CONSTRUCTION LOAN AGREEMENT
Exhibit
10.83
by
and
between
American
Retirement Corporation,
a
Tennessee corporation,
as
Borrower,
and
Bank
of
America, N.A.,
a
national
banking association,
as
Lender,
with
respect to The Cumberland at Xxxxx Xxxxx
Xxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxxx
TABLE
OF CONTENTS
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Page
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Article
I
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General
Information
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1
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Section
1.1
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Conditions
to Closing
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1
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Section
1.2
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Schedules
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1
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Section
1.3
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Defined
Terms
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1
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Article
II
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Advances
of the Loan
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1
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Section
2.1
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The
Loan
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1
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Section
2.2
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Purpose;
Reallocation; Revenues from Property
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2
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Section
2.3
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Draw
Requests
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2
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|
Section
2.4
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Additional
Terms Regarding Advances
|
2
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|
Section
2.5
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Liability
of Lender
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2
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Article
III
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Representations
and Warranties
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2
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Section
3.1
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Organization,
Power and Authority of Borrower; Loan Documents
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3
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Section
3.2
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Other
Documents; Laws
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3
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Section
3.3
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Taxes
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3
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|
Section
3.4
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Legal
Actions
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3
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Section
3.5
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Nature
of Loan
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3
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|
Section
3.6
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Trade
Names
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4
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Section
3.7
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Financial
Statements
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4
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Section
3.8
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ERISA
and Prohibited Transactions
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4
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Section
3.9
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Compliance
with Zoning and Other Requirements
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4
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Section
3.10
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Plans
and Specifications
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4
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Section
3.11
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Building
Permits; Other Permits
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4
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Section
3.12
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Utilities
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5
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Section
3.13
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Access;
Roads
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5
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Section
3.14
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Other
Liens
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5
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Section
3.15
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No
Work Commenced
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5
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Section
3.16
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No
Material Adverse Change
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5
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Section
3.17
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Defaults
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5
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Section
3.18
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Affirmation
of Representations and Warranties
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5
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Article
IV
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Affirmative
Covenants and Agreements
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6
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Section
4.1
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Commencement
and Completion of Construction
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6
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Section
4.2
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Approval
of Construction
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6
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-i-
TABLE
OF CONTENTS
(continued)
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Page
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Section
4.3
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Deposits
to Balance Loan
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6
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Section
4.4
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Compliance
with Laws; Encroachments
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7
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Section
4.5
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Inspections;
Cooperation
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7
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Section
4.6
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Contracts,
Vouchers and Receipts
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7
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Section
4.7
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Payment
and Performance of Contractual Obligations
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7
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Section
4.8
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Correction
of Construction Defects
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7
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Section
4.9
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Insurance
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8
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Section
4.10
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Adjustment
of Condemnation and Insurance Claim
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9
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Section
4.11
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Utilization
of Net Proceeds
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9
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Section
4.12
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Management
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10
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Section
4.13
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Books
and Records; Financial Statements
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10
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Section
4.14
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Estoppel
Certificates
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11
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Section
4.15
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Taxes
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11
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Section
4.16
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Lender’s
Rights to Pay and Perform
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11
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Section
4.17
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Reimbursement;
Interest
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11
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Section
4.18
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Notification
by Borrower
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12
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Section
4.19
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Indemnification
by Borrower
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12
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Section
4.20
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Fees
and Expenses
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12
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Section
4.21
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Appraisals
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12
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Section
4.22
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Leasing
and Tenant Matters
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12
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Section
4.23
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Principal
Depository
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13
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Section
4.24
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Swap
Contracts
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13
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Article
V
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Negative
Covenants
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13
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Section
5.1
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Conditional
Sales
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13
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Section
5.2
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Changes
to Plans and Specifications
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13
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Section
5.3
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Changes
to ASF Loan Documents or the Subordinated Loan Documents
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13
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Section
5.4
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Insurance
Policies and Bonds
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13
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Section
5.5
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Consolidated
Fixed Charge Coverage Ratio
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13
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Article
VI
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Events
of Default
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14
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Section
6.1
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Payment
Default
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14
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Section
6.2
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Default
Under Other Loan Documents
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14
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Section
6.3
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Accuracy
of Information; Representations and Warranties
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14
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-ii-
TABLE
OF CONTENTS
(continued)
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Page
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Section
6.4
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Covenants
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14
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Section
6.5
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Deposits
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14
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Section
6.6
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Insurance
Obligations
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14
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Section
6.7
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Other
Obligations
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14
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Section
6.8
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Progress
of Construction
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15
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Section
6.9
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Damage
to Improvements
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15
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Section
6.10
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Lapse
of Permits or Approvals
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15
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Section
6.11
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Completion
of Construction
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15
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Section
6.12
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Mechanic’s
Lien
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15
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Section
6.13
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Survey
Matters
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15
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Section
6.14
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General
Contractor Default
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15
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Section
6.15
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Performance
Enjoined or Prohibited
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16
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Section
6.16
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Bankruptcy
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16
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Section
6.17
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Appointment
of Receiver, Trustee, Liquidator
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16
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Section
6.18
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Judgment
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16
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Section
6.19
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Dissolution;
Change in Business Status
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16
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Section
6.20
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Default
Under Other Indebtedness
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16
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Section
6.21
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Change
in Controlling Interest
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16
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Section
6.22
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Material
Adverse Change
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16
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Article
VII
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Remedies
on Default
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17
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Section
7.1
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Remedies
on Default
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17
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Section
7.2
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No
Release or Waiver; Remedies Cumulative and Concurrent
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18
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Article
VIII
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Miscellaneous
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18
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Section
8.1
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Further
Assurances; Authorization to File Documents
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18
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Section
8.2
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No
Warranty by Lender
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19
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Section
8.3
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Standard
of Conduct of Lender
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19
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Section
8.4
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No
Partnership
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19
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Section
8.5
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Severability
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19
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Section
8.6
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Notices
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19
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Section
8.7
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Permitted
Successors and Assigns; Disclosure of Information
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21
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Section
8.8
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Modification;
Waiver
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21
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Section
8.9
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Third
Parties; Benefit
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21
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-iii-
TABLE
OF CONTENTS
(continued)
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Page
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Section
8.10
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Rules
of Construction
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22
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Section
8.11
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Counterparts
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22
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Section
8.12
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Signs;
Publicity
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22
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Section
8.13
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Governing
Law
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22
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Section
8.14
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Time
of Essence
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22
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Section
8.15
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Electronic
Transmission of Data
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22
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Section
8.16
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Dispute
Resolution
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23
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Section
8.17
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Forum
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24
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Section
8.18
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WAIVER
OF JURY TRIAL
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24
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Section
8.19
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USA
Patriot Act Notice
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25
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Section
8.20
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Entire
Agreement
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25
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Section
8.21
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HIPPA
Disclosure
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25
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-iv-
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Schedules
to Construction Loan Agreement
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Schedule
1
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Definitions
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Schedule
2
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Form
of Draw Request
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Schedule
3
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Budget
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Schedule
4
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Project
Schedule
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Schedule
5
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Additional
Terms Regarding Advances
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Schedule
6
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Leasing
and Tenant Matters
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Schedule
7
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Swap
Contracts
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i
This
Construction Loan Agreement (this “Agreement”)
is made
as of the 12th
day of
December, 2005, by and between American Retirement Corporation, a Tennessee
corporation (“Borrower”),
and
Bank of America, N.A., a national banking association (“Lender”).
Recitals
Borrower
has applied to Lender for a loan to assist in financing certain costs related
to
the construction and development of improvements on real property in Xxxxxx
Hills, Nashville, Tennessee. The Borrower has simultaneously herewith sold
its
interest in the real property to ASF of Green Hills, LLC, a Tennessee non-profit
limited liability company ("ASF") owned solely by American Seniors Foundation,
an Ohio non-profit corporation ("American Seniors"). Borrower intends to
re-lend
the entire proceeds of its loan from Lender to ASF pursuant to separate
construction loan documentation between Borrower and ASF, and to act as the
developer of the property and the improvements on ASF's behalf. Lender has
agreed to make the loan to Borrower for the sole purpose of the Borrower
re-lending same to ASF on the terms and conditions set forth in this Agreement
and in the other documents, including without limitation those documents
between
Borrower and ASF evidencing and securing the second loan (the "ASF
Loan").
Now,
therefore, in consideration of the premises, and in further consideration
of the
mutual covenants and agreements herein set forth and of the sum of Ten Dollars
($10.00) paid by each party to the other, receipt of which is hereby
acknowledged, the parties covenant and agree as follows:
Agreements
Article
I
General
Information.
Section
1.1 Conditions
to Closing.
The
conditions precedent to closing the Loan and recording the Mortgage are set
forth in the Closing Checklist.
Section
1.2 Schedules.
The
Schedules attached to this Agreement are incorporated herein and made a part
hereof.
Section
1.3 Defined
Terms.
Capitalized
terms in this Agreement shall have the meanings ascribed to such terms in
the
Preamble hereto and in Schedule 1.
Article
II
Advances
of the Loan.
Section
2.1 The
Loan.
Borrower
agrees to borrow the Loan from Lender, and Lender agrees to lend the Loan
to
Borrower, subject to the terms and conditions herein set forth, in incremental
advances which will not exceed, in the aggregate, the Loan Amount. Interest
shall accrue and be payable in arrears only on sums advanced hereunder for
the
period of time outstanding. The Loan is not a revolving loan; amounts repaid
may
not be re-borrowed.
PAGE
1
Section
2.2 Purpose;
Reallocation; Revenues from Property.
The
Loan
shall be advanced by Lender in accordance with the terms of this Agreement
to
pay those expenses related to the Loan and the Property that are described
in
the Budget, but not, in the aggregate with respect to any line item set forth
in
the Budget, in excess of the amount of the Loan to be disbursed for such
line
item, as set forth in the Budget. Borrower will receive each advance in trust
for the purpose of paying only those costs for which the advance is made
and
will utilize the funds advanced for no other purpose. With the prior approval
of
Lender, any cost savings, actual or estimated, affecting any approved line
item
within the Budget, other than the interest reserve, may be reallocated by
Borrower to any other line item within the Budget. Upon completion of the
Improvements and the payment of all costs in connection therewith, any
undisbursed proceeds of the Loan shall be allocated to the interest reserve
or
to such other line item as Lender shall approve. Each disbursement from a
contingency reserve shall be subject to approval by Lender as to the amount
and
purpose for which such disbursement will be used. If and when revenues are
derived from the Property in amounts sufficient to pay all or any portion
of the
operating expenses of the Property or all or any portion of the interest
on the
Loan, revenues will be used to pay such expenses and/or interest, and Lender,
at
its sole option, may restrict or prohibit future disbursements of the Loan
for
such purposes to the extent that revenues are sufficient to pay such
amounts.
Section
2.3 Draw
Requests.
Advances
shall be made not more frequently than monthly based on draw requests signed
by
an Authorized Signers in the form attached hereto as Schedule 2.
Each
draw request, whether for hard or soft costs, shall be set forth on AIA Forms
G702 and G703, and shall be reviewed by the Construction Consultant, signed
by
the General Contractor and, if requested by Lender, approved by the Architect.
Draw requests for hard costs shall show the percentage of completion of
construction and shall set forth in trade breakdown form and in such detail
as
may be required by Lender the amounts expended and/or costs incurred for
work
done and materials incorporated in the Improvements. Retainage will be withheld
and released in accordance with the terms of Schedule 5.
Each
draw request, whether for hard and/or soft costs, shall be supported by such
information and documentation (such as paid receipts, invoices, statements
of
accounts, lien releases, etc.) as Lender may require to assure that amounts
requested are to be used to reimburse Borrower for costs previously paid
by
Borrower and/or ASF or to pay costs incurred by Borrower and/or ASF that
are to
be paid from proceeds of the Loan, as set forth in the Budget. Unless reasonably
requested by Lender in any instance, Borrower will not be required to provide
any individual invoice for an amount less than or equal to $5,000.00 in support
of a draw request; provided, Borrower shall provide or cause to be provided
with
each draw request a complete listing of all payees and the amounts requested
for
payment by each.
Section
2.4 Additional
Terms Regarding Advances.
Advances
of the Loan shall also be subject to the terms and conditions set forth in
Schedule 5.
Section
2.5 Liability
of Lender.
Lender
shall in no event be responsible or liable to any Person other than Borrower
for
the disbursement of or failure to disburse the Loan proceeds or any part
thereof
and neither ASF, the General Contractor, Construction Consultant nor any
subcontractor, laborer or material supplier shall have any right or claim
against Lender under this Agreement or the other Loan Documents.
Article
III
Representations
and Warranties.
Borrower
represents and warrants to Lender that:
PAGE
2
Section
3.1 Organization,
Power and Authority of Borrower; Loan Documents.
Borrower
(a) is a corporation duly organized, existing and in good standing under
the
laws of the state in which it is organized and is duly qualified to do business
and in good standing in the state in which the Land is located (if different
from the state of its formation) and in any other state where the nature
of
Borrower’s business or property requires it to be qualified to do business, and
(b) has the power, authority and legal right to own its property and carry
on
the business now being conducted by it and to engage in the transactions
contemplated by the Loan Documents. The Loan Documents to which Borrower
is a
party have in each case been duly executed and delivered by Borrower, and
the
execution and delivery of, and the carrying out of the transactions contemplated
by, such Loan Documents, and the performance and observance of the terms
and
conditions thereof, have been duly authorized by all necessary organizational
action by and on behalf of Borrower. The Loan Documents to which Borrower
is a
party constitute the valid and legally binding obligations of Borrower and
are
fully enforceable against each of them in accordance with their respective
terms, except to the extent that such enforceability may be limited by laws
generally affecting the enforcement of creditors’ rights.
Section
3.2 Other
Documents; Laws.
The
execution and performance of the Loan Documents to which the Borrower is
a party
and the consummation of the transactions contemplated thereby will not conflict
with, result in any breach of, or constitute a default under, the organizational
documents of Borrower or any contract, agreement, document or other instrument
to which Borrower is a party or by which Borrower or any of its respective
properties may be bound or affected, and such actions do not and will not
violate or contravene any Law to which Borrower is subject.
Section
3.3 Taxes.
Borrower
has filed all federal, state, county and municipal Tax returns required to
have
been filed by Borrower and has paid all Taxes which have become due pursuant
to
such returns or pursuant to any Tax assessments received by
Borrower.
Section
3.4 Legal
Actions.
There
are
no Claims or investigations by or before any court or Governmental Authority,
pending, or to the best of Borrower’s knowledge and belief, threatened against
or affecting Borrower, Borrower’s business, or the Property. Borrower is not in
default with respect to any order, writ, injunction, decree or demand of
any
court or any Governmental Authority affecting Borrower or the
Property.
Section
3.5 Nature
of Loan.
Borrower
is a business or commercial organization. The Loan is being obtained solely
for
business or investment purposes, and solely to be re-loaned to ASF for
Construction of the Improvements, and will not be used for personal, family,
household or agricultural purposes.
Section
3.6 Trade
Names.
Borrower
conducts its business solely under the name set forth in the Preamble to
this
Agreement and makes use of no trade names in connection therewith, unless
such
trade names have been previously disclosed to Lender in writing.
Section
3.7 Financial
Statements.
The
financial statements heretofore delivered by Borrower to Lender are true
and
correct in all respects, have been prepared in accordance with sound accounting
principles consistently applied, and fairly present the respective financial
conditions of the subjects thereof as of the respective dates
thereof.
PAGE
3
Section
3.8 ERISA
and Prohibited Transactions.
As
of the
date hereof and throughout the term of the Loan: (a) Borrower is not and
will not be (i) an “employee benefit plan,” as defined in Section 3(3) of
ERISA, (ii) a “governmental plan” within the meaning of Section 3(32) of
ERISA, or (iii) a “plan” within the meaning of Section 4975(e) of the Code;
(b) the assets of Borrower do not and will not constitute “plan assets”
within the meaning of the United States Department of Labor Regulations set
forth in Section 2510.3-101 of Title 29 of the Code of Federal Regulations;
(c) transactions by or with Borrower are not and will not be subject to
state statutes applicable to Borrower regulating investments of fiduciaries
with
respect to governmental plans; and (d) Borrower will not engage in any
transaction that would cause any Obligation or any action taken or to be
taken
hereunder (or the exercise by Lender of any of its rights under the Mortgage
or
any of the other Loan Documents) to be a non-exempt (under a statutory or
administrative class exemption) prohibited transaction under ERISA or Section
4975 of the Code. Borrower agrees to deliver to Lender such certifications
or
other evidence of compliance with the provisions of this Section as Lender
may
from time to time request.
Section
3.9 Compliance
with Zoning and Other Requirements.
The
anticipated use of the Property complies with applicable zoning ordinances,
regulations and restrictive covenants affecting the Land. All use and other
requirements of any Governmental Authority having jurisdiction over the Property
have been satisfied. No violation of any Law exists with respect to the
Property.
Section
3.10 Plans
and Specifications.
The
Plans
and Specifications are complete and adequate for the Construction of the
Improvements. The Plans and Specifications have been approved by all
Governmental Authorities having or claiming jurisdiction over the Property
and
by the beneficiary of each restrictive covenant affecting the Property whose
approval is required. The Plans and Specifications have also been approved
by
any tenant and by any prospective purchaser of the Property or provider of
permanent financing for the Property whose approval is required. To the best
of
Borrower’s knowledge, the Improvements, if constructed substantially in
accordance with the Plans and Specifications, will fully comply with all
applicable Laws, including those Laws relating to access and facilities for
disabled persons.
Section
3.11 Building
Permits; Other Permits.
All
building, construction and other permits necessary or required in connection
with the Construction of the Improvements have been validly issued or will
be
issued in a timely manner by a date sufficient to ensure commencement of
construction and Completion of Construction in accordance with the Project
Schedule. All required fees have been paid and bonds and/or other security
have
been posted in connection with all permits that have been issued, and adequate
amounts are included in the Budget to pay all fees and the cost of all bonds
and
other security in connection with permits to be issued in the future. Following
the issuance thereof, all permits will remain in full force and
effect.
Section
3.12 Utilities.
All
utility services necessary for the Construction of the Improvements and the
operation thereof for their intended purposes are available at the boundaries
of
the Land (or will be available upon the completion of work shown in the Plans
and Specifications), including telephone service, cable television, water
supply, storm and sanitary sewer facilities, natural gas and electric
facilities, including cabling for telephonic and data communication, and
the
capacity to send and receive wireless communication.
Section
3.13 Access;
Roads.
All
roads
and other accesses necessary for the Construction of the Improvements and
full
utilization thereof for their intended purposes have either been completed
or
the necessary rights of way therefor have either been acquired by the
appropriate Governmental Authority, or have been dedicated to public use
and
accepted by such Governmental Authority and all necessary steps have been
taken
by Borrower, ASF or such Governmental Authority to assure the complete
construction and installation thereof by a date sufficient to ensure the
Completion of Construction of the Improvements in accordance with the Project
Schedule.
PAGE
4
Section
3.14 Other
Liens.
Except
for
contracts for labor, materials and services furnished or to be furnished
in
connection with the Construction of the Improvements, Borrower has made no
contract or arrangement of any kind the performance of which by the other
party
thereto would give rise to a lien on the Property.
Section
3.15 No
Work
Commenced.
Prior
to
the recordation of the Mortgage, except as disclosed to Lender in writing,
no
work of any kind (including destruction or removal of any existing improvements,
site work, clearing, grading, grubbing, draining or fencing of the Land)
has
been or will be commenced or performed on the Land, no equipment or material
has
been or will be delivered to or placed upon the Land for any purpose whatsoever,
and no contract (or memorandum or affidavit thereof) for the supplying of
labor,
materials, or services for the design or construction of the Improvements,
or
the surveying of the Land or Improvements, has been entered into which could
cause a mechanic’s or materialman’s lien or similar lien to achieve priority
over the Mortgage or the rights of Lender thereunder.
Section
3.16 No
Material Adverse Change.
No
material adverse change has occurred in the financial conditions reflected
in
the financial statements of Borrower since the respective dates of such
statements, and no material additional liabilities have been incurred by
Borrower since the dates of such statements other than the borrowings
contemplated herein or as approved in writing by Lender.
Section
3.17 Defaults.
There
is
no Default or Event of Default under any of the Loan Documents, and there
is no
default or event of default under any material contract, agreement or other
document related to the Construction of the Improvements or the operation
thereof.
Section
3.18 Affirmation
of Representations and Warranties.
Each
draw
request and each receipt of the funds requested thereby shall constitute
an
affirmation that (a) the foregoing representations and warranties of Borrower
are true and correct as of the date of the draw request and, unless Lender
is
notified to the contrary prior to the disbursement of the advance requested,
will be so on the date of the disbursement, (b) the work completed to the
date
of the draw request is of quality and in all other respects consistent with
the
Plans and Specifications, and (c) if applicable, Construction of the
Improvements is proceeding in accordance with the Project Schedule.
Article
IV
Affirmative
Covenants and Agreements.
Section
4.1 Commencement
and Completion of Construction.
Borrower
shall cause the Construction of the Improvements to be commenced by ASF and
prosecuted in a good and workmanlike manner and shall cause the same to be
completed by ASF in accordance with the Project Schedule and substantially
in
accordance with the Plans and Specifications.
PAGE
5
Section
4.2 Approval
of Construction.
No
work
associated with the Construction of the Improvements shall be commenced by
Borrower or ASF unless and until the Plans and Specifications have been approved
by Lender, by all Governmental Authorities having or claiming jurisdiction
over
the Land and Improvements, by the beneficiary of any applicable restrictive
covenant whose approval is required, and by any other party whose approval
is
required under applicable agreements, and unless and until all building,
construction and other permits necessary or required in connection with the
Construction of the Improvements have been validly issued and all fees, bonds
and any other security required in connection therewith have been paid or
posted.
Section
4.3 Deposits
to Balance Loan.
If
at any
time Lender shall determine that (a) the proceeds of the Loan remaining to
be
advanced for any line item within the Budget, together with any anticipated
Deferred Equity that Lender determines to its satisfaction is or will be
available for such item, are not or will not be sufficient to pay, in a timely
manner, the amount of such line item remaining to be paid, and (b) the
deficiency cannot be remedied by a reallocation of budgeted amounts pursuant
to
Section
2.2,
then
Borrower shall deposit with Lender, within ten (10) days from the effective
date
of a Notice from Lender requesting such deposit, funds in an amount equal
to the
deficiency. Such funds shall be held by Lender in a Borrower’s Deposit Account,
which shall be an interest-bearing account, with all accrued interest to
become
part of Borrower’s deposit. Borrower agrees that it shall include all interest
and earnings on any such deposit as its income, and shall be the owner of
all
funds on deposit in the Borrower’s Deposit Account for federal and applicable
state and local tax purposes. Lender shall have the exclusive right to manage
and control all funds in the Borrower’s Deposit Account, but Lender shall have
no fiduciary duty with respect to such funds. Advances of the deposited funds
will be made from time to time for the payment of deficient line item amounts,
prior to the advance of proceeds of the Loan for such amounts. Advances of
the
deposited funds will be subject to the terms of this Agreement regarding
advances of the Loan. Any account fees and charges may be deducted from the
balance, if any, in the Borrower’s Deposit Account. Borrower grants to Lender a
security interest in the Borrower’s Deposit Account and all such deposited funds
hereafter deposited to such deposit account, and any proceeds thereof, as
security for the Obligations. Such security interest shall be governed by
the
Uniform Commercial Code of the State, and Lender shall have available to
it all
of the rights and remedies available to a secured party thereunder. The
Borrower’s Deposit Account may be established and held in such name or names as
Lender shall deem appropriate, including in the name of Lender. Borrower
hereby
constitutes and appoints Lender and any officer or agent of Lender its true
and
lawful attorneys-in-fact with full power of substitution to open the Borrower’s
Deposit Account and to do any and every act that Borrower might do on its
own
behalf to fulfill the terms of this Section
4.3.
To the
extent permitted by Law, Borrower hereby ratifies all that said attorneys
shall
lawfully do or cause to be done by virtue hereof. It is understood and agreed
that this power of attorney, which shall be deemed to be a power coupled
with an
interest, cannot be revoked.
Section
4.4 Compliance
with Laws; Encroachments.
The
Improvements shall be constructed in accordance with all applicable (whether
present or future) Laws. The Improvements shall be constructed entirely on
the
Land and shall not encroach upon any easement or right-of-way, or upon the
land
of others. Construction of the Improvements shall occur wholly within all
applicable building restriction lines and set-backs, however established,
and
shall be in strict compliance with all applicable use or other restrictions
and
the provisions of any prior agreements, declarations, covenants and all
applicable zoning and subdivision ordinances and regulations.
Section
4.5 Inspections;
Cooperation.
Borrower
shall permit or cause ASF to permit representatives of Lender and the
Construction Consultant to enter upon the Land, to inspect the Improvements
and
any and all materials to be used in connection with the Construction of the
Improvements, to examine all detailed plans and shop drawings and similar
materials as well as all records and books of account maintained by or on
behalf
of Borrower or ASF relating thereto and to discuss the affairs, finances
and
accounts pertaining to the Loan and the Improvements with representatives
of
Borrower and ASF. Borrower shall at all times cooperate and cause ASF, the
General Contractor and each and every one of its subcontractors and material
suppliers to cooperate with the representatives of Lender and the Construction
Consultant in connection with or in aid of the performance of Lender’s functions
under this Agreement. Except in the event of an emergency, Lender shall give
Borrower at least twenty-four hours’ notice by telephone in each instance before
entering upon the Land and/or exercising any other rights granted in this
Section.
PAGE
6
Section
4.6 Contracts,
Vouchers and Receipts.
Borrower
shall furnish to Lender, or cause to be furnished to Lender, promptly on
demand,
any contracts, subcontracts, bills of sale, statements, receipted vouchers
or
other agreements relating to the Construction of the Improvements, including
any
such items pursuant to which Borrower or ASF has any claim of title to any
materials, fixtures or other articles delivered or to be delivered to the
Land
or incorporated or to be incorporated into the Improvements. Borrower shall
furnish to Lender, or cause to be furnished to Lender, promptly on demand,
a
verified written statement, in such form and detail as Lender may require,
setting forth the names and addresses of all contractors, subcontractors
and
suppliers furnishing labor or materials in the Construction of the Improvements
and showing all amounts paid for labor and materials and all items of labor
and
materials furnished or to be furnished for which payment has not been made
and
the amounts to be paid therefor.
Section
4.7 Payment
and Performance of Contractual Obligations.
Borrower
shall cause to be performed in a timely manner all of ASF's obligations under
the Architect’s Contract, the Construction Contract and any and all other
contracts and agreements related to the Construction of the Improvements
or the
operation thereof, and Borrower will pay or cause to be paid when due all
bills
for services or labor performed and materials supplied in connection with
the
Construction of the Improvements. Within thirty (30) days after the filing
of
any mechanic’s lien or other lien or encumbrance against the Property, Borrower
will promptly discharge or cause to be discharged the same by payment or
filing
a bond or otherwise as permitted by Law. So long as Lender’s security has been
protected by the filing of a bond or otherwise in a manner satisfactory to
Lender in its sole and absolute discretion, Borrower and/or ASF shall have
the
right to contest in good faith any claim, lien or encumbrance, provided that
Borrower and/or ASF does so diligently and without prejudice to Lender or
delay
in completing Construction of the Improvements.
Section
4.8 Correction
of Construction Defects.
Promptly
following any demand by Lender, Borrower shall correct or cause the correction
of any structural defects in the Improvements, any work that fails to comply
with the requirements of Section
4.4
and any
material departures or deviations from the Plans and Specifications not approved
in writing by Lender.
Section
4.9 Insurance.
Borrower
shall maintain or cause to be maintained the following insurance:
(a) Insurance
against Casualty to the Property under a policy or policies covering such
risks
as are presently included in “special form” (also known as “all risk”) coverage,
including such risks as are ordinarily insured against by similar businesses,
but in any event including fire, lightning, windstorm, hail, explosion, riot,
riot attending a strike, civil commotion, damage from aircraft, smoke,
vandalism, malicious mischief and acts of terrorism. Such insurance shall
name
Borrower and Lender as joint mortgagee and loss payees. Unless otherwise
agreed
in writing by Lender, such insurance shall be for the full insurable value
of
the Property, with a deductible amount, if any, satisfactory to Lender. No
policy of insurance shall be written such that the proceeds thereof will
produce
less than the minimum coverage required by this Section by reason of
co-insurance provisions or otherwise. The term “full insurable value” means one
hundred percent (100%) of the actual replacement cost of the Property (excluding
foundation and excavation costs and costs of underground flues, pipes, drains
and other uninsurable items).
PAGE
7
(b) Comprehensive
(also known as commercial) general liability insurance on an “occurrence” basis
against claims for “personal injury” liability and liability for death, bodily
injury and damage to property, products and completed operations, in limits
satisfactory to Lender with respect to any one occurrence and the aggregate
of
all occurrences during any given annual policy period. Such insurance shall
name
Lender as an additional insured.
(c) Workers’
compensation insurance for all employees in such amount as is required by
Law
and including employer’s liability insurance, if required by
Lender.
(d) During
any
period of construction upon the Property, Borrower shall maintain, or cause
others to maintain, builder’s risk insurance (non-reporting form) of the type
customarily carried in the case of similar construction for one hundred percent
(100%) of the full replacement cost of work in place and materials stored
at or
upon the Property.
(e) If
at any
time any portion of any structure on the Property is insurable against Casualty
by flood and is located in a Special Flood Hazard Area under the Flood Disaster
Protection Act of 1973, as amended, a flood insurance policy in form and
amount
acceptable to Lender but in no amount less than the amount sufficient to
meet
the requirements of applicable Law as such requirements may from time to
time be
in effect.
(f) Loss
of
rental value insurance or business interruption insurance in an amount
acceptable to Lender.
(g) Such
other
and further insurance as may be required from time to time by Lender in order
to
comply with regular requirements and practices of Lender in similar transactions
including, if required by Lender, wind insurance and earthquake insurance,
so
long as any such insurance is generally available at commercially reasonable
premiums as determined by Lender from time to time.
In
addition to the foregoing, Borrower shall cause the General Contractor to
provide and maintain comprehensive (commercial) general liability insurance
and
workers’ compensation insurance for all employees of the General Contractor
meeting, respectively, the requirements of Subsections
(b) and (c),
above.
Each
policy of insurance (i) shall be issued by one or more insurance companies
each
of which must have an A.M. Best Company financial and performance rating
of A-IX
or better and are qualified or authorized by the Laws of the State to assume
the
risks covered by such policy, (ii) with respect to the insurance described
under
the preceding Subsections
(a), (d), (e) and (f),
shall
have attached thereto standard non-contributing, non-reporting mortgagee
clauses
in favor of and entitling Lender without contribution to collect any and
all
proceeds payable under such insurance, either as sole payee or as joint payee
with Borrower, (iii) shall provide that such policy shall not be canceled
or
modified without at least thirty (30) days prior written notice to Lender,
and
(iv) shall provide that any loss otherwise payable thereunder shall be payable
notwithstanding any act or negligence of Borrower which might, absent such
agreement, result in a forfeiture of all or a part of such insurance payment.
Borrower shall promptly pay all premiums when due on such insurance and,
not
less than thirty (30)
days
prior to
the expiration dates of each such policy, Borrower will deliver to Lender
acceptable evidence of insurance, such as a renewal policy or policies marked
“premium paid” or other evidence satisfactory to Lender reflecting that all
required insurance is current and in force. Borrower will immediately give
Notice to Lender of any cancellation of, or change in, any insurance policy.
Lender shall not, because of accepting, rejecting, approving or obtaining
insurance, incur any liability for (A) the existence, nonexistence, form
or
legal sufficiency thereof, (B) the solvency of any insurer, or (C) the payment
of losses. Borrower may satisfy any insurance requirement hereunder by providing
one or more “blanket” insurance policies, subject to Lender’s approval in each
instance as to limits, coverages, forms, deductibles, inception and expiration
dates, and cancellation provisions.
PAGE
8
Section
4.10 Adjustment
of Condemnation and Insurance Claims.
Borrower
shall give prompt Notice to Lender of any Casualty or any Condemnation or
threatened Condemnation. Lender is authorized, at its sole and absolute option,
to commence, appear in and prosecute, in its own or in Borrower’s and/or ASF's
name or names, any action or proceeding relating to any Condemnation or
Casualty, and to make proof of loss for and to settle or compromise any Claim
in
connection therewith. In such case, Lender shall have the right to receive
all
Condemnation Awards and Insurance Proceeds, and may deduct therefrom any
or all
of its Expenses. However, so long as no Event of Default has occurred and
Borrower and/or ASF is diligently pursuing its rights and remedies with respect
to a Claim, Lender will obtain Borrower’s written consent (which consent shall
not be unreasonably withheld or delayed, with Borrower obtaining ASF's consent
if deemed necessary) before making proof of loss for or settling or compromising
such Claim. Borrower agrees to diligently assert or cause to be asserted
its
and/or ASF's rights and remedies with respect to each Claim and to promptly
pursue the settlement and compromise of each Claim subject to Lender’s approval,
which approval shall not be unreasonably withheld or delayed. If, prior to
the
receipt by Lender of any Condemnation Award or Insurance Proceeds, the Property
shall have been sold pursuant to the provisions of the Mortgage, Lender shall
have the right to receive such funds (a) to the extent of any deficiency
found
to be due upon such sale with interest thereon (whether or not a deficiency
judgment on the Mortgage shall have been sought or recovered or denied),
and (b)
to the extent necessary to reimburse Lender for its Expenses. If any
Condemnation Awards or Insurance Proceeds are paid to ASF or Borrower, Borrower
shall in each case receive the same or cause the same to be received in trust
for Lender. Within ten (10) days after receipt of any Condemnation Awards
or
Insurance Proceeds, Borrower shall deliver such awards or proceeds to Lender
in
the form in which they were received, together with any endorsements or
documents that may be necessary to effectively negotiate or transfer the
same to
Lender. Borrower agrees to execute and deliver from time to time, upon the
request of Lender, such further instruments or documents as may be requested
by
Lender to confirm the grant and assignment to Lender of any Condemnation
Awards
or Insurance Proceeds, including obtaining any such documents requested by
Lender from ASF.
Section
4.11 Utilization
of Net Proceeds.
(a) Net
Proceeds must be utilized either for payment of the Obligations or for the
restoration of the Property. Net Proceeds may be utilized for the restoration
of
the Property only if no Default shall exist and only if in the reasonable
judgment of Lender (i) there has been no material adverse change in the
financial viability of the construction or operation of the Improvements,
(ii)
the Net Proceeds, together with other funds deposited with Lender for that
purpose, are sufficient to pay the cost of the restoration pursuant to a
budget
and plans and specifications approved by Lender, and (iii) the restoration
can be completed prior to maturity of the Loan. Otherwise, Net Proceeds shall
be
utilized for payment of the Obligations.
(b) If
Net
Proceeds are to be utilized for the restoration of the Property, the Net
Proceeds, together with any other funds deposited with Lender for that purpose,
must be deposited in an interest-bearing account with Lender, which account
will
be assigned to Lender as additional security for the Loan. The account will
be
opened, managed and controlled in a manner consistent with, and subject to,
the
provisions of Section
4.3
governing
a Borrower’s Deposit Account, including those provisions permitting Lender to
require Borrower to deposit funds in the event of a deficiency in the funds
available to complete restoration as herein contemplated. Disbursements of
funds
from the account will be made in a manner consistent with, and subject to,
the
requirements for the closing and funding of the Loan and the terms of this
Agreement regarding the disbursement of Loan proceeds.
Section
4.12 Management.
Borrower
at all times shall provide for the competent and responsible management and
operation of the Property. Any management contract or contracts affecting
the
Property must be approved in writing by Lender prior to the execution of
the
same, provided Lender's approval will not be unreasonably withheld or
delayed.
PAGE
9
Section
4.13 Books
and Records; Financial Statements.
(a) Borrower
will keep and maintain or cause to be kept and maintained full and accurate
books and records administered in accordance with sound accounting principles,
consistently applied, showing in detail the earnings and expenses of the
Property and the operation thereof. Borrower will keep and maintain its books
and records, including recorded data of any kind and regardless of the medium
of
recording, at the address of Borrower set forth in Section
8.6.
Borrower
shall permit Lender, or any Person authorized by Lender, to inspect and examine
such books and records (regardless of where maintained) and all supporting
vouchers and data and to make copies and extracts therefrom at all reasonable
times and as often as may be requested by Lender. Borrower will furnish or
cause
to be furnished to Lender annual financial statements, including balance
sheets
and income statements, for the Borrower, ASF, any Guarantor and the Property,
within ninety (90) days after each fiscal year end for the Borrower and one
hundred twenty (120) days after each fiscal year end for ASF and any Guarantor.
Borrower will also furnish or cause to be furnished to Lender quarter-annual
financial statements within forty-five (45) days after each fiscal quarter-end
for the respective reporting party, including the December 31 fiscal quarter
end, and such financial statements shall include (i) consolidated balance
sheets
and income statements for the Borrower, ASF, each Guarantor and the Property,
and (ii) cash flow statements for the Borrower. In addition, Borrower will
furnish or cause to be furnished to Lender, with reasonable promptness, such
interim financial statements of Borrower, ASF, each Guarantor and the Property,
together with such additional information, reports or statements in connection
therewith, as Lender may from time to time request. All financial statements
must be in form and detail acceptable to Lender and must be certified as
to
accuracy by Borrower, ASF or the respective Guarantor, as the case may be.
The
year-end financial statements of the Borrower and American Seniors must also
be
audited, with an unqualified opinion given by the respective independent
certified public accountant reasonably satisfactory to Lender. Borrower shall
provide, upon Lender’s request, convenient facilities for the audit and
verification of any such
statement of the Borrower. All certifications and signatures on behalf of
corporations, partnerships, limited liability companies and other entities
shall
be by a representative of the reporting party satisfactory to Lender.
(b) Contemporaneously
with each quarter annual and fiscal year-end financial report required by
the
foregoing paragraph (a), a certificate of the president or chief financial
officer of the Borrower stating that: (i) such officer has individually reviewed
the provisions of this Agreement; (ii) a review of the activities of the
Borrower and its Subsidiaries during such year or quarter-annual period,
as the
case may be, has been made by such officer or under such officer’s supervision,
with a view to determining whether the Borrower has fulfilled all its
obligations under this Agreement; and (iii) to the best of such officer’s
knowledge, the Borrower has observed and performed each undertaking contained
in
this Agreement and is not in default in the observance or performance of
any of
the provisions hereof or, if the Borrower shall be so in default, specifying
all
such defaults and events of which such officer may have knowledge. Such
certificate shall further set forth the calculations of the financial ratios
and
covenants set forth in Section 5.5, including without limitation any antecedent
calculations and the source of any information that was used in such
calculations.
Section
4.14 Estoppel
Certificates.
Within
ten
(10) days after any request by Lender or a proposed assignee or purchaser
of the
Loan or any interest therein, Borrower shall certify in writing to Lender,
or to
such proposed assignee or purchaser, the then unpaid balance of the Loan
and
whether Borrower claims any right of defense or setoff to the payment or
performance of any of the Obligations, and if Borrower claims any such right
of
defense or setoff, Borrower shall give a detailed written description of
such
claimed right.
PAGE
10
Section
4.15 Taxes.
Borrower
shall pay and discharge or cause to be paid and discharged all Taxes prior
to
the date on which penalties are attached thereto unless and to the extent
only
that such Taxes are contested in accordance with the terms of the
Mortgage.
Section
4.16 Lender’s
Rights to Pay and Perform.
If,
after
any required notice, Borrower fails to promptly pay or perform any of the
Obligations within any applicable grace or cure periods or an Event of Default
otherwise occurs hereunder, Lender, without Notice to or demand upon Borrower,
and without waiving or releasing any Obligation or Default, may (but shall
be
under no obligation to) at any time thereafter make such payment or perform
such
act for the account and at the expense of Borrower. Lender may enter upon
the
Property for that purpose and take all action thereon as Lender considers
necessary or appropriate. At the option of Lender, following the occurrence
of
an Event of Default, Lender may apply any undisbursed Loan proceeds to the
satisfaction of the conditions of the Loan Documents, irrespective of the
allocation of such Loan proceeds in the Budget. Without limiting the generality
of the foregoing, Lender may pay directly from the proceeds of the Loan all
interest bills rendered by Lender in connection with the Loan, and following
the
occurrence of an Event of Default may make advances directly to the General
Contractor, the title insurance company, any subcontractor or material supplier,
or to any of them jointly. The execution hereof by Borrower shall, and hereby
does, constitute an irrevocable authorization so to advance the proceeds
of the
Loan. No further direction or authorization from Borrower shall be necessary
to
warrant such direct advances. Each advance shall be secured by the Loan
Documents and shall satisfy the obligations of Lender hereunder to the extent
of
the amount of the advance.
Section
4.17 Reimbursement;
Interest.
If
Lender
shall incur any Expenses or pay any Claims by reason of the Loan or the rights
and remedies provided under the Loan Documents (regardless of whether or
not any
of the Loan Documents expressly provide for an indemnification by Borrower
against such Claims), Lender’s payment of such Expenses and Claims shall
constitute advances to Borrower which shall be paid by Borrower to Lender
on
demand, together with interest thereon from the date incurred until paid
in full
at the rate of interest then applicable to the Loan under the terms of the
Note.
Each advance shall be secured by the Loan Documents as fully as if made to
Borrower and ASF, regardless of the disposition thereof by the party or parties
to whom such advance is made. Notwithstanding the foregoing, however, in
any
action or proceeding to foreclose the Mortgage or to recover or collect the
Obligations, the provisions of Law governing the recovery of costs,
disbursements and allowances shall prevail unaffected by this
Section.
Section
4.18 Notification
by Borrower.
Borrower
will promptly give Notice to Lender of the occurrence of any Default or Event
of
Default hereunder or under any of the other Loan Documents, including without
limitation under any loan documents entered into between Borrower and ASF
with
respect to the property and the construction of the improvements thereon.
Borrower will also promptly give Notice to Lender of any claim of a default
by
ASF, or any claim by ASF of a default by any other party, under the Architect’s
Contract, the Construction Contract or any Lease.
Section
4.19 Indemnification
by Borrower.
Borrower
agrees to indemnify Lender and to hold Lender harmless from and against,
and to
defend Lender by counsel approved by Lender against, any and all Claims directly
or indirectly arising out of or resulting from any transaction, act, omission,
event or circumstance in any way connected with the Property or the Loan,
including any Claim arising out of or resulting from (a) Construction of
the
Improvements, including any defective workmanship or materials; (b) any failure
by Borrower to comply with the requirements of any Laws or to comply with
any
agreement that applies or pertains to the Property, including any agreement
with
a broker or “finder” in connection with the Loan or other financing of the
Property; (c) any failure by Borrower to observe and perform any of the
obligations imposed upon the landlord under the Leases; (d) any other Default
or
Event of Default hereunder or under any of the other Loan Documents; or (e)
any
assertion or allegation that Lender is liable for any act or omission of
Borrower or any other Person in connection with the ownership, development,
financing, leasing, operation or sale of the Property; provided, however,
that
Borrower shall not be obligated to indemnify Lender with respect to any Claim
arising solely from the gross negligence or willful misconduct of Lender.
The
agreements and indemnifications contained in this Section shall apply to
Claims
arising both before and after the repayment of the Loan and shall survive
the
repayment of the Loan, any foreclosure or deed, assignment or conveyance
in lieu
thereof and any other action by Lender to enforce the rights and remedies
of
Lender hereunder or under the other Loan Documents.
PAGE
11
Section
4.20 Fees
and Expenses.
Borrower
shall pay all fees, charges, costs and expenses required to satisfy the
conditions of the Loan Documents. Without limitation of the foregoing, Borrower
will pay, when due, and if paid by Lender will reimburse Lender on demand
for,
all fees and expenses of the Construction Consultant, the title insurer,
environmental engineers, appraisers, surveyors and Lender’s counsel in
connection with the closing, administration, modification or any “workout” of
the Loan, or the enforcement of Lender’s rights and remedies under any of the
Loan Documents.
Section
4.21 Appraisals.
Lender
may
obtain from time to time an appraisal of all or any part of the Property,
prepared in accordance with written instructions from Lender, from a third-party
appraiser satisfactory to, and engaged directly by, Lender. The cost of one
such
appraisal obtained by Lender in each calendar year and the cost of each such
appraisal obtained by Lender following the occurrence of an Event of Default
shall by borne by Borrower and shall be paid by Borrower on demand.
Section
4.22 Leasing
and Tenant Matters.
Borrower
shall comply with the terms and conditions of Schedule 6
in
connection with the leasing of space within the Improvements.
Section
4.23 Principal
Depository.
Borrower
shall maintain Bank of America, N.A. as its principal depository bank, including
for the maintenance of business, cash management, operating and administrative
deposit accounts. If Lender determines that Bank of America, N.A. is not
Borrower's principal depository bank, it shall not be deemed an Event of
Default, but the interest rate charged on the Loan shall be increased by
forty-two and one half (42.5) basis points per annum upon five (5) days'
prior
written notice to Borrower.
Section
4.24 Swap
Contracts.
Borrower
shall comply with the terms and conditions of Schedule 7
with
respect to all Swap Contracts.
PAGE
12
Article
V
Negative
Covenants.
Section
5.1 Conditional
Sales.
Borrower
shall not incorporate in the Improvements any property acquired under a
conditional sales contract or lease or as to which the vendor retains title
or a
security interest, without the prior written consent of Lender.
Section
5.2 Changes
to Plans and Specifications.
Borrower
shall not allow or permit any changes, whether made by ASF, Borrower or
otherwise, in the Plans and Specifications, including any such changes that
alter, diminish or add to the work to be performed or change the design of
the
Improvements, without the prior written consent of Lender and under such
reasonable conditions as Lender may establish. Lender’s prior written consent
shall not be required, however, as to any change order which (a) individually
does not cause the fixed or guaranteed maximum price of the Construction
Contract to be increased or decreased by more than Fifty Thousand Dollars
($50,000.00) and, when added to all previous change orders, does not cause
such
price to be increased or decreased by more than Five Hundred Thousand Dollars
($500,000.00) in the aggregate, (b) does not result in a material change to
the design of the Improvements, and (c) has been approved in writing by the
Architect and any Governmental Authority, tenant or other party whose approval
is required.
Section
5.3 Changes
to ASF Loan Documents or the Subordinated Loan Documents.
Borrower
shall not allow or permit any changes or modifications to be made to the
ASF
Loan Documents or the Subordinated Loan Documents without first obtaining
in
each instance the prior written consent of the Lender, nor shall Borrower
enter
into any additional or supplemental documents relating to or affecting in
any
manner the ASF Loan or the Subordinated Loan without first obtaining Lender's
prior written consent. Borrower shall not release any collateral or cancel
any
guaranty securing the ASF Loan or the Subordinated Loan.
Section
5.4 Insurance
Policies and Bonds.
Borrower
shall not do or permit to be done anything that would affect the coverage
or
indemnities provided for pursuant to the provisions of any insurance policy,
performance bond, labor and material payment bond or any other bond given
in
connection with the Construction of the Improvements.
Section
5.5 Consolidated
Fixed Charge Coverage Ratio.
Borrower
shall not allow or permit its Consolidated Fixed Charge Coverage Ratio to
be
less than 1.20 to 1.00.
Article
VI
Events
of Default.
The
occurrence or happening, from time to time, of any one or more of the following
shall constitute an Event of Default under this Agreement:
Section
6.1 Payment
Default.
Borrower
fails to pay any Obligation under this Agreement within three (3) days after
the
date such Obligation is due or upon acceleration, maturity or
otherwise.
PAGE
13
Section
6.2 Default
Under
Other Loan Documents.
An
Event
of Default (as defined therein) occurs under the Note, or the Borrower, ASF
or
any Guarantor fails to promptly pay, perform, observe or comply with any
term,
obligation or agreement contained in the Mortgage or any of the other Loan
Documents (within any applicable grace or cure period).
Section
6.3 Accuracy
of Information; Representations and Warranties.
Any
information contained in any financial statement, schedule, report or any
other
document delivered by Borrower, ASF, Guarantor or any other Person to Lender
in
connection with the Loan proves at any time not to be in all material respects
true and accurate, or Borrower, ASF, Guarantor or any other Person shall
have
failed to state any material fact or any fact necessary to make such information
not misleading, or any representation or warranty contained in this Agreement
or
in any other Loan Document or other document, certificate or opinion delivered
to Lender in connection with the Loan, proves at any time to be incorrect
or
misleading in any material respect either on the date when made or on the
date
when reaffirmed pursuant to the terms of this Agreement.
Section
6.4 Deposits.
Borrower
fails to deposit funds with Lender, in the amount requested by Lender, pursuant
to the provisions of Section
4.3
or
Section
4.11,
within
ten (10) days from the effective date of a Notice from Lender requesting
such
deposit, or Borrower fails to deliver to Lender or cause to be delivered
to
Lender any Condemnation Awards or Insurance Proceeds within ten (10) days
after
Borrower’s or ASF's receipt thereof.
Section
6.5 Insurance
Obligations.
Borrower
fails to promptly perform or comply with any of the covenants contained in
the
Loan Documents with respect to maintaining insurance, including the covenants
contained in Section
4.9.
Section
6.6 Other
Obligations.
Borrower
fails to promptly perform or comply with any covenants or other Obligations
set
forth in this Agreement and such failure continues uncured for a period of
thirty (30) days after Notice from Lender to Borrower, other than those
expressly described in other Sections of this Article
VI
and those
covenants set forth in Sections 4.13, 5.3 and 5.5, for which no notice or
cure
rights shall be applicable and the occurrence of any of which shall constitute
an immediate Event of Default. Notwithstanding the foregoing, if Lender
determines, in Lender's sole discretion, that such failure, by its nature,
is
not capable of being cured within the thirty (30) day period after the initial
Notice from Lender to Borrower (other than a failure to comply with any of
the
Obligations expressly described in other Sections of this Article VI
and/or
the covenants set forth in Sections 4.13, 5.3 and 5.5), it shall not be an
Event
of Default hereunder if (a) Borrower commences to cure such failure and
thereafter diligently prosecutes the cure thereof, and (b) Borrower causes
such
failure to be cured no later than ninety (90) days after the date of such
initial Notice from Lender.
Section
6.7 Progress
of Construction.
Construction
of the Improvements is abandoned or is discontinued for a period of more
than
twenty (20) consecutive days.
PAGE
14
Section
6.8 Damage
to Improvements.
The
Improvements are substantially damaged or destroyed by fire or other casualty
and Lender determines that the Improvements cannot be restored and completed
in
accordance with the terms and provisions of this Agreement and the
Mortgage.
Section
6.9 Lapse
of Permits or Approvals.
Any
permit, license, certificate or approval that Borrower is required to obtain
with respect to the construction, operation, development, leasing or maintenance
of the Improvements or the Property lapses or ceases to be in full force
and
effect.
Section
6.10 Completion
of Construction.
Completion
of Construction does not occur in accordance with the Project Schedule, or
Lender determines that Completion of Construction will not occur in accordance
with the Project Schedule.
Section
6.11 Mechanic’s
Lien.
A
lien for
the performance of work or the supply of materials filed against the Property,
or any stop notice served on Borrower, ASF, the General Contractor or Lender,
remains unsatisfied or unbonded for a period of thirty (30) days after the
date
of filing or service.
Section
6.12 Survey
Matters.
Any
Survey
required by Lender during the period of construction shows any matter which
in
Lender’s reasonable judgment would interfere with the Construction of the
Improvements or the operation or use of the Property, and such matter is
not
removed within a period of thirty (30) days after Notice thereof by Lender
to
Borrower.
Section
6.13 General
Contractor Default.
The
General Contractor defaults under the Construction Contract in a manner which
Lender deems in Lender's reasonable judgment to be material, and, unless
otherwise agreed in writing by Lender, ASF fails promptly to exercise its
rights
and remedies under the Construction Contract with respect to such
default.
Section
6.14 Performance
Enjoined or Prohibited.
Borrower
or ASF is enjoined or prohibited from performing any of its respective
obligations under any of the Loan Documents for a period of more than fifteen
(15) consecutive days.
Section
6.15 Bankruptcy.
Borrower,
ASF or any Guarantor files a bankruptcy petition or makes a general assignment
for the benefit of creditors, or a bankruptcy petition is filed against
Borrower, ASF or any Guarantor and such involuntary bankruptcy petition
continues undismissed for a period of sixty (60) days after the filing
thereof.
PAGE
15
Section
6.16 Appointment
of Receiver, Trustee, Liquidator.
Borrower,
ASF, or any Guarantor applies for or consents in writing to the appointment
of a
receiver, trustee or liquidator of Borrower, ASF, any Guarantor, the Property,
or all or substantially all of the other assets of Borrower, ASF, or any
Guarantor, or an order, judgment or decree is entered by any court of competent
jurisdiction on the application of a creditor appointing a receiver, trustee
or
liquidator of Borrower, ASF, any Guarantor, the Property, or all or
substantially all of the other assets of Borrower, ASF, or any
Guarantor.
Section
6.17 Judgment.
A
final
nonappealable judgment for the payment of money involving more than $100,000
is
entered against Borrower or a final nonappealable judgment for the payment
of
money involving more than $50,000 is entered against ASF or any
Guarantor, and
Borrower, ASF or such Guarantor
fails to discharge the same, or causes it to be discharged or bonded off
to
Lender’s satisfaction, within thirty (30) days from the date of the entry of
such judgment.
Section
6.18 Dissolution;
Change in Business Status.
Unless
the
written consent of Lender is previously obtained, all or substantially all
of
the business assets of Borrower, ASF or any Guarantor are sold, Borrower,
ASF or
any Guarantor is dissolved, or there occurs any change in the form of business
entity through which Borrower, ASF or any Guarantor presently conducts its
business or any merger or consolidation involving Borrower, ASF or any
Guarantor.
Section
6.19 Default
Under Other Indebtedness.
Borrower
defaults under any existing or future loan and/or credit agreements (other
than
this Agreement) in excess of Ten Million and No/100 Dollars ($10,000,000.00),
subject to all applicable grace periods therein; however, any periods of
forbearance with respect to such credit agreements, which arise and continue
for
more than forty-five (45) consecutive days, will be deemed as a default
hereunder.
Section
6.20 Change
in Controlling Interest.
A
Change
of Control occurs without the prior written consent of the Lender.
Section
6.21 Material
Adverse Change.
In
the
reasonable opinion of Lender, the prospect of payment or performance of all
or
any part of the Obligations has been impaired because of a material adverse
change in the financial condition, results of operations, business or properties
of Borrower.
Article
VII
Remedies
on Default.
Section
7.1 Remedies
on Default.
Upon
the
happening of any Event of Default, Lender shall have the right, in addition
to
any other rights or remedies available to Lender under the Mortgage or any
of
the other Loan Documents or under applicable Law, to exercise any one or
more of
the following rights and remedies:
PAGE
16
(a) Lender
may
terminate its obligation to advance any further principal of the Loan pursuant
to this Agreement by Notice to Borrower.
(b) Lender
may
accelerate all of Borrower’s Obligations under the Loan Documents whereupon such
Obligations shall become immediately due and payable, without notice of default,
acceleration or intention to accelerate, presentment or demand for payment,
protest or notice of nonpayment or dishonor, or notices or demands of any
kind
or character (all of which are hereby waived by Borrower).
(c) Lender
may
apply to any court of competent jurisdiction for, and obtain appointment
of, a
receiver for the Property.
(d) Lender
may
set off the amounts due Lender under the Loan Documents against any and all
accounts, credits, money, securities or other property of Borrower now or
hereafter on deposit with, held by or in the possession of Lender to the
credit
or for the account of Borrower, without notice to or the consent of
Borrower.
(e) Lender
may
enter into possession of the Property and perform any and all work and labor
necessary to complete the Construction of the Improvements (whether or not
in
accordance with the Plans and Specifications) and to employ watchmen to protect
the Property and the Improvements. All sums expended by Lender for such purposes
shall be deemed to have been advanced to Borrower under the Note and shall
be
secured by the Loan Documents and the Mortgage. For this purpose, Borrower
hereby constitutes and appoints Lender its true and lawful attorney-in-fact
with
full power of substitution, which power is coupled with an interest, to complete
the work either in the name of Borrower and/or ASF, and hereby empowers said
attorney or attorneys, in the name of Borrower, ASF or Lender:
|
(i)
|
To
use any funds of Borrower including any balance which may be
held by
Lender and any funds which may remain unadvanced hereunder for
the purpose
of completing
|
| the Construction of the Improvements, whether or not in the manner called for in the Plans and Specifications; | |
|
(ii)
|
To
make such additions and changes and corrections to the Plans
and
Specifications as shall be necessary or desirable in the judgment
of
Lender to complete the
|
| Construction of the Improvements; | |
|
(iii)
|
To
employ such contractors, subcontractors, agents, architects and
inspectors
as shall be necessary or desirable for said purpose;
|
|
(iv)
|
To
pay, settle or compromise all existing bills and claims which
are or may
be liens against the Property, or may be necessary or desirable
for the
completion of the work
|
| or the clearance of title to the Property; | |
|
(v)
|
To
execute all applications and certificates which may be required
in the
name of ASF and/or the Borrower;
|
|
(vi)
|
To
enter into, enforce, modify or cancel Leases and to fix or modify
Rents on
such terms as Lender may consider proper;
|
|
(vii)
|
To
file for record, at Borrower’s cost and expense and in the name of ASF
and/or Borrower, any notices of completion, notices of cessation
of labor,
or any other notices
|
| that Lender in its sole and absolute discretion may consider necessary or desirable to protect its security; and | |
|
(viii)
|
To
do any and every act with respect to the Construction of the
Improvements
which either the Borrower or ASF could do in its own
behalf.
|
PAGE
17
It
is
understood and agreed that this power of attorney shall be deemed to be a
power
coupled with an interest which cannot be revoked, and includes within it
any
power of attorney or other similar rights granted by ASF to Borrower to act
on
ASF's behalf. Said attorney-in-fact shall also have the power to prosecute
and
defend all actions or proceedings in connection with the Construction of
the
Improvements and to take such actions and to require such performance as
Lender
may deem necessary.
Section
7.2 No
Release or Waiver; Remedies Cumulative and Concurrent.
Borrower
shall not be relieved of any Obligation by reason of the failure of Lender
to
comply with any request of Borrower or of any other Person to take action
to
foreclose on the Property under the Mortgage or otherwise to enforce any
provision of the Loan Documents, or by reason of the release, regardless
of
consideration, of all or any part of the Property. No delay or omission of
Lender to exercise any right, power or remedy accruing upon the happening
of an
Event of Default shall impair any such right, power or remedy or shall be
construed to be a waiver of any such Event of Default or any acquiescence
therein. No delay or omission on the part of Lender to exercise any option
for
acceleration of the maturity of the Obligations, or for foreclosure of the
Mortgage following any Event of Default as aforesaid, or any other option
granted to Lender hereunder in any one or more instances, or the acceptance
by
Lender of any partial payment on account of the Obligations shall constitute
a
waiver of any such Event of Default and each such option shall remain
continuously in full force and effect. No remedy herein conferred upon or
reserved to Lender is intended to be exclusive of any other remedies provided
for in the Loan Documents, and each and every such remedy shall be cumulative,
and shall be in addition to every other remedy given hereunder, or under
the
Loan Documents, or now or hereafter existing at Law or in equity or by statute.
Every right, power and remedy given by the Loan Documents to Lender shall
be
concurrent and may be pursued separately, successively or together against
Borrower, ASF or the Property or any part thereof, and every right, power
and
remedy given by the Loan Documents may be exercised from time to time as
often
as may be deemed expedient by Lender.
Article
VIII
Miscellaneous.
Section
8.1 Further
Assurances; Authorization to File Documents.
At
any
time, and from time to time, upon request by Lender, Borrower will, at
Borrower’s expense, (a) correct any defect, error or omission which may be
discovered in the form or content of any of the Loan Documents, and
(b) make, execute, deliver and record, or cause to be made, executed,
delivered and recorded, any and all further instruments, certificates and
other
documents as may, in the opinion of Lender, be necessary or desirable in
order
to complete, perfect or continue and preserve the lien of the Mortgage. Upon
any
failure by Borrower to do so, Lender may make, execute and record any and
all
such instruments, certificates and other documents for and in the name of
Borrower and/or ASF, all at the sole expense of Borrower, and Borrower hereby
appoints Lender the agent and attorney-in-fact of Borrower to do so, this
appointment being coupled with an interest and being irrevocable. Without
limitation of the foregoing, Borrower irrevocably authorizes Lender at any
time
and from time to time to file any initial financing statements, amendments
thereto and continuation statements deemed necessary or desirable by Lender
to
establish or maintain the validity, perfection and priority of the security
interests granted in the Mortgage, and Borrower ratifies any such filings
made
by Lender prior to the date hereof.
Section
8.2 No
Warranty by Lender.
By
accepting or approving anything required to be observed, performed or fulfilled
by Borrower or to be given to Lender pursuant to this Agreement, including
any
certificate, Survey, receipt, appraisal or insurance policy, Lender shall
not be
deemed to have warranted or represented the sufficiency, legality, effectiveness
or legal effect of the same, or of any term, provision or condition thereof
and
any such acceptance or approval thereof shall not be or constitute any warranty
or representation with respect thereto by Lender.
PAGE
18
Section
8.3 Standard
of Conduct of Lender.
Nothing
contained in this Agreement or any other Loan Document shall limit the right
of
Lender to exercise its business judgment or to act, in the context of the
granting or withholding of any advance or consent under this Agreement or
any
other Loan Document, in a subjective manner, whether or not objectively
reasonable under the circumstances, so long as Lender’s exercise of its business
judgment or action is made or undertaken in good faith. Borrower and Lender
intend by the foregoing to set forth and affirm their entire understanding
with
respect to the standard pursuant to which Lender’s duties and obligations are to
be judged and the parameters within which Lender’s discretion may be exercised
hereunder and under the other Loan Documents. As used herein, “good faith” means
honesty in fact in the conduct and transaction concerned.
Section
8.4 No
Partnership.
Nothing
contained in this Agreement shall be construed in a manner to create any
relationship between Borrower and Lender other than the relationship of borrower
and lender and Borrower and Lender shall not be considered partners or
co-venturers for any purpose on account of this Agreement.
Section
8.5 Severability.
In
the
event any one or more of the provisions of this Agreement or any of the other
Loan Documents shall for any reason be held to be invalid, illegal or
unenforceable, in whole or in part or in any other respect, or in the event
any
one or more of the provisions of any of the Loan Documents operates or would
prospectively operate to invalidate this Agreement or any of the other Loan
Documents, then and in either of those events, at the option of Lender, such
provision or provisions only shall be deemed null and void and shall not
affect
the validity of the remaining Obligations, and the remaining provisions of
the
Loan Documents shall remain operative and in full force and effect and shall
in
no way be affected, prejudiced or disturbed thereby.
Section
8.6 Notices.
All
Notices required or which any party desires to give hereunder or under any
other
Loan Document shall be in writing and, unless otherwise specifically provided
in
such other Loan Document, shall be deemed sufficiently given or furnished
if
delivered by personal delivery, by nationally recognized overnight courier
service or by certified United States mail, postage prepaid, addressed to
the
party to whom directed at the applicable address set forth below (unless
changed
by similar notice in writing given by the particular party whose address
is to
be changed) or by facsimile. Any Notice shall be deemed to have been given
either at the time of personal delivery or, in the case of courier or mail,
as
of the date of first attempted delivery at the address and in the manner
provided herein, or, in the case of facsimile, upon receipt; provided that
service of a Notice required by any applicable statute shall be considered
complete when the requirements of that statute are met. Notwithstanding the
foregoing, no notice of change of address shall be effective except upon
actual
receipt. This Section shall not be construed in any way to affect or impair
any
waiver of notice or demand provided in this Agreement or in any other Loan
Document or to require giving of notice or demand to or upon any Person in
any
situation or for any reason.
PAGE
19
The
address and fax number of Borrower are:
American
Retirement Corporation
Address:
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxx/Xxxxx/Xxx:
Xxxxxxxxx, XX 00000
Contact
Person: Xxxxxx Xxxxx
Telephone:
000-000-0000
Fax:
000-000-0000
E-mail
Address (if applicable): xxxxxx@xxxxx.xxx
PAGE
20
With
a
copy to:
Xxxxxx
Xxxxx
Bass,
Xxxxx & Xxxx
000
Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx,
Xxxxxxxxx 00000
Telephone:
000-000-0000
Fax:
000-000-0000
The
address and fax number of Lender are:
Bank
of
America, N.A. Bank of America, N.A.
000
Xxxxx
Xxxxxx
Xxxxxxxxx,
XX 00000-0000
Senior
Underwriter: Xx. Xxxx Xxxxxx
Phone:
(000) 000-0000
Fax:
(000)
000-0000
E-mail
Address: xxxx.xxxxxx@xxxxxxxxxxxxx.xxx
Construction
Administration: Xxxxxxx X. Xxxxxxx
0000
X.
Xxxx Xxxxxx, 0xx
Xxxxx
Xxxxxxxx,
XX. 23219
E-mail
address: Xxxxxxx.x.xxxxxxx@xxxxxxxxxxxxx.xxx
Phone
(000) 000-0000
Fax:
(000)
000-0000
With
a
copy to:
Xxxxxxx
X.
Xxxxxxxx, III
Boult,
Cummings, Xxxxxxx & Xxxxx, PLC
0000
Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx,
Xxxxxxxxx 00000
Telephone:
000-000-0000
Fax:
000-000-0000
Section
8.7 Permitted
Successors and Assigns; Disclosure of Information.
(a) Each
and
every one of the covenants, terms, provisions and conditions of this Agreement
and the Loan Documents shall apply to, bind and inure to the benefit of
Borrower, its successors and those assigns of Borrower consented to in writing
by Lender, and shall apply to, bind and inure to the benefit of Lender and
the
endorsees, transferees, successors and assigns of Lender, and all Persons
claiming under or through any of them.
(b) Borrower
agrees not to transfer, assign, pledge or hypothecate any right or interest
in
any payment or advance due pursuant to this Agreement, or any of the other
benefits of this Agreement, without the prior written consent of Lender,
which
consent may be withheld by Lender in its sole and absolute discretion. Any
such
transfer, assignment, pledge or hypothecation made or attempted by Borrower
without the prior written consent of Lender shall be void and of no effect.
No
consent by Lender to an assignment shall be deemed to be a waiver of the
requirement of prior written consent by Lender with respect to each and every
further assignment and as a condition precedent to the effectiveness of such
assignment.
PAGE
21
(c) Lender
may
sell or offer to sell the Loan or interests therein to one or more assignees
or
participants. Borrower shall execute, acknowledge and deliver any and all
instruments reasonably requested by Lender in connection therewith, and to
the
extent, if any, specified in any such assignment or participation, such
assignee(s) or participant(s) shall have the same rights and benefits with
respect to the Loan Documents as such Person(s) would have if such Person(s)
were Lender hereunder. Lender may disseminate any information it now has
or
hereafter obtains pertaining to the Loan, including any security for the
Loan,
any credit or other information on the Property (including environmental
reports
and assessments), Borrower, any of Borrower’s principals or any Guarantor, to
any actual or prospective assignee or participant, to Lender’s affiliates,
including Banc of America Securities LLC, to any regulatory body having
jurisdiction over Lender, to any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to Borrower and
the
Loan, or to any other party as necessary or appropriate in Lender’s reasonable
judgment.
Section
8.8 Modification;
Waiver.
None
of
the terms or provisions of this Agreement may be changed, waived, modified,
discharged or terminated except by instrument in writing executed by the
party
or parties against whom enforcement of the change, waiver, modification,
discharge or termination is asserted. None of the terms or provisions of
this
Agreement shall be deemed to have been abrogated or waived by reason of any
failure or failures to enforce the same.
Section
8.9 Third
Parties; Benefit.
All
conditions to the obligation of Lender to make advances hereunder are imposed
solely and exclusively for the benefit of Lender and its assigns and no other
Persons shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Lender will refuse
to
make advances in the absence of strict compliance with any or all thereof
and no
other Person shall, under any circumstances, be deemed to be the beneficiary
of
such conditions, any or all of which may be freely waived in whole or in
part by
Lender at any time in the sole and absolute exercise of its discretion. The
terms and provisions of this Agreement are for the benefit of the parties
hereto
and, except as herein specifically provided, no other Person shall have any
right or cause of action on account thereof.
Section
8.10 Rules
of Construction.
The
words
“hereof,” “herein,” “hereunder,” “hereto,” and other words of similar import
refer to this Agreement in its entirety. The terms “agree” and “agreements” mean
and include “covenant” and “covenants.” The words “include” and “including”
shall be interpreted as if followed by the words “without limitation.” The
captions and headings contained in this Agreement are included herein for
convenience of reference only and shall not be considered a part hereof and
are
not in any way intended to define, limit or enlarge the terms hereof. All
references (a) made in the neuter, masculine or feminine gender shall be
deemed
to have been made in all such genders, (b) made in the singular or plural
number
shall be deemed to have been made, respectively, in the plural or singular
number as well, (c) to the Loan Documents are to the same as extended, amended,
restated, supplemented or otherwise modified from time to time unless expressly
indicated otherwise, (d) to the Land, the Improvements or the Property shall
mean all or any portion of each of the foregoing, respectively, and (e) to
Articles, Sections and Schedules are to the respective Articles, Sections
and
Schedules contained in this Agreement unless expressly indicated
otherwise.
Section
8.11 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
considered an original for all purposes; provided, however, that all such
counterparts shall together constitute one and the same instrument.
PAGE
22
Section
8.12 Signs;
Publicity.
At
Lender’s request, Borrower shall place a sign at a location on the Property
satisfactory to Lender, which sign shall recite, among other things, that
Lender
is financing the Construction of the Improvements. Borrower expressly authorizes
Lender to prepare and to furnish to the news media for publication from time
to
time news releases with respect to the Property, specifically to include
releases detailing Lender’s involvement with the financing of the
Property.
Section
8.13 Governing
Law.
This
Agreement shall be governed by and construed, interpreted and enforced in
accordance with the laws of the State.
Section
8.14 Time
of
Essence.
Time
shall
be of the essence for each and every provision of this Agreement of which
time
is an element.
Section
8.15 Electronic
Transmission of Data.
Lender
and
Borrower agree that certain data related to the Loan (including confidential
information, documents, applications and reports) may be transmitted
electronically, including transmission over the Internet. This data may be
transmitted to, received from or circulated among agents and representatives
of
Borrower and/or Lender and their affiliates and other Persons involved with
the
subject matter of this Agreement. Borrower acknowledges and agrees that (a)
there are risks associated with the use of electronic transmission and that
Lender does not control the method of transmittal or service providers, (b)
Lender has no obligation or responsibility whatsoever and assumes no duty
or
obligation for the security, receipt or third party interception of any such
transmission, and (c) Borrower will release, hold harmless and indemnify
Lender
from any claim, damage or loss, including that arising in whole or part from
Lender’s strict liability or sole, comparative or contributory negligence, which
is related to the electronic transmission of data.
Section
8.16 Dispute
Resolution.
(a) Arbitration.
Except
to the extent expressly provided below, any Dispute shall, upon the request
of
either party, be determined by binding arbitration in accordance with the
Federal Arbitration Act, Xxxxx 0, Xxxxxx Xxxxxx Code (or if not applicable,
the
applicable state law), the then-current rules for arbitration of financial
services disputes of AAA and the “Special Rules” set forth below. In the event
of any inconsistency, the Special Rules shall control. The filing of a court
action is not intended to constitute a waiver of the right of Borrower or
Lender, including the suing party, thereafter to require submittal of the
Dispute to arbitration. Any party to this Agreement may bring an action,
including a summary or expedited proceeding, to compel arbitration of any
Dispute in any court having jurisdiction over such action. For the purposes
of
this Dispute Resolution Section only, the terms “party” and “parties” shall
include any
parent
corporation, subsidiary or affiliate of Lender involved in the servicing,
management or administration of any obligation described in or evidenced
by this
Agreement, together with the officers, employees, successors and assigns
of each
of the foregoing.
(b) Special
Rules.
(i) The
arbitration shall be conducted in any U.S. state where real or tangible personal
property collateral is located, or if there is no such collateral, in the
City
and County where Lender is located pursuant to its address for notice purposes
in this Agreement.
(ii) The
arbitration shall be administered by AAA, who will appoint an arbitrator.
If AAA
is unwilling or unable to administer or legally precluded from administering
the
arbitration, or if AAA is unwilling or unable to enforce or legally precluded
from enforcing any and all provisions of this Dispute Resolution Section,
then
any party to this Agreement may substitute another arbitration organization
that
has similar procedures to AAA and that will observe and enforce any and all
provisions of this Dispute Resolution Section. All
Disputes shall be determined by one arbitrator; however, if the amount in
controversy in a Dispute exceeds Five Million Dollars ($5,000,000), upon
the
request of any party, the Dispute shall be decided by three arbitrators (for
purposes of this Agreement, referred to collectively as the
“arbitrator”).
PAGE
23
(iii) All
arbitration hearings will be commenced within ninety (90) days of the demand
for
arbitration and completed within ninety (90) days from the date of commencement;
provided, however, that upon a showing of good cause, the arbitrator shall
be
permitted to extend the commencement of such hearing for up to an additional
sixty (60) days.
(iv) The
judgment and the award, if any, of the arbitrator shall be issued within
thirty
(30) days of the close of the hearing. The arbitrator shall provide a concise
written statement setting forth the reasons for the judgment and for the
award,
if any. The
arbitration award, if any, may be submitted to any court having jurisdiction
to
be confirmed and enforced, and such confirmation and enforcement shall not
be
subject to arbitration.
(v) The
arbitrator will give effect to statutes of limitations and any waivers thereof
in determining the disposition of any Dispute and may dismiss one or more
claims
in the arbitration on the basis that such claim or claims is or are barred.
For
purposes of the application of the statute of limitations, the service on
AAA
under
applicable AAA
rules of
a notice of Dispute is the equivalent of the filing of a lawsuit.
(vi) Any
dispute concerning this arbitration provision, including any such dispute
as to
the validity or enforceability of this provision, or whether a Dispute is
arbitrable, shall be determined by the arbitrator; provided, however, that
the
arbitrator shall not be permitted to vary the express provisions of these
Special Rules or the Reservations of Rights in subsection (c)
below.
(vii) The
arbitrator shall have the power to award legal fees and costs pursuant to
the
terms of this Agreement.
(viii) The
arbitration will take place on an individual basis without reference to,
resort
to, or consideration of any form of class or class action.
(c) Reservations
of Rights.
Nothing
in this Agreement shall be deemed to (i) limit the applicability of any
otherwise applicable statutes of limitation and any waivers contained in
this
Agreement, or (ii) apply to or limit the right of Lender (A) to exercise
self help remedies such as (but not limited to) setoff, or (B) to foreclose
judicially or nonjudicially against any real or personal property collateral,
or
to exercise judicial or nonjudicial power of sale rights, (C) to obtain
from a court provisional or ancillary remedies such as (but not limited to)
injunctive relief, writ of possession, prejudgment attachment, or the
appointment of a receiver, or (D) to pursue rights against a party to this
Agreement in a third-party proceeding in any action brought against Lender
in a
state, federal or international court, tribunal or hearing body (including
actions in specialty courts, such as bankruptcy and patent courts). Lender
may
exercise the rights set forth in clauses (A) through (D), inclusive, before,
during or after the pendency of any arbitration proceeding brought pursuant
to
this Agreement. Neither the exercise of self help remedies nor the institution
or maintenance of an action for foreclosure or provisional or ancillary remedies
shall constitute a waiver of the right of any party, including the claimant
in
any such action, to arbitrate the merits of the Dispute occasioning resort
to
such remedies. No provision in the Loan Documents regarding submission to
jurisdiction and/or venue in any court is intended or shall be construed
to be
in derogation of the provisions in any Loan Document for arbitration of any
Dispute.
(d) Conflicting
Provisions for Dispute Resolution.
If there
is any conflict between the terms, conditions and provisions of this Section
and
those of any other provision or agreement for arbitration or dispute resolution,
the terms, conditions and provisions of this Section shall prevail as to
any
Dispute arising out of or relating to (i) this Agreement, (ii) any
other Loan Document, (iii) any related agreements or instruments, or
(iv) the transaction contemplated herein or therein (including any claim
based on or arising from an alleged personal injury or business tort). In
any
other situation, if the resolution of a given Dispute is specifically governed
by another provision or agreement for arbitration or dispute resolution,
the
other provision or agreement shall prevail with respect to said
Dispute.
PAGE
24
(e) Jury
Trial Waiver in Arbitration.
By
agreeing to this Section, the parties irrevocably and voluntarily waive any
right they may have to a trial by jury in respect of any Dispute.
Section
8.17 Forum.
Borrower
hereby irrevocably submits generally and unconditionally for itself and in
respect of its property to the jurisdiction of any state court or any United
States federal court sitting in the State specified in the governing law
section
of this Agreement and to the jurisdiction of any state court or any United
States federal court sitting in the state in which any of the Property is
located, over any Dispute. Borrower hereby irrevocably waives, to the fullest
extent permitted by Law, any objection that Borrower may now or hereafter
have
to the laying of venue in any such court and any claim that any such court
is an
inconvenient forum. Borrower hereby agrees and consents that, in addition
to any
methods of service of process provided for under applicable law, all service
of
process in any such suit, action or proceeding in any state court or any
United
States federal court sitting in the state specified in the governing law
section
of this Agreement may be made by certified or registered mail, return receipt
requested, directed to Borrower at its address for notice set forth in this
Agreement, or at a subsequent address of which Lender received actual notice
from Borrower in accordance with the notice section of this Agreement, and
service so made shall be complete five (5) days after the same shall have
been
so mailed. Nothing herein shall affect the right of Lender to serve process
in
any manner permitted by Law or limit the right of Lender to bring proceedings
against Borrower in any other court or jurisdiction.
Section
8.18 WAIVER
OF JURY TRIAL.
WITHOUT
INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO ARBITRATE ANY “DISPUTE”
(FOR PURPOSES OF THIS SECTION, AS DEFINED IN SCHEDULE
1)
AS SET FORTH IN THIS AGREEMENT, TO THE EXTENT ANY “DISPUTE” IS NOT SUBMITTED TO
ARBITRATION OR IS DEEMED BY THE ARBITRATOR OR BY ANY COURT WITH JURISDICTION
TO
BE NOT ARBITRABLE OR NOT REQUIRED TO BE ARBITRATED, BORROWER AND LENDER WAIVE
TRIAL BY JURY IN RESPECT OF ANY SUCH “DISPUTE” AND ANY ACTION ON SUCH “DISPUTE.”
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWER AND
LENDER,
AND BORROWER AND LENDER HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT
OR
OPINION HAVE BEEN MADE BY ANY PERSON OR ENTITY TO INDUCE THIS WAIVER OF TRIAL
BY
JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES ENTERING INTO THE LOAN DOCUMENTS. BORROWER AND
LENDER
ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING
AS
CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL. BORROWER FURTHER REPRESENTS
AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT
AND
IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE
OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS
OWN
FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL.
Section
8.19 USA
Patriot Act Notice.
Lender
hereby notifies Borrower that pursuant to the requirements of the USA Patriot
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
“Act”), Lender is required to obtain, verify and record information that
identifies Borrower, which information includes the name and address of Borrower
and other information that will allow Lender to identify Borrower in accordance
with the Act.
PAGE
25
Section
8.20 Entire
Agreement.
The
Loan
Documents constitute the entire understanding and agreement between Borrower
and
Lender with respect to the transactions arising in connection with the Loan,
and
supersede all prior written or oral understandings and agreements between
Borrower and Lender with respect to the matters addressed in the Loan Documents.
In particular, and without limitation, the terms of any commitment by Lender
to
make the Loan are merged into the Loan Documents. Except as incorporated
in
writing into the Loan Documents, there are no representations, understandings,
stipulations, agreements or promises, oral or written, with respect to the
matters addressed in the Loan Documents. If there is any conflict between
the
terms, conditions and provisions of this Agreement and those of any other
instrument or agreement, including any other Loan Document, the terms,
conditions and provisions of this Agreement shall prevail.
Section
8.21 HIPPA
Disclosure.
During
the
course of Lender's, its agents' or employees' inspection of the Property
pursuant to the terms of this Agreement, Lender, its agents or employees
may
encounter individually identifiable healthcare information or other confidential
information relating to the residents at the Property (collectively, the
"Confidential
Information").
Unless
otherwise required by law, Lender, its agents and employees shall use
commercially reasonable efforts not to disclose, compile, aggregate, remove
from
the Property or record in any manner any Confidential Information, and shall
not
willfully cause Borrower or the Property to violate any laws, regulations
or
ordinances intended to protect the privacy rights of the residents at the
Property, including, without limitation, the Health Insurance Portability
and
Accountability Act of 1996 or its implementing regulations.
PAGE
26
IN
WITNESS
WHEREOF, Borrower and Lender have caused this Agreement to be executed
under
seal
as of the
date first above written.
| BORROWER: | ||
|
American
Retirement Corporation,
a
Tennessee corporation
|
||
| |
|
|
|
By:
Name:
Title:
|
||
| LENDER: | ||
|
Bank
of America, N.A.,
a
national banking association
|
||
|
By:
Name:
Title:
|
||
PAGE
27
Schedule
1
Definitions
Unless
the
context otherwise specifies or requires, the following terms shall have the
meanings herein specified, such definitions to be applicable equally to the
singular and the plural forms of such terms and to all genders:
“AAA”
means
the American Arbitration Association, or any successor thereof.
“Act”
means
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October
26,
2001)).
“Architect”
means
Xxxx Xxxxxxxx Associates, its successors and permitted assigns.
“Architect’s
Contract”
means
the agreement dated September 1, 2005, by and between ASF, as owner, and
the
Architect, as architect, and any other contract for architectural services
relating to the Construction of the Improvements between ASF and an architect,
and approved in writing by Lender, as the same may be amended from time to
time
with the prior written approval of Lender.
"ASF
Loan"
means
the loan in the Loan Amount from Borrower to ASF, the repayment obligations
in
connection with which are evidenced by the ASF Note.
"ASF
Loan Agreement"
means
that Construction Loan Agreement of even date herewith between the Borrower
as
the lender therein and ASF as the borrower therein pertaining to the ASF
Loan.
"ASF
Loan Documents"
means
the ASF Note, the Mortgage, the ASF Loan Agreement, and all other documents
now
or hereafter evidencing or securing the ASF Loan from Borrower to
ASF.
"ASF
Note"
means
the Promissory Note of even date herewith, in an amount equal to the Loan
Amount, made by ASF to the order of Borrower and collaterally assigned and
negotiated by Borrower to the order of Lender, as the same may from time
to time
be extended, amended, restated, supplemented or otherwise modified.
“Authorized
Signers”
means
either Xxxxxx X. Xxxxx or H. Xxxx Xxxxxxxx of the Borrower, and either
Xxxxxxxxxxx Xxxxxx or R. Xxxxxx Xxxxxxx of ASF, or such substitute officers
of
Borrower and/or ASF as shall be duly designated and authorized in writing
by
Borrower and/or ASF, as the case may be, to sign draw requests in a writing
addressed to Lender, which writing may include a draw request in the form
attached hereto as Schedule 2.
“Banking
Day”
means
any day that is not a Saturday, Sunday or banking holiday in the
State.
“Borrower’s
Deposit Account”
means
an
account established with Lender pursuant to the terms of Section
4.3.
“Budget”
means
the breakdown of hard costs and soft costs attached hereto as Schedule
3,
as the
same may be revised from time to time with the written approval of
Lender.
“Casualty”
means
any act or occurrence of any kind or nature that results in damage, loss
or
destruction to the Property.
"Change
of Control"
means an
event or series of events by which:
(a) any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of
the
Securities Exchange Act of 1934, but excluding any employee benefit plan
of such
person or its subsidiaries, and any person or entity acting in its capacity
as
trustee, agent or other fiduciary or administrator of any such plan) becomes
the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, except that a person or group shall be deemed to have
"beneficial ownership" of all Capital Stock that such person or group has
the
right to acquire (such right, an "option right"), whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of thirty percent (30%) of the Capital Stock of the Borrower
entitled to vote for members of the board of directors or equivalent governing
body of the Borrower on a fully diluted basis (and taking into account all
such
securities that such person or group has the right to acquire pursuant to
any
option right); or
SCHEDULE
1 - PAGE 1
(b) during
any
period of 24 consecutive months, a majority of the members of the board of
directors or other equivalent governing body of the Borrower cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and
(ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case
of
both clause (ii) and clause (iii), any individual whose initial nomination
for,
or assumption of office as, a member of that board or equivalent governing
body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person
or
group other than a solicitation for the election of one or more directors
by or
on behalf of the board of directors); or
(c) any
Person
or two or more Persons acting in concert shall have acquired by contract
or
otherwise, or shall have entered into a contract or arrangement that, upon
consummation thereof, will result in its or their acquisition of the power
to
exercise, directly or indirectly, a controlling influence over the management
or
policies of the Borrower, or control over the Voting Stock of the Borrower
on a
fully-diluted basis (and taking into account all such Voting Stock that such
Person or group has the right to acquire pursuant to any option right)
representing thirty percent (30%) or more of the combined voting power of
such
Voting Stock.
“Checking
Account”
means
account no. 3253194544 of the Borrower maintained at Lender.
“Claim”
means
any liability, suit, action, claim, demand, loss, expense, penalty, fine,
judgment or other cost of any kind or nature whatsoever, including fees,
costs
and expenses of attorneys, consultants, contractors and experts.
“Closing
Checklist”
means
that certain Closing Requirements and Checklist setting forth the conditions
for
closing the Loan and recording the Mortgage.
“Code”
means
the Internal Revenue Code of 1986, as amended.
"Collateral
Assignment of Loan Documents"
means
that Collateral of Assignment of Loan Documents of even date herewith from
Borrower to Lender assigning to Lender the ASF Note, the ASF Loan Agreement,
the
Mortgage, the Guaranty and the other loan documents entered into by and between
ASF and Borrower, or from ASF and/or American Seniors to Borrower, with respect
to the ASF Loan, as the same may be modified and amended from time to time
with
the consent of the Lender.
"Collateral
Assignment of Subordinated Loan Documents"
means
that Collateral Assignment of Subordinated Loan Documents of even date herewith
from Borrower to Lender assigning to Lender the Subordinated Note, the
Subordinated Mortgage, and other documents between ASF and Borrower pertaining
to the Subordinated Loan.
"Collateral
Assignments of Loan Documents"
means,
collectively, the Collateral Assignment of Loan Documents and the Collateral
Assignment of Subordinated Loan Documents.
“Completion
of Construction”
means,
with respect to the Construction of the Improvements or any component thereof,
the satisfaction of all of the conditions of Section
5
of
Schedule
5.
SCHEDULE
1 - PAGE 2
“Condemnation”
means
any taking of title to, use of, or any other interest in the Property under
the
exercise of the power of condemnation or eminent domain, whether temporarily
or
permanently, by any Governmental Authority or by any other Person acting
under
or for the benefit of a Governmental Authority.
“Condemnation
Awards”
means
any and all judgments, awards of damages (including severance and consequential
damages), payments, proceeds, settlements, amounts paid for a taking in lieu
of
Condemnation, or other compensation heretofore or hereafter made, including
interest thereon, and the right to receive the same, as a result of, or in
connection with, any Condemnation or threatened Condemnation.
"Consolidated
Fixed Charge Coverage Ratio"
means
the ratio of Borrower's EBITDAR to its Fixed Charges, computed in each instance
for the immediately preceding two (2) fiscal quarters. "EBITDAR" shall mean,
as
of any time of determination, Borrower's consolidated net income plus
(without
duplication) the following items: consolidated interest expense, consolidated
income tax expense, consolidated depreciation and amortization, and consolidated
rental expense; in addition, any gains or losses arising from the sale of
assets, or any non-cash, stock-based employee compensation expense arising
from
the application of APB 25 (Accounting for Stock Issued to Employees), SFAS
123R
(Accounting for Shared Based Payment) or SFAS No. 148 (Stock Based Compensation
- Transition and Disclosure), or from any other items of income or expense
which
are deemed to be extraordinary or nonrecurring in nature shall be subtracted
or
added back, as the case may be. Items shall be deemed to be extraordinary
only
if deemed to be so in accordance with GAAP, and items shall be deemed to
be
non-recurring only if they are expenditures or charges that have not been
incurred in the last eight (8) fiscal quarters and are not likely to recur
in
the subsequent two year period. "Fixed Charges" shall mean, as of any time
of
determination, the sum of Borrower's consolidated rent expense, consolidated
interest expense (including the interest component of rentals under capitalized
leases, but exclusive of prepayment fees or one-time loan fees), scheduled
principal payments due on any indebtedness or capitalized leases (but exclusive
of balloon payments due on maturity or expiration), dividends due or paid
on
preferred stock, and any mandatory distributions of earnings to shareholders.
All calculations shall be done on a consolidated basis in accordance with
generally accepted accounting principles consistently applied ("GAAP") computed
over the trailing two fiscal quarter period.
“Construction
Consultant”
means
a
person or firm appointed or designated by Lender from time to time to inspect
the progress of the Construction of the Improvements and the conformity of
construction with the Plans and Specifications, the Budget and the Project
Schedule, and to perform such other acts and duties for such other purposes
as
Lender may from time to time deem appropriate or as may be required by the
terms
of this Agreement.
“Construction
Contract”
means
the agreement dated October 20, 2005, by and between ASF, as owner, and the
General Contractor, as general contractor, and any other contract for the
Construction of the Improvements between ASF and a contractor, and approved
in
writing by Lender, as the same may be amended from time to time with the
prior
written approval of Lender.
“Construction
of the Improvements”
means
the development of the Land and/or the construction of the
Improvements.
“Default”
means
an
event or circumstance that, with the giving of Notice or lapse of time, or
both,
would constitute an Event of Default under the provisions of this
Agreement.
“Deferred
Equity”
has
the
meaning ascribed to such term in Schedule
5.
“Dispute”
means
any controversy, claim or dispute between or among the parties to this
Agreement, including any such controversy, claim or dispute arising out of
or
relating to (a) this Agreement, (b) any other Loan Document,
(c) any related agreements or instruments, or (d) the transaction
contemplated herein or therein (including any claim based on or arising from
an
alleged personal injury or business tort).
SCHEDULE
1 - PAGE 3
“Environmental
Agreement”
means
the Environmental Indemnification and Release Agreement of even date herewith
by
and between Borrower and Lender pertaining to the Property, as the same may
from
time to time be extended, amended, restated or otherwise modified.
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as amended.
“Event
of Default”
means
any event or circumstance specified in Article
VI
and the
continuance of such event or circumstance beyond the applicable grace and/or
cure periods therefor, if any, set forth in Article
VI.
“Expenses”
means
all fees, interest, charges, costs and expenses of any nature whatsoever
incurred at any time and from time to time (whether before or after an Event
of
Default) by Lender in making, funding, administering or modifying the Loan
and/or the ASF Loan, in negotiating or entering into any “workout” of the Loan
and/or the ASF Loan, or in exercising or enforcing any rights, powers and
remedies provided in the Collateral Assignment of Loan Documents, the Mortgage,
or any of the other Loan Documents, including attorneys’ fees, court costs,
receiver’s fees, management fees and costs incurred in the repair, maintenance
and operation of, or taking possession of, or selling, the
Property.
“Force
Majeure”
means
strikes, lock-outs, war, civil disturbance, natural disaster, acts of terrorism
or acts of God which cause a delay in Borrower’s performance of an Obligation
related to the work of construction; provided, however, that (a) Borrower
must
give Notice to Lender within ten (10) days after the occurrence of an event
which it believes to constitute Force Majeure, (b) in no event shall Force
Majeure extend the time for the performance of an Obligation by more than
sixty
(60) days, and (c) circumstances that can be remedied or mitigated through
the
payment of money shall not constitute Force Majeure hereunder to the extent
such
remedy or mitigation is deemed reasonable by Lender in its sole
discretion.
“General
Contractor”
means
American Constructors, Inc., its successors and permitted assigns.
“Governmental
Authority”
means
any governmental or quasi-governmental entity, including any court, department,
commission, board, bureau, agency, administration, service, district or other
instrumentality of any governmental entity.
“Guarantor” means
American Seniors Foundation, an Ohio non-profit corporation, as the guarantor
of
the loan from Borrower to ASF, and its successors and assigns.
“Guaranty”
means
the Guaranty Agreement of even date herewith executed by Guarantor for the
benefit of Borrower as well as the Lender as assignee of the Borrower, as
the
same may from time to time be extended, amended, restated, supplemented or
otherwise modified.
“Improvements”
means
all on-site and off-site improvements to the Land for a 93 unit assisted
living
center together with an 18 unit Alzheimers' facility to be constructed on
the
Land, together with all fixtures, tenant improvements and appurtenances now
or
later to be located on the Land and/or in such improvements.
“Insurance
Proceeds”
means
the insurance claims under and the proceeds of any and all policies of insurance
covering the Property or any part thereof, including all returned and unearned
premiums with respect to any insurance relating to such Property, in each
case
whether now or hereafter existing or arising.
“Land”
means
the approximately 4.674 acre tract of land described in and encumbered by
the
Mortgage.
“Laws”
means
all federal, state and local laws, statutes, rules, ordinances, regulations,
codes, licenses, authorizations, decisions, injunctions, interpretations,
orders
or decrees of any court or other Governmental Authority having jurisdiction
as
may be in effect from time to time.
SCHEDULE
1 - PAGE 4
“Leases”
means
all leases, license agreements and other occupancy or use agreements (whether
oral or written), now or hereafter existing, which cover or relate to the
Property or any part thereof, together with all options therefor, amendments
thereto and renewals, modifications and guaranties thereof, including any
cash
or security deposited under the Leases to secure performance by the tenants
of
their obligations under the Leases, whether such cash or security is to be
held
until the expiration of the terms of the Leases or applied to one or more
of the
installments of rent coming due thereunder.
“Letter
of Credit”
means
any letter of credit issued by Lender for the account of Borrower or its
nominee
in connection with the Construction of the Improvements, together with any
and
all extensions, renewals or modifications thereof, substitutions therefor
or
replacements thereof.
“Loan”
means
the loan from Lender to Borrower, the repayment obligations in connection
with
which are evidenced by the Note.
“Loan
Amount”
means
Twenty-Six Million Two Hundred Fifty Thousand and No/100 Dollars
($26,250,000.00).
“Loan
Documents”
means:
(a) this Agreement, the Note, the Environmental Agreement, the Collateral
Assignments of Loan Documents and related instruments, (b) all documents
now or
hereafter evidencing or securing the ASF Loan, including without limitation
the
ASF Note, the Mortgage,
and
the
other ASF Loan Documents, and (c) any and all other documents which Borrower,
ASF, Guarantor or any other party or parties have executed and delivered,
or may
hereafter execute and deliver, to evidence, secure or guarantee the Obligations,
or any part thereof, as the same may from time to time be extended, amended,
restated, supplemented or otherwise modified.
“Mortgage”
means
the Deed of Trust, Assignment, Security Agreement and Fixture Filing of even
date herewith given by ASF to Xxxx X. Xxxxxxx, trustee for the benefit of
Borrower, and collaterally assigned by Borrower to Lender to secure the
Obligations, as the same may from time to time be extended, amended, restated,
supplemented or otherwise modified.
“Net
Proceeds,”
when
used with respect to any Condemnation Awards or Insurance Proceeds, means
the
gross proceeds from any Condemnation or Casualty remaining after payment
of all
expenses, including attorneys’ fees, incurred in the collection of such gross
proceeds.
“Note”
means
the Promissory Note of even date herewith, in an amount equal to the Loan
Amount, made by Borrower to the order of Lender, as the same may from time
to
time be extended, amended, restated, supplemented or otherwise
modified.
“Notice”
means
a
notice, request, consent, demand or other communication given in accordance
with
the provisions of Section
8.6
of this
Agreement.
“Obligations”
means
all present and future debts, obligations and liabilities of Borrower to
Lender
arising pursuant to, or on account of, the provisions of this Agreement,
the
Note or any of the other Loan Documents, including the obligations: (a) to
pay
all principal, interest, late charges, prepayment premiums (if any) and other
amounts due at any time under the Note; (b) to pay all Expenses, indemnification
payments, fees and other amounts due at any time under the Mortgage or any
of
the other Loan Documents, together with interest thereon as provided in the
Mortgage or such Loan Document; (c) to pay and perform all obligations of
Borrower (or its affiliate) under any Swap Contract; and (d) to perform,
observe
and comply with all of the terms, covenants and conditions, expressed or
implied, which Borrower is required to perform, observe or comply with pursuant
to the terms of the Mortgage or any of the other Loan Documents.
SCHEDULE
1 - PAGE 5
“Person”
means
an
individual, a corporation, a partnership, a joint venture, a limited liability
company, a trust, an unincorporated association, any Governmental Authority
or
any other entity.
“Plans
and Specifications”
means
any and all plans and specifications prepared in connection with the
Construction of the Improvements and approved in writing by Lender, as the
same
may from time to time be amended with the prior written approval of
Lender.
“Project
Schedule”
means
the schedule for commencement and completion of the Construction of the
Improvements attached hereto as Schedule 4,
as the
same may be revised from time to time with the written approval of
Lender.
“Property”
means
the real and personal property conveyed and encumbered by the
Mortgage.
“Rents”
means
all of the rents, royalties, issues, profits, revenues, earnings, income
and
other benefits of the Property or any part thereof, or arising from the use
or
enjoyment of the Property or any part thereof, including all such amounts
paid
under or arising from any of the Leases and all fees, charges, accounts or
other
payments for the use or occupancy of rooms or other public facilities within
the
Property or any part thereof.
“State”
means
the State of Tennessee.
“Stored
Materials”
means
building materials or furnishings that have not yet been incorporated into
the
Improvements.
"Subordinated
Loan"
means
that loan in the amount of up to $6,050,000.00 to be made by Borrower to
ASF to
finance the purchase of the Property by ASF as well as ASF's working capital
operating deficits upon Completion of Construction.
"Subordinated
Loan Documents"
means
the Subordinated Note from ASF to Borrower, the Subordinated Mortgage and
related loan agreement and other documents.
"Subordinated
Note"
means
that Note in the maximum principal amount of $6,050,000.00 from ASF payable
to
the order of Borrower.
"Subordinated
Mortgage"
means
the Deed of Trust, Assignment, Security Agreement and Fixture Filing from
ASF to
Xxxx X. Xxxxxxx, trustee, to secure the Subordinated Loan.
“Survey”
means
a
map or plat of survey of the Land which conforms with Lender’s survey
requirements set forth in the Closing Checklist and with the “Minimum Standard
Detail Requirements for ALTA/ACSM Land Title Surveys” jointly established and
adopted by ALTA, ACSM and NSPS in 1999, and pursuant to Accuracy Standards
as
adopted by ALTA, ACSM and NSPS and in effect on the date when the Survey
is
certified to Lender in the form specified in the Closing Checklist.
“Swap
Contract”
means
any agreement, whether or not in writing, relating to any Swap Transaction,
including, unless the context otherwise clearly requires, any form of master
agreement (the “Master Agreement”) published by the International Swaps and
Derivatives Association, Inc., or any other master agreement, entered into
between Swap Counterparty and Borrower (or its affiliate) in connection with
the
Loan, together with any related schedule and confirmation, as amended,
supplemented, superseded or replaced from time to time, relating to or governing
any Swap Transaction.
“Swap
Counterparty”
means
Lender or an affiliate of Lender, in its capacity as counterparty under any
Swap
Contract.
“Swap
Transaction”
means
any transaction that is a rate swap, basis swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap or option,
bond,
note or xxxx option, interest rate option, forward foreign exchange transaction,
cap, collar or floor transaction, currency swap, cross-currency rate swap,
swap
option, currency option or any other similar transaction (including any option
to enter into the foregoing) or any combination of the foregoing, entered
into
between Swap Counterparty and Borrower (or its affiliate) in connection with
the
Loan.
SCHEDULE
1 - PAGE 6
“Taxes”
means
all taxes and assessments whether general or special, ordinary or extraordinary,
or foreseen or unforeseen, which at any time may be assessed, levied, confirmed
or imposed by any Governmental Authority or any communities facilities or
other
private district on Borrower or on any of its properties or assets or any
part
thereof or in respect of any of its franchises, businesses, income or
profits.
SCHEDULE
1 - PAGE 7
Schedule
2
Form
of
Draw Request
[BORROWER’S
LETTERHEAD]
DRAW
REQUEST NO. _________
|
TO:
BANK OF AMERICA, N.A. (“Lender”)
|
|
|
LOAN
NO.
|
|
|
PROJECT
|
The
Cumberland at Xxxxx Xxxxx
|
|
XXXXXXXX
|
Xxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxxx
|
|
BORROWERS
|
American
Retirement Corporation
|
|
ASF
of Green Hills, LLC
|
|
|
FOR
PERIOD ENDING
|
In
accordance with those two (2) certain Construction Loan Agreements in the
amount
of $26,250,000.00 dated December 12, 2005, with one being between ASF of
Green
Hills, LLC and American Retirement Corporation and the other between American
Retirement Corporation and Bank of America, N.A., the undersigned jointly
request that $______________________ be advanced from Loan proceeds. The
proceeds should be credited to American Retirement Corporation's Account
No.
3253194544, at Bank of America, N.A.
|
1. CURRENT
DRAW REQUEST FOR HARD COSTS
|
$
|
|
|
2. CURRENT
DRAW REQUEST FOR SOFT COSTS
|
$
|
|
|
3. TOTAL
DRAW REQUEST
|
$
|
|
AUTHORIZED
SIGNERS:
|
|||
|
ASF
of Green Hills, LLC
|
Dated:
|
||
|
|
|
||
|
Approved:
|
|||
|
American
Retirement Corporation
|
Dated:
|
||
|
|
|
SCHEDULE
2
Schedule
3
Budget
SCHEDULE
3
Schedule 4
Project
Schedule
1. Commencement.
Subject
to
Force Majeure, Borrower shall cause development of the Land to commence no
later
than December 31, 2005, and shall cause Construction of the Improvements
to
commence no later than February 7, 2006. In connection with the foregoing,
Borrower shall obtain from the appropriate government officials (i) a grading
permit on or before February 7, 2006 and (ii) a building permit on or before
February 7, 2006.
2. Completion
of Construction of All Improvements.
Subject
to
Force Majeure, Borrower shall cause Completion of Construction of all of
the
Improvements to occur no later than August 27, 2007.
3. Outside
Date for Completion of Construction.
Regardless
of the existence or non-existence or occurrence or non-occurrence of Force
Majeure, in no event shall Completion of Construction of the Improvements
occur
later than November 27, 2007.
SCHEDULE
4
Schedule 5
Additional
Terms Regarding Advances
The
conditions precedent to closing the Loan, recording the Mortgage and making
the
first advance are set forth in the Closing Checklist. Subsequent advances
of the
Loan shall be subject to the following additional terms and
conditions:
1. Advances
Under the Budget.
As
listed
in the Budget: (a) the “Total
Costs”
are
the
maximum costs anticipated by Borrower for each item specified; (b) the
“Total
Budget”
is
the
maximum cost anticipated by Borrower for the Construction of the Improvements
and Borrower’s satisfaction of the other requirements of the Loan; (c) the
“Loan
Proceeds”
are
the
maximum amount to be advanced under the Loan; (d) “Upfront
Equity”
is
the
amount that Borrower is required to pay toward the Total Costs; and (e)
“Deferred
Equity”
is
an
additional amount that Borrower is required to pay toward the Total Costs
as of
the date indicated. Whenever Borrower is required to pay any items from Upfront
Equity or Deferred Equity, Lender, at its option, may restrict or prohibit
advances of the Loan for such items to the extent that Upfront Equity or
Deferred Equity is sufficient to pay such amounts. Whenever Borrower’s Upfront
Equity or Deferred Equity is on deposit with Lender, Lender shall make all
advances first from such equity based on the allocations thereof set forth
in
the Budget. After the exhaustion of Upfront Equity or Deferred Equity allocated
to a given line item, Lender will advance Loan proceeds for that line item
pursuant to the Budget.
2. Special
Conditions to Second Advance [First
Advance for Hard Costs].
Prior
to
the second advance of the Loan [first
advance for hard costs],
Borrower
shall furnish the following items to Lender, all of which must be satisfactory
to Lender:
(a) The
original title insurance policy insuring Lender’s interest under the Mortgage,
issued pursuant to the commitment for title insurance approved by Lender
prior
to the closing of the Loan;
(b) Evidence
of Borrower’s Upfront Equity investment in the Property of not less than Three
Million Six Hundred Thousand and No/100 Dollars ($3,600,000.00) from sources
other than the Loan, in accordance with the Budget.
3. Additional
Items Required for Each Advance.
Lender
shall not be obligated to make an advance of Loan proceeds until and unless
the
following additional items shall have been received and approved by Lender,
as
and to the extent required by Lender, prior to the date of the
advance:
(a) A
notice
of title continuation or an endorsement to the title insurance policy with
respect to the Land theretofore delivered to Lender, showing that since the
last
preceding advance, there has been no change in the status of title and no
other
exception not theretofore approved by Lender, which endorsement shall have
the
effect of advancing the effective date of the policy to the date of the advance
then being made and increasing the coverage of the policy by an amount equal
to
the advance then being made, if the policy does not by its terms provide
automatically for such an increase.
(b) Interim
acknowledgments of payment and releases of liens from all Persons who have
furnished labor, materials and/or services in the Construction of the
Improvements, covering work performed, materials supplied and services rendered
through the date of the last preceding advance.
SCHEDULE
5 - PAGE 1
(c) Soil
compaction test reports, bearing capacity test reports and concrete test
reports.
(d) A
foundation Survey and such other current Surveys as Lender may reasonably
request, in each instance disclosing no violation, encroachment or other
variance from applicable set-backs or other restrictions unless approved
in
writing by Lender.
(e) Evidence
that the Improvements have not been materially damaged by fire or other Casualty
unless Lender shall have received Insurance Proceeds, or satisfactory assurance
that it will receive such proceeds in a timely manner pursuant to Section
4.10,
sufficient in the judgment of Lender to effect a satisfactory restoration
and
completion of the Improvements in accordance with the terms of the Mortgage
and
this Agreement.
(f) Evidence
that all work requiring inspection by any Governmental Authority having or
claiming jurisdiction has been duly inspected and approved by such authority
and
by any rating or inspection organization, bureau, association or office having
or claiming jurisdiction.
(g) Evidence,
including a report from the Construction Consultant, that all work completed
at
the time of the application for an advance has been performed in a good and
workmanlike manner, that all materials and fixtures usually furnished and
installed at that stage of construction have been so furnished and installed,
that the Improvements can be completed in accordance with the Project Schedule,
and that the balance of the Loan proceeds then held by Lender and available
for
advance pursuant to the terms of this Agreement, together with other funds
which
Lender determines to be available to Borrower for such purpose, are and will
be
sufficient to pay the cost of such completion.
4. Conditions
Precedent to All Advances.
Lender
shall not be obligated to make an advance of Loan proceeds unless the following
additional conditions shall have been satisfied or waived in writing by Lender
as of the date of each advance:
(a) No
lien
for the performance of work or supplying of labor, materials or services
shall
have been filed against the Land and remain unsatisfied or
unbonded.
(b) No
condition or situation shall exist at the Land which, in the reasonable
determination of Lender, constitutes a danger to or impairment of the Property
or presents a danger or hazard to the public.
(c) The
representations and warranties made in Article III
shall be
true and correct on and as of the date of the advance with the same effect
as if
made on such date.
(d) All
terms
and conditions of the Loan Documents required to be met as of the date of
the
applicable advance shall have been met to the satisfaction of
Lender.
(e) No
Default
or Event of Default shall have occurred and be continuing.
5. Advances
for Hard and Soft Costs.
Lender
shall make periodic advances for hard and soft costs as construction progresses.
Each advance shall be equal to 91.2646% of Borrower’s total costs as reflected
in the applicable draw request, net of retainage in the amount of 10% for
hard
costs, until Lender has disbursed an amount equal to 50% of all hard cost
line
items in the Budget. Thereafter, each advance shall be equal to 91.2646%
of
Borrower’s total costs as reflected in the applicable draw request, net of
retainage in the amount of 5% for hard costs. The balance of Borrower's total
costs, being 8.7354% of each draw request, shall be made up by the Borrower
in
cash as Deferred Equity simultaneously with each advance by the Lender. Lender
shall not be obligated to make the final advance of the Loan for hard costs
unless the following additional conditions shall have been satisfied, to
the
extent required by Lender:
SCHEDULE
5 - PAGE 2
(a) The
Construction Consultant and the Architect shall have certified to Lender
that
construction has been completed in a good and workmanlike manner, in accordance
with applicable requirements of all Governmental Authorities and substantially
in accordance with the Plans and Specifications;
(b) To
the
extent required by applicable Governmental Authorities for the use and occupancy
of the Improvements, certificates of occupancy and other applicable permits
and
releases shall have been issued with respect to the Improvements and copies
thereof have been furnished to Lender;
(c) Lender
shall have received a satisfactory as-built Survey showing the location of
the
Improvements;
(d) Lender
shall have received a satisfactory final affidavit from the General Contractor
and full and complete releases of lien from the General Contractor and each
subcontractor of and supplier to the General Contractor with respect to work
performed and/on materials supplied in the Construction of the
Improvements;
(e) Lender
shall have received a satisfactory set of as-built plans and specifications
for
the Improvements;
(f) A
valid
notice of completion shall have been recorded;
(g) Lender
shall have received a satisfactory endorsement to its title insurance policy;
and
(h) All
other
terms and conditions of this Agreement and the other Loan Documents required
to
be met as of the date of the final advance of the Loan for hard costs shall
have
been met to the satisfaction of Lender.
6.
Advances for Stored Materials.
No
advances will be made for Stored Materials unless (a) Borrower has good title
to
the Stored Materials and has furnished satisfactory evidence of such title
to
Lender, to the extent required by Lender, (b) the Stored Materials are
components in a form ready for incorporation into the Improvements and will
be
so incorporated within a period of forty-five (45) days from the date of
the
advance for the Stored Materials, (c) the Stored Materials are in Borrower’s
possession and are satisfactorily stored on the Land or at such other location
as Lender may approve, in each case with adequate safeguards to prevent
commingling with materials for other projects, (d) the Stored Materials are
protected and insured against loss, theft and damage in a manner and amount
satisfactory to Lender, (e) the Stored Materials have been paid for in full
or
will be paid for in full from the funds to be advanced, (f) Lender has or
will
have upon the payment for the Stored Materials from the advanced funds a
perfected, first priority security interest in the Stored Materials, (g)
all
lien rights and claims of the supplier have been released or will be released
upon payment with the advanced funds, and (h) following the advance for the
Stored Materials, the aggregate amount of advances for Stored Materials that
have not yet been incorporated into the Improvements will not exceed Two
Hundred
Thousand Dollars ($200,000.00).
7.
Advances
for Soft Costs.
Lender
shall make periodic advances for soft costs, each in the amount requested
in the
applicable draw request, without retainage.
8.
Advances for Interest.
Lender
shall make periodic advances to pay interest as and when it becomes due.
Borrower hereby irrevocably authorizes Lender to make any interest payment
on
Borrower’s behalf by debiting the interest reserve in the amount of the payment
and applying the debited amount to accrued and unpaid interest on the Loan.
Lender will disburse the amount of any interest payment into the account
designated below for funding of advances, and will invoice Borrower for such
interest payment.
SCHEDULE
5 - PAGE 3
9.
Account
for Funding Advances.
Subject
to
Lender’s right to advance Loan proceeds as provided in this Agreement, Lender
may make advances into Borrower’s checking account No. 3253194544 maintained
with Lender. Borrower hereby irrevocably authorizes Lender to deposit any
advance to the credit of Borrower in that account, by wire transfer or other
deposit. Borrower further irrevocably authorizes Lender to pay and reimburse
itself for any Expenses incurred by Lender by debit to such account.
SCHEDULE
5 - PAGE 4
Schedule
6
Leasing
and Tenant Matters
1.
Representations
and Warranties of Borrower Regarding Leases.
Borrower
represents and warrants that Borrower has delivered to Lender Borrower’s
standard form of tenant lease, and no Lease or lease guaranty contains any
option or right of first refusal to purchase all or any portion of the Property
or any present or future interest therein.
2.
Covenants
of Borrower Regarding Leases and Rents.
Borrower
covenants that Borrower (a) will observe and perform all of the obligations
imposed upon the landlord in the Leases and will not do or permit to be done
anything to impair the security thereof; (b) will use its best efforts to
enforce or secure, or cause to be enforced or secured, the performance of
each
and every obligation and undertaking of the respective tenants under the
Leases
and will appear in and defend, at Borrower’s sole cost and expense, any action
or proceeding arising under, or in any manner connected with, the Leases;
(c) will not collect any of the Rents in advance of the time when the same
become due under the terms of the Leases; (d) will not discount any future
accruing Rents; (e) without the prior written consent of Lender, will not
execute any assignment of the Leases or the Rents; (f) other
than in the ordinary course of business, will not alter, modify or change
the
terms of the Leases, or surrender, cancel or terminate the same without the
prior written consent of Lender; and (g) will execute and deliver, at the
request of Lender, all such assignments of the Leases and Rents in favor
of
Lender as Lender may from time to time require.
3.
Leasing
Guidelines.
Borrower
shall not enter into or allow ASF to enter into any Lease of space in the
Improvements unless approved or deemed approved by Lender prior to execution.
The standard form of tenant lease, and any revisions thereto, must have the
prior written approval of Lender. Lender shall be “deemed” to have approved any
Lease that: (a) is on the standard form lease approved by Lender with no
deviations except as approved by Lender; (b) is entered into in the ordinary
course of business with a bona fide unrelated third party tenant, and ASF,
acting in good faith and exercising due diligence, has determined that the
tenant is financially capable of performing its obligations under the Lease;
(c)
reflects an arm’s length transaction at then-current market rate for comparable
space; and (d) contains no right or option to purchase the Property or any
present or future interest therein. If requested by Lender, Borrower shall
provide to Lender a correct and complete copy of each existing and future
Lease,
including any exhibits, and any guaranty(ies) thereof, within seven (7) days
after Lender’s request (for existing Leases) or seven (7) days after execution
(for future Leases).
4.
Delivery
of Leasing Information and Documents.
From
time
to time upon Lender’s request, Borrower shall promptly deliver to Lender (a)
complete executed originals of each Lease, including any exhibits thereto
and
any guaranty(ies) thereof, (b) a complete fee schedule relating to the Property
in such detail as Lender may legally require, together with such operating
statements and leasing schedules and reports as Lender may require in compliance
with applicable law, and (c) such other information regarding tenants and
prospective tenants and other leasing information as Lender may reasonably
request.
SCHEDULE
6 - PAGE 1
Schedule
7
Swap
Contracts
1.
Swap
Documentation.
Within
the timeframes required by Lender and Swap Counterparty, Borrower shall deliver
to Swap Counterparty the following documents and other items, executed and
acknowledged as appropriate, all in form and substance satisfactory to Lender
and Swap Counterparty: (a) Master Agreement in the form published by the
International Swaps and Derivatives Association, Inc. and related schedule
in
the form agreed upon between Borrower (or its affiliate) and Swap Counterparty;
(b) a confirmation under the foregoing; (c) the Guaranty; (d) if Borrower
(or
its affiliate) is anything other than a natural person, evidence of due
authorization to enter into transactions under the foregoing Swap Contract
with
Swap Counterparty, together with evidence of due authorization and execution
of
any Swap Contract; and such other title endorsements, documents, instruments
and
agreements as Lender and Swap Counterparty may require to evidence satisfaction
of the conditions set forth in this Section
1
of
Schedule
7.
2.
Conveyance
and Security Interest.
To
secure Borrower’s Obligations, Borrower hereby transfers, assigns and transfers
to Lender, and grants to Lender a security interest in, all of Borrower’s right,
title and interest, but not its obligations, duties or liabilities for any
breach, in, under and to the Swap Contract, any and all amounts received
by
Borrower in connection therewith or to which Borrower is entitled thereunder,
and all proceeds of the foregoing. All amounts payable to Borrower under
the
Swap Contract shall be paid to Lender and shall be applied to pay interest
or
other amounts under the Loan.
3.
Interest
Reserve.
Borrower
and Lender acknowledge that the amount of the interest reserve line item
in the
Budget was calculated based on the assumptions that Borrower (or its affiliate)
would obtain the Swap Contract and would timely pay and perform its Obligations
under the Swap Contract in the future. On the terms and subject to the
provisions of this Agreement governing advances of Loan proceeds, Lender
will
make advances from interest reserve for periodic payments under the Swap
Contract as and when they become due. Borrower hereby irrevocably authorizes
Lender to make any payment under the Swap Contract by debiting the interest
reserve in the amount of the payment and applying the debited amount to the
Swap
Contract. [Lender
will disburse the amount of any payment under a Swap Contract into the Checking
Account defined and designated below.] Notwithstanding
the foregoing, Lender shall have no obligation to make any advance for any
payment which becomes due under a Swap Contract following an Event of
Default.
4.
Cross-Default.
It shall
be an Event of Default under this Agreement if any Event of Default occurs
as
defined under any Swap Contract as to which Borrower (or its affiliate) is
the
Defaulting Party, or if any Termination Event occurs under any Swap Contract
as
to which Borrower (or its affiliate) is an Affected Party. As used in this
Section, the terms “Defaulting
Party,”
“Termination
Event”
and
“Affected
Party”
have
the
meanings ascribed to them in the Swap Contract.
5.
Remedies;
Cure Rights.
In
addition to any and all other remedies to which Lender and Swap Counterparty
are
entitled at law or in equity, Swap Counterparty shall have the right, to
the
extent so provided in any Swap Contract or any Master Agreement relating
thereto, (a) to declare an event of default, termination event or other similar
event thereunder and to designate an Early Termination Date as defined under
the
Master Agreement, and (b) to determine net termination amounts in accordance
with the Swap Contract and to setoff amounts between Swap Contracts. Lender
shall have the right at any time (but shall have no obligation) to take in
its
name or in the name of Borrower (or its affiliate) such action as Lender
may at
any time determine to be necessary or advisable to cure any default under
any
Swap Contract or to protect the rights of Borrower (or its affiliate) or
Swap
Counterparty thereunder; provided, however, that before the occurrence of
an
Event of Default under this Agreement, Lender shall give prior written notice
to
Borrower before taking any such action. For this purpose, Borrower hereby
constitutes Lender its true and lawful attorney-in-fact with full power of
substitution, which power of attorney is coupled with an interest and
irrevocable, to exercise, at the election of Lender, any and all rights and
remedies of Borrower (or its affiliate) under the Swap Contract, including
making any payments thereunder and consummating any transactions contemplated
thereby, and to take any action that Lender may deem proper in order to collect,
assert or enforce any claim, right or title, in and to the Swap Contract
hereby
assigned and conveyed, and generally to take any and all such action in relation
thereto as Lender shall deem advisable. Lender shall not incur any liability
if
any action so taken by Lender or on its behalf shall prove to be inadequate
or
invalid. Borrower expressly understands and agrees that Lender is not hereby
assuming any duties or obligations of Borrower (or its affiliate) to make
payments to Swap Counterparty under any Swap Contract or under any other
Loan
Document. Such payment duties and obligations remain the responsibility of
Borrower (or its affiliate) notwithstanding any language in this
Agreement.
SCHEDULE
7 - PAGE 1
[Optional
provision requiring the borrower to choose one-month LIBOR fixings under
the
note to coincide with swap payments. Swaps use British Bankers Association
LIBOR, which is expressed to 5 decimal places without rounding. If you want
the
loan and swap to match exactly, you will need to delete the LIBOR rounding
in
the note.]
6.
Timing
of Interest Rate Periods.
At all
times when any Swap Contract is in effect, Borrower shall elect Interest
Periods
of one month in duration for all LIBOR Rate Principal. As used herein, the
terms
“Interest
Period”
and
“LIBOR
Rate Principal”
have
the
meanings ascribed to them in the Note. Borrower shall time its rate elections
under the Note so that each Interest Period for LIBOR Rate Principal ends
on a
day when a payment is due from either counterparty under any Swap
Contract.
[Optional
provision authorizing the lender to debit and credit a specified checking
account for loan and swap payments.]
7.
Automatic
Deduction and Credit.
|
(a)
|
At
all times when any Swap Contract is in effect, Borrower shall
maintain the
Checking Account in good standing with Lender. Borrower hereby
grants to
Lender and
|
|
| Swap Counterparty a security interest in the Checking Account, and any other accounts and deposit accounts from which Borrower may from time to time authorize Lender to debit payments due on the Loana nd the Swap Contracts. Borrower is granting this security interest to Lender and Swap Counterparty for the purpose of securing the Obligations. | ||
|
(b)
|
At
all times when any Swap Contract is in effect, all monthly payments
owed
by Borrower under the Note will be automatically deducted on
their due
dates from the
|
|
| Checking Account. Lender is hereby authorized to apply the amounts so debited to Borrower’s obligations under the Loan. Notwithstanding the foregoing, Lender will not automatically deduct the principal payment at maturity from the Checking Account. | ||
|
(c)
|
At
all times when any Swap Contract is in effect, all payments owed
by
Borrower (or its affiliate) under any Swap Contract will be automatically
deducted on their due
|
|
| dates from the Checking Account. The preceding sentence includes Borrower’s authorization for Lender to debit from the Checking Account any monetary obligation owed by Borrower (or its affiliate) to Swap Counterparty following any Early Termination Date, as defined under the Master Agreement. Swap Counterparty is hereby authorized to apply the amounts so debited to the obligations of Borrower (or its affiliate) under the applicable Swap Contract. | ||
|
(d)
|
Lender
will debit the Checking Account on the dates the foregoing payments
become
due; provided, however, that if a due date does not fall on a
Banking Day,
Lender
|
|
| will debit the Checking Account on the first Banking Day following such due date. | ||
|
(e)
|
Borrower
shall maintain sufficient funds on the dates when Lender enters
debits
authorized by this Agreement. If there are insufficient funds
in the
Checking Account on
|
|
| any date when Lender enters any debit authorized by this Agreement, without limiting Lender’s other remedies in such an event, the debit will be reversed in whole or in part, in Lender’s sole and absolute discretion, and such amount not debited shall be deemed to be unpaid and shall be immediately due and payable in accordance with the terms of the Note and/or the Swap Contract, as applicable. | ||
|
(f)
|
So
long as there is no Event of Default existing under this Agreement
or any
Swap Contract, Lender will automatically credit the Checking
Account for
payments owed
|
|
| by Swap Counterparty under the Swap Contract. Lender will credit the Checking Account on the dates the foregoing payments become due; provided, however, that if a due date does not fall on a Banking Day, Lender will credit the Checking Account on the first Banking Day following such due date. | ||
SCHEDULE
7 - PAGE 2
