or in respect of, or filing with, any
Governmental
Authority and do not violate, conflict with or cause a breach or a
default under
(a) any Law applicable to any Credit Party or any of the Organizational
Documents of any Credit Party, or (b) any agreement or instrument binding
upon it, except for such violations, conflicts, breaches or defaults
as could
not, with respect to this clause (b), reasonably be expected to have
a Material
Adverse Effect.
Section
3.3 Binding
Effect.
Each
of
the Financing Documents to which any Credit Party is a party constitutes
a valid
and binding agreement or instrument of such Credit Party, enforceable
against
such Credit Party in accordance with its respective terms, except as
the
enforceability thereof may be limited by bankruptcy, insolvency or
other similar
laws relating to the enforcement of creditors' rights generally and
by general
equitable principles.
-30-
Section
3.4 Capitalization.
(a) The
authorized equity securities of each of the Borrowers as of the Closing
Date is
as set forth on Schedule 3.4(a) and
as of
the Transfer Date as set forth on Schedule 3.4(b).
All
issued and outstanding equity securities of each of the Borrowers are
duly
authorized and validly issued, fully paid, nonassessable, free and
clear of all
Liens other than those in favor of Administrative Agent for the benefit
of
Administrative Agent and Lenders, and such equity securities were issued
in
compliance with all applicable Laws. The identity of the holders of
the equity
securities of each of the Borrowers and the percentage of their fully-diluted
ownership of the equity securities of each of the Borrowers as of the
Closing
Date is set forth on Schedule 3.4(a) and
as of
the Transfer Date as set forth on Schedule 3.4(b).
No
shares of the capital stock or other equity securities of any Borrower,
other
than those described above, are issued and outstanding as of the Closing
Date.
Except as set forth on Schedule 3.4(a) and
as of
the Transfer Date as set forth on Schedule 3.4(b),
as of
the Closing Date there are no preemptive or other outstanding rights,
options,
warrants, conversion rights or similar agreements or understandings
for the
purchase or acquisition from any Borrower of any equity securities
of any such
entity nor will there be any after the Transfer Date.
(b) Lenders
acknowledge and agree that without further consent from Administrative
Agent the
one hundred percent (100%) ownership interest of PIM Warehouse, Inc., a
Delaware corporation, in PIM Senior Portfolio, LLC, a Delaware limited
liability
company (which LLC is the indirect eighty percent (80%) owner of the
Borrowers) may be transferred to senior Housing Partners III, L.P., a
Delaware limited partnership ("SHP
III") (the
"Permitted
SHP III Transfer"),
within
thirty (30) days of the date hereof (the date of such transfer being
referred to as the "Transfer
Date"),
provided the sole general partner of SHP III is an Affiliate of The
Prudential
Insurance Company of America, provided that following such transfer
the
organizational structure of Borrowers and said entities shall be as
shown on
Schedule
3.4(b).
Section
3.5 Financial
Information.
(a) The
consolidated and consolidating balance sheet of the Borrowers as of
September
30, 2005 and the related consolidated and consolidating statements
of
operations, stockholders' equity (or comparable calculation, if such
Person is
not a corporation) and cash flows for the fiscal year then ended, reported
on by Epoch Senior Living, copies of which have been delivered to Administrative
Agent, fairly present, in conformity with GAAP, the consolidated and
consolidating financial position of Borrowers as of such date and their
consolidated and consolidating results of operations, changes in stockholders'
equity (or comparable calculation) and cash flows for such
period.
(b) The
unaudited consolidated and consolidating balance sheet of the Borrowers
as of
September 30, 2005 and the related unaudited consolidated and
consolidating statements of operations and cash flows for the nine
(9) months then ended, copies of which have been delivered to
Administrative Agent, fairly present, in conformity with GAAP applied
on a basis
consistent with the financial statements referred to in Section 3.5(a),
the
consolidated and consolidating financial position of the Borrowers
as of such
date and their consolidated and consolidating results of operations
and cash
flows for the nine (9) months then ended (subject to normal year-end
adjustments and the absence of footnote disclosures).
-31-
(c) The
pro
forma balance sheet of Borrowers as of September 30, 2005, copies of
which have been delivered to Administrative Agent, fairly presents,
in
conformity with GAAP applied on a basis consistent with the financial
statements
referred to in Section 3.5(a),
the
consolidated and consolidating financial position of Borrowers as of
such date,
adjusted to give effect (as if such events had occurred on such date) to
(i) the transactions contemplated by the Financing Documents, (ii) the
making of the initial Loans, (iii) the application of the proceeds
therefrom as contemplated by the Financing Documents, and (iv) the payment
of all legal, accounting and other fees related thereto to the extent
known at
the time of the preparation of such balance sheet. As of the date of
such
balance sheet and the date hereof, no Credit Party had or has any material
liabilities, contingent or otherwise, including liabilities for taxes,
long-term
leases or forward or long-term commitments, which are not properly
reflected on
such balance sheet.
(d) Since
September 1, 2005, there has been no material adverse change in the
business,
operations, properties or condition (financial or otherwise) of Borrowers,
taken as a whole. Since September 1, 2005, there has been no material
adverse
change in the business, operations, properties or condition (financial
or
otherwise) of any business, assets or entities being purchased by Borrowers
pursuant to the Financing Documents.
Section
3.6 Litigation.
Except
as
set forth on Schedule 3.6
as of the
Closing Date, and except as hereafter disclosed to Administrative Agent
in
writing, (a) there is no Litigation pending against, or to such Borrower's
knowledge threatened against or affecting, any Borrower or any Project
and
(b) there is no material Litigation pending, or, to such Borrower's
knowledge, threatened against Guarantor. There is no Litigation pending
in which
an adverse decision could reasonably be expected to have a Material
Adverse
Effect or which in any manner draws into question the validity of any
of the
Financing Documents.
Section
3.7 Ownership
of Property Generally.
Each
Borrower is the lawful owner of, has good and marketable title to and
is in
lawful possession of, or has valid leasehold interests in, all properties
and
other assets (real or personal, tangible, intangible or mixed) purported or
reported to be owned or leased (as the case may be) by such Person, subject
to Permitted Liens.
Section
3.8 No
Default.
No
Default
or Event of Default has occurred and is continuing. No Credit Party
is in breach
or default under or with respect to any contract, agreement, lease
or other
instrument to which it is a party or by which its property is bound
or affected,
which breach or default could reasonably be expected to have a Material
Adverse
Effect.
-32-
Section
3.9 Labor
Matters.
As
of the
Closing Date, there are no strikes or other labor disputes pending
or, to such
Borrower's knowledge, threatened against any Borrower. Hours worked
and payments
made to the employees of the Borrowers have not been in violation of
the Fair
Labor Standards Act or any other applicable Law dealing with such matters.
All
payments due from the Borrower, or for which any claim may be made
against any
of them, on account of wages and employee and retiree health and welfare
insurance and other benefits have been paid or accrued as a liability
on their
books, as the case may be. The consummation of the transactions contemplated
by
the Financing Documents will not give rise to a right of termination
or right of
renegotiation on the part of any union under any collective bargaining
agreement
to which it is a party or by which it is bound.
Section
3.10 Regulated
Entities.
Section
3.11 Margin
Regulations.
None
of
the proceeds from the Loans have been or will be used, directly or
indirectly,
for the purpose of purchasing or carrying any "margin stock" (as defined
in
Regulation U of the Federal Reserve Board), for the purpose of reducing
or
retiring any indebtedness which was originally incurred to purchase
or carry any
"margin stock" or for any other purpose which might cause any of the
Loans to be
considered a "purpose credit" within the meaning of Regulation T, U
or X of the
Federal Reserve Board.
Section
3.12 Compliance
With Laws; Anti-Terrorism Laws.
(a) Each
Credit Party is in compliance with the requirements of all applicable
Laws,
except for such Laws the noncompliance with which could not reasonably
be
expected to have a Material Adverse Effect.
-33-
(b) None
of
the Credit Parties, or any of the entities shown in Schedule 3.4(a) or
Schedule 3.4(b),
as
applicable, or any of their respective agents acting or benefiting
in any
capacity in connection with the transactions contemplated by this Agreement
is
(i) in violation of any Anti-Terrorism Law, (ii) engages in or
conspires to engage in any transaction that evades or avoids, or has
the purpose
of evading or avoiding, or attempts to violate, any of the prohibitions
set
forth in any Anti-Terrorism Law, or (iii) is a Blocked Person. No Credit
Party nor, to the knowledge of any Credit Party, any of its Affiliates
or agents
acting or benefiting in any capacity in connection with the transactions
contemplated by this Agreement, (x) conducts any business or engages in
making or receiving any contribution of funds, goods or services to
or for the
benefit of any Blocked Person, or (y) deals in, or otherwise engages in any
transaction relating to, any property or interest in property blocked
pursuant
to Executive Order No. 13224, any similar executive order or other
Anti-Terrorism Law.
Section
3.13 Taxes.
All
Federal, state and local tax returns, reports and statements required
to be
filed by or on behalf of each Borrower have been filed with the appropriate
Governmental Authorities in all jurisdictions in which such returns,
reports and
statements are required to be filed and, except to the extent subject
to a
Permitted Contest, all Taxes (including real property Taxes) and other
charges shown to be due and payable in respect thereof have been timely
paid
prior to the date on which any fine, penalty, interest, late charge
or loss may
be added thereto for nonpayment thereof. Except to the extent subject
to a
Permitted Contest, all state and local sales and use Taxes required
to be paid
by each Borrower have been paid. All Federal and state returns have
been filed
by each Borrower for all periods for which returns were due with respect
to
employee income tax withholding, social security and unemployment taxes,
and,
except to the extent subject to a Permitted Contest, the amounts shown
thereon
to be due and payable have been paid in full or adequate provisions
therefor
have been made.
Section
3.14 Compliance
with ERISA.
(a) Each
ERISA
Plan (and the related trusts and funding agreements) complies in form and
in operation with, has been administered in compliance with, and the
terms of
each ERISA Plan satisfy, the applicable requirements of ERISA and the
Code in
all material respects. Each ERISA Plan which is intended to be qualified
under
Section 401(a) of the Code is so qualified, and the United States Internal
Revenue Service has issued a favorable determination letter with respect
to each
such ERISA Plan which may be relied on currently. No Borrower has incurred
liability for any material excise tax under any of Sections 4971 through
5000 of
the Code.
(b) During
the
thirty-six (36) month period prior to the Closing Date or the making of any
Loan, (i) no steps have been taken to terminate any Pension Plan, and
(ii) no contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA. No
condition exists or event or transaction has occurred with respect
to any
Pension Plan which could result in the incurrence by any Borrower of
any
material liability, fine or penalty. No Borrower has incurred liability
to the
PBGC (other than for current premiums) with respect to any employee Pension
Plan. All contributions (if any) have been made on a timely basis to any
Multiemployer Plan that are required to be made by any Borrower or
any other
member of the Controlled Group under the terms of the plan or of any
collective
bargaining agreement or by applicable Law; no Borrower nor any member
of the
Controlled Group has withdrawn or partially withdrawn from any Multiemployer
Plan, incurred any withdrawal liability with respect to any such plan
or
received notice of any claim or demand for withdrawal liability or
partial
withdrawal liability from any such plan, and no condition has occurred
which, if
continued, could result in a withdrawal or partial withdrawal from
any such
plan, and no Borrower nor any member of the Controlled Group has received
any
notice that any Multiemployer Plan is in reorganization, that increased
contributions may be required to avoid a reduction in plan benefits
or the
imposition of any excise tax, that any such plan is or has been funded
at a rate
less than that required under Section 412 of the Code, that any such plan
is or may be terminated, or that any such plan is or may become
insolvent
-34-
Section
3.15 Consummation
of Financing Documents; Brokers.
Except
for
fees payable to Administrative Agent and/or Lenders, no broker, finder
or other
intermediary has brought about the obtaining, making or closing of
the
transactions contemplated by the Financing Documents, and no Borrower
has or
will have any obligation to any Person in respect of any finder's or
brokerage
fees, commissions or other expenses in connection herewith or therewith.
All
brokerage and finder's fees, commissions and other expenses payable
in
connection with the transactions contemplated by the Financing Documents
have
been paid in full by Borrowers contemporaneously with the execution
of the
Financing Documents and the initial funding of the Loans. No broker,
finder or
other intermediary has brought about the obtaining, making or closing
of the
transactions contemplated by the Financing Documents, and no Borrower
has or
will have any obligation to any Person in respect of any finder's or
brokerage
fee in connection herewith or therewith.
Section
3.16 Related
Transactions.
All
transactions contemplated by the Financing Documents to be consummated
on or
prior to the date hereof have been so consummated (including without
limitation
the disbursement and transfer of all funds in connection therewith) in all
material respects pursuant to the provisions of the applicable Financing
Documents, true and complete copies of which have been delivered to
Administrative Agent, and in compliance with all applicable Law, except
for such
Laws the noncompliance with which would not reasonably be expected
to have a
Material Adverse Effect.
Section
3.17 Material
Contracts.
Except
for
the Financing Documents and the other agreements set forth on Schedule
3.17
(collectively with the Financing Documents, the "Material
Contracts"),
as of
the Closing Date there are no (a) employment agreements covering the
management of any Borrower, (b) collective bargaining agreements or other
labor agreements covering any employees of any Borrower, (c) agreements for
managerial, consulting or similar services to which any Borrower is
a party or
by which it is bound, (d) agreements regarding any Borrower, its assets or
operations or any investment therein to which any of its equityholders
is a
party or by which it is bound, (e) real estate leases, intellectual
property licenses or other lease or license agreements to which any
Borrower is
a party, either as lessor or lessee, or as licensor or licensee, or
(f) customer, distribution, marketing or supply agreements to which any
Borrower is a party, in each case with respect to the preceding clauses
(a),
(c), (d), (e), and (f) requiring payment of more than $100,000 in any year,
(g) partnership agreements to which any Borrower is a general partner or
joint venture agreements to which any Borrower is a party, (h) third party
billing arrangements to which any Borrower is a party, or (i) any other
agreements or instruments to which any Borrower is a party, and the
breach,
nonperformance or cancellation of which, or the failure of which to
renew, could
reasonably be expected to have a Material Adverse Effect. Schedule
3.17
sets
forth, with respect to each real estate lease agreement to which any
Borrower is
a party (as a lessee) and which is a Material Contract as of the Closing
Date, the address of the subject property and the annual rental (or,
where
applicable, a general description of the method of computing the annual
rental).
The consummation of the transactions contemplated by the Financing
Documents and
the other Financing Documents will not give rise to a right of termination
in
favor of any party to any Material Contract (other than any Borrower),
except
for such Material Contracts the noncompliance with which would not
reasonably be
expected to have a Material Adverse Effect.
-35-
Except
in
each case as set forth on Schedule
3.18:
(a) no
Hazardous Materials are located on any of the Projects except those
that are
both (i) in compliance with Environmental Laws and with permits issued
pursuant thereto (if such permits are required), if any, and (ii) either
(A) in amounts not in excess of that necessary to operate the applicable
Project for the purposes set forth herein or in amounts used in the
ordinary
course of business, or (B) fully disclosed to and approved by
Administrative Agent; to Borrower's knowledge, Hazardous Materials
have not been
Released or threatened to be Released into the environment, at, on,
under or
near any of the Projects in a manner that would require the taking
of any action
under any Environmental Law and that have given rise to, or could reasonably
be
expected to give rise to, remediation costs and expenses on the part
of any
Borrower in excess of $250,000; and no portion of any Project is being
used, or
has been used at any previous time, for the disposal, storage, treatment,
processing or other handling of Hazardous Materials in violation of
any
Environmental Law in any material respect nor, to Borrower's knowledge,
is any
such property affected by any Hazardous Materials Contamination;
(b) no
Borrower knows of, nor has received, any written notice from any Person
relating
to Hazardous Materials in, on, under or from any Project and no notice,
notification, demand, request for information, citation, summons, complaint
or
order has been issued, no complaint has been filed, no penalty has
been assessed
and no investigation or review is pending, or to each Borrower's knowledge,
threatened by any Governmental Authority or other Person with respect
to any
(i) alleged violation by any Borrower of any Environmental Law,
(ii) alleged failure by any Borrower to have any Permits required in
connection with the conduct of its business or to comply with the terms
and
conditions thereof, (iii) any generation, treatment, storage, recycling,
transportation or disposal of any Hazardous Materials, or (iv) Release of
Hazardous Materials;
(c) to
the
best knowledge of each Borrower, all oral or written notifications
of a Release
of Hazardous Materials required to be filed by or on behalf of any
Borrower
under any applicable Environmental Law have been filed or are in the
process of
being timely filed by or on behalf of the applicable Borrower;
-36-
(d) to
each
Credit Party's best knowledge, no property now owned by any Borrower
and no such
property previously owned by any Borrower, to which any Borrower has,
directly
or indirectly, transported or arranged for the transportation of any
Hazardous
Materials, is listed or proposed for listing, on the National Priorities
List
promulgated pursuant to CERCLA, or CERCLIS (as defined in CERCLA) or any
similar state list or is the subject of Federal, state or local enforcement
actions or, to the knowledge of such Borrower, other investigations
which may
lead to claims against any Credit Party for clean-up costs, remedial
work,
damage to natural resources or personal injury claims, including, without
limitation, claims under CERCLA;
(e) to
each
Credit Party's best knowledge, after reasonable investigation, there
are no
underground storage tanks located on any property owned or to be owned
or leased
by any Borrower that are not properly registered or permitted under
applicable
Environmental Laws or that are leaking or disposing of Hazardous
Materials;
(f) to
each
Credit Party's best knowledge, after reasonable investigation, there
are no
Liens under or pursuant to any applicable Environmental Laws on any
real
property or other assets owned or leased by any Borrower, and no actions
by any
Governmental Authority have been taken or, to the knowledge of such
Borrower,
are in process which could subject any of such properties or assets
to such
Liens;
and
(g) to
each
Borrower's best knowledge, after reasonable investigation, each Borrower
has
truthfully and fully provided to Administrative Agent, in writing,
any and all
information relating to environmental conditions in, on, under or from
the
Projects, known to each Borrower or contained in each Borrower's files
and
records, including but not limited to any reports relating to Hazardous
Materials in, on, under or migrating to or from the Projects and/or
to the
environmental condition of the Projects.
Section
3.19 Intellectual
Property.
Each
Borrower owns, is licensed to use or otherwise has the right to use,
all
intellectual property that is material to the condition (financial
or other),
business or operations of such Borrower. To such Borrower's knowledge,
each
Borrower conducts its business without infringement or claim of infringement
of
any intellectual property rights of others and there is no infringement
or claim
of infringement by others of any intellectual property rights of any
Borrower,
which infringement or claim of infringement could reasonably be expected
to have
a Material Adverse Effect.
Section
3.20 Solvency.
Each
Borrower and Guarantor are each Solvent.
-37-
Section
3.21 Full
Disclosure.
None
of
the information (financial or otherwise) furnished by or on behalf of any
Credit Party to Administrative Agent or any Lender in connection with
the
consummation of the transactions contemplated by the Financing Documents,
contains (with respect to information provided by third parties on
behalf of any
Credit Party, to the best knowledge of the Credit Parties) any untrue
statement of a material fact or omits to state a material fact necessary
to make
the statements contained herein or therein not misleading in light
of the
circumstances under which such statements were made. All financial
projections
delivered to Administrative Agent and the Lenders have been prepared
on the
basis of the assumptions stated therein. Such projections represent
each
Borrower's best estimate of such Borrower's future financial performance
and
such assumptions are believed by such Borrower to be fair and reasonable
in
light of current business conditions; provided,
however, that
Borrowers can give no assurance that such projections will be
attained.
Section
3.22 Interest
Rate.
The
rate
of interest paid under the Notes and the method and manner of the calculation
thereof do not violate any usury or other law or applicable Laws, any
of the
Organizational Documents or any of the Financing Documents.
As
of the
Closing Date, each of the representations and warranties made in the
Financing
Documents by each of the parties thereto is true and correct in all
material
respects, and such representations and warranties are hereby incorporated
herein
by reference with the same effect as though set forth in their entirety
herein,
as qualified therein, except to the extent that such representation
or warranty
relates to a specific date, in which case such representation and warranty
shall
be true as of such earlier date.
Section
3.24 Subsidiaries.
There
are no Subsidiaries of Borrowers.
ARTICLE
4
Each
Borrower agrees that, so long as any Credit Exposure exists:
Section
4.1 Financial
Statements and Other Reports.
(a) Each
Borrower will maintain a system of accounting established and administered
in
accordance with sound business practices to permit preparation of financial
statements in accordance with GAAP and to provide the information required
to be
delivered to Administrative Agent and the Lenders hereunder.
(b) Each
Borrower will furnish to Administrative Agent (or cause to be furnished
to
Administrative Agent) the following financial information and reports with
respect to each Borrower and each Licensed Operator, in each case in
form and
format and providing information satisfactory to Administrative Agent
in its
discretion:
-38-
(i) for
the
Licensed Operator only, a sales and collections report and accounts
receivable
and payable aging schedule on a form reasonably acceptable to Lender
within
twenty-five (25) days after the end of each calendar month, which shall
include, without limitation, a report of sales, credits issued, and
collections
received;
(ii) within
twenty-five (25) days of the end of each calendar month, internally
prepared monthly financial statements prepared for Borrowers on a consolidated
and consolidating basis in accordance with GAAP (including income statements
and
balance sheets for each Licensed Location and a consolidated operating
cash flow
statement, accompanied by management analysis and actual vs. budget
variance
reports for
each
Licensed Location;
(iii) within
twenty-five (25) days of the end of each calendar quarter, each of the
statements and information described in the preceding section;
(iv) within
twenty-five (25) days of the end of each calendar month, (A) a current
rent roll/census report (including, with respect to the census report
for a
Licensed Location, a monthly schedule of delinquency receipts and payments
and a
schedule showing payor mix in respect of Third Party Payor Programs),
and
(B) a summary of all leasing/admissions activity then taking place with
respect to each Licensed Location;
(v) within
twenty-five (25) days after the end of each measurement period applicable
to any financial covenant hereunder, such financial reports and information
as
Administrative Agent shall require evidencing compliance with the applicable
financial covenants, which reports and information shall include, at
a minimum,
delivery to Administrative Agent of a Compliance Certificate, and,
if requested
by Administrative Agent, back-up documentation (including, without
limitation,
invoices, receipts and other evidence of costs incurred during such
quarter as
Administrative Agent shall reasonably require) evidencing the propriety of
the deductions from revenues in determining such compliance;
(vi) annual
projected profit and loss statements (prepared on a monthly basis) for the
succeeding fiscal year within forty-five (45) days before the end of each
fiscal year;
(vii) internally
prepared annual financial statements prepared for Borrowers on a consolidated
and consolidating basis in accordance with GAAP within sixty (60) days
after the end of each fiscal year;
(viii) annual
consolidated and consolidating audited financial statements prepared
for
Borrowers in accordance with GAAP and prepared by a firm of independent
public
accountants reasonably satisfactory to Administrative Agent, within
one hundred
twenty (120) days after the end of each fiscal year;
-39-
(ix) promptly
upon receipt thereof, copies of any reports by the independent accountants
in
connection with any interim audit and copies of each management control
letter
provided by independent accountants;
(x) for
each
Borrower, as requested by Administrative Agent, evidence satisfactory
to
Administrative Agent that all federal and state taxes, including, without
limitation payroll taxes, that are due have been paid in full;
(xi) for
Licensed Operator only, as requested, copies of all cost reports filed
with
Medicare or Medicaid or any other Third Party Payor;
(xii) within
ten
(10) days after Administrative Agent request, a written statement, duly
acknowledged by Borrowers, setting forth any right of set-off, claims,
counterclaims, withholdings or other defenses to which any of the Collateral
or
Administrative Agent's rights with respect to the Collateral are subject
or that
exist against such sums and Borrowers' obligations under the Financing
Documents;
(xiii) within
ten
(10) days after Administrative Agent request, a written statement, duly
acknowledged by Licensed Operator, setting forth any right of set-off,
counterclaim or other defense that exists against such sums and Licensed
Operator's obligations under any Leases; and
(xiv) such
additional information, reports or statements regarding the Borrowers,
the
Licensed Locations or Licensed Operator as Administrative Agent may
from time to
time reasonably request.
All
financial statements shall include a balance sheet and statement of
earnings and
shall be prepared in accordance with GAAP.
(c) From
time
to time, if Administrative Agent determines that obtaining appraisals
is
necessary in order for a Lender to comply with applicable Laws, each
Borrower
shall furnish to Administrative Agent appraisal reports in form and
substance
and from appraisers reasonably satisfactory to Administrative Agent
stating the
then current fair market values of all or any portion of the real estate
owned
by each Borrower. In addition to the foregoing, from time to time,
but in the
absence of a Default or Event of Default not more than once during
each calendar
year, Administrative Agent may require Borrowers to obtain and deliver
to
Administrative Agent appraisal reports in form and substance and from
appraisers
reasonably satisfactory to Administrative Agent stating the then current
fair
market values of all or any portion of the real estate and personal
property
owned by each Borrower.
-40-
Section
4.2 Payment
and Performance of Obligations.
Each
Borrower (a) will pay and discharge, at or before maturity, all of their
respective obligations and liabilities, including tax liabilities,
except for
such obligations and/or liabilities (i) that may be the subject of a
Permitted Contest, or (ii) the nonpayment or nondischarge of which could
not reasonably be expected to have a Material Adverse Effect or result
in a Lien
against any Collateral, except for Permitted Liens, (b) will maintain, in
accordance with GAAP, appropriate reserves for the accrual of all of
their
respective obligations and liabilities, (c) will not breach, or permit to
exist any default under, the terms of any commitment, contract, instrument
or
obligation (other than Leases) to which it is a party, or by which its
properties or assets are bound, except for such breaches or defaults
which could
not reasonably be expected to have a Material Adverse Effect, and (d) will
not breach, or permit to exist any default under, the terms of any
Material
Lease to which it is a party as a lessor.
(a) Each
Borrower will preserve, renew and keep in full force and effect their
respective
existence and their respective rights, privileges and franchises necessary
or
desirable in the normal conduct of business.
(b) Each
Borrower will preserve, renew and keep in full force and effect their
respective
existence and their respective rights, privileges and franchises necessary
or
desirable to, at all times, comply with all single purpose entity requirements
set forth on Exhibit
B.
If any
of the Term Loans are placed in a securitization, then Borrowers shall
promptly
upon notice from Administrative Agent, amend their respective Organizational
Documents to incorporate the single purpose entity requirements set
forth on
Exhibit
B,
at
Borrowers' sole cost and expense.
(c) Each
Borrower shall at all times be a wholly-owned direct or indirect subsidiary
of
either ARC or a Prudential Entity or a joint venture between ARC or
a
wholly-owned subsidiary of ARC and a Prudential Entity or a wholly-owned
subsidiary of a Prudential Entity, and ARC or a Prudential Entity or
such joint
venture shall control selection of the officers and manager(s), if
any, or
general partners, as applicable, of Borrowers. "Prudential Entity"
means either
PIM Warehouse, Inc., a Delaware corporation, an Affiliate of The Prudential
Insurance Company of America ("Prudential"), or Senior Housing Partners
III,
L.P., a Delaware limited partnership, whose sole general partner is
an Affiliate
of Prudential.
Section
4.4 Maintenance
of Property; Payment of Taxes; Insurance.
(a) Each
Borrower will keep all property useful and necessary in its business
in good
working order and condition, ordinary wear and tear excepted. If all
or any part
of the Collateral becomes damaged or destroyed, each Borrower will
promptly and
completely repair and/or restore the affected Collateral in a good
and
workmanlike manner, provided that such Borrower shall only be obligated
to
repair or restore the affected Collateral if Administrative Agent agrees
to
disburse insurance proceeds or other sums to pay costs of the work
of repair or
reconstruction. Borrowers will not commit or allow waste or permit
impairment or
deterioration of the Collateral or abandon all or any part of the Collateral.
Borrowers will perform such acts to preserve the value of Collateral.
Each
Borrower will (i) preserve its or their interest in and title to the
Collateral and will forever warrant and defend the same to Administrative
Agent
and Lenders against any and all claims made by, through or under Borrowers,
and
(ii) except in respect of Permitted Liens, forever warrant and defend the
validity and priority of the lien and security interest created in
the Security
Documents against the claims of all Persons whomsoever claiming by,
through or
under Borrowers. The foregoing warranty of title shall survive the
foreclosure
of the Security Documents and shall inure to the benefit of and be
enforceable
by Administrative Agent in the event Administrative Agent acquires
title to any
Collateral pursuant to any foreclosure.
-41-
(b) Borrowers
will pay or cause to be paid all Taxes prior to the date upon which
any fine,
penalty, interest or cost for nonpayment is imposed, and furnish to
Administrative Agent, upon request, receipted bills of the appropriate
taxing
authority or other documentation reasonably satisfactory to Administrative
Agent
evidencing the payment thereof. If Borrowers shall fail to pay any
Taxes in
accordance with this Section and is not contesting or causing a contesting
of
such Taxes pursuant to a Permitted Contest, or if there are insufficient
funds
in the applicable reserves or escrows under Article 2 to pay any such
Taxes,
Administrative Agent shall have the right, but shall not be obligated,
to (for
the account of all Lenders) pay such Taxes, and Borrowers shall repay to
Administrative Agent, on written demand, any amount paid by Administrative
Agent, with interest thereon from the date of the advance thereof to
the date of
repayment, at the rate applicable during periods of Default hereunder,
and such
amount shall constitute a portion of the Obligations. Borrowers shall
not pay
any Taxes or other obligations in installments unless permitted by
applicable
Laws, and shall, upon the request of Administrative Agent, deliver
copies of all
notices and bills relating to any Taxes or other charge covered by
this Section
to Administrative Agent.
(c) Upon
completion of any Permitted Contest, Borrowers shall promptly pay the
amount
due, if any, and deliver to Administrative Agent proof of the completion
of the
contest and payment of the amount due, if any, following which Administrative
Agent Lender shall return the security, if any, deposited with Lender
pursuant
to the definition of Permitted Contest.
(d) Each
Borrower will maintain (i) casualty insurance on all real and personal
property on an all risks basis (including the perils of flood and quake),
covering the repair and replacement cost of all such property and coverage
for
business interruption and rent loss and professional liability and
public
liability insurance (including products/completed operations liability
coverage) in the amounts and on such terms as attached hereto as
Schedule
4.4,
and
(ii) such other insurance coverage in such amounts and with respect to such
risks as Administrative Agent may reasonably request. All such insurance
shall
be provided by insurers having an A.M. Best policyholders rating reasonably
acceptable to Administrative Agent. Borrowers will not bring or keep
any article
on any business location of any Credit Party, or cause or allow any
condition to
exist, if the presence of such article or the occurrence of such condition
could
reasonably cause the invalidation of any insurance required by this
Section
4.4(d),
or would
otherwise be prohibited by the terms thereof.
-42-
(e) On
or
prior to the Closing Date, and at all times thereafter, each Borrower
will cause
Administrative Agent to be named as an additional insured, assignee
and loss
payee (which shall include, as applicable, identification as mortgagee),
as
applicable, on each insurance policy required to be maintained pursuant
to this
Section
4.4
pursuant
to endorsements in form and content acceptable to Administrative
Agent.
Borrowers will deliver to Administrative Agent and the Lenders (i) on the
Closing Date, a certificate from Borrowers' insurance broker dated
such date
showing the amount of coverage as of such date, and that such policies
will
include effective waivers (whether under the terms of any such policy
or
otherwise) by the insurer of all claims for insurance premiums against all
loss payees and additional insureds and all rights of subrogation against
all
loss payees and additional insureds, and that if all or any part of
such policy
is canceled, terminated or expires, the insurer will forthwith give
notice
thereof to each additional insured, assignee and loss payee and that
no
cancellation, reduction in amount or material change in coverage thereof
shall
be effective until at least thirty (30) days after receipt by each
additional insured, assignee and loss payee of written notice thereof,
(ii) upon the request of any Lender through Administrative Agent from time
to time full information as to the insurance carried, (iii) within five
(5) days of receipt of notice from any insurer, a copy of any notice of
cancellation, nonrenewal or material change in coverage from that existing
on
the date of this Agreement, and (iv) forthwith, notice of any cancellation
or nonrenewal of coverage by any Borrower.
(f) In
the
event any Borrower fails to provide Administrative Agent with evidence
of the
insurance coverage required by this Agreement, Administrative Agent
may purchase
insurance at Borrowers' expense to protect Administrative Agent's interests
in
the Collateral. This insurance may, but need not, protect any Borrower's
interests. The coverage purchased by Administrative Agent may not pay
any claim
made by any Borrower or any claim that is made against any Borrower
in
connection with the Collateral. The applicable Borrower may later cancel
any
insurance purchased by Administrative Agent, but only after providing
Administrative Agent with evidence that such Borrower has obtained
insurance as
required by this Agreement. If Administrative Agent purchases insurance
for the
Collateral, to the fullest extent provided by law Borrowers will be
responsible
for the costs of that insurance, including interest and other charges
imposed by
Administrative Agent in connection with the placement of the insurance,
until
the effective date of the cancellation or expiration of the insurance.
The costs
of the insurance may be added to the Obligations. The costs of the
insurance may
be more than the cost of insurance each Borrower is able to obtain
on its
own.
(g) Borrowers
shall not carry separate insurance concurrent in form or contributing
in the
event of loss with that required to be maintained under this
Section.
-43-
Section
4.5 Compliance
with Laws.
Each
Borrower will comply with the requirements of all applicable Laws,
except to the
extent that failure to so comply could not reasonably be expected to
(a) have a Material Adverse Effect, or (b) result in any Lien upon
either (i) a material portion of the assets of any such Person in favor of
any Governmental Authority, or (ii) any portion of the
Collateral.
Section
4.6 Inspection
of Property, Books and Records.
Each
Borrower will keep proper books of record and account in accordance
with GAAP in
which full, true and correct entries shall be made of all dealings
and
transactions in relation to its business and activities; and will permit
at the
sole cost of the applicable Borrower, representatives of Administrative
Agent
and of any Lender (but at such Lender's expense unless such visit or
inspection
is made concurrently with Administrative Agent) to visit and inspect any of
their respective properties, to examine and make abstracts or copies
from any of
their respective books and records, to conduct a collateral audit and
analysis
of their respective operations and the Collateral and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants as often as may reasonably
be
desired. In the absence of an Event of Default, Administrative Agent
or any
Lender exercising any rights pursuant to this Section
4.6
shall
give the applicable Borrower commercially reasonable prior notice of
such
exercise, and shall not require Borrower to reimburse the costs and
expenses
incurred in connection with such visit or inspection for more than
one
(1) visit per year. No notice shall be required during the existence and
continuance of any Event of Default.
Section
4.7 Use
of
Proceeds.
Borrowers
will use the proceeds of the Term Loans solely for payment of amounts
due in
respect of an acquisition of equity interests or assets contemplated
by the
Financing Documents, transaction fees incurred in connection with the
Financing
Documents and the refinancing on the Closing Date of Debt. No portion
of the
proceeds of the Loans will be used for family, personal, agricultural
or
household use.
Section
4.8 [Reserved]
Section
4.9 [Reserved]
Section
4.10 Environmental
Covenants.
(a) Each
Borrower covenants and agrees that so long as such Borrower owns, manages,
is in
possession of, or otherwise controls the operation of the Projects:
(i) all
uses and operations on or of the Projects, whether by such Borrower
or any other
Person, shall be in compliance with all Environmental Laws and permits
issued
pursuant thereto in all material respects; (ii) there shall be no material
Releases of Hazardous Materials in, on, under or from the Projects;
(iii) there shall be no Hazardous Materials in, on, or under the Projects,
except those that are both (A) in compliance with all Environmental Laws in
all material respects and with permits issued pursuant thereto, if
and to the
extent required, and (B) (I) in amounts not in excess of that
necessary to operate the Projects for the purposes set forth herein
or
(II) fully disclosed to and approved by Administrative Agent in writing;
(iv) each Borrower shall keep the Projects free and clear of all
Environmental Liens; (v) each Borrower shall, at its sole cost and expense,
fully and expeditiously cooperate in all activities pursuant to Subsection
4.10(c) below,
including but not limited to providing all relevant information and
making
knowledgeable persons available for interviews; (vi) each Borrower shall,
at its sole cost and expense, perform any environmental site assessment
or other
investigation of environmental conditions in connection with the Projects,
pursuant to any reasonable written request of Administrative Agent,
upon
Administrative Agent's reasonable belief that any Project is not in
compliance
with all Environmental Laws in all material respects, and share with
Administrative Agent the reports and other results thereof, and Administrative
Agent and Lenders shall be entitled to rely on such reports and other
results
thereof; (vii) each Borrower shall, at its sole cost and expense, comply
with all reasonable written requests of Administrative Agent to
(A) reasonably effectuate remediation of any Hazardous Materials in, on,
under or from the Projects as required by Environmental Laws; and
(B) comply in all material respects with any Environmental Law;
(viii) Borrower shall not allow any Operating Lessee or other user of the
Projects to violate any Environmental Law; and (ix) each Borrower shall
immediately notify Administrative Agent in writing after it has become
aware of
(A) any material Release or threatened Release of Hazardous Materials in,
on, under, from or migrating towards the Projects; (B) any non-compliance
with any Environmental Laws related in any way to the Projects in any
material
respects; (C) any actual or potential Environmental Lien against the
Projects; (D) any required or proposed remediation of environmental
conditions relating to the Projects; and (E) any written or other
communication of which any Borrower becomes aware from any source whatsoever
(including but not limited to a Governmental Authority) effecting or
relating in any way to Hazardous Materials and the Borrowers or any
Project.
-44-
(b) Administrative
Agent and any other Person designated by Administrative Agent, including
but not
limited to any representative of a Governmental Authority, and any
environmental
consultant, and any receiver appointed by any court of competent jurisdiction,
shall have the right, but not the obligation, to enter upon the Projects
at all
reasonable times to assess any and all aspects of the environmental
condition of
the Projects and its use, including but not limited to conducting any
environmental assessment or audit (the scope of which shall be determined
in
Administrative Agent's sole discretion) and taking samples of soil,
groundwater or other water, air, or building materials, and conducting
other
invasive testing, provided, however, that so long as no Default has
occurred and
is continuing, Borrower shall have the right to approve any sampling
or other
invasive testing, such approval not to be unreasonably withheld. Each
Borrower
shall cooperate with and provide access to Administrative Agent and
any such
person or entity designated by Administrative Agent.
(c) Each
Borrower shall establish and comply with that any operations and maintenance
program if recommended by Administrative Agent's environmental consultant
with
respect to the Projects, in form and substance reasonably acceptable
to
Administrative Agent, and prepared by an environmental consultant reasonably
acceptable to Administrative Agent, which program may address any
asbestos-containing material or lead based paint that may now or in
the future
be detected at or on the Projects. Without limiting the generality
of the
preceding sentence, Administrative Agent may require to the extent
reasonable
under the circumstances (i) periodic notices or reports to Administrative
Agent in form, substance and at such intervals as Administrative Agent
may
specify, (ii) an amendment to such operations and maintenance program to
address changing circumstances, laws or other matters, (iii) at each
Borrower's sole expense, supplemental examination of the Projects by
consultants
specified by Administrative Agent, (iv) access to the Projects by
Administrative Agent, its agents or servicer, to review and assess
the
environmental condition of the Projects and each Borrower's compliance
with any
operations and maintenance program, and (v) variation of the operations and
maintenance program in response to the reports provided by any such
consultants.
-45-
(d) If
any
Release or disposal of Hazardous Materials shall occur or shall have
occurred on
any real property or any other assets of any Borrower, such Borrower
will cause
the prompt containment and removal of such Hazardous Materials and
the
remediation of such real property or other assets as is necessary to
comply in
all material respects with all Environmental Laws and to preserve the
value of
such real property or other assets. Without limiting the generality
of the
foregoing, each Borrower shall comply with each Environmental Law requiring
the
performance at any Project by any Borrower or any other Credit Party
of
activities in response to the Release or threatened Release of a Hazardous
Material.
(e) If
requested by Administrative Agent, Borrowers
will provide Administrative Agent within thirty (30) days after written
demand therefor with a bond, letter of credit or similar financial
assurance
evidencing to the reasonable satisfaction of Administrative Agent that
sufficient funds are available to pay the cost of removing, treating
and
disposing of any Hazardous Materials or Hazardous Materials Contamination
and
discharging any assessment which may be established on any property
as a result
thereof, such demand to be made, if at all, upon Administrative Agent's
reasonable business determination that the failure to remove, treat
or dispose
of any Hazardous Materials or Hazardous Materials Contamination, or
the failure
to discharge any such assessment, could reasonably be expected to have
a
Material Adverse Effect.
Section
4.11 Deferred
Maintenance.
Borrowers
shall complete all deferred maintenance items reflected on Schedule
4.11
within
twelve (12) months after the Closing Date.
Section
4.12 Further
Assurances.
(a) Each
Borrower will at its own cost and expense, cause to be promptly and
duly taken,
executed, acknowledged and delivered all such further acts, documents
and
assurances as may from time to time be necessary or as Administrative
Agent or
the Required Lenders may from time to time reasonably request in order
to carry
out the intent and purposes of the Financing Documents and the transactions
contemplated thereby, including all such actions to establish, create,
preserve,
protect and perfect a first priority Lien (subject only to Permitted
Liens) in favor of Administrative Agent for the benefit of the Lenders on
the Collateral (including Collateral acquired after the date hereof),
including
on any and all assets of each Credit Party, whether now owned or hereafter
acquired.
-46-
(b) Upon
receipt of an affidavit of an officer of Administrative Agent or a
Lender as to
the loss, theft, destruction or mutilation of any Note or any other
Financing
Document which is not of public record, and, in the case of any such
mutilation,
upon surrender and cancellation of such Note or other applicable Financing
Document, Borrowers will issue, in lieu thereof, a replacement Note
or other
applicable Financing Document, dated the date of such lost, stolen,
destroyed or
mutilated Note or other Financing Document in the same principal amount
thereof
and otherwise of like tenor.
Section
4.13 Litigation.
Borrowers
will give prompt written notice to Administrative Agent of any litigation
or
governmental proceedings pending or threatened (in writing) against
Borrowers or ARC which might have a Material Adverse Effect with respect
to
Borrowers, any other Credit Party or any Project.
Section
4.14 Intentionally
deleted.
Section
4.15 Power
of Attorney.
Each
of
the officers of Administrative Agent is hereby irrevocably made, constituted
and
appointed the true and lawful attorney for Borrowers (without requiring
any of
them to act as such) with full power of substitution to do the following,
all during the existence of an Event of Default: (a) endorse the name of
Borrowers upon any and all checks, drafts, money orders, and other
instruments
for the payment of money that are payable to Borrowers and constitute
collections on Borrowers' Accounts; (b) execute in the name of Borrowers
any financing statements, schedules, assignments, instruments, documents,
and
statements that Borrowers are obligated to give Administrative Agent
under this
Agreement; (c) after the occurrence of a Default take any action Borrowers
are required to take under this Agreement; and (d) do such other and
further acts and deeds in the name of Borrowers that Administrative
Agent
reasonably may deem necessary or desirable to enforce any Account or
other
Collateral or perfect Administrative Agent's security interest or Lien
in any
Collateral. This
power
of attorney shall be irrevocable and coupled with an interest.
Section
4.16 Estoppel
Certificates.
After
written request by Administrative Agent, Borrowers, within fifteen
(15) days and at their expense, will furnish Administrative Agent with a
statement, duly acknowledged and certified, setting forth (a) the amount of
the original principal amount of the Notes, and the unpaid principal
amount of
the Notes, (b) the rate of interest of the Notes, (c) the date
payments of interest and/or principal were last paid, (d) any offsets or
defenses to the payment of the Obligations, and if any are alleged,
the nature
thereof, (e) that the Notes and this Agreement have not been modified or if
modified, giving particulars of such modification, and (f) that there has
occurred and is then continuing no Default or if such Default exists,
the nature
thereof, the period of time it has existed, and the action being taken
to remedy
such Default.
-47-
ARTICLE
5
Each
Borrower agrees that, so long as any Credit Exposure exists:
Section
5.1 Debt.
No
Borrower will, directly or indirectly, create, incur, assume, guarantee
or
otherwise become or remain directly or indirectly liable with respect
to, any
Debt, except for: (a) Debt under the Financing Documents;
(b) unsecured Debt in the form of trade payables aged in a manner
consistent with ARC's past business practices; but in no event more
than ninety
(90) days; (c) Debt incurred or assumed for the purpose of financing
all or any part of the cost of acquiring any equipment used by a Borrower
in the
operation of a Project in the Ordinary Course of Business (including
through
Capital Leases), in an aggregate principal amount at any time outstanding
not
greater than $100,000; and (d) other Debt approved by Administrative Agent
from time to time in its sole discretion.
Section
5.2 Liens.
No
Borrower will, directly or indirectly, create, assume or suffer to
exist any
Lien on any asset now owned or hereafter acquired by it, except for
Permitted
Liens.
Section
5.3 Contingent
Obligations.
No
Borrower will, directly or indirectly, create, assume, incur or suffer
to exist
any Contingent Obligations, except for:
(a) Contingent
Obligations arising in respect of the Debt under the Financing
Documents;
(b) Contingent
Obligations resulting from endorsements for collection or deposit in
the
Ordinary Course of Business;
(c) Contingent
Obligations arising under indemnity agreements with title insurers
to cause such
title insurers to issue to Administrative Agent mortgagee title insurance
policies;
and
(d) Contingent
Obligations arising with respect to customary indemnification obligations
in
favor of purchasers in connection with dispositions permitted under
Section
2.12.
Section
5.4 Restricted
Distributions.
No
Borrower will, directly or indirectly, declare, order, pay, make or
set apart
any sum for any Restricted Distribution at any time during which any
monetary
Default or Event of Default has occurred and is then continuing, or
if such
Restricted Distribution is reasonably likely to result in a Default
or Event of
Default (including, without limitation, any violation of any financial
covenant
on a pro forma basis).
-48-
Section
5.5 Restrictive
Agreements.
No
Borrower will, directly or indirectly enter into or assume any agreement
(other
than the Financing Documents) prohibiting the creation or assumption of any
Lien upon its properties or assets, whether now owned or hereafter
acquired.
Section
5.6 Payments
and Modifications of Subordinated Debt.
No
Borrower will, directly or indirectly declare, pay, make or set aside
any amount
for payment in respect of any Subordinated Debt except as may be permitted
by
the applicable Subordination Agreement.
Section
5.7 Consolidations,
Mergers and Sales of Assets.
Except
for
a Sale of a Project permitted by Section
2.12,
no
Borrower will, directly or indirectly (a) consolidate or merge with or into
any other Person, or (b) consummate any Asset Dispositions other than
dispositions of personal property assets for cash and fair value that
the
applicable Borrower determines in good faith is no longer used or useful
in the
business of such Borrower if
all of
the following conditions are met: (i) after giving effect to any such
disposition, Borrowers are in compliance on a pro forma basis with
the covenants
set forth in Article 6 recomputed for the most recently ended month and
quarter for which information is available as though such disposition
and
repayment had occurred during such month and quarter and is in compliance
with
all other terms and conditions of this Agreement; and (ii) no Default or
Event of Default then exists or would result from any such
disposition.
Section
5.8 Purchase
of Assets.
(a) No
Borrower will, directly or indirectly (a) acquire or enter into any
agreement to acquire any assets other than in the Ordinary Course of
Business;
(b) create, acquire or enter into any agreement to create or acquire any
Subsidiary; (c) engage or enter into any agreement to engage in any joint
venture or partnership with any other Person; or (d) except as permitted by
Section
2.12,
acquire
or own or enter into any agreement to acquire or own any investment
in any
Person.
Section
5.9 Transactions
with Affiliates.
Except
as
otherwise disclosed on Schedule
5.9,
and
except for transactions that are disclosed to Administrative Agent
in advance of
being entered into and which contain terms that are no less favorable
to the
applicable Borrower than those which might be obtained from a third
party not an
Affiliate of any Credit Party, no Borrower will, directly or indirectly,
enter
into or permit to exist any transaction (including the purchase, sale,
lease or
exchange of any property or the rendering of any service) with any
Affiliate of any Borrower.
-49-
Section
5.10 Modification
of Organizational Documents.
No
Borrower will, directly
or indirectly, amend
or
otherwise modify any Organizational Documents of such Person, except
for such
amendments or other modifications required under this Agreement, or
by
applicable Law and fully disclosed to Administrative Agent, or amendments
which
are not material, provided that such amendments are submitted to Lender
no later
than five (5) Business Days before becoming effective.
Section
5.11 Modification
of Certain Agreements.
Without
Administrative Agent's prior written consent, not to be unreasonably
withheld,
no Borrower will, directly or indirectly, amend or otherwise modify
any
Management Agreement or any other Material Contract, which amendment
or
modification in any case:
(a) is
contrary to the terms of this Agreement or any other Financing
Document;
(b) could
reasonably be expected to be adverse to the rights, interests or privileges
of
the Administrative Agent or the Lenders or their ability to enforce
the
same;
(c) results
in
the imposition or expansion in any material respect of any restriction
or burden
on any Borrower; or
(d) reduces
in
any material respect any rights or benefits of any Borrower (it being
understood
and agreed that any such determination shall be in the reasonable discretion
of
the Administrative Agent).
Each
Borrower shall, prior to entering into any amendment or other modification
of
any of the foregoing documents, deliver to Administrative Agent reasonably
in
advance of the execution thereof, any final or execution form copy
of amendments
or other modifications to such documents.
Section
5.12 Fiscal
Year.
No
Borrower will change its Fiscal Year without the prior written consent
of
Administrative Agent.
Section
5.13 Conduct
of Business.
No
Borrower will, directly or indirectly, engage in any line of business
other than
those businesses engaged in on the Closing Date and businesses reasonably
related thereto.
-50-
Section
5.14 Operating
Leases.
No
Borrower will lease any Licensed Location under any Operating Lease
without
Administrative Agent's consent.
Section
5.15 Lease
Payments.
No
Borrower will, directly
or indirectly, incur
or
assume (whether pursuant to a Guarantee or otherwise) any liability for
rental payments under a lease if, after giving effect thereto, the
aggregate
amount of minimum lease payments that Borrowers have so incurred or
assumed will
exceed, $50,000 per Project for any calendar year under all such leases
(excluding Capital Leases).
Section
5.16 Limitation
on Sale and Leaseback Transactions.
No
Borrower will, directly or indirectly, enter into any arrangement with
any
Person whereby in a substantially contemporaneous transaction any Borrower
sells
or transfers all or substantially all of its right, title and interest
in an
asset and, in connection therewith, acquires or leases back the right
to use
such asset.
Section
5.17 Compliance
with Anti-Terrorism Laws.
Administrative
Agent hereby notifies Borrowers that pursuant to the requirements of
Anti-Terrorism Laws, and Administrative Agent's policies and practices,
Administrative Agent is required to obtain, verify and record certain
information and documentation that identifies Borrowers and its principals,
which information includes the name and address of each Borrower and
its
principals and such other information that will allow Administrative
Agent to
identify such party in accordance with Anti-Terrorism Laws. No Borrower
will,
directly or indirectly, knowingly enter into any Financing Documents
or Material
Contracts with any Person listed on the OFAC Lists. Each Borrower shall
immediately notify Administrative Agent if such Borrower has knowledge
that any
Borrower or any additional Credit Party is listed on the OFAC Lists
or
(a) is convicted on, (b) pleads nolo contendere to, (c) is
indicted on, or (d) is arraigned and held over on charges involving money
laundering or predicate crimes to money laundering. No Borrower will,
directly
or indirectly, (i) conduct any business or engage in any transaction or
dealing with any Blocked Person, including, without limitation, the
making or
receiving of any contribution of funds, goods or services to or for
the benefit
of any Blocked Person, (ii) deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant
to Executive
Order No. 13224, any similar executive order or other Anti-Terrorism Law,
or (iii) engage in or conspire to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate,
any
of the prohibitions set forth in Executive Order No. 13224 or other
Anti-Terrorism Law.
-51-
ARTICLE
6
Borrowers
agree that, so long as any Credit Exposure exists:
Section
6.1 Definitions.
(a) As
used in
this Article 6, the following terms have the following meanings:
(i) "Debt
Yield Ratio"
means
the ratio (expressed as a percentage) of Net Operating Income (measured for
the trailing six (6) months and on an annualized basis) to the average
outstanding balance of the Loans at the time of determination.
(ii) "Net
Operating Income"
means
"Operating
Revenue"
for the
applicable period annualized minus
"Operating
Expenses"
for the
immediately prior twelve (12) month period.
(iii) "Operating
Revenue"
means
the sum of the following, based on customary industry accounting practices
and
reasonable adjustments made by Administrative Agent, and adjusted,
however, to
reflect a vacancy factor equal to the greater of actual vacancy or
five percent
(5%):
(A) for
Licensed Locations with private pay patients, all amounts collected
by or on
behalf of Licensed Operator from residents or patients of the Licensed
Locations
(including, without limitation, rent, patient day charges, assisted
living
services, rehabilitation service charges, non-refundable deposits,
entrance fees
and property fees), as recognized revenue under GAAP, excluding:
(1) nonrecurring income, extraordinary items, revenues items of the type
described in subpart (C) below and other non-property related income (each
as reasonably determined by Administrative Agent); and (2) income from
residents (i) that are thirty (30) or more days delinquent,
(ii) that have been thirty (30) or more days delinquent two
(2) or more times during the immediately prior twelve (12) month
period, plus
(B) without
duplication, all revenues of Licensed Operator in the form of reimbursements
under Third Party Payor Programs for services rendered during the preceding
three (3) months (and specifically excluding any cost report settlements or
other payments received in respect of services rendered prior to the
preceding
three (3) months), plus
(C) without
duplication, other operating revenues of Licensed Operator not to exceed
$1,000.00 per month for vending, catering and special events, food
and beverage,
parking, subleases and other occupancy payments (other than late fees
and
interest income) based upon collections and that are a normal, recurring
operating revenue, minus
-52-
(D) rebates,
free rent and other concessions made by Licensed Operator (or Manager) to
induce residents to enter into Resident Agreements.
(iv) "Operating
Expenses"
means
the sum of the following for any period: the expenses incurred by Licensed
Operators and Manager in connection with operating the Projects (including
any
amounts of corporate overhead expense of ARC actually allocated by
ARC to
Borrowers and/or the Projects, if any), determined on a stabilized
accrual basis
for such period (as determined in accordance with GAAP, and as reasonably
adjusted by Administrative Agent), including, without limitation:
(1) recurring expenses (e.g., real estate tax and insurance expenses or
deposits, tenant improvements, leasing commissions, carpeting replacement,
appliance and drapery replacement and such others as determined by
Lender) which are not paid out of the replacement reserve,
(2) management fees (whether paid or not) in an amount equal to the
greater of actual fees accrued or five percent (5%) of effective gross
income for the Projects, (3) a replacement reserve (whether reserved or
not) of not less than $300 per bed per annum, and (4) all interest and
fee obligations accruing under any Debt (other than scheduled payments
due and
owing under the Loan). Insurance expenses shall be calculated at the
greater of
(1) actual annual insurance premiums plus claims paid or accrued (without
duplication) for which no insurance coverage is available, or (2) $500
per bed, per year. "Operating
Expenses"
shall
specifically exclude income taxes, depreciation, and amortization.
Section
6.2 [Reserved]
Section
6.3 [Reserved]
Section
6.4 [Reserved]
Section
6.5 Debt
Yield Covenant.
Borrowers
covenant and agree to maintain the following Debt Yield Ratio for the
applicable
period shown below throughout the term of the Loan:
|
Testing
Period
|
Minimum
Debt Yield Ratio
|
|
Each
six (6) month period ending June 30, 2006 and
September 30, 2006 |
8.00%
|
|
Each
six (6) month period ending December 31, 2006, March 31, 2007,
June 30, 2007 and September 30, 2007 |
10.50%
|
|
Each
six (6) month period thereafter
|
12.00%
|
Determinations
of compliance with the covenant in this Section
6.5
(the
"Debt
Yield Covenant") shall
be calculated as of the first (1st) day
of each calendar quarter (commencing with a calculation as of July 1,
2006).
-53-
Section
6.6 Evidence
of Compliance.
Borrowers
shall furnish to Lender, concurrently with the financial reports and
documentation required by Section
4.1(b)(v),
evidence
(in form and content satisfactory to Lender) of Borrowers' compliance with
the covenants in this Article and evidence that no Event of Default
specified in
this Article has occurred. Such evidence shall include, without limitation,
(a) a statement and report, on a form approved by Administrative Agent,
detailing Borrowers' calculations, and (b) if requested by Administrative
Agent, back-up documentation (including, without limitation, invoices,
receipts
and other evidence of costs incurred during such quarter as Administrative
Agent
shall reasonably require) evidencing the propriety of the calculations.
Section
6.7 Financial
Covenant Default.
(a) In
the
event that Borrowers fail to satisfy the Debt Yield Covenant as of
any
calculation date (i.e., the date as of which covenant compliance is
calculated;
not the date on which the determination of compliance or non-compliance
is
made), Borrowers shall, within ten (10) calendar days after the date the
financial reports and compliance certificates required by Sections
4.1(b)(v) and
6.6
are due,
pay to Administrative Agent, as a mandatory prepayment, an amount (a
"Covenant
Prepayment") which,
if such amount were applied against the outstanding principal balance
of the
Loans, would be sufficient to satisfy the Debt Yield Covenant as of
such
calculation date, calculating the outstanding principal balance of
the Loans
after giving proforma effect to such Covenant Prepayment. Failure to
satisfy the
Debt Yield Covenant shall be deemed an Event of Default under Section
11.1
only if
Borrowers fail to make the Covenant Prepayment, together with the proportionate
amount of the Exit Fee owing with respect thereto within said ten (10) day
period.
(b) Notwithstanding
the provisions of Section 6.7(a), if Borrowers fail to satisfy the
Debt Yield
Covenant for the first or second time during the term of the Loans
and no
monetary Default or Event of Default has occurred and is continuing,
then,
instead of applying the required Covenant Prepayment to the Loans,
Administrative Agent shall hold such Covenant Prepayment as a cash
collateral
deposit ("Covenant
Deposit") without
interest, and the proportionate amount of the Exit Fee otherwise payable
with
respect thereto will not be payable except as and until provided below.
If at
any time after Administrative Agent receives a Covenant Deposit, Borrowers
satisfy the Debt Yield Covenant (without having to make a Covenant
Prepayment
and without taking into account the Covenant Deposit) for two
(2) consecutive calendar quarters and provided that the Covenant Deposit
has not theretofore been applied to the Indebtedness as a result of
the
occurrence of an Event of Default or the occurrence of a third failure
to
satisfy the Debt Yield Covenant, the Covenant Deposit shall be returned
to
Borrowers. The Covenant Deposit, if any, shall be given proforma application
to
principal balance of the Loans solely for purposes of determining whether
an
additional amount should be paid to Administrative Agent and added
to the
Covenant Deposit if the Debt Yield Covenant is not satisfied for a
second time.
If the Debt Yield Covenant is not satisfied (whether or not a Covenant
Prepayment is made) for a third time, then (i) Administrative Agent
shall no longer be required to hold any Covenant Prepayments as a Covenant
Deposit and all subsequent Covenant Prepayments shall be applied to
the
principal balance of the Loans and (ii) the Covenant Deposit, if any, shall
be applied to the principal balance of the Loans and the proportionate
amount of
the Exit Fee with respect thereto shall be due and payable within ten
(10) calendar days after the date of determination of non-compliance. The
Covenant Deposit shall be Collateral. If an Event of Default occurs
at any time,
the Covenant Deposit may be immediately applied to the Indebtedness
in such
order as Administrative Agent determines and the Exit Fee shall be
due with
respect thereto.
-54-
ARTICLE
7
Section
7.1 Conditions
to Closing.
The
obligation of each Lender to make the initial Loans shall be subject
to the
receipt or waiver by Administrative Agent of each agreement, document
and
instrument set forth on the closing checklist prepared by Administrative
Agent
or its counsel and provided to Borrower in anticipation of Closing,
each in form
and substance satisfactory to Administrative Agent, and to the satisfaction
of
the following conditions precedent, each to the satisfaction of Administrative
Agent in its sole discretion:
(a) evidence
of the consummation of the transactions (other than the funding of
the Loans and
the closing of any acquisition for which the proceeds of the Loans
are purchase
money) contemplated by the Financing Documents;
(b) the
payment of all fees, expenses and other amounts due and payable under
each
Financing Document;
(c) the
absence, since September 1, 2005, of any material adverse change in
any aspect
of the business, operations, properties, prospects or condition (financial
or
otherwise) of any Credit Party, or any event or condition which could
reasonably be expected to result in such a material adverse change;
and
(d) evidence
that ARC and a Prudential Entity have invested a minimum of $31,775,000
of cash
equity into the Borrowers, and such equity infusion has been used by
Borrowers
to fund the transactions under the Financing Documents and otherwise
for working
capital purposes, and all portions of such cash equity infusion which
are not
used on the Closing Date to fund the transactions under the Financing
Documents
shall remain available to Borrowers for working capital purposes and
shall be
unencumbered (other than by any Lien of Administrative Agent).
Section
7.2 Searches.
Before
Closing, and thereafter (as and when determined by Administrative Agent
in its
discretion), Administrative Agent shall have the right to perform,
all at
Borrowers' expense, the searches described in clauses (a), (b) and
(c) below against Borrowers and any other Credit Party, the results of
which are to be consistent with Borrowers' representations and warranties
and
covenants under this Agreement:
-55-
(a) UCC
searches with the Secretary of State and local filing offices of each
jurisdiction where the applicable Person maintains its executive offices,
a
place of business, or assets and the jurisdiction in which the applicable
Person
is organized;
(b) Judgment,
pending litigation, federal tax lien, personal property tax lien, and
corporate
and partnership tax lien searches, in each jurisdiction searched under
clause
(a) above;
(c) Real
property title and lien searches in each jurisdiction in which any
real property
Collateral is located; and
(d) Searches
of applicable corporate, limited liability company, partnership and
related
records to confirm the continued existence, organization and good standing
of
the applicable Person and the exact legal name under which such Person
is
organized.
Section
7.3 Certain
Post-Closing Obligations.
Borrowers
shall complete and/or satisfy the obligations described on Schedule
7.3
within
the time periods set forth therein.
ARTICLE
8
Each
Borrower agrees that, so long as any Credit Exposure exists (for the
avoidance
of doubt, any provisions relating to any CON with respect to any Licensed
Location shall be applicable only to the extent CON is required or
may hereafter
be required under applicable Law with respect to such Licensed
Location):
To
induce
Administrative Agent and Lenders to enter into this Agreement and to
make the
Loans and other credit accommodations contemplated hereby, each Borrower
hereby
represents and warrants to Administrative Agent and each Lender that:
(a) None
of
the Licensed Locations are in violation of any Health Care Laws, except
where
any such violation would not have a Material Adverse Effect.
(b) Each
Borrower that is the owner of a Licensed Location has (i) or is in the
process of obtaining each Healthcare Permit and other rights from,
and has made
all declarations and filings with, all applicable Governmental Authorities,
all
self regulatory authorities and all courts and other tribunals necessary
to
engage in the ownership (but not operation) of the Licensed Location, and
(ii) no knowledge that any Governmental Authority is considering limiting,
suspending or revoking any such Healthcare Permit. All Healthcare Permits
which
have been issued, if any, are valid and in full force and effect. Each
Borrower
who is the owner of a Licensed Location is or, when the applicable
Healthcare
Permit is issued, will be in material compliance with the terms and
conditions
of all such Healthcare Permits except where failure to be in such compliance
or
for a Healthcare Permit to be valid and in full force and effect would
not have
a Material Adverse Effect.
-56-
(c) If
applicable, each Licensed Location has received and maintains accreditation
in
good standing and without impairment by all applicable accrediting
organizations, to the extent required by law (including any equivalent
regulation) or the terms of any Lease pertaining to the Licensed
Location.
(d) No
Borrower is a participant in any federal program whereby any federal,
state or
local government or quasi-governmental body, agency, board or other
authority
may have the right to recover funds by reason of the advance of federal
funds,
including, without limitation, those authorized under the Xxxx-Xxxxxx
Act (42
U.S.C. 291, et seq.). No Borrower has received notice, and no Borrower
is aware
of any violation of applicable anti-trust laws of any federal, state
or local
government or quasi-governmental body, agency, board or other authority
pertaining to the Licensed Locations.
(e) Each
Borrower that is the owner of a Licensed Location is the owner of record
of any
CON pertaining to such Licensed Location. If under applicable Healthcare
Laws,
the CON for a Licensed Location operated by a Borrower merges into
a
state-issued license to operate the Licensed Location, then each such
Borrower
is the owner of record of any CON pertaining to such Licensed
Location.
(f) Each
Licensed Location located in a state where licensing as an assisted
living
facility is required is duly licensed as an assisted living facility
under the
applicable laws of the state where the Licensed Location is located.
The
licensed bed or unit capacity of the Licensed Locations is shown on
Schedule 8.1.
None of
the Borrowers has granted to any third party the right to reduce the
number of
licensed beds or units in the Licensed Location or the right to apply
for
approval to move any and all of the licensed beds or units in the Licensed
Location to any other location and there are no proceedings or contemplated
to
reduce the number of licensed beds in the Licensed Location.
(g) The
Licensed Locations and Licensed Operators do not have any uncorrected
licensure
deficiencies.
(h) Each
of
the representations and warranties of the Licensed Operators set forth
in
Section
8.2
below are
true, complete and correct.
(i) If
(i) any Borrower or is or becomes a "covered entity"
within
the meaning of HIPAA, or (ii) any Borrower is or becomes subject to the
"Administrative Simplification"
provisions of HIPAA, such Borrower is HIPAA Compliant.
To
induce
Administrative Agent and Lenders to enter into this Agreement and to
make the
Loans and other credit accommodations contemplated hereby, Borrowers
hereby
represent and warrant the following to Administrative Agent:
-57-
(a) Each
of
the representations and warranties of Borrowers set forth in Sections
8.1(a) through
8.1(f) above
are
true, complete and correct.
(b) No
Licensed Operator is in violation of any of the Health Care Laws, except
where
any such violation would not have a Material Adverse Effect.
(c) Each
Licensed Operator has (i) or is in the process of obtaining each Healthcare
Permit and other rights from, and has made all declarations and filings
with,
all applicable Governmental Authorities, all self regulatory authorities
and all
courts and other tribunals necessary to engage in the business conducted
by it
except for such Healthcare Permits with respect to which the failure
to obtain
would not have a Material Adverse Effect and (ii) no knowledge that any
Governmental Authority is considering limiting, suspending or revoking
any such
Healthcare Permit. All Healthcare Permits which have been issued, if
any, are
valid and in full force and effect. Each Licensed Operator is or upon
issuance
of the applicable Healthcare Permits, will be in material compliance
with the
terms and conditions of all such Healthcare Permits except where failure
to be
in such compliance or for a Healthcare Permit to be valid and in full
force and
effect would not have a Material Adverse Effect.
(d) To
the
extent a Licensed Operator submits claims to Governmental Payors, the
Licensed
Operator has the requisite provider number and, if required, Healthcare
Permits,
to xxxx Governmental Payors, except where the failure to have such
provider
number or Healthcare Permits would not have a Material Adverse Effect.
To the
extent a Licensed Operator submits claims to Third Party Payors, the
Licensed
Operator has any Healthcare Permit necessary to xxxx Third Party Payors
except
where the failure to have such Healthcare Permit would not have a Material
Adverse Effect. There is no investigation, audit, claim review, or
other action
pending or, to the knowledge of any Licensed Operator, threatened which
could
result in a revocation, suspension, termination, probation, restriction,
limitation, or non-renewal of any provider number or other Healthcare
Permit or
result in a Licensed Operator's or Licensed Location's exclusion from
any
Governmental Payor program or Third Party Payor Program, nor has any
Third Party
Payor Program made any decision not to renew any provider agreement
related to
the Licensed Locations, nor have the Licensed Locations or Licensed
Operators
made any decision not to renew any provider agreement, nor is there
any action
pending or threatened to impose material intermediate or alternative
sanctions
with respect to the Licensed Locations.
(e) All
Medicare, Medicaid, and private insurance cost reports and financial
reports
submitted by the Licensed Operator will be when submitted materially
accurate
and complete and will not be misleading in any material respects. No
cost
reports for the Licensed Locations remain "open" or unsettled, except
as
otherwise disclosed to Administrative Agent.
(f) If
applicable, each Licensed Operator has received and maintains accreditation
in
good standing and without impairment by all applicable accrediting
organizations, to the extent required by law (including any equivalent
regulation) or the terms of any Lease pertaining to the Licensed
Location.
-58-
(g) No
Licensed Operator has been, or to its knowledge has been threatened
to be,
(i) excluded from U.S. health care programs pursuant to 42 U.S.C. Β§1320a7
and related regulations, (ii) "suspended" or "debarred" from selling
products to the U.S. government or its agencies pursuant to the Federal
Acquisition Regulation, relating to debarment and suspension applicable
to
federal government agencies generally (48 C.F.R. Subpart 9.4), or other
applicable laws or regulations, or (iii) made a party to any other action
by any governmental authority that may prohibit it from selling products
to any
governmental or other purchaser pursuant to any Law.
(h) No
statement of charges or deficiencies has been made or penalty enforcement
action
has been undertaken against the Licensed Locations or any Licensed
Operator (or
any officer, director or stockholder of any of the foregoing) during the
last three (3) calendar years, and there have been no violations over the
past three (3) calendar years which have threatened any certification of
the Licensed Locations or any Licensed Operator for participation in
Medicare,
Medicaid or other Third Party Payor Programs. There are no current,
pending or
outstanding Medicare, Medicaid or Third Party Payor Program reimbursement
audits
or appeals pending at the Licensed Locations.
(i) Neither
Licensed Operators nor the Licensed Locations are subject to any proceeding,
suit or investigation by any federal, state or local government or
quasi-governmental body, agency, board or authority or any other administrative
or investigative body which may result in the imposition of a fine,
alternative,
interim or final sanction, a lower reimbursement rate for services
rendered to
eligible patients which has not been provided for on their respective
financial
statements, or which would have a material adverse effect on any Licensed
Operator or the operation of the Licensed Locations, or which would
result in
the revocation, transfer, surrender, suspension or other impairment
of the
operating certificate or provider agreement of the Licensed Locations,
nor any
Healthcare Permit.
(j) There
are
no Resident Agreements with patients or residents of the Licensed Locations
or
with any other persons or organizations which deviate in any material
adverse
respect from the standard form customarily used at an assisted-living
facility
or which conflict with any statutory or regulatory requirements. All
resident
records at the Licensed Locations and in the possession of or created
by the
Licensed Operators, including resident trust fund accounts, are true
and correct
in all material respects.
(k) Neither
the execution nor performance by Licensed Operator of any Financing
Documents
nor the exercise of any remedies by any party thereunder, will adversely
affect
Licensed Operator's right to receive payments and reimbursements from
Governmental Payors with respect to the Licensed Locations, nor materially
reduce the payments and reimbursements from Governmental Payors which
Licensed
Operator is receiving as of the date hereof.
(l) Licensed
Operator is not a participant in any federal program whereby any federal,
state
or local government or quasi-governmental body, agency, board or other
authority
may have the right to recover funds by reason of the advance of federal
funds,
including, without limitation, those authorized under the Xxxx-Xxxxxx
Act (42
U.S.C. 291, et seq.).
-59-
(m) Licensed
Operator has received no notice, and is not aware of any violation
in any
material respect of applicable antitrust laws, employment or landlord-tenant
Laws of any federal, state or local government or quasi-governmental
body,
agency, board or other authority with respect to the Licensed Locations
or
Licensed Operator.
(n) No
Licensed Operator, or any of its respective officers, directors, shareholders
or
members has ever been charged with or investigated for committing any
violation
of any state or federal statute or regulation involving fraudulent
and abusive
practices relating to its or his participation in state or federally
sponsored
reimbursement programs, including, without limitation, fraudulent billing
practices. The Licensed Locations and, to the knowledge of the Licensed
Operator, their contractors, have properly and legally billed all intermediaries
and Third Party Payors for services rendered with respect to the Licensed
Locations and have maintained their records to reflect such billing
practices.
No funds relating to the Licensed Operators are now, or, to the knowledge
of the
Licensed Operators will be, withheld by any Medicare intermediary or
other Third
Party Payor. Neither the Licensed Locations nor any other healthcare
facilities
managed by the Licensed Operator, nor any officer, director, shareholder
or
member of the Licensed Operator has engaged in any of the following:
(i) knowingly and willfully making or causing to be made a false statement
or representation of a material fact in any application for any benefit
or
payment under any Healthcare Laws; (ii) knowingly and willfully making or
causing to be made any false statement or representation of a material
fact for
use in determining rights to any benefit or payment under any Healthcare
Laws;
(iii) failing to disclose knowledge by a claimant of the occurrence of any
event affecting the initial or continued right to any benefit or payment
under
any Healthcare Laws on its own behalf or on behalf of another, with
intent to
secure such benefit or payment fraudulently; (iv) knowingly and willfully
soliciting or receiving any remuneration (including any kickback, bribe
or
rebate), directly or indirectly, overtly or covertly, in cash or in
kind or
offering to pay such remuneration (A) in return for referring an individual
to a Person for the furnishing or arranging for the furnishing of any
item or
service for which payment may be made in whole or in part by any Healthcare
Laws, or (B) in return for purchasing, leasing or ordering or arranging for
or recommending the purchasing, leasing or ordering of any good, facility,
service, or item for which payment may be made in whole or in part
by any
Healthcare Laws; (v) presenting or causing to be presented a claim for
reimbursement for services that is for an item or services that was
known or
should have been known to be (A) not provided as claimed, or (B) false
or fraudulent; or (vi) knowingly and willfully making or causing to be made
or inducing or seeking to induce the making of any false statement
or
representation (or omitting to state a fact required to be stated therein
or
necessary to make the statements contained therein not misleading) of a
material fact with respect to (A) a facility in order that the facility may
qualify for Governmental Authority certification, or (B) information
required to be provided under 42 U.S.C. Β§ 1320a-3.
(o) Licensed
Operator is HIPAA Compliant.
-60-
Section
8.3 Covenants
Pertaining to Licensed Locations.
To
induce
Administrative Agent and Lenders to enter into this Agreement and to
make the
Loans and other credit accommodations contemplated hereby, each Borrower
hereby
covenants and agrees with Administrative Agent and each Lender that:
(a) If
required under applicable Healthcare Laws, each Borrower has and shall
maintain
in full force and effect a valid CON for no less than the number of
beds and
units in the Licensed Locations as of the date of this Agreement.
-61-
(b) Each
Borrower shall maintain any applicable CON free from restrictions or
known
conflicts which would materially impair the use or operation of each
Licensed
Location for its current use, and shall not permit any CON to become
provisional, probationary or restricted in any way.
(c) No
Borrower shall do (or suffer to be done by a Borrower or any Affiliate
of a
Borrower) any of the following without Administrative Agent's prior written
consent, which consent shall not be unreasonably withheld, conditioned
or
delayed:
(i) Replace
or
transfer all or any part of any Licensed Location's units or beds to
another
site or location;
(ii) Transfer
or demise (other than a demised under an Operating Lease approved by
Administrative Agent in writing) any CON or other Healthcare Permit or
rights thereunder to any Person (other than Administrative Agent) or to any
location other than the Licensed Location to which such CON or Governmental
Approval pertains; or
(iii) Pledge
or
hypothecate any CON or other Healthcare Permit as collateral security
for any
indebtedness other than indebtedness to Lender.
(d) If
any
Licensed Location is currently accredited by JCAHO, Borrowers shall
use diligent
efforts to do the following except to the extent that a Licensed Operator
is
otherwise obligated to do the following pursuant to any Lease: (i) maintain
such accreditation in good standing and without limitation or impairment,
(ii) promptly submit to JCAHO a plan of correction for any deficiencies
listed on any JCAHO accreditation survey report, and (iii) cure all such
deficiencies within such time frame as is necessary to preserve and
maintain in
good standing and without limitation or impairment such JCAHO
accreditation.
Section
8.4 Covenants
Pertaining to Licensed Operators.
To
induce
Administrative Agent and Lenders to enter into this Agreement and to
make the
Loans and other credit accommodations contemplated hereby, Borrowers
hereby
covenant and agree to the following:
(a) Licensed
Operators shall do nothing to cause Borrower to breach any of the provisions
of
Section
8.3.
(b) Licensed
Operators will:
(i) timely
file or caused to be timely filed (after giving effect to any extension
duly
obtained), all notifications, reports, submissions, Permit renewals,
cost
reports and other reports of every kind whatsoever required by Healthcare
Laws
(which reports will be materially accurate and complete in all respects
and not
misleading in any material respect and shall not remain open or
unsettled);
(ii) if
not
issued as of the Closing Date, use diligent efforts to obtain all Healthcare
Permits necessary under Healthcare Laws to carry on the business at
the Licensed
Locations as it is conducted on the Closing Date; and once any Healthcare
Permit
is issued, maintain in full force and effect, and free from restrictions,
probations, conditions or known conflicts which would materially impair
the use
or operation of any Licensed Location for its current use, all such
Healthcare
Permits necessary under Healthcare Laws (A) to carry on the business of
Licensed Operator as it is conducted on the Closing Date, and (B) if
Licensed Operator receives or has applied for Medicaid or Medicare
reimbursements as part of its business, to continue to receive reimbursement
under Medicare and Medicaid in full compliance with all requirements
for
participation in, and for the licensure required to provide the services
that
are reimbursable under, Medicare and Medicaid, including, without limitation,
the Medicare and Medicaid Patient Protection Act of 1987, as the same
may be
amended, and such other Third Party Payor Programs as to which any
Licensed
Operator receives or has applied for reimbursement as part of its business;
(iii) not
suffer
or permit to occur any of the following:
(A) any
transfer of a Healthcare Permit or rights thereunder to any Person
(other than a
Borrower or Administrative Agent) or to any location other than a Licensed
Location approved by Administrative Agent in advance in writing;
(B) any
pledge
or hypothecation of any Healthcare Permit as collateral security for
any
indebtedness other than indebtedness to Administrative Agent;
(C) any
rescission, withdrawal, revocation, amendment or modification of or
other
alteration to the nature, tenor or scope of any Healthcare Permit without
Administrative Agent's prior written consent, including, without limitation,
(I) any change to the authorized units/beds capacity of any Licensed
Location and/or the number of units/beds approved by the applicable
Governmental
Authority, and (II) any transfer all or any part of any Licensed Location's
authorized units or beds to another site or location;
-62-
(D) any
voluntary transfer of any resident of any Licensed Location to any
other
facility, unless such transfer is at the request of the resident (without
economic incentives being given to the resident by an Affiliate of
Licensed
Operator) or its payor or is for reasons relating to non-payment or the
health, required level of medical care or safety of the resident to
be
transferred;
(E) without
Administrative Agent's prior written consent, the provision by Licensed
Operator
of additional regulated services at any Licensed Location, including,
without
limitation, medical services; or
(F) any
fact,
event or circumstance for which notice to Administrative Agent is required
under
Section
8.5;
(iv) operate
or
cause the Licensed Locations to be operated in a manner such that the
Healthcare
Permits remain in full force and effect;
(v) maintain
or cause to be maintained the standard of care for the patients of
the Licensed
Locations at all times at a level necessary to insure a level of quality
care
for the patients of the Licensed Locations comparable to that existing
on the
date of this Agreement;
(vi) maintain
or cause to be maintained a standard of care in the storage, use, transportation
and disposal of all medical equipment, medical supplies, medical products
and
medical waste, of any kind and in any form, that is in accordance at
least, that
of the highest prudent industry standard and in conformity with all
applicable
regulations and laws;
(vii) operate
or
cause to be operated the Licensed Location in a prudent manner in compliance
in
all material respects with applicable Healthcare Laws and cause all
Healthcare
Permits and any other agreements necessary for the use and operation
of the
Licensed Location or as may be necessary for participation in Third
Party Payor
Programs to remain in effect without reduction in the number of licensed
beds or
beds authorized for use in applicable Third Party Payor Programs;
(viii) maintain
or cause to be maintained sufficient inventory and equipment of types
and
quantities at the Licensed Location to enable Licensed Operator to
adequately to
perform operation of the Licensed Location;
(ix) to
the
extent required by applicable law, maintain or cause to be maintained
all
deposits, including, without limitation, deposits relating to patients
or
Resident Agreements if such deposits are in cash such deposits are
to be
deposited and held by Licensed Operator (or the Manager under the Management
Agreement), as the case may be, at such commercial or savings bank
or banks as
may be reasonably satisfactory to Administrative Agent, if such deposits
are in
any other form, such deposits are to be maintained as Administrative
Agent may
expressly permit. Any bond or other instrument which Licensed Operator
(or the
Manager under the Management Agreement), as the case may be, is permitted
to
hold in lieu of cash deposits under any applicable legal requirements
shall be
maintained in full force and effect unless replaced by cash deposits
as
hereinabove described, shall be issued by an institution reasonably
satisfactory
to Administrative Agent, shall, if permitted pursuant to any legal
requirements,
name Administrative Agent as payee or mortgagee thereunder (or at Administrative
Agent's option, be fully assignable to Administrative Agent) and shall, in
all respects, comply with any applicable in legal requirements and
otherwise be
reasonably satisfactory to Administrative Agent. Licensed Operator
shall, upon
request, provide Administrative Agent with evidence reasonably satisfactory
to
Administrative Agent of Licensed Operator's compliance with the foregoing.
Following the occurrence and during the continuance of any Event of
Default,
Licensed Operator shall, upon Administrative Agent's request, if permitted
by
any applicable legal requirements, turn over to Administrative Agent
the
deposits (and any interest theretofore earned thereon) with respect to the
Licensed Locations, to be held by Administrative Agent subject to the
terms of
their related agreements;
-63-
(x) provide
to
Administrative Agent no later than two (2) Business Days after request, to
the extent applicable, an accurate, complete and current list of all
participation agreements with Third Party Payors with respect to the
business of
Licensed Operators (collectively, "Participation
Agreements").
Licensed Operators shall at all times comply in all material respects
with all
requirements, contracts, conditions and stipulations applicable to
Licensed
Operators in order to maintain in good standing and without default
or
limitation all such Participation Agreements; and
(xi) maintain
a
corporate health care regulatory compliance program ("CCP") which
includes at a minimum, the elements of an effective compliance program,
as
published in the Federal Register from time to time, by the Department
of Health
and Human Services, Office of Inspector General (or any successor Governmental
Authority), without regard to whether such program is specifically
applicable to
the operations at the Licensed Locations.
(c) No
Licensed Operator, shall, other than in the normal course of business,
change
the terms of any of the Medicaid, Medicare or other Third Party Payor
Programs
or its normal billing payment and reimbursement policies and procedures
with
respect thereto (including without limitation the amount and timing
of finance
charges, fees and write-offs).
(d) No
Licensed Operator or any manager of the Licensed Locations shall rescind,
withdraw, revoke, amend, modify, supplement, or otherwise alter the
nature,
tenor or scope of the Healthcare Permits for the Licensed Locations.
(e) If
any
Licensed Location is currently accredited by JCAHO, Licensed Operators
shall
(i) maintain such accreditation in good standing and without limitation
or
impairment, (ii) promptly submit to JCAHO a plan of correction for any
deficiencies listed on any JCAHO accreditation survey report, and
(iii) cure all such deficiencies within such time frame as is necessary to
preserve and maintain in good standing and without limitation or impairment
such
JCAHO accreditation.
Section
8.5 Special
Notices to Administrative Agent.
Borrowers
shall notify Administrative Agent within three (3) Business Days of
Borrower's becoming aware of (but in any event prior to Borrowers submitting
any
requests for advances of reserves or escrows), and shall contractually
obligate
(via written agreement acceptable to Administrative Agent) the Licensed
Operators to notify Administrative Agent of the occurrence of, any
of the
following facts, events or circumstances, whether existing or pending,
together
with such supporting data and information as shall be necessary to
fully explain
to Administrative Agent the scope and nature of the fact, event or
circumstance,
and shall provide to Administrative Agent within two (2) Business Days of
Administrative Agent's request, such additional information as Administrative
Agent shall request regarding such disclosure:
-64-
(a) a
Licensed
Operator or any Credit Party, has become subject to any federal, state,
local
governmental or private payor civil or criminal investigations, inquiries,
validation review, program integrity review or reimbursement audits
or statement
of deficiencies involving and/or related to its compliance with Healthcare
Laws
(including, without limitation, an inquiry or investigation of any
Person having
"ownership, financial or control interest" in any Borrowers (as that
phrase is
defined in 42 C.F.R. Β§420.201 et seq.)) which, if adversely determined,
could reasonably be expected to have a Material Adverse Effect, but
excluding
where such certification is not existent as of the Closing Date issues
related
to initial Medicare or Medicaid certification ;
(b) that
an
owner, officer, manager, employee or Person with a "direct or indirect
ownership
interest" (as that phrase is defined in 42 C.F.R. Β§420.201) in a Licensed
Operator or a Credit Party: (A) has had a civil monetary penalty assessed
against him or her pursuant to 42 U.S.C. Β§1320a-7a or is the subject of a
proceeding seeking to assess such penalty; (B) has been excluded from
participation in a Federal Health Care Program (as that term is defined
in 42
U.S.C. Β§1320a-7b) or is the subject of a proceeding seeking to assess such
penalty; (C) has been convicted (as that term is defined in 42 C.F.R.
Β§1001.2) of any of those offenses described in 42 U.S.C. Β§1320a-7b or 18
U.S.C. §§669, 1035, 1347, 1518 or is the subject of a proceeding seeking to
assess such penalty; or (D) has been involved or named in a U.S. Attorney
complaint made or any other action taken pursuant to the False Claims
Act under
31 U.S.C. §§3729-3731 or qui tam action brought pursuant to 31 U.S.C. §3729 et
seq.;
(c) any
claims, actions or appeals before any commission, board or agency charged
with
administering Healthcare Laws or programs operated under Healthcare
Laws
(including without limitation any intermediary or carrier, the Provider
Reimbursement Review Board or the Administrator of the Center for Medicare
Services) with respect to any state or federal Medicare or Medicaid cost
reports or claims filed by any Licensed Operator, or any disallowance
by any
commission, board or agency in connection with any audit of such cost
reports,
to the extent such audits are not routine;
(d) [reserved];
(e) [reserved];
(f) any
liability in respect of amounts received by Borrowers or any Licensed
Operator
for the purchase or improvement of any real property under restricted
or
conditioned grants or donations, including, without limitation, monies
received
under the Public Health Service Act, 42 U.S.C. Section 291 et
seq.;
-65-
(g) the
voluntary disclosure by any Credit Party or Licensed Operator to the
Office of
the Inspector General of the United States Department of Health and
Human
Services, a Medicare fiscal intermediary or any state's Medicaid program
of a
potential material overpayment matter involving the submission of claims
to such
payor by any Licensed Operator;
(h) receipt
by
any Credit Party or Licensed Operator of any notice or communication
from the
Joint Commission on Accreditation of Healthcare Organizations that
a Licensed
Location is (A) subject to or is required to file a plan of correction with
respect to any accreditation survey, or (B) in danger of losing its
accreditation due to a failure to comply with a plan of correction;
(i) any
charges of resident abuse which are made in any legal or regulatory
proceedings
or material licensing violations involving the Licensed Operator at
the Licensed
Locations;
(j) if
applicable, any health care survey report related to licensure or certification
(including, without limitation, an annual or biannual Medicare or Medicaid
certification survey report) which includes any statement of material
deficiencies pertaining to any Licensed Operator or any of the Licensed
Locations (whether via CMS 2567 form or otherwise);
(k) without
duplication, any failure of any Credit Party or Licensed Operator to
comply with
any covenants or conditions in this Article 8;
(l) any
revocation, suspension, termination, probation, restriction, limitation,
denial,
or nonrenewal affecting any Licensed Operator with respect to any Medicare
and/or Medicaid participation or provider agreement, certification,
billing
number, assignment (via CMS 855 forms or otherwise), billing agent
or electronic
funds transfer instruction, including, without limitation, any denial
of payment
for new admissions; and/or
(m) any
revocation, suspension, termination, probation, restriction, limitation,
denial
or nonrenewal affecting any Licensed Operator with respect to any participation
or provider agreement with any Third Party Payor.
Section
8.6 Cure
of
Healthcare Laws Violations.
If
there
shall occur any fact, event or circumstance for which Borrowers or
Licensed
Operators are required to give Administrative Agent notice under Section
8.5
above, or
if there shall occur any breach of this Article 8 (or the corresponding
provisions of any Financing Document), Borrowers shall take, and shall
cause the
Licensed Operators to take (subject to the terms of any Financing Documents
and
the terms of any Lease to the Licensed Operator), such action as is
necessary to
validly challenge or otherwise appropriately respond to such fact,
event or
circumstance within any timeframe required by applicable Healthcare
Laws, and
shall thereafter diligently pursue the same to a favorable conclusion,
all to
the effect that the fact, event or circumstance giving rise to Borrowers'
or
Licensed Operators' notice obligation under Section
8.5
or the
breach of this Article 8 (or the corresponding provisions of any Financing
Documents), shall be dismissed, rescinded, eliminated and otherwise
cease to
exist on that date which is the earlier to occur of (a) sixty
(60) days after the date any Borrower became aware of such fact, event or
circumstance, or (b) the expiration of any cure period given under
applicable Healthcare Laws to cure any such breach. Provided that Borrowers
are
at all times in compliance with the foregoing covenants and diligently
pursue
and obtain the cure described above within the timeframe described
above, the
existence of any fact, event or circumstance for which Borrowers or
Licensed
Operators are required to give Administrative Agent notice under Section
8.5,
or the
existence of a breach of this Article 8 (or the corresponding provisions
of any
Financing Documents), shall not, in and of itself, constitute a breach
of
Borrowers' or Licensed Operators obligations hereunder or thereunder
unless the
same shall (y) have a Material Adverse Effect, or (z) have occurred as
a result of any Credit Parties' or any Licensed Operators' negligence,
willful
misconduct, willful breach of this Agreement or Healthcare Laws or
failure to
adhere to commercial reasonable standards of operations.
-66-
Section
8.7 Licensed
Operator; Manager.
(a) Without
in
any way limiting the other provisions of this Agreement, Borrowers
shall not
change the Licensed Operator of any Licensed Location. Borrowers shall
cause the
Licensed Locations at all times to be operated by the Licensed Operators
identified on Schedule
8.7.
If the
Licensed Operator for a Licensed Location is a Person separate and
distinct from
Borrowers as of the date of this Agreement, then, without Administrative
Agent's
prior written consent, no Borrower shall become the Licensed Operator
for such
Licensed Location, nor shall Borrowers or any Affiliate of any Borrower
render
any regulated healthcare service at any Licensed Location in connection
with or
in the furtherance of the operation of the Licensed Location.
(b) Borrowers
shall not change or permit any Licensed Operator to change the manager
of any
Licensed Location or make any modification, amendment, termination
or
cancellation of any management contract for any Licensed Location or
agreements
with brokers, without the prior written consent of Administrative Agent
in its
sole and absolute discretion. Any substitute property manager shall
be required
to enter into an assignment and subordination of management or operating
agreement in form and substance reasonably satisfactory to Administrative
Agent.
Borrowers shall, and shall cause each Licensed Operator to, cause the
Licensed
Locations initially and at all times until a substitute property manager
is
approved by Administrative Agent to be managed by ARC or an Affiliate
or
Affiliates of ARC approved by Administrative Agent (collectively in
the
singular, the "Manager") pursuant
to management/operating agreements approved by Administrative Agent
in writing
(the "Management
Agreements").
Such
restrictions and approval rights are solely for the purposes of assuring
that
the Licensed Locations are managed and operated in a first-class manner
consistent with Healthcare Laws and the preservation and protection
of the
Licensed Locations as security for the Obligations and shall not place
responsibility for the control, care, management or repair of the Licensed
Locations upon Administrative Agent, or make Administrative Agent responsible
or
liable for any negligence in the management, operation, upkeep, repair
or
control
of
the Licensed Locations.
Section
8.8 Transfer
of Healthcare Permits and Operations.
Upon
written notice from Administrative Agent to Borrowers following the
occurrence
of an Event of Default that is continuing hereunder, or immediately
if, at any
time during the term hereof, a Licensed Operator vacates any Licensed
Location,
the following provisions shall be effective:
(a) Borrowers
shall, or shall cause Licensed Operator to, cooperate with the Administrative
Agent to effectuate a change of ownership of the Healthcare Permits
for any
Licensed Location to a replacement operator designated by Administrative
Agent
("Replacement
Operator"),
subject to required approval of any Governmental Authority, and in
connection
therewith, cooperate to effectuate, if requested, the assignment of
any Third
Party Payor or Governmental Payor contracts (to the extent assignable).
Borrowers further shall provide to Administrative Agent all information
and
records requested by Administrative Agent in connection with the change
of
ownership of the Healthcare Permits; and
(b) In
order
to facilitate an efficient transfer of the operations of any Licensed
Location,
Borrowers shall, if and to the extent requested by Administrative Agent,
(i) deliver to Administrative Agent copies of all Healthcare Permits and
the most recent reports and notices pertaining to such Licensed Location
required to be delivered under Section
8.5;
(ii) continue and maintain, and cause Licensed Operator to continue and
maintain, the operation of such Licensed Location in the ordinary course
of
business, including, without limitation, the retention of all residents
at the
Licensed Location to the fullest extent possible until the transfer
of the
operations of such Licensed Location to the Replacement Operator is
completed;
(iii) enter into such operation transfer agreements, management agreements,
and other agreements as may be requested by Administrative Agent until
the
transfer of the operations of such Licensed Location to the Replacement
Operator
is completed; and (iv) provide continued access to Administrative Agent and
its agents to show such Licensed Location to potential replacement
operators.
Subject to all laws governing the privacy and confidentiality of individually
identifiable health information, Borrowers hereby consents to the disclosure
by
Administrative Agent to potential replacement operators of Borrowers'
financial
statements, licensure reports and surveys, financial and property due
diligence
materials and other documents, materials and information relating to
the
Licensed Locations.
-70-
ARTICLE
9
Each
Borrower agrees that, so long as any Credit Exposure exists:
Section
9.1 Leases;
Resident Agreements.
(a) Without
the prior written consent of Administrative Agent, Borrowers shall
not:
(i) enter into any Leases, other than Permitted Leases; (ii) modify,
amend, renew, surrender, terminate, consent to a sublease of, consent
to a
transfer of, xxxxx rent or other payments due under or otherwise grant
any
financial or other concession under any Material Lease or any Permitted
Lease if
the effect thereof would cause the Permitted Lease to become a Material
Lease;
(iii) accept any rental payment under any Leases more than one
(1) month in advance of its due date or in violation of the cash management
or lockbox provisions of this Agreement; or (iv) enter into any ground
lease of any Project.
(b) Without
the prior written consent of Administrative Agent, Borrowers shall
not, and
shall not permit the Licensed Operator to: (i) modify in any material
respect the form of Resident Agreement previously approved by Administrative
Agent; provided
that
Borrowers will submit all proposed form modifications to Administrative
Agent
prior to the use thereof, (ii) accept any payment under any Resident
Agreement more than one (1) month in advance of its due date or in
violation of the cash management or lockbox provisions of this Agreement;
(iii) enter into any subleases with respect to any Project except for
Permitted Leases; (iv) modify, amend, renew, surrender, terminate, consent
to a sublease of, consent to a transfer of, xxxxx rent or other payments
due
under or otherwise grant any financial or other concession under any
sublease
(except for Permitted Leases) with respect to any Project; or
(v) enter into any Resident Agreement for a term of more than one
(1) year, or upon rates other than market rates or upon a form that fails
to comply in all material respects with applicable Laws.
(c) Borrowers
shall, and shall cause Licensed Operator to, provide Administrative
Agent with a
copy of all Material Leases no less than ten (10) days prior to execution
of such Leases and such Leases shall be on the form of lease previously
approved
by Administrative Agent (which form shall include an automatic attornment
provision whereby, in the event of a foreclosure, the tenant automatically
shall
recognize the successor owner as landlord and such tenant shall have
no right to
terminate its lease in the event of such foreclosure). If Administrative
Agent
consents to any new Material Lease or the modification or renewal of
any
existing Material Lease, at Administrative Agent's request, Borrowers
or
Licensed Operator, as applicable, shall cause the tenant thereunder
to execute a
subordination and attornment agreement in form and substance satisfactory
to
Administrative Agent.
(d) Any
Operating Lease (or, at Administrative Agent's option, any subordination
agreement between Administrative Agent and the Operating Lessee pertaining
to
such Operating Lease) shall at all times be in form and substance
satisfactory to Administrative Agent.
(e) Borrowers
shall not suffer or permit any breach or default to occur in any of
Borrowers'
obligations under any of the Material Leases nor suffer or permit the
same to
terminate by reason of any failure of Borrowers to meet any requirement
of any
Material Lease.
(f) Borrowers
shall not suffer or permit any breach or default by a Licensed Operator
to occur
in any of the Licensed Operator's obligations under any Resident Agreement
nor
suffer or permit the same to terminate by reason of any failure of
the Licensed
Operator to meet any requirement of any Resident Agreement.
-71-
(g) If
any
Borrower has authorized or permitted an Operating Lessee to apply for
or
maintain the CON, or if the CON for a Licensed Location operated by
an Operating
Lessee merges into a state-issued license to operate the Licensed Location,
Borrower shall not, at any time, pledge, transfer, hypothecate or otherwise
alienate the CON.
Section
9.2 Project
Use and Operation.
(a) Without
the prior written consent of Administrative Agent in each instance,
which
consent shall not be unreasonably withheld or delayed, Borrowers shall
not
demolish, remove, construct, or, except as otherwise expressly provided
herein,
restore, or alter the Projects or any portion thereof in any material
respect;
nor consent to or permit any such demolition, removal, construction,
restoration, addition or alteration which would diminish in any material
respect
the value of the Projects. No excavation, construction, earth work,
site work or
any other mechanic's lienable work shall be done to or for the benefit
of a
Project, without Administrative Agent's approval, except for normal
repair and
maintenance in the ordinary course of business. Borrowers shall, at
their
expense, (i) take good care of the Projects including grounds generally,
and utility systems and sidewalks, roads, alleys, and curbs therein,
and shall
keep the same in good, safe and insurable condition and in compliance
with all
applicable Laws in all material respects, (ii) promptly make all repairs to
the Projects, above grade and below grade, interior and exterior, structural
and
nonstructural, ordinary and extraordinary, unforeseen and foreseen,
which are
necessary in order to maintain the Projects in a manner consistent
with their
quality and use as required hereby, and (iii) not commit or suffer to be
committed any waste of the Projects or do or suffer to be done anything
which
will increase the risk of fire or other hazard to the Projects or impair
the
value thereof. Borrowers shall keep the sidewalks, vaults, gutters
and curbs
comprising, or adjacent to, the Projects, clean and free from dirt,
snow, ice,
rubbish and obstructions.
(b) Unless
required by applicable Law, Borrowers shall not permit or engage in
changes in
the use of any Project (including any change from residential to non-residential
use, or from non-residential use to residential use) from the use at the
time this Agreement was executed without Administrative Agent's prior
written
consent. Borrowers shall not request and shall not initiate or acquiesce
in a
change in the plat of subdivision, or zoning classification or use
of any
Project, or grant any encumbrances or easements burdening any Project,
without
in each case obtaining Administrative Agent's prior written consent,
not to be
unreasonably withheld. Borrowers shall not desert or abandon the Projects
or
cause or permit the use or occupancy of any part of the Projects to
be
discontinued if such discontinuance or use change would violate in
any material
respect any zoning or other law, ordinance or regulation.
(c) Borrowers
shall not, and neither shall permit, the Projects or any portion thereof
to be
converted or take any preliminary actions which could lead to a conversion
to
condominium or cooperative form or ownership.
(d) All
of
Borrowers' personal property delivered upon, attached to, used or required
to be
used in connection with the operation of any Project (collectively,
the
"FF&E") shall
always be located at such Project and except as otherwise permitted
herein shall
be kept free and clear of all Liens other than the Permitted Liens.
Borrowers
shall not, without the prior written consent of Administrative Agent,
remove or
permit to be removed from any Project any of the FF&E except to repair or
replace the same except as otherwise permitted herein.
-70-
(e) Borrowers
shall not consent to or initiate the joint assessment of any Project
(i) with any other real property constituting a separate tax lot and
Borrowers represent and covenant that each Project is are and shall
remain a
separate tax lot, or (ii) with any portion of the Projects which may be
deemed to constitute personal property, or any other procedure whereby
the lien
of any taxes which may be levied against such personal property shall
be
assessed or levied or charged to the Project as a single lien.
Section
9.3 Casualty
Proceeds.
(a) Borrowers
shall notify Administrative Agent promptly of the commencement or threat
of any
Taking of the Projects or any portion thereof or of the occurrence
of any
casualty with respect to any Project.
(b) Subject
to
the provisions of Section
9.4
below,
Administrative Agent may elect to collect, retain and apply against
the
Obligations of Borrowers under this Agreement or any of the other Financing
Documents all proceeds of insurance resulting from any loss at any
Project or of
any Taking of all or any portion of a Project (individually and collectively
referred to as "Casualty
Proceeds") after
deduction of all expenses of collection and settlement, including attorneys'
and
adjusters' fees and charges. If any insurance proceeds are paid by
check, draft
or other instrument payable to any Borrower and Administrative Agent
jointly,
such Borrower authorizes Administrative Agent to endorse such Borrower's
name
thereon and do such other things as Administrative Agent may deem advisable
to
reduce the same to cash. Administrative Agent is authorized and empowered,
and
each Borrower hereby irrevocably appoints Administrative Agent as its
(or
their) attorney-in-fact (such appointment is coupled with an interest), at
Administrative Agent's option, to make or file proofs of loss or damage
and to
settle and adjust any claim under insurance policies which insure against
such
risks, or to direct Borrowers, in writing, to agree with the insurance
carrier(s) on the amount to be paid in regard to such loss. Any Casualty
Proceeds remaining after repayment of the Obligations shall be paid
by
Administrative Agent to Borrowers.
(c) Notwithstanding
anything in Section
9.3(b) to
the
contrary, in the event of any casualty to any Project or any Taking
of part of
any Project, Administrative Agent agrees to make available the Casualty
Proceeds
to restoration of the Project if (i) no Event of Default exists,
(ii) all Casualty Proceeds are deposited with Administrative Agent,
(iii) in Administrative Agent's reasonable judgment, the amount of Casualty
Proceeds, together with additional amounts, if any, deposited by Borrower
with
Administrative Agent, available for restoration of the Project is sufficient
to
pay the full and complete costs of such restoration, (iv) the casualty or
Taking will not require more than twenty percent (20%) of the occupancy
space at the Project to become vacant during the restoration, (v) the
income to Borrowers from such affected Project (excluding the effect
of business
interruption or rent loss insurance) will not decrease more than twenty
percent (20%) as a result of such casualty or Taking, (vi) the income
(excluding the effect of business interruption or rent loss insurance) to
the Licensed Operator of the Licensed Locations, if different from
Borrowers,
will not decrease more than twenty percent (20%) as a result of such
casualty or Taking, (vii) in Administrative Agent's sole determination, the
Allocated Loan Amount for such Project will not exceed seventy-five
percent
(75%) of the fair market value of the Project after completion of
restoration but prior to any re-tenanting, (viii) in Administrative Agent's
reasonable determination, the affected Project can be restored to an
architecturally and economically viable project in compliance with
applicable
Laws, and (ix) in Administrative Agent's reasonable determination, such
restoration is likely to be completed not later than six (6) months prior
to the Termination Date.
-71-
(d) Notwithstanding
the foregoing, if the damage to the Project does not exceed twelve
percent
(12%) of the Allocated Loan Amount for such Project, and so long as no
Default has occurred and is continuing, Borrowers shall be entitled
to receive
the Casualty Proceeds attributable thereto, provided, however, that
Borrowers
shall use the Casualty Proceeds to restore or rebuild the Project in
all
material respects to its condition prior to such casualty or
Taking.
(a) In
case
Administrative Agent does not elect to apply or does not have the right
to apply
the Casualty Proceeds to the Obligations, as provided in Section
9.3
above,
Borrowers shall:
(i) Proceed
with diligence to make settlement with insurers or the appropriate
governmental
authorities and except as provided in Section
9.3(d) above,
cause the Casualty Proceeds to be deposited with Administrative
Agent;
(ii) In
the
event of any delay in making settlement with insurers or the appropriate
governmental authorities or effecting collection of the Casualty Proceeds,
deposit with Administrative Agent the full amount required to complete
construction as aforesaid;
(iii) If
the
damage exceeds twelve percent (12%) of the Allocated Loan Amount, in the
event the Casualty Proceeds are insufficient to assure Administrative
Agent that
the all contemplated repairs or construction will be completed, promptly
deposit
with Administrative Agent any amount necessary to assure that such
contemplated
repairs or construction will be completed; and
(iv) Promptly
proceed with the assumption of construction of the applicable Project,
including
the repair of all damage resulting from such fire, Taking or other
cause and
restoration to its former or reasonably equivalent condition in all
material
respects.
-72-
(b) Any
request by Borrowers for a disbursement by Administrative Agent of
Casualty
Proceeds and funds deposited by Borrowers shall be subject to reasonable
construction loan type draw requirements as determined by Administrative
Agent.
(c) Notwithstanding
anything to the contrary, if the damage to the applicable Project does
not
exceed twelve percent (12%) of the Allocated Loan Amount and so long as no
Default has occurred and is continuing, Borrowers may settle and adjust
any
claim without the consent of Administrative Agent and agree with the
insurance
company or companies (or Governmental Authority, in the case of a
Taking) on the amount to be paid upon the loss, provided, however, that
such adjustment is carried out in a competent and timely manner. Any
monies
collected under this subsection (c) shall be applied in accordance with
Section
9.3(d) below.
(d) If
the
damage to the applicable Project exceeds twelve percent (12%) of the
Allocated Loan Amount, then Administrative Agent may elect to file
the
respective proof of loss, settle and adjust any claim without the consent
of
Borrowers and agree with the insurance company on the amount of the
Casualty
Proceeds in the place and stead of Borrowers and without the consent
of
Borrowers; provided, however,
that so long as no Event of Default exists, Administrative Agent agrees
to work
with Borrowers and to keep Borrowers fully apprised of any and all
action
Administrative Agent takes to settle or adjust any claim. Borrowers
hereby release Administrative Agent from any and all liability with
respect to
the settlement and adjustment by Administrative Agent of any claims
in respect
of any casualty.
Section
9.5 Tax
Reduction Proceedings.
After
and
during the continuance of an Event of Default, Borrowers shall be deemed
to have
appointed Administrative Agent as their attorney-in-fact to seek a
reduction or
reductions in the assessed valuation of the Projects for real property
tax
purposes or for any other purpose and to prosecute any action or proceeding
in
connection therewith. This power, being coupled with an interest, shall
be
irrevocable for so long as any part of the Obligations remains unpaid
and any
Event of Default shall be continuing.
Section
9.6 Commingling;
FIRPTA.
No
Borrower has commingled the funds related to the Projects with funds
from any
other property. Neither Borrowers nor any partner, stockholder, member
or other
principal in Borrowers is or will be, and no legal or beneficial interest
of a
partner, stockholder, member or other principal in Borrowers is or
will be held,
directly or indirectly, by a "foreign corporation", "foreign partnership",
"foreign trust", "foreign estate", "foreign person", "affiliate" of
a "foreign
person" or a "United States intermediary" of a "foreign person" within
the
meaning of the Internal Revenue Code Sections 897, 1445 or 7701, the
Foreign Investments in Real Property Tax Act of 1980, the International
Foreign
Investment Survey Act of 1976, the Agricultural Foreign Investment
Disclosure
Act of 1978, or the regulations promulgated pursuant to such Acts or
any
amendments to such Acts.
-73-
Section
9.7 Representations
and Warranties.
To
induce
Administrative Agent and Lenders to enter into this Agreement and to
make the
Loans and other credit accommodations contemplated hereby, each Borrower
hereby
represents and warrants to Administrative Agent and each Lender the
following
with respect to each individual Project, standing alone and without
reliance
upon any other Project:
(a) Except
as
disclosed to Administrative Agent in writing, (i) no condemnation of any
portion of any Project, has commenced or, to any Borrower's knowledge,
is
contemplated by any Governmental Authority, (ii) except as disclosed to
Administrative Agent in writing, no condemnation or relocation of any
roadways
abutting any Project has commenced or, to any Borrower's knowledge,
is
contemplated by any Governmental Authority, and (iii) no proceeding to deny
access to any Project from any point or planned point of access to
any Project,
has commenced or, to any Borrower's knowledge, is contemplated by any
Governmental Authority.
(b) Except
as
disclosed to Administrative Agent in writing the contemplated use of
any Project
as an assisted living facility and the contemplated accessory uses
do not
violate, in any material respects, (i) any Laws (including subdivision,
zoning and building Laws and Environmental Laws), or (ii) any building
permits, covenants, conditions and restrictions of record, or agreements
affecting any Project or any part thereof. Neither the zoning authorizations,
subdivision approvals or variances nor any other right to construct
or to use
any Project is to any extent dependent upon or related to any real
estate other
than the real property constituting the Collateral. Except as disclosed
to
Administrative Agent on the land title surveys delivered to Administrative
Agent
prior to the Closing Date, no building or other improvement encroaches
upon any
property line, building line, set back line, side yard line or any
recorded or
visible easement (or other easement of which Borrowers are aware or
has reason
to believe may exist) with respect to any Project. Except as disclosed on
such surveys, no Project is situated in an area designated as having
special
flood hazards as defined by the Flood Disaster Protection Act of 1973,
as
amended, or designated as a wetland by any governmental entity having
jurisdiction over the Project. All Permits required for the use and
occupancy of
the Project have been obtained. All Laws relating to the construction
of and
operation of the Improvements have been complied with in all material
respects
and all permits and licenses required for the construction of and operation
of
the Project have been obtained. The Project is accessible through fully
improved
and dedicated roads, accepted for maintenance and public use by public
authority
having jurisdiction. The Project has adequate water, gas and electrical
supply,
storm and sanitary sewerage facilities, telephone facilities, other
required
public utilities, fire and police protection, and means of access between
the
Project and public highways; none of the foregoing will be foreseeably
delayed
or impeded by virtue of any requirements under any applicable Laws.
The Project
includes all property and rights that may be reasonably necessary or
desirable
to promote the present uses and enjoyment thereof. To the best of each
Borrower's knowledge, there are no, nor are there any alleged or asserted,
violations of law, regulations, ordinances, codes, permits, licenses,
declarations, covenants, conditions or restrictions of record, or other
agreements relating to any Project, or the improvements thereto, or
any part
thereof. Final certificates of occupancy or non-residential use permits
have
been obtained for all improvements on the Project. The parcels of land
comprising the Project are contiguous, subdivided parcels and are in
full
compliance with applicable subdivision ordinances. No subdivision or
resubdivision of such parcels is required to: (y) convey, transfer, assign
or lease such parcels, either individually or as a whole; or (z) rebuild
after a casualty all or any portion of the improvements on the Project
to
current size and configuration.
-74-
(c) The
Project is taxed separately without regard to any other property and
for all
purposes the Project may be mortgaged, conveyed and otherwise dealt
with as an
independent parcel. There are no unpaid or outstanding real estate
or other
taxes or assessments on or against any Project or any part thereof,
except
general real estate taxes for fiscal year 2006 not yet due or payable.
To each
Credit Party's knowledge, there is no pending or contemplated action
pursuant to
which any special assessment may be levied against any portion of any
Project.
(d) There
has
been no damage or destruction of any part of any Project by fire or
other
casualty that has not been repaired. Except for the deferred maintenance
items,
if any, reflected on Schedule
4.11
or as
part of routine maintenance or capital improvements required to be
made by
Borrowers under this Agreement, there are presently no material existing
defects
in any Project and no material repairs or alterations thereof are reasonably
necessary or appropriate.
(e) Neither
Borrower nor any Licensed Operator has entered into any Material Leases
that are
currently in effect other than as set forth on the rent roll delivered
by
Borrower to Administrative Agent prior to the closing of the Loans,
which
Borrower certifies is true and correct in all material respects. True,
correct
and complete copies of the form of Lease, Resident Agreement and other
lease or
care documents and all non-residential Leases, as amended, as in effect
with
respect to Borrower's or Operator's operation of the Project, have
been
delivered to Administrative Agent. All Material Leases are in full
force and
effect. Neither Borrower nor any tenant is in material default under
any
Material Lease. Borrower has disclosed to Administrative Agent in writing
any
material default by any tenant under any Material Lease and no notice
of
termination has been issued under any Lease. All rents or other payments
required of the tenant under the Material Lease due to date have been
collected
and have been collected no more than one (1) month in advance, and no
tenant has been granted any rent concession or inducement whatsoever
except as
reflected on the rent roll previously delivered to Administrative
Agent.
(f) The
Resident Agreements comply with all applicable Laws in all material
respects,
including Healthcare Laws.
-75-
ARTICLE
10
Section
10.1 Generally.
(a) As
security for the payment and performance of the Obligations, and the
payment and
performance of all obligations, and without limiting any other grant
of a Lien
and security interest in any Security Document, Borrowers hereby assign
and
grant to Administrative Agent a continuing first priority Lien on and
security
interest in, upon, and to all right, title and interest in and to any
and all
property and interests in property of Borrowers whether now owned or
hereafter
created, acquired or arising including all of the following properties
and
interests in properties (the "Personal
Property";
unless
otherwise defined in this Agreement, all terms used in this Article 10
shall have the meanings given them in Article 9 of the Uniform Commercial
Code):
(i) All
of
Borrowers' Accounts, and all of Borrowers' money, contract rights,
chattel
paper, documents, deposit accounts, securities, investment property
and
instruments with respect thereto, and all of Borrowers' rights, remedies,
security, Liens and supporting obligations, in, to and in respect of
the
foregoing;
(ii) To
the
extent not listed above, all of Borrowers' money, securities, investment
property, deposit accounts, instruments, general intangibles, healthcare
insurance receivables, inventory and other property and the proceeds
thereof;
(iii) All
of
Borrowers' letter-of-credit rights and commercial tort claims;
(iv) All
of
Borrowers' now owned or hereafter acquired machinery, equipment, computer
equipment, tools, tooling, furniture, fixtures, goods, supplies, materials,
work
in process, whether now owned or hereafter acquired, together with
all
additions, parts, fittings, accessories, special tools, attachments,
and
accessions now and hereafter affixed thereto and/or used in connection
therewith, all replacements thereof and substitutions therefor, and
all cash and
non-cash proceeds and products thereof and all present and future warranties,
manuals and other written materials relating thereto;
(v) All
of
Borrowers' now owned or hereafter acquired goods of any kind and any
and all
tangible and intangible books and records of Borrowers relating to
Borrowers,
their businesses, their financial condition, records and statements,
the
Licensed Locations and/or the Collateral; and
(vi) To
the
extent not listed above as original collateral, the proceeds (including,
without
limitation, insurance proceeds) and products of any or all of the
foregoing, and all accessions to, substitutions for or replacements
of and rents
and profits from any or all of the foregoing.
(b) Pursuant
to the Liens created pursuant to Section 10.1
and
pursuant to all of the other Security Documents (if any) (including,
without limitation, any and all UCC financing statements being filed
by
Administrative Agent against any Borrower), and assuming that any such
Security
Document that is intended to be filed with any governmental public
recording
office has been so filed, Administrative Agent has been granted and
has a valid
and perfected first priority security interest and Lien in the Collateral,
including the Personal Property (subject only to any Permitted Liens
permitted
under the terms of this Agreement and the other Financing
Documents) securing the payment of the Obligations, and such security
interests and Liens are entitled to all of the rights, priorities and
benefits
afforded by the UCC or other applicable Laws as enacted in any relevant
jurisdiction which relate to perfected security interests. No authorization,
approval or other action by, and no notice to or filing with, any Governmental
Authority or consent of any other Person is required for (i) the grant by
each Borrower to Administrative Agent of the security interests and
Liens in the
Collateral, including the Personal Property, provided for under this
Agreement
and the other Security Documents (if any), or (ii) the exercise by
Administrative Agent of its rights and remedies with respect to the
Collateral,
including the Personal Property, provided for under this Agreement
and the other
Security Documents or under any applicable Law, including the UCC.
-76-
Section
10.2 Covenants
Relating to Collateral.
(a) Borrowers
shall not take any of the following actions or make any of the following
changes
unless Borrowers have given at least thirty (30) days prior written notice
to Administrative Agent of Borrowers' intention to take any such action
and have
executed any and all documents, instruments and agreements and taken
any other
actions with Administrative Agent may request after receiving such
written
notice in order to protect and preserve the Liens, rights and remedies
of
Administrative Agent with respect to the Collateral: (i) change the legal
name or organizational identification number of any Borrower, or
(ii) change the jurisdiction of incorporation or formation of any Borrower
or allow any Borrower to designate any jurisdiction as an additional
jurisdiction of incorporation for such Borrower.
(b) Borrowers
shall cause all equipment and other tangible personal property other
than
inventory to be maintained and preserved in the same condition, repair
and in
working order as when new, ordinary wear and tear excepted, and shall
promptly
make or cause to be made all repairs, replacements and other improvements
in
connection therewith that are necessary or desirable to such end, provided
Borrowers may make such Asset Dispositions as are permitted herein.
(c) Each
Borrower hereby authorizes Administrative Agent to file without the
signature of
such Borrower one or more UCC financing statements relating to all
or any part
of the Collateral, which financing statements may list Administrative
Agent as
the "secured party" and such Borrower as the "debtor" and which describe
and
indicate the collateral covered thereby as all or any part of the Collateral
under the Financing Documents (including an indication of the collateral
covered
by any such financing statement as "all assets" of such Borrower now
owned or
hereafter acquired), in such jurisdictions as Administrative Agent
from time to
time determine are appropriate, and to file without the signature of
such
Borrower any continuations of or amendments to any such financing statements,
in
any such case in order for Administrative Agent to perfect, preserve
or protect
the Liens, rights and remedies of Administrative Agent with respect
to the
Collateral.
-77-
(d) Without
limiting or contradicting any of the provisions of Sections 4.1,
10.3(b) 10.3(c) or any other provisions of the Financing Documents
requiring the delivery by Borrowers to Administrative Agent and/or
the Lenders
of any reports, certificates, information or schedules, Borrowers shall
furnish
to Administrative Agent from time to time any statements and schedules
further
identifying or describing the Collateral and any other information,
reports or
evidence concerning the Collateral as Lender may reasonably request
from time to
time.
Section
10.3 UCC
Remedies.
(a) Upon
the
occurrence of and during the continuance of an Event of Default under
this
Agreement or the other Financing Documents, Administrative Agent, in
addition to
all other rights, options, and remedies granted to Administrative Agent
under
this Agreement or at law or in equity, may exercise, either directly
or through
one or more assignees or designees, all rights and remedies granted
to it under
all Financing Documents and under the UCC in effect in the applicable
jurisdiction(s) and under any other applicable law; including, without
limitation:
(i) The
right
to take possession of, send notices regarding, and collect directly
the
Collateral, with or without judicial process;
(ii) The
right
to (by its own means or with judicial assistance) enter any of Borrowers'
premises and take possession of the Collateral, or render it unusable,
or to
render it usable or saleable, or dispose of the Collateral on such
premises in
compliance with subsection (iii) below and to take possession of Borrowers'
original books and records, to obtain access to Borrowers' data processing
equipment, computer hardware and software relating to the Collateral
and to use
all of the foregoing and the information contained therein in any manner
Administrative Agent deems appropriate, without any liability for rent,
storage,
utilities, or other sums, and Borrowers shall not resist or interfere
with such
action (if Borrowers' books and records are prepared or maintained
by an
accounting service, contractor or other third party agent, Borrowers
hereby
irrevocably authorize such service, contractor or other agent, upon
notice by
Administrative Agent to such Person that an Event of Default has occurred
and is
continuing, to deliver to Administrative Agent or its designees such
books and
records, and to follow Administrative Agent's instructions with respect
to
further services to be rendered);
(iii) The
right
to require Borrowers at Borrowers' expense to assemble all or any part
of the
Collateral and make it available to Administrative Agent at any place
designated
by Lender;
(iv) The
right
to notify postal authorities to change the address for delivery of
Borrowers'
mail to an address designated by Administrative Agent and to receive,
open and
dispose of all mail addressed to any Borrower; and
-78-
(v) The
right
to enforce Borrowers' rights against Account Debtors and other obligors,
including, without limitation, the right to collect Accounts directly
in
Administrative Agent's own name (as agent for Lenders) and to charge the
collection costs and expenses, including attorneys' fees, to
Borrowers.
(b) Without
restricting the generality of the foregoing and for the purposes aforesaid,
each
Borrower hereby appoints and constitutes Administrative Agent its lawful
attorney-in-fact with full power of substitution in the Collateral
to use
unadvanced funds remaining under this Agreement or which may be reserved,
escrowed or set aside for any purposes hereunder at any time, or to
advance
funds in excess of the face amount of the Notes, to pay, settle or
compromise
all existing bills and claims, which may be liens or security interests,
or to
avoid such bills and claims becoming liens against the Collateral;
to execute
all applications and certificates in the name of such Borrower and
to prosecute
and defend all actions or proceedings in connection with the Collateral;
and to
do any and every act which such Borrower might do in its own behalf;
it being
understood and agreed that this power of attorney shall be a power
coupled with
an interest and cannot be revoked.
ARTICLE
11
Section
11.1 Events
of Default.
For
purposes of the Financing Documents, the occurrence of any of the following
conditions and/or events, whether voluntary or involuntary, by operation
of law
or otherwise, shall constitute an "Event
of Default":
(a) Borrowers
shall fail to pay all amounts due under the Financing Documents on
the
Termination Date or any Borrower shall fail to pay within five (5) days of
when due any principal, interest, premium or fee under any Financing
Document or
any other amount payable under any Financing Document;
(b) any
Borrower shall fail to observe or perform any covenant contained in
Section
2.12,
Section 4.4(b),
Section
4.4(d),
Section 4.7,
Section 4.10,
Article 5,
Article 6
(subject
to the provisions of Section
6.7),
Section
8.3(c),
clauses
(iii), (iv) or (x) of Section
8.4(b),
Section
8.4(c),
Section
8.4(e) or
Section
8.5
or
Borrowers shall fail to deliver any financial reports or statements
when due
under Section
4.1
and such
default is not remedied or waived within five (5) Business Days after
receipt by Borrower Representative of notice from Administrative Agent
of such
default, or Borrowers shall fail to permit any visit or inspection
required by
Section
4.6
within
two (2) Business Days after notice;
(c) any
Credit
Party defaults in the performance of or compliance with any term contained
in
this Agreement or in any other Financing Document (other than occurrences
described in other provisions of this Section
11.1
for which
a different grace or cure period is specified or for which no grace
or cure
period is specified and thereby constitute immediate Events of Default) and
such default is not remedied or waived within thirty (30) days after the
earlier of (i) receipt by Borrower Representative of notice from
Administrative Agent or Required Lenders of such default or (ii) actual
knowledge of any Borrower or any other Credit Party of such default,
provided,
however, if such default cannot by its nature be cured within thirty
(30) days, but such Credit Party commences cure within said thirty
(30) day period and diligently pursues such cure thereafter, such Credit
Party shall have an additional reasonable time to complete such cure
up to a
maximum of ninety (90) days;
-79-
(d) any
representation, warranty, certification or statement made by any Credit
Party or
to Borrowers' knowledge any other Person in any Financing Document
or in any
certificate, financial statement or other document delivered pursuant
to any
Financing Document is incorrect in any respect (or in any material
respect if
such representation, warranty, certification or statement is not by
its terms
already qualified as to materiality) when made;
(e) (i) failure
of any Borrower to pay when due or within any applicable grace period
any
principal, interest or other amount on Debt (other than the Loans),
or the
occurrence of any breach, default, condition or event with respect
to any Debt
(other than the Loans), if the effect of such failure or occurrence
is to cause,
or to permit the holder or holders of any such Debt to cause, Debt
or other
liabilities having an individual principal amount in excess of $100,000
or
having an aggregate principal amount in excess of $100,000 to become
or be
declared due prior to its stated maturity; or (ii) the occurrence of any
breach or default under any terms or provisions of any Subordinated
Debt
Document or under any agreement subordinating the Subordinated Debt
to all or
any portion of the Obligations or the occurrence of any event requiring
the
prepayment of any Subordinated Debt;
(f) any
Credit
Party shall commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any
bankruptcy, insolvency or other similar law now or hereafter in effect
or
seeking the appointment of a trustee, receiver, liquidator, custodian
or other
similar official of it or any substantial part of its property, or
shall consent
to any such relief or to the appointment of or taking possession by
any such
official in an involuntary case or other proceeding commenced against
it, or
shall make a general assignment for the benefit of creditors, or shall
fail
generally to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing;
(g) an
involuntary case or other proceeding shall be commenced against any
Credit Party
seeking liquidation, reorganization or other relief with respect to
it or its
debts under any bankruptcy, insolvency or other similar law now or
hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian
or other similar official of it or any substantial part of its property,
and
such involuntary case or other proceeding shall remain undismissed
and unstayed
for a period of sixty (60) days; or an order for relief shall be entered
against any Credit Party under the federal bankruptcy laws as now or
hereafter
in effect;
(h) (i) institution
of any steps by any Person to terminate a Pension Plan if as a result
of such
termination any Borrower or any member of the Controlled Group could
be required
to make a contribution to such Pension Plan, or could incur a liability
or
obligation to such Pension Plan, in excess of $100,000, (ii) a contribution
failure occurs with respect to any Pension Plan sufficient to give
rise to a
Lien under Section 302(f) of ERISA, or (iii) there shall occur any
withdrawal or partial withdrawal from a Multiemployer
Plan and the withdrawal liability (without unaccrued interest) to
Multiemployer Plans as a result of such withdrawal (including any outstanding
withdrawal liability that any Borrower or any member of the Controlled
Group
have incurred on the date of such withdrawal) exceeds $100,000;
-80-
(i) one
or
more judgments or orders for the payment of money (not paid or fully
covered by
insurance maintained in accordance with the requirements of this Agreement
and
as to which the relevant insurance company has acknowledged
coverage) aggregating in excess of $1,000,000 shall be rendered against any
or all Borrowers and either (i) enforcement proceedings shall have been
commenced by any creditor upon any such judgments or orders or (ii) there
shall be any period of twenty (20) consecutive days during which a stay of
enforcement of any such judgments or orders, by reason of a pending
appeal, bond
or otherwise, shall not be in effect;
(j) ARC,
a
Prudential Entity or a joint venture between ARC and a Prudential Entity
shall
cease to, directly or indirectly, own and control at least (i) 100% of the
outstanding equity interests of Borrowers, or (ii) that percentage of the
outstanding voting equity interests of Borrowers necessary at all times
to elect
a majority of the board of directors (or similar governing body) of each
Borrower and to direct the management policies and decisions of Borrowers,
or
any other violation of Section
4.3(c) occurs;
(k) any
Lien
created by any of the Security Documents shall at any time fail to
constitute a
valid and perfected Lien on all of the Collateral purported to be secured
thereby, subject to no prior or equal Lien except Permitted Liens,
or any
Borrower shall so assert;
(l) any
Borrower shall be prohibited or otherwise materially restrained from
conducting
the business theretofore conducted by it by virtue of any casualty,
any labor
strike, any determination, ruling, decision, decree or order of any
court or
regulatory authority of competent jurisdiction or any other event and
such
casualty, labor strike, determination, ruling, decision, decree, order
or other
event remains unstayed and in effect for any period of ten
(10) days;
(m) the
institution by any Governmental Authority of criminal proceedings against
any
Credit Party; or
(n) Borrowers
shall fail to perform any of the post-closing obligations as required
by
Section
7.3
and
Schedule
7.3.
All
cure
periods provided for in this Section shall run concurrently with any
cure period
provided for in any applicable Financing Documents under which the
default
occurred.
-81-
Section
11.2 Acceleration.
Upon
the
occurrence and during the continuance of an Event of Default, Administrative
Agent may, and shall if requested by Required Lenders, by notice to
Borrower
Representative declare the Obligations to be, and the Obligations shall
thereupon become, immediately due and payable without presentment,
demand,
protest or other notice of any kind, all of which are hereby waived
by each
Borrower and Borrowers will pay the same; provided, however, that in
the case of
any of the Events of Default specified in Section
11.1(f) or
11.1(g) above,
without any notice to any Borrower or any other act by Administrative
Agent or
the Lenders, all of the Obligations shall become immediately due and
payable
without presentment, demand, protest or other notice of any kind, all
of which
are hereby waived by each Borrower and Borrowers will pay the same.
Section
11.3 [Reserved]
Section
11.4 Default
Rate of Interest.
At
the
election of Administrative Agent or Required Lenders, after the occurrence
of an
Event of Default and for so long as it continues, the Loans and other
Obligations shall bear interest at rates that are two percent (2.0%) per
annum in excess of the rates otherwise payable under this Agreement.
Section
11.5 Setoff
Rights.
During
the
continuance of any Event of Default, each Lender is hereby authorized
by each
Borrower at any time or from time to time, with reasonably prompt subsequent
notice to such Borrower (any prior or contemporaneous notice being
hereby
expressly waived) to set off and to appropriate and to apply any and all
(a) balances held by such Lender or any of such Lender's Affiliates at
any
of its offices for the account of such Borrower (regardless of whether
such
balances are then due to such Borrower), and (b) other property at any time
held or owing by such Lender to or for the credit or for the account
of such
Borrower, against and on account of any of the Obligations; except
that no
Lender shall exercise any such right without the prior written consent
of
Administrative Agent. Any Lender exercising a right to set off shall
purchase
for cash (and the other Lenders shall sell) interests in each of such other
Lender's Pro Rata Share of the Obligations as would be necessary to
cause all
Lenders to share the amount so set off with each other Lender in accordance
with
their respective Pro Rata Share of the Obligations. Each Borrower agrees,
to the
fullest extent permitted by law, that any Lender and any of such Lender's
Affiliates may exercise its right to set off with respect to the Obligations
as
provided in this Section
11.5.
Section
11.6 Application
of Proceeds.
Notwithstanding
anything to the contrary contained in this Agreement, upon the occurrence
and
during the continuance of an Event of Default, (a) each Borrower
irrevocably waives the right to direct the application of any and all
payments
at any time or times thereafter received by Administrative Agent from
or on
behalf of such Borrower or any Guarantor of all or any part of the
Obligations,
and, as between Borrowers on the one hand and Administrative Agent
and Lenders
on the other, Administrative Agent shall have the continuing and exclusive
right
to apply and to reapply any and all payments received against the Obligations
in
such manner as Administrative Agent may deem advisable notwithstanding
any
previous application by Administrative Agent and (b) the proceeds of any
sale of, or other realization upon, all or any part of the Collateral
shall be
applied: first,
to all
reasonable fees, costs, indemnities, liabilities, obligations and expenses
incurred by or owing to Administrative Agent with respect to this Agreement,
the
other Financing Documents or the Collateral; second,
to all
reasonable fees, costs, indemnities, liabilities, obligations and expenses
incurred by or owing to any Lender with respect to this Agreement,
the other
Financing Documents or the Collateral; third,
to
accrued and unpaid interest on the Obligations (including any interest
which,
but for the provisions of the Bankruptcy Code, would have accrued on
such
amounts); fourth,
to the
principal amount of the Obligations outstanding; and fifth
to any
other indebtedness or obligations of Borrowers owing to Administrative
Agent or
any Lender under the Financing Documents. Any balance remaining shall
be
delivered to Borrowers or to whoever may be lawfully entitled to receive
such
balance (including any holder of the indebtedness evidenced by the
Affiliated
Financing Documents) or as a court of competent jurisdiction may direct. In
carrying out the foregoing, (y) amounts received shall be applied in the
numerical order provided until exhausted prior to the application to
the next
succeeding category, and (z) each of the Persons entitled to receive a
payment in any particular category shall receive an amount equal to
its pro rata
share of amounts available to be applied pursuant thereto for such
category.
-82-
Section
11.7 Waivers.
(a) Except
as
otherwise provided for in this Agreement and to the fullest extent
permitted by
applicable law, each Borrower waives: (i) presentment, demand and protest,
and notice of presentment, dishonor, intent to accelerate, acceleration,
protest, default, nonpayment, maturity, release, compromise, settlement,
extension or renewal of any or all Financing Documents, the Notes or
any other
notes, commercial paper, accounts, contracts, documents, instruments,
chattel
paper and Guarantees at any time held by Lenders on which any Borrower
may in
any way be liable, and hereby ratifies and confirms whatever Lenders
may do in
this regard; (ii) all rights to notice and a hearing prior to
Administrative Agent's or any Lender's taking possession or control
of, or to
Administrative Agent's or any Lender's replevy, attachment or levy
upon, any
Collateral or any bond or security which might be required by any court
prior to
allowing Administrative Agent or any Lender to exercise any of its
remedies; and
(iii) the benefit of all valuation, appraisal and exemption Laws. Each
Borrower acknowledges that it has been advised by counsel of its choices
and
decisions with respect to this Agreement, the other Financing Documents
and the
transactions evidenced hereby and thereby.
(b) Each
Borrower for itself and all endorsers, guarantors and sureties and
their heirs,
legal representatives, successors and assigns, (i) agrees that its
liability shall not be in any manner affected by any indulgence, extension
of
time, renewal, waiver, or modification granted or consented to by Lender;
(ii) consents to any indulgences and all extensions of time, renewals,
waivers, or modifications that may be granted by Administrative Agent
or any
Lender with respect to the payment or other provisions of the Financing
Documents, and to any substitution, exchange or release of the Collateral,
or
any part thereof, with or without substitution, and agrees to the addition
or
release of any Borrower, endorsers, guarantors, or sureties, or whether
primarily or secondarily liable, without notice to any other Borrower
and
without affecting its liability hereunder; (iii) agrees that its liability
shall be unconditional and without regard to the liability of any other
Borrower, Administrative Agent or any Lender for any tax on the indebtedness;
and (iv) to
the
fullest extent permitted by law,
expressly
waives the benefit of any statute or rule of law or equity now provided,
or
which may hereafter be provided, which would produce a result contrary
to or in
conflict with the foregoing.
-83-
(c) To
the
extent that Administrative Agent or any Lender may have acquiesced
in any
noncompliance with any requirements or conditions precedent to the
closing of
the Loans or to any subsequent disbursement of Loan proceeds, such
acquiescence
shall not be deemed to constitute a waiver by Administrative Agent
or any Lender
of such requirements with respect to any future disbursements of Loan
proceeds
and Administrative Agent may at any time after such acquiescence require
Borrowers to comply with all such requirements. Any forbearance by
Administrative Agent or Lender in exercising any right or remedy under
any of
the Financing Documents, or otherwise afforded by applicable law, including
any
failure to accelerate the maturity date of the Loans, shall not be
a waiver of
or preclude the exercise of any right or remedy nor shall it serve
as a novation
of the Notes or as a reinstatement of the Loans or a waiver of such
right of
acceleration or the right to insist upon strict compliance of the terms
of the
Financing Documents. Administrative Agent's or any Lender's acceptance
of
payment of any sum secured by any of the Financing Documents after
the due date
of such payment shall not be a waiver of Administrative Agent's and
such
Lender's right to either require prompt payment when due of all other
sums so
secured or to declare a default for failure to make prompt payment.
The
procurement of insurance or the payment of taxes or other liens or
charges by
Administrative Agent as the result of an Event of Default shall not
be a waiver
of Administrative Agent's right to accelerate the maturity of the Loans,
nor
shall Administrative Agent's receipt of any condemnation awards, insurance
proceeds, or damages under this Agreement operate to cure or waive
any Credit
Party's default in payment of sums secured by any of the Financing
Documents.
(d) Without
limiting the generality of anything contained in this Agreement or
the other
Financing Documents, each Borrower agrees that if an Event of Default
is
continuing (i) Administrative Agent and Lenders are not subject to any "one
action" or "election of remedies" law or rule, and (ii) all Liens and other
rights, remedies or privileges provided to Administrative Agent or
Lenders shall
remain in full force and effect until Administrative Agent or Lenders
have
exhausted all remedies against the Collateral and any other properties
owned by
Borrowers and the Financing Documents and other security instruments
or
agreements securing the Loans have been foreclosed, sold and/or otherwise
realized upon in satisfaction of Borrowers' obligations under the Financing
Documents.
(e) Nothing
contained herein or in any other Financing Document shall be construed
as
requiring Administrative Agent or any Lender to resort to any part
of the
Collateral for the satisfaction of any of Borrowers' obligations under
the
Financing Documents in preference or priority to any other Collateral,
and
Administrative Agent may seek satisfaction out of all of the Collateral
or any
part thereof, in its absolute discretion in respect of Borrowers' obligations
under the Financing Documents. In addition, Administrative Agent shall
have the
right from time to time to partially foreclose upon any Collateral
in any manner
and for any amounts secured by the Financing Documents then due and
payable as
determined by Administrative Agent in its sole discretion, including,
without
limitation, the following circumstances: (i) in the event any Borrower
defaults beyond any applicable grace period in the payment of one or
more
scheduled payments of principal and/or interest, Administrative Agent
may
foreclose upon all or any part of the Collateral to recover such delinquent
payments, or (ii) in the event Administrative Agent elects to accelerate
less than the entire outstanding principal balance of the Loans, Administrative
Agent may foreclose all or any part of the Collateral to recover so
much of the
principal balance of the Loans as Lender may accelerate and such other
sums
secured by one or more of the Financing Documents as Administrative
Agent may
elect. Notwithstanding one or more partial foreclosures, any unforeclosed
Collateral shall remain subject to the Financing Documents to secure
payment of
sums secured by the Financing Documents and not previously
recovered.
-84-
(f) To
the
fullest extent permitted by law, each Borrower, for itself and its
successors
and assigns, waives in the event of foreclosure of any or all of the
Collateral
any equitable right otherwise available to any Credit Party which would
require
the separate sale of the any of the Collateral or require Administrative
Agent
or Lenders to exhaust their remedies against any part of the Collateral
before
proceeding against any other part of the Collateral; and further in
the event of
such foreclosure each Borrower does hereby expressly consent to and
authorize,
at the option of Lender, the foreclosure and sale either separately
or together
of each part of the Collateral.
Section
11.8 Injunctive
Relief.
The
parties acknowledge and agree that, for certain Events of Default,
Administrative Agent and Lenders may have no adequate remedy in money
damages
and, accordingly, shall be entitled to an injunction (including without
limitation, a temporary restraining order, preliminary injunction,
writ of
attachment, or order compelling an audit) against such Events of Default.
However, no specification in this Agreement of a specific legal or
equitable
remedy shall be construed as a waiver or prohibition against any other
legal or
equitable remedies in the event of a breach or threatened breach of
any
provision of this Agreement.
Each
Credit Party waives, to
the
fullest extent permitted by law,
the
requirement of the posting of any bond in connection with such injunctive
relief. By joining in the Financing Documents as a Credit Party, each
Credit
Party specifically joins in this Section as if this Section were a
part of each
Financing Documents executed by the Credit Party.
Section
11.9 Marshalling.
Administrative
Agent and Lenders shall have no obligation to marshal any assets in
favor of any
Credit Party, or against or in payment of any of the other Obligations
or any
other obligation owed to Administrative Agent or Lenders by any Credit
Party.
-85-
ARTICLE
12
Section
12.1 Expenses.
Each
Borrower hereby agrees to promptly pay (a) all reasonable costs and
expenses of Administrative Agent (including without limitation the
reasonable
fees, costs and expenses of counsel to, and independent appraisers
and
consultants retained by Administrative Agent) in connection with the
examination, review, due diligence investigation, documentation, negotiation
and
closing of the transactions contemplated by the Financing Documents,
in
connection with the performance by Administrative Agent of its rights
and
remedies under the Financing Documents and in connection with the continued
administration of the Financing Documents, including (i) any amendments,
modifications, consents and waivers to and/or under any and all Financing
Documents and (ii) any periodic public record searches conducted by or at
the request of Administrative Agent (including, without limitation,
title
investigations, UCC searches, fixture filing searches, judgment, pending
litigation and tax lien searches and searches of applicable corporate,
limited
liability, partnership and related records concerning the continued
existence,
organization and good standing of certain Persons), (b) without limitation
of the preceding clause (a), all costs and expenses of Administrative
Agent
(including recordation and transfer taxes) in connection with the creation,
perfection and maintenance of Liens pursuant to the Financing Documents,
(c) without limitation of the preceding clause (a), all costs and expenses
of Administrative Agent in connection with (i) protecting, storing,
insuring, handling, maintaining or selling any Collateral; (ii) any
litigation, dispute, suit or proceeding relating to any Financing Document;
and
(iii) any workout, collection, bankruptcy, insolvency and other enforcement
proceedings under any and all of the Financing Documents, and (d) all costs
and expenses incurred by Lenders in connection with any litigation,
dispute,
suit or proceeding relating to any Financing Document and in connection
with any
workout, collection, bankruptcy, insolvency and other enforcement proceedings
under any and all Financing Documents, provided, however, that to the
extent
that the costs and expenses referred to in this clause (d) consist of fees,
costs and expenses of counsel, Borrowers shall be obligated to pay
such fees,
costs and expenses for counsel to Administrative Agent and for only
one counsel
acting for all Lenders (other than Administrative Agent).
Section
12.2 Indemnity.
Each
Borrower hereby agrees to indemnify, pay and hold harmless Administrative
Agent
and Lenders and the officers, directors, employees, trustees, agents,
investment
advisors, collateral managers, servicers, and counsel of Administrative
Agent
and Lenders (collectively called the "Indemnitees") from
and against any and all liabilities, obligations, losses, damages,
penalties,
actions, judgments, suits, claims, costs, expenses and disbursements
of any kind
or nature whatsoever (including the fees and disbursements of counsel
for such
Indemnitee) in connection with any investigative, response, remedial,
administrative or judicial matter or proceeding, whether or not such
Indemnitee
shall be designated a party thereto and including any such proceeding
initiated
by or on behalf of a Credit Party, and the reasonable expenses of investigation
by engineers, environmental consultants and similar technical personnel
and any
commission, fee or compensation claimed by any broker (other than any
broker
retained by Administrative Agent or Lenders) asserting any right to payment
for the transactions contemplated hereby, which may be imposed on,
incurred by
or asserted against such Indemnitee as a result of or in connection
with the
transactions contemplated hereby or by the other Financing Documents
(including
(a)(i) as a direct or indirect result of the presence on or under, or
escape, seepage, leakage, spillage, discharge, emission or release
from, any
property now or previously owned, leased or operated by any Borrower,
or any
other Person of any Hazardous Materials or any Hazardous Materials
Contamination, (ii) arising out of or relating to the offsite disposal of
any materials generated or present on any such property or (iii) arising
out of or resulting from the environmental condition of any such property
or the
applicability of any governmental requirements relating to Hazardous
Materials,
whether or not occasioned wholly or in part by any condition, accident
or event
caused by any act or omission of any Borrower, (b) proposed and actual
extensions of credit under this Agreement) and the use or intended use of
the proceeds of the Loans and (c) any brokerage claims in connection with
the sale or any leasing of any Project, except that no Borrower shall
have any
obligation hereunder to an Indemnitee with respect to any liability
resulting
from the gross negligence or willful misconduct of such Indemnitee,
as
determined by a final non-appealable judgment of a court of competent
jurisdiction or for any liability with respect to clauses (a) or
(c) first occurring after transfer of title of a Project following a
foreclosure or pursuant to a conveyance in lieu of foreclosure provided
that the
applicable Borrower is no longer in possession of the applicable Project.
To the
extent that the undertaking set forth in the immediately preceding
sentence may
be unenforceable, each Borrower shall contribute the maximum portion
which it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all such indemnified liabilities incurred by the Indemnitees
or
any of them.
-86-
ARTICLE
13
Section
13.1 Appointment
and Authorization.
Each
Lender hereby irrevocably appoints and authorizes Administrative Agent
to enter
into each of the Financing Documents to which it is a party (other
than this
Agreement) on its behalf and to take such actions as Administrative Agent
on its behalf and to exercise such powers under the Financing Documents
as are
delegated to Administrative Agent by the terms thereof, together with
all such
powers as are reasonably incidental thereto. Subject to the terms of
Section
13.16
and to
the terms of the other Financing Documents, Administrative Agent is
authorized
and empowered to amend, modify, or waive any provisions of this Agreement
or the
other Financing Documents on behalf of Lenders. The provisions of this
Article
13 are solely for the benefit of Administrative Agent and Lenders and
neither
any Borrower nor any other Credit Party shall have any rights as a
third party
beneficiary of any of the provisions hereof. In performing its functions
and
duties under this Agreement, Administrative Agent shall act solely
as agent of
Lenders and does not assume and shall not be deemed to have assumed
any
obligation toward or relationship of agency or trust with or for any
Borrower or
any other Credit Party. Administrative Agent may perform any of its
duties
hereunder, or under the Financing Documents, by or through its agents
or
employees.
Section
13.2 Administrative
Agent and Affiliates.
Administrative
Agent
shall
have the same rights and powers under the Financing Documents as any
other
Lender and may exercise or refrain from exercising the same as though
it were
not Administrative Agent, and Administrative Agent and its Affiliates
may lend
money to, invest in and generally engage in any kind of business with
each
Credit Party or Affiliate of any Credit Party as if it were not Administrative
Agent hereunder.
Section
13.3 Action
by Administrative Agent.
The
duties
of Administrative Agent shall be mechanical and administrative in nature.
Administrative Agent shall not have by reason of this Agreement a fiduciary
relationship in respect of any Lender. Nothing in this Agreement or
any of the
Financing Documents is intended to or shall be construed to impose
upon
Administrative Agent any obligations in respect of this Agreement or
any of the
Financing Documents except as expressly set forth herein or
therein.
Section
13.4 Consultation
with Experts.
Administrative
Agent may consult with legal counsel, independent public accountants
and other
experts selected by it and shall not be liable for any action taken
or omitted
to be taken by it in good faith in accordance with the advice of such
counsel,
accountants or experts.
Section
13.5 Liability
of Administrative Agent.
Neither
Administrative Agent nor any of its directors, officers, agents or
employees
shall be liable to any Lender for any action taken or not taken by
it in
connection with the Financing Documents, except that Administrative
Agent shall
be liable with respect to its specific duties set forth hereunder but
only to
the extent of its own gross negligence or willful misconduct in the
discharge
thereof as determined by a final non-appealable judgment of a court
of competent
jurisdiction. Neither Administrative Agent nor any of its directors,
officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify (a) any statement, warranty or representation made
in connection with any Financing Document or any borrowing hereunder;
(b) the performance or observance of any of the covenants or agreements
specified in any Financing Document; (c) the satisfaction of any condition
specified in any Financing Document; (d) the validity, effectiveness,
sufficiency or genuineness of any Financing Document, any Lien purported
to be
created or perfected thereby or any other instrument or writing furnished
in
connection therewith; (e) the existence or non-existence of any Default or
Event of Default; or (f) the financial condition of any Credit Party.
Administrative Agent shall not incur any liability by acting in reliance
upon
any notice, consent, certificate, statement, or other writing (which
may be a
bank wire, telex, facsimile or electronic transmission or similar
writing) believed by it to be genuine or to be signed by the proper party
or parties. Administrative Agent shall not be liable for any apportionment
or
distribution of payments made by it in good faith and if any such apportionment
or distribution is subsequently determined to have been made in error
the sole
recourse of any Lender to whom payment was due but not made, shall
be to recover
from other Lenders any payment in excess of the amount to which they
are
determined to be entitled (and such other Lenders hereby agree to return
to such
Lender any such erroneous payments received by them).
-88-
Section
13.6 Indemnification.
Each
Lender shall, in accordance with its Pro Rata Share, indemnify Administrative
Agent (to the extent not reimbursed by Borrowers) upon demand against any
cost, expense (including counsel fees and disbursements), claim, demand,
action,
loss or liability (except such as result from Administrative Agent's
gross
negligence or willful misconduct as determined by a final non-appealable
judgment of a court of competent jurisdiction) that Administrative Agent
may suffer or incur in connection with the Financing Documents or any
action
taken or omitted by Administrative Agent hereunder or thereunder. If
any
indemnity furnished to Administrative Agent for any purpose shall,
in the
opinion of Administrative Agent, be insufficient or become impaired,
Administrative Agent may call for additional indemnity and cease, or
not
commence, to do the acts indemnified against even if so directed by
Required
Lenders until such additional indemnity is furnished.
Section
13.7 Right
to Request and Act on Instructions.
Administrative
Agent may at any time request instructions from Lenders with respect
to any
actions or approvals which by the terms of this Agreement or of any
of the
Financing Documents Administrative Agent is permitted or desires to
take or to
grant, and if such instructions are promptly requested, Administrative
Agent
shall be absolutely entitled to refrain from taking any action or to
withhold
any approval and shall not be under any liability whatsoever to any
Person for
refraining from any action or withholding any approval under any of
the
Financing Documents until it shall have received such instructions
from Required
Lenders or all or such other portion of the Lenders as shall be prescribed
by
this Agreement. Without limiting the foregoing, no Lender shall have
any right
of action whatsoever against Administrative Agent as a result of Administrative
Agent acting or refraining from acting under this Agreement or any
of the other
Financing Documents in accordance with the instructions of Required
Lenders (or
all or such other portion of the Lenders as shall be prescribed by
this
Agreement) and, notwithstanding the instructions of Required Lenders (or
such other applicable portion of the Lenders), Administrative Agent
shall have
no obligation to take any action if it believes, in good faith, that
such action
would violate applicable Law or exposes Administrative Agent to any
liability
for which it has not received satisfactory indemnification in accordance
with
the provisions of Section
13.6.
-89-
Section
13.8 Credit
Decision.
Each
Lender acknowledges that it has, independently and without reliance
upon
Administrative Agent or any other Lender, and based on such documents
and
information as it has deemed appropriate, made its own credit analysis
and
decision to enter into this Agreement. Each Lender also acknowledges
that it
will, independently and without reliance upon Administrative Agent
or any other
Lender, and based on such documents and information as it shall deem
appropriate
at the time, continue to make its own credit decisions in taking or
not taking
any action under the Financing Documents.
Section
13.9 Collateral
Matters.
Lenders
irrevocably authorize Administrative Agent, at its option and in its
discretion,
to (a) release any Lien granted to or held by Administrative Agent under
any Security Document (i) upon payment
in
full of all Obligations; (ii) constituting property sold or disposed of as
part of or in connection with any disposition permitted under any Financing
Document (it being understood and agreed that Administrative Agent
may
conclusively rely without further inquiry on a certificate of a Responsible
Officer as to the sale or other disposition of property being made
in full
compliance with the provisions of the Financing Documents); or (iii) as
required by Section
2.12,
and
(b) release or subordinate any Lien granted to or held by Administrative
Agent under any Security Document constituting property described in
Section
5.7(b) (it
being
understood and agreed that Administrative Agent may conclusively rely
without
further inquiry on a certificate of a Responsible Officer as to the
identification of any property described in Section 5.7(b)).
Upon
request by Administrative Agent at any time, Lenders will confirm Administrative
Agent's authority
to release and/or subordinate particular types or items of Collateral
pursuant
to this Section
13.9.
Section
13.10 Agency
for Perfection.
Administrative
Agent and each Lender hereby appoint each other Lender as agent for
the purpose
of perfecting Administrative Agent's security interest in assets which,
in
accordance with the Uniform Commercial Code in any applicable jurisdiction,
can
be perfected by possession or control. Should any Lender (other than
Administrative Agent) obtain possession or control of any such assets, such
Lender shall notify Administrative Agent thereof, and, promptly upon
Administrative Agent's request therefor, shall deliver such assets
to
Administrative Agent or in accordance with Administrative Agent's instructions
or transfer control to Administrative Agent in accordance with Administrative
Agent's instructions. Each Lender agrees that it will not have any
right
individually to enforce or seek to enforce any Security Document or
to realize
upon any Collateral for the Loans unless instructed to do so by Administrative
Agent (or consented to by Administrative Agent, as provided in Section
11.5),
it
being understood and agreed that such rights and remedies may be exercised
only
by Administrative Agent.
-90-
Section
13.11 Notice
of Default.
Administrative
Agent shall not be deemed to have knowledge or notice of the occurrence
of any
Default or Event of Default except with respect to defaults in the
payment of
principal, interest and fees required to be paid to Administrative
Agent for the
account of Lenders, unless Administrative Agent shall have received
written
notice from a Lender or a Borrower referring to this Agreement, describing
such
Default or Event of Default and stating that such notice is a "notice
of
default". Administrative Agent will notify each Lender of its receipt
of any
such notice. Administrative Agent shall take such action with respect
to such
Default or Event of Default as may be requested by Required Lenders
(or all or
such other portion of the Lenders as shall be prescribed by this
Agreement) in accordance with the terms hereof. Unless and until
Administrative Agent has received any such request, Administrative
Agent may
(but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it
shall deem
advisable or in the best interests of Lenders.
Section
13.12 Successor
Administrative Agent.
Administrative
Agent may at any time give notice of its resignation to the Lenders
and
Borrowers. Upon receipt of any such notice of resignation, Required
Lenders
shall have the right, in consultation with Borrowers, to appoint a
successor
Administrative Agent, and provided that, if no Default or Event of
Default has
occurred and is outstanding, Borrower shall have the right to consent
to any
such successor Administrative Agent, which consent shall not be unreasonably
withheld, conditioned or delayed. Upon the acceptance of a successor's
appointment as Administrative Agent hereunder and notice of such acceptance
to
the retiring Administrative Agent, such successor shall succeed to
and become
vested with all of the rights, powers, privileges and duties of the
retiring (or
retired) Administrative Agent, the retiring Administrative Agent's
resignation shall become immediately effective and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder
and
under the other Financing Documents (if such resignation was not already
effective and such duties and obligations not already discharged, as
provided
below in this paragraph). The fees payable by Borrowers to a successor
Administrative Agent under this Agreement shall be the same as those
payable to
its predecessor unless otherwise agreed among Borrowers and such successor.
If
no such successor shall have been so appointed by Required Lenders
and shall
have accepted such appointment within thirty (30) days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders (but without any
obligation) appoint a successor Administrative Agent, and provided that, if
no Default or Event of Default has occurred and is outstanding, Borrower
shall
have the right to consent to any such successor Administrative Agent,
which
consent shall not be unreasonably, withheld, conditioned or delayed.
From and
following the expiration of such thirty (30) day period, Administrative
Agent shall have the exclusive right, upon one (1) Business Days' notice to
Borrower Representative and the Lenders, to make its resignation effective
immediately. From and following the effectiveness of such notice, (a) the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Financing Documents, and
(b) all
payments, communications and determinations provided to be made by,
to or
through Administrative Agent shall instead be made by or to each Lender
directly, until such time as Required Lenders appoint a successor Administrative
Agent as provided for above in this paragraph. The provisions of this
Agreement
shall continue in effect for the benefit of any retiring Administrative
Agent
and its sub-agents after the effectiveness of its resignation hereunder
and
under the other Financing Documents in respect of any actions taken
or omitted
to be taken by any of them while the retiring Administrative Agent
was acting or
was continuing to act as Administrative Agent.
-91-
Section
13.13 Payment
and Sharing of Payment.
(a) Term
Loan Payments.
Payments
of principal, interest and fees in respect of the Term Loans will be
settled on
the date of receipt if received by Administrative Agent on the last
Business Day
of a month or on the Business Day immediately following the date of
receipt if
received on any day other than the last Business Day of a month.
(b) Return
of Payments.
(i) If
Administrative Agent pays an amount to a Lender under this Agreement
in the
belief or expectation that a related payment has been or will be received
by
Administrative Agent from a Borrower and such related payment is not
received by
Administrative Agent, then Administrative Agent will be entitled to
recover such
amount from such Lender on demand without setoff, counterclaim or deduction
of
any kind, together with interest accruing on a daily basis at the Federal
Funds
Rate.
(ii) If
Administrative Agent determines at any time that any amount received
by
Administrative Agent under this Agreement must be returned to any Borrower
or
paid to any other Person pursuant to any insolvency law or otherwise,
then,
notwithstanding any other term or condition of this Agreement or any
other
Financing Document, Administrative Agent will not be required to distribute
any
portion thereof to any Lender. In addition, each Lender will repay
to
Administrative Agent on demand any portion of such amount that Administrative
Agent has distributed to such Lender, together with interest at such
rate, if
any, as Administrative Agent is required to pay to any Borrower or
such other
Person, without setoff, counterclaim or deduction of any kind.
(c) Defaulted
Lenders.
The
failure of any Defaulted Lender to make any payment required by it
hereunder
shall not relieve any other Lender of its obligations to make payment,
but
neither any other Lender nor Administrative Agent shall be responsible
for the
failure of any Defaulted Lender to make any payment required hereunder.
Notwithstanding anything set forth herein to the contrary, a Defaulted
Lender
shall not have any voting or consent rights under or with respect to
any
Financing Document or constitute a "Lender" (or be included in the
calculation
of "Required Lenders" hereunder) for any voting or consent rights under or
with respect to any Financing Document.
(d) Sharing
of Payments.
If any
Lender shall obtain any payment or other recovery (whether voluntary,
involuntary, by application of setoff or otherwise) on account of any Loan
(other than pursuant to the terms of Section
2.9) in
excess of its pro rata share of payments entitled pursuant to the other
provisions of this Section
13.13,
such
Lender shall purchase from the other Lenders such participations in
extensions
of credit made by such other Lenders (without recourse, representation
or
warranty) as shall be necessary to cause such purchasing Lender to share
the excess payment or other recovery ratably with each of them; provided,
however, that if all or any portion of the excess payment or other
recovery is
thereafter recovered from such purchasing Lender, the purchase shall
be
rescinded and each Lender which has sold a participation to the purchasing
Lender shall repay to the purchasing Lender the purchase price to the
ratable
extent of such recovery, without interest. Each Borrower agrees that
any Lender
so purchasing a participation from another Lender pursuant to this
clause
(d) may, to the fullest extent permitted by law, exercise all its rights
of
payment (including pursuant to Section
11.5) with
respect to such participation as fully as if such Lender were the direct
creditor of Borrowers in the amount of such participation. If under
any
applicable bankruptcy, insolvency or other similar law, any Lender
receives a
secured claim in lieu of a setoff to which this clause (d) applies, such
Lender shall, to the extent practicable, exercise its rights in respect
of such
secured claim in a manner consistent with the rights of the Lenders
entitled
under this clause (d) to share in the benefits of any recovery on such
secured claim.
-92-
Section
13.14 Right
to Perform, Preserve and Protect.
Upon
and
during the continuance of any Default or Event of Default, Administrative
Agent
itself may, but shall not be obligated to, cause any obligation of
any Credit
Party hereunder or under any other Financing Document to be performed
at
Borrowers' expense. Upon and during the continuance of any Default
or Event of
Default, Administrative Agent is further authorized by Borrowers and
the Lenders
to make expenditures from time to time which Administrative Agent,
in its
reasonable business judgment, deems necessary or desirable to (a) preserve
or protect the business conducted by Borrowers, the Collateral, or
any portion
thereof, and/or (b) enhance the likelihood of, or maximize the amount of,
repayment of the Loans and other Obligations. Each Borrower hereby
agrees to
reimburse Administrative Agent on demand for any and all costs (which
costs
shall be reasonable), liabilities and obligations incurred by Administrative
Agent pursuant to this Section
13.14.
Each
Lender hereby agrees to indemnify Administrative Agent upon demand
for any and
all costs, liabilities and obligations incurred by Administrative Agent
pursuant
to this Section
13.14,
in
accordance with the provisions of Section
13.6.
Section
13.15 Additional
Titled Agents.
Except
for
rights and powers, if any, expressly reserved under this Agreement
to any
bookrunner, arranger or to any titled agent named on the cover page
of this
Agreement, other than Administrative Agent (collectively, the "Additional
Titled Agents"),
and
except for obligations, liabilities, duties and responsibilities, if
any,
expressly assumed under this Agreement by any Additional Titled Agent,
no
Additional Titled Agent, in such capacity, has any rights, powers,
liabilities,
duties or responsibilities hereunder or under any of the other Financing
Documents. Without limiting the foregoing, no Additional Titled Agent
shall have
nor be deemed to have a fiduciary relationship with any Lender. At
any time that
any Lender serving as an Additional Titled Agent shall have transferred
to any
other Person (other than any Affiliates) all of its interests in the Loans,
such Lender shall be deemed to have concurrently resigned as such Additional
Titled Agent.
-93-
Section
13.16 Amendments
and Waivers.
In
addition to the required signatures under Section
14.5,
no
provision of this Agreement or any other Financing Document may be
amended,
waived or otherwise modified unless such amendment, waiver or other
modification
is in writing and is signed or otherwise approved by the following
Persons:
(a) if
any
amendment, waiver or other modification would increase a Lender's funding
obligations in respect of any Term Loan, by such Lender; and/or
(b) if
the
rights or duties of Administrative Agent are affected thereby, by Administrative
Agent;
Provided
that,
in
each of (a) and (b) above, no such amendment, waiver or other
modification shall, unless signed by all the Lenders directly affected
thereby,
(i) reduce the principal of, rate of interest on or any fees with respect
to any Loan or forgive any principal, interest (other than default
interest) or fees (other than late charges) with respect to any Loan;
(ii) postpone the date fixed for, or waive, any payment (other than a
payment pursuant to Section 2.1(c) or
Section
6.7) of
principal of any Loan, or of interest on any Loan (other than default
interest) or any fees provided for hereunder (other than late
charges) or for any termination of any commitment; (iii) change the
definition of the term Required Lenders or the percentage of Lenders
which shall
be required for Lenders to take any action hereunder; (iv) release all or
substantially all of the Collateral, authorize any Borrower to sell
or otherwise
dispose of all or substantially all of the Collateral or release any
Guarantor
of all or any portion of the Obligations of its Guarantee obligations
with
respect thereto, except, in each case with respect to this clause (iv), as
otherwise may be provided in this Agreement or the other Financing
Documents
(including in connection with any disposition permitted hereunder);
(v) amend, waive or otherwise modify this Section
13.16
or the
definitions of the terms used in this Section
13.16
insofar
as the definitions affect the substance of this Section
13.16;
or
(vi) consent
to
the assignment, delegation or other transfer by any Credit Party of
any of its
rights and obligations under any Financing Document or release any
Borrower of
its payment obligations under any Financing Document, except, in each
case with
respect to this clause (vi), pursuant to a merger or consolidation
permitted pursuant to this Agreement. It is hereby understood and agreed
that
all Lenders shall be deemed directly affected by an amendment, waiver
or other
modification of the type described in the preceding clauses (iii),
(iv),
(v) and (vi) of the preceding sentence.
Section
13.17 Assignments
and Participations.
(a) Any
Lender
may at any time assign to one or more Eligible Assignees all or any
portion of
such Lender's Loans together with all related obligations of such Lender
hereunder. Except as Administrative Agent may otherwise agree, the
amount of any
such assignment (determined as of the date of the applicable Assignment
Agreement or, if a "Trade
Date"
is
specified in such Assignment Agreement, as of such Trade Date) shall be in
a minimum
aggregate amount equal to $1,000,000 or, if less, the assignor's entire
interests in the outstanding Loans; provided, however, that, in connection
with
simultaneous assignments to two or more related Approved Funds, such
Approved
Funds shall be treated as one assignee for purposes of determining
compliance
with the minimum assignment size referred to above. Borrowers and Administrative
Agent shall be entitled to continue to deal solely and directly with
such Lender
in connection with the interests so assigned to an Eligible Assignee
until
Administrative Agent shall have received and accepted an effective
Assignment
Agreement executed,
delivered and fully completed by the applicable
parties thereto
and
a
processing fee of $3,500;
provided,
however,
that
only one processing fee shall be payable in connection with simultaneous
assignments to two or more related Approved Funds.
-94-
(b) From
and
after the date on which the conditions described above have been met,
(i) such Eligible Assignee shall be deemed automatically to have become
a
party hereto and, to the extent of the interests assigned to such Eligible
Assignee pursuant to such Assignment Agreement, shall have the rights
and
obligations of a Lender hereunder and (ii) the assigning Lender, to the
extent that rights and obligations hereunder have been assigned by
it pursuant
to such Assignment Agreement, shall be released from its rights and
obligations
hereunder (other than those that survive termination pursuant to Section
14.1).
Upon
the request of the Eligible Assignee (and, as applicable, the assigning
Lender) pursuant to an effective Assignment Agreement, each Borrower shall
execute and deliver to Administrative Agent for delivery to the Eligible
Assignee (and, as applicable, the assigning Lender) Notes in the aggregate
principal amount of the Eligible Assignee's Term Loans (and, as applicable,
Notes in the principal amount of that portion of the principal amount
of the
Term Loans retained by the assigning Lender). Upon receipt by the assigning
Lender of such Note, the assigning Lender shall return to Borrower
Representative any prior Note held by it.
(c) Notwithstanding
the foregoing provisions of this Section
13.17
or any
other provision of this Agreement, any Lender may at any time pledge
or assign a
security interest in all or any portion of its rights under this Agreement
to
secure obligations of such Lender, including any pledge or assignment
to secure
obligations to a Federal Reserve Bank; provided, however, that no such
pledge or
assignment shall release such Lender from any of its obligations hereunder
or
substitute any such pledgee or assignee for such Lender as a party
hereto.
(d) Notwithstanding
the foregoing provisions of this Section
13.17
or any
other provision of this Agreement, Administrative Agent has the right,
but not
the obligation, to effectuate assignments of Loans via an electronic
settlement
system acceptable to Administrative Agent as designated in writing
from time to
time to the Lenders by Administrative Agent (the "Settlement
Service").
At any
time when the Administrative Agent elects, in its sole discretion,
to implement
such Settlement Service, each such assignment shall be effected by
the assigning
Lender and proposed assignee pursuant to the procedures then in effect
under the
Settlement Service, which procedures shall be consistent with the other
provisions of this Section
13.17.
Each
assigning Lender and proposed Eligible Assignee shall comply with the
requirements of the Settlement Service in connection with effecting
any
assignment of Loans pursuant to the Settlement Service. If so elected
by each of
Administrative Agent and the Borrowers, Administrative Agent's and
the
Borrowers' approval of such Eligible Assignee shall be deemed to have
been
automatically granted with respect to any transfer effected through
the
Settlement Service. Assignments and assumptions of the Loans shall
be effected
by the provisions otherwise set forth herein until Administrative Agent
notifies
Lenders of the Settlement Service as set forth herein.
-95-
(e) Any
Lender
may at any time, without the consent of, or notice to, any Borrower
or
Administrative Agent, sell to one or more Persons participating interests
in its
Loans, commitments or other interests hereunder (any such Person, a
"Participant").
In the
event of a sale by a Lender of a participating interest to a Participant,
(i) such Lender's obligations hereunder
shall remain unchanged for all purposes, (ii) Borrowers and Administrative
Agent shall continue to deal solely
and
directly with such Lender in connection with such Lender's rights and
obligations hereunder, and (iii) all amounts payable by each Borrower shall
be determined as if such Lender had not sold such participation and
shall
be paid directly to such Lender. No Participant shall have any direct
or
indirect voting rights hereunder except with respect to (x) any event
described in Section
13.16
expressly
requiring the unanimous vote of all Lenders or, as applicable, all
affected
Lenders, and (y) the institution or commencement of enforcement remedies.
Each Lender agrees to incorporate the requirements of the preceding
sentence
into each participation agreement which such Lender enters into with
any
Participant. Each Borrower agrees that if amounts outstanding under
this
Agreement are due and payable (as a result of acceleration or otherwise),
each
Participant shall be deemed to have the right of set-off in respect
of its
participating interest in amounts owing under this Agreement to the
same extent
as if the amount of its participating interest were owing directly
to it as a
Lender under this Agreement; provided, however, that such right of
set-off shall
be subject to the obligation of
each
Participant to share with Lenders, and Lenders agree to share with
each
Participant, as provided in Section
11.5.
(f) Within
thirty (30) days after: (i) receipt by Administrative Agent of notice
and demand from any Lender for payment of additional costs as provided
in
Section
2.9,
which
demand shall not have been revoked, (ii) any Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for
the
account of any Lender pursuant to Section
2.8,
(iii) any Lender is a Defaulted Lender, and the circumstances causing such
status shall not have been cured or waived; or (iv) any failure by any
Lender to consent to a requested amendment, waiver or modification
to any
Financing Document in which Required Lenders have already consented
to such
amendment, waiver or modification but the consent of each Lender, or
each Lender
affected thereby, is required with respect thereto, (each relevant
Lender in the
foregoing clauses (i) through (iv) being an "Affected Lender") each
of Borrower Representative and Administrative Agent may, at its option,
notify
such Affected Lender and, in the case of Borrowers' election, the Administrative
Agent, of such Person's intention to obtain, at Borrowers' expense,
a
replacement Lender ("Replacement
Lender") for
such Lender, which Replacement Lender shall be an Eligible Assignee
and, in the
event the Replacement Lender is to replace an Affected Lender described
in the
preceding clause (iv), such Replacement Lender consents to the requested
amendment, waiver or modification making the replaced Lender an Affected
Lender.
In the event Borrowers or Administrative Agent, as applicable, obtains
a
Replacement Lender within ninety (90) days following notice of its
intention to do so, the Affected Lender shall sell, at par, and assign
all of
its Loans and funding commitments hereunder to such Replacement Lender
in
accordance with the procedures set forth in Section
14.6(a);
provided, however, that (i) Borrowers shall have reimbursed such Lender for
its increased costs and additional payments for which it is entitled
to
reimbursement under Section
2.8
or
Section
2.9,
as
applicable, of this Agreement through the date of such sale and assignment
and
(ii) Borrowers shall pay to Administrative Agent the $3,500 processing fee
in respect of such assignment. In the event that a replaced Lender
does not
execute an Assignment Agreement pursuant to Section
13.17(a) within
five (5) Business Days after receipt by such replaced Lender of notice of
replacement pursuant to this Section
13.17(f) and
presentation to such replaced Lender of an Assignment Agreement evidencing
an
assignment pursuant to this Section
13.17(f),
such
replaced Lender shall be deemed to have consented to the terms of such
Assignment Agreement, and any such Assignment Agreement executed by
Administrative Agent, the Replacement Lender and, to the extent required
pursuant to Section
13.17(a),
Borrowers, shall be effective for purposes of this Section
13.17(f) and
Section
13.17(a).
Upon any
such assignment and payment, such replaced Lender shall no longer constitute
a
"Lender" for purposes hereof, other than with respect to such rights
and
obligations that survive termination as set forth in Section
14.1.
-96-
Section
13.18 Definitions.
As
used in
this Article 13, the following terms have the following meanings:
"Additional
Titled Agents"
has the
meaning set forth in Section
13.15.
"Affected
Lender"
has the
meaning set forth in Section
13.17(f).
"Approved
Fund"
means
any (a) investment company, fund, trust, securitization vehicle or conduit
that is (or will be) engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit in the
ordinary
course of its business or (b) any Person (other than a natural
person) which temporarily warehouses loans for any Lender or any entity
described in the preceding clause (a) and that, with respect to each of the
preceding clauses (a) and (b), is administered or managed by (i) a
Lender, (ii) an Affiliate of a Lender or (iii) a Person (other than a
natural person) or an Affiliate of a Person (other than a natural
person) that administers or manages a Lender.
"Assignment
Agreement"
means an
agreement substantially in the form of Exhibit
A
hereto.
"Defaulted
Lender"
means,
so long as such failure shall remain in existence and uncured, any
Lender which
shall have failed to make any Loan or other credit accommodation, disbursement
or reimbursement required pursuant to the terms of any Financing
Document.
"Eligible
Assignee"
means
(a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund,
and (d) any other Person (other than a natural person) approved by
(i) Administrative Agent, and (ii) unless an Event of Default has
occurred and is continuing, Borrower Representative (such approval
of Borrower
Representative not to be unreasonably withheld or delayed, and shall
be deemed
provided unless expressly withheld by Borrower Representative within
three
(3) Business Days of request therefor); provided, however, that
notwithstanding the foregoing, "Eligible
Assignee"
shall
not include any Borrower or any of a Borrower's Affiliates.
-97-
"Federal
Funds Rate"
means,
for any day, the rate of interest per annum (rounded upwards, if necessary,
to
the nearest whole multiple of 1/100 of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with members of the
Federal
Reserve System arranged by Federal funds brokers on such day, as published
by
the Federal Reserve Bank of New York on the Business Day next succeeding
such
day, provided, however, that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions
on the
next preceding Business Day, and (b) if no such rate is so published on
such next preceding Business Day, the Federal Funds Rate for such day
shall be
the average rate quoted to Administrative Agent on such day on such
transactions
as determined by Administrative Agent.
ARTICLE
14
Section
14.1 Survival.
All
agreements, representations and warranties made herein and in every
other
Financing Document shall survive the execution and delivery of this
Agreement
and the other Financing Documents. The provisions of Sections 2.8
and
2.9
and
Article 12 and 13 shall survive the payment of the Obligations (both with
respect to any Lender and all Lenders collectively) and any termination of
this Agreement.
Section
14.2 No
Waivers.
No
failure
or delay by Administrative Agent or any Lender in exercising any right,
power or
privilege under any Financing Document shall operate as a waiver thereof
nor
shall any single or partial exercise thereof preclude any other or
further
exercise thereof or the exercise of any other right, power or privilege.
The
rights and remedies herein and therein provided shall be cumulative
and not
exclusive of any rights or remedies provided by law. Any reference
in any
Financing Document to the "continuing" nature of any Event of Default
shall not
be construed as establishing or otherwise indicating that any Borrower
or any
other Credit Party has the independent right to cure any such Event
of Default,
but is rather presented merely for convenience should such Event of
Default be
waived in accordance with the terms of the applicable Financing
Documents.
Section
14.3 Notices.
(a) All
notices, requests and other communications to any party hereunder shall
be in
writing (including prepaid overnight courier, facsimile transmission
or similar
writing) and shall be given to such party at its address, facsimile number
or e-mail address set forth on the signature pages hereof (or, in the
case of
any such Lender who becomes a Lender after the date hereof, in an Assignment
Agreement or in a notice delivered to Borrower Representative and Administrative
Agent by the assignee Lender forthwith upon such assignment) or at such
other address, facsimile number or e-mail address as such party may
hereafter
specify for the purpose by notice to Administrative Agent and Borrower
Representative; provided, however, that notices, requests or other
communications shall be permitted by electronic means only in accordance
with
the provisions of Section
14.3(b).
Each
such notice, request or other communication shall be effective (i) if given
by facsimile, when such notice is transmitted to the facsimile number
specified
by this Section and the sender receives a confirmation of transmission
from the
sending facsimile machine, or (ii) if given by mail, prepaid overnight
courier or any other means, when received or
when
receipt is refused at
the
applicable address specified by this Section.
-98-
(b) Notices
and other communications to the parties hereto may be delivered or
furnished by
electronic communication (including facsimile transmission, e-mail
and Internet
or intranet websites) pursuant to procedures approved from time to time by
Administrative Agent, provided, however, that the foregoing shall not
apply to
default notices or any notice of the exercise of remedies to any Credit
Party
unless such electronic communication is confirmed within one (1) Business
Day by overnight courier or notices sent directly to any Lender if
such Lender
has notified the Administrative Agent that it is incapable of receiving
notices
by electronic communication. The Administrative Agent or Borrower Representative
may, in its discretion, agree to accept notices and other communications
to it
hereunder by electronic communications pursuant to procedures approved
by it,
provided, however, that approval of such procedures may be limited
to particular
notices or communications.
(c) Unless
the
parties otherwise agree, (i) notices and other communications sent to an
e-mail address shall be deemed received upon the sender's receipt of
an
acknowledgment from the intended recipient (such as by the "return
receipt
requested" function, as available, return e-mail or other written
acknowledgment), and (ii) notices or communications posted to an Internet
or intranet website shall be deemed received upon the deemed receipt
by the
intended recipient at its e-mail address as described in the foregoing
clause
(i) of notification that such notice or communication is available and
identifying the website address therefor, provided, however, that if
any such
notice or other communication is not sent or posted during normal business
hours, such notice or communication shall be deemed to have been sent
at the
opening of business on the next Business Day.
Section
14.4 Severability.
In
case
any provision of or obligation under this Agreement or any other Financing
Document shall be invalid, illegal or unenforceable in any jurisdiction,
the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall
not in any way be affected or impaired thereby.
-99-
Section
14.5 Amendments
and Waivers.
No
provision of this Agreement or any other Financing Document may be
materially
amended, waived or otherwise modified unless such amendment, waiver
or other
modification is in writing and is signed or otherwise approved by Borrowers,
the
Required Lenders and any other Lender to the extent required under
Section
13.16;
provided,
however,
that
Administrative Agent shall be entitled, in its sole but commercially
reasonable
discretion and without the consent of any other Lender, to waive any
financial
covenant of any Credit Party.
Section
14.6 Credit
Party Assignments.
No
Credit
Party may assign, delegate or otherwise transfer any of its rights
or other
obligations hereunder or under any other Financing Document without
the prior
written consent of Administrative Agent and each Lender.
Section
14.7 Headings.
Headings
and captions used in the Financing Documents (including the Exhibits,
Schedules
and Annexes hereto and thereto) are included for convenience of reference
only and shall not be given any substantive effect.
Section
14.8 Confidentiality.
Administrative
Agent and each Lender shall hold all non-public information regarding
the Credit
Parties, their Affiliates and their respective businesses identified
as such by
Borrowers and obtained by Administrative Agent or any Lender pursuant
to the
requirements hereof in accordance with such Person's customary procedures
for
handling information of such nature, except that disclosure of such
information
may be made (a) to their respective agents, employees, Subsidiaries,
Affiliates, attorneys, auditors, professional consultants, rating agencies,
insurance industry associations and portfolio management services,
(b) to
prospective transferees or purchasers of any interest in the Loans,
provided,
however, that any such Persons shall have agreed to be bound by the
provisions
of this Section
14.8,
(c) as required by Law, subpoena, judicial order or similar order and in
connection with any litigation, (d) as may be required in connection with
the examination, audit or similar investigation of such Person and
(e) to
a Person that is a trustee, investment advisor, collateral manager,
servicer,
noteholder or secured party in a Securitization (as hereinafter defined) in
connection with the administration, servicing and reporting on the
assets
serving as collateral for such Securitization. For the purposes of
this Section,
"Securitization"
shall
mean a public or private offering by a Lender or any of its Affiliates
or their
respective successors and assigns, of securities which represent an
interest in,
or which are collateralized, in whole or in party, by the Loans.
Confidential information shall include only such information identified
as such
at the time provided to Administrative Agent and shall not include
information
that either: (i) is in the public domain, or becomes part of the public
domain after disclosure to such Person through no fault of such Person,
or
(ii) is disclosed to such Person by a Person other than a Credit Party,
provided, however, Administrative Agent does not have actual knowledge
that such
Person is prohibited from disclosing such information. The obligations
of
Administrative Agent and Lenders under this Section
14.8
shall
supersede and replace the obligations of Administrative Agent and Lenders
under
any confidentiality agreement in respect of this financing executed
and
delivered by Administrative Agent or any Lender prior to the date
hereof.
-100-
Section
14.9 Waiver
of Consequential and Other Damages.
To
the
fullest extent permitted by applicable law, no Borrower shall assert,
and each
Borrower hereby waives, any claim against any Indemnitee, on any theory
of
liability, for special, indirect, consequential or punitive damages
(as opposed
to direct or actual damages) arising out of, in connection with, or as a
result of this Agreement, any other Financing Document or any agreement
or
instrument contemplated hereby or thereby, the transactions contemplated
hereby
or thereby, any Loan or the use of the proceeds thereof. No Indemnitee
shall be
liable for any damages arising from the use by unintended recipients
of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection
with this
Agreement or the other Financing Documents or the transactions contemplated
hereby or thereby.
Section
14.10 GOVERNING
LAW; SUBMISSION TO JURISDICTION.
THIS
AGREEMENT, EACH NOTE AND EACH OTHER FINANCING DOCUMENT, AND ALL MATTERS
RELATING
HERETO OR THERETO OR ARISING THEREFROM (WHETHER SOUNDING IN CONTRACT
LAW, TORT
LAW OR OTHERWISE), SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD
TO CONFLICTS
OF LAWS PRINCIPLES. EACH BORROWER HEREBY CONSENTS TO THE JURISDICTION
OF ANY
STATE OR FEDERAL COURT LOCATED WITHIN CHICAGO, STATE OF ILLINOIS AND
IRREVOCABLY
AGREES THAT, SUBJECT TO ADMINISTRATIVE AGENT'S ELECTION, ALL ACTIONS
OR
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER
FINANCING
DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. EACH BORROWER EXPRESSLY
SUBMITS AND
CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY
DEFENSE OF
FORUM NON CONVENIENS. EACH BORROWER HEREBY WAIVES PERSONAL SERVICE
OF ANY AND
ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE
UPON SUCH
BORROWER BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED,
ADDRESSED TO
SUCH BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE
SO MADE
SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
Section
14.11 WAIVER
OF JURY TRIAL.
EACH
OF EACH BORROWER, ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY
WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
ARISING OUT
OF OR RELATING TO THE FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
THEREBY AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A
COURT AND NOT BEFORE A JURY. EACH OF EACH BORROWER, ADMINISTRATIVE
AGENT AND
EACH LENDER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT
TO ENTER INTO
A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING
INTO
THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND THAT EACH WILL
CONTINUE TO
RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH OF EACH
BORROWER,
ADMINISTRATIVE AGENT AND EACH LENDER WARRANTS AND REPRESENTS THAT EACH
HAS HAD
THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND
THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
-101-
Section
14.12 Publication;
Advertisement.
(a) Publication.
No
Credit Party will directly or indirectly publish, disclose or otherwise
use in
any public disclosure, advertising material, promotional material,
press release
or interview, any reference to the name, logo or any trademark of Xxxxxxx
Xxxxx
or any of its Affiliates or any reference to this Agreement or the
financing
evidenced hereby, in any case except (i) as required by Law, subpoena or
judicial or similar order, in which case the applicable Credit Party
shall give
Administrative Agent prior written notice of such publication or other
disclosure, or (ii) with Xxxxxxx Xxxxx'x prior written
consent.
(b) Advertisement.
Each
Lender and each Credit Party hereby authorizes Xxxxxxx Xxxxx to publish
the name
of such Lender and Credit Party, the existence of the financing arrangements
referenced under this Agreement, the primary purpose and/or structure
of those
arrangements, the amount of credit extended under each facility, the
title and
role of each party to this Agreement, and the total amount of the financing
evidenced hereby in any "tombstone", comparable advertisement or press
release
which Xxxxxxx Xxxxx elects to submit for publication. In addition,
each Lender
and each Credit Party agrees that Xxxxxxx Xxxxx may provide lending
industry
trade organizations with information necessary and customary for inclusion
in
league table measurements after the Closing Date. With respect to any
of the
foregoing, Xxxxxxx Xxxxx shall provide Borrowers with an opportunity
to review
and confer with Xxxxxxx Xxxxx regarding the contents of any such tombstone,
advertisement or information, as applicable, prior to its submission
for
publication and, following such review period, Xxxxxxx Xxxxx may, from
time to
time, publish such information in any media form desired by Xxxxxxx
Xxxxx, until
such time that Borrowers shall have requested Xxxxxxx Xxxxx xxxxx any
such
further publication.
Section
14.13 Counterparts;
Integration.
This
Agreement and the other Financing Documents may be signed in any number
of
counterparts, each of which shall be an original, with the same effect
as if the
signatures thereto and hereto were upon the same instrument. Signatures
by
facsimile shall bind the parties hereto. This Agreement and the other
Financing
Documents constitute the entire agreement and understanding among the
parties
hereto and supersede any and all prior agreements and understandings,
oral or
written, relating to the subject matter hereof.
-102-
Section
14.14 No
Strict Construction.
The
parties hereto have participated jointly in the negotiation and drafting
of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by
the parties
hereto and no presumption or burden of proof shall arise favoring or
disfavoring
any party by virtue of the authorship of any provisions of this
Agreement.
Section
14.15 Time.
Time
is of
the essence in each Borrower's and each other Credit Party's performance
under
this Agreement and all other Financing Documents.
Section
14.16 Lender
Approvals.
Unless
expressly provided herein to the contrary, any approval, consent, waiver
or
satisfaction of Administrative Agent or Lenders with respect to any
matter that
is the subject of this Agreement, the other Financing Documents may
be granted
or withheld by Administrative Agent and Lenders in their sole and absolute
discretion and credit judgment.
Section
14.17 [Reserved.]
SECTION
14.18 WAIVERS.
EACH
BORROWER WAIVES THE BENEFIT OF ANY AND EVERY STATUTE, ORDINANCE, OR
RULE OF
COURT WHICH MAY BE LAWFULLY WAIVED CONFERRING UPON SUCH BORROWER ANY RIGHT
OR PRIVILEGE OF EXEMPTION, HOMESTEAD RIGHTS, STAY OF EXECUTION, OR
SUPPLEMENTARY
PROCEEDINGS, OR OTHER RELIEF FROM THE ENFORCEMENT OR IMMEDIATE ENFORCEMENT
OF A
JUDGMENT OR RELATED PROCEEDINGS ON A JUDGMENT.
Section
14.19 Release
of Administrative Agent and Lenders.
Each
Borrower, voluntarily, knowingly, unconditionally, and irrevocably,
with
specific and express intent, for and on behalf of itself and its agents,
attorneys, heirs, successors, and assigns (collectively the "Releasing
Parties") does
hereby fully and completely release, acquit and forever discharge each
Indemnitee, and any other person, firm, business, corporation, insurer,
or
association which may be responsible or liable for the acts or omissions
of any
Indemnitee, or who may be liable for the injury or damage resulting
therefrom
(collectively the "Released
Parties"),
of and
from any and all actions, causes of action, suits, debts, disputes,
damages,
claims, obligations, liabilities, costs, expenses and demands of any
kind
whatsoever, at law or in equity, whether matured or unmatured, liquidated
or
unliquidated, vested or contingent, xxxxxx or inchoate, known or unknown
that
the Releasing Parties (or any of them) has against the Released Parties or
any of them (whether directly or indirectly). The foregoing release
shall be
deemed renewed and reaffirmed as of the date of each advance of proceeds
under
any Loans and each other accommodation made or granted to any Borrower
by any
Released Party under any Financing Document. Each Borrower acknowledges
that the
foregoing release is a material inducement to Administrative Agent's
and each
Lender's decision to extend to Borrower the financial accommodations
hereunder
and has been relied upon by Administrative Agent and each Lender in
agreeing to
extend the credit herein contemplated and in making each advance or
other
accommodation hereunder.
-103-
ARTICLE
15
Section
15.1 Joint
and Several Obligations.
(a) Borrowers
is defined collectively to include all Persons constituting the Borrowers;
provided, however, that any references herein to "any Borrower", "each
Borrower"
or similar references, shall be construed as a reference to each individual
Person comprising the Borrowers. Each Person comprising Borrowers shall
be
jointly and severally liable for all of the obligations of Borrowers
under this
Agreement and the Borrowers under the Affiliated Financing Documents
(the
"Affiliated
Borrowers"),
regardless of which of the Borrowers or the Affiliated Borrowers actually
receives the proceeds of the indebtedness governed hereby or the benefit
of any
other extensions of credit hereunder or the benefit of any other extension
of
credit under the Affiliated Financing Documents, or the manner in which
the
Borrowers, the Affiliated Borrowers, the Administrative Agent or the
Lenders
account therefor in their respective books and records. In addition,
each entity
comprising Borrowers hereby acknowledges and agrees that all of the
representations, warranties, covenants, obligations, conditions, agreements
and
other terms contained in this Agreement shall be applicable to and
shall be
binding upon and measured and enforceable individually against each
Person
comprising Borrowers as well as all such Persons when taken together.
By way of
illustration, but without limiting the generality of the foregoing,
the terms of
Section 11.1
of this
Agreement are to be applied to each individual Person comprising the
Borrowers
(as well as to all such Persons taken as a whole), such that the occurrence
of
any of the events described in Section 11.1
of this
Agreement as to any Person comprising the Borrowers shall constitute
an Event of
Default even if such event has not occurred as to any other Persons
comprising
the Borrowers or as to all such Persons taken as a whole (except as
otherwise
expressly provided therein).
(b) Each
Borrower acknowledges that it will enjoy significant benefits from
the business
conducted by the other Borrowers and the Affiliated Borrowers because
of, inter
alia, their combined ability to bargain with other Persons including
without
limitation their ability to receive the credit extensions under this
Agreement
and the other Financing Documents and the Affiliated Financing Documents
on
favorable terms granted by this Agreement and other Financing Documents
and the
Affiliated Financing Documents which would not have been available
to an
individual Borrower acting alone. Each Borrower has determined that
it is in its
best interest to procure the credit facilities contemplated hereunder,
with the
credit support of the other Borrowers as contemplated by this Agreement
and the
other Financing Documents and the credit support of the Affiliated
Borrowers as
contemplated by the Affiliated Financing Documents.
-104-
(c) Administrative
Agent and Lenders have advised the Borrowers that each of them is unwilling
to
enter into this Agreement, the other Financing Documents and the Affiliated
Financing Documents and make available the credit facilities extended
hereby or
thereby to any Borrower or Affiliated Borrower unless each Borrower
agrees,
among other things, to be jointly and severally liable for the due
and proper
payment of the Obligations of each other Borrower under this Agreement
and other
Financing Documents and of each Affiliated Borrower under the Affiliated
Financing Documents. Each Borrower has determined that it is in its
best
interest and in pursuit of its purposes that it so induce the Administrative
Agent and Lender to extend credit pursuant to this Agreement and the
other
documents executed in connection herewith (i) because of the desirability
to each Borrower of the credit facilities hereunder and to each Affiliated
Borrower of the credit facilities under the Affiliated Financing Documents
and
the interest rates and the modes of borrowing available hereunder and
thereunder, (ii) because each Borrower may engage in transactions jointly
with other Borrowers or Affiliated Borrowers, and (iii) because each
Borrower may require, from time to time, access to funds under this
Agreement
for the purposes herein set forth. Each Borrower, individually, expressly
understands, agrees and acknowledges, that the credit facilities contemplated
hereunder would not be made available on the terms herein in the absence
of the
collective credit of all of the Persons constituting the Borrowers
and the
Affiliated Borrowers, the joint and several liability of all such Persons,
and
the cross-collateralization of the collateral of all such Persons hereunder
and
under the Affiliated Financing Documents. Accordingly, each Borrower,
individually acknowledges that the benefit to each of the Persons comprising
the
Borrowers as a whole constitutes reasonably equivalent value, regardless
of the
amount of the indebtedness actually borrowed by, advanced to, or the
amount of
credit provided to, or the amount of collateral provided by, any individual
Borrower.
(d) Each
Borrower has determined that it is and, after giving effect to the
transactions
contemplated by this Agreement, the other Financing Documents and the
Affiliated
Financing Documents (including, without limitation, the inter-Borrower
arrangement set forth in this Section) will be Solvent and has and will
have the ability to pay its debts from time to time incurred in connection
with
the conduct of its business as such debts mature and that the value
of the
benefits to be derived by such Borrower from the access to funds under
this
Agreement (including, without limitation, the inter-Borrower arrangement
set
forth in this Section) is reasonably equivalent to the obligations
undertaken pursuant hereto.
(e) The
Borrower Representative (on behalf of each Borrower) shall maintain records
specifying (i) all Obligations incurred by each Borrower, (ii) the
date of such incurrence, (iii) the date and amount of any payments made in
respect of such Obligations, and (iv) all inter-Borrower obligations
pursuant to this Section. The Borrower Representative shall make copies
of such
records available to the Administrative Agent, upon request.
-105-
(f) To
the
extent that applicable law otherwise would render the full amount of
the joint
and several obligations of any Borrower hereunder, under the other
Financing
Documents and under the Affiliated Financing Documents invalid or unenforceable,
such Borrower's obligations hereunder and under the other Financing
Documents
and Affiliated Financing Documents shall be limited to the maximum
amount which
does not result in such invalidity or unenforceability; provided, however,
that
each Borrower's obligations hereunder and under the other Financing
Documents
and Affiliated Financing Documents shall be presumptively valid and
enforceable
to their fullest extent in accordance with the terms hereof or thereof,
as if
this Section were not a part of this Agreement.
(g) To
the
extent that any Borrower shall make a payment under this Section of all or
any of the Obligations (other than credit facilities made to that Borrower
for
which it is primarily liable) (a "Joint
Liability Payment") which,
taking into account all other Joint Liability Payments then previously
or
concurrently made by any other Borrower, exceeds the amount which such
Borrower
would otherwise have paid if each Borrower had paid the aggregate Obligations
satisfied by such Joint Liability Payments in the same proportion that
such
Borrower's Allocable Amount (as defined below) (as determined immediately
prior to such Joint Liability Payments) bore to the aggregate Allocable
Amounts of each of the Borrowers as determined immediately prior to
the making
of such Joint Liability Payments, then, following indefeasible payment
in full
in cash of the Obligations and termination of the Commitments, such
Borrower
shall be entitled to receive contribution and indemnification payments
from, and
be reimbursed by, each other Borrower for the amount of such excess,
pro rata
based upon their respective Allocable Amounts in effect immediately
prior to
such Joint Liability Payments. As of any date of determination, the
"Allocable
Amount"
of any
Borrower shall be equal to the maximum amount of the claim which could
then be
recovered from such Borrower under this Section without rendering such
claim voidable or avoidable under Section 548 of Chapter 11 of the
Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer
Act,
Uniform Fraudulent Conveyance Act or similar statute or common law.
(h) Except
as
specifically provided in this Agreement or any of the other Financing
Documents,
Administrative Agent shall have the exclusive right to determine the
time and
manner of application of any payments or credits, whether received
from any
Borrower or any other source, and such determination shall be binding
on all
Borrowers. All such payments and credits may be applied, reversed and
reapplied,
in whole or in part, to any of the Obligations as Administrative Agent
shall
determine in its sole discretion without affecting the validity or
enforceability of the Obligations of any other Borrower or Affiliated
Borrower.
(i) Each
Borrower hereby agrees that, except as hereinafter provided, its obligations
hereunder shall be unconditional, irrespective of (i) the absence of any
attempt to collect the Obligations from any obligor or other action
to enforce
the same; (ii) the waiver or consent by Administrative Agent and/or any
applicable Lender(s) with respect to any provision of any instrument
evidencing the Obligations, or any part thereof, or any other agreement
heretofore, now or hereafter executed by a Borrower or Affiliated Borrower
and
delivered to Administrative Agent and/or any Lender; (iii) failure by
Administrative Agent to take any steps to perfect and maintain its
security
interest in, or to preserve its rights to, any security or collateral
for the
Obligations; (iv) the institution of any proceeding under the United States
Bankruptcy Code, or any similar proceeding, by or against a Borrower
or
Affiliated Borrower or Administrative Agent's or any Lender's election
in any
such proceeding of the application of Section 1111(b)(2) of the United
States Bankruptcy Code; (v) any borrowing or grant of a security interest
by a Borrower or Affiliated Borrower as debtor-in-possession, under
Section 364 of the United States Bankruptcy Code; (vi) the
disallowance, under Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code, of
all or any portion of Administrative Agent's or any Lender's claim(s) for
repayment of any of the Obligations; or (vii) any other circumstance other
than payment in full of the Obligations which might otherwise constitute
a legal
or equitable discharge or defense of a guarantor or surety.
-106-
(j) Until
all
Obligations have been paid and satisfied in full, no payment made by
or for the
account of a Borrower or Affiliated Borrower including, without limitation,
(i) a payment made by such Borrower or Affiliated Borrower on behalf of
the
liabilities of any other Borrower or Affiliated Borrower, or (ii) a payment
made by any other person under any Guarantee, shall entitle such Borrower
or
Affiliated Borrower, by subrogation or otherwise, to any payment from
any other
Borrower or Affiliated Borrower or from or out of any other Borrower's
or
Affiliated Borrower's property and such Borrower or Affiliated Borrower
shall
not exercise any right or remedy against any other Borrower or Affiliated
Borrower or any property of any other Borrower or Affiliated Borrower
by reason
of any performance of such Borrower or Affiliated Borrower of its joint
and
several obligations hereunder.
(k) Any
notice
given by one Borrower hereunder shall constitute and be deemed to be
notice
given by all Borrowers and Affiliated Borrowers, jointly and severally.
Notice
given by Administrative Agent or any Lender to any one Borrower or
Affiliated
Borrower hereunder or pursuant to any Financing Documents or Affiliated
Financing Documents in accordance with the terms hereof or thereof
shall
constitute notice to each and every Borrower and Affiliated Borrower.
The
knowledge of one Borrower or Affiliated Borrower shall be imputed to
all
Borrowers and Affiliated Borrowers and any consent by one Borrower
or Affiliated
Borrower shall constitute the consent of and shall bind all Borrowers
and
Affiliated Borrower.
(l) This
Section is intended only to define the relative rights of Borrowers and
Affiliated Borrowers and nothing set forth in this Section is intended to
or shall impair the obligations of Borrowers, jointly and severally,
to pay any
amounts as and when the same shall become due and payable in accordance
with the
terms of this Agreement or any other Financing Documents. Nothing contained
in
this Section shall limit the liability of any Borrower to pay the credit
facilities made directly or indirectly to that Borrower and accrued
interest,
Fees and expenses with respect thereto for which such Borrower shall
be
primarily liable.
(m) The
parties hereto acknowledge that the rights of contribution and indemnification
hereunder shall constitute assets of each Borrower to which such contribution
and indemnification is owing. The rights of any indemnifying Borrower
against
the other Borrowers or Affiliated Borrowers under this Section shall be
exercisable upon the full and indefeasible payment of the Obligations
and the
termination of the credit facilities hereunder and under the Affiliated
Financing Documents.
-107-
Section
15.2 Guarantor
Provisions.
(a) Each
Borrower, as joint and several primary obligor of the Obligations directly
incurred by any other Borrower or by any Affiliated Borrower, authorizes
Administrative Agent and Lenders, without giving notice to such Borrower
or to
any other Borrower or any Affiliated Borrower (to the extent permitted
hereunder
or under any Affiliated Financing Document) or obtaining such Borrower's
consent or any other Borrower's or Affiliated Borrower's consent (to
the extent
permitted hereunder or under any Affiliated Financing Document) and without
affecting the liability of such Borrower for the Obligations directly
incurred
by the other Borrower or Affiliated Borrower, from time to time to:
(i) compromise,
settle, renew, extend the time for payment, change the manner or terms
of
payment, liquidate, discharge the performance of, decline to enforce,
or release
all or any of the Obligations; grant other indulgences to any Borrower
in
respect thereof; or modify in any manner any documents relating to
the
Obligations;
(ii) declare
all Obligations due and payable upon the occurrence and during the
continuance
of an Event of Default;
(iii) take
and
hold security for the performance of the Obligations of any Borrower
and
exchange, enforce, waive and release any such security;
(iv) release,
surrender or exchange any deposits or other property securing the Obligations
or
on which Administrative Agent and/or any applicable Lender(s) at any time
may have a Lien; release, substitute or add any one or more endorsers
or
guarantors of the Obligations of any other Borrower or Affiliated Borrower
or
such Borrower; or compromise, settle, renew, extend the time for payment,
discharge the performance of, decline to enforce, or release all or
any
obligations of any such endorser or guarantor or other Person who is
now or may
hereafter be liable on any Obligations or release, surrender or exchange
any
deposits or other property of any such Person;
(v) accept
partial payments, apply Payments received by Administrative Agent and/or
any
applicable Lender(s) from any Borrower or any Affiliated Borrower to any
Obligations, in such order as Administrative Agent shall determine,
in its sole
discretion; and
(vi) subject
to
the provisions hereof, assign this Agreement in whole or in part.
(b) Each
Borrower, as a primary, joint and several obligor with respect to the
Obligations directly incurred by any other Borrower or any Affiliated
Borrower,
waives:
(i) any
defense based upon any legal disability or other defense of any other
Borrower
or any Affiliated Borrower, or by reason of the cessation or limitation
of the
liability of any other Borrower or any Affiliated Borrower from any
cause (other
than full payment of all Obligations), including, without limitation,
failure of
consideration, breach of warranty, statute of frauds, statute of limitations,
accord and satisfaction, and usury;
(ii) any
defense based upon any legal disability or other defense of any other
guarantor
or other Person;
(iii) any
defense based upon any lack of authority of the officers, directors,
partners or
agents acting or purporting to act on behalf of any other Borrower
or Affiliated
Borrower or any principal of any other Borrower or Affiliated Borrower
or any
defect in the formation of any other Borrower or Affiliated Borrower
or any
principal of any other Borrower or Affiliated Borrower;
(iv) any
defense based upon the application by any other Borrower or Affiliated
Borrower
of the proceeds of the credit facilities or the loans under the Affiliated
Financing Documents for purposes other than the purposes represented
by such
other Borrower or Affiliated Borrower to Administrative Agent and Lenders
or
intended or understood by Administrative Agent and Lenders or such
Borrower;
(v) any
defense based on such Borrower's rights, under statute or otherwise,
to require
Administrative Agent and/or any applicable Lender(s) to xxx any other
Borrower or Affiliated Borrower or otherwise to exhaust its rights
and remedies
against any other Borrower or Affiliated Borrower or any other Person
or against
any collateral before seeking to enforce its right to require such
Borrower to
satisfy the Obligations of any other Borrower or Affiliated
Borrower;
(vi) any
defense based on Administrative Agent's or any Lender's failure at
any time to
require strict performance by any Borrower of any provision of the
Financing
Documents or by any Affiliated Borrower of any provisions of the Affiliated
Financing Documents. Such Borrower agrees that no such failure shall
waive,
alter or diminish any right of Administrative Agent and/or any applicable
Lender(s) thereafter to demand strict compliance and performance therewith.
Nothing contained herein shall prevent Administrative Agent and/or
any
applicable Lender(s) from foreclosing on any Lien, or exercising any rights
available to Administrative Agent and/or any applicable
Lender(s) thereunder, and the exercise of any such rights shall not
constitute a legal or equitable discharge of such Borrower;
(vii) any
defense arising from any act or omission of Administrative Agent and/or
any
applicable Lender(s) which changes the scope of such Borrower's risks
hereunder, but the foregoing shall not limit any Credit Party from
asserting
claims based on breaches of this Agreement or willful misconduct by
Administrative Agent and/or any applicable Lender;
-108-
(viii) any
defense based upon Administrative Agent's or any Lender's election
of any remedy
against such Borrower or any other Borrower or Affiliated Borrower
or any of
them; any defense based on the order in which Administrative Agent
and/or any
Lender(s) enforces its remedies;
(ix) any
defense based on (A) Administrative Agent's or any applicable Lender's
surrender, release, exchange, substitution, dealing with or taking
any
additional collateral, (B) Administrative Agent's or any applicable
Lender's abstaining from taking advantage of or realizing upon any
Lien or other
Guarantee, and (C) any impairment of collateral securing the Obligations,
including, without limitation, Administrative Agent's or any applicable
Lender's
failure to perfect or maintain a Lien in such collateral;
(x) any
defense based upon Administrative Agent's or any Lender's failure to
disclose to
such Borrower any information concerning any other Borrower's or Affiliated
Borrower's financial condition or any other circumstances bearing on
any other
Borrower's or Affiliated Borrower's ability to pay the Obligations;
(xi) any
defense based upon any statute or rule of law which provides that the
obligation
of a surety must be neither larger in amount nor in any other respects
more
burdensome than that of a principal;
(xii) any
defense based upon Administrative Agent's and/or any Lender's election,
in any
proceeding instituted under the Bankruptcy Code, of the application
of
Bankruptcy Code Β§1111(b)(2) or any successor statute;
(xiii) any
defense based upon any borrowing or any grant of a security interest
under
Bankruptcy Code Β§364;
(xiv) any
defense based on Administrative Agent's and/or any Lender's failure
to be
diligent or to satisfy any other standard imposed on a secured party,
in
exercising rights with respect to collateral securing the
Obligations;
(xv) except
as
otherwise expressly set forth herein: notice of acceptance hereof;
notice of the
existence, creation or acquisition of any Obligation; notice of any
Event of
Default; notice of the amount of the Obligations outstanding from time
to time;
notice of any other fact which might increase such Borrower's risk;
diligence;
presentment; demand of payment; protest; filing of claims with a court
in the
event of any other Borrower's receivership or bankruptcy and all other
notices
and demands to which such Borrower might otherwise be entitled (and
agrees the
same shall not have to be made on the other Borrower as a condition
precedent to
such Borrower's obligations hereunder);
(xvi) any
defense based on errors and omissions by Administrative Agent and/or
any Lender
in connection with its administration of the credit facilities or the
loans made
under the Affiliated Financing Documents, but the foregoing shall not
limit any
Credit Party from asserting claims based on breaches of this Agreement
or
willful misconduct by Administrative Agent and/or any applicable
Lender;
(xvii) any
defense based on application of fraudulent conveyance or transfer law
or
shareholder distribution law to any of the Obligations or the security
therefor;
-110-
(xviii) any
defense based on Administrative Agent's and/or any Lender's failure
to seek
relief from stay or adequate protection in any other Borrower's or
Affiliated
Borrower's bankruptcy proceeding or any other act or omission by Administrative
Agent and/or any Lender which impairs such Borrower's prospective subrogation
rights;
(xix) any
defense based on legal prohibition of Administrative Agent's and/or
any Lender's
acceleration of the maturity of the Obligations during the occurrence
of an
Event of Default or any other legal prohibition on enforcement of any
other
right or remedy of Administrative Agent and/or any Lender with respect
to the
Obligations and the security therefor;
(xx) any
defense available to a surety under applicable law; and
(xxi) the
benefit of any statute of limitations affecting the liability of such
Borrower
hereunder or the enforcement hereof.
(c) Each
Borrower further agrees that its obligations hereunder shall not be
impaired in
any manner whatsoever by any bankruptcy, extensions, moratoria or other
relief
granted to any other Borrower or Affiliated Borrower pursuant to any
statute
presently in force or hereafter enacted.
(d) Each
Borrower authorizes Administrative Agent and each Lender to exercise,
in its
sole discretion, any right, remedy or combination thereof which may
then be
available to Administrative Agent or such Lender, since it is such
Borrower's
intent that the Obligations be absolute, independent and unconditional
obligations of such Borrower under all circumstances. Notwithstanding
any
foreclosure of any Lien with respect to any or all of any property
securing the
Obligations, whether by the exercise of the power of sale contained
therein, by
an action for judicial foreclosure or by an acceptance of a deed in
lieu of
foreclosure, each Borrower shall remain bound under such Borrower's
Guarantee of
the Obligations directly incurred by any other Borrower or Affiliated
Borrower.
(e) This
Agreement is a primary and original obligation of each of the Borrowers
and each
of the Borrowers shall be liable for all existing and future Obligations
of any
other Borrower or Affiliated Borrower as fully as if such Obligations
were
directly incurred by such Borrower.
[SIGNATURES
APPEAR ON FOLLOWING PAGES]
-111-
IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above
written.
|
ADMINISTRATIVE
AGENT AND LENDERS:
|
||
|
XXXXXXX
XXXXX CAPITAL, a division of Xxxxxxx Xxxxx
Business
|
||
|
Financial
Services Inc., as Administrative Agent and a
Lender
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
Address:
|
000
X. XxXxxxx Xxxxxx, 00xx Xxxxx
|
|
|
Xxxxxxx,
Xxxxxxxx 00000
|
||
|
Attn:
Account Manager for MLC-HCF
|
||
|
ARC
transaction
|
||
|
Facsimile
number: (000) 000-0000
|
||
|
E-Mail
Address: XXX_XXX_XX0@xx.xxx
|
||
|
With
copies to:
|
||
|
Xxxxxxx
Xxxxx Capital
|
||
|
000
X. XxXxxxx Xxxxxx, 00xx Xxxxx
|
||
|
Xxxxxxx,
Xxxxxxxx 00000
|
||
|
Attn:
Group Senior Transaction Attorney,
Healthcare
Finance |
||
|
Facsimile
Number: (000) 000-0000
|
||
|
Xxxxxxx
Xxxxx Capital
|
||
|
0000
Xxxxxxxxx Xxx., Xxxxx 000
|
||
|
Xxxxxxxx,
Xxxxxxxx 00000
|
||
|
Attn:
Group Senior Transaction Attorney, Healthcare
|
||
|
Finance
|
||
|
Facsimile
Number: (000) 000-0000
|
||
|
And
with an additional copy to:
|
||
|
Goldberg,
Kohn, Bell, Black,
|
||
|
Xxxxxxxxxx
& Moritz, Ltd.
|
||
|
00
Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
|
||
|
Xxxxxxx,
Xxxxxxxx 00000
|
||
|
Attn:
Xxxxx X. Xxxxxxxxxx
|
||
|
Facsimile
number: (000) 000-0000
|
||
|
E-mail
Address: xxxxx.xxxxxxxxxx@xxxxxxxxxxxx.xxx
|
||
|
Payment
Account Designation:
|
|
|
|
|
|
ABA
No.:
|
|
|
|
|
|
Account
No.:
|
|
|
|
|
|
Account
Name:
|
|
|
|
|
|
Reference:
|
|
|
|
ANNEXES
Annex
A - Commitment
Annex
EXHIBITS
Exhibit
A - Assignment
Agreement
Exhibit
B - Single
Purpose Entity Requirements
Exhibit
C - Compliance
Certificate
Exhibit
D - Payment
Notification
Exhibit
E - Borrowers'
Taxpayer Identification Numbers
SCHEDULES
Schedule
3.1 - Existence,
Organizational Identification Numbers, Foreign
Qualification,
Prior Names
Schedule
3.4 - Capitalization
Schedule
3.6 - Litigation
Schedule
3.17 - Material
Contracts
Schedule
3.18 - Environmental
Compliance
Schedule
4.4 - Insurance
Requirements
Schedule
4.11 - Deferred
Maintenance Items
Schedule
5.9 - Affiliate
Transactions
Schedule
7.3 - Post-Closing
Deliveries and Covenants
Schedule
8.1 - Licensed
Units and Beds
Schedule
8.7 - Operating
Lessees
 |
Annex A to Credit Agreement (Commitment Annex) |
|
Lender
|
Term
Loan Commitment Amount
|
Term
Loan Commitment Percentage
|
|
Xxxxxxx
Xxxxx Capital
|
$85,000,000
|
100%
|
|
TOTALS
|
$85,000,000
|
100%
|
| |
Exhibit A to Credit Agreement (Assignment Agreement) |
This
Assignment Agreement (this "Assignment
Agreement") is
entered into as of __________ by and between the Assignor named on
the signature
page hereto ("Assignor") and
the Assignee named on the signature page hereto ("Assignee").
Reference is made to the Credit Agreement dated as of November __,
2005 (as
amended or otherwise modified from time to time, the "Credit
Agreement") among
XXXXXXX XXXXX CAPITAL, as Administrative Agent and Lender and the other
Lenders
party thereto from time to time and ARC SUN CITY WEST, LLC, ARC ROSWELL,
LLC,
ARC VEGAS, LLC, ARC TUCSON, LLC, ARC OVERLAND PARK, LLC, ARC MINNETONKA,
LLC,
ARC DENVER MONACO, LLC, each a Delaware limited liability company,
and ARC
TANGLEWOOD, L.P., a Delaware limited partnership ("Borrowers"),
the
financial institutions party thereto from time to time, as Lenders,
and Xxxxxxx
Xxxxx Capital, a division of Xxxxxxx Xxxxx Business Financial Services
Inc., as
Administrative Agent. Capitalized terms used herein and not otherwise
defined
shall have the meanings assigned to them in the Credit Agreement.
Assignor
and Assignee hereby agree as follows:
1. Assignor
hereby sells and assigns to Assignee, and Assignee hereby purchases
and assumes
from Assignor the interests set forth on the schedule attached hereto
(the
"Schedule"),
in and
to Assignor's rights and obligations under the Credit Agreement as
of the
effective date set forth on the Schedule (the "Effective Date").
Such
purchase and sale is made without recourse, representation or warranty
except as
expressly set forth herein. On the Effective Date, Assignee shall pay
to
Assignor an amount equal to the aggregate amounts assigned pursuant
to the
Schedule and Assignor shall pay to Assignee a closing fee in respect
of the
transactions contemplated hereby in the amount specified on the
Schedule.
2. Assignor
(a) represents that as of the Effective Date, that it is the legal and
beneficial owner of the interests assigned hereunder free and clear
of any
adverse claim, (b) makes no other representation or warranty and assumes no
responsibility with respect to any statement, warranties or representations
made
in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the
Credit
Agreement, any other Financing Documents or any other instrument or
document
furnished pursuant thereto; and (c) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
any other
Credit Party or any other Person or the performance or observance by
any Credit
Party of its Obligations under the Credit Agreement or any other Financing
Documents or any other instrument or document furnished pursuant
thereto.
3. Assignee
(a) confirms that it has received a copy of the Credit Agreement and the
other Financing Documents, together with copies of the most recent
financial
statements delivered pursuant thereto and such other documents and
information
as it has deemed appropriate to make its own credit analysis and decision
to
enter into this Assignment Agreement; (b) agrees that it will,
independently and without reliance upon Administrative Agent, Assignor
or any
other Lender and based on such documents and information as it shall
deem
appropriate at the time, continue to make its own credit decisions
in taking or
not taking action under the Credit Agreement; (c) appoints and authorizes
Administrative Agent to take such action as Administrative Agent on
its behalf
and to exercise such powers under the Credit Agreement and the other
Financing
Documents as are delegated to Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (d) agrees
that it will perform in accordance with their terms all obligations
which by the
terms of the Credit Agreement are required to be performed by it as
a Lender;
(e) represents that on the date of this Assignment Agreement it is not
presently aware of any facts that would cause it to make a claim under
the
Credit Agreement; (f) represents and warrants that Assignee is not a
Foreign Lender or, if it is a Foreign Lender, (i) that it has delivered to
Administrative Agent the documentation required to be delivered to
Administrative Agent by
Section
13
below
and
(i) that if it is claiming exemption from U.S. federal withholding tax
under Section 871(h) or 881(c) of the Code with respect to payments of
"portfolio interest", (w) it is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code, (x) it is not a 10-percent shareholder of
any Credit Party within the meaning of Section 881(c)(3)(B) or Section
871(h)(3)(B) of the Code, (y) it is not a controlled foreign
corporation related to any Credit Party within the meaning of
Section 881(c)(3)(C) of the Code, and (z) it is not a conduit
entity participating in a conduit financing arrangement (as defined
in Section
1.881-3 of the Code Treasury Regulations); (g) represents and warrants that
Assignee is (or, upon receipt of the required consents hereto by Administrative
Agent and Borrowers will become) an Eligible Assignee, and
(h) represents and warrants that it has experience and expertise in the
making or the purchasing of loans such as the Loans, and that it has
acquired
the interests described herein for its own account and without any
present
intention of selling all or any portion of such interests.
-1-
4. Each
of
Assignor and Assignee represents and warrants to the other party hereto
that it
has full power and authority to enter into this Assignment Agreement
and to
perform its obligations hereunder in accordance with the provisions
hereof, that
this Assignment Agreement has been duly authorized, executed and delivered
by
such party and that this Assignment Agreement constitutes a legal,
valid and
binding obligation of such party, enforceable against such party in
accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws
affecting creditors' rights generally and by general principles of
equity.
5. Upon
the
effectiveness of this Assignment Agreement pursuant to Section
13
below,
(a) Administrative Agent shall register Assignee as a Lender, pursuant
to
the terms of the Credit Agreement, (b) Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment Agreement,
have
the rights and obligations of a Lender thereunder, (c) Assignor shall, to
the extent provided in this Assignment Agreement, relinquish its rights
and be
released from its obligations under the Credit Agreement and
(d) Administrative Agent shall thereafter make all payments in respect
of
the interest assigned hereby (including payments of principal, interest,
fees
and other amounts) to Assignee. Assignor and Assignee shall make all
appropriate adjustments in payments for periods prior to the Effective
Date by
Administrative Agent or with respect to the making of this assignment
directly
between themselves.
-2-
6. Each
of
Assignor and Assignee hereby agrees from time to time, upon request
of the other
such party hereto, to take such additional actions and to execute and
deliver
such additional documents and instruments as such other party may reasonably
request to effect the transactions contemplated by, and to carry out
the intent
of, this Assignment Agreement.
7. Neither
this Assignment Agreement nor any term hereof may be changed, waived,
discharged
or terminated, except by an instrument in writing signed by the party
(including, if applicable, any party required to evidence its consent
to or
acceptance of this Assignment Agreement) against whom enforcement of such
change, waiver, discharge or termination is sought.
8. For
the
purposes hereof and for purposes of the Credit Agreement, the notice
address of
Assignee shall be as set forth on the Schedule. Any notice or other
communication herein required or permitted to be given shall be in
writing and
delivered in accordance with the notice provisions of the Credit Agreement.
9. In
case
any provision in or obligation under this Assignment Agreement shall
be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality
and
enforceability of the remaining provisions or obligations, or of such
provision
or obligation in any other jurisdiction, shall not in any way be affected
or
impaired thereby.
10. THIS
ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD
TO
CONFLICTS OF LAWS PRINCIPLES.
11. This
Assignment Agreement shall be binding upon, and shall inure to the
benefit of,
the parties hereto and their respective successors and assigns.
12. This
Assignment Agreement may be signed in any number of counterparts, each
of which
shall be an original, with the same effect as if the signatures hereto
were upon
the same agreement.
-3-
13. This
Assignment Agreement shall become effective as of the Effective Date
upon the
satisfaction of each of the following conditions: (a) the execution of a
counterpart hereof by each of Assignor and Assignee, (b) the execution of a
counterpart hereof by Administrative Agent and each Borrower as evidence
of its
consent hereto to the extent required pursuant to Section
14.6(a) of
the
Credit Agreement, (c) the receipt by Administrative Agent of the
administrative fee referred to in Section
13.17(a) of
the
Credit Agreement, (d) in the event Assignee is a Foreign Lender, the
receipt by Administrative Agent of United States Internal Revenue Service
Forms
W-8ECI, W-8BEN or W-8IMY (as applicable), and such other forms, certificates
or
documents, including those prescribed by the United States Internal
Revenue
Service, properly completed and executed by Assignee, certifying as
to
Assignee's entitlement to exemption from withholding or deduction of
Taxes, and
(e) the receipt by Administrative Agent of originals or facsimiles of the
counterparts described above.
-4-
The
parties hereto have caused this Assignment Agreement to be executed
and
delivered as of the date first written above.
|
ASSIGNOR:
|
|
|
By:
|
|
|
Title:
|
|
|
ASSIGNEE:
|
|
|
By:
|
|
|
Title:
|
|
|
Consented
to:
|
|
|
Xxxxxxx
Xxxxx Capital, a division of Xxxxxxx Xxxxx
Business Financial Services Inc., as Administrative Agent |
|
|
By:
|
|
|
Title
|
|
|
ARC
SUN CITY WEST, LLC, ARC ROSWELL,
LLC, ARC VEGAS, LLC, ARC TUCSON, LLC, ARC OVERLAND PARK, LLC, ARC MINNETONKA, LLC, ARC DENVER MONACO, LLC |
|
|
By:
|
|
|
Name:
|
|
|
Its:
|
|
|
Address:
|
|
|
Facsimile
number:
|
|
|
E-mail
Address:
|
-5-
|
Taxpayer
Identification Number:
|
|
|
SEE
EXHIBIT E ATTACHED HERETO
|
|
|
ARC
TANGLEWOOD, L.P., a Delaware limited
partnership
|
|
|
By:
|
|
|
ARC
Tanglewood GP, LLC, a Delaware limited liability company,
its general
partner
|
|
|
By:
|
|
|
Name:
|
|
|
Its:
|
|
|
Address:
|
|
|
Facsimile
number:
|
|
|
E-mail
Address:
|
|
|
Taxpayer
Identification Number:
|
-6-
Schedule
to Assignment Agreement
Assignor: ___________________
Assignee: ___________________
Effective
Date: ______________
Credit
Agreement dated as of November __, 2005 among ARC Sun City West, LLC,
ARC
Roswell, LLC, ARC Vegas, LLC, ARC Tucson, LLC, ARC Overland Park, LLC,
ARC
Minnetonka, LLC, ARC Denver Monaco, LLC and ARC Tanglewood, L.P., as
Borrowers,
the financial institutions party thereto from time to time, as Lenders,
and
Xxxxxxx Xxxxx Capital, a division of Xxxxxxx Xxxxx Business Financial
Services
Inc., as Administrative Agent
Interests
Assigned:
|
Commitment/Loan
|
Term
Loan
|
|
Assignor
Amounts
|
$
|
|
Amounts
Assigned
|
$
|
|
Assignor
Amounts (post-assignment)
|
$
|
|
Closing
Fee:
|
$
|
Assignee
Information:
|
Address
for Notices:
|
Address
for Payments:
|
|
| Bank: | ||
|
|
||
|
Attention:
|
ABA
#:
|
|
|
Telephone:
|
Account
#:
|
|
|
Facsimile:
|
Reference:
|
-7-
| |
Exhibit B to Credit Agreement (SPE Requirements) |
1. The
Borrowers' business and purposes are and will continue to be limited
to the
following:
(a) to
enter
into and perform its obligations under this Agreement and the other
Financing
Documents;
(b) to
acquire, own, hold, lease, maintain, develop and improve the
Projects;
(c) to
sell,
transfer, service, convey, dispose of, pledge, assign, borrow money
against,
finance or otherwise deal with the Projects to the extent permitted
under the
Financing Documents;
(d) to
refinance the Projects in connection with a permitted repayment of
the Loans;
and
(e) to
engage
in any lawful act or activity and to exercise any powers permitted
to entities
of the type (e.g., limited partnerships, limited liability companies,
corporations, as applicable to each Borrower) formed under the laws of the
state of organization of such Person as of the date of this Agreement
that are
related or incidental to and necessary, convenient or advisable for
the
accomplishment of the above mentioned purposes.
2. Borrowers
shall do (or cause to be done) all things necessary in order to preserve
their existence to the fullest extent permitted by law. Except as expressly
permitted by the Financing Documents (if at all), Borrowers shall do
(or cause
to be done) all of the following:
(a) not
own
any asset or property other than (i) a fee interest in the Projects, and
(ii) incidental personal property necessary for the ownership or operation
of the Projects;
(b) not
enter
into any contract or agreement with any Affiliate of the Borrowers,
any
constituent party of the Borrowers, any guarantor or indemnitor under
any of the
Financing Documents or any Affiliate of any such constituent party
or guarantor
or indemnitor, except upon terms and conditions that are intrinsically
fair and
substantially similar to those that would be available on an arm's-length
basis
with third parties other than any such party;
(c) maintain
their intention to remain solvent and pay their debts and liabilities
(including, as applicable, shared personnel and overhead expenses) from
their assets, to the extent of their assets, as the same shall become
due;
-1-
(d) do
or
cause to be done all things necessary to observe organizational formalities
of
the Borrowers and preserve their existence, and not terminate or fail
to comply
with any of the provisions in this Section.
(e) maintain
all of their books, records, financial statements and bank accounts
separate
from those of their Affiliates and any other person or entity; provided,
however, that the Borrowers' financial position, assets, results of
operations
and cash flows may be included in a consolidated financial statement
of an
Affiliate of the Borrowers in accordance with GAAP so long as any such
consolidated financial statement contains a note indicating that the
Borrowers
and their Affiliates comprising the consolidated group are separate
legal
entities;
(f) hold
themselves out to the public as a legal entities separate and distinct
from each
other and from any other entity (including any Affiliate of the Borrowers,
any
guarantor or any constituent party of the Borrowers), correct any known
misunderstanding regarding their status as a separate entities, conduct
business
in their own name, and not identify themselves or any of their Affiliates
as a
division or part of the other; provided, however, that all Borrowers
shall be
permitted to, and shall at all times, hold themselves out to the public
as
entities that operate as a common enterprise;
(g) to
the
extent of cash flow available from ownership of the Projects and other
business
of the Borrowers, intend to maintain adequate capital for the normal
obligations
reasonably foreseeable in a business of their size and character and
in light of
their contemplated business operations;
(h) not
commingle the funds and other assets of the Borrowers with those of
any
Affiliate or constituent party, any guarantor or any other person,
except for
funds deposited into any lockbox accounts or other cash management
arrangements
required under this Agreement;
(i) maintain
their assets in such a manner that it will not be costly or difficult
to
segregate, ascertain or identify its individual assets from those of
any
Affiliate or constituent party, any guarantor or any other person or
entity;
(j) not
permit
any Affiliate or constituent party independent access to the Borrowers'
bank
accounts, except Borrower Representative in connection with any lockbox
account
or other cash management arrangements required hereunder, any property
management agreements entered into by Borrowers and approved by Administrative
Agent, and otherwise in connection with property or cash management
activities
consistent with the terms of the Financing Documents;
(k) pay
the
salaries of their own employees, if any;
(l) compensate
each of their consultants and agents, if any;
(m) maintain
an arm's-length relationship with their Affiliates;
-2-
(n) allocate
fairly and reasonably shared expenses, if any, including shared office
space;
(o) not
pledge
any of their assets for the benefit of any person or entity other than
Administrative Agent, except as expressly permitted by the Financing
Documents
(if at all);
(p) have
no obligation to indemnify their equity owners or members (but not
including
their respective individual officers, as the case may be, except
to the extent
that payment of such obligation is fully subordinated to the payment
of the
Obligations;
provided, however, the foregoing shall not apply where the indemnity
is paid
from third party funds, such as insurance proceeds;
(q) maintain
records, books of account and bank accounts separate and apart from
any other
person or entity (other than any lockbox account or other cash management
arrangement required hereunder); and file their own tax returns, if
any, as may
be required under applicable law, provided, however, that the Borrowers
may file
their federal tax return on a consolidated basis); and maintain their
books,
records, resolutions and agreements as official records; and
(r) not
make
any loans or advances to any third party, and not acquire obligations
or
securities of their Affiliates, except, in each case, as permitted
under the
Financing Documents.
3. So
long as
the Loans remain outstanding, the Borrowers shall not do (or cause
to be
done) any of the following except to the extent otherwise permitted under
the Financing Documents (if at all):
(a) assume,
guarantee, become obligated for, or hold themselves out to be responsible
for
the debts or obligations of any other person or entity or the decisions
or
actions respecting the daily business or affairs of any other
person;
(b) engage,
directly or indirectly, in any business other than the actions required
or
permitted to be performed under the Borrower's Organizational Documents
(as the
same may be amended or supplemented from time to time with Administrative
Agent's consent);
(c) incur,
create or assume any indebtedness other than the Loans except as otherwise
permitted by the Financing Documents;
(d) make
or
permit to remain outstanding any loan or advance to, or own or acquire
any stock
or securities of, any person or entity;
-3-
(e) form,
acquire or hold any subsidiary (whether corporate, partnership, limited
liability company or other); or
(f) to
the
fullest extent permitted by law, engage in any dissolution, liquidation,
consolidation, merger or sale of all or substantially all of their
assets.
-4-
| |
Exhibit C to Credit Agreement (Compliance Certificate) |
COMPLIANCE
CERTIFICATE
[BORROWER
REPRESENTATIVE]
Date:
__________, _____
This
certificate is given by _____________________, a Responsible Officer
of
_____________ ("Borrower
Representative"),
pursuant to that certain Credit Agreement dated as of November __,
2005 among
ARC SUN CITY WEST, LLC, ARC ROSWELL, LLC, ARC VEGAS, LLC, ARC TUCSON,
LLC, ARC
OVERLAND PARK, LLC, ARC MINNETONKA, LLC, ARC DENVER MONACO, LLC, each
a Delaware
limited liability company, and ARC TANGLEWOOD, L.P., a Delaware limited
partnership (collectively, "Borrower"),
the
Lenders from time to time party thereto and Xxxxxxx Xxxxx Capital,
a division of
Xxxxxxx Xxxxx Business Financial Services Inc., as Administrative Agent
for
Lenders (as such agreement may have been amended, restated, supplemented
or
otherwise modified from time to time, the "Credit
Agreement").
Capitalized terms used herein without definition shall have the meanings
set
forth in the Credit Agreement.
The
undersigned Responsible Officer hereby certifies to Administrative
Agent and
Lenders that:
(a) the
financial statements delivered with this certificate in accordance
with
Section 4.1
of the
Credit Agreement fairly present in all material respects the results
of
operations and financial condition of Borrower and its Subsidiaries
as of the
dates and the accounting period covered by such financial
statements;
(b) I
have
reviewed the terms of the Credit Agreement and have made, or caused
to be made
under my supervision, a review in reasonable detail of the transactions
and
conditions of Borrower and its Subsidiaries during the accounting period
covered
by such financial statements;
(c) such
review has not disclosed the existence during or at the end of such
accounting
period, and I have no knowledge of the existence as of the date hereof,
of any
condition or event that constitutes a material Default or an Event
of Default,
except as set forth in Schedule
1
hereto,
which includes a description of the nature and period of existence
of such
Default or an Event of Default and what action Borrower has taken,
is
undertaking and proposes to take with respect thereto; and
(d) Borrower
is in compliance with the covenants contained in Article 6 of the Credit
Agreement, and Guarantor is in compliance with the covenants contained
in the
Guarantee constituting a part of the Financing Documents, as demonstrated
by the
calculation of such covenants below, except as set forth below.
-1-
(e) Except
as
noted on Schedule
2
attached
hereto, the Credit Agreement contains a complete and accurate list
of all
business locations of Borrowers and all names under which each Borrower
currently conducts business; Schedule
2
specifically notes any changes in the names under which Borrower conducts
business.
(f) Except
as
noted on Schedule
3
attached
hereto, the undersigned has no knowledge of any federal or state tax
liens
having been filed against the Borrower or any Collateral or the Guarantor,
to
the extent that tax liens against Guarantor would result in a Material
Adverse
Effect or would adversely affect the Collateral.
(g) Except
as
noted on Schedule
3
attached
hereto, the undersigned has no knowledge of any failure of the Borrower
or the
Guarantor, to the extent that tax liens against Guarantor would result
in a
Material Adverse Effect or would adversely affect the Collateral to
make
required payments of withholding or other tax obligations of the Borrower
or the
Guarantor, to the extent that tax liens against Guarantor would result
in a
Material Adverse Effect or would adversely affect the Collateral during
the
accounting period to which the attached statements pertain or any subsequent
period.
(h) [Reserved.]
(i) [Reserved.]
(j) Schedule
4
attached
hereto contains a complete and accurate statement of all deposit or
investment
accounts maintained by Borrower.
(k) Except
as
described on Schedule
5
attached
hereto:
(i) there
are
no current, pending or threatened proceedings relating to a condemnation
or
other public taking of any Project;
(ii) no
Project
has suffered no casualty or other damage or loss of the type typically
covered
by hazard insurance;
(iii) all
insurance required to be maintained by Borrowers or ARC for the benefit
of
Borrower is in force and premiums therefor have been paid as and when
due and no
Borrower has made any claims thereunder;
(iv) the
undersigned has no knowledge of any current, pending or threatened
changes to
the zoning classification or permitted uses of any Project; and
(l) Except
as
described in the Credit Agreement or in Schedule
6
attached
hereto, the undersigned has no knowledge of any current, pending or
threatened:
(i) material
litigation against any Borrower;
(ii) inquiries,
investigations or proceedings concerning the business affairs, practices,
licensing or reimbursement entitlements of any Borrower;
-2-
(iii) default
by
Borrower under any material contract to which either of them is a party,
including, without limitation, any Material Leases.
In
determining compliance with the provisions identified in (d) above, the
following calculations have been made:
REFER
TO ATTACHED WORKSHEETS FOR ALL CALCULATIONS
-3-
Such
calculations and the certifications contained therein are true, correct
and
complete;
The
foregoing certifications and computations are made as of ___________________,
_____ (end of month) and delivered this ____ day of _____________,
20___.
|
Sincerely,
By:_______________________________________________
Name:_____________________________________________
Title
of
_________________________Borrower
Representative
|
List
of Schedules:
Schedule
1
- Non-Compliance with Covenants
Schedule
2
- Business Locations and Names of Borrower
Schedule
3
- Unpaid Tax or Withholding Obligations
Schedule
4
- List of all Deposit and Investment Accounts of Borrower
Schedule
5
- Events Affecting Real Property (condemnation, insurance, zoning,
taxes)
Schedule
6
- Pending Litigation, Inquiries or Investigations; Defaults under Material
Contracts
Worksheet(s) for
Financial or Other Covenant Calculations
-5-
| Schedules to Compliance Certificate |
Schedule
1
- Non-Compliance with Covenants
Schedule
2
- Business Locations and Names of Borrower
Schedule
3
- Unpaid Tax or Withholding Obligations
Schedule
4
- List of all Deposit and Investment Accounts of Borrower
Schedule
5
- Events Affecting Real Property (condemnation, insurance, zoning,
taxes)
Schedule
6
- Pending Litigation, Inquiries or Investigations; Defaults under Material
Contracts
Worksheets
for covenant calculations
-5-
| |
Exhibit D to Credit Agreement (Payment Notification) |
[BORROWER
REPRESENTATIVE]
Date:
___________, ______
Reference
is hereby made to the Credit Agreement dated November __, 2005 among
the
undersigned, Xxxxxxx Xxxxx Capital, a division of Xxxxxxx Xxxxx Business
Financial Services Inc., as Administrative Agent and the financial
institutions
party thereto. Capitalized terms used here have the meanings ascribed
thereto in
the Credit Agreement.
Please
be
advised that funds in the amount of $_____________ will be wire transferred
to
Administrative Agent on _________, 200_. Such funds shall constitute
[an
optional]
[a
mandatory]
prepayment of the Term Loans, with such prepayments to be applied in
the manner
specified in Section
2.1(e).
Such
mandatory prepayment is being made pursuant to Section __________ of
the Credit
Agreement.
Fax
to MLC Operations 000-000-0000 no later than noon Chicago
time
|
Note:
|
Funds
must be received no later than noon Chicago time for same
day
application
|
Wire
Instructions:
Bank
Name:
LaSalle Bank National Association
000 X. XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
LaSalle Bank National Association
000 X. XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
ABA#: 0000-0000-0
Account
Name: ______________________
Account
#:__________________________
Reference: (Client
Name)
Address:
Xxxxxxx
Xxxxx Capital
000 X. XxXxxxx Xxxxxx, 00xx Xxxxx
000 X. XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx,
XX 00000
IN
WITNESS
WHEREOF, the undersigned officer has executed and delivered this certificate
this ____ day of ___________, ____.
|
By:_______________________________________________
Name:_____________________________________________
Title
of
_________________________Borrower
Representative
|
| |
Exhibit E to Credit Agreement (Borrowers' Taxpayer Identification Numbers) |
See
Schedule 3.1
-1-
| |
Schedule 1 β Permitted Leases |
|
Lessee
|
Location
|
Annual
Rent
|
|
HBP
Corporation
(Hairstyles
by Xxxxxxxx)
|
Sun
City, Arizona
|
10%
of services rendered by Lessee
|
|
Sierra
Corporation
|
Roswell,
Georgia
|
$6,000
|
|
Xxxx
Xxxxxxxxx
|
Tucson,
Arizona
|
$1,440
|
|
Xxxx
Xxxxx
|
Overland
Park, Kansas
|
N/A
|
|
Xxxxxxxxx
Xxxxxxxxx
|
Denver,
Colorado
|
$2,400
|
|
Xxxx
Xxxxx
|
Xxxxxxx,
Texas
|
$2,400
|
-1-
| |
Schedule 3.1 β Existence, Organizational Identification Numbers, Foreign Qualifications, Prior Names |
ARC
Sun City West, LLC
d/b/a:
Freedom Inn Sun City West
Organizational
ID No.: 4032632
EIN: 00-0000000
State
of
Formation: Delaware
Foreign
Qualifications: Arizona
ARC
Roswell, LLC
d/b/a:
Freedom Inn Roswell
Organizational
ID No.: 4032633
EIN: 00-0000000
State
of
Formation: Delaware
Foreign
Qualifications: Georgia
ARC
Vegas, LLC
d/b/a:
Heritage Club Las Vegas
Organizational
ID No.: 4032634
EIN: 00-0000000
State
of
Formation: Delaware
Foreign
Qualifications: Nevada
ARC
Tucson, LLC
d/b/a:
Freedom Inn Ventana Canyon
Organizational
ID No.: 4032635
EIN: 00-0000000
State
of
Formation: Delaware
Foreign
Qualifications: Arizona
ARC
Overland Park, LLC
d/b/a:
Freedom Inn at Overland Park
Organizational
ID No.: 4032637
EIN: 00-0000000
State
of
Formation: Delaware
Foreign
Qualifications: Kansas
ARC
Minnetonka, LLC
d/b/a:
Freedom Inn Minnetonka
Organizational
ID No.: 4032685
EIN: 00-0000000
State
of
Formation: Delaware
Foreign
Qualifications: Minnesota
-1-
ARC
Denver Monaco, LLC
d/b/a:
Heritage Club at Denver Tech Center
Organizational
ID No.: 4032690
EIN: 00-0000000
State
of
Formation: Delaware
Foreign
Qualifications: Colorado
ARC
Tanglewood, L.P.
d/b/a:
Hampton Assisted Living at Tanglewood
Organizational
ID No.: 4032856
EIN: 00-0000000
State
of
Formation: Delaware
Foreign
Qualifications: Texas
American
Retirement Corporation
Organizational
ID No.: 0325434
EIN: 00-0000000
State
of
Formation: Tennessee
-2-
| |
Schedule 3.4(a). β Capitalization |
 |
| |
Schedule 3.4(b). β Capitalization |
 |
| |
Schedule 3.6(a). β Litigation |
The
estate
of Xxxxx Xxxxx Xxxxx vs. Creekside Hospice, Inc., Xxxx Xxxxx Xxxxxxx,
M.D. and
Epoch SL VI, Inc. filed November 11, 2004 with the Xxxxx County Nevada
District
Court, Case 04-A-495353-C claiming wrongful death and vicarious liability
with
respect to Epoch SL VI, Inc. Epoch SL VI, Inc. has insurance coverage
for this
matter in the amount of $1,000,000 and the insurance company has retained
legal
counsel on behalf of Epoch SL VI, Inc.
| |
Schedule 3.17 β Capitalization |
Management Agreements listed on Schedule 5.9.
Assisted
Living Plus and Respite Care Services Agreement for the period January
1, 2003
through December 31, 2006 between Epoch SL VI, Inc., d.b.a. Epoch Assisted
Living of Minnetonka and the County of Hennepin, a political subdivision
of the
State of Minnesota, as assigned to ARC Minnetonka, LLC, d.b.a. Freedom
Pointe
Minnetonka.
| |
Schedule 3.18 β Capitalization |
Those
matters referenced in the following reports prepared by XX Xxxxx Technical
Services, LLC:
|
(1)
|
Environmental
Site Assessment dated July 28, 2005 and Property Condition
Report dated
July 28, 2005 for the Epoch Assisted Living of Sun City West
in Sun City
West, Arizona
|
|
(2)
|
Environmental
Site Assessment dated July 27, 2005 and Property Condition
Report dated
July 28, 2005 for Epoch Assisted Living Facility of Roswell
in Roswell,
Georgia
|
|
(3)
|
Environmental
Site Assessment dated July 28, 2005 and Property Condition
Report dated
July 28, 2005 for Epoch of Las Vegas in Las Vegas,
Nevada
|
|
(4)
|
Environmental
Site Assessment dated July 28, 2005 and Property Condition
Report dated
July 28, 2005 for the Epoch of Ventana Canyon in Tucson,
Arizona
|
|
(5)
|
Environmental
Site Assessment dated July 28, 2005 and Property Condition
Report dated
July 28, 2005 for the Epoch Assisted Living of Overland Park
in Overland
Park, Kansas
|
|
(6)
|
Environmental
Site Assessment dated July 27, 2005 and Property Condition
Report dated
July 28, 2005 for Epoch Assisted Living of Minnetonka in
Minnetonka,
Minnesota
|
|
(7)
|
Environmental
Site Assessment dated July 28, 2005 and Property Condition
Report dated
July 28, 2005 for the Epoch Assisted Living Facility of Denver
in Denver
Colorado
|
|
(8)
|
Environmental
Site Assessment dated July 27, 2005 and Property Condition
Report dated
July 28, 2005 for the Epoch Assisted Living of Tanglewood
in Houston,
Texas
|
| |
Schedule 4.4 β Insurance Requirements |
The
following requirements for insurance are effective as of the Closing
Date.
Lender reserves the absolute right to modify, amend or supplement these
requirements at any time and from time to time during the term of the
Loan and
Borrower will be required to satisfy any such modified, amended or
supplemented
requirements after commercially reasonable notice to Borrower from
Lender of
such modification, amendment or supplement.
1. Issued
on
XXXXX
27
form
(Evidence of Insurance), signed by authorized agent.
2. Insurance
carrier(s) must be rated A- VII or better (by A.M. Best).
3. XXXXX
27
should
disclose: (a) annual premium for the coverages should be shown on the
XXXXX
27;
(b) premiums that remain unpaid for the term of the policy, if any.
Lender
has accepted the schedule of estimated 2006 insurance expense provided
by Xxxxx
XxXxxxxx from the Borrower.
4. Policy
should be an all risk/special perils coverage form.
5. Policy
must provide replacement cost coverage with waiver of coinsurance or
agreed
amount endorsement.
6. Policy
must provide waiver of terrorism exclusion (or indicate "no terrorism
exclusion").
7. Deductible
shall be no greater than $10,000. Lender
has approved the
property deductible of $50,000.
| Γ |
If
the deductible is subject to an
overall aggregate deductible, this must be disclosed with
a copy of the
specific aggregate deductible agreement
provided.
|
8. Building
coverage must be greater than or equal to replacement cost valued by
Xxxxxxx
Xxxxx Capital or its representatives (if the policy is a blanket policy
insuring
other properties, and there is any sublimit on the amount of coverage
for any
particular property, such limit should be shown on the evidence of
insurance).
Renewal amount and annual agreed amount endorsement shall be adjusted
by
Borrower, subject to Lender's approval, to maintain proper insurable
values.
Lender
has approved the following actual coverage: Building, Business Personal
Property, and Business Income coverages are written on a blanket basis
with
total limits of $500,000,000 applicable to each
location.
9. Loss
of
Rents coverage must be greater than or equal to twelve (12) months rental
income (if the policy is a blanket policy insuring other properties,
and there
is any sublimit on the amount of coverage for any particular property,
such
limit should be shown on the evidence of insurance). Lender
has approved the following actual coverage: Building, Business Personal
Property, and Business Income coverages are written on a blanket basis
with
total limits of $500,000,000 applicable to each
location.
-1-
10. Policy
must provide for Boiler & Machinery coverage.
11. Policy
must provide for Building Law and Ordinance coverage.
12. Policy
must provide for windstorm coverage, if applicable (For Florida/Coastal
properties).
13. Policy
must provide for flood coverage, if applicable (For properties in FEMA
flood
zones A, B, V, and X-Shaded). Lender
has approved the following actual coverage: Flood coverage is written
at a
blanket limit of $50,000,000
with a deductible of $100,000 each occurrence. Lender has confirmed
that no
flood coverage is required for any Property in this
transaction.
14. Policy
must provide for earthquake coverage, if applicable (For properties
located in
Seismic Zones 3 and 4). Lender
has approved the following actual coverage: Earthquake coverage is
written at a
blanket limit of $50,000,000 with a deductible of $100,000 each occurrence.
Lender has confirmed that no earthquake coverage is required for any
Property in
this transaction.
15. Xxxxxxx
Xxxxx Capital shall be named on the XXXXX 27 as Mortgagee and Loss
Payee (as
applicable) and Certificate Holder.
16. XXXXX
27
must provide for thirty (30) days' notice of cancellation or any material
change in the policy to Xxxxxxx Xxxxx Capital, and if possible, deleting
"endeavor to" and "but failure to mail such notice shall impose no
obligation or
liability of any kind upon the company, its agents or representatives"
language.
17. Policy
must contain waiver of subrogation by insurer with respect to contractual
releases made by insured prior to loss.
18. Higher
limits and special coverages in addition to those indicated above may
be
required depending upon the property size and nature of operations
(if a joint
venture).
-2-
1. Operator
must carry business interruption insurance with a coverage of twelve
(12) months. Lender
has approved the following actual coverage: Building, Business Personal
Property, and Business Income coverages are written on a blanket basis
with
total limits of $500,000,000 applicable to each
location.
2. Issued
on
XXXXX
27
form
(Evidence of Insurance), signed by authorized agent.
3. Insurance
carrier(s) must be rated A- VII or better (by A.M. Best).
4. XXXXX
27
should
disclose: (a) annual premium for the coverages should be shown on the Xxxxx
27; (b) premiums that remain unpaid for the term of the policy, if any.
Lender
has accepted the schedule of estimated 2006 insurance expense provided
by Xxxxx
XxXxxxxx from the Borrower.
5. Policy
should be an all risk/special perils coverage form.
6. Policy
must provide replacement cost coverage with waiver of coinsurance or
agreed
amount endorsement. Lender
has approved the following actual coverage: Building, Business Personal
Property, and Business Income coverages are written on a blanket basis
with
total limits of $500,000,000 applicable to each
location.
7. Policy
must provide waiver of terrorism exclusion (or indicate "no terrorism
exclusion").
8. Deductible
shall be no greater than $10,000. Lender
has approved the
property deductible of $50,000.
9. XXXXX
27
must provide for thirty (30) days' notice of cancellation or any material
change in the policy to Xxxxxxx Xxxxx Capital.
10. Policy
must contain waiver of subrogation by insurer with respect to contractual
releases made by insured prior to loss.
11.
Xxxxxxx Xxxxx Capital shall be named on the XXXXX
27
as
Mortgagee and Loss Payee (as applicable) and Certificate
Holder.
-3-
1. Certificate
must be issued on XXXXX
25
form
(Certificate of Ins.), signed by authorized agent.
2. Insurance
carrier(s) must be rated A- VII or better (by A.M. Best).
3. XXXXX
25
should
disclose: (a) annual premium for the coverages should be shown on the
XXXXX
25;
(b) premiums that remain unpaid for the term of the policy, if any.
Lender
has accepted the schedule of estimated 2006 insurance expense provided
by Xxxxx
XxXxxxxx from the Borrower.
4. Policy
should include coverage for Contractual Liability.
5. Policy
should include waiver of terrorism exclusion (or indicate "no terrorism
exclusion"). Lender
has approved the following: The
certificates on insurance do not reflect that terrorism is included
in the
combined general and professional liability policy insurance program;
however,
the Borrower and Borrower's insurance broker confirmed that terrorism
coverage
is included in the primary and excess insurance programs discussed
herein.
6. Policy
must have a deductible not greater than $25,000. Lender
has approved deductibles discussed below in item 7 of this
section.
| Γ |
If
the deductible is subject to an overall aggregate deductible,
this must be
disclosed with a copy of the specific aggregate deductible
agreement
provided.
|
7. Coverage
is required in a minimum $1,000,000 per claim and $3,000,000 in the
aggregate
(aggregate may apply to other insureds beyond the other named insureds
listed
below only with Lender's prior written consent): [enter names of named
insurance
- i.e., the policy owner - and the other named insureds; this should
consist
only of borrowers unless MLC otherwise approves].
Lender
has approved the following coverage: The combined general liability
and
professional liability insurance program is written with two insurance
carriers.
| Γ |
The
primary general liability coverage is written with a limit
of $4,000,000
each occurrence, with a $4,000,000 policy aggregate including
a
self-insured retention of $1,000,000 plus an excess-umbrella
liability
policy at a limit of $5,000,000 with no retention. The total
combined
primary insurance program for general liability is $5,000,000
with a
$1,000,000 self-insured
retention.
|
| Γ |
In
addition to the primary general liability insurance program,
there are two
excess programs written separately. The first policy combines
the general
liability and professional liability, each written at a limit
of
$15,000,000 in excess of the primary general liability insurance
program
with $5,000,000 self-insured retention applicable only to
the professional
liability coverage. The second excess coverage policy is
for general
liability written at a $10,000,000 limit.
|
| Γ |
Total
combined primary and excess general liability coverage is
$25,000,000 with
a $1,000,000 self-insured retention. Total combined coverage
for
professional liability is $15,000,000 with a $5,000,000 self-insured
retention.
|
-4-
8. XXXXX
25
should provide for thirty (30) days' notice of cancellation or any material
change in the policy to Xxxxxxx Xxxxx Capital, and if possible, deleting
"endeavor to" and "but failure to mail such notice shall impose no
obligation or
liability of any kind upon the company, its agents or representatives"
language.
Lender
has approved the certificates without the requested changes to the
notice of
cancellation.
9. Policy
must name Xxxxxxx
Xxxxx Capital as additional insured and must name the
following as other named insureds: The entities identified on Schedule
5.9.
10. Policy
must include Separation of Insureds/Cross Liability.
11. Policy
will be written on a claims-made basis. Lender
has approved the following: The primary general liability insurance
program is
written on an Occurrence basis. The two combined Excess General Liability
and
Professional Liability insurance programs are written on a Claims-Made
basis
with the retroactive date of coverage being the inception date of coverage
on
October 31, 2005.
12. Insurance
shall be noted as being primary without right of contribution of any
other
insurance carried by or on behalf of Lessor.
13. Higher
limits and special coverages in addition to those indicated above may
be
required depending upon the property size and nature of operations
(if a joint
venture).
-5-
Automobile
Liability Insurance (must show the following):
| 1. |
Issued
on Xxxxx 25 form (Certificate of Insurance), signed by authorized
agent.
|
| 2. |
Insurance
carrier (s) rated A- VII or better (by A.M.
Best).
|
| 3. |
Current
policy term.
|
| 4. |
Coverage
for Owned, Non-Owned, and Hired
autos.
|
| 5. |
Annual
premium for the coverages shown. Lender
has accepted the schedule of estimated 2006 insurance expense
provided by
Xxxxx XxXxxxxx from the
Borrower.
|
| 6. |
Premiums
that remain unpaid for the policy term, if any.
|
| 7. |
Waiver
of terrorism exclusion (or indicate "no terrorism
exclusion").
|
| 1. |
Liability
deductible not greater than $5,000. Lender
has approved the
automobile liability deductible of
$100,000.
|
| 2. |
If
the deductible is subject to an overall aggregate deductible,
this must be
disclosed with a copy of the specific aggregate deductible
agreement
provided.
|
| 3. |
Minimum
$1,000,000 per occurrence limit (primary and umbrella/excess
can be
combined to achieve minimum limit.
|
| 4. |
Thirty
(30) days (ten (10) days for non-payment) notice of
cancellation or any material change in the policy to Xxxxxxx
Xxxxx Capital
deleting "endeavor to" and "but failure to mail such notice
shall impose
no obligation or liability of any kind upon the company,
its agents or
representatives" language. Lender
has approved the certificates without the requested changes
to the notice
of cancellation.
|
| 5. |
Xxxxxxx
Xxxxx Capital included as Additional Insured (see
below).
|
| 6. |
Waiver
of Subrogation endorsement in favor of Xxxxxxx Xxxxx Capital
(see below).
Lender
has accepted the following: The current insurance carrier
would not
provide Waiver of Subrogation in favor of Lender. However,
the policy does
name Lender as Additional Insured which insures Lender to
the extent of
Lender's insurable interest in the automobiles for this
transaction.
|
-6-
| 7. |
Separation
of Insureds/Cross Liability included. Lender
has accepted the following: The current insurance carrier
would not
provide the Separation of Insureds/Cross Liability wording
to the policy.
However, Lender is named as Additional Insured and all owner
and facility
entities are included as named insureds on the policy. Therefore,
Lender
and all owner facility entities are provided named insured
status on the
policy thereby mitigating the need for this wording on the
policy.
|
| 8. |
Insurance
shall be noted as being primary without right of contribution
of any other
insurance carried by or on behalf of Lessor. Lender
has accepted the following: The current insurance carrier
would not
provide primary without right of contribution wording to
the policy.
However, Lender is named as Additional Insured and all owner
and facility
entities are included as named insureds on the policy. Therefore,
Lender
and all owner facility entities are provided named insured
status on the
policy thereby mitigating the need for this wording on the
policy.
|
| 9. |
Higher
limits and special coverages in addition to those indicated
above may be
required depending upon the property size and nature of operations
(if a
joint venture).
|
-7-
Xxxxxxx
Xxxxx Capital, a Division of
Xxxxxxx
Xxxxx Business Financial Services Inc.,
and
its
successors and assigns
000
X. Xx
Xxxxx Xxxxxx - 16th
Floor
Xxxxxxx,
XX 00000
Attn:
Portfolio Management
Lockton
Companies, Inc.
0000
Xxx
Xxxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
|
Primary
Contact:
|
Secondary
Contact:
|
|
Xxxxxx
X. Xxxxxx, CPCU
|
Xxxxx
Xxxxxxxxx
|
|
Vice
President, Risk Management Services
|
Assistant
Vice President, Account Manager
|
|
|
|
|
713.458.5200
(Main)
|
713.458.5200
(Main)
|
|
713.458.5281
(Direct)
|
713.458.5454
(Direct)
|
|
000.000.0000
(Fax)
|
000.000.0000
(Fax)
|
|
|
|
|
xxxxxxx@xxxxxxx.xxx(E-mail)
|
xxxxxxxxxx@xxxxxxx.xxx(E-mail)
|
-8-
| |
Schedule 4.11 β Deferred Maintenance Schedule |
Location:
Tanglewood
000 Xxxxxx Xxxxx
000 Xxxxxx Xxxxx
Xxxxxxx,
XX 00000
|
Estimated
Cost of Remediation
|
||||
|
Repair
EIFS system finish
|
$
|
30,000
|
||
|
Repair
exterior EIFS
|
20,000
|
|||
|
Elastomeric
coating
|
200,000
|
|||
|
Remove
organic matter
|
40,000
|
|||
|
Replace
urethane sealants
|
40,000
|
|||
|
Install
sealant to control joints
|
20,000
|
|||
|
Install/seal
expansion joints
|
40,000
|
|||
|
Repair/seal
control splice joints
|
15,000
|
|||
|
Total
|
405,000
|
|||
(based
upon report dated September 27, 2005 from Stone and Glazing
Consultant)
| |
Schedule 5.9 β Affiliate Transactions |
Senior
Independent Living Facility Management Agreement dated November ___,
2005 by and
between ARC Sun City West, LLC and ARC Management LLC.
Senior
Independent Living Facility Management Agreement dated November ___,
2005 by and
between ARC Roswell, LLC and ARC Management LLC.
Senior
Independent Living Facility Management Agreement dated November ___,
2005 by and
between ARC Vegas, LLC and ARC Management LLC.
Senior
Independent Living Facility Management Agreement dated November ___,
2005 by and
between ARC Tucson, LLC and ARC Management LLC.
Senior
Independent Living Facility Management Agreement dated November ___,
2005 by and
between ARC Overland Park, LLC and ARC Management LLC.
Senior
Independent Living Facility Management Agreement dated November ___,
2005 by and
between ARC Minnetonka, LLC and ARC Management LLC.
Senior
Independent Living Facility Management Agreement dated November ___,
2005 by and
between ARC Denver Monaco, LLC and ARC Management LLC.
Senior
Independent Living Facility Management Agreement dated November ___,
2005 by and
between ARC Tanglewood, L.P. and ARC Management LLC.
| |
Schedule 7.3 β Post Closing Deliveries and Covenants |
| 1. |
Borrowers
shall cause completion of the repairs referenced on Schedule 4.11
with respect to the Houston, Texas, Project, which repairs
shall be
completed in a good and workmanlike manner and in compliance
with all
applicable Laws within the time period set forth in Section
4.11.
|
| 2. |
Borrowers
shall deliver to Administrative Agent a copy of the Healthcare
Permit for
each Project issued in the name of the respective Licensed
Operator within
90 days after the Closing Date, provided that Borrowers shall
deliver to
Administrative Agent a status update every 30 days with respect
to each
pending application for a Healthcare Permit which has not
been issued
within 30 days after the Closing Date and such updates shall
demonstrate
that no delay in the issuance of any Healthcare Permit is
the result of
material approval issues with respect to the applicant or
ARC.
|
| 3. |
Borrowers
shall, in accordance with applicable Law, within 12 months
after the
Closing Date, pave and/or stripe the parking spaces so as
to create 18
additional legal parking spaces at the Project located in
Minnetonka,
Minnesota and Borrowers shall submit evidence thereof to
Administrative
Agent.
|
| 4. |
Within
90 days of the Closing Date, ARC Minnetonka, LLC, Manager
and/or Licensed
Operator, as applicable, shall be fully qualified to participate
in the
Medicaid Waiver Program with respect to the Minnetonka, Minnesota
Project
and be submitting bills to Governmental Payors with respect
to said
program, and Borrowers shall submit written evidence of same
to
Administrative Agent.
|
| |
Schedule 8.1 β Licensed Units and Beds |
|
Owner
|
Location
|
Beds
|
|
ARC
Sun City West, LLC
|
Sun
City, Arizona
|
97
Beds
|
|
ARC
Roswell, LLC
|
Roswell,
Georgia
|
96
Beds
|
|
ARC
Vegas, LLC
|
Las
Vegas, Nevada
|
108
Beds
|
|
ARC
Tucson, LLC
|
Tucson,
Arizona
|
99
Beds
|
|
ARC
Overland Park, LLC
|
Overland
Park, Kansas
|
124
Beds
|
|
ARC
Minnetonka, LLC
|
Minnetonka,
Minnesota
|
128
Beds
|
|
ARC
Denver Monaco, LLC
|
Denver,
Colorado
|
96
Beds
|
|
ARC
Tanglewood, L.P.
|
Houston,
Texas
|
140
Beds
|
| |
Schedule 8.7 β Operating Less ees |
ARC
Management, LLC
ARC
Sun
City West, LLC
ARC
Roswell, LLC
ARC
Vegas,
LLC
ARC
Tucson, LLC
ARC
Overland Park, LLC
ARC
Minnetonka, LLC
ARC
Denver
Monaco, LLC
ARC
Tanglewood, L.P.