AGREEMENT BETWEEN LIENHOLDERS
THIS AGREEMENT is made this 20th day of June, 1997, by and between
Emprise Bank, N.A.(hereinafter "Lender"), having a notice address at 0000
Xxxx, X.0. Xxx 000, Xxxx, Xxxxxx 00000-0000, and Colonial Trust Company,
Trustee (hereinafter "Trustee"), having a notice address at X.X. Xxx 00000,
Xxxxxxx, Xxxxxxxx Xxxxxx, Xxxxxxx 00000-0000.
WHEREAS, Lender has committed to loan and intends to loan to Front
Range Assisted Living, L.L.C. of 000 Xxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxxx 00000 (hereinafter "FRAL") the sum of Two Million Dollars
($2,000,000.00) (said loan, together with all extensions, modifications and
renewals thereof being hereinafter referred to as the "Construction Loan")
to be evidenced by a promissory note executed by FRAL and payable to Lender
and secured by, among other things, a first Deed of Trust against the real
property of FRAL described on EXHIBIT "A" attached, as well as a security
interest in and to the personal property of FRAL described on said EXHIBIT
"A" all of such real and personal property to be collateral for the
Construction Loan and hereinafter collectively referred to as the "Joint
Collateral"; and
WHEREAS, the purpose of the Construction Loan is to provide interim
financing for the construction of an intermediate care facility for senior
citizens (the "Project"); and the Construction Loan is to be paid off from
the proceeds of a bond offering in the amount of $2,500,000.00 to be made by
FRAL through MMR Investment Bankers, Inc. (hereinafter "MMR") pursuant to a
Trust Indenture dated June 20, 1997, (the "Trust Indenture") entered into by and
between FRAL and Trustee for the benefit of the holders of bonds issued
thereunder (the "Bondholders") and
WHEREAS, the indebtedness evidenced by such bonds (hereinafter the
"Bond Indebtedness") is also to be secured with the Joint Collateral and the
liens on the Joint Collateral securing the Bond Indebtedness shall also to
be a first lien of equal position and on parity with the liens securing the
Construction Loan, subject to the terms of that Agreement: and
WHEREAS, for purposes of this Agreement, (i) the Construction Loan and
the Bond Indebtedness are some times referred to individually as a "Loan"
and collectively as the "Loans"; and (ii) the term "Loan Documents" shall
mean, as the context requires, the note, loan agreement and other loan
documents evidencing the Construction Loan, or the bonds, Bond Indenture and
other bond documents evidencing the Bond Indebtedness, or both.
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NOW, THEREFORE, IN CONSIDERATION of mutual covenants and agreements
herein contained Lender and Trustee do hereby agree as follows.
1. Equity of Liens. FRAL shall execute, acknowledge and deliver,
for the benefit of both Lender and Trustee, a single form of Deed of Trust
and Security Agreement, and a single form of such other documents
encumbering the Joint Collateral as may be required by Lender or Trustee
(all of the foregoing being hereinafter referred to collectively as the
"Joint Collateral Documents"). The Joint Collateral Documents shall name
both Lender and Trustee as lienholder and secured party and shall secure
ratably (as further described herein) and on a parity with one another the
Construction Loan and the Bond Indebtedness,
2. Application of Bond Proceeds. The parties agree that the
proceeds from the bond offering shall be used to the extent available and
subject to the provisions of the Section IV of the Trust Indenture, a copy
of which is attached hereto as Exhibit "B", to pay the principal balance and
accrued interest of the Construction Loan. On the tenth (10th) day of each
calendar month during the term hereof, or on such day as may be mutually
agreeable to the parties, Trustee will deliver to Lender, for application to the
Construction Loan, all proceeds received from the sale of bonds that are
available for the payment of the Construction Loan pursuant to Exhibit "B",
until the Construction Loan is paid in full.
3. Notice of Default; Acceleration. In the event of a default
under either the Construction Loan or the Bond Indebtedness, the party
holding the Loan in default will give written notice to the other party
within ten (10) days after learning of such event of default. If either
party elects to accelerate such party's Loan as a result of any default, the
party electing to accelerate shall likewise give written notice to the other
party of the election prior to taking any action thereon. Each party
agrees, to the extent permitted by such party's Loan Documents, to
accelerate such party's Loan in the event of acceleration by the other
party.
4. Realization on Collateral, In the event of acceleration of the
Construction Loan and theBond Indebtedness, Lender and Trustee shall, to the
extent possible under their respective Loan Documents, act in concert to
foreclose and realize upon the Joint Collateral. The parties agree to
work together in good faith in attempting to make joint decisions regarding
such matters as collection attempts, foreclosure, selection of joint counsel
(if the parties determine that joint counsel is appropriate) and maintenance and
disposition of the Joint Collateral. In the event the parties are
unable to agree, however, Lender shall have the right, in its discretion,
(i) to direct the time, method and place of conducting all
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proceedings taken in connection with the enforcement of the terms and
conditions of the Joint Collateral Documents; (ii) to determine whether a
receiver for the Joint Collateral or any part thereof should be appointed
and the identity of any receiver; and (iii) to otherwise make decisions
and take action with regard to the maintenance, protection, or disposition
of the Joint Collateral; provided that such directions and actions shall be
permitted under applicable law and shall be for the ratable benefit of both
Lender and Trustee. Without limiting the generality of the foregoing,
Lender may, in its discretion, sell or otherwise dispose of the Joint
Collateral in its condition at the time of default, or may make such
renovations as Lender deems appropriate to prepare the Joint Collateral for
sale or disposition. In the event default occurs before completion of
construction or equipping of the Project, Lender may, but shall not be
required, to complete and equip the Project. In connection with the repair
or completion of the Project, Lender may, in its sole discretion advance
such funds as may be reasonably necessary to accomplish such repair or
completion, and any funds so advanced shall be reimbursed as provided in
Section 5 below. Exercise of the foregoing powers by Lender shall bind the
interest of both Lender and Trustee in the Joint Collateral, and Trustee
shall from time to time execute and deliver such instructions, conveyances
and other documents as Lender may request to further evidence the authority
granted to Lender in this Section 4 or to effectuate Lender's exercise of
the powers granted in this Section 4, Either party may be a purchaser at any
public sale or other disposition of the Joint Collateral, and after
consummation of such sale, the purchaser shall hold the Joint Collateral
free and clear of any claims of the other party. The non-purchasing party
shall be entitled to receive its portion of the proceeds of such sale or
other disposition as determined hereinafter.
5. Fees and Expenses. All legal fees, court costs and related
expenses incurred in connection with actions taken under Section 4 pursuant
to an agreement of both parties shall be advanced pro rata by Lender and
Trustee in the same proportion that the unpaid principal balance of each
party's Loan bears to the unpaid principal balance of both Loans. In the
event Lender exercises any of the powers granted to Lender in Section 4,
above, to direct the actions of the parties with regard to the Joint
Collateral, and in the further event Lender advances funds in connection the
exercise of such powers, proceeds from the sale or other disposition of the
Joint Collateral shall be applied, first, to reimburse Lender for all
amounts so advanced, All other fees, cost and expenses shall be advanced by
the party incurring such fees, costs and expenses, and all such reasonable
fees, costs and expenses shall be added to and deemed a part of the Loan of
such party to the extent permitted under such Party's Loan Documents,
Nothing contained in this Agreement is intended to constitute a waiver of
each party's right to recover all fees and expenses to the extent provided
in such party's Loan Documents.
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6. Proceeds of Collateral. Any proceeds arising from the
disposition of the Joint Collateral during the term of this Agreement shall,
after reimbursement of Lender's fees and expenses as provided in Section 5,
above, be divided between Lender and Trustee in the proportion that the
unpaid principal balance of each party's Loan bears to the total unpaid
principal balance of both Loans on the date such proceeds are distributed.
For purposes of calculating such prorations, the principal balance of the
Bond Indebtedness shall be reduced by the amount of any reserve or other
account held by the Trustee for the benefit of the Bondholders, and the
principal balance shall not include fees, charges or expenses incurred as a
result of default. Proceeds of Joint Collateral shall include, without
limitation, proceeds arising from the sale, condemnation or other
disposition of the Joint Collateral and shall include insurance proceeds
paid with respect to the Joint Collateral, Any proceeds of Joint Collateral
received by either party to the Agreement shall be held in trust for the
other to the extent of the other party's interest therein as provided in
this Agreement. This Agreement concerns the Joint Collateral and the
application of proceeds arising from the disposition of the Joint
Collateral. It is acknowledged that Lender has or may have third party
guarantees of all or a portion of the Construction Loan and that the
Construction Loan is or may be secured by collateral (the "Emprise
Collateral") other than and in addition to the Joint Collateral, and Trustee
shall not be entitled to receive, directly or indirectly, any proceeds of or
benefit from the payment of any such guaranty and/or realization on any of
the Emprise Collateral which is not jointly held. Accordingly, for the
purpose of calculating the interests of Lender and Trustee in the proceeds
of Joint Collateral as set forth in the first sentence of this Section 6,
the unpaid principal balance of Lender's Construction Loan shall be deemed
to be increased by any amount theretofore received by Lender attributable to
Emprise Collateral and/or a third party guarantee of the Construction Loan;
provided, however, that at such time as Lender has actually received final
payment in full of the Construction Loan (including all interest, fees,
costs and expenses permitted under the Construction Loan Documents), and
such final payment is not subject to risk of refund, the balance, if any, of the
proceeds arising from the disposition of the Joint Collateral shall be
remitted to the Trustee for the benefit of the Bondholders.
7. Representations.
a. Lender represents and warrants to Trustee that the
execution and delivery of this Agreement has been duly authorized by all
appropriate corporate action on the part of Lender; that it does not
contravene or conflict with any of the documents evidencing the Construction
Loan; and that this Agreement constitutes the legal, valid, and binding
obligation of Lender, enforceable against Lender in accordance with its
terms, subject to applicable bankruptcy and insolvency laws.
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b. Trustee represents and warrants to Lender (i) that the
execution, delivery and performance of this Agreement by Trustee has been
duly authorized by all appropriate corporate action on the part of Trustee;
(ii) that the execution, delivery and performance of this Agreement by
Trustee does not contravene, violate or conflict with, and is authorized by
the Trust Indenture; (iii) that the Trustee has the power and authority to
perform its obligations hereunder without further consent of the
Bondholders; and (iv) that this Agreement constitutes the legal, valid and
binding obligation of Trustee and is enforceable against the Trustee and
against all Bondholders in accordance with its terms, subject to applicable
bankruptcy and insolvency laws.
c. Concurrently with the execution of this Agreement, each party
shall deliver to the other party a favorable opinion of its counsel in form
and substance reasonably satisfactory to the recipient with regard to the
issues addressed in subparagraphs (a) and (b) above.
8. Term. This Agreement shall continue until the earliest to occur of.
(a) payment in full of the Construction Loan and transfer of Lender's
interest in the Joint Collateral Documents to Trustee; (b) the sale or other
disposition of the Joint Collateral pursuant to the Joint Collateral
Documents, the confirmation of such sale or disposition to the extent
required under applicable law, the expiration of any appeal period, and the
disbursement of the proceeds from such sale to Lender and Trustee according
to the terms hereof; or (c) the mutual written agreement of the parties to
terminate this agreement. Each party may, during the term of this Agreement and
without notice to the other party, continue to deal with and make
advances to FRAL in reliance hereon.
9. Enforcement, In any action brought to enforce or defend any of
the provisions of this agreement, the prevailing party shall be entitled to
recover its reasonable attorney's fees and expenses from the other party in
addition to other relief awarded.
10. Construction, This agreement does not make either party the
employee, agent, partner, fiduciary or legal representative of the other
party for any purpose whatsoever. Neither party is granted any right or
authority to assume or create any obligation or responsibility, express or
implied, on behalf of or in the name of the other party. Each party
acknowledges that it has, independently and without reliance on the other,
made its own credit decision with regard to FRAL. Except as expressly
provided herein, neither party has any duty or responsibility to the
other. Neither Lender nor Trustee nor any of their respective directors,
officers, agents or employees shall be liable for any action taken or
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omitted to be take under or in connection with this Agreement or the Joint
Collateral in the absence of its or their own gross negligence or willful
misconduct. Nothing contained in this Agreement shall be deemed an
amendment of any Loan Document or a waiver of any right or remedy contained
in any Loan Document. This Agreement shall be binding upon Leader, Trustee
and Bondholders, and shall inure to the benefit of Leader and Trustee and
their respective successors and assigns. This Agreement is solely for the
benefit of the Lender and Trustee and their respective successors and
assigns and no other person or entity shall have any right, benefit or
interest under or because of this Agreement.
IN WITNESS WHEREOF, the parties have executed this instrument effective the
date first above written.
DATED this 20th day of June, 1997.
EMPRISE BANK, N.A.
BY: /S/Xxxxx Xxxxxx S.V.P.
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Xxxxx Xxxxxx, Senior Vice
President
COLONIAL TRUST COMPANY, TRUSTEE-
BY: /S/Xxxx X Xxxxxxx
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Xxxx X. Xxxxxxx, President
CONSENT
Front Range Assisted Living, L.L.C. hereby consents to the terms of the
foregoing Agreement and consents to any action of Lender or Trustee taken in
accordance with the terms thereof.
Dated this 20th day of June, 1997.
FRONT RANGE ASSISTED LIVING, L.L.C.
BY: /S/Xxxxxx X Xxxxxx
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Xxxxxx X. Xxxxxx, Managing Member
