Loan No. 70004021
LOAN AGREEMENT
between
GENERAL ELECTRIC CAPITAL CORPORATION,
a Delaware corporation
("Lender")
and
CNL RETIREMENT-AM/COLORADO LP
a Delaware limited partnership
("Borrower")
$11,000,000.00 Loan
The Heritage Club at Xxxxxxxxx Xxxxxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx
TABLE OF CONTENTS
RECITALS.1
ARTICLE I The Loan...........................................................2
ARTICLE II Security..........................................................5
ARTICLE III Conditions Precedent.............................................5
ARTICLE IV Representations and Warranties....................................8
ARTICLE V Affirmative Covenants..............................................15
ARTICLE VI Negative Covenants................................................20
ARTICLE VII Events of Default; Acceleration of Indebtedness; Remedies........21
ARTICLE VIII Miscellaneous...................................................23
EXHIBIT A Legal Description
EXHIBIT B Leases
EXHIBIT C Litigation
SCHEDULE I Net Operating Income
SCHEDULE II Index of Defined Terms
SENIOR HOUSING RIDER
Loan No. 7004021
LOAN AGREEMENT
This LOAN AGREEMENT (this "Agreement") is made this ____ day of
August, 2002 between CNL RETIREMENT-AM/COLORADO LP, a Delaware limited
partnership ("Borrower"), whose sole general partner is CNL
RETIREMENT-GP/COLORADO CORP., a Delaware corporation ("General Partner"), and
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation ("Lender").
RECITALS
A. Lender has agreed to make a loan (the "Loan") to Borrower
subject to the terms and conditions contained herein. The Loan is evidenced by
that certain Promissory Note A of even date herewith in the original principal
amount of Seven Million One Hundred Fifty Thousand and No/100 Dollars
($7,150,000.00) and that certain Subordinated Promissory Note B of even date
herewith in the original principal amount of Three Million Eight Hundred Fifty
Thousand and No/100 Dollars ($3,850,000.00) (said notes, together with and all
amendments thereto and substitutions therefor are hereinafter referred to as the
"Note"). The terms and provisions of the Note are hereby incorporated herein by
reference in this Agreement.
B. Borrower is or on the Closing Date will be the owner of a
skilled nursing, assisted living and dementia care facility located in Arapahoe
County, Colorado, commonly known as The Heritage Club at Greenwood Village and
more particularly described on Exhibit A hereto (the "Property"), and the
improvements located thereon (collectively called the "Improvements"). The
Property and the Improvements are sometimes collectively called the "Project".
C. Borrower will use the proceeds of the Loan for the purpose of
acquiring or refinancing the Project and for the other purposes contemplated
hereby.
D. Borrower's obligations under the Loan will be secured by, among
other things, (a) a first priority Mortgage, Assignment of Rents and Security
Agreement Deed of Trust, Assignment of Leases and Rents, Security Agreement and
Fixture Filing of even date herewith (the "Mortgage") encumbering the Project,
and (b) an Assignment of Leases and Rents of even date herewith ("Assignment of
Leases") encumbering the Project. This Agreement, the Note, the Mortgage, the
Assignment of Leases, the Agreement of Principals, the Environmental Indemnity
and any other documents evidencing or securing the Loan or executed in
connection therewith, and any modifications, renewals and extensions thereof,
are referred to herein collectively as the "Loan Documents."
E. An index of defined terms appears on the attached Schedule II.
NOW, THEREFORE, in consideration of the foregoing and the mutual
conditions and agreements contained herein, the parties agree as follows:
ARTICLE I
The Loan
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1.1 Disbursements.
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1.1.1. Initial Funding. On the Closing Date, Lender shall disburse
to Borrower from the proceeds of the Loan the sum of $9,100,000.00 (the "Initial
Funding Amount"). "Closing Date" means the date of disbursement of the Initial
Funding Amount.
1.1.2. Additional Advances. Lender shall make one additional
advance of the Loan in the amount of $1,900,000.00 fifteen (15) business days
following a request therefore from Borrower and Lender's receipt, review,
approval and/or confirmation of the following, each in form and content
satisfactory to Lender in its sole discretion:
(a) There is not a material Event of Default hereunder or under
any of the other Loan Documents.
(b) The representations and warranties contained in this Loan
Agreement and in all other Loan Documents are true and correct in all
material respects.
(c) Lender shall have received, at Borrower's expense, an
endorsement to the Title Policy insuring the priority of the Mortgage
with respect to such advance and indicating that no intervening liens
exist against the Project.
(d) Borrower shall have paid the Costs incurred by Lender in
connection with such advance (including title charges, and costs and
expenses of Lender's attorneys).
(e) No change shall have occurred in the financial condition of
Borrower or any Principal, which would have, in Lender's judgment, a
material adverse effect on the Loan, the Project, or Borrower's or any
Principal's ability to perform its obligations under the Loan
Documents.
(f) No material condemnation or adverse, as determined by Lender,
zoning or usage change proceeding shall have occurred or shall have
been threatened against the Project; the Project shall not have
suffered any damage by fire or other casualty which has not been
repaired or is not being restored in accordance with this Agreement; no
law, regulation, ordinance, moratorium, injunctive proceeding,
restriction, litigation, action, citation or similar proceeding or
matter shall have been enacted, adopted, or threatened by any
governmental authority, which would have, in Lender's judgment, a
material adverse effect on the Project or Borrower's or any Principal's
ability to perform its obligations under the Loan Documents.
(g) On the thirtieth (30th) day of the month preceding the month
in which the additional advance is requested, the proforma Net
Operating Income (as defined on Schedule I attached hereto) of the
Property shall be at least $1,800,000.00.
Notwithstanding the foregoing, Lender shall not be obligated to make any
additional advance of Loan proceeds after February 27, 2004.
1.2 Loan Term.
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1.2.1. Maturity Date. The Loan shall mature on August 31, 2007 or
such earlier date upon which the Loan is paid in full or becomes due and payable
in full, whether by acceleration or otherwise (the "Maturity Date").
1.3 Interest Rate. Prior to an Event of Default, Borrower shall
pay interest on the outstanding principal balance of the Loan at a floating rate
per annum equal to the Base Rate plus three and nine-tenths percent (3.90%) (the
aggregate rate referred to as the "Interest Rate"). "Base Rate" shall mean the
rate published each day in The Wall Street Journal for notes maturing three (3)
months after issuance under the caption "Money Rates, London Interbank Offered
Rates (LIBOR)". The Interest Rate for each calendar month shall be fixed based
upon the Base Rate published prior to and in effect on the first (1st) business
day of such month; provided, however, the Interest Rate from and including the
Closing Date through September 1, 2002 shall be fixed based upon the Base Rate
in effect on the business day immediately preceding the Closing Date. Interest
shall be calculated based on a 360 day year and charged for the actual number of
days elapsed. Notwithstanding the foregoing, the Interest Rate shall not at any
time be less than six and one-half percent (6.5%). Following an Event of
Default, the Borrower will pay interest on the outstanding principal balance of
the Loan and all other amount owing by Borrower under the Loan Documents at the
Default Rate (as defined in the Note).
1.4 Payments.
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1.4.1. Interest Payment. Borrower shall make interest payments
monthly in arrears on the first (1st) day of each month commencing October 1,
2002 computed on the outstanding principal balance of the Loan at the Interest
Rate; provided, however, interest for the period from and after the Closing Date
through September 30, 2002 shall be paid in advance on the Closing Date at the
rate described in Section 1.3 above.
1.4.2. Principal Payments. In addition to the payments made under
Section 1.4.1 hereof, Borrower shall make principal payments monthly on the
first day of each month commencing October 1, 2002. The amount of each monthly
installment of principal shall be equal to the amount which would amortize
$9,100,000.00 over three hundred (300) months, computed at an annual interest
rate of six and one-half percent (6.5%); provided however, (i) if the additional
advance contemplated by Section 1.1.2 hereof is made, thereafter the amount of
each monthly installment payable hereunder shall be equal to the amount which
would amortize $11,000,000.00 over three hundred (300) months computed at an
annual interest rate of six and one-half percent (6.5%), and (ii) if any
prepayment of principal is made pursuant to Section 1.6.2 hereof, thereafter the
amount of each monthly installment payable hereunder shall be equal to the
amount which would amortize the then outstanding principal balance of the Loan
over three hundred (300) months computed at an annual interest rate of six and
one-half percent (6.5%).
1.5 Sources and Uses. The sources and uses of funds for the contemplated
transaction are as follows:
SOURCES USES
Borrower's Equity: $ 7,145,375.00 Purchase Price: $17,865,375.00
Loan: Loan Payoff: $ 0.00
--Initial Funding Developer Fee: $ 0.00
Amount: $ 9,100,000.00 Accrued Interest: $ 0.00
--Additional Advances: $ 1,900,000.00 Application Fee $ 5,000.00
--Holdback: $ 0.00 Closing Costs: $ 50,000.00
Accrued Interest: $ 0.00 Broker Fees: $ 110,000.00
Holdbacks: $ 0.00 Commitment Fee: $ 110,000.00
Total: $18,145,375.00 Total: $18,145,375.00
Borrower shall deliver such information and documentation as Lender shall
request to verify that the sources and uses are as indicated above.
1.6 Prepayments of the Loan.
1.6.1 Restrictions on Prepayment Borrower may not prepay all or
any portion of the Loan prior to September 1, 2004. Thereafter, Borrower
may prepay the Note in full or in part at any time, provided Borrower gives
Lender at least thirty (30) days prior written notice and pays to Lender a
prepayment premium in an amount equal to the corresponding percentage of
principal prepaid:
Loan Year Percentage
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Third one percent (1.0%)
Fourth Zero
Fifth Zero
"Loan Year" shall mean the period from the Closing Date through
the last day of the same month in the following year and thereafter each
successive twelve (12) month period.
1.6.2 Special Prepayment Rights. Notwithstanding the provisions of
Section 1.6.1 hereof, (a) during any period when the Debt Service Coverage Ratio
is less than 1.5 to 1.0, Borrower may, without payment of a prepayment premium,
prepay the portion of the Loan which will cause the Debt Service Coverage Ratio
to be 1.5 to 1.0, such prepayment to be made upon 30 days prior written notice
to Lender, and (b) any prepayment which is made pursuant to Section 4 of the
Mortgage may be made without payment of a prepayment penalty.
ARTICLE II
Security
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2.1 Collateral. The Loan and all other indebtedness and obligations under
the Loan Documents shall be secured by the following (collectively, the
"Collateral"): (a) the Mortgage, (b) the Assignment of Leases, and (c) any other
collateral or security described in this Agreement or required by Lender in
connection with the Loan.
ARTICLE III
Conditions Precedent
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Lender's obligation to disburse the Initial Funding Amount is subject to
satisfaction of all of the following conditions:
3.1 Loan Documents. Lender shall have received the following Loan Documents,
all in form and substance satisfactory to Lender:
(a) this Agreement;
(b) the Note;
(c) the Mortgage;
(d) the Assignment of Leases;
(e) such Uniform Commercial Code financing statements as Lender may
require;
(f) an agreement of principals regarding non-recourse exception
liability (the "Agreement of Principals"), executed by General Partner and
CNL Retirement Properties, Inc., a Maryland corporation (collectively the
"Principals");
(g) a hazardous wastes indemnity agreement ("Environmental Indemnity"),
executed by Borrower and the Principals; and
(h) a security agreement and related documents ("Cash Account
Agreement") granting Lender a perfected first lien security interest in
Borrower's interest in the Reserve and Security Deposit (as those terms are
defined in the Tenant Lease).
3.2 Appraisal. Lender shall obtain an appraisal report for the Project, in
form and content acceptable to Lender, prepared by an independent MAI appraiser
in accordance with the Financial Institutions Reform, Recovery and Enforcement
Act ("FIRREA") and the regulations promulgated pursuant to such act. Borrower
may provide to Lender a copy of any FIRREA appraisal prepared for another Lender
within the past six (6) months. Lender may, in its sole discretion: (a) accept
such appraisal; (b) request an update of such appraisal; or (c) retain an MAI
appraiser to perform a new appraisal.
3.3 Title Policy and Endorsements. Lender shall have received a commitment
for title insurance in an amount and issued by a title insurance company
satisfactory to Lender. On the Closing Date, Lender shall receive an ALTA (or
equivalent) mortgagee policy of title insurance ("Title Policy"), acceptable to
Lender, in the maximum amount of the Loan, insuring marketability of title and
insuring that the lien of the Mortgage is a valid first lien on the Project,
subject only to exceptions to title approved by Lender. The Title Policy shall
also contain any reinsurance and endorsements required by Lender including
without limitation creditors' rights, zoning 3.1, variable rate, usury and
extended coverage endorsements (Comprehensive Form 1).
3.4 Survey. Lender shall have received and approved a survey of the Project,
dated no more than six (6) months prior to the Closing Date, prepared by a
registered land surveyor in accordance with the 1999 American Land Title
Association/ American Congress on Surveying and Mapping Standards and certified
in favor of Lender and the title insurer. The surveyor shall certify that the
Property is not in a flood hazard area as identified by the Secretary of Housing
and Urban Development. The survey shall be sufficient for the title insurer to
remove the general survey exception.
3.5 Environmental Report. Lender shall have received a Phase I Environmental
audit of the Project. The audit shall (i) be addressed to Lender or Lender shall
have obtained a reliance letter which is acceptable to Lender; (ii) state that
Lender may rely thereon; and (iii) be acceptable to Lender in its sole
discretion.
3.6 Leases. Lender shall have reviewed and approved the Lease Agreement
dated March 21, 2002 between Borrower, as landlord, and ARC Greenwood Village,
Inc. (the "Tenant"), as tenant (the "Tenant Lease") and all leases, licenses and
other agreements with regard to the occupancy of the Property entered into by
Tenant, including patient and resident care agreements (such agreements, whether
now existing or hereafter entered into being the "Subleases"). The Tenant Lease
and the Subleases are collectively called the "Leases"). Lender must approve all
Leases except Subleases with residents which are entered into by Tenant in the
ordinary course of business and in accordance with the terms of the Tenant
Lease. If any non-residential Leases exist or are hereafter entered into with
respect to the Property, such lease form shall provide that the tenant shall
attorn to Lender, and that any cancellation, surrender or amendment of such
lease without the prior written consent of Lender shall be voidable by Lender,
and each tenant thereunder shall execute and deliver to Lender prior to the
Closing or prior to the execution thereof by Borrower, as applicable, a
Subordination and Attornment Agreement in a form reasonably acceptable to
Lender.
3.7 Insurance. Borrower shall have provided Lender with and Lender shall
have approved copies of certificates evidencing the insurance policies required
to be delivered pursuant to the Mortgage.
3.8 Compliance with Laws. Borrower shall have submitted and Lender shall
have approved (a) a final certificate of occupancy (or the equivalent) for the
Project, (b) evidence satisfactory to Lender that the Project complies in all
material respects with all applicable laws (including, without limitation, all
building, zoning, density, land use, ordinances, regulations, planning
requirements, and health care permits and licenses), covenants, conditions and
restrictions, subdivision requirements (including, without limitation, parcel
maps), and environmental impact and other environmental requirements.
3.9 Commitment Fee. Borrower shall have paid Lender a commitment fee in the
amount of $110,000.00 which commitment fee shall be nonrefundable and shall be
deemed fully earned upon receipt.
3.10 Audit Requirement. Lender shall have determined that the annualized Net
Operating Income (as defined in Schedule I attached hereto) is at least
$1,450,000.00.
3.11 Organization Documents. All documents evidencing the formation,
organization, valid existence, good standing, and due authorization of and for
Borrower and each Principal for the execution, delivery, and performance of the
Loan Documents by Borrower and each Principal.
3.12 Opinions. Legal opinions issued by counsel for Borrower and each
Principal, opining as to the due organization, valid existence and good standing
of Borrower and each Principal, and the due authorization, execution, delivery,
enforceability and validity of the Loan Documents with respect to, Borrower and
each Principal; that the Loan, as reflected in the Loan Documents, is not
usurious; to the extent that Lender is not otherwise satisfied, that the Project
and its use is in full compliance with all legal requirements; that the Loan
Documents do not create or constitute a partnership, a joint venture or a trust
or fiduciary relationship between Borrower and Lender; and as to such other
matters as Lender and Lender's counsel reasonably may specify.
3.13 Tenant Lease. A certified copy of the Tenant Lease and the guaranty of
the Tenant Lease dated March 21, 2002 executed by Tenant Guarantor (the "Tenant
Guaranty"). A current resident roll of the Project, certified by Tenant, which
shall include the following information with respect to the Subleases: (a) names
of the tenants; (b) unit/suite numbers; (c) area of each demised premises and
total area of the Project (stated in net rentable square feet); (d) rental rate
(including escalations); (e) lease term (commencement, expiration and renewal
options); (f) any expense pass-throughs; (g) cancellation/termination
provisions; and (h) security deposit. In addition, Borrower shall provide Lender
with (a) a certificate that the current resident roll certified by Tenant is, to
Borrower's knowledge, true and correct in all material respects, (b) a copy of
the standard lease form used by Tenant in leasing space in the Project, and (c)
at Lender's request, true and correct copies of all Subleases of the Project.
3.14 Financial Condition. No change shall have occurred in the financial
condition of Borrower, any Principal or Tenant, or in the Net Operating Income
of the Project, which would have, in Lender's judgment, a material adverse
effect on the Project or on Borrower's or any Principal's ability to repay the
Loan or otherwise perform its obligations under the Loan Documents. No Tenant
Guarantor Adverse Event shall have occurred.
3.15 Condemnation; Casualty. No condemnation or adverse zoning or usage
change proceeding shall have occurred or shall have been threatened against the
Project; the Project shall not have suffered any significant damage by fire or
other casualty which has not been repaired; no law, regulation, ordinance,
moratorium, injunctive proceeding, restriction, litigation, action, citation or
similar proceeding or matter shall have been enacted, adopted, or threatened by
any governmental authority, which would have, in Lender's judgment, a material
adverse effect on Borrower, any Principal or the Project.
3.16 Fees and Commissions. All fees and commissions payable to real estate
brokers, mortgage brokers, or any other brokers or agents in connection with the
Loan or the acquisition of the Project have been paid, such evidence to be
accompanied by any waivers or indemnifications deemed necessary by Lender.
3.17 Budget. The Budget showing total costs relating to closing of the
proposed transaction, all uses of the initial advance, amounts allocated for
future advances (if any), and all other amounts approved by Lender as set forth
in Section 1.5 of this Agreement.
3.18 Fees and Expenses. Payment of Lender's costs and expenses in
underwriting, documenting, and closing the transaction, including fees and
expenses of Lender's inspecting engineers, consultants, and outside counsel.
3.19 Estoppels; Subordination Agreements. Estoppel certificates and
subordination, non-disturbance and attornment agreements from Tenant.
3.20 Representations and Warranties. The representations and warranties
contained in this Loan Agreement and in all other Loan Documents are true and
correct.
3.21 Event of Default. No Event of Default shall exist.
3.22 Additional Items. Lender shall have received such other documents or
items as Lender may reasonably require.
ARTICLE IV
Representations and Warranties
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As an inducement to Lender to disburse the Loan, Borrower hereby
represents and warrants as follows, which representations and warranties shall
be true as of the date hereof and shall remain true throughout the term of the
Loan:
4.1 Borrower Existence. Borrower is a limited partnership duly formed,
validly existing and in good standing under the laws of the State of Delaware
with its principal place of business at 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxx 00000. Borrower is in good standing under the laws of the State of
Colorado and is authorized to transact business in the State of Colorado. The
Loan Documents have each been duly authorized, executed and delivered and each
constitutes the duly authorized, valid and legally binding obligation of
Borrower enforceable against Borrower in accordance with their respective terms.
4.2 Partners Existence.
------------------
4.2.1. General Partner. General Partner is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware with its principal place of business at 000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000. General Partner is the sole general partner of Borrower
and owns one percent (1%) of the partnership interests in Borrower free and
clear of all liens, claims, and encumbrances. General Partner has full right,
power and authority to execute the Loan Documents on its own behalf and on
behalf of Borrower. CNL Retirement-GP Hold Corp., a Delaware corporation is the
sole shareholder of General Partner.
4.2.2. Principals Existence. CNL Retirement Properties, Inc. is a
corporation, duly organized, validly existing and in good standing under the
laws of the State of Maryland with its principal place of business at 000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000. CNL Retirement Properties, Inc. is (a)
the indirect owner of all the limited partnership interests in Borrower, and (b)
the sole shareholder of CNL Retirement-GP Hold Corp. CNL Retirement Properties,
Inc. has full right, power and authority to execute the Loan Documents to which
it is a party on its own behalf.
4.2.3. Ownership of Borrower. CNL Retirement Properties, Inc., directly
or indirectly, owns all of the interests in Borrower free and clear of all
liens, claims, encumbrances and rights of others.
4.2.4. Authority. Xxxx Xxxx or any successor to his position shall have
authority to make all material business decisions (including a sale or
refinance) for Borrower during the term of the Loan.
4.3 Borrower's Partnership Agreement. A true and complete copy of the
partnership agreement creating Borrower and any and all amendments thereto
(collectively, the "Partnership Agreement") have been furnished to Lender. The
Partnership Agreement constitutes the entire agreement among the partners and is
binding upon and enforceable against each of the partners in accordance with its
terms. There are no other agreements, oral or written, among any of the partners
relating to Borrower. No material breach exists under the Partnership Agreement
and no condition exists which, with the giving of notice or the passage of time
would constitute a breach under the Partnership Agreement.
4.4 Corporate Documents. A true and complete copy of the articles of
incorporation and by-laws of the Principals and all other documents creating and
governing the Principals (collectively, the "Incorporation Documents") have been
furnished to Lender. There are no other agreements, oral or written, among any
of the shareholders of the Principals relating to the Principals. The
Incorporation Documents were duly executed and delivered, are in full force and
effect, and binding upon and enforceable in accordance with their terms. The
Incorporation Documents constitute the entire understanding among the
shareholders of the Principals. No material breach exists under the
Incorporation Documents and no act has occurred and no condition exists which,
with the giving of notice or the passage of time would constitute a breach under
the Incorporation Documents.
4.5 Other Agreements. Borrower is not in default under any material
contract, agreement or commitment to which it is a party. The execution,
delivery and compliance with the terms and provisions of this Agreement and the
Loan Documents will not (i) to the best of Borrower's knowledge, violate any
provisions of law or any applicable regulation, order or other decree of any
court or governmental entity, or (ii) conflict or be inconsistent with, or
result in any default under, any contract, agreement or commitment to which
Borrower is bound. Borrower has delivered to Lender copies of any agreements
(including leases) between Borrower and any Affiliate related in any way to the
Project and any other agreements or documents materially affecting the use and
operation of the Project. Neither Borrower nor General Partner is a party to any
agreement or instrument or subject to any court order, injunction, permit, or
restriction which would likely adversely affect the Project or the business,
operations, or condition (financial or otherwise) of Borrower or General
Partner.
4.6 Property. Fee simple title to the Property is owned by Borrower free and
clear of all liens, claims, encumbrances, covenants, conditions and
restrictions, security interests and claims of others, except only such
exceptions as have been approved in writing by Lender. To the best of Borrower's
knowledge, the Project is in compliance with all zoning requirements, building
codes, subdivision improvement agreements, and all covenants, conditions and
restrictions of record. The zoning and subdivision approval of the Project and
the right and ability to, use or operate the Improvements are not in any way
dependent on or related to any real estate other than the Property. To the best
of 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 the Project, or any part thereof. Borrower has all
requisite licenses, permits, franchises, qualifications, certificates of
occupancy or other governmental authorizations to own and lease the Project and
carry on its business, and the Project is in compliance with all applicable
legal requirements and is free of structural defects, and, to the best of
Borrower's knowledge after due inquiry, all building systems contained therein
are in good working order, subject to ordinary wear and tear. The Project does
not constitute, in whole or in part, a legally non-conforming use under
applicable legal requirements.
4.7 Property Access. The Property is accessible through fully improved and
dedicated roads accepted for maintenance and public use by the public authority
having jurisdiction.
4.8 Utilities. All utility services necessary and sufficient for the use or
operation of the Project are available including water, storm, sanitary sewer,
gas, electric and telephone facilities. Such utilities are located in the public
right-of-way abutting the Project, and all such utilities are connected so as to
serve the Project without passing over other property, except to the extent such
other property is subject to a perpetual easement for such utility benefiting
the Project.
4.9 Flood Hazards/Wetlands. The Property is not situated in an area
designated as having special flood hazards as defined by the Flood Disaster
Protection Act of 1973, as amended, or as a wetlands by any governmental entity
having jurisdiction over the Property.
4.10 Taxes/Assessments. The Project is comprised of one or more parcels,
each of which constitutes a separate tax lot and none of which constitutes a
portion of any other tax lot. There are no unpaid or outstanding real estate or
other taxes or assessments on or against the Project or any part thereof, except
general real estate taxes for 2002 not yet due or payable. Copies of the current
general real estate tax bills with respect to the Project have been delivered to
Lender. Said bills cover the entire Project and do not cover or apply to any
other property. There is no pending or contemplated action pursuant to which any
special assessment may be levied against any portion of the Project.
4.11 Eminent Domain. There is no eminent domain or condemnation proceeding
pending or, to the best of Borrower's knowledge threatened, relating to the
Project.
4.12 Litigation. Except as set forth in Exhibit B, there is no litigation,
arbitration or other proceeding or governmental investigation pending or, to the
best of Borrower's knowledge, threatened against or relating to Borrower, any
partner in Borrower, any Principal or any of their property, assets, or
business, including the Project, which if decided adversely would affect the
business, affairs, assets or financial condition of Borrower, any Principal, the
Project, or the prospects for repayment of the Loan.
4.13 Accuracy. Neither this Agreement nor any document, financial statement,
credit information, certificate or statement furnished to Lender by Borrower or
the Principals contains any untrue statement of a material fact or omits to
state a material fact which would affect Lender's decision to make the Loan.
4.14 Foreign Ownership. Neither Borrower nor any partner in Borrower nor any
Principal is or will be, and no legal or beneficial interest of a partner in
Borrower 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 IRC Sections 897 and 1445, 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.
4.15 Solvency. Neither Borrower, nor any partner in Borrower, nor any
Principal is insolvent and there has been no: (i) assignment made for the
benefit of the creditors of any of them; (ii) appointment of a receiver for any
of them or for the property of any of them; or (iii) bankruptcy, reorganization,
or liquidation proceeding instituted by or against any of them. Neither Borrower
nor any Principal is contemplating either the filing of a petition by it under
state or federal bankruptcy or insolvency laws or the liquidation of all or a
major portion of its assets or property, and neither Borrower nor any Principal
has knowledge of any Person contemplating the filing of any such petition
against it. Giving effect to the Loan, the fair saleable value of Borrower's
assets exceeds and will, immediately following the making of the Loan, exceed
Borrower's total liabilities, including, without limitation, subordinated,
unliquidated, disputed and contingent liabilities. The fair saleable value of
Borrower's assets is and will, immediately following the making of the Loan, be
greater than Borrower's probable liabilities, including the maximum amount of
its contingent liabilities on its debts as such debts become absolute and
matured. Borrower's assets do not and, immediately following the making of the
Loan will not, constitute unreasonably small capital to carry out its business
as conducted or as proposed to be conducted. Borrower does not intend to, and
does not believe that it will, incur debts and liabilities (including contingent
liabilities and other commitments) beyond its ability to pay such debts as they
mature (taking into account the timing and amounts of cash to be received by
Borrower and the amounts to be payable on or in respect of obligations of
Borrower).
4.16 Financial Statement/No Change. Borrower has heretofore delivered to
Lender copies of the most current financial statements of Borrower and the
Principals. Said financial statements were prepared on a basis consistent with
that of preceding years (except for the 2002 financial statements of Borrower),
and all of such financial statements present fairly the financial condition of
said Borrower and the Principals as of the dates in question and the results of
operations for the periods indicated. Since the dates of such statements, there
has been no material adverse change in the business or financial condition of
either Borrower or the Principals. Neither Borrower nor the Principals has any
material contingent liabilities not provided for or disclosed in said financial
statements. There has been no material adverse change since March 31, 2002 in
the structure, business operations, credit, prospects or financial condition of
Borrower, any Principal or the Project. The financial statements that are
hereafter delivered to Lender pursuant to Section 5.3.1(a) shall be true and
correct copies of the financial statements Borrower received from Tenant and, to
Borrower's knowledge, fairly present the financial condition of the Tenant and
the results of operation for the periods indicated.
4.17 Single Asset Entity. Borrower: (i) does not hold, directly or
indirectly, any ownership interest (legal or equitable) in any real or personal
property other than the interest which it owns in the Project; (ii) is not a
shareholder or partner or member of any other entity; and (iii) does not conduct
any business other than the ownership of the Property.
4.18 No Broker. No brokerage commission or finder's fee is owing to any
broker or finder arising out of any actions or activity of Borrower in
connection with the Loan, other than the commission payable to Xxxxxxxx Xxxxx &
Company.
4.19 Employees. Borrower does not have any employees and shall not have any
employees until after the Repayment Date. No employee benefit plan (a "Plan")
subject to the Employee Retirement Income Security Act of 1974 ("ERISA") and
regulations issued pursuant to ERISA that is maintained by Borrower or under
which Borrower could have any material liability under ERISA (i) has failed to
meet minimum funding standards established in Section 302 of ERISA, (ii) has
failed to substantially comply with all applicable requirements of ERISA and of
the Internal Revenue Code, including all applicable rulings and regulations
thereunder, or (iii) has engaged in or been involved in a prohibited transaction
(as defined in ERISA) under ERISA or under the Internal Revenue Code. Neither
Borrower nor any member of a Controlled Group that includes Borrower has
assumed, or received notice of a claim asserted against Borrower or another
member of the Controlled Group for, withdrawal liability (as defined in the
Multi-Employer Pension Plan Amendments Act of 1980, as amended) with respect to
any multi-employer pension plan. Borrower has timely made when due all
contributions with respect to any multi-employer pension plan in which it
participates and no event has occurred triggering a material claim against
Borrower for withdrawal liability with respect to any multi-employer pension
plan in which Borrower participates. The term "Controlled Group" means all
businesses that would be treated as a single employer under Section 401(b) of
ERISA.
4.20 Security Deposits. Borrower has not collected nor is it in receipt of
any security deposit or similar deposits from any resident or tenant of the
Project, except for the Security Deposit, as defined in the Tenant Lease.
4.21 Leases. Borrower represents and warrants to Lender with respect to
Leases of the Project that: (1) the Tenant Lease and Tenant Guaranty are each
valid and in and full force and effect; (2) to Borrower's knowledge, the
resident roll delivered to Lender which describes the Subleases is true and
correct and the Subleases are in full force and effect; (3) the Tenant Lease
(including amendments) is in writing, and there are no oral agreements with
respect thereto; (4) to Borrower's knowledge the Subleases (including
amendments) are in writing and there are no oral agreements with respect
thereto; (5) the copy of the Tenant Lease and Tenant Guaranty delivered to
Lender are true and complete and, to Borrower's knowledge, the Subleases
reviewed by Lender are true and complete; (6) neither the Borrower nor Tenant is
in default under the Tenant Lease; (7) to Borrower's knowledge neither the
Tenant nor any tenant under a Sublease is in default with respect to any
Sublease; (8) Borrower has no knowledge of any notice of termination or default
with respect to any Lease; (9) Borrower has not assigned or pledged the Tenant
Lease nor its interest in any Subleases, the rents or any interests therein
except to Lender; (10) neither the Tenant, Tenant Guarantor, any tenant under a
Sublease nor any other party has an option to purchase all or any portion of the
Project; (11) except as provided therein, neither the Tenant, nor to Borrower's
knowledge, any tenant under a Sublease, has the right to terminate its Lease
prior to expiration of the stated term of such Lease; and (12) neither the
Tenant, nor to Borrower's knowledge, any tenant under a Sublease, has prepaid
more than one month's rent in advance (except for bona fide security deposits
not in excess of an amount equal to one month's rent).
4.22 Margin Stock. No portion of the proceeds of the Loan shall be used by
Borrower in any manner that might cause the borrowing or the application of such
proceeds to violate Regulations G, U, T or X or any other regulation of the
Board of Governors of the Federal Reserve System or to violate the Securities
Act of 1933 or the Securities Exchange Act of 1934.
4.23 Tax Filings. Borrower and each Principal have filed (or have obtained
effective extensions for filing) all federal, state and local tax returns
required to be filed and have paid or made adequate provision for the payment of
all federal, state and local taxes, charges and assessments payable by Borrower
and each Principal, respectively.
4.24 Full and Accurate Disclosure. No statement of fact made by or on behalf
of Borrower or any Principal in this Agreement or in any of the other Loan
Documents contains any untrue statement of a material fact or omits to state any
material fact necessary to make statements contained herein or therein not
misleading. There is no fact presently known to Borrower which has not been
disclosed to Lender which adversely affects, nor as far as Borrower can foresee,
might adversely affect, the Project or the business, operations or condition
(financial or otherwise) of Borrower or any Principal.
4.25 Compliance with Anti-Terrorism Orders.
-------------------------------------
(a) Borrower and each partner, member or stockholder in Borrower, and
all beneficial owners of Borrower and any such partner, member or
stockholder, are in compliance with all laws, statutes, rules and
regulations of any federal, state or local governmental authority in the
United States of America applicable to such Persons, including, without
limitation, the requirements of Executive Order No. 13224, 66 Fed. Reg.
49079 (Sept. 25, 2001) (the "Order") and other similar requirements
contained in the rules and regulations of the Office of Foreign Asset
Control, Department of the Treasury ("OFAC") and in any enabling legislation
or other Executive Orders in respect thereof (the Order and such other
rules, regulations, legislation, or orders are collectively called the
"Orders"). Borrower agrees to make its policies, procedures and practices
regarding compliance with the Orders of any Persons who, pursuant to
transfers permitted by the Mortgage, become stockholders, members, partners
or other investors of Borrower available to Lender for its review and
inspection during normal business hours and upon reasonable prior notice.
(b) Neither Borrower, any partner, member or stockholder in Borrower
nor the beneficial owner of Borrower or any such partner, member or
stockholder:
(i) is listed on the Specially Designated Nationals and Blocked
Persons List maintained by OFAC pursuant to the Order and/or on any
other list of terrorists or terrorist organizations maintained pursuant
to any of the rules and regulations of OFAC or pursuant to any other
applicable Orders (such lists are collectively referred to as the
"Lists");
(ii) is a Person who has been determined by competent authority to
be subject to the prohibitions contained in the Orders;
(iii) is owned or controlled by, nor acts for or on behalf of, any
Person on the Lists or any other Person who has been determined by
competent authority to be subject to the prohibitions contained in the
Orders;
(iv) shall transfer or permit the transfer of any interest in
Borrower or any Principal to any Person who is or whose beneficial
owners are listed on the Lists; or
(v) shall knowingly lease space in the Project to any Person who is
listed on the Lists or who is engaged in illegal activities.
(c) If Borrower obtains knowledge that Borrower or any of its partners,
members or stockholders or their beneficial owners become listed on the
Lists or are indicated, arraigned, or custodially detained on charges
involving money laundering or predicate crimes to money laundering, Borrower
shall immediately notify Lender.
(d) If Borrower obtains knowledge that Tenant or any tenant under a
Sublease has become listed on the Lists or is convicted, pleads nolo
contendere, indicted, arraigned, or custodially detained on charges
involving money laundering or predicate crimes to money laundering, Borrower
shall immediately notify Lender.
(e) If Tenant or any tenant under a Sublease is listed on the Lists or
is convicted or pleads nolo contendere to charges related to activity
prohibited in the Orders, then proceeds from the rents of such tenant shall
not be used to pay debt service and Borrower shall provide Lender such
representations and verifications as Lender shall reasonably request that
such rents are not being so used.
(f) If Tenant or any tenant under a Sublease is arrested on such
charges, and such charge is not dismissed within thirty (30) days
thereafter, Lender may at its option notify Borrower to exclude such rents
from the debt service payments.
(g) If Borrower or any Principal is listed on the Lists, no earn-out
disbursements, escrow disbursements, or other disbursements under the Loan
Documents shall be made and all such funds shall be paid in accordance with
the direction of a court of competent jurisdiction.
ARTICLE V
Affirmative Covenants
---------------------
5.1 Inspection. Subject to the rights of Tenant, Lender and its authorized
agents may enter upon and inspect the Project upon reasonable advance notice
given orally or in writing to Borrower and Borrower shall pay the Costs incurred
in connection therewith.
5.2 Books and Records/Audits. Borrower shall keep and maintain at all times
at Borrower's address stated below, or such other place as Lender may approve in
writing (a) complete and accurate books of accounts and records adequate to
reflect the results of its operation, (b) complete copies of all the financial
statements required to be provided to Lender pursuant to Section 5.3 below, and
(c) copies of all written contracts, correspondence, reports of Lender's
independent consultant, if any, and other documents affecting the Project.
Lender and its designated agents shall have the right to inspect and copy any of
the foregoing. Additionally, Lender may audit the Borrower's books and records
from time to time upon reasonable advance notice given orally or in writing to
Borrower. Borrower shall be responsible for payment of the Costs of an audit in
connection with an advance of funds under Section 1.1.2 hereof and the Costs of
all audits conducted during an Event of Default.
5.3 Financial Statements; Balance Sheets; Budgets. Borrower shall furnish to
Lender and shall cause the Principals to furnish to Lender such financial
statements and other financial information as Lender may from time to time
reasonably request. All such financial statements shall show all material
contingent liabilities and shall accurately and fairly present the results of
operations and the financial condition of Borrower and Principals at the dates
and for the period indicated. Without limitation of the foregoing, Borrower
shall furnish to Lender and shall cause Principals to furnish to Lender the
following statements:
3
5.3.1. Monthly and Annual Operating Statements.
-----------------------------------------------------------
(a) All financial statements received from Tenant under the
Lease, which shall, in any event, include statements of the operation
of the Project (including a current resident roll, balance sheet,
monthly operating statements (showing monthly activity and
year-to-date, and stating operating revenues, operating expenses and
operating income for the calendar month just ended and calculating, as
of the end of such month, the amount of the Reserve and the amount of
the Tenant Shortfall Reserve)) monthly delinquency reports and a
monthly schedule of delinquency of receipts and payments) as of the
last day of each calendar month, to be delivered within twenty (20)
days after the end of each calendar month and certified by Tenant as
true, correct, and complete, and yearly statements of the operation of
the Project, to be delivered within ninety (90) days after the end of
each fiscal year and certified by Tenant as true, correct, and
complete. Borrower shall certify to Lender that the foregoing financial
statements are, to Borrower's knowledge, true, correct and complete.
(b) On or before the twentieth (20th) day of each calendar
month, Borrower shall submit to Lender a statement for the calendar
month just ended and calculating, as of the end of such month, the Net
Operating Income and the Debt Service Coverage Ratio, which statements
will be certified by Borrower as true, correct and complete. If
requested by Lender, Borrower shall deliver to Lender a written
statement setting forth any variance from the annual budget under the
Tenant Lease, and other documentation supporting the information
disclosed in the most recent financial statements.
5.3.2. Annual Balance Sheets and Financial Statements. Annual balance
sheets and financial statements from Borrower and each other Principal, within
ninety (90) days of the end of each fiscal year of Borrower which are true and
correct in all respects, have been prepared in accordance with sound accounting
practices (and as to CNL Retirement Properties, Inc. have been audited by an
independent public accountant satisfactory to Lender), and fairly present the
financial condition(s) of the person(s) referred to therein as of the date(s)
indicated.
5.3.3. Accounting Principles. All financial statements shall be
prepared in accordance with sound accounting principles, consistently applied
from year to year. If the financial statements are prepared on an accrual basis,
such statements shall be accompanied by a reconciliation to cash basis
accounting principles.
5.3.4. Other Information. Borrower shall deliver to Lender such
additional information regarding Borrower, its subsidiaries, its business, any
Principal, and the Project within 30 days after Lender's request therefor.
5.3.5. Annual Budget. At least thirty (30) days prior to the
commencement of each fiscal year, Borrower will provide to Lender the Tenant's
proposed annual operating and capital improvements budget for such fiscal year
and Borrower shall not approve such proposed budgets without Lender's prior
written consent, which will not be unreasonably withheld or delayed.
5.4 Notice of Litigation or Default. Borrower shall promptly provide Lender
with:
(a) written notice of any litigation or arbitration pending or, to
Borrower's or any Principal's knowledge, threatened against or relating to
Borrower, any Principal, or the Project involving amounts in excess of
$100,000.00;
(b) a copy of all notices of default and violations of laws,
regulations, codes, ordinances or other proceeding or governmental
investigation and the like received by Borrower or any Principal relating to
Borrower, the Collateral or the Project, including without limitation, a
comprehensive list of all deficiencies identified during survey(s) conducted
by any regulatory agency, as well as any corrective action plans submitted
to the agency;
(c) copies of all surveys and inspections conducted by regulatory
agencies; and
(d) a copy of all notices sent to or received from Tenant under the
Tenant Lease, Tenant Guarantor under the Tenant Guaranty or Tenant Guarantor
under the Earnout Agreement dated March 21, 2002 between Borrower and Tenant
Guarantor (the "Earnout Agreement").
5.5 Affiliate Transactions. Prior to entering into any agreement with an
Affiliate pertaining to the Project, Borrower shall deliver to Lender a copy of
such agreement, which shall be satisfactory to Lender in its reasonable
discretion. If requested by Lender, such agreement shall provide Lender the
right to terminate it upon Lender's (or its designee's) acquisition of the
Project through foreclosure, a deed-in-lieu of foreclosure, UCC sale or
otherwise.
"Affiliate" means with respect to any individual, trust, estate,
partnership, limited liability company, corporation or any other incorporated or
unincorporated organization (each a "Person"), a Person that directly or
indirectly, through one or more intermediaries, controls or is controlled by or
is under common control with Borrower or any Principal; any officer, director,
partner or shareholder of such Borrower or any Principal; any relative of any of
the foregoing. The term "control" means possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
5.6 Lien on Certain Deposits. Borrower shall at all times have on deposit in
the account described in Section 1(a) of the Cash Account Agreement, an amount
of cash equal to the aggregate amount of the Security Deposit, as that term is
defined in the Tenant Lease. Additionally, if Borrower, pursuant to the terms of
the Tenant Lease, establishes an account in Borrower's name in which the Reserve
is to be held, such account shall be the account described in Section 1(b) of
the Cash Account Agreement. Borrower shall not commingle such funds in the
aforementioned accounts (the "Deposit Accounts)"with any other funds of
Borrower. Prior to an Event of Default, Lender agrees to allow Borrower to use
such funds in the Deposit Accounts solely for the purposes specified in the
Tenant Lease. Following an Event of Default, Borrower shall not be entitled to
make withdrawals from the Deposit Accounts and Lender shall release such amounts
directly to Tenant as required by the Tenant Lease upon Lender's receipt of
evidence reasonably satisfactory to Lender that such amounts are due to Tenant
and that no default exists under the Tenant Lease. Upon payment in full of the
Loans and all other amounts due Lender under the Loan Documents, Lender shall
pay any remaining amounts on deposit pursuant to this Section 5.6 to Borrower.
5.7 Leases. Borrower (a) shall perform the obligations which Borrower is
required to perform under the Tenant Lease; (b) shall enforce the obligations to
be performed by the Tenant under the Tenant Lease and Tenant Guarantor under the
Tenant Guaranty; and (c) shall promptly furnish to Lender any notice of default
or termination received by Borrower from Tenant or Tenant Guarantor, and any
notice of default or termination given by Borrower to Tenant or Tenant
Guarantor.
5.8 Estoppels. At Lender's request from time to time, Borrower shall obtain
and furnish to Lender, written estoppels in form and substance reasonably
satisfactory to Lender, executed by Tenant.
5.9 Taxes; Charges. Borrower shall pay or cause Tenant to pay before any
fine, penalty, interest or cost may be added thereto, and shall not enter into
any agreement to defer, any real estate taxes and assessments, franchise taxes
and charges, and other governmental charges that may become a lien upon the
Project or become payable during the term of the Loan, and will promptly furnish
Lender with evidence of such payment. Borrower shall not suffer or permit the
joint assessment of the Project with any other real property constituting a
separate tax lot or with any other real or personal property. Borrower shall pay
when due all claims and demands of mechanics, materialmen, laborers and others
which, if unpaid, might result in a lien on the Project; however, Borrower may
contest the validity of such claims and demands so long as (a) Borrower notifies
Lender that it intends to contest such claim or demand, (b) Borrower provides
Lender with an indemnity, bond or other security satisfactory to Lender
(including an endorsement to Lender's title insurance policy insuring against
such claim or demand) assuring the discharge of Borrower's obligations for such
claims and demands, including interest and penalties, and (c) Borrower is
diligently contesting the same by appropriate legal proceedings in good faith
and at its own expense and concludes such contest prior to the tenth (10th) day
preceding the earlier to occur of the Maturity Date or the date on which the
Project is scheduled to be sold for non-payment.
5.10 Control. There shall be no change in the day-to-day control and
management of Borrower or General Partner without the prior written consent of
Lender which shall not be unreasonably withheld.
5.11 Taxes on Security. Borrower shall pay all taxes, charges, filing,
registration and recording fees, excises and levies payable with respect to the
Note or the liens created or secured by the Loan Documents, other than income,
franchise and doing business taxes imposed on Lender. If there shall be enacted
any law (a) deducting the Loan from the value of the Project for the purpose of
taxation, (b) affecting any lien on the Project, or (c) changing existing laws
of taxation of mortgages, deeds of trust, security deeds, or debts secured by
real property, or changing the manner of collecting any such taxes, Borrower
shall promptly pay to Lender, on demand, all taxes, costs and charges for which
Lender is or may be liable as a result thereof; however, if such payment would
be prohibited by law or would render the Loan usurious, then instead of
collecting such payment, Lender may declare all amounts owing under the Loan
Documents to be immediately due and payable.
5.12 Legal Existence; Name, Etc. Borrower and General Partner shall each
preserve and keep in full force and effect its existence as a single asset
entity, entity status, franchises, rights and privileges under the laws of the
state of its formation, and all qualifications, licenses and permits applicable
to the ownership of the Project. Neither Borrower nor General Partner shall wind
up, liquidate, dissolve, reorganize, merge, or consolidate with or into, or
convey, sell, assign, transfer, lease, or otherwise dispose of all or
substantially all of its assets, or acquire all or substantially all of the
assets of the business of any Person. Borrower and General Partner shall each
conduct business only in its own name and shall not change its name, identity,
or organizational structure, unless Borrower (a) shall have obtained the prior
written consent of Lender to such change, and (b) shall have taken all actions
necessary or requested by Lender to file or amend any financing statement or
continuation statement to assure perfection and continuation of perfection of
security interests under the Loan Documents. Borrower and General Partner, if
any, shall maintain its separateness as an entity, including maintaining
separate books, records, and accounts and observing corporate and partnership
formalities independent of any other entity, shall pay its obligations with its
own funds and shall not commingle funds or assets with those of any other
entity.
5.13 Further Assurances. Borrower shall promptly (a) cure any defects in the
execution and delivery of the Loan Documents, and (b) execute and deliver, or
cause to be executed and delivered, all such other documents, agreements and
instruments as Lender may reasonably request to further evidence and more fully
describe the collateral for the Loan, to correct any omissions in the Loan
Documents, to perfect, protect or preserve any liens created under any of the
Loan Documents, or to make any recordings, file any notices, or obtain any
consents, as may be necessary or appropriate in connection therewith.
5.14 Estoppel Certificates. Borrower, within ten (10) days after request,
shall furnish to Lender a written statement, duly acknowledged, setting forth
the amount due on the Loan, the terms of payment of the Loan, the date to which
interest has been paid, whether any offsets or defenses exist against the Loan
and, if any are alleged to exist, the nature thereof in detail, and such other
matters as Lender reasonably may request.
5.15 Notice of Certain Events. Borrower shall promptly notify Lender of (a)
any event or condition which, with the giving of notice, the passage of time, or
both, would constitute an Event of Default, together with a detailed statement
of the steps being taken to cure such event or condition; (b) any notice of
default received by Borrower under other obligations relating to the Project or
otherwise material to Borrower's business; and (c) any threatened or pending
legal, judicial or regulatory proceedings, including any dispute between
Borrower and any governmental authority, affecting Borrower or the Project.
ARTICLE VI
Negative Covenants
------------------
6.1 No Amendments. Borrower shall not amend, modify or terminate, or permit
the amendment, modification or termination of:
(a) the Partnership Agreement, except for changes which are immaterial;
or
(b) the Tenant Guaranty or the Earnout Agreement.
6.2 Leases. Borrower shall not (a) collect any rents for more than thirty
(30) days in advance of the time when the same shall become due, (b) further
assign or encumber the Tenant Lease or Tenant Guaranty; (c) except with Lender's
prior written consent, cancel or accept surrender or termination of the Tenant
Lease or the Tenant Guaranty and any action in violation of this Section 6.2
shall be void at the election of Lender. Notwithstanding the foregoing, Borrower
may make minor modifications and amendments to the Tenant Lease without the
consent of Lender provided that the modifications and amendments are entered
into in the ordinary course of business, are consistent with prudent property
management practices, do not affect the economic terms of the Tenant Lease (e.g.
Minimum Rent, Percentage Rent, Additional Charges, the Term), do not affect the
terms of the Tenant Lease that require Tenant to comply with applicable laws,
regulations and procedures and have been consented to in writing by the Tenant
Guarantor. Borrower shall send Lender a draft of any proposed modification or
amendment to the Tenant Lease at least five (5) Business Days prior to the date
upon which it is to be executed and, following its execution shall provide
Lender with a copy of the executed original.
6.3 No Additional Indebtedness. Borrower shall not, without Lender's prior
written consent, incur additional indebtedness, except for trade payables in the
ordinary course of business.
6.4 No Commingling Funds. Borrower shall not commingle the funds related to
the Project with funds from any other property.
6.5 Lienable Work. No excavation, construction, earth work, site work or any
other mechanic's lienable work shall be done by Borrower or its agents to or for
the benefit of the Project, without Lender's approval, except for normal repair
and maintenance in the ordinary course of business. Borrower will not consent to
any request by Tenant to perform any work at the Project which could create
liens on the Project, without Lender's consent, which will not be unreasonably
withheld.
6.6 Conversion. Borrower shall not, and shall not permit, the Project or any
portion thereof to be converted or take any preliminary actions which could lead
to a conversion to condominium or cooperative form of ownership.
6.7 Use of Property. Unless required by applicable law, Borrower shall not
permit changes in the use of any part of the Property from the use existing at
the time the Mortgage was executed. Borrower shall not initiate or acquiesce in
a change in the plat of subdivision, or zoning classification of the Project
without Lender's prior written consent.
ARTICLE VII
Events of Default; Acceleration of Indebtedness; Remedies
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7.1 Events of Default. The occurrence of any one or more of the following
events shall constitute an "Event of Default" under this Agreement:
(a) Failure of Borrower to pay, within five (5) days of the due date,
any of the payment obligations of Borrower to Lender ("Indebtedness"),
including any payment due under the Note or this Agreement; or
(b) Failure of Borrower to strictly comply with the provisions of
Section 4.17 (single asset entity) or 5.1 (inspection) of this Agreement; or
(c) Breach of any covenant, representation or warranty other than as set
forth in subsections (a) and (b) above which is not cured within ten (10)
days after notice; provided, however, if such breach cannot by its nature be
cured within ten (10) days, and Borrower diligently pursues the curing
thereof (and then in all events cures such failure within forty-five (45)
days after the original notice thereof), Borrower shall not be in default
hereunder; or
(d) Commencement of an involuntary case or other proceeding against
Borrower, any Principal or any other Person having an ownership or security
interest in the Project (each, a "Bankruptcy Party") which seeks
liquidation, reorganization or other relief with respect to it or its debts
or other liabilities under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeks the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any of its
property, and such involuntary case or other proceeding shall remain
undismissed or unstayed for a period of 60 days; or an order for relief
against a Bankruptcy Party shall be entered in any such case under the
Federal Bankruptcy Code.
(e) Commencement by a Bankruptcy Party of a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect
to itself or its debts or other liabilities under any bankruptcy, insolvency
or other similar law or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official for it or any of its
property, or consent by a Bankruptcy Party 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 the making by a Bankruptcy
Party of a general assignment for the benefit of creditors, or the failure
by a Bankruptcy Party, or the admission by a Bankruptcy Party in writing of
its inability, to pay its debts generally as they become due, or any action
by a Bankruptcy Party to authorize or effect any of the foregoing
(f) The occurrence of a default and the expiration of any cure period
applicable thereto under the or any Loan Document; or
(g) Borrower shall default in the payment of any indebtedness (other
than the Indebtedness) and such default is declared and is not cured within
the time, if any, specified therefor in any agreement governing the same; or
(h) Any statement, report or certificate made or delivered to Lender by
Borrower or any Principal is not materially true and complete at any time;
(i) There shall occur a material adverse change in the financial
condition or business prospects of Borrower or any Principal;
(j) The Debt Service Coverage Ratio, as calculated by Lender at the end
of each month during the term of the Lease, is less than 1.5 to 1.0 for
three (3) consecutive months. "Debt Service Coverage Ratio" shall mean a
quotient, expressed as a ratio, of (i) Net Operating Income divided by the
projected payments of principal and interest for the next twelve (12) month
period using the Interest Rate in effect on the date of determination.
(k) The Minimum Rent under the Tenant Lease for Accounting Year 1 (as
defined in the Tenant Lease) is less than $1,786,537.50.
(l) The occurrence of a material default under the Tenant Lease (other
than a default under Section 12.1(e) or (f) thereof) and the expiration of
any applicable cure period, provided if such default is capable of being
cured and during the process of achieving such cure no other Events of
Default exist, then if Borrower diligently pursues the curing thereof (and
then in all events cure such failure within ninety (90) days after the
occurrence of the default under the Tenant Lease), Borrower shall not be in
default hereunder.
(m) Any default under any document or instrument, other than the Loan
Documents, evidencing or creating a lien on the Project or any part thereof.
(n) If Borrower or any Principal is listed on the Lists or is convicted
or pleads nolo contendere to charges related to activity prohibited in the
Orders, or if Borrower or any Principal is arrested on charges related to
activity prohibited in the Orders and such charge is not dismissed within
thirty (30) days thereafter.
7.2 Acceleration; Remedies - Insolvency Events. Upon the occurrence of any
Event of Default described in Section 7.1(d) or 7.1(e), the obligations of
Lender to advance amounts hereunder shall immediately terminate, and all amounts
due under the Loan Documents immediately shall become due and payable, all
without written notice and without presentment, demand, protest, notice of
protest or dishonor, notice of intent to accelerate the maturity thereof, notice
of acceleration of the maturity thereof, or any other notice of default of any
kind, all of which are hereby expressly waived by Borrower; however, if the
Bankruptcy Party under Section 7.1(d) or 7.1(e) is other than Borrower, then all
amounts due under the Loan Documents shall become immediately due and payable at
Lender's election, in Lender's sole discretion.
7.3 Acceleration; Remedies - Other Events. Except as set forth in Section
7.2 above, while any Event of Default exists, Lender may (a) by written notice
to Borrower, declare the entire Loan to be immediately due and payable without
presentment, demand, protest, notice of protest or dishonor, notice of intent to
accelerate the maturity thereof, notice of acceleration of the maturity thereof,
or other notice of default of any kind, all of which are hereby expressly waived
by Borrower, (b) terminate the obligation, if any, of Lender to advance amounts
hereunder, and (c) exercise all rights and remedies therefor under the Loan
Documents and at law or in equity.
7.4 Lender's Right to Perform the Obligations. If Borrower shall fail,
refuse or neglect to make any payment or perform any act required by the Loan
Documents, then while any Event of Default exists, and without notice to or
demand upon Borrower and without waiving or releasing any other right, remedy or
recourse Lender may have because of such Event of Default, Lender may (but shall
not be obligated to) make such payment or perform such act for the account of
and at the expense of Borrower, and shall have the right to enter upon the
Project for such purpose and to take all such action thereon and with respect to
the Project as it may deem necessary or appropriate. If Lender shall elect to
pay any sum due with reference to the Project, Lender may do so in reliance on
any xxxx, statement or assessment procured from the appropriate governmental
authority or other issuer thereof without inquiring into the accuracy or
validity thereof. Similarly, in making any payments to protect the security
intended to be created by the Loan Documents, Lender shall not be bound to
inquire into the validity of any apparent or threatened adverse title, lien,
encumbrance, claim or charge before making an advance for the purpose of
preventing or removing the same. Borrower shall indemnify Lender for all losses,
expenses, damages, claims and causes of action, including reasonable attorneys'
fees, incurred or accruing by reason of any acts performed by Lender pursuant to
the provisions of this Section 7.4, including those arising from the joint,
concurrent, or comparative negligence of Lender, except as a result of Lender's
gross negligence or willful misconduct. All sums paid by Lender pursuant to this
Section 7.4, and all other sums expended by Lender to which it shall be entitled
to be indemnified, shall constitute additions to the Loan, shall be secured by
the Loan Documents and shall be paid by Borrower to Lender upon demand.
ARTICLE VIII
Miscellaneous
-------------
8.1 Expenditures and Expenses. Borrower shall promptly pay all reasonable
Costs (defined below) incurred by Lender and all such Costs shall be included as
additional Indebtedness bearing interest at the Default Rate set forth in the
Note until paid. For the purposes hereof "Costs" means all expenditures and
expenses which may be paid or incurred by or on behalf of Lender in connection
with the documentation, modification, workout, administration, collection or
enforcement of the Loan or any of the Loan Documents (as applicable) including
repair costs, payments to remove or protect against liens, attorneys' fees
(including fees of Lender's inside counsel), receivers' fees, engineers' fees,
accountants' fees (including fees of Lender's inside accountants), independent
consultants' fees (including environmental consultants), all costs and expenses
incurred in connection with any of the foregoing, Lender's out-of-pocket costs
and expenses related to any audit or inspection of the Property (including fees
of Lender's inside auditors), outlays for documentary and expert evidence,
stenographers' charges, stamp taxes, publication costs, and costs (which may be
estimates as to items to be expended after entry of an order or judgment) for
procuring all such abstracts of title, title and UCC searches, and examination,
title insurance policies, and similar data and assurances with respect to title
as Lender may deem reasonably necessary either to prosecute any action or to
evidence to bidders at any foreclosure sale of the Project the true condition of
the title to, or the value of, the Project.
8.2 Disclosure of Information. Lender shall have the right (but shall be
under no obligation) to make available to any party for the purpose of granting
participations in or selling, transferring, assigning or conveying all or any
part of the Loan (including any governmental agency or authority and any
prospective bidder at any foreclosure sale of the Project) any and all
information which Lender may have with respect to the Project and Borrower,
whether provided by Borrower, the Principals or any third party or obtained as a
result of any environmental assessments. Borrower and the Principals agree that
Lender shall have no liability whatsoever as a result of delivering any such
information to any such third party, and Borrower and the Principals, on behalf
of themselves and their successors and assigns, hereby release and discharge
Lender from any and all liability, claims, damages, or causes of action, arising
out of, connected with or incidental to the delivery of any such information to
any such third party.
8.3 Sale of Loan. Lender, at any time and without the consent of Borrower or
the Principals, may grant participations in or sell, transfer, assign and convey
all or any portion of its right, title and interest in and to the Loan, this
Agreement and the other Loan Documents, any guaranties given in connection with
the Loan and any collateral given to secure the Loan.
8.4 Forbearance by Lender Not a Waiver. Any forbearance by Lender in
exercising any right or remedy under any of the Loan Documents, or otherwise
afforded by applicable law, shall not be a waiver of or preclude the exercise of
any right or remedy. Lender's acceptance of payment of any sum secured by any of
the Loan Documents after the due date of such payment shall not be a waiver of
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
Lender shall not be a waiver of Lender's right to accelerate the maturity of the
Loan, nor shall Lender's receipt of any awards, proceeds, or damages under
Section 4 of the Mortgage operate to cure or waive Borrower's or the Principal's
default in payment of sums secured by any of the Loan Documents. With respect to
all Loan Documents, only waivers made in writing by Lender shall be effective
against Lender.
8.5 APPLICABLE LAW; SEVERABILITY. THIS AGREEMENT AND THE LOAN DOCUMENTS
SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES. The invalidity, illegality or unenforceability of any provision of
this Agreement shall not affect or impair the validity, legality or
enforceability of the remainder of this Agreement, and to this end, the
provisions of this Agreement are declared to be severable.
8.6 Relationship. The relationship between Lender and Borrower shall be that
of creditor-debtor only. No term in this Agreement or in the other Loan
Documents and no course of dealing between the parties shall be deemed to create
any relationship of agency, partnership or joint venture or any fiduciary duty
by Lender to any other party.
8.7 Indemnity. Borrower shall indemnify, protect, hold harmless and defend
Lender, its successors, assigns, shareholders, directors, officers, employees,
and agents from and against any and all loss, damage, cost, expense (including
attorneys' fees), and claims arising out of or in connection with (a) the
Project, (b) the Collateral, (c) any act or omission of Borrower, any Principal,
or their respective employees or agents, whether actual or alleged, and (d) any
and all brokers' commissions or other costs of similar type by any party in
connection with the Loan, in each case except to the extent arising from the
indemnitee's gross negligence or willful misconduct. Upon written request by an
indemnitee, Borrower will undertake, at its own costs and expense, on behalf of
such indemnitee, using counsel satisfactory to the indemnitee, the defense of
any legal action or proceeding whether or not such indemnitee shall be a party
and for which such indemnitee is entitled to be indemnified pursuant to this
section. At Lender's option, Lender may, at Borrower's expense, prosecute or
defend any action involving the priority, validity or enforceability of any of
the Loan Documents.
8.8 Notice. Any notice or other communication required or permitted to be
given shall be in writing addressed to the respective party as set forth below
and may be personally served, telecopied or sent by overnight courier or U.S.
Mail and shall be deemed given: (a) if served in person, when served; (b) if
telecopied, on the date of transmission if before 3:00 p.m. (Chicago time) on a
business day; provided that a hard copy of such notice is also sent pursuant to
(c) or (d) below; (c) if by overnight courier, on the first business day after
delivery to the courier; or (d) if by U.S. Mail, certified or registered mail,
return receipt requested on the fourth (4th) day after deposit in the mail
postage prepaid.
Notices to Borrower: CNL Retirement-AM Colorado, LP
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
With a copy to: Lowndes Drosdrick Xxxxxx Xxxxxx & Xxxx P.A.
000 Xxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxxxx
Telecopy: (000) 000-0000
Notices to Lender: General Electric Capital Corporation
Loan No. 70004021
0 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxx 00000
Attn: Manager, Portfolio Management Group
Telecopy: (000) 000-0000
With a copy to: General Electric Capital Corporation
Loan No. 70004021
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxxxxx, Vice President and
Chief Counsel, Senior
Living Group
Telecopy: (000) 000-0000
And a copy to: General Electric Capital Corporation
Loan No. 70004021
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx XxXxxx, Senior Vice President
Telecopy: (000) 000-0000
8.9 Successors and Assigns Bound; Joint and Several Liability; Agents; and
Captions. The covenants and agreements contained in the Loan Documents shall
bind, and the rights thereunder shall inure to, the respective successors and
assigns of Lender, Borrower and the Principals, subject to the provisions of
this Agreement. All covenants and agreements of Borrower and the Principals
shall be joint and several. In exercising any rights under the Loan Documents or
taking any actions provided for therein, Lender may act through its employees,
agents or independent contractors as authorized by Lender. The captions and
headings of the paragraphs and sections of this Agreement are for convenience
only and are not to be used to interpret or define the provisions hereof.
8.10 Terms and Usage. As used in the Loan Documents "business day" means any
day, other than a Saturday or a Sunday, when banks in Chicago, Illinois are not
required or authorized to be closed.
8.11 Time of Essence. Time is of the essence of this Agreement and the other
Loan Documents and the performance of each of the covenants and agreements
contained herein and therein.
8.12 CONSENT TO JURISDICTION. BORROWER HEREBY CONSENTS TO THE JURISDICTION
OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF XXXX, STATE OF
ILLINOIS AND IRREVOCABLY AGREES THAT, SUBJECT TO LENDER'S ELECTION, ALL ACTIONS
OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. BORROWER EXPRESSLY SUBMITS AND
CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS. BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON BORROWER BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO 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.
8.13 WAIVER OF JURY TRIAL. BORROWER AND LENDER HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. BORROWER AND LENDER ACKNOWLEDGE
THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT EACH OF THEM HAS RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS AND THAT EACH OF THEM WILL CONTINUE TO RELY ON THIS
WAIVER IN THEIR RELATED FUTURE DEALINGS. BORROWER AND LENDER WARRANT AND
REPRESENT 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.
8.14 Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall constitute an original, and together shall constitute the
Agreement.
8.15 Entire Agreement. This Agreement and the other Loan Documents embody
the entire agreement among the parties hereto and supercede all prior
commitments, agreements, representations and understandings, whether written or
oral, relating to the subject matter hereof, and may not be contradicted or
varied by evidence of prior, contemporaneous, or subsequent oral agreements or
discussions of the parties hereto.
8.16 Amendments and Waivers. No amendment or waiver of any provision of the
Loan Documents shall be effective unless in writing and signed by the party
against whom enforcement is sought.
8.17 Limitation on Interest. It is the intention of the parties hereto to
conform strictly to applicable usury laws. Accordingly, all agreements between
Borrower and Lender with respect to the Loan are hereby expressly limited so
that in no event, whether by reason of acceleration of maturity or otherwise,
shall the amount paid or agreed to be paid to Lender or charged by Lender for
the use, forbearance or detention of the money to be lent hereunder or
otherwise, exceed the maximum amount allowed by law. If the Loan would be
usurious under applicable law (including the laws of the State of Illinois and
the laws of the United States of America), then, notwithstanding anything to the
contrary in the Loan Documents: (a) the aggregate of all consideration which
constitutes interest under applicable law that is contracted for, taken,
reserved, charged or received under the Loan Documents shall under no
circumstances exceed the maximum amount of interest allowed by applicable law,
and any excess shall be credited on the Note by the holder thereof (or, if the
Note has been paid in full, refunded to Borrower); and (b) if maturity is
accelerated by reason of an election by Lender, or in the event of any
prepayment, then any consideration which constitutes interest may never include
more than the maximum amount allowed by applicable law. In such case, excess
interest, if any, provided for in the Loan Documents or otherwise, to the extent
permitted by applicable law, shall be amortized, prorated, allocated and spread
from the date of advance until payment in full so that the actual rate of
interest is uniform through the term hereof. If such amortization, proration,
allocation and spreading is not permitted under applicable law, then such excess
interest shall be cancelled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited on the Note (or, if the
Note has been paid in full, refunded to Borrower). The terms and provisions of
this Section 8.17 shall control and supersede every other provision of the Loan
Documents. The Loan Documents are contracts made under and shall be construed in
accordance with and governed by the laws of the State of Illinois, except that
if at any time the laws of the United States of America permit Lender to
contract for, take, reserve, charge or receive a higher rate of interest than is
allowed by the laws of the State of Illinois (whether such federal laws directly
so provide or refer to the law of any state), then such federal laws shall to
such extent govern as to the rate of interest which Lender may contract for,
take, reserve, charge or receive under the Loan Documents.
8.18 Approvals; Third Parties; Conditions. All approval rights retained or
exercised by Lender with respect to Leases, contracts, plans, studies and other
matters are solely to facilitate Lender's credit underwriting, and shall not be
deemed or construed as a determination that Lender has passed on the adequacy
thereof for any other purpose and may not be relied upon by Borrower or any
other Person. This Agreement is for the sole and exclusive use of Lender and
Borrower and may not be enforced, nor relied upon, by any Person other than
Lender and Borrower. All conditions of the obligations of Lender hereunder,
including the obligation to make advances, are imposed solely and exclusively
for the benefit of Lender, its successors and assigns, and no other Person shall
have standing to require satisfaction of such conditions or be entitled to
assume that Lender will refuse to make advances in the absence of strict
compliance with any or all of such conditions, and no other Person shall, under
any circumstances, be deemed to be a beneficiary of such conditions, any and all
of which may be freely waived in whole or in part by Lender at any time in
Lender's sole discretion.
8.19 Lender Not in Control; No Partnership. None of the covenants or other
provisions contained in this Agreement shall, or shall be deemed to, give Lender
the right or power to exercise control over the affairs or management of
Borrower, the power of Lender being limited to the rights to exercise the
remedies referred to in the Loan Documents. The relationship between Borrower
and Lender is, and at all times shall remain, solely that of debtor and
creditor. No covenant or provision of the Loan Documents is intended, nor shall
it be deemed or construed, to create a partnership, joint venture, agency or
common interest in profits or income between Lender and Borrower or to create an
equity in the Project in Lender. Lender neither undertakes nor assumes any
responsibility or duty to Borrower or to any other person with respect to the
Project or the Loan, except as expressly provided in the Loan Documents; and
notwithstanding any other provision of the Loan Documents: (a) Lender is not,
and shall not be construed as, a partner, joint venturer, alter ego, manager,
controlling person or other business associate or participant of any kind of
Borrower or its stockholders, members, or partners and Lender does not intend to
ever assume such status; (b) Lender shall in no event be liable for any debts,
expenses or losses incurred or sustained by Borrower; and (c) Lender shall not
be deemed responsible for or a participant in any acts, omissions or decisions
of Borrower or its stockholders, members, or partners. Lender and Borrower
disclaim any intention to create any partnership, joint venture, agency or
common interest in profits or income between Lender and Borrower, or to create
an equity in the Project in Lender, or any sharing of liabilities, losses, costs
or expenses.
8.20 Renewal, Extension or Rearrangement. All provisions of the Loan
Documents shall apply with equal effect to each and all promissory notes and
amendments thereof hereinafter executed which in whole or in part represent a
renewal, extension, increase or rearrangement of the Loan. For portfolio
management purposes, Lender may elect to divide the Loan into two or more
separate loans evidenced by separate promissory notes so long as the payment and
other obligations of Borrower are not effectively increased or otherwise
modified. Borrower agrees to cooperate with Lender and to execute such documents
as Lender reasonably may request to effect such division of the Loan.
8.21 Cumulative Rights. Rights and remedies of Lender under the Loan
Documents shall be cumulative, and the exercise or partial exercise of any such
right or remedy shall not preclude the exercise of any other right or remedy.
8.22 Singular and Plural. Words used in this Agreement and the other Loan
Documents in the singular, where the context so permits, shall be deemed to
include the plural and vice versa. The definitions of words in the singular in
this Agreement and the other Loan Documents shall apply to such words when used
in the plural where the context so permits and vice versa.
8.23 Phrases. When used in this Agreement and the other Loan Documents, the
phrase "including" shall mean "including, but not limited to," the phrase
"satisfactory to Lender" shall mean "in form and substance satisfactory to
Lender in all respects," the phrase "with Lender's consent" or "with Lender's
approval" shall mean such consent or approval at Lender's discretion, and the
phrase "acceptable to Lender" shall mean "acceptable to Lender at Lender's sole
discretion."
8.24 Exhibits, Schedules and Riders. The exhibits, schedules and riders
attached to this Agreement are incorporated herein and shall be considered a
part of this Agreement for the purposes stated herein.
8.25 Titles of Articles, Sections and Subsections. All titles or headings to
articles, sections, subsections or other divisions of this Agreement and the
other Loan Documents or the exhibits hereto and thereto are only for the
convenience of the parties and shall not be construed to have any effect or
meaning with respect to the other content of such articles, sections,
subsections or other divisions, such other content being controlling as to the
agreement between the parties hereto.
8.26 Promotional Material. Borrower authorizes Lender to issue press
releases, advertisements and other promotional materials in connection with
Lender's own promotional and marketing activities, and describing the Loan in
general terms or in detail and Lender's participation in the Loan. All
references to Lender contained in any press release, advertisement or
promotional material issued by Borrower shall be approved in writing by Lender
in advance of issuance.
8.27 Survival. All of the representations, warranties, covenants, and
indemnities hereunder, and under the indemnification provisions of the other
Loan Documents shall survive the repayment in full of the Loan and the release
of the liens evidencing or securing the Loan, and shall survive the transfer (by
sale, foreclosure, conveyance in lieu of foreclosure or otherwise) of any or all
right, title and interest in and to the Project to any party, whether or not an
Affiliate of Borrower.
8.28 Waiver of Punitive or Consequential Damages. Neither Lender nor
Borrower shall be responsible or liable to the other or to any other Person for
any punitive, exemplary or consequential damages which may be alleged as a
result of the Loan or the transaction contemplated hereby, including any breach
or other default by any party hereto.
8.29 Limitation on Liability of Lender's Officers, Employees, etc. Any
obligation or liability whatsoever of Lender which may arise at any time under
this Agreement or any other Loan Document shall be satisfied, if at all, out of
the Lender's assets only. No such obligation or liability shall be personally
binding upon, nor shall resort for the enforcement thereof be had to, the
property of any of Lender's shareholders, directors, officers, employees or
agents, regardless of whether such obligation or liability is in the nature of
contract, tort or otherwise.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
has caused the same to be executed by their duly authorized representatives as
of the date first above written.
BORROWER:
CNL RETIREMENT-AM/COLORADO LP, a Delaware limited partnership
By: CNL Retirement GP/Colorado Corp., a Delaware
corporation, general partner
By: /s/ Xxxxxxx X. Xxxx
---------------------------------------
Name: Xxxxxxx X. Xxxx
Its Senior Vice President
LENDER:
GENERAL ELECTRIC CAPITAL CORPORATION,
a Delaware corporation
By /s/ Xxxxxxx Xxxxxxx
----------------------------------------------------
Name Xxxxxxx Xxxxxxx
----------------------------------------------------
Its Vice President
EXHIBIT A
Legal Description
EXHIBIT B
Litigation
[To Be Attached]
SCHEDULE I
CALCULATION OF NET OPERATING INCOME
"Net Operating Income" means Revenue less Expenses, as determined by Lender in
its sole discretion.
"Revenue" means (a) an annualized amount based on all amounts collected by
Tenant from tenants under Subleases for the most current three (3) months (or,
solely for the purposes of Section 1.1.2(g) hereof, the most current four (4)
months), excluding nonrecurring income and non-property related income (as
determined by Lender in its sole discretion) and income from tenants under
Subleases (i) who are thirty (30) or more days delinquent, (ii) who have been
delinquent four (4) or more times during the past twelve (12) months, or (iii)
who have vacated their unit, plus (b) other revenue, not to exceed ten percent
(10%) of the amounts described in clause (a), for laundry, vending, parking and
other ancillary services based upon collections for the previous twelve (12)
months, but excluding any income from interest earned or late fees.. In
determining Revenue, the occupancy factor utilized shall be the lesser of (a)
actual occupancy, or (b) an assumed ninety-five percent (95%) occupancy rate.
"Expenses" means actual and customary operating expenses incurred by Tenant on a
stabilized accrual basis for the previous twelve (12) month period (as adjusted
by Lender), including: (i) recurring operating expenses, (ii) real estate taxes,
(iii) management fees (whether paid or not) in an amount not less than five
percent (5%) of gross income of Tenant, and (iv) a replacement reserve (whether
reserved or not) of not less than Two Hundred Fifty and No/100 Dollars ($250.00)
per unit. Expenses shall not include any deposits made by Tenant into the Tenant
Shortfall Reserve or the Reserve or any operating expenses that are funded out
of the Reserve unless such expenses exceed 250.00 per unit.
SENIOR HOUSING RIDER
[To be attached]
SCHEDULE II
INDEX OF DEFINED TERMS
Defined Term Page
Affiliate 17
Agreement of Principals 5
Approved Bank Account 17
Assignment of Leases 1
Bankruptcy Party 21
Base Rate 3
Borrower 1
Business Day 26
Cash Account Agreements 5
Closing Date 2
Collateral 5
Control 17
Costs 23
Debt Service Coverage Ratio 22
Deposit Accounts 17
Earnout Agreement 17
Environmental Indemnity 5
Event of Default 21
FIRREA 5
General Partner 1
Improvements 1
Incorporation Documents 9
Indebtedness 21
Initial Funding Amount 2
Interest Rate 3
Leases 6
Lender 1
Loan 1
Loan Documents 1
Loan Year 4
Maturity Date 3
Mortgage 1
Note 1
Partnership Agreement 9
Person 17
Principals 5
Project 1
Property 1
Subleases 6
Tenant 2
Tenant Guarantor 2
Tenant Guaranty 7
Tenant Lease 6
Title Policy 6
