LOAN AGREEMENT
Dated as of October 31, 1995
by and among
JAYBER, INC.,
P.V.M. ASSOCIATES, INC.,
POMPTON AVENUE ASSOCIATES, INC.,
CONTINENTAL XXXXXXX HOLDINGS, INC.
and
NOMURA ASSET CAPITAL CORPORATION
TABLE OF CONTENTS
Page
ARTICLE I
CERTAIN DEFINITIONS.................. 2
Section 1.1. Definitions.......................... 2
ARTICLE II
GENERAL TERMS........................ 32
Section 2.1. Amount of the Loan................... 32
Section 2.2. Use of Proceeds...................... 32
Section 2.3. Security for the Loan................ 32
Section 2.4. Borrower's Notes..................... 32
Section 2.5 Principal and Interest Payments...... 33
Section 2.6. Voluntary Prepayment and Defeasance.. 34
Section 2.7. Mandatory Prepayment................. 35
Section 2.8. Application of Payments.............. 35
Section 2.9. Payment of Debt Service, Method and
Place of Payment................... 35
Section 2.10. Taxes................................ 36
Section 2.11. Release of Collateral................ 36
Section 2.12. Central Cash Management.............. 37
Section 2.13. Security Agreement................... 45
Section 2.14. Securitization....................... 49
Section 2.15. Supplemental Mortgage Affidavits..... 50
ARTICLE III
CONDITIONS PRECEDENT................. 51
Section 3.1. Conditions Precedent to the Making
of the Loan........................ 51
Section 3.2. Form of Loan Documents and
Related Matters.................... 56
ARTICLE IV
REPRESENTATIONS AND WARRANTIES....... 56
Section 4.1. Closing Date Representations
and Warranties..................... 56
Section 4.2. Survival of Representations
and Warranties..................... 68
ARTICLE V
AFFIRMATIVE COVENANTS................ 69
Section 5.1. Borrower Covenants................... 69
ARTICLE VI
NEGATIVE COVENANTS................... 82
Section 6.1. Borrower Negative Covenants.......... 82
ARTICLE VII
DEFAULTS............................. 85
Section 7.1. Event of Default..................... 85
Section 7.2. Remedies............................. 89
Section 7.3. Remedies Cumulative.................. 89
ARTICLE VIII
MISCELLANEOUS........................ 90
Section 8.1. Survival............................. 90
Section 8.2. Lender's Discretion.................. 90
Section 8.3. Governing Law........................ 90
Section 8.4. Modification, Waiver in Writing...... 92
Section 8.5. Delay Not a Waiver................... 92
Section 8.6. Notices.............................. 92
SECTION 8.7. TRIAL BY JURY........................ 93
Section 8.8. Headings............................. 93
Section 8.9. Assignment........................... 93
Section 8.10. Severability........................ 93
Section 8.11. Preferences......................... 93
Section 8.12. Waiver of Notice.................... 94
Section 8.13. Remedies of Borrowers............... 94
Section 8.14. Exculpation as to Borrowers'
Shareholders...................... 94
Section 8.15. Exhibits Incorporated............... 96
Section 8.16. Offsets, Counterclaims
and Defenses...................... 96
Section 8.17. No Joint Venture or Partnership..... 96
Section 8.18. Waiver of Marshalling of
Assets Defense.................... 96
Section 8.19. Waiver of Counterclaim.............. 97
Section 8.20. Conflict; Construction
of Documents...................... 97
Section 8.21. Brokers and Financial Advisors...... 97
Section 8.22. Counterparts ....................... 97
Section 8.23. Estoppel Certificates .............. 98
Section 8.24. Payment of Expenses ................ 98
Section 8.25. Bankruptcy Waiver .................. 98
Section 8.26. [Intentionally Deleted]............. 99
Section 8.27. Entire Agreement.................... 99
Section 8.28 Cross Collateralization............. 99
Section 8.29. Limitation of Interest.............. 99
Section 8.30 [Intentionally Deleted.............. 100
Section 8.31. Indemnification..................... 100
Section 8.32. Borrowers' Acknowledgments.......... 100
Section 8.33. Lender as Shareholder............... 101
Section 8.34. Release of Acreage at
Xxxxxxx Facility.................. 101
EXHIBITS
Exhibit A - Assignment of Management Agreement and Agreements
Affecting Real Estate
Exhibit B - Assignment of Leases and Rents
Exhibit C - Manager's Consent and Subordination of Management Agreement
Exhibit D - Mortgage, Assignment of Rents, Security Agreement
and Fixture Filing
Exhibit E - Note
Exhibit F - [Intentionally deleted]
Exhibit G - [Intentionally deleted]
Exhibit H - [Intentionally deleted]
Exhibit I - Surveyor's Certification
Exhibit J - Opinions of Counsel (2)
Exhibit K - Allocated Loan Amounts
Exhibit L - [Intentionally Deleted]
Exhibit M - Secretary's Certificate
Exhibit N - Cash Collateral Accounts
Exhibit O - Certificate of Lender
Exhibit P - CC Account Agreement
Exhibit Q - Letters of Instruction
Exhibit R - Title Instruction Letter
Exhibit S - Zoning Letter
Exhibit T - Disbursement Accounts
LOAN AGREEMENT
THIS LOAN AGREEMENT, made as of October 31, 1995,
is by and among NOMURA ASSET CAPITAL CORPORATION, a Delaware
corporation, having an address at 2 World Xxxxxxxxx Xxxxxx, Xxxxxxxx X,
Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxxxx Xxxxxxxx, Telefax
Number 000-000-0000 (together, with its successors and assigns,
"Lender"), JAYBER, INC., a New Jersey corporation ("Jayber"), P.V.M.
ASSOCIATES, INC., a Florida corporation ("P.V.M."), CONTINENTAL XXXXXXX
HOLDINGS, INC., a New Jersey corporation ("Xxxxxxx") and POMPTON AVENUE
ASSOCIATES, INC., a New Jersey corporation ("Pompton"), all with an
address of 000 Xxxxxx Xxxxxx, Xxxxxxxxx Xxxxxx, XX 00000, Attention:
Xxxxxxxx Xxxxxxxx, Telefax Number 000-000-0000 (each a "Borrower" and
collectively, the "Borrowers").
RECITALS
WHEREAS, Borrowers desire to obtain a loan (the
"Loan") from Lender in an aggregate maximum amount of up to $41,000,000
(the "Loan Amount") to finance the acquisition by the Borrowers of four
nursing home facilities and to provide working capital to the Borrowers;
WHEREAS, Lender is willing to make the Loan on the
condition that each of the Borrowers join in the execution and delivery
of this Agreement which shall establish the terms and conditions of the
Loan;
WHEREAS, Xxxxxxx has leased its Facility (the
"Xxxxxxx Facility") to the Operator pursuant to the Master Lease and the
Operator has, in such Master Lease, pledged to such Borrower a security
interest in all of such Operator's Collateral (as defined in the Master
Lease) as security for payment of such Operator's obligations to Xxxxxxx
under such Master Lease;
WHEREAS, the obligations of each Borrower shall
hereunder shall be "cross-defaulted" and "cross-collateralized" with the
obligations of all other Borrowers hereunder;
WHEREAS, Lender and Borrowers contemplate that
Lender's interest in the Loan and to the Loan Documents may be assigned,
in whole or in part, by Lender to another person, including without
limitation to a trustee on behalf of security holders in connection with
a Securitization.
NOW, THEREFORE, in consideration of the making of
the Loan by Lender and the covenants, agreements, representations and
warranties set forth in this Agreement, the parties hereby covenant,
agree, represent and warrant as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. Definitions. For all purposes of
this Agreement:
(a) the capitalized terms defined in this Article
I have the meanings assigned to them in this Article I, and include the
plural as well as the singular;
(b) all accounting terms have the meanings
assigned to them in accordance with GAAP;
(c) the words "herein", "hereof", and "hereunder"
and other words of similar import refer to this Agreement as a whole and
not to any particular Article, Section, or other subdivision; and
(d) the following terms have the following
meanings:
"Account Collateral" has the meaning set forth in
Section 2.13(a).
"Accounts" means, with respect to each Borrower,
to the extent such Borrower has any rights, title or interests in or to
any of the following, such Borrower's rights or the rights of the
Operator, if any, of such Borrower's Facility to payment for goods sold
or leased or for services rendered arising from the ownership or
operation of such Borrower's Facility and not evidenced by an
Instrument, including, without limitation, all accounts and accounts
receivable arising from the ownership or operation of such Facility, now
existing or hereinafter coming into existence, and all proceeds thereof
(whether cash or non-cash, movable or immovable, tangible or
intangible), received from the sale, exchange, transfer, collection or
other disposition or substitution. In addition to the foregoing, the
term "Accounts" shall include the meaning as such term has in Section
9-106 of the UCC.
"Adjusted Net Operating Income" means for any
period (and calculated either for a Facility or the Facilities) the Net
Operating Income for such period reduced by (to the extent that the
following are not already included in Operating Expenses) (i) an annual
allowance for Capital Improvement Costs in an amount equal to the
Capital Reserve Amount, pro rated for the applicable period, and (ii)
annual management fees pro rated for the applicable period equal to the
greater of (x) actual management fees paid pursuant to the relevant
Management Agreements and (y) five percent (5%) of Gross Revenue, and
(iii) for the applicable period an amount necessary to reflect operating
revenues at a five percent (5%) vacancy factor if the actual vacancy
factor is less than five percent (5%). Notwithstanding the foregoing
part of this definition of "Adjusted Net Operating Income" to the
contrary, if the period for which Adjusted Net Operating Income is being
calculated includes periods prior to the Closing Date, Adjusted Net
Operating Income for such Facility shall be calculated for such period
based on the applicable pro rata portion of Base NOI.
"Advisor" means Nomura Securities International,
Inc.
"Affiliate" of any specified Person means any
other Person controlling, controlled by or under common control with
such specified Person. For the purposes of this Agreement, "control"
when used with respect to any specified Person means the power to direct
the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities or other beneficial
interests, by contract or otherwise; and the terms "controls",
"controlling" and "controlled" have the meanings correlative to the
foregoing.
"Agreement" means this Loan Agreement, as the same
may from time to time hereafter be modified, supplemented or amended.
"Allocated Loan Amount" means the portion of the
Loan Amount allocated to each Facility, as set forth on Exhibit K
attached hereto as such amounts shall be adjusted from time to time as
hereinafter set forth. Upon a prepayment with respect to the King Xxxxx
Xxxxxx Facility, in accordance with Section 2.6(b), the Allocated Loan
Amount for that Facility shall be reduced to zero. Upon each adjustment
of Principal Indebtedness due to either (i) a regular monthly payment of
principal pursuant to Section 2.5 or (ii) a prepayment of principal
pursuant to Section 2.7(a), each Allocated Loan Amount shall be
decreased by an amount equal to the product of (i) the amount of such
principal payment and (ii) a fraction, the numerator of which is the
applicable Allocated Loan Amount (prior to the adjustment in question)
and the denominator of which is the total of all Allocated Loan Amounts
(prior to the adjustment in question). Notwithstanding the foregoing
sentence to the contrary, when the Principal Indebtedness is reduced as
a result of Lender's receipt of Net Proceeds or Loss Proceeds, with
respect to a Taking or casualty affecting one hundred percent (100%) of
a Facility, the Allocated Loan Amount for such Facility with respect to
which the Net Proceeds or Loss Proceeds were received shall be reduced
to zero (such Allocated Loan Amount prior to reduction being referred to
as the "Withdrawn Allocated Amount"), and each other Allocated Loan
Amount shall, if the Withdrawn Allocated Amount exceeds the Net Proceeds
or Loss Proceeds, (such excess being referred to as the "Proceeds
Deficiency"), be increased by an amount equal to the product of (1) the
Proceeds Deficiency and (2) a fraction, the numerator of which is the
applicable Allocated Loan Amount (prior to the adjustment in question)
and the denominator of which is the aggregate of all of the Allocated
Loan Amounts other than the Withdrawn Allocated Amount.
"Appraisals" means the appraisals, if any, with
respect to a Facility delivered to Lender in connection with the Loan
and any more recent appraisal of any Facility delivered to Lender, each
made by an Appraiser at the request of a Borrower or Lender, as any of
the same may be updated by recertification from time to time by the
Appraiser performing such Appraisal.
"Appraiser" means any Independent appraiser
selected by a Borrower (and satisfactory to Lender) who is a member of
the Appraisal Institute with a national practice and who has at least
ten years experience with real estate of the same type and in the
geographic area of the Facility to be appraised.
"Assignment of Agreements" means, with respect to
each Facility, a first priority Assignment of Management Agreement and
Agreements Affecting Real Estate, in the form attached hereto as Exhibit
A, (conformed to local lending practices in the jurisdiction in which
the relevant Facility is located including, without limitation,
additional remedies available to lenders in such jurisdiction), dated as
of the Closing Date from the relevant Borrower, as assignor, to Lender,
as assignee, assigning to Lender (to the extent set forth in the
Assignment of Agreements) such Borrower's interest in and to all
contracts between such Borrower and third parties in connection with the
management and operation of such Facility, including without limitation,
the Management Agreement, any other agreements with design
professionals, all agreements, allocations, and rights with all utility
services serving such Facility and all development agreements and
Permits, as the same may thereafter from time to time be supplemented,
amended or extended by one or more written agreements supplemental
thereto, and "Assignments of Agreements" means all such instruments
collectively.
"Assignment of Leases" means, with respect to each
Facility, a first priority Assignment of Leases and Rents, in the form
attached hereto as Exhibit B, (conformed to local lending practices in
the jurisdiction in which the relevant Facility is located including,
without limitation, additional remedies available to lenders in such
jurisdiction), dated as of the Closing Date from the relevant Borrower,
as assignor, to Lender, as assignee, assigning to Lender such Borrower's
interest in and to the Leases and the Rents with respect to such
Facility as security for the Loan, as the same may thereafter from time
to time be supplemented, amended, modified or extended by one or more
written agreements supplemental thereto, and "Assignments of Leases"
means all such instruments collectively.
"Bank" means Boatmen's First National Bank of
Kansas City, 10th & Baltimore, Xxxxxx Xxxx, Xxxxxxxx 00000, or any
successor bank hereafter selected by Lender in accordance with the terms
hereof.
"Base NOI" means $2,023,000 for the Cedar Grove
Facility, $1,133,000 for the Northfield Manor Facility, $485,000 for the
King Xxxxx Xxxxxx Facility and $2,574,000 for the Xxxxxxx Facility.
"Basic Carrying Costs" means, with respect to each
Facility, the following costs: (i) real property taxes, assessments and
Impositions applicable to such Facility, and (ii) insurance premiums for
policies of insurance required or permitted to be maintained by a
Borrower pursuant to this Agreement or the other Loan Documents.
"Basic Carrying Costs Monthly Installment" means,
with respect to each Facility, Lender's good faith estimate of
one-twelfth (1/12th) of the annual amount of the relevant Basic Carrying
Costs. Should the relevant Basic Carrying Costs for the then current
Fiscal Year or payment period not be ascertainable by Lender at the time
a monthly deposit is required to be made, the relevant Basic Carrying
Costs Monthly Installment shall be Lender's good faith estimate based on
one-twelfth (1/12th) of the relevant aggregate Basic Carrying Costs for
the prior Fiscal Year or payment period, with reasonable adjustments as
determined by Lender. As soon as the relevant Basic Carrying Costs are
fixed for the then current Fiscal Year or period, the next ensuing
relevant Basic Carrying Costs Monthly Installment shall be adjusted to
reflect any deficiency or surplus in prior relevant Basic Carrying Costs
Monthly Installments.
"Basic Carrying Costs Sub-Account" means the
Sub-Account of the relevant Cash Collateral Account established and
maintained pursuant to Section 2.12 relating to the payment of the
relevant Basic Carrying Costs.
"Borrower" and "Borrowers" have the meanings
provided in the first paragraph of this Agreement.
"Borrower's Broker" has the meaning set forth in
Section 8.21.
"Borrower's Certificate" means the certificate in
the form attached hereto as Exhibit F of Borrower dated as of the
Closing Date.
"Business Day" means any day other than (i) a
Saturday or a Sunday, and (ii) a day on which federally insured
depository institutions in Missouri or New York or any State in which
the Collection Accounts, the Cash Collateral Accounts or the
Sub-Accounts are located are authorized or obligated by law, regulation,
governmental decree or executive order to be closed.
"Capital Improvement Costs" means costs incurred
by a Borrower in connection with capital improvements to the relevant
Facility.
"Capital Reserve Amount" means, with respect to
each Facility, an amount equal to the greater of (x) $250 per bed or
unit (as applicable) of such Facility per annum and (y) the amount
identified in the relevant Engineering Report(s) as the annual amount
needed to be reserved for ongoing capital expenditures.
"Capital Reserve Monthly Installment" means, with
respect to a Facility, an amount equal to one-twelfth (1/12th) of the
Capital Reserve Amount.
"Capital Reserve Sub-Account" means the
Sub-Account of the relevant Cash Collateral Account established and
maintained pursuant to Section 2.12 relating to the payment of the
relevant Capital Improvement Costs.
"Cash Collateral Account" has the meaning provided
in Section 2.12(b).
"CC Account Agreement" has the meaning provided in
Section 2.13(c).
"Cedar Grove Facility" means the Facility owned by
Pompton.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended, and as it may be further amended from time to time, any
successor statutes thereto, and applicable U.S. Department of Treasury
regulations issued pursuant thereto in temporary or final form.
"Collateral" means, collectively, the Land,
Improvements, Equipment, Rents, Leases, Accounts, Account Collateral,
General Intangibles, Instruments, Inventory and Money, and (to the full
extent assignable) Permits and all proceeds of the foregoing, all
whether now owned or hereafter acquired and all other property which is
or hereafter may become subject to a Lien in favor of Lender as security
for the Loan.
"Collateral Security Instrument" means any right,
document or instrument, other than a Mortgage, given as security for the
Loan, including, without limitation, the Assignments of Leases, the
Assignments of Agreements and the Manager's Subordinations, as same may
thereafter from time to time be supplemented, amended, extended or
modified.
"Collection Account" has the meaning provided in
Section 2.12(a).
"Collection Account Bank" means, with respect to a
Facility, the applicable bank for such Facility and any successor bank
hereafter selected by Borrower and approved by Lender. Each Collection
Account Bank (i) shall be a financial institution within reasonable
proximity of such Facility with respect to which it will hold accounts
and (ii) shall meet the rating requirements set forth in clause (i) of
the definition of "Eligible Account".
"Commitment Letters" means collectively the letter
from Lender to Xxxxxxx dated October 13, 1995 and the letter from Lender
to TNS Nursing Homes, Inc., dated October 20, 1995, which letters were
accepted by Borrowers in writing.
"CON" has the meaning set forth in Section
4.1(b)(AG)(ii).
"Condemnation Proceeds" has the meaning provided
in Section 2.12(h).
"Contingent Obligation" means any obligation of
any Borrower guaranteeing any indebtedness, leases, dividends or other
obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of any Borrower, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or
supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the
primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation (including any master lease) or (iv) otherwise to
assure or hold harmless the owner of such primary obligation against
loss in respect thereof, except the Loan and indemnities required by
Title Insurer in connection with the issuance of the Title Insurance
Policies. The amount of any Contingent Obligation shall be deemed to be
an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made
(taking into account the non-recourse or limited recourse nature of such
Contingent Obligation, if applicable) or, if not stated or determinable,
the maximum reasonably anticipated liability in respect thereof
(assuming that the relevant Borrower is required to perform thereunder)
as determined by Lender in good faith (taking into account the
non-recourse or limited recourse nature of such Contingent Obligation,
if applicable).
"Current Interest Accrual Period" has the meaning
provided in Section 2.12(g).
"Current Rate" means, with respect to each
principal payment, the Ten-Year Treasury Rate as of such date of
payment.
"Debt Service" means, for any period (and
calculated either for a Facility or all Facilities) the principal,
interest payments, Default Rate interest, Late Charges, Yield
Maintenance Premium and Hedge Loss, if any, that would accrue or be due
and payable in accordance with the Loan Documents during such period.
"Debt Service Payment Sub-Account" means the
Sub-Account of the relevant Cash Collateral Account established and
maintained pursuant to Section 2.12 relating to the payment of the
relevant Debt Service.
"Deed of Trust Trustee" means each of the
trustees, if any, under the Mortgages.
"Default" means the occurrence of any event which,
but for the giving of notice or the passage of time, or both, would be
an Event of Default.
"Default Collateral" has the meaning provided in
Section 8.14.
"Default Rate" means the per annum interest rate
equal to the lesser of (i) the Maximum Amount or (ii) the greater of (x)
the Interest Rate plus five percent (5%) or (y) the Prime Rate of
Interest (as of the date that Lender is first entitled to collect the
applicable Default Rate interest hereunder) plus five percent (5%).
"DOH" has the meaning set forth in Section
4.1(b)(AG)(i).
"Eligible Account" means (i) an account maintained
with a federal or state chartered depository institution or trust
company, whose (x) commercial paper, short-term debt obligations or
other short-term deposits are rated at least A-1 by each Rating Agency,
if the deposits in such account are to be held in such account for
thirty (30) days or less or (y) long-term unsecured debt obligations are
rated by each Rating Agency as at least AA-, if the deposits are to be
held in such account for more than thirty (30) days, (ii) a segregated
trust account maintained with the trust department of a federal or state
chartered depository institution or trust company acting in its
fiduciary capacity which institution or trust company is subject to
regulations regarding fiduciary funds on deposit substantially similar
to 12 C.F.R. Section 9.10(b) or (iii) prior to Securitization, an account
maintained at the Bank.
"Engineer" means any reputable Independent
engineer, properly licensed in the relevant jurisdiction and approved by
Lender, in Lender's discretion.
"Engineering Reports" means the structural
engineering reports with respect to each Facility prepared by an
Engineer and delivered to Lender in connection with the Loan and any
amendments or supplements thereto delivered to Lender.
"Environmental Claim" means any written request
for information by a Governmental Authority, or any written notice,
notification, claim, administrative, regulatory or judicial action,
suit, judgment, demand or other written communication by any Person or
Governmental Authority requiring, alleging or asserting liability with
respect to any Borrower, or any Facility, whether for damages,
contribution, indemnification, cost recovery, compensation, injunctive
relief, investigatory, response, remedial or cleanup costs, damages to
natural resources, personal injuries, fines or penalties arising out of,
based on or resulting from (i) the presence, Use, Release or threatened
Release into the environment of any Hazardous Substance originating at
or from, or otherwise affecting, a Facility, (ii) any fact,
circumstance, condition or occurrence forming the basis of any
violation, or alleged violation, of any Environmental Law by any
Borrower or otherwise affecting a Facility or (iii) any alleged injury
or threat of injury to health, safety or the environment by any Borrower
or otherwise affecting a Facility.
"Environmental Laws" means any and all applicable
federal, state and local laws, rules, regulations or municipal
ordinances, each as amended from time to time, any judicial or
administrative orders, decrees, settlement agreements or judgments
thereunder, and any permits, approvals, licenses, registrations, filings
and authorizations, in each case as in effect as of the relevant date,
relating to the environment, health or safety, or the Release or
threatened Release of Hazardous Substances into the indoor or outdoor
environment including, without limitation, ambient air, soil, surface
water, ground water, wetlands, land or subsurface strata or otherwise
relating to the presence or Use of Hazardous Substances.
"Environmental Reports" means, with respect to
each Facility, the environmental audit reports delivered to Lender in
connection with the Loan for a Facility and any amendments or
supplements thereto delivered to Lender.
"Equipment" means, with respect to each Borrower,
to the extent such Borrower has any rights, title or interests in or to
any of the following, all fixtures, appliances, machinery, furniture,
furnishings, decorations, tools and supplies, now owned or hereafter
acquired, including but not limited to, all beds, linen, radios,
televisions, carpeting, telephones, cash registers, computers, lamps,
glassware, restaurant and kitchen equipment, all medical, dental,
rehabilitation, therapeutic and paramedic equipment and supplies, any
building equipment, including but not limited to, all heating, lighting,
incinerating, waste removal and power equipment, engines, pipes, tanks,
motors, conduits, switchboards, security and alarm systems, plumbing,
lifting, cleaning, fire prevention, fire extinguishing, refrigeration,
ventilating, and communications apparatus, air cooling and air
conditioning apparatus, escalators, elevators, ducts, and compressors,
materials and supplies, and all other machinery, apparatus, equipment,
fixtures and fittings now owned or hereafter acquired by such Borrower,
or by the Operator, if any, of such Borrower's Facility, any portion
thereof or any appurtenances thereto, together with all additions,
replacements, parts, fittings, accessions, attachments, accessories,
modifications and alterations of any of the foregoing, to the extent
relating to such Borrower's Facility, provided, however, that, with
respect to any items which are leased and not owned by a Borrower, the
Equipment shall include the leasehold interest only of such Borrower,
together with any options to purchase any of said items and any
additional or greater rights with respect to such items which such
Borrower may hereafter acquire. In addition to the foregoing, the term
"Equipment" shall include the meaning such term has in the UCC.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and the regulations
promulgated thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and, as of the relevant date, any
subsequent provisions of ERISA, amendatory thereof, supplemental thereto
or substituted therefor.
"ERISA Affiliate" means any corporation or trade
or business that is a member of any group of organizations (i) described
in Section 414(b) or (c) of the Code of which any Borrower is a member,
and (ii) solely for purposes of potential liability under Section
302(c)(11) of ERISA and Section 412(c)(11) of the Code and the lien
created under Section 302(f) of ERISA and Section 412(n) of the Code,
described in Section 414(m) or (o) of the Code of which any Borrower is
a member.
"Event of Default" has the meaning set forth in
Section 7.1.
"Facility" means, with respect to each Borrower,
such Borrower's Collateral and the Collateral relating to such Borrower
unless released pursuant to the terms of this Agreement and "Facilities"
means every Facility.
"Fifteen-Year Treasury Rate" means the yield,
calculated by linear interpolation (rounded to three decimal places) of
the yields of United States Treasury Constant Maturities with terms (one
longer and one shorter) most nearly approximating that of noncallable
United States Treasury obligations having maturities as close as
possible to 15 years from the Closing Date, as determined by Lender on
the basis of Federal Reserve Statistical Release H.15-Selected Interest
Rates under the heading U.S. Governmental Security/Treasury Constant
Maturities, or other recognized source of financial market information
selected by Lender.
"Fiscal Year" means the 12-month period ending on
December 31 of each year or such other fiscal year of a Borrower as a
Borrower may select from time to time with the prior consent of Lender
(which consent shall not be unreasonably withheld); provided, however,
that all Borrowers shall always have the same Fiscal Year.
"GAAP" means generally accepted accounting
principles consistently applied in the United States of America as of
the date of the applicable financial report.
"General Intangibles" means, with respect to each
Borrower, to the extent such Borrower has any rights, title, or
interests in or to any of the following, all intangible personal
property of such Borrower or of the Operator, if any, of such Borrower's
Facility arising out of or directly relating to such Borrower's Facility
(other than Accounts, Rents, Instruments, Inventory, Money and Permits),
including, without limitation, things in action, settlements, judgments,
contract rights, rights to performance (including, without limitation,
rights under warranties) refunds of real estate taxes and assessments
and other rights to payment of Money, copyrights, trademarks and patents
now existing or hereinafter in existence. In addition to the foregoing,
the term "General Intangibles" shall include the meaning as such term
has in Section 9-106 of the UCC.
"Governmental Authority" means any national or
federal government, any state, regional, local or other political
subdivision thereof with jurisdiction and any Person with jurisdiction
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Gross Revenue" means, with respect to a Facility,
the total dollar amount of all income and receipts whatsoever received
by Operator, if any, and, without duplication, the relevant Borrower in
the ordinary course of its business with respect to such Borrower's
Facility, including, without limitation, all Rents (but excluding
security deposits) and Money.
"Hazardous Substance" means, collectively, (i) any
petroleum or petroleum products or waste oils, explosives, radioactive
materials, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls ("PCBs"), lead in drinking water, and lead-based paint, the
presence, generation, use, transportation, storage or disposal of or
exposure to which (x) is regulated or could lead to liability under any
Environmental Law or (y) is subject to notice or reporting requirements
under any Environmental Law, (ii) any chemicals or other materials or
substances which are now or hereafter become defined as or included in
the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous wastes," "restricted hazardous wastes,"
"toxic substances," "toxic pollutants," "contaminants," "pollutants" or
words of similar import under any Environmental Law and (iii) any other
chemical or any other material or substance, exposure to which is now or
hereafter prohibited, limited or regulated under any Environmental Law.
"Hedge Loss" means the product of (i) the amount
of the relevant Principal Indebtedness being paid by P.V.M. multiplied
by (ii) the Modified Duration (determined as of the date of such
principal payment) multiplied by (iii) the Rate Difference (determined
as of the date of such principal payment).
"Impositions" means all taxes (including, without
limitation, all real estate, ad valorem, sales (including those imposed
on lease rentals), use, single business, gross receipts, value added,
intangible transaction privilege, privilege, license or similar taxes),
assessments (including, without limitation, to the extent not discharged
prior to the Closing Date, all assessments for public improvements or
benefits, whether or not commenced or completed within the term of the
Related Mortgage), ground rents, water, sewer or other rents and
charges, excises, levies, fees (including, without limitation, license,
permit, inspection, authorization and similar fees), and all other
governmental charges, in each case whether general or special, ordinary
or extraordinary, foreseen or unforeseen, of every character in respect
of a Facility or in respect of Operator, if any, (including all interest
and penalties thereon), which at any time prior to, during or in respect
of the term hereof may be assessed or imposed on or in respect of or be
a lien upon (i) a Borrower (including, without limitation, all income,
franchise, single business or other taxes imposed on such Borrower for
the privilege of doing business in the jurisdiction in which such
Facility, or any other Collateral, is located), an Operator, if any, or
Lender, (ii) a Facility, or any other Collateral or any part thereof, or
(iii) any occupancy, operation, use or possession of, or sales from, or
activity conducted on, or in connection with such Facility or the
leasing or use of such Facility or any part thereof, or the acquisition
or financing of the acquisition of such Facility by such Borrower.
Nothing contained in this Agreement shall be construed to require any
Borrower to pay any tax, assessment, levy or charge imposed on Lender,
in the nature of a franchise, capital levy, estate, inheritance,
succession, income or net revenue tax.
"Improvements" means, with respect to each
Facility, all buildings, structures and improvements of every nature
whatsoever situated on the Land on the Closing Date or thereafter,
including, but not limited to, to the extent of any Borrower's right,
title or interest therein, all gas and electric fixtures, radiators,
heaters, engines and machinery, boilers, ranges, elevators and motors,
plumbing and heating fixtures, antennas, carpeting and other floor
coverings, water heaters, awnings and storm sashes, and cleaning
apparatus which are or shall be attached to the Land or said buildings,
structures or improvements.
"Indebtedness" means the Principal Indebtedness,
together with all accrued and unpaid interest thereon and all other
obligations and liabilities due or to become due to Lender pursuant
hereto, under the Notes or in accordance with any of the other Loan
Documents, and all other amounts, sums and expenses paid by or payable
to Lender hereunder or pursuant to the Notes or any of the other Loan
Documents.
"Independent" means, when used with respect to any
Person, a Person who (i) does not have any direct financial interest or
any material indirect financial interest in any Borrower or any Operator
or in any Affiliate of any Borrower or of any Operator, and (ii) is not
connected with any Borrower or any Operator or any Affiliate of any
Borrower or any Operator as an officer, employee, promoter, underwriter,
trustee, partner, member, manager, creditor, director or person
performing similar functions.
"Independent Director" means a duly appointed
member of the board of directors of the relevant entity who shall not
have been, at the time of such appointment or at any time in the
preceding five (5) years, (a) a direct or indirect legal or beneficial
owner in such entity or any of its affiliates, (b) a creditor, supplier,
employee, officer, director, manager or contractor of such entity or any
of its affiliates, or (c) a person who controls such entity or its
affiliates.
"Initial Basic Carrying Costs Amount" means
$48,006.00 for the Northfield Manor Facility, $11,500.00 for the Cedar
Grove Manor Facility, $67,638.00 for the King Xxxxx Xxxxxx Facility, and
$87,856.00 for the Xxxxxxx Facility.
"Initial Capital Reserve Amount" means $69,500 for
the Northfield Manor Facility, $500 for the Cedar Grove Manor Facility,
$1500 for the King Xxxxx Xxxxxx Facility and $625 for the Xxxxxxx
Facility.
"Instruments" means, with respect to each
Borrower, to the extent such Borrower has any rights, title, or
interests in or to any of the following, all instruments, chattel paper,
documents or other writing obtained by such Borrower or by the Operator,
if any, of such Borrower's Facility from or in connection with the
operation of such Borrower's Facility evidencing a right to the payment
of Money, including, without limitation, all notes, drafts, acceptances,
documents of title, and policies and certificates of insurance,
including but not limited to, liability, hazard, rental and credit
insurance, guarantees and securities, now or hereafter received by such
Borrower or by the Operator, if any, of such Borrower's Facility or in
which such Borrower or Operator, if any, has or acquires an interest
pertaining to the foregoing. In addition to the foregoing, "Instruments"
shall include the meaning such term has in Section 9-105 of the UCC.
"Insurance Proceeds" has the meaning provided in
Section 2.12(h).
"Insurance Requirements" means all material terms
of any insurance policy required pursuant to the Loan Documents and all
material regulations and then current standards applicable to or
affecting the applicable Facility or any part thereof or any use or
condition thereof, which may, at any time, be recommended by the Board
of Fire Underwriters, if any, having jurisdiction over such Facility, or
such other body exercising similar functions.
"Interest Accrual Period" means each period of
time running from and including the eleventh day of a calendar month to
and including the tenth day of the following calendar month during the
term of the Loan, provided, however, that the first Interest Accrual
Period for the Loan shall be from and including the Closing Date to but
not including the first Payment Date. Interest for the first Interest
Accrual Period shall be paid on the Closing Date.
"Interest Rate" means 9.86% per annum.
"Inventory" means, with respect to each Borrower,
to the extent such Borrower has any rights, title or interest in or to
any of the following, all goods now owned or hereinafter acquired by
such Borrower or the Operator, if any, of such Borrower's Facility
intended for sale or lease, or to be furnished under contracts of
service by such Borrower or the Operator, if any, in connection with
such Borrower's Facility, including without limitation, all inventories
of food and beverages held by such Borrower or Operator, if any, for
sale or use at or from such Borrower's Facility, and all other such
goods, wares, merchandise, and materials and supplies of every nature
held by such Borrower or Operator, if any, for sale to or for
consumption by guests of such Facility and others, and all such other
goods returned to or repossessed by such Borrower or Operator, if any.
In addition to the foregoing, the term "Inventory" shall include the
meaning as such term has in Section 9-109 of the UCC.
"Issuer" means any issuer of securities issued in
connection with a Securitization.
"Xxxx Xxxxx Facility" means the Facility owned by
PVM.
"Land" has the meaning provided in the Mortgages.
"Late Charge" means the lesser of (i) five percent
(5%) of any unpaid amount and (ii) the maximum late charge permitted to
be charged under applicable laws of the State of New York.
"Leases" means, with respect to each Borrower, all
leases (including, without limitation, any Master Lease) and other
agreements or arrangements affecting the use or occupancy of all or any
portion of such Borrower's Facility now in effect or hereafter entered
into (including, without limitation, all patient admissions and resident
care agreements, lettings, subleases, licenses, concessions, tenancies
and other occupancy agreements covering or encumbering all or any
portion of such Borrower's Facility), together with any guarantees,
supplements, amendments, modifications, extensions and renewals of the
same, and all additional remainders, reversions, and other rights and
estates appurtenant thereto.
"Legal Requirements" means all governmental
statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions of Governmental Authorities affecting either an
applicable Facility or any part thereof or the ownership, construction,
use, alteration or operation thereof, or any part thereof, enacted and
in force as of the relevant date, and all Permits and regulations
relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instruments, either of record or known to
any Borrower, at any time in force affecting such Facility or any part
thereof, including, without limitation, any which (i) may require
repairs, modifications, or alterations in or to such Facility or any
part thereof, or (ii) in any way limit the use and enjoyment thereof.
"Lender" has the meaning provided in the first
paragraph of this Agreement.
"Lender's Brokers" has the meaning set forth in
Section 8.21.
"Letters of Instructions" has the meaning set
forth in Section 2.12(b).
"Licenses" has the meaning provided in Section
4.1(d)(AG)(ii).
"Lien" means any mortgage, deed of trust, lien
(statutory or other), pledge, easement, restrictive covenant,
hypothecation, assignment, preference, priority, security interest, or
any other encumbrance or charge on or affecting a Facility or any
portion thereof or any Collateral or any Borrower, or any interest
therein, including, without limitation, any conditional sale or other
title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, the filing of any
financing statement or similar instrument under the UCC or comparable
law of any other jurisdiction, domestic or foreign, and mechanic's,
materialmen's and other similar liens and encumbrances.
"Loan" has the meaning provided in the Recitals
hereto.
"Loan Amount" has the meaning provided in the
Recitals hereto.
"Loan Documents" means this Agreement, the Notes,
the Mortgages, the Assignments of Leases, the Assignments of Agreements,
the Manager's Subordinations, the Commitment Letters, the Cash
Collateral Account Agreements, and all other agreements, instruments,
certificates and documents delivered by or on behalf of any Borrower or
any Affiliate to evidence or secure the Loan or otherwise in
satisfaction of the requirements of this Agreement, the Mortgages or the
other documents listed above.
"Locked Rate" means, as of the Closing Date, the
Fifteen-Year Treasury Rate.
"Loss Proceeds" has the meaning provided in
Section 2.12(h).
"Management Agreement" means, with respect to a
Facility, the Management Agreement entered into between a Manager and
the relevant Borrower pertaining to the management of such Facility in
the form attached to the form of Manager's Subordination which is
attached hereto as Exhibit C or such other form as may be approved by
Lender in Lender's discretion, and "Management Agreements" means all
such agreements collectively.
"Manager" means TNS Nursing Homes, Inc., a
Delaware corporation, or any successor or assignee, as manager of a
Facility or all of the Facilities, as the case may be, which successor
or assignee shall be acceptable to Lender in Lender's discretion.
"Manager's Subordination" means, with respect to a
Facility, the Manager's Consent and Subordination of Management
Agreement in the form attached hereto as Exhibit C, (conformed to local
lending practices in the jurisdiction in which the relevant Facility is
located including, without limitation, additional remedies available to
lenders in such jurisdiction), dated as of the Closing Date, executed by
a Manager, the relevant Borrower and Lender, as the same may thereafter
from time to time be supplemented, amended, modified or extended by one
or more written agreements supplemental thereto, and "Manager's
Subordinations" means all such agreements collectively provided,
however, that in the event that the Management Agreement deviates from
the form attached hereto as Exhibit C, and Lender approves such
deviation, Lender shall have the right to modify the form of Manager's
Subordination to the extent reasonably necessary to reflect such
deviations.
"Master Lease" means, with respect to the Xxxxxxx
Facility, that certain Lease between Xxxxxxx and the Operator, if any,
for the lease of all or a part of such Facility, together with any
guarantees, supplements, amendments, modifications, extensions, and
renewals of the same, and all additional remainders, reversions, and
other rights and estates appurtenant thereto, and "Master Leases" means
all such leases collectively.
"Material Adverse Effect" means a material adverse
effect upon (i) the business or the financial position or results of
operation of any Borrower, (ii) the ability of any Borrower to perform,
or of Lender to enforce, any of the Loan Documents, (iii) the value of
(x) the Collateral taken as a whole or (y) any Facility or (iv) the
ability of the Operator, if any, to perform Operator's obligations under
the relevant Master Lease.
"Material Lease" has the meaning provided in
Section 3.1(a)(U).
"Maturity Date" means November 11, 2010 or such
earlier date resulting from acceleration of the Indebtedness by Lender.
"Maximum Amount" means the maximum rate of
interest designated by applicable laws of the State of New York.
"Modified Duration" means the modified duration
(calculated to six decimal places) for a Ten-Year Treasury Rate.
"Money" means, with respect to each Borrower, to
the extent such Borrower has any rights, title, or interests in or to
any of the following, all moneys, cash, rights to deposit or savings
accounts, credit card receipts or other items of legal tender obtained
from or for use in connection with the ownership or operation of such
Borrower's Facility.
"Mortgage" means, with respect to a Facility, a
first priority Mortgage, Assignment of Rents, Security Agreement and
Fixture Filing, a first priority Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing or such other comparable document
which is customarily used by prudent lenders in the jurisdiction in
which the relevant Collateral is located, in the form attached hereto as
Exhibit D (conformed to local lending practices in the jurisdiction in
which the relevant Facility is located including, without limitation
additional remedies available to lenders in such jurisdiction) dated as
of the Closing Date, granted by a Borrower to Lender (or, in the case of
a Deed of Trust, to Deed of Trust Trustee for the benefit of Lender)
with respect to such Facility as security for the Loan, as same may
thereafter from time to time be supplemented, amended, modified or
extended by one or more written agreements supplemental thereto, but
shall exclude any such instrument released by Lender pursuant to Section
2.11, and "Mortgages" means all such instruments collectively.
"Mortgaged Property" means, at any time, the
Facility encumbered by the Related Mortgage and "Mortgaged Properties"
means, at any time, the Facilities encumbered by the Mortgages.
"Multiemployer Plan" means a multiemployer plan
defined as such in Section 3(37) of ERISA to which contributions have
been made by any Borrower or any ERISA Affiliate and which is covered by
Title IV of ERISA.
"Net Operating Income" means for any period (and
calculated either for a Facility or for all Facilities) the excess, if
any, of Operating Income for such period over Operating Expenses for
such period.
"Net Proceeds" means the sum of any amounts which
Lender elects to apply toward reduction of Principal Indebtedness after
the occurrence and continuance of an Event of Default pursuant to
Section 2.8 plus (to the extent not already included in the foregoing)
(i) either (x) the purchase price (at foreclosure or otherwise) actually
received by Lender from a third party purchaser with respect to one or
more Facilities as a result of the exercise by Lender of its rights,
powers, privileges and other remedies after the occurrence of an Event
of Default or (y) in the event that Lender is the purchaser at
foreclosure of one or more of such Facilities, the fair market value of
such Facilities, as determined by Lender in good faith, or, at a
Borrower's request and expense, an Appraiser, in either case less (ii)
all costs and expenses, including, without limitation, all attorneys'
fees and disbursements and any closing costs, brokerage fees, sheriff's
or xxxxxxxx'x commissions or the like, if applicable, incurred by Lender
in connection with the exercise of such remedies; provided, however,
that such costs and expenses shall not be deducted to the extent such
amounts previously have been added to the Indebtedness in accordance
with the terms of the Mortgages or applicable law.
"Northfield Manor Facility" means the Facility
owned by Jayber.
"Xxxxxxx Facility" means the Facility owned by
Xxxxxxx.
"Note" means and refers to, with respect to each
Borrower, the promissory note, in the form attached hereto as Exhibit E,
dated the Closing Date, made by a Borrower to Lender pursuant to this
Agreement as such note may be modified, amended, supplemented, extended
or consolidated in writing, and any note(s) issued in exchange therefor
or in replacement thereof, and "Notes" means all such promissory notes
and instruments collectively.
"Officer's Certificate" means a certificate by a
Borrower which is signed by an authorized general partner, officer or
managing member of such Borrower.
"Operating Expenses" means, for any period, for
any Borrower, all expenditures by such Borrower as and to the extent
required to be expensed under GAAP during such period in connection with
the ownership, operation, maintenance, repair or leasing of the
Facilities (or of a Facility), and all expenditures of Operator, if any,
to the extent required to be expensed under GAAP during such period in
connection with such Operator's activities as tenant and operator of the
Xxxxxxx Facility, including, without limitation:
(i) expenses in connection with cleaning,
repair and maintenance;
(ii) wages, benefits, payroll taxes, uniforms,
insurance costs and all other related expenses for
employees of such Borrower or any Affiliate engaged in
repair, operation, maintenance or service to patrons;
(iii) any management fees and expenses;
(iv) the cost of all electricity, oil, gas, water,
steam, heat, ventilation, air conditioning and any other
energy, utility or similar item and overtime services;
(v) the cost of cleaning supplies;
(vi) Impositions (but excluding income taxes of
such Borrower or Operator, if any, or any partner, member
or shareholder thereof);
(vii) business interruption, liability, casualty
and fidelity insurance premiums (the cost of which, in the
case of any policies covering more than one Facility,
shall be allocated among the Facilities pro rata in
proportion to the insured value of the Facilities covered
by such policies);
(viii) legal, accounting and other professional
fees and expenses including, without limitation,
collection costs and expenses;
(ix) costs and expenses of security and
security systems;
(x) trash removal and exterminating
costs and expenses;
(xi) advertising and marketing costs;
(xii) costs of environmental audits and monitoring,
environmental investigation, remediation or other response
actions or any other expenses incurred with respect to
compliance with Environmental Laws; and
(xiii) all other ongoing expenses which in
accordance with GAAP are required to be or are included in
such Borrower's and Operator's, if any, annual financial
statements as operating expenses of the Facilities (or of
a Facility).
Notwithstanding the foregoing, Operating Expenses shall not include (w) any
Capital Improvement Costs, (x) depreciation, amortization and other non-cash
charges, (y) any extraordinary items not normally considered an operating
expense in accordance with GAAP or (z) Debt Service and Operator Debt Service,
if any. Operating Expenses shall be calculated in accordance with GAAP.
"Operating Income" means, for any period, for any
Borrower, all regular ongoing income during such period of the Operator,
if any, together with all regular ongoing income of such Borrower from
any source other than such Operator, if any, arising from the ownership
or during such period from the operation of the Facilities (or of a
Facility), including, without limitation:
(i) all amounts payable as Rents and all
other amounts under Leases or other agreements relating
to the Facilities (or a Facility);
(ii) business interruption proceeds; and
(iii) all other amounts which in accordance with
GAAP are required to be or are included in such Borrower's
or such Operator's, if any, annual financial statements as
operating income, except that, in the case of such
Borrower, such other amounts shall only be included if
from any source other than such Operator, if any, of the
Facilities (or of a Facility).
Notwithstanding the foregoing, Operating Income shall not include (v) any
Condemnation Proceeds or Insurance Proceeds, (w) any proceeds resulting from the
sale, exchange, transfer, financing or refinancing of all or any portion of one
or more Facilities, (x) any Rent attributable to a Lease prior to the date on
which the actual payment of Rent is required to be made thereunder, or (y)
security deposits received from tenants until forfeited. Operating Income shall
be calculated in accordance with GAAP.
"Operator" means Senior Care Foundation, Inc., a
non-profit New Jersey corporation, or any successor or assignee, as
operator of the Xxxxxxx Facility, which successor or assignee shall be
acceptable to Lender in Lender's discretion.
"Operator Debt Service" means, for any period (and
calculated either for a Facility or all Facilities), any principal or
interest payments that would accrue or be due and payable by Operator
during such period under any loan.
"Other Borrowings" means, with respect to a
Borrower, without duplication (but not including the Indebtedness or any
Transaction Costs payable in connection with the Transactions) (i) all
indebtedness of such Borrower for borrowed money or for the deferred
purchase price of property or services, (ii) all indebtedness of such
Borrower evidenced by a note, bond, debenture or similar instrument,
(iii) the face amount of all letters of credit issued for the account of
such Borrower and, without duplication, all unreimbursed amounts drawn
thereunder, (iv) all indebtedness of such Borrower secured by a Lien on
any property owned by such Borrower whether or not such indebtedness has
been assumed, (v) all Contingent Obligations of such Borrower, and (vi)
all payment obligations of such Borrower under any interest rate
protection agreement (including, without limitation, any interest rate
swaps, caps, floors, collars or similar agreements) and similar
agreements.
"Payment Date" has the meaning provided in Section
2.5.
"PBGC" means the Pension Benefit Guaranty
Corporation established under ERISA, or any successor thereto.
"PCBs" has the meaning provided in the definition
of "Hazardous Substance."
"Permits" means, with respect to a Facility, all
licenses, registrations, permits, allocations, filings, authorizations,
approvals and certificates used in connection with the ownership,
operation, construction, renovation, use or occupancy of such Facility,
including, without limitation, building permits, business licenses,
state health department licenses, food service licenses, liquor
licenses, licenses to conduct business, and all such other permits,
licenses and rights, obtained from any Governmental Authority or private
Person concerning ownership, operation, renovation use or occupancy of
such Facility.
"Permitted Encumbrances" means, with respect to a
Facility, collectively, (i) the Lien created by the Related Mortgage or
the other Loan Documents of record, (ii) all Liens and other matters
disclosed in the applicable Title Insurance Policies concerning such
Facility or any part thereof which have been approved by Lender in
Lender's discretion, (iii) Liens, if any, for Impositions imposed by any
Governmental Authority not yet due or delinquent or being contested in
good faith and by appropriate proceedings in accordance with the Related
Mortgage, (iv) subject to Section 2.06(b) of the Related Mortgage, any
mechanics' and materialmen's Liens deleted from the exceptions to, or
affirmatively insured against collection with respect to, the Facility
under the applicable Title Insurance Policies, and (v) without limiting
the foregoing, any and all governmental, public utility and private
restrictions, covenants, reservations, easements, licenses or other
agreements of an immaterial nature which may be granted by such Borrower
after the Closing Date and which do not affect (A) the ability of such
Borrower to pay any of its obligations to any Person as and when due,
(B) the marketability of title to such Facility, (C) the fair market
value of such Facility, or (D) the use or operation of such Facility as
of the Closing Date and thereafter, (vi) [intentionally deleted], and
(vii) [intentionally deleted].
"Permitted Investments" means any one or more of
the following obligations or securities:
(i) obligations of, or obligations fully guaranteed
as to payment of principal and interest by, (x) the United
States or any agency or instrumentality thereof provided such
obligations are backed by the full faith and credit of the
United States of America including, without limitation,
obligations of: the U.S. Treasury (all direct or fully
guaranteed obligations), the Farmers Home Administration
(certificates of beneficial ownership), the General Services
Administration (participation certificates), the U.S. Maritime
Administration (guaranteed Title XI financing), the Small
Business Administration (guaranteed participation certificates
and guaranteed pool certificates), the U.S. Department of
Housing and Urban Development (local authority bonds) and the
Washington Metropolitan Area Transit Authority (guaranteed
transit bonds); provided, however, that the investments
described in this clause must (i) have a predetermined fixed
dollar of principal due at maturity that cannot vary or
change, (ii) if rated by Standard & Poor's Rating Services,
must not have an "r" highlighter affixed to their rating,
(iii) if such investments have a variable rate of interest,
such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must prove
proportionately with that index, and (iv) such investments may
not be subject to liquidation prior to their maturity;
(ii) Federal Housing Administration debentures;
(iii) obligations of the following United States
government sponsored agencies: Federal Home Loan Mortgage
Corp. (debt obligations), the Farm Credit System (consolidated
systemwide bonds and notes), the Federal Home Loan Banks
(consolidated debt obligations), the Federal National Mortgage
Association (debt obligations), the Student Loan Marketing
Association (debt obligations), the Financing Corp. (debt
obligations), and the Resolution Funding Corp. (debt
obligations); provided, however, that the investments
described in this clause must (i) have a predetermined fixed
dollar of principal due at maturity that cannot vary or
change, (ii) if rated by Standard & Poor's Rating Services,
must not have an "r" highlighter affixed to their rating,
(iii) if such investments have a variable rate of interest,
such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must prove
proportionately with that index, and (iv) such investments may
not be subject to liquidation prior to their maturity;
(iv) federal funds, unsecured certificates of
deposit, time deposits, bankers' acceptances and repurchase
agreements of any bank, the short term obligations of which
are rated in the highest short term rating category by the
Rating Agencies; provided, however, that the investments
described in this clause must (i) have a predetermined fixed
dollar of principal due at maturity that cannot vary or
change, (ii) if rated by Standard & Poor's Rating Services,
must not have an "r" highlighter affixed to their rating,
(iii) if such investments have a variable rate of interest,
such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must prove
proportionately with that index, and (iv) such investments may
not be liquidated prior to their maturity;
(v) fully Federal Deposit Insurance
Corporation-insured demand and time deposits in or
certificates of deposit of, or bankers' acceptances issued by,
any bank or trust company, savings and loan association or
savings bank; provided, however, that the investments
described in this clause must (i) have a predetermined fixed
dollar of principal due at maturity that cannot vary or
change, (ii) if rated by Standard & Poor's Rating Services,
must not have an "r" highlighter affixed to their rating,
(iii) if such investments have a variable rate of interest,
such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must prove
proportionately with that index, and (iv) such investments may
not be subject to liquidation prior to their maturity;
(vi) debt obligations rated by the Rating Agencies in
their highest long-term unsecured rating category; provided,
however, that the investments described in this clause must
(i) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (ii) if rated by Standard
& Poor's Rating Services, must not have an "r" highlighter
affixed to their rating, (iii) if such investments have a
variable rate of interest, such interest rate must be tied to
a single interest rate index plus a fixed spread (if any) and
must prove proportionately with that index, and (iv) such
investments may not be subject to liquidation
prior to their maturity;
(vii) commercial paper (including both
non-interest-bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not more
than one year after the date of issuance thereof) that is
rated by the Rating Agencies in their highest short-term
unsecured debt rating; provided, however, that the investments
described in this clause must (i) have a predetermined fixed
dollar of principal due at maturity that cannot vary or
change, (ii) if rated by Standard & Poor's Rating Services,
must not have an "r" highlighter affixed to their rating,
(iii) if such investments have a variable rate of interest,
such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must prove
proportionately with that index, and (iv) such investments may
not be subject to liquidation prior to their maturity;
(viii) units of taxable money market funds rated AAAm
or AAAm-G by Standard & Poor's Rating Services and in the
highest rating category by the other Rating Agencies (if rated
by such other Rating Agencies); and
(ix) any other demand, money market or time deposit,
or any other obligation, security or investment, that before
the Securitization Closing Date may be acceptable to Lender
(as evidenced in writing) and, after the Securitization
Closing Date, the Rating Agencies have confirmed in writing
would not result in a downgrade, withdrawal or qualification
of the then-applicable ratings assigned to the securities
issued in a Securitization;
provided, however, that no obligation or security shall be a Permitted
Investment if (x) the right to receive principal and interest payments derived
from the underlying investment provides a yield to maturity in excess of 120% of
the yield to maturity at par of such underlying investment, or (y) such
investments have a maturity in excess of one year.
"Permitted Transfers" shall mean (i) Permitted Encumbrances;
(ii) all transfers, conveyances or sales of personalty in the ordinary course of
business; (iii) all transfers of worn out or obsolete furnishings, fixtures or
equipment that are replaced with equivalent property; (iv) all resident care
agreements in the ordinary course of business; (v) a Transfer of the Mortgaged
Property to a Person which complies with the definitions of Single Purpose
Entity provided that prior to such Transfer (a) prior to a Securitization,
Lender shall have consented to such Transfer in its sole discretion, (b) after a
Securitization, Lender shall have consented to such Transfer in its sole
discretion and the Rating Agencies then rating any securities issued in
connection with a Securitization shall have confirmed in writing that such
Transfer shall not result in a downgrade, withdrawal or qualification of the
then-applicable ratings assigned to any securities issued in connection with
such Securitization, (c) acceptable opinions relating to such Transfer shall
have been delivered by Borrower to the Rating Agencies then rating any
securities issued in connection with a Securitization and Lender, (d) the
relevant Borrower pays to the Lender an assumption fee equal to one percent (1%)
of the Principal Indebtedness, and (e) the transferee executes assumption
agreements and such other agreements as Lender may require; and (vi) the initial
signing of any Master Lease (but not any amendments thereto).
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, estate, trust, unincorporated
association, any federal, state, county or municipal government or any bureau,
department or agency thereof and any fiduciary acting in such capacity on behalf
of any of the foregoing.
"Plan" means an employee benefit or other plan established
or maintained by Borrower or any ERISA Affiliate and that is covered by Title IV
of ERISA, other than a Multiemployer Plan.
"Pooling and Servicing Agreement" means a Pooling and
Servicing Agreement entered into by and among Lender, as depositor, a servicer
and a trustee with respect to a Securitization, and "Pooling and Servicing
Agreements" means all such agreements collectively.
"Prime Rate of Interest" means the prime rate as published
from time to time in the Money Rates table of The Wall Street Journal.
"Principal Indebtedness" means the principal amount of the
entire Loan outstanding as the same may be increased or decreased, as a result
of prepayment or otherwise, from time to time.
"Proceeds" means all proceeds whether cash or non-cash,
movable or immovable, tangible or intangible (including Insurance Proceeds and
Condemnation Proceeds), from the Collateral, including, without limitation,
those from the sale, exchange, transfer, collection, loss, damage, disposition,
substitution or replacement of any of the Collateral and all income, gain,
credit, distributions and similar items from or with respect to the Collateral.
In addition to the foregoing "Proceeds" shall also include the meaning as such
term has in Section 9-306 of the UCC.
"Proceeds Deficiency" has the meaning provided in
the definition of "Allocated Loan Amount".
"Rate Difference" means the percentage obtained by
subtracting (i) the Current Rate from (ii) the Locked Rate.
"Rating Agencies" means Fitch Investors Service,
Inc., Xxxxx'x Investors Service, Inc., Duff & Xxxxxx Credit Rating Co.
and Standard & Poor's Rating Services, or any successor thereto, and any
other nationally recognized statistical rating organization which may
hereafter be engaged by Lender or its designees.
"Recourse Distributions" has the meaning provided
in Section 8.14.
"Related Collateral Security Instrument" means, with respect
to a particular Facility, the Collateral Security Instrument relating to such
Facility.
"Related Mortgage" means, with respect to a particular
Facility, the Mortgage encumbering such Facility.
"Related Assignment of Agreements" means, with respect to a
particular Facility, the Assignment of Agreements relating to such Facility.
"Related Assignment of Leases" means, with respect to a
particular Facility, the Assignment of Leases relating to such Facility.
"Release" means any release, threatened release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Substances through ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata.
"Release Date" has the meaning provided in Section 2.11(a).
"Remedial Work" has the meaning provided in Section
5.1(D)(i).
"Rents" means, with respect to each Borrower and its
Facility, to the extent such Borrower has any rights, title or interests in or
to any of the following, all rents (whether denoted as advance rent, minimum
rent, percentage rent, additional rent or otherwise), issues, income, royalties,
profits, revenues, proceeds, bonuses, deposits (whether denoted as security
deposits or otherwise), lease termination fees or payments, rejection damages,
buy-out fees and any other fees made or to be made in lieu of rent, any award
made hereafter to Borrower or Operator, if any, in any court proceeding
involving any tenant, lessee, licensee or concessionaire under any of the Leases
in any bankruptcy, insolvency or reorganization proceedings in any state or
federal court, and all other payments, rights and benefits of whatever nature
from time to time due under the Leases, including, without limitation, (i)
rights to payment earned under the Leases for space in the Improvements for the
operation of ongoing businesses such as restaurants, news stands, xxxxxx shops,
beauty shops and pharmacies, and (ii) all other income, consideration, issues,
accounts, profits or benefits of any nature arising from the ownership,
possession, use or operation of such Borrower's Facility, including, without
limitation, all rights to payment from the Medicare and Medicaid programs or
similar state or federal programs, boards, bureaus or agencies and rights to
payment from patients or private insurers, arising from the operation of such
Borrower's Facility.
"Required Debt Service Payment" means, with respect to each
Borrower and any Payment Date, the Debt Service then due and payable by such
Borrower.
"Secretary's Certificate" means, with respect to a Borrower,
the certificate in the form attached hereto as Exhibit M of such Borrower dated
as of the Closing Date.
"Securitization" shall have the meaning set forth
in Section 2.14.
"Securitization Closing Date" means the date on
which a Securitization is effected.
"Security Agreement" has the meaning set forth in
Section 2.11.
"Security Deposit Accounts" has the meaning set
forth in Section 2.12(a).
"Single-Purpose Entity" means a corporation, limited
partnership, or limited liability company which, as stated herein, at all times
since its formation or will from the Closing Date and thereafter (i) be
organized solely for the purpose of (x) owning one Facility or (y) acting as the
managing member of a limited liability company which owns one Facility or (z)
acting as the general partner of a limited partnership which owns one Facility,
(ii) has not and will not engage in any business unrelated to the (x) the
ownership of one Facility or (y) acting as a member of a limited liability
company which owns one Facility or (z) acting as a general partner of a limited
partnership which owns one Facility, (iii) has not and will not have any assets
other than (x) those related to one Facility or (y) its member interest in the
limited liability company which owns one Facility or (z) its general partnership
interest in the limited partnership which owns one Facility, as applicable, (iv)
except as otherwise expressly permitted by this Agreement, has not and will not
engage in, seek or consent to any dissolution, winding up, liquidation,
consolidation, merger, asset sale, transfer of partnership or membership
interests, or amendment of its limited partnership agreement, articles of
incorporation, articles of organization, certificate of formation or operating
agreement (as applicable), (v) if such entity is a limited partnership, has as
its only general partners, general partners which are Single-Purpose Entities
which are corporations, (vi) if such entity is a corporation, will have at least
one Independent Director, (vii) the board of directors of such entity may not
take any action requiring the unanimous affirmative vote of 100% of the members
of the board of directors unless an Independent Director shall have participated
in such vote, (viii) will not fail to correct any known misunderstanding
regarding the separate identity of such entity, (ix) intentionally deleted, (x)
intentionally omitted, (xi) if such entity is a limited liability company, has
at least one member that is a Single-Purpose Entity which is a corporation,
(xii) without the unanimous consent of all of the partners, directors or
members, as applicable, shall not file a bankruptcy or insolvency petition or
otherwise institute insolvency proceedings with respect to itself or to any
other entity in which it has a direct or indirect legal or beneficial ownership
interest, (xiii) will maintain its accounts, books and records separate from any
other person or entity, (xiv) will maintain its books, records, resolutions and
agreements as official records, (xv) will not commingle its funds or assets with
those of any other entity, (xvi) will hold its assets in its own name, (xvii)
will conduct its business in its name, (xviii) will maintain its financial
statements, accounting records and other entity documents separate from any
other person or entity, (xix) will pay its own liabilities out of its own funds
and assets, (xx) will observe all partnership, corporate or limited liability
company formalities as applicable, (xxi) will maintain an arms-length
relationship with its affiliates, (xxii) has no indebtedness other than the
Indebtedness and unsecured trade payables in the ordinary course of business
relating to the ownership and operation of the Facility which are paid within
sixty (60) days of the date incurred except for outstanding trade payables
existing as of the Closing Date which do not require payment within sixty (60)
days, (xxiii) will not assume or guarantee or become obligated for the debts of
any other entity or hold out its credit as being available to satisfy the
obligations of any other entity except for the Indebtedness, (xxiv) will not
acquire obligations or securities of its partners, members or shareholders,
(xxv) will allocate fairly and reasonably any shared expenses, including but not
limited to, overhead for shared office space and use separate stationary,
invoices and checks, (xxvi) will not pledge its assets for the benefit of any
other person or entity, (xxvii) will hold itself out and identify itself as a
separate and distinct entity under its own name and not as a division or part of
any other person or entity, (xxviii) will not make loans to any person or
entity, (xxix) will not identify its partners, members or shareholders, or any
affiliates of any of them as a division or part of it, (xxx) if such entity is a
limited liability company, its articles of organization, certificate of
formation and/or operating agreement, as applicable, shall provide that the vote
of a majority-in-interest of the remaining members is sufficient to continue the
life of such limited liability company, (xxxi) will not enter into or be a party
to, any transaction with its partners, members, shareholders or its affiliates
except in the ordinary course of its business and on terms which are
intrinsically fair and are no less favorable to it than would be obtained in a
comparable arms-length transaction with an unrelated third party.
"Start-Up Day" means the "start-up day," within the meaning
of Section 860G(a)(9) of the Code, of any "real estate mortgage investment
conduit," within the meaning of Section 860D of the Code, that holds the Notes.
"Sub-Account" shall have the meaning provided in
Section 2.12(c).
"Survey" means, with respect to a Facility, a survey of such
Facility satisfactory to Lender, prepared by a registered Independent surveyor
satisfactory to Lender and Title Insurer, together with a metes and bounds legal
description of the land corresponding with the survey and containing the
Surveyor's Certification.
"Surveyor's Certification" means a certification in
substantially the form of Surveyor's certification attached hereto as Exhibit I.
"Taking" means a taking or voluntary conveyance during the
term hereof of all or part of a Facility, or any interest therein or right
accruing thereto or use thereof, as the result of, or in settlement of, any
condemnation or other eminent domain proceeding by any Governmental Authority
affecting a Facility or any portion thereof whether or not the same shall have
actually been commenced.
"Tax Fair Market Value" means, with respect to a Facility,
the fair market value of such Facility, and (x) shall not include the value
of any personal property or other property that is not an "interest in real
property" within the meaning of Treasury Regulation Sections 1.860G-2 and
1.856-3(c), or is not "qualifying real property" within the meaning of
Treasury Regulation Section 1.593-11(b), and (y) shall be reduced by the
"adjusted issue price" (within the meaning of Code Section 1272(sa)(44))
(the "Tax Adjusted Issue Price") of any indebtedness, other than the Loan,
secured by a Lien affecting such Facility, which Lien is prior to or on
a parity with the Lien created under the Related Mortgage.
"Ten-Year Treasury Rate" means the yield, calculated by
linear interpolation (rounded to three decimal places) of the yields of
United States Treasury Constant Maturities with terms (one longer and one
shorter) most nearly approximating that of noncallable United States Treasury
obligations having maturities as close as possible to 10 years from the
Closing Date, as determined by Lender on the basis of Federal Reserve
Statistical Release H.15-Selected Interest Rates under the heading U.S.
Governmental Security/Treasury Constant Maturities, or other recognized source
of financial market information selected by Lender.
"Third-Party Payors' Programs" has the meaning set
forth in Section 4.1(b)(AG)(v).
"Title Instruction Letter" means an instruction letter in
substantially the form attached hereto as Exhibit R.
"Title Insurance Policy" means, with respect to a Facility,
the loan policy of title insurance for such Facility issued by Title Insurer
with respect to such Facility in an amount acceptable to Lender and insuring the
first priority lien in favor of Lender created by the relevant Mortgage, subject
only to the items described in clause (ii) of the definition of "Permitted
Encumbrances" for that Facility and containing such endorsements and affirmative
assurances as Lender shall require, and "Title Insurance Policies" means all
such title policies collectively.
"Title Insurer" means Chicago Title Insurance Company and
any reinsurer required by Lender and/or any other nationally recognized title
insurance company acceptable to Lender in Lender's discretion, provided,
however, that the reinsurer of any Title Insurance Policy may include, in
amounts acceptable to Lender, First American Title Insurance Company, Lawyers
Title Insurance Company, Commonwealth Land Title Insurance Company and Xxxxxxx
Title Insurance Company.
"Transaction Costs" means all costs and expenses paid or
payable by Borrowers relating to the Transactions on the Closing Date,
including, without limitation, (i) a financing fee of $432,500 and (ii) all
appraisal fees, legal fees, accounting fees and the costs and expenses described
in Section 8.24.
"Transactions" means each of the transactions
contemplated by the Loan Documents.
"Transfer" means any conveyance, transfer, sale, Lease,
(including any amendment, extension, modification, waiver or renewal thereof),
assignment, mortgage, pledge, grant of a security interest, or hypothecation,
whether by law or otherwise of any Collateral (including any legal or beneficial
direct or indirect interest therein or in any Borrower) other than a Permitted
Transfer.
"UCC" means, with respect to any Collateral, the Uniform
Commercial Code in effect in the jurisdiction in which the relevant Collateral
is located.
"UCC Searches" has the meaning specified in Section 3.1.
"U.S. Obligations" means obligations or securities not
subject to prepayment, call or early redemption which are direct obligations of,
or obligations fully guaranteed as to timely payment by, the United States of
America or any agency or instrumentality of the United States of America, the
obligations of which are backed by the full faith and credit of the United
States of America.
"Use" means, with respect to any Hazardous Substance, the
generation, manufacture, processing, distribution, handling, use, treatment,
recycling or storage of such Hazardous Substance or transportation to or from
the property of such Person of such Hazardous Substance.
"Yield Maintenance Premium" means, with respect to each
Note, the amount, together with the principal paid (or required to be paid
pursuant to an acceleration of such Note) that will be sufficient (at the time
of an acceleration of such Note or a defeasance of the Loan pursuant to Section
2.11) to purchase U.S. Obligations having maturity dates on or prior to, but as
close as possible to, successive scheduled Payment Dates after the Release Date
or date of acceleration of such Note, as applicable, upon which interest and
principal payments would be required under such Note through November 11, 2010,
and in amounts sufficient to pay all scheduled principal and interest payments
through the Maturity Date, November 11, 2010.
ARTICLE II
GENERAL TERMS
Section 2.1. Amount of the Loan. Lender shall lend to
Borrowers a total aggregate amount of up to the Loan Amount.
Section 2.2. Use of Proceeds. Proceeds of the Loan shall be
used for the following purposes: (a) to pay the acquisition costs for the
Facilities being acquired by the Borrowers and reasonable costs and expenses
directly related to such acquisition, (b) to fund any upfront reserves or escrow
accounts hereunder, (c) to pay any Transaction Costs and (d) to provide working
capital to the Borrowers.
Section 2.3. Security for the Loan. The Notes and each
Borrower's obligations hereunder and under the other Loan Documents shall be
secured by the Mortgages, the Assignments of Leases, the Assignments of
Agreements, the Manager's Subordinations and the security interest and Liens
granted in this Agreement and in the other Loan Documents.
Section 2.4. Borrower's Notes. (a) Each Borrower's
obligation to pay the principal, interest, Late Charges, Default Rate interest
and Indebtedness shall be evidenced by this Agreement, a Note, and a Related
Mortgage duly executed and delivered by the relevant Borrower. The Notes shall
be payable as to principal and interest (including Late Charges, Default Rate
interest and Yield Maintenance Premium and Hedge Loss, if any) as specified in
this Agreement, with a final maturity on the Maturity Date. The Borrowers shall
pay all outstanding Indebtedness on the Maturity Date.
(b) Lender is hereby authorized, at its sole option, (i) to
endorse on a schedule attached to each Note (or on a continuation of such
schedule attached to such Note and made a part thereof) an appropriate notation
evidencing the date and amount of each payment of principal, interest, Late
Charges, Default Rate interest, and Yield Maintenance Premium and Hedge Loss, if
any, in respect thereof, and/or (ii) to record the Allocated Loan Amounts and
such payments in its books and records.
Section 2.5. Principal and Interest Payments. (a) Accrual of
Interest. Interest shall accrue on the outstanding principal balance of each
Borrower's Note (which balance shall initially be established on the Closing
Date by reference to the relevant Allocated Loan Amount) and all other amounts
due to Lender under the Loan Documents at the Interest Rate.
(b) Monthly Payments of Principal and Interest at the
Interest Rate. During the entire term of the Loan, the Borrowers shall pay to
Lender monthly constant payments as follows: $71,908.03 for Jayber, Inc.,
$31,459.76 for P.V.M. Associates, Inc., $112,356.30 for Pompton Avenue
Associates, Inc., and $152,804.57 for Continental Xxxxxxx Holdings, Inc., which
monthly payments represent the amount necessary to pay the outstanding principal
balance of the Notes (and each Note) and interest thereon at the Interest Rate
in equal amount installments calculated to fully amortize the Loan to November
11, 2010. Each such installment of principal and interest shall be payable in
arrears.
(c) Payment Dates. All payments required to be made pursuant
to paragraphs (a) and (b) above shall be made beginning on the eleventh day of
the second full calendar month following the calendar month in which the Closing
Date occurs, and on the eleventh day of each and every calendar month
thereafter, unless, in any such case, such day is not a Business Day in which
event such payments shall be payable on the first Business Day following such
date (such date for any particular month, the "Payment Date").
(d) Calculation of Interest. Interest shall accrue on the
outstanding principal balance of the Loan and all other amounts due to Lender
under the Loan Documents commencing upon the Closing Date. Interest shall be
computed on the actual number of days elapsed, based on a 360 day year.
(e) Default Rate Interest. If (i) on any Payment Date there
are insufficient funds in any Debt Service Payment Sub-Account to make any
Required Debt Service Payment then due and if the Borrowers otherwise fail to
make any Required Debt Service Payment then due on such Payment Date or any
other payment when due hereunder including the payment due on the Maturity Date
or (ii) if an Event of Default has occurred and is continuing, the entire unpaid
amount outstanding hereunder and under all Notes will bear interest at the
Default Rate.
(f) Late Charge. If any Borrower fails to make
any payment of any sums due under the Loan Documents within fifteen (15)
days after the same is due, such Borrower shall pay a Late Charge.
(g) Maturity Date. On the Maturity Date, Borrowers shall pay
to Lender all amounts owing under the Loan Documents, including without
limitation, interest, principal, Late Charges, Default Rate interest and any
Yield Maintenance Premium and Hedge Loss.
Section 2.6. Voluntary Prepayment and Defeasance. (a)
Provided that no Default has occurred and is continuing and that no Event of
Default has occurred and is continuing, prior to a Securitization Closing Date,
the Loan may be prepaid in whole, but not in part, on a Payment Date by
Borrowers, provided, however, that, any such prepayment must be accompanied by
an amount equal to the Yield Maintenance Premium. After the date specified in
Section 2.11, the Loan may be defeased in whole, but not in part, in accordance
with Section 2.11. The Loan may only be prepaid pursuant to Sections 2.6(a),
2.6(b) and 2.7.
(b) Notwithstanding the foregoing, P.V.M. may
prepay, in whole, but not in part, the Allocated Loan Amount with
respect to the King Xxxxx Xxxxxx Facility at any time from the Closing
Date through and including January 31, 1996, provided, however, that any
such prepayment must consist of the payment of (i) 102% of the Allocated
Loan Amount with respect to the King Xxxxx Xxxxxx Facility, (ii) all of
the accrued and unpaid interest to the date of such prepayment and all
other sums due and owing under the Note executed by P.V.M. and (iii) the
Hedge Loss.
(c) In the event that the Hedge Loss paid pursuant to the
preceding Section 2.6(b)(iii) is greater than zero, Lender shall credit against
the payment described in Section 2.6.(b)(i) above an amount equal to the lesser
of (i) 50% of the Hedge Loss, and (ii) an amount which would cause the amount
set forth in Section 2.6(b)(i) above to equal one hundred percent (100%) of the
Allocated Loan Amount with respect to the Xxxx Xxxxx Facility.
(d) In the event of any voluntary prepayment or defeasance
pursuant to this Section 2.6, each of P.V.M. or the Borrowers, as applicable,
shall give Lender written notice of its intent to prepay or defease, which
notice shall be given at least five Business Days prior to the date upon which
prepayment or defeasance is to be made and shall specify the Payment Date and
the amount of such prepayment or defeasance. If notice of prepayment or
defeasance is given, the entire Indebtedness (in the case of a prepayment in
full) pursuant to Section 2.6(a) or the Allocated Loan Amount (in the case of a
prepayment pursuant to Section 2.6(b)) shall be due and payable on the Payment
Date specified therein (unless such notice is revoked by such Borrower prior to
the date specified therein in which event such Borrower shall immediately
reimburse Lender for any costs incurred by Lender in connection with such
Borrower's giving of such notice and its revocation). Any defeasance or
prepayment hereunder is required to be made on a Payment Date.
(e) Borrowers shall not be permitted at any time
to prepay or defease all or any part of the Loan except as expressly
provided herein and in the other Loan Documents.
Section 2.7. Mandatory Prepayment. (a) If any Borrower is
required by Lender under the provisions of a Mortgage to prepay the Loan or any
portion thereof in the event of damage, destruction or a Taking of a Facility,
such Borrower shall prepay the Loan (such prepayment to be applied to the
Allocated Loan Amounts as set forth in the definition of such term) to the full
extent of the Insurance Proceeds or the Condemnation Proceeds.
(b) Upon prepayment of the Loan, the Borrowers shall pay to
Lender, in addition to the amounts specified in Section 2.6 or this Section 2.7,
as applicable, any other amounts then due and payable to Lender pursuant to the
Loan Documents. All prepayments made pursuant to Section 2.6 or this Section 2.7
shall be applied in accordance with the provisions of Section 2.8.
Section 2.8. Application of Payments. Prior to the
occurrence of an Event of Default, all proceeds of any repayment,
including prepayments, of the Loan shall be applied to pay: first, any
costs and expenses of Lender, including, without limitation, the
Lender's attorney's fees and disbursements arising as a result of such
repayment or made by Lender to protect the Collateral; second, any Late
Charges and accrued and unpaid interest (including Default Rate interest
but not including interest thereon) then payable with respect to the
Loan or the portion thereof being repaid; third, the Yield Maintenance
Premium and the Hedge Loss, if any, on the Loan or the portion thereof
being repaid; fourth, to the Principal Indebtedness in accordance with
the relevant Allocated Loan Amounts; and fifth, any other amounts due
and owing under the Loan Documents. After the occurrence and continuance
of an Event of Default, all proceeds of any payment or recovery on the
Collateral including any Net Proceeds, shall, unless otherwise provided
in the Mortgages, be applied in such order and in such manner as Lender
shall elect in its sole discretion.
Section 2.9. Payment of Debt Service, Method and
Place of Payment. (a) Except as otherwise specifically provided herein,
all payments and prepayments under this Agreement and the Notes shall be
made to Lender not later than 12:00 noon, New York City time, on the
date when due and shall be made in lawful money of the United States of
America in federal or other immediately available funds to an account
specified to the Borrowers by Lender in writing, and any funds received
by Lender after such time for all purposes hereof, shall be deemed to
have been paid on the next succeeding Business Day.
(b) All payments made by any Borrower hereunder,
or by any Borrower under the other Loan Documents, shall be made
irrespective of, and without any deduction for, any set-offs or
counterclaims.
Section 2.10. Taxes. All payments made by any
Borrower under this Agreement and under the other Loan Documents shall
be made free and clear of, and without deduction or withholding for or
on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority (other than taxes imposed on the income of
Lender).
Section 2.11. Release of Collateral. (a) Provided
that no Default has occurred and is continuing and that no Event of
Default has occurred and is continuing, at any time after the date which
is two years after the Start-up Day and, notwithstanding the previous
phrase to the contrary, at any time after the third anniversary of the
date hereof the Loan may be defeased in whole, but not in part, provided
that the Borrowers: (i) provide not less than thirty (30) days prior
written notice to the Lender specifying a Payment Date (the "Release
Date") on which the payments provided in clauses (ii) and (iii) below
are to be made and the deposits provided in clauses (iv) and (v) below
are to be made, (ii) pay all interest accrued and unpaid on the
Principal Indebtedness to and including the Release Date, (iii) pay all
other sums, not including scheduled interest or principal payments, due
under the Loan Documents, (iv) deposit with the Lender an amount equal
to the Principal Indebtedness, (v) deposit with the Lender the Yield
Maintenance Premium and (vi) deliver to the Lender (A) a security
agreement, in form and substance satisfactory to the Lender, creating a
first priority perfected Lien on the deposits required pursuant to this
Section and the U.S. Obligations purchased on behalf of the Borrowers in
accordance with this Section (the "Security Agreement"), (B) for
execution by the Lender, releases of the Mortgaged Properties from the
liens of the Mortgages in a form appropriate for the jurisdictions in
which the Mortgaged Properties are located, (C) an Officer's Certificate
of each of the Borrowers certifying that the requirements set forth in
this Section have been satisfied, (D) an opinion of counsel from the
Borrowers' counsel in form satisfactory to the Lender stating, among
other things, that (x) the U.S. Obligations have been duly and validly
assigned and delivered to Lender and Lender has a first priority
perfected security interest on the deposits required pursuant to this
Section and a first priority perfected lien on the U.S. Obligations and
the proceeds thereof purchased hereunder, and (y) that the defeasance
will not adversely affect the status of any REMIC formed in connection
with a Securitization and (E) such other certificates, documents or
instruments as the Lender may request including, without limitation, (x)
written confirmation that such defeasance will not cause any Rating
Agency to withdraw, qualify or downgrade the then-applicable rating on
any security issued in connection with any Securitization and (y) a
certificate from an Independent certified public accountant certifying
that the U.S. Obligations comply with all of the requirements of this
Loan Agreement. The U.S. Obligations shall mature on or be redeemable,
or provide for payment thereon, on or prior to the Business Day
preceding the date on which payments under the relevant Note are due and
payable and the proceeds thereof shall be payable directly to the
relevant Cash Collateral Account. In connection with the foregoing, the
Borrowers appoint the Lender as their agent for the purpose of applying
the amounts delivered pursuant to clauses (iv) and (v) above to purchase
U.S. Obligations. Notwithstanding anything in this Agreement to the
contrary, in the event the Yield Maintenance Premium is due as a result
of the acceleration of the Indebtedness after the occurrence and
continuance of an Event of Default, Lender shall have the right to
receive and collect the Yield Maintenance Premium but shall have no
obligation to purchase U.S. Obligations or otherwise comply with this
Section 2.11.
(b) Upon compliance with the requirements of this
Section 2.11, the property encumbered by the lien of the Related
Mortgage shall be released from the lien of the Related Mortgage. In
connection with a complete defeasance of the Loan, the Borrowers may be
required by Lender to assign their obligations under the Notes, the
other Loan Documents and the Security Agreements together with the
pledged U.S. Obligations to such other entity or entities established or
designated by Lender (the "Successor Mortgagor"). Such Successor
Mortgagor shall assume the obligations under the Notes, the other Loan
Documents and the Security Agreements and, upon such assignment, the
Borrowers shall be relieved of their obligations thereunder. Each of the
Borrowers shall pay $1,000 to any such Successor Mortgagor as
consideration for assuming the obligations under the Notes, the other
Loan Documents and the Security Agreements.
(c) Nothing in this Section 2.11 shall release any
Borrower from any liability or obligation relating to any environmental
matters arising under Sections 4.1(d)(U) or 5.1(D)-(I), inclusive,
hereof.
Section 2.12. Central Cash Management. (a)
Collection Accounts, Security Deposit Accounts and Cash Collateral
Accounts. Each Borrower hereby acknowledges and agrees that all of the
Rents (other than security deposits) and Money constituting Proceeds of
Accounts derived from its Facility shall, subject to Section 2.12(b), be
first utilized (i) to pay all amounts to become due and payable under
the relevant Borrower's Note by funding the relevant Debt Service
Payment Sub-Account to the extent required pursuant to Section
2.12(g)(i), (ii) to fund the relevant Basic Carrying Costs Sub-Account
to the extent required pursuant to Section 2.12(g)(ii), (iii) to fund
the relevant Capital Reserve Sub-Account to the extent required pursuant
to Section 2.12(g)(iii), and (iv) to fund other Cash Collateral Accounts
and the relevant Sub-Accounts of such Cash Collateral Accounts to the
extent required by Section 2.12(g)(iv) and then, in accordance with
Section 2.12(g), shall be either disbursed to the relevant Borrower or
applied to the Indebtedness. For each Facility, each Borrower shall open
and maintain at a Collection Account Bank a demand deposit account
(each, a "Collection Account" and collectively the "Collection
Accounts"). Each Collection Account shall be assigned a separate and
unique identification number by the Collection Account Banks and shall
be opened and maintained in the name "[Jayber, Inc., P.V.M. Associates,
Inc., Pompton Avenue Associates, Inc., or Continental Xxxxxxx Holdings,
Inc. as applicable], as Debtor, and Nomura Asset Capital Corporation, as
Secured Party, pursuant to the Loan Agreement dated as of [insert date
of Loan Agreement]." Each Borrower shall collect or cause the collection
of all Rents (other than security deposits) from its Facility and shall
endorse all checks and deposit all such funds and other receipts, within
one Business Day after receipt thereof, directly into the relevant
Collection Account for such Facility. Each Borrower shall open and
maintain for its Facility a demand deposit account (each, a "Security
Deposit Account" and collectively "the Security Deposit Accounts"). Each
Security Deposit Account shall be assigned a separate and unique
identification number by the relevant Collection Account Bank and shall
be opened and maintained in the name "[Jayber, Inc., P.V.M. Associates,
Inc., Pompton Avenue Associates, Inc., or Continental Xxxxxxx Holdings,
Inc., as applicable], as Debtor, and Nomura Asset Capital Corporation,
as Secured Party, pursuant to the Loan Agreement dated as of [insert
date of the Loan Agreement]" and on the Closing Date (and at all times
thereafter), each Borrower, if applicable, shall instruct and cause the
Manager and/or the Operator, if any, of such Borrower's Facility to
cause all rents, revenues or income of any kind under the Master Lease
and derived by such Operator, if any, or from such Borrower's Facility
to be deposited within one Business Day after receipt thereof, directly
into the Collection Account for such Borrower's Facility. Each Borrower
shall collect or, if applicable, shall instruct and cause the Manager
and/or the Operator, if any, to collect all security deposits with
respect to its Facility and shall deposit or cause the deposit of all
such funds and other receipts within one Business Day after receipt
thereof, directly into the Security Deposit Account for such Facility.
Each Security Deposit Account shall at all times be an Eligible Account.
No Borrower, Manager or Operator, if any, shall have any right of
withdrawal from a Security Deposit Account except that, prior to a
Collection Account Bank's receipt of notice of the occurrence of an
Event of Default, a Borrower may withdraw funds from the Security
Deposit Account for Borrower's Facility to refund or apply security
deposits as required by the related Leases or by applicable Legal
Requirements, and, after delivery of such notice, Lender, on written
request from such Borrower with appropriate supporting materials, will
direct the relevant Collection Account Bank to release funds from such
Security Deposit Account to refund security deposits as required by the
Leases or by applicable Legal Requirements. Each Borrower may designate
a new financial institution to serve as a Collection Account Bank
hereunder as provided in Section 2.13(l). Each Collection Account shall
at all times be an Eligible Account. No Borrower, Manager or Operator,
if any, shall have any right of withdrawal from the Collection Accounts.
Any breach of this Section 2.12(a) by any Borrower shall be an Event of
Default.
(b) Cash Collateral Accounts. Pursuant to the
Letters of Instructions to be delivered to the Collection Account Banks
(the "Letters of Instructions") in substantially the form attached
hereto as Exhibit Q, each Borrower will authorize and direct the
relevant Collection Account Bank to transfer on a daily basis all funds
deposited in the relevant Collection Account for the Borrower's Facility
to the cash collateral account for such Facility each as identified on
Exhibit N hereto (individually, the "Cash Collateral Account" and
collectively, the "Cash Collateral Accounts"); Lender may elect to
change the financial institution at which the Cash Collateral Accounts
shall be maintained; provided, however, that Lender shall give each
Borrower and each Collection Account Bank not fewer than 30 days' prior
notice of each change. One Cash Collateral Account shall be established
for each Borrower and its Facility. Each Cash Collateral Account shall
at all times be an Eligible Account. Lender has established each Cash
Collateral Account with the Bank in the name of Lender as aforesaid, and
each Cash Collateral Account shall be under the sole dominion and
control of Lender. Borrower shall have no right of withdrawal in respect
of any Cash Collateral Account.
(c) Establishment of Sub-Accounts. Each Cash
Collateral Account shall contain a Debt Service Payment Sub-Account, a
Basic Carrying Costs Sub-Account and a Capital Reserve Sub-Account, each
of which accounts (individually, a "Sub-Account" and collectively, the
"Sub-Accounts") shall be an Eligible Account to which certain funds
shall be allocated and from which disbursements shall be made pursuant
to the terms of this Agreement.
(d) Permitted Investments. Upon the written
request of any Borrower, which request may be made once per Interest
Accrual Period, Lender shall direct Bank to invest and reinvest any
balance in the relevant Cash Collateral Account from time to time in
Permitted Investments as instructed by such Borrower; provided, however,
that (i) if Borrower fails to so instruct Lender, or if a Default or an
Event of Default shall have occurred and is continuing, Lender may
direct the Bank to invest and reinvest such balance in Permitted
Investments as Lender shall determine in its sole discretion; (ii) the
maturities of the Permitted Investments on deposit in any Cash
Collateral Account shall, to the extent such dates are ascertainable, be
selected and coordinated to become due not later than the day before any
disbursements from the relevant Sub-Accounts must be made; (iii) all
such Permitted Investments shall be held in the name and be under the
sole dominion and control of Lender; (iv) no Permitted Investment shall
be made unless Lender shall retain a perfected first priority Lien in
such Permitted Investment securing the Indebtedness and all filings and
other actions necessary to ensure the validity, perfection, and priority
of such Lien have been taken; (v) Lender shall only be required to
follow the investment instructions which were most recently received by
Lender for such Borrower and such Borrower shall be bound by such last
received investment instructions; and (vi) any written request from any
Borrower containing investment instructions shall contain an Officer's
Certificate from such Borrower (which may be conclusively relied upon by
Lender and its agents) that any such investments constitute Permitted
Investments. It is the intention of the parties hereto that all amounts
deposited in the Cash Collateral Accounts (or as much thereof as Lender
may arrange to invest) shall at all times be invested in Permitted
Investments. All funds in the Cash Collateral Accounts that are invested
in a Permitted Investment are deemed to be held in such Cash Collateral
Accounts for all purposes of this Agreement and the other Loan
Documents. All gain in investments of funds in the Cash Collateral
Accounts shall be allocated in the same manner as any other funds in
such Cash Collateral Accounts. Lender shall have no liability for any
loss in investments of funds in the Cash Collateral Accounts that are
invested in Permitted Investments (unless invested contrary to a
Borrower's request other than after the occurrence and continuance of a
Default or an Event of Default) and no such loss shall affect any
Borrower's obligation to fund, or liability for funding, the Cash
Collateral Accounts and each Sub-Account, as the case may be. Each
Borrower and Lender agree that each Borrower shall include all such
earnings and losses (other than those for Lender's account in accordance
with the immediately preceding sentence) on the relevant Cash Collateral
Account as income of Borrower for federal and applicable state tax
purposes.
(e) Interest on Accounts. All interest paid or
other earnings on the Permitted Investments made hereunder shall be
deposited into the relevant Cash Collateral Account and shall be subject
to allocation and distribution like any other monies deposited therein.
(f) Payment of Debt Service, Basic Carrying Costs
and Capital Improvement Costs. Not later than three Business Days before
each Payment Date during the term of the Loan, Lender shall deliver to
each Borrower a certificate in the form attached hereto as Exhibit O,
setting forth (i) the relevant Required Debt Service Payment for such
Payment Date and (ii) whether sufficient funds exist in the relevant
Cash Collateral Account to fund the relevant Debt Service Payment
Sub-Account, the relevant Basic Carrying Costs Sub-Account and the
relevant Capital Reserve Sub-Account in the required amounts. If any
such certificate states that the funds then allocated to the relevant
Sub-Accounts are less than the amount of funds which are required to be
on deposit therein on such Payment Date, the Borrowers shall be
obligated to deposit funds into the relevant Cash Collateral Account in
the amount of such deficiency, and failure to make such deposit prior to
12:00 noon, New York City time, on such Payment Date 20
shall be an Event of Default hereunder. Notwithstanding anything contained
herein to the contrary, Lender shall not be in any way liable for (i) Lender's
failure to perform its obligations pursuant to this Section 2.12(f), or (ii)
Lender's miscalculation of any amounts pursuant to this Section 2.12(f); and
such failure to perform or miscalculation shall not in any way relieve Borrowers
from any of their obligations hereunder or under any other Loan Document.
(i) Payment of Debt Service. At or before 12:00 noon, New York
City time, on each Payment Date during the term of the Loan, Lender
shall, with respect to each Borrower and each Collection Account,
transfer to Lender's own account from the relevant Debt Service Payment
Sub-Account an amount equal to the Required Debt Service Payment for
such Borrower for such Payment Date. Each relevant Borrower shall be
deemed to have timely made the relevant Required Debt Service Payment
pursuant to Section 2.9 regardless of the time Lender makes such
transfer as long as sufficient funds are on deposit in the relevant
Debt Service Payment Sub-Account at 12:00 noon, New York City time on
the applicable Payment Date.
(ii) Payment of Basic Carrying Costs. At least five (5)
Business Days prior to the due date of any Basic Carrying Cost and not
more frequently than once each Interest Accrual Period, each Borrower
shall notify Lender in writing and request that Lender pay such Basic
Carrying Cost on behalf of such Borrower on or prior to the due date
thereof. Together with each such request, such Borrower shall furnish
Lender with copies of bills and other documentation as may be required
by Lender to establish that such Basic Carrying Cost is then due.
Lender shall make such payments out of the relevant Basic Carrying Cost
Sub-Account before the same shall be delinquent to the extent that
there are funds available in the relevant Basic Carrying Cost
Sub-Account and Lender has received appropriate documentation to
establish the amount(s) due and the due date(s) as and when provided
above.
(iii) Payment of Capital Improvement Costs. Not more
frequently than once each Interest Accrual Period and provided that no
Default or Event of Default has occurred and is continuing, each
Borrower shall notify Lender in writing and request that Lender release
to such Borrower funds out of the Capital Reserve Sub- Account for
payment of the relevant Capital Improvement Costs for Borrower's
Facility. Together with each such request, each Borrower shall furnish
Lender with copies of bills and other documentation as may be required
by Lender to establish that such Capital Improvement Costs are
reasonable and have been paid by Borrowers or are then due.
(g) Monthly Funding of Sub-Accounts. During each Interest
Accrual Period during the term of the Loan commencing with the Interest Accrual
Period in which the Closing Date occurs (each, the "Current Interest Accrual
Period"), with respect to each Borrower, Lender shall allocate all funds then on
deposit in the relevant Cash Collateral Account among the relevant Sub-Accounts
as follows and in the following priority:
(i) first, to the relevant Debt Service Payment Sub-Account,
until an amount equal to the relevant Required Debt Service Payment for
the Payment Date occurring in the Interest Accrual Period following the
Current Interest Accrual Period has been allocated to the relevant Debt
Service Payment Sub-Account;
(ii) second, to the relevant Basic Carrying Costs Sub-Account,
until an amount equal to the relevant Basic Carrying Costs Monthly
Installment for the Current Interest Accrual Period has been allocated
to the relevant Basic Carrying Costs Sub-Account. On the Closing Date,
each Borrower will deposit the relevant Initial Basic Carrying Costs
Amount into the relevant Basic Carrying Costs Sub-Account;
(iii) third, to the relevant Capital Reserve Sub-Account,
until an amount equal to the relevant Capital Reserve Monthly
Installment for the Current Interest Accrual Period has been allocated
to the relevant Capital Reserve Sub-Account. On the Closing Date, each
Borrower will deposit the relevant Initial Capital Reserve Amount into
the relevant Capital Reserve Sub-Account; and
(iv) fourth, to the extent that the funds in any of the
Sub-Accounts in any other Cash Collateral Accounts are insufficient to
pay the relevant monthly installments required hereunder, then to such
other Cash Collateral Accounts and the relevant Sub-Accounts of such
Cash Collateral Accounts until the relevant monthly installments have
been paid.
Provided that (i) no Event of Default has occurred and is
continuing, (ii) Lender has received all financial information described in
Section 5.1(Q) for the most recent periods for which the same are due and (iii)
the conditions in the third to last sentence of this paragraph are satisfied,
Lender agrees that, with respect to each Borrower, in each Current Interest
Accrual Period, any amounts deposited into or remaining in the relevant Cash
Collateral Account after the minimum amounts set forth in clauses (i), (ii),
(iii) and (iv) above have been satisfied with respect to the Current Interest
Accrual Period (as to all Facilities) and any periods prior thereto, shall be
disbursed by Lender on a weekly basis for the remainder of the Current Interest
Accrual Period, at Borrower's expense, to the accounts identified next to each
Borrower's name as set forth in Exhibit T hereto. Each Borrower shall use any
funds distributed to such Borrower pursuant to the foregoing to first pay all
Operating Expenses of such Borrower (including any management and servicing fee
agreed to by Lender), unless prepayments of the Loan are then required pursuant
to Section 2.7, and thereafter any excess funds may be retained by such
Borrower. Notwithstanding the foregoing, no Borrower shall be entitled to
receive any amounts described in the first sentence of this paragraph until all
amounts set forth in clauses (i), (ii), (iii) and (iv) with respect to all of
the Sub-Accounts for all of the Cash Collateral Accounts have been satisfied
with respect to the Current Interest Accrual Period and any periods prior
thereto. The parties hereto agree that Lender and its agents shall not be
responsible for monitoring Borrowers' use of any funds disbursed from the Cash
Collateral Account or any of the Sub-Accounts. Notwithstanding anything in this
Agreement to the contrary, if an Event of Default has occurred and is
continuing, any amounts deposited into or remaining in any Cash Collateral
Account shall be for the account of Lender and may be withdrawn by Lender to be
applied in any manner as Lender may elect in its sole discretion.
If with respect to any Borrower, on any Payment Date, the
balance in the relevant Debt Service Payment Sub-Account is insufficient to make
the relevant Required Debt Service Payment, Lender may (but shall not be
obligated to), in addition to any other rights and remedies available hereunder,
withdraw funds to pay such deficiency from (A) first, the relevant Basic
Carrying Costs Sub-Account, (B) thereafter, the relevant Capital Reserve
Sub-Account and (C) thereafter, any other Cash Collateral Accounts (including
the relevant Basic Carrying Costs Sub-Accounts and the relevant Capital Reserve
Sub-Accounts, but not including any other Debt Service Sub-Accounts). In the
event that Lender elects to pay the relevant Required Debt Service Payment by
applying the proceeds of (A) either such relevant Sub-Account and/or (B) any
other Cash Collateral Account, Basic Carrying Cost Sub-Account or Capital
Reserve Sub-Account the Borrowers shall repay, upon demand, to Lender the amount
of such withdrawn funds to replenish such relevant Sub-Account and/or relevant
Cash Collateral Account, Basic Carrying Cost Sub-Account or Capital Reserve
Sub-Account and if any Borrower shall fail to repay such amounts within one (1)
Business Day after notice of such withdrawal, an Event of Default shall exist
hereunder.
(h) Loss Proceeds. In the event of a casualty or Taking with
respect to a Facility, unless the Related Mortgage allows the relevant Borrower
to utilize the proceeds received under any insurance policy required to be
maintained by such Borrower ("Insurance Proceeds") or the proceeds in respect of
any Taking ("Condemnation Proceeds"), as the case may be, for restoration,
Lender and such Borrower shall cause all such Insurance Proceeds or Condemnation
Proceeds (collectively, "Loss Proceeds") to be paid directly to the relevant
Cash Collateral Account and Lender shall apply the same to reduce the
Indebtedness in accordance with Section 2.7(a) and Section 2.8. All Insurance
Proceeds received by a Borrower or Lender in respect of business interruption
coverage and all Condemnation Proceeds received in respect of a temporary Taking
shall be maintained in the relevant Cash Collateral Account, to be applied by
Lender in the same manner as Rents received from such Borrower with respect to
the operation of a Facility; provided, further, that in the event that the
Insurance Proceeds of any such business interruption insurance policy or
Condemnation Proceeds of such temporary Taking are paid in a lump sum in
advance, Lender shall hold such Insurance Proceeds or Condemnation Proceeds in a
segregated interest-bearing escrow account at the Bank, and Lender shall
estimate, in Lender's reasonable discretion, the number of months required for
the relevant Borrower to restore the damage caused by the casualty to such
Facility or that such Facility will be affected by such casualty or temporary
Taking, as the case may be, shall divide the aggregate business interruption
Insurance Proceeds or Condemnation Proceeds in connection with such casualty or
temporary Taking by such number of months, and shall disburse from such escrow
account into the relevant Cash Collateral Account each month during the
performance of such restoration or pendency of such temporary Taking such
monthly installment of said Insurance Proceeds or Condemnation Proceeds. In the
event that Insurance Proceeds or other Loss Proceeds are to be applied toward
restoration pursuant to the Related Mortgage, Lender shall hold such funds in a
segregated interest-bearing escrow account for the relevant Borrower's and
Lender's benefit, as the case may be, at the Bank and shall disburse same in
accordance with the provisions of the Related Mortgage. If any Loss Proceeds are
received by a Borrower, such Loss Proceeds shall be received in trust for
Lender, shall be segregated from other funds of such Borrower, and shall be
forthwith paid to the relevant Cash Collateral Account or paid to Lender to hold
in a segregated interest-bearing escrow account, in each case to be applied or
disbursed in accordance with the foregoing, except as provided to the contrary
in the Related Mortgage. Any Loss Proceeds made available to a Borrower for
restoration in accordance herewith, to the extent not used by such Borrower in
connection with, or to the extent they exceed the cost of, such restoration,
shall be deposited into the relevant Cash Collateral Account whereupon Lender
shall apply the same to reduce the Indebtedness in accordance with Section 2.7
and Section 2.8.
(i) Payment of Basic Carrying Costs. Except to the extent that
Lender is obligated to pay Basic Carrying Costs from a Basic Carrying Costs
Sub-Account pursuant to the terms of Section 2.12(f), each Borrower shall pay
all Basic Carrying Costs with respect to itself and its Facility in accordance
with the provisions of the Related Mortgage, subject, however, to such
Borrower's rights to contest payment of the same in accordance with the Related
Mortgage. Each Borrower's obligation to pay (or cause Lender to pay) Basic
Carrying Costs pursuant to this Agreement shall include, to the extent permitted
by applicable law, Impositions resulting from future changes in law which impose
upon Lender or any Deed of Trust Trustee an obligation to pay any property taxes
or other Impositions or which otherwise adversely affect Lender's or the Deed of
Trust Trustee's interests. (In the event such a change in law prohibits a
Borrower from assuming liability for payment of any such Imposition, the
outstanding Indebtedness shall, at the option of Lender, become due and payable,
on the date that is 120 days after such change in law and failure to pay such
amounts on the date due shall be an Event of Default.) Should an Event of
Default have occurred, the proceeds on deposit in any Basic Carrying Costs
Sub-Account may be applied by Lender in any manner as Lender in its sole
discretion may determine.
(j) The Bank's Reliance. The Bank may rely and shall be
protected in acting or refraining from acting upon any written notice,
instruction or request furnished to it hereunder and believed by it in good
faith to be genuine and to have been signed or presented by the proper party or
parties. The Bank may rely on written notice from Lender as to the occurrence of
an Event of Default.
Section 2.13. Security Agreement. (a) Pledge of Accounts. To
secure the full and punctual payment and performance of all of the Indebtedness,
each Borrower hereby sells, assigns, conveys, pledges and transfers to Lender
and grants a first and continuing security interest in and to, the following
property, whether now owned or existing or hereafter acquired or arising and
regardless of where located (collectively, the "Account Collateral"):
(i) all of such Borrower's right, title and interest in the
relevant Collection Account and relevant Security Deposit Account and
all Money, if any, from time to time deposited or held in each such
Collection Account and Security Deposit Account;
(ii) all of such Borrower's right, title and interest in the
relevant Cash Collateral Account (including all relevant Sub-Accounts)
and all Money and Permitted Investments, if any, from time to time
deposited or held in such Cash Collateral Account;
(iii) all interest, dividends, Money, Instruments and other
property from time to time received, receivable or otherwise payable in
respect of, or in exchange for, any of the foregoing; and
(iv) to the extent not covered by clauses (i), (ii),
(iii) or above, all Proceeds of any or all of the foregoing.
(b) Covenants. Each Borrower covenants that (i) on the Closing
Date (and at all times thereafter), each Borrower, if applicable, shall instruct
and cause the Manager and/or the Operator, if any, of such Borrower's Facility
to cause all rents, revenues or income of any kind under the Master Lease and
derived by such Operator, if any, or from such Borrower's Facility, to be
deposited within one Business Day after receipt thereof, directly into the
relevant Collection Account or the relevant Security Deposit Account, as
applicable, for such Borrower's Facility (ii) all Rents and Money received from
Accounts shall be deposited into the relevant Collection Account or relevant
Security Deposit Account, as applicable, and (iii) so long as any portion of the
Indebtedness is outstanding, no Borrower shall open any other account for the
collection of Rents or Money received from Accounts, other than such replacement
Collection Accounts and Security Deposit Accounts as may be established pursuant
to Section 2.13(l). The Collection Accounts and Security Deposit Accounts shall
be subject to such applicable laws, and such applicable regulations of the Board
of Governors of the Federal Reserve System and of any other banking authority or
Governmental Authority, as may now or hereafter be in effect, and to the rules,
regulations and procedures of the relevant Collection Account Bank relating to
demand deposit accounts from time to time in effect.
(c) Instructions and Agreements. On or before the Closing
Date, each relevant Borrower will submit to the Collection Account Bank for the
applicable Facility a Letter of Instructions, and such Collection Account Bank
will execute and return the acknowledgement of instructions and notice that is
part of its Letter of Instructions. In connection with the Closing Date, each
Borrower and the Bank will execute and deliver that certain Cash Collateral
Account Agreement (the "CC Account Agreement"), the form of which is attached
hereto as Exhibit P. Each Borrower agrees that prior to the payment in full of
the Indebtedness, the relevant CC Account Agreement shall be irrevocable by such
Borrower without the prior written consent of Lender. Each Cash Collateral
Account shall be subject to such applicable laws, and such applicable
regulations of the Board of Governors of the Federal Reserve System and of any
other banking authority or Governmental Authority, as may now or hereafter be in
effect and the rules, regulations and procedures of the Bank relating to demand
deposit accounts from time to time in effect. All statements relating to each
Cash Collateral Account shall be issued by the Bank as provided in the relevant
CC Account Agreement.
(d) Financing Statements; Further Assurances. Each Borrower
will execute and deliver to Lender for filing a financing statement or
statements in connection with the Account Collateral in the form required to
properly perfect Lender's security interest in the Account Collateral to the
extent that it may be perfected by such a filing. Each Borrower agrees that at
any time and from time to time, at the expense of such Borrower, such Borrower
shall promptly execute and deliver all further instruments, and take all further
action, that Lender may request, in order to perfect and protect the pledge and
security interest granted or purported to be granted hereby, or to enable Lender
to exercise and enforce Lender's rights and remedies hereunder with respect to,
any Account Collateral.
(e) Transfers and Other Liens. Each Borrower agrees that it
will not sell or otherwise dispose of any of the Account Collateral other than
pursuant to the terms hereof and of the other Loan Documents, or create or
permit to exist any Lien upon or with respect to all or any of the Account
Collateral, except for the Lien granted to Lender under this Agreement.
(f) Lender's Right to Perform. If any Borrower fails to
perform any covenant or obligation contained herein and such failure shall
continue for a period of five Business Days after the relevant Borrower's
receipt of written notice thereof from Lender, Lender may, but shall have no
obligation to, itself perform, or cause performance of, such covenant or
obligation, and the expenses of Lender incurred in connection therewith shall be
payable by Borrowers to Lender upon demand. Notwithstanding the foregoing,
Lender shall have no obligation to send notice to any Borrower of any such
failure.
(g) Lender's Reasonable Care. Beyond the exercise of
reasonable care in the custody thereof, Lender shall not have any duty as to any
Account Collateral or any income thereon in its possession or control or in the
possession or control of any agents for, or of Lender, or the preservation of
rights against any Person or otherwise with respect thereto. Lender shall be
deemed to have exercised reasonable care in the custody of the Account
Collateral in its possession if the Account Collateral is accorded treatment
substantially equal to that which Lender accords its own property, it being
understood that Lender shall not be liable or responsible for (i) any loss or
damage to any of the Account Collateral, or for any diminution in value thereof
from a loss of, or delay in Lender's acknowledging receipt of, any wire transfer
from the Collection Account Banks or (ii) any loss, damage or diminution in
value by reason of the act or omission of Lender, or Lender's agents, employees
or bailees, except to the extent that such loss or damage or diminution in value
results from Lender's gross negligence or willful misconduct or the gross
negligence or willful misconduct of any such agent, employee or bailee of
Lender.
(h) Remedies. The rights and remedies provided in this Section
2.13 are cumulative and may be exercised independently or concurrently, and are
not exclusive of any other right or remedy provided at law or in equity. No
failure to exercise or delay by Lender in exercising any right or remedy
hereunder or under the Loan Documents shall impair or prohibit the exercise of
any such rights or remedies in the future or be deemed to constitute a waiver or
limitation of any such rights or remedies or acquiescence therein.
(i) No Waiver. Every right and remedy granted to Lender under
this Agreement or by law may be exercised by Lender at any time and from time to
time, and as often as Lender may deem it expedient. Any and all of Lender's
rights with respect to the pledge and security interest granted hereunder shall
continue unimpaired, and each Borrower shall be and remain obligated in
accordance with the terms hereof, notwithstanding (i) any proceeding of any
Borrower under the United States Bankruptcy Code or any bankruptcy, insolvency
or reorganization laws or statutes of any state, (ii) the release or
substitution of Account Collateral at any time, or of any rights or interests
therein or (iii) any delay, extension of time, renewal, compromise or other
indulgence granted by Lender in the event of any Default with respect to the
Account Collateral or otherwise hereunder. No delay or extension of time by
Lender in exercising any power of sale, option or other right or remedy
hereunder, and no notice or demand which may be given to or made upon any
Borrower by Lender, shall constitute a waiver thereof, or limit, impair or
prejudice Lender's right, without notice or demand, to take any action against
any Borrower or to exercise any other power of sale, option or any other right
or remedy.
(j) Lender Appointed Attorney-In-Fact. Each Borrower hereby
irrevocably constitutes and appoints Lender as such Borrower's true and lawful
attorney-in-fact, with full power of substitution, at any time that an Event of
Default has occurred and is continuing (provided, however, that Borrower shall
not be entitled to any other notice or cure periods other than as set forth in
the definition of "Event of Default" unless consented to by Lender in writing),
to execute, acknowledge and deliver any instruments and to exercise and enforce
every right, power, remedy, option and privilege of such Borrower with respect
to the Account Collateral, and do in the name, place and stead of such Borrower,
all such acts, things and deeds for and on behalf of and in the name of such
Borrower with respect to the Account Collateral, which such Borrower could or
might do or which Lender may deem necessary or desirable to more fully vest in
Lender the rights and remedies provided for herein with respect to the Account
Collateral and to accomplish the purposes of this Agreement. The foregoing
powers of attorney are irrevocable and coupled with an interest.
(k) Continuing Security Interest; Termination. This Section
2.13 shall create a continuing pledge of and security interest in the Account
Collateral and shall remain in full force and effect until payment in full of
the Indebtedness. Subject to the terms of this Agreement and upon payment in
full of the Indebtedness, each Borrower shall be entitled to the return, upon
its request and at its expense, of such of the Account Collateral as shall not
have been sold or otherwise applied pursuant to the terms hereof, and Lender
shall execute such instruments and documents as may be reasonably requested by
such Borrower to evidence such termination and the release of the pledge and
Lien hereof, provided, however, that such Borrower shall pay on demand all of
Lender's expenses in connection therewith.
(l) Replacement of a Collection Account Bank. So long as no
Event of Default shall have occurred and be continuing (provided, however, that
Borrower shall not be entitled to any other notice or cure periods other than as
set forth in the definition of "Event of Default" unless consented to by Lender
in writing), Borrowers shall have the right at any time to designate a successor
Collection Account Bank to hold one or more of the Collection Accounts and
Security Deposit Accounts upon thirty (30) days' prior written notice to Lender,
and Lender's approval of the successor, which approval shall not be unreasonably
withheld or delayed. In the event that the rating of long-term unsecured debt
obligations of any Collection Account Bank fails to comply with the ratings set
forth in clause (i) of the definition of Eligible Account, Borrowers shall be
obligated to promptly select a new Collection Account Bank and, upon approval of
such selection by Lender, to establish and maintain all the Collection Accounts
and Security Deposit Accounts previously held at such Collection Account Bank at
said successor. Any successor Collection Account Bank selected hereunder shall
comply with the definition of "Collection Account Bank." No such designation
shall become effective until Borrowers have (i) delivered to the successor
Collection Account Bank a written letter of instructions substantially
equivalent to the Letter of Instructions and (ii) delivered to Lender evidence
satisfactory to Lender that such instructions have been delivered to the
successor Collection Account Bank and acknowledged by such successor's execution
of an acknowledgement of instructions and notice substantially in the form
included in the Letter of Instructions such financing statements as may be
necessary or appropriate have been prepared, executed and delivered to a filing
agency.
Section 2.14. Securitization. Each Borrower hereby
acknowledges that Lender, its successors or assigns, may securitize the
Loan or portions thereof in one or more transactions through the
issuance of securities, which may be rated by the Rating Agencies (each,
a "Securitization"; collectively, the "Securitizations"). Each Borrower
agrees that it shall cooperate with Lender in each Securitization
including, but not limited to, by (a) amending this Agreement and the
other Loan Documents, and executing such additional documents, including
amendments to such Borrower's organizational documents, and preparing
financial statements as requested by the Rating Agencies; (b) providing
such information as may be requested in connection with the preparation
of a private placement memorandum or a registration statement required
to privately place or publicly distribute the securities in a manner
which does not conflict with federal or state securities laws; (c)
providing in connection with each of (i) a preliminary and a private
placement memorandum or (ii) a preliminary and final prospectus, as
applicable, an indemnification certificate (x) certifying that such
Borrower has carefully examined such memorandum or prospectus, as
applicable, including, without limitation, the sections entitled
"Special Considerations", "Description of the Mortgage Loan" and "The
Underlying Mortgaged Properties", "The Manager", "The Borrower" and
"Certain Legal Aspects of the Mortgage Loan", and such sections (and any
other sections reasonably requested) do not contain any untrue statement
of a material fact or omit to state a material fact necessary in order
to make the statements made, in the light of the circumstances under
which they were made, not misleading (provided, however, Lender shall
have afforded Borrower an opportunity to review and comment upon such
memorandum or prospectus in order to allow Borrower to render such
indemnification certificate), (y) indemnifying Lender, the Issuer, and
the Advisor for any losses, claims, damages or liabilities (the
"Liabilities") to which Lender, the Issuer or the Advisor may become
subject insofar as the Liabilities arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in such sections or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated in such sections or necessary in order to make the
statements in such sections, in light of the circumstances under which
they were made, not misleading and (z) agreeing to reimburse Lender, the
Issuer, and the Advisor for any legal or other expenses reasonably
incurred by Lender, the Issuer, and the Advisor in connection with
investigating or defending the Liabilities; (d) causing to be rendered
such customary opinion letters as shall be requested by the Rating
Agencies; (e) making such representations, warranties and covenants with
respect to such Borrower, (and its Affiliates), and the Mortgaged
Property, as may be requested by the Rating Agencies; (f) [intentionally
deleted]; (g) providing such information regarding the Mortgaged
Property as may be requested by the Rating Agencies or otherwise
required in connection with the formation of a REMIC, including, without
limitation, recertified or updated Appraisals; and (h) amending such
Borrower's organizational papers and making such other changes to the
structure of such Borrower required by the Rating Agencies; provided,
however, that the costs of all Securitizations to be reimbursed by
Borrower shall not exceed 0.5% of the Loan Amount. If a portion of the
Loan is included in a Securitization, that portion of the Loan and all
of the Loan Documents and Mortgaged Property related thereto shall be
severed from the balance of the Loan for all purposes. Nothing herein
shall in any way limit Lender's right to sell any portion of the Loan in
a transaction which is not a Securitization.
Section 2.15. Supplemental Mortgage Affidavits. The Liens to
be created by each Mortgage are intended to encumber the Facility described
therein to the full extent of the relevant Borrower's obligations under such
Borrower's Note from time to time. As of the Closing Date, each Borrower shall
have paid all state, county and municipal recording and all other taxes imposed
upon the execution and recordation of the Mortgages. Notwithstanding anything
contained herein to the contrary, if at any time Lender determines, based on
Lender's estimation of market value and applicable law, that Lender is not being
afforded the maximum amount of security available from any Facility as a direct,
or indirect, result of applicable taxes not having been paid with respect to the
Related Mortgage, Lender may request, and each Borrower agrees that it (i) will
execute, acknowledge and deliver to Lender, immediately upon Lender's request,
supplemental affidavits increasing the amount of Indebtedness for which all
applicable taxes have been or are required to be paid under the Related Mortgage
to an amount determined by Lender to be appropriate and (ii) will pay any and
all applicable recording, intangible or similar taxes.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1. Conditions Precedent to the Making of the Loan.
(a) As a condition precedent to the making of the Loan, Borrowers shall have
satisfied the following conditions (unless waived by Lender in accordance with
Section 8.4) with respect to each Facility on or before the Closing Date:
(A) Loan Documents.
(i) Loan Agreement. Borrowers shall
have executed and delivered this Agreement to Lender.
(ii) Notes. Each Borrower shall have executed
and delivered to Lender such Borrower's Note.
(iii) Mortgages. Each Borrower shall have executed
and delivered to Lender the Related Mortgage with respect to such
Borrower's Facility and the Mortgages shall have been filed of record
in the appropriate filing offices in the jurisdictions in which the
respective Facilities are located or irrevocably delivered to a title
agent for such recordation.
(iv) Assignments of Leases. Each Borrower shall have
executed and delivered to Lender the Related Assignment of Leases with
respect to such Borrower's Facility and the Assignments of Leases shall
have been filed of record in the appropriate filing offices in the
jurisdictions in which the respective Facilities are located or
irrevocably delivered to a title agent for such recordation.
(v) Assignments of Agreements. Each Borrower shall
execute and deliver to Lender the Related Assignment of Agreements with
respect such Borrower's Facility and the Assignments of Agreements
shall, to the extent prudent pursuant to local practices, have been
filed of record in the appropriate filing offices in the jurisdictions
in which the respective Facilities are located or irrevocably delivered
to a title agent for such recordation.
(vi) Financing Statements. Each Borrower shall have
executed and delivered to Lender all financing statements required by
Lender and such financing statements shall have been filed of record in
the appropriate filing offices in each of the appropriate jurisdictions
or irrevocably delivered to a title agent for such recordation.
(vii) Manager's Subordination. Each Borrower
and Manager shall have executed and delivered to Lender the
Manager's Subordinations.
(viii) Cash Collateral Account Agreement.
Each Borrower and the Bank shall have executed and delivered a
CC Account Agreement and shall have delivered an executed copy
of such agreement to Lender.
(B) Opinions of Counsel. In addition, Lender shall have
received from Schepisi & XxXxxxxxxx, counsel to the Borrowers, a legal
opinion in substantially the form attached hereto as Exhibit J, from
Florida real estate counsel to the relevant Borrower, its legal opinion
in substantially the form attached hereto as Exhibit J, and a
non-consolidation opinion from Dechert Price & Xxxxxx and such other
opinions as Lender may request. Each of such legal opinions will be
addressed to Lender and the Rating Agencies, dated as of the Closing
Date, and in form and substance satisfactory to Lender, the Rating
Agencies and their counsel. Each Borrower hereby instructs such counsel
to deliver to Lender such opinions addressed to Lender and the Rating
Agencies.
(C) Secretary's Certificate. Lender shall have received,
with respect to each Borrower, a Secretary's Certificate.
(D) Insurance. Lender shall have received certificates of
insurance demonstrating insurance coverage in respect of the Facilities
of types, in amounts, with insurers and otherwise in compliance with
the terms, provisions and conditions set forth in the Related
Mortgages. Such certificates shall indicate that Lender is an
additional insured as its interests may appear and shall contain a loss
payee endorsement in favor of Lender with respect to the property
policies required to be maintained under the Related Mortgages. All
insurance policies required to be maintained hereunder shall be
maintained from the Closing Date throughout the term of this Agreement
in the types and amounts required under the Related Mortgages.
(E) Lien Search Reports. Lender shall have received
satisfactory reports of UCC (collectively, the "UCC Searches"), federal
tax lien, state tax lien, judgment and pending litigation searches
conducted by a search firm acceptable to Lender. Such searches shall
have been received in relation to each Borrower, each Operator, if any,
and each owner of each Facility (or any portion thereof) immediately
prior to the acquisition of such Facility by the relevant Borrower and
each Operator, if any, immediately prior to the acquisition of such
Facility by the relevant Borrower. Such searches shall have been
conducted in each of the locations designated by Lender in Lender's
discretion and shall be dated not more than 45 days prior to the
Closing Date.
(F) Title Insurance Policies. Lender shall have received (i)
Title Insurance Policies or marked up commitments (in form and
substance satisfactory to Lender in Lender's discretion) from Title
Insurer to issue the Title Insurance Policies and (ii) a fully executed
copy of the Title Instruction Letter from the Title Insurer in the form
attached hereto as Exhibit R.
(G) Environmental Matters. Lender shall have received an
Environmental Report with respect to each Facility, addressed to
Lender, which Environmental Reports shall be acceptable to Lender in
Lender's sole discretion and shall otherwise show no adverse
environmental condition on the Facilities, such Environmental Reports
to be conducted by an Independent environmental Engineer.
(H) Consents, Licenses, Approvals. Lender shall have received
copies of all consents, licenses and approvals, if any, required in
connection with the execution, delivery and performance by the
Borrowers under, and the validity and enforceability of, the Loan
Documents, and such consents, licenses and approvals shall be in full
force and effect.
(I) Additional Matters. Lender shall have received such other
Permits, certificates (including certificates of occupancy reflecting
the use of each Facility as of the Closing Date), opinions, documents
and instruments (including, without limitation, written proof from the
appropriate Governmental Authority regarding the zoning of each
Facility in substantially the form attached hereto as Exhibit S and
letters from the applicable utility companies confirming the
availability of adequate utilities relating to each Facility) relating
to the Loan as may have been requested by Lender, and all other
documents and all legal matters in connection with the Loan shall be
satisfactory in form and substance to Lender.
(J) Representations and Warranties. The representations and
warranties herein and in the other Loan Documents shall be true and
correct in all material respects.
(K) [Intentionally Deleted]
(L) No Injunction. No law or regulation shall have been
adopted, no order, judgment or decree of any Governmental Authority
shall have been issued, and no litigation shall be pending or
threatened, which in the good faith judgment of Lender would enjoin,
prohibit or restrain, or impose or result in a material adverse effect
upon the making or repayment of the Loan or the consummation of the
Transactions.
(M) Survey. Lender shall have received a Survey with respect
to each Facility which Survey shall be satisfactory to Lender in
Lender's discretion.
(N) Engineering Report. Lender shall have received an
Engineering Report with respect to each Facility prepared by an
Engineer (addressed to Lender) and which reports shall be acceptable to
Lender in Lender's discretion and shall show no adverse property or
structural condition.
(O) Appraisal. If Lender shall so request, Lender shall have
received an Appraisal with respect to each Facility.
(P) Service Contracts. Each Borrower shall have delivered to
Lender a copy of each material service contract and Permit affecting
such Borrower's Facility.
(Q) Site Inspection. Unless waived by Lender in accordance
with Section 8.4, Lender shall have performed, or caused to be
performed on its behalf, an on-site due diligence review of each
Facility to be acquired with the Loan satisfactory to Lender in
Lender's sole discretion.
(R) Nursing Homes. The Facilities shall be operating only as
nursing homes.
(S) Financial Information. Lender shall have received all
financial information (which financial information shall be
satisfactory to Lender in Lender's sole discretion) relating to each
Facility which (i) the relevant Borrower received from the seller of
the Facility or (ii) which relates to the relevant Borrower's ownership
of the Facility which shall include any financial statements, operating
statements, census data, rent roll and resident mix.
(T) Management Agreement. Lender shall have received the
Management Agreement with respect to each Facility.
(U) Leases; Tenant Estoppels. With respect to each Facility,
the relevant Borrower shall have delivered a true and correct rent roll
and a copy of each of the Leases identified in such rent roll, and with
respect to any Lease, evidence satisfactory to Lender that each such
Lease is in full force and effect, including, but not limited to, an
originally executed tenant estoppel certificate from each such tenant
in form and substance satisfactory to Lender.
(V) Subdivision. Evidence satisfactory to Lender (including
title endorsements) that the Land with respect to each Facility
constitutes a separate lot for real estate tax and assessment purposes.
(W) Transaction Costs. Borrowers shall have paid or caused
to be paid all Transaction Costs.
(X) Master Lease. With respect to the Xxxxxxx Facility,
Xxxxxxx shall have executed and delivered a true and correct copy of
the Master Lease in form and substance satisfactory to Lender.
(b) Lender shall not make the Loan unless and until each of
the applicable conditions precedent set in Section 3.1 is satisfied.
(c) In connection with the Loan, Borrowers shall execute
and/or deliver to Lender all additions, amendments, modifications and
supplements to the Loan Agreement and the organizational materials of Borrowers
set forth in this Article III, including without limitation, amendments,
modifications and supplements to the Notes, Mortgages, Assignments of Leases,
Assignments of Agreements, and Manager's Subordinations, if requested by Lender
to effectuate the provisions hereof, and to provide Lender with the full benefit
of the security intended to be provided under the Loan Documents. Without in any
way limiting the foregoing, such additions, modifications and supplements shall
include those deemed desirable by Lender's counsel in the jurisdiction in which
the relevant Facility is located.
(d) The making of the Loan shall constitute, without the
necessity of specifically containing a written statement to such effect, a
confirmation, representation and warranty by the relevant Borrower to Lender
that all of the applicable conditions to be satisfied in connection with the
making of the Loan have been satisfied (unless waived by Lender in accordance
with Section 8.4,) and that all of the representations and warranties of the
Borrowers set forth in the Loan Documents are true and correct as of the date of
the making of the Loan.
Section 3.2. Form of Loan Documents and Related Matters. The
Loan Documents and all of the certificates, agreements, legal opinions and other
documents and papers referred to in this Article III, unless otherwise
specified, shall be delivered to Lender, and shall be satisfactory in form and
substance to Lender (unless the form thereof is prescribed herein).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Closing Date Representations and Warranties.
(a) [Intentionally deleted]
(b) [Intentionally deleted]
(c) Closing Date Representations of Corporate Borrowers.
Each Borrower represents and warrants, as to itself that, as of the
Closing Date:
(A) Organization. Borrower (i) is a duly organized and validly
existing corporation in good standing under the laws of the State of
its formation, (ii) has the requisite corporate power and authority to
carry on its business as now being conducted, and (iii) has the
requisite corporate power to execute and deliver, and perform its
obligations under the Loan Documents.
(B) Authorization. The execution and delivery by Borrower of
the Loan Documents, Borrower's performance of its obligations
thereunder and the creation of the security interests and Liens
provided for in the Loan Documents (i) have been duly authorized by all
requisite corporate action on the part of Borrower, (ii) will not
violate any provision of any Legal Requirements, any order of any court
or other Governmental Authority, the articles of incorporation or
by-laws of Borrower or any indenture or material agreement or other
instrument to which Borrower is a party or by which Borrower is bound,
(iii) will not be in conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under,
or result in the creation or imposition of any Lien of any nature
whatsoever upon any of the property or assets of Borrower pursuant to,
any such indenture or material agreement or instrument and (iv) have
been duly executed and delivered by Borrower. Other than those obtained
or filed on or prior to the Closing Date, Borrower is not required to
obtain any consent, approval or authorization from, or to file any
declaration or statement with, any Governmental Authority or other
agency in connection with or as a condition to the execution, delivery
or performance of the Loan Documents.
(C) Single-Purpose Entity.
(i) Borrower at all times since its formation has
been, and will continue to be, a duly formed and existing corporation,
and following an amendment to its articles of incorporation prior to
the Closing Date will be and will continue to be, a Single-Purpose
Entity.
(ii) Borrower at all times since its formation has
complied, and will continue to comply, with the provisions of its
articles of incorporation, and the laws of the State of its formation
relating to corporations.
(iii) All customary formalities regarding the
corporate existence of Borrower have been observed at all times since
its formation and will continue to be observed.
(iv) Borrower has been at all times since its
formation and will continue to be adequately capitalized in light of
the nature of its business.
(d) Closing Date Borrower Representations and Warranties.
Each Borrower represents and warrants, as to itself and its Facility,
that, as of the Closing Date:
(A) Litigation. There are no actions, suits or proceedings at
law or in equity by or before any Governmental Authority or other
agency now pending and served or, to the knowledge of Borrower,
threatened against Borrower or its Facility, which actions, suits or
proceedings, if determined against Borrower or its Facility, might
result in a Material Adverse Effect.
(B) Agreements. Borrower is not a party to any agreement or
instrument or subject to any restriction which is reasonably likely to
have a Material Adverse Effect. Borrower is not in default in any
material respect in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any agreement
or instrument to which it is a party or by which Borrower or its
Facility is bound.
(C) No Bankruptcy Filing. Borrower is not contemplating either
the filing of a petition by it under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of
Borrower's assets or property, and Borrower has no knowledge of any
Person contemplating the filing of any such petition against it.
(D) Full and Accurate Disclosure. No statement of fact made by
or on behalf of Borrower in the Loan Documents or in any other document
or certificate delivered to Lender contains any untrue statement of a
material fact or omits to state any material fact necessary to make
statements contained herein or therein not misleading. There is no fact
presently known to Borrower which has not been disclosed to Lender
which adversely affects, nor as far as Borrower can foresee, might
adversely affect the business, operations or condition (financial or
otherwise) of Borrower.
(E) Location of Chief Executive Offices. The location of
Borrower's principal place of business and chief executive office
is the Borrower's Facility.
(F) Compliance. Borrower, its Facility and Borrower's use
thereof and operations thereat comply in all material respects with all
applicable Legal Requirements, including without limitation, building
and zoning ordinances and codes. Borrower is not in default or
violation of any order, writ, injunction, decree or demand of any
Governmental Authority, the violation of which is reasonably likely to
have a Material Adverse Effect.
(G) Other Debt and Obligations. Borrower has no material
financial obligation under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which Borrower is a party
incurred in the ordinary course of business relating to the ownership
and operation of its Facility or by which Borrower or its Facility is
bound, other than unsecured trade payables incurred in the ordinary
course of business relating to the ownership and operation of its
Facility which are paid within sixty (60) days of the date incurred,
except for outstanding trade payables existing as of the Closing Date
which do not require payment within sixty (60) days, and other than
obligations under the Related Mortgage and the other Loan Documents.
Borrower has not borrowed or received other debt financing that has not
been heretofore repaid in full and Borrower has no known material
contingent liabilities.
(H) ERISA. Each Plan, and, to the knowledge of Borrower, each
Multiemployer Plan, is in compliance in all material respects with, and
has been administered in all material respects in compliance with, its
terms and the applicable provisions of ERISA, the Code and any other
federal or state law, and no event or condition has occurred and is
continuing as to which Borrower would be under an obligation to furnish
a report to Lender under Section 5.1(T).
(I) Solvency. Borrower (i) has not entered into this Loan
Agreement or any Loan Document with the actual intent to hinder, delay,
or defraud any creditor, and (ii) has received reasonably equivalent
value in exchange for its obligations under the Loan Documents. Giving
effect to the transactions contemplated hereby, the fair saleable value
of Borrower's assets exceeds and will, immediately following the
execution and delivery of this Agreement, exceed Borrower's total
liabilities, including, without limitation, subordinated, unliquidated
or disputed liabilities or Contingent Obligations. The fair saleable
value of Borrower's assets is and will, immediately following the
execution and delivery of this Agreement, be greater than Borrower's
probable liabilities, including the maximum amount of its Contingent
Obligations or its debts as such debts become absolute and matured.
Borrower's assets do not and, immediately following the execution and
delivery of this Agreement, will not, constitute unreasonably small
capital to carry out its business as conducted or as proposed to be
conducted. Borrower does not intend to, and does not believe that it
will, incur debts and liabilities (including, without limitation,
Contingent Obligations and other commitments) beyond its ability to pay
such debts as they mature (taking into account the timing and amounts
to be payable on or in respect of obligations of Borrower).
(J) Not Foreign Person. Borrower is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Code.
(K) Enforceability. The Loan Documents are the legal, valid
and binding obligation of Borrower, enforceable against Borrower in
accordance with their terms, subject to bankruptcy, insolvency and
other limitations on creditors' rights generally and to equitable
principles and the other matters described in the opinions delivered
pursuant to Section 3.1.
(L) Investment Company Act; Public Utility Holding Company
Act. Borrower is not (i) an "investment company" or a company
"controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended, (ii) a "holding company" or
a "subsidiary company" of a "holding company" or an "affiliate" of
either a "holding company" or a "subsidiary company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended, or (iii)
subject to any other federal or state law or regulation which purports
to restrict or regulate its ability to borrow money.
(M) No Defaults. No Default or Event of Default exists
under or with respect to any Loan Document.
(N) Labor Matters. Except for the Northfield Manor Nursing
Home and The Heritage at Xxxxxxx, Borrower is not a party to any
collective bargaining agreements. No collective bargaining agreement
will have a Material Adverse Effect, and all obligations which accrued
under any collective bargaining agreement prior to the date hereof have
been satisfied in full without exception.
(O) Title to the Mortgaged Property. Borrower owns good,
marketable and insurable fee simple title to its Facility, free and
clear of all Liens, other than the Permitted Encumbrances applicable to
its Facility. Except as disclosed in writing to Lender, there are no
outstanding options to purchase or rights of first refusal affecting
its Facility. The Permitted Encumbrances do not and will not materially
and adversely affect (i) the ability of Borrower to pay in full all
sums due under its Note in a timely manner or (ii) the use of such
Borrower's Facility for the use currently being made thereof, the
operation of its Facility as currently being operated or the value of
its Facility.
(P) Use of Proceeds; Margin Regulations. Borrower will use the
proceeds of the Loan for the purposes described in Section 2.2. No part
of the proceeds of the Loan will be used for the purpose of purchasing
or acquiring any "margin stock" within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System or for any other
purpose which would be inconsistent with such Regulation U or any other
Regulations of such Board of Governors, or for any purposes prohibited
by Legal Requirements.
(Q) Financial Information. All historical financial data
concerning Borrower and its Facility that has been delivered by
Borrower to Lender is true, complete and correct in all material
respects. Since the delivery of such data, except as otherwise
disclosed in writing to Lender, there has been no material adverse
change in the financial position of Borrower, its Facility, or in the
results of operations of Borrower. Borrower has not incurred any
obligation or liability, contingent or otherwise, not reflected in such
financial data which might materially adversely affect its business
operations or its Facility.
(R) Condemnation. No Taking has been commenced or, to
Borrower's knowledge, is contemplated with respect to all or any
portion of its Facility or for the relocation of roadways providing
access to its Facility.
(S) Other Debt. Except for unsecured trade payables incurred
in the ordinary course of business relating to the ownership and
operation of its Facility which are paid within sixty (60) days of the
date incurred, except for outstanding trade payables existing as of the
Closing Date which do not require payment within sixty (60) days.
Borrower has not borrowed or received other debt financing whether
unsecured or secured by its Facility or any part thereof.
(T) Utilities and Public Access. Borrower's Facility has
rights of access to public ways and is served by water, sewer, sanitary
sewer and storm drain facilities as are adequate for full utilization
of its Facility for its current purpose. Except as otherwise disclosed
by the Surveys, all public utilities necessary to the continued use and
enjoyment of Borrower's Facility as presently used and enjoyed are
located in the public right-of-way abutting the premises, and all such
utilities are connected so as to serve such Facility without passing
over other property. All roads necessary for the full utilization of
Borrower's Facility for its current purpose have been completed and
dedicated to public use and accepted by all Governmental Authorities or
are the subject of access easements for the benefit such Facility.
(U) Environmental Compliance. Except for matters set forth in
the "Summary" sections of the Environmental Reports delivered to Lender
in connection with the Loan (true, correct and complete copies of which
have been provided to Lender by Borrower):
(i) Borrower and its Facility are in compliance with
all applicable Environmental Laws, which compliance includes, but is
not limited to, the possession by Borrower of and compliance with all
environmental, health and safety permits, licenses and other
governmental authorizations required in connection with the ownership
and operation of such Facility under all Environmental Laws, except
where the failure to comply with such laws is not reasonably likely to
result in a Material Adverse Effect.
(ii) There is no Environmental Claim pending or, to
Borrower's knowledge, threatened, and no penalties arising under
Environmental Laws have been assessed, against Borrower, its Facility
or against any Person whose liability for any Environmental Claim
Borrower has or may have retained or assumed either contractually or by
operation of law, and no investigation or review is pending or, to the
knowledge of Borrower, threatened by any Governmental Authority,
citizens group, employee or other Person with respect to any alleged
failure by Borrower, or its Facility to have any environmental, health
or safety permit, license or other authorization required under, or to
otherwise comply with, any Environmental Law or with respect to any
alleged liability of Borrower for any Use or Release of any Hazardous
Substances or the presence, Use or Release of any Hazardous Substances
at, on, in, under, or from any Facility.
(iii) To the knowledge of Borrower after due inquiry,
there have been and are no past or present Releases of any Hazardous
Substance that are reasonably likely to form the basis of any
Environmental Claim against Borrower or, to Borrower's knowledge,
against any Person whose liability for any Environmental Claim Borrower
has or may have retained or assumed either contractually or by
operation of law.
(iv) To the knowledge of Borrower after due inquiry,
without limiting the generality of the foregoing, there is not present
at, on, in or under the Facility, PCB-containing equipment, asbestos or
asbestos containing materials, underground or aboveground storage tanks
or surface impoundments for Hazardous Substances, lead in drinking
water (except in concentrations that comply with all Environmental
Laws), or lead-based paint (nor have there been any underground storage
tanks present at, on, in, or under the Facility).
(v) No Liens are presently recorded with the
appropriate land records under or pursuant to any Environmental Law
with respect to Borrower's Facility and, to Borrower's knowledge, no
Governmental Authority has been taking or is in the process of taking
any action that could subject the Facility to Liens under any
Environmental Law.
(vi) There have been no environmental investigations,
studies, audits, reviews or other analyses conducted by or on behalf of
Borrower that are in the possession or control of Borrower in relation
to a Facility which have not been provided to Lender.
(vii) No conditions exist which would require
Borrower under any Environmental Laws to place a notice on any deed to
its Facility with respect to the presence, Use or Release of Hazardous
Substances at, on, in, under or from its Facility and no such Facility
has any such notice in its deed.
(V) No Joint Assessment; Separate Lots. Borrower has not and
shall not suffer, permit or initiate the joint assessment of its
Facility (i) with any other real property constituting a separate tax
lot, and (ii) with any portion of such Facility which may be deemed to
constitute personal property, or any other procedure whereby the lien
of any taxes which may be levied against such personal property shall
be assessed or levied or charged to its Facility as a single lien.
Borrower's Facility is comprised of one or more parcels, each of which
constitutes a separate tax lot and none of which constitutes a portion
of any other tax lot.
(W) Assessments. Except as disclosed in the Title Insurance
Policies, there are no pending or, to the knowledge of Borrower,
proposed special or other assessments for public improvements or
otherwise affecting Borrower's Facility, nor, to the knowledge of
Borrower, are there any contemplated improvements to its Facility that
may result in such special or other assessments.
(X) Mortgage and Other Liens. The Related Mortgage creates a
valid and enforceable first mortgage Lien on the Borrower's Facility,
as security for the repayment of the Indebtedness, subject only to the
Permitted Encumbrances applicable to that Facility. The Related
Collateral Security Instrument establishes and creates a valid,
subsisting and enforceable Lien on and a security interest in, or claim
to, the rights and property described therein. All property covered by
such Related Collateral Security Instrument is subject to a UCC
financing statement filed and/or recorded, as appropriate, (or
irrevocably delivered to an agent for such recordation or filing) in
all places necessary to perfect a valid first priority Lien with
respect to the rights and property that are the subject of such Related
Collateral Security Instrument to the extent governed by the UCC. All
continuations and any assignments of any such financing statements have
been or will be timely filed or refiled, as appropriate, in the
appropriate recording offices.
(Y) Enforceability. The Loan Documents executed by Borrower in
connection with the Loan, including, without limitation, any Related
Collateral Security Instrument, contain the legal, valid and binding
obligations of Borrower, enforceable against Borrower in accordance
with their terms, subject to bankruptcy, insolvency and other
limitations on creditors' rights generally and to equitable principles
and the other matters described in the opinions delivered pursuant to
Section 3.1(a)(B). Such Loan Documents are, as of the Closing Date, not
subject to any right of rescission, set-off, counterclaim or defense by
Borrower, including the defense of usury, nor will the operation of any
of the terms of the Borrower's Note, the Related Mortgage, or such
other Loan Documents, or the exercise of any right thereunder, render
the Related Mortgage unenforceable against Borrower, in whole or in
part, or subject to any right of rescission, set-off, counterclaim or
defense by Borrower, including the defense of usury, and Borrower has
not asserted any right of rescission, set-off, counterclaim or defense
with respect thereto.
(Z) Fair Market Value. As of the Closing Date, the fair market
value of the Facility with respect to which the Loan is made is equal
to or greater than the Allocated Loan Amount of such Facility after
giving effect to the Loan.
(AA) No Prior Assignment. As of the Closing Date, (i) Lender
is the assignee of Borrower's interest under the Leases, and (ii) there
are no prior assignments of the Leases or any portion of the Rent due
and payable or to become due and payable which are presently
outstanding.
(AB) Use of Facilities. Borrower's Facility is used
exclusively as a nursing home and uses ancillary thereto.
(AC) Certificate of Occupancy. Borrower has obtained (in its
own name, or in Manager's name), all Permits necessary to use and
operate Borrower's Facility for the use described in Section
4.1(d)(AB). The use being made of Borrower's Facility is in conformity
in all material respects with the certificate of occupancy and/or
Permits for such Facility and any other restrictions, covenants or
conditions affecting such Facility.
(AD) Flood Zone. Except as shown on the Surveys, Borrower's
Facility is not located in a flood hazard area as defined by the
Federal Insurance Administration.
(AE) Physical Condition. Borrower's Facility is free of
material structural defects and all building systems contained therein
are in good working order in all material respects subject to ordinary
wear and tear, except as disclosed in the Engineering Reports.
(AF) Intellectual Property. All material trademarks, trade
names and service marks that Borrower owns or has pending, or under
which it is licensed, are in good standing and uncontested. There is no
right under any trademark, trade name or service xxxx necessary to the
business of Borrower as presently conducted or as Borrower contemplates
conducting its business. Borrower has not infringed, is not infringing,
and has not received notice of infringement with respect to asserted
trademarks, trade names and service marks of others. To Borrower's
knowledge, there is no infringement by others of material trademarks,
trade names and service marks of Borrower.
(AG) Nursing Home Representations.
(i) Compliance with Laws. Borrower and its Facility
comply with all applicable federal, state and local laws, regulations,
quality and safety standards, accreditation standards and requirements
of the applicable state Department of Health (each a "DOH") and all
other Governmental Authorities including, without limitation, those
relating to the quality and adequacy of medical care, distribution of
pharmaceuticals, rate setting, equipment, personnel, operating
policies, additions to facilities and services and fee splitting.
(ii) Licenses. All governmental licenses, permits,
regulatory agreements or other approvals or agreements necessary or
desirable for the use and operation of Borrower's Facility as intended
are held by the Borrower and are in full force and effect, including,
without limitation, a valid certificate of need ("CON") or similar
certificate, license, or approval issued by the DOH for the requisite
number of beds, and approved provider status in any approved provider
payment program (collectively, the "Licenses").
(iii) Ownership of Licenses. The Licenses,
including without limitation, the CON:
(a) may not be, and have not been,
transferred to any location other than Borrower's Facility;
(b) have not been pledged as collateral
security for any other loan or indebtedness; and
(c) are held free from restrictions or
known conflicts which would materially impair the use or operation
of the Borrower's Facility as intended, and are not provisional,
probationary or restricted in any way.
(iv) Medicare and Medicaid Compliance. Borrower's
Facility is in compliance with all requirements for participation in
Medicare and Medicaid, including without limitation, the Medicare and
Medicaid Patient and Program Protection Act of 1987. Such Facility is
in conformance in all material respects with all insurance,
reimbursement and cost reporting requirements, and has a current
provider agreement which is in full force and effect under Medicare and
Medicaid.
(v) Third Party Payors. There is no threatened or
pending revocation, suspension, termination, probation, restriction,
limitation, or non-renewal affecting Borrower or its Facility or any
participation or provider agreement with any third party payor
(including Medicare, Medicaid, Blue Cross and/or Blue Shield, and any
other private commercial insurance managed care and employee assistance
program) (such programs, the "Third Party Payors' Programs") to which
Borrower presently is subject. All Medicaid, Medicare, and private
insurance cost reports and financial reports submitted by Borrower are
and will be materially accurate and complete and have not been and will
not be misleading in any material respects. No cost reports for
Borrower's Facility remain "open" or unsettled, except as otherwise
disclosed.
(vi) Governmental Proceedings and Notices. Neither
Borrower nor its Facility is currently the subject of any proceeding by
any Governmental Authority, and no notice of any violation has been
received from a Governmental Authority that would, directly or
indirectly, or with the passage of time:
(a) have a Material Adverse Effect on
Borrower's ability to accept and/or retain patients or result in the
imposition of a fine, a sanction, a lower rate certification or a
lower reimbursement rate for services rendered to eligible patients;
(b) modify, limit or annul or result in
the transfer, suspension, revocation or imposition of probationary
use of Borrower's Licenses; or
(c) affect Borrower's continued
participation in the Medicaid or Medicare programs or any other of
the Third Party Payors' Programs, or any successor programs thereto,
at current rate certifications.
(vii) Physical Plant Standards. Borrower's Facility
and the use thereof complies in all material respects with all
applicable local, state and federal building codes, fire codes, health
care, nursing facility and other similar regulatory requirements (the
"Physical Plant Standards") and no waivers of Physical Plant Standards
exist at such Facility.
(viii) Past Violations. Borrower's Facility has not
received a "Level A" (or equivalent) violation, and no statement of
charges or deficiencies has been made or penalty enforcement action has
been undertaken against such Facility or against Borrower or against
any partner, member, officer, director or stockholder of Borrower by
any Governmental Authority during the last three calendar years, and
there have been no violations over the past three years which have
threatened such Facility's or Borrower's certification for
participation in Medicare or Medicaid or the other Third Party
Payors' Programs.
(ix) Audits. There are no current, pending or
outstanding Medicaid, Medicare or Third Party Payors' Programs
reimbursement audits or appeals pending at Borrower's Facility, and
there are no years that are subject to audits.
(x) Recoupment. There are no current or pending
Medicaid or Medicare or Third Party Payors' Programs recoupment efforts
at Borrower's Facility. The Borrower is not a participant in any
federal program whereby any Governmental Authority may have the right
to recover funds by reason of the advance of federal funds, including,
without limitation, those authorized under the Xxxx-Xxxxxx Act (42
U.S.C. 291, et seq.).
(xi) Pledges of Receivables. Borrower has not
pledged its receivables as collateral security for any other loan
or indebtedness.
(xii) Patient Care Agreements. There are no patient
or resident care agreements with patients or residents or with any
other persons which deviate in any material adverse respect from the
standard form customarily used at Borrower's Facility.
(xiii) Patient Records. All patient or resident
records at Borrower's Facility, including patient or resident trust
fund accounts, are true and correct in all material respects.
(xiv) Management and Operating Agreements. Any
existing Management Agreement with respect to Borrower's Facility is in
full force and effect and is not in default by any party thereto. In
the event any Management Agreement is terminated or in the event of
foreclosure or other acquisition of such Facility by the Lender,
neither the Borrower, the Lender, nor any subsequent operator or any
subsequent purchaser must obtain a CON prior to applying for and
receiving a license to operate such Facility or prior to receiving
Medicare or Medicaid payments.
(AH) Conduct of Business. Borrower does not conduct its
business "also known as," "doing business as" or under any other name
other than (i) for Pompton, the "Cedar Grove Manor Nursing Home," (ii)
for PVM, the "Xxxx Xxxxx at West Palm Beach," (iii) for Jayber, the
"Northfield Manor Nursing Home," and (iv) for Xxxxxxx, "The Heritage at
Xxxxxxx" and "The Rosemont."
(AI) Title Insurance. Borrower's Facility is covered by either
an American Land Title Association (ALTA) mortgagee's title insurance
policy, or a commitment to issue such a title insurance policy,
insuring a valid first lien on such Facility, which is in full force
and effect and is freely assignable to and will inure to the benefit of
Lender and any assignee of Lender, including but not limited to the
trustee in a Securitization, subject only to the Permitted
Encumbrances.
(AJ) Borrower's Facility is not an "industrial establishment"
as defined by the Industrial Site Recovery Act, NJSA B:1K-6 et seq., as
amended.
(AK) (i) The amount of the Note with respect to each Facility
does not exceed the Tax Fair Market Value of such Facility.
(ii) If a Note with respect to a Facility is
significantly modified prior to the closing date of a Securitization so
as to result in a taxable exchange under Code ss.1001, the relelvant Borrower
will, if requested by Lender, represent that the amount of such Note does
not exceed the Tax Fair Market Value of such Facility as of the date of
such significant modification.
Section 4.2. Survival of Representations and Warranties. Each
Borrower agrees that (i) all of the representations and warranties of such
Borrower set forth in this Agreement and in the other Loan Documents delivered
on the Closing Date are made as of the Closing Date (except as expressly
otherwise provided) and (ii) all representations and warranties made by such
Borrower shall survive the delivery of the Notes and continue for so long as any
amount remains owing to Lender under this Agreement, the Notes or any of the
other Loan Documents; provided, however, that the representations set forth in
Section 4.1(d) (U) shall survive in perpetuity. All representations, warranties,
covenants and agreements made in this Agreement or in the other Loan Documents
shall be deemed to have been relied upon by Lender notwithstanding any
investigation heretofore or hereafter made by Lender or on its behalf.
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.1. Borrower Covenants. Each Borrower covenants and
agrees that, from the date hereof and until payment in full of the Indebtedness
(or with respect to a particular Facility, the earlier release of its Related
Mortgage):
(A) Existence; Compliance with Legal Requirements; Insurance.
Borrower shall do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its corporate existence,
rights, licenses, Permits and franchises necessary for the conduct of
its business and shall comply in all material respects with all Legal
Requirements and Insurance Requirements applicable to it and its
Facility. Borrower shall notify Lender promptly of any written notice
or order that the Borrower receives from any Governmental Authority
with respect to the Borrower's compliance with such Legal Requirements
relating to such Borrower's Facility and promptly take any and all
actions necessary to bring its operations at such Facility into
compliance with such Legal Requirements (and shall fully comply with
the requirements of such Legal Requirements that at any time are
applicable to its operations at such Facility) provided, that the
Borrower at its expense may, after prior notice to the Lender, contest
by appropriate legal, administrative or other proceedings conducted in
good faith and with due diligence, the validity or application, in
whole or in part, of any such Legal Requirements as long as (i) neither
the applicable Collateral nor any part thereof or any interest therein,
will be sold, forfeited or lost if the Borrower pays the amount or
satisfies the condition being contested, and the Borrower would have
the opportunity to do so, in the event of the Borrower's failure to
prevail in the contest, (ii) Lender would not, by virtue of such
permitted contest, be exposed to any risk of any civil liability for
which the Borrower has not furnished additional security as provided in
clause (iii) below, or to any risk of criminal liability, and neither
the applicable Collateral nor any interest therein would be subject to
the imposition of any Lien provided in clause (iii) below as a result
of the failure to comply with such Legal Requirement or of such
proceeding and (iii) the Borrower shall have furnished to the Lender
additional security in respect of the claim being contested or the loss
or damage that may result from the Borrower's failure to prevail in
such contest in such amount as may be reasonably requested by the
Lender but in no event less than 125% of the amount of such claim.
Borrower shall at all times maintain, preserve and protect all
franchises and trade names and preserve all the remainder of its
property necessary for the continued conduct of its business and keep
its Facility in good repair, working order and condition, except for
reasonable wear and use, and from time to time make, or cause to be
made, all necessary repairs, renewals, replacements, betterments and
improvements thereto, all as more fully provided in the Related
Mortgage. Borrower shall keep its Facility insured at all times, by
financially sound and reputable insurers, to such extent and against
such risks, and maintain liability and such other insurance, as is more
fully provided herein and in the Related Mortgage.
(B) Impositions and Other Claims. Borrower shall pay and
discharge or cause to be paid and discharged all Impositions, as well
as all lawful claims for labor, materials and supplies or otherwise,
which could become a Lien, all as more fully provided in, and subject
to any rights to contest contained in, the Related Mortgage.
(C) Litigation. Borrower shall give prompt written notice to
Lender of any litigation or governmental proceedings pending or
threatened against Borrower which is reasonably likely to have a
Material Adverse Effect.
(D) Environmental Remediation.
(i) If any investigation, site monitoring, cleanup,
removal, abatement, restoration, remedial work or other response action
of any kind or nature is required pursuant to an order or directive of
any Governmental Authority or under any applicable Environmental Law
(collectively, the "Remedial Work"), because of or in connection with
the (x) past, present or future presence, suspected presence, Release
or suspected Release of a Hazardous Substance at, on, in, under or from
a Facility or any portion thereof, or (y) violation of or compliance
with applicable Environmental Laws, Borrower shall promptly commence
and diligently prosecute to completion all such Remedial Work. In all
events, such Remedial Work shall be commenced within the time period
ordered or directed by such Governmental Authority or such shorter
period as may be required under any applicable Environmental Law;
provided, however, that Borrower shall not be required to commence such
Remedial Work within the above specified time periods: (x) if prevented
from doing so by any Governmental Authority, (y) if commencing such
Remedial Work within such time periods would result in Borrower or such
Remedial Work violating any Environmental Law or (z) if Borrower, at
its expense and after prior notice to Lender, is contesting by
appropriate legal, administrative or other proceedings conducted in
good faith and with due diligence the need to perform Remedial Work, as
long as (1) Borrower is permitted by the applicable Environmental Laws
to delay performance of the Remedial Work pending such proceedings, (2)
neither Borrower's Facility nor any part thereof or interest therein
will be sold, forfeited or lost if Borrower performs the Remedial Work
being contested, and Borrower would have the opportunity to do so, in
the event of Borrower's failure to prevail in the contest, (3) Lender
would not, by virtue of such permitted contest, be exposed to any risk
of any civil liability for which Borrower has not furnished additional
security as provided in clause (4) below, or to any risk of criminal
liability, and neither such Facility nor any interest therein would be
subject to the imposition of any Lien for which Borrower has not
furnished additional security as provided in clause (4) below, as a
result of the failure to perform such Remedial Work and (4) Borrower
shall have furnished to Lender additional security in respect of the
Remedial Work being contested and the loss or damage that may result
from Borrower's failure to prevail in such contest in such amount as
may be reasonably requested by Lender, but in no event less than 125%
of the cost of such Remedial Work and any loss or damage that may
result from Borrower's failure to prevail in such contest.
(ii) All Remedial Work under clause (i) above shall
be performed by contractors, and under the supervision of a consulting
environmental Engineer, each approved in advance by Lender which
approval will not be unreasonably withheld or delayed. All costs and
expenses incurred in connection with such Remedial Work shall be paid
by Borrower. If Borrower does not timely commence and diligently
prosecute to completion the Remedial Work, Lender may (but shall not be
obligated to), upon 30 days prior written notice to Borrower of its
intention to do so, cause such Remedial Work to be performed. Borrower
shall pay or reimburse Lender on demand for all Advances (as defined in
the Related Mortgage) and expenses (including attorneys' fees and
disbursements, but excluding internal overhead, administrative and
similar costs of Lender) relating to or incurred by Lender in
connection with monitoring, reviewing or performing any Remedial Work
in accordance herewith.
(iii) Unless otherwise required by law, Environmental
Laws or any Governmental Authority, Borrower shall not commence any
Remedial Work under clause (i) above, nor enter into any settlement
agreement, consent decree or other compromise relating to any Hazardous
Substances or Environmental Laws which is reasonably likely to have a
Material Adverse Effect. Notwithstanding the foregoing, if the presence
or threatened presence or Release of Hazardous Substances at, on, in,
under, from or about Borrower's Facility poses an immediate threat to
the health, safety or welfare of any Person or the environment, or is
of such a nature that an immediate response is necessary, Borrower may
complete all necessary Remedial Work. In such events, Borrower shall
notify Lender as soon as practicable and, in any event, within three
Business Days, of any action taken.
(E) Environmental Matters; Inspection.
(i) Borrower shall not cause, allow or authorize a
Hazardous Substance to be present at, on, in, under or to emanate from
its Facility, or migrate from adjoining property controlled by Borrower
onto or into its Facility, except under conditions permitted by
applicable Environmental Laws and, in the event that such Hazardous
Substances are present at, on, in, under or emanate from such Facility,
or migrate onto or into such Facility, Borrower shall cause the
performance of Remedial Work, removal or remediation of such Hazardous
Substances, in accordance with this Agreement and Environmental Laws.
Borrower shall use best efforts to prevent, and to seek the remediation
of, any migration of Hazardous Substances onto or into Borrower's
Facility from any adjoining property.
(ii) Upon prior written notice, Lender shall have the
right at all reasonable times to enter upon and inspect all or any
portion of any Facility, provided that such inspections shall not
unreasonably interfere with the operation or the tenants, residents or
occupants of such Facility. If Lender suspects that Remedial Work may
be required, Lender may select or may require Borrower to select a
consulting environmental Engineer satisfactory to Lender to conduct and
prepare environmental reports assessing the environmental condition of
the Facility. Lender shall be given a reasonable opportunity to review
any reports, data and other documents or materials reviewed or prepared
by the environmental Engineer. The inspection rights granted to Lender
in this Section 5.1(E) shall be in addition to, and not in limitation
of, any other inspection rights granted to Lender in the Loan
Documents, and shall expressly include the right (if Lender suspects
that Remedial Work may be required) to conduct or require Borrower to
conduct soil borings, establish ground water monitoring xxxxx and
conduct other customary environmental tests, assessments and audits.
(iii) Borrower agrees to bear and shall pay or
reimburse Lender on demand for all sums advanced and expenses incurred
(including attorneys' fees and disbursements, but excluding internal
overhead, administrative and similar costs of Lender) relating to, or
incurred by Lender in connection with, the inspections and reports
described in this Section 5.1(E) in the following situations:
(x) If Lender has reasonable grounds to believe, at
the time any such inspection is ordered, that there exists an
occurrence or condition that could lead to an Environmental
Claim;
(y) If any such inspection reveals an occurrence or
condition that could lead to an Environmental Claim; or
(z) If an Event of Default with respect to any
Facility exists at the time any such inspection is ordered,
and such Event of Default relates to any representation,
covenant or other obligation pertaining to Hazardous
Substances, Environmental Laws or any other environmental
matter.
(F) Environmental Notices. Borrower shall promptly provide
notice to Lender of:
(i) any Environmental Claim asserted or threatened by
any Governmental Authority or other Person with respect to any
Hazardous Substance on, in, under or emanating from Borrower's
Facility, which could reasonably be expected to impair the value of
Lender's security interests hereunder or have a Material Adverse
Effect;
(ii) any Environmental Claim or proceeding,
investigation or inquiry commenced or threatened in writing by any
Person or Governmental Authority, against Borrower, with respect to the
presence, suspected presence, Release or threatened Release of
Hazardous Substances from or onto, in or under any property not owned
by Borrower, including, without limitation, proceedings under the
Comprehensive Environmental Response, Compensation, and Liability Act,
as amended, 42 U.S.C. ss. 9601, et seq., which could reasonably be
expected to impair the value of Lender's security interests hereunder
or have a Material Adverse Effect;
(iii) all Environmental Claims asserted or threatened
against Borrower, against any other party occupying any Facility or any
portion thereof which become known to Borrower or against such
Facility, which could reasonably be expected to impair the value of
Lender's security interests hereunder or have a Material Adverse
Effect;
(iv) the discovery by Borrower of any occurrence or
condition on its Facility or on any real property adjoining or in the
vicinity of such Facility which could reasonably be expected to lead to
an Environmental Claim against Borrower or Lender which such
Environmental Claim is reasonably likely to have a Material Adverse
Effect; and
(v) the commencement or completion of any Remedial
Work.
(G) Copies of Notices. Borrower shall immediately transmit to
Lender copies of any citations, orders, notices or other written
communications received from any Person or any Governmental Authority
and any notices, reports or other written communications submitted to
any Governmental Authority with respect to the matters described in
Section 5.1(F).
(H) Environmental Claims. Lender and/or, to the extent
authorized by Lender if applicable, the Deed of Trust Trustee may join
and participate in, as a party if Lender so determines, any legal or
administrative proceeding or action concerning a Facility or any
portion thereof under any Environmental Law, if, in Lender's reasonable
judgment, the interests of Lender or the Deed of Trust Trustee, will
not be adequately protected by Borrower. Borrower agrees to bear and
shall pay or reimburse Lender and the Deed of Trust Trustee on demand
for all sums advanced and expenses incurred (including attorneys' fees
and disbursements, but excluding internal overhead, administrative and
similar costs of Lender) and the Deed of Trust Trustee, incurred by
Lender and the Deed of Trust Trustee in connection with any such action
or proceeding.
(I) Indemnification. Each Borrower agrees to indemnify,
reimburse, defend, and hold harmless Lender and the Deed of Trust
Trustee, for, from, and against all demands, claims, actions or causes
of action, assessments, losses, damages, liabilities, costs and
expenses, including, without limitation, interest, penalties,
consequential damages, attorneys' fees, disbursements and expenses, and
consultants' fees, disbursements and expenses including costs of
Remedial Work (but excluding internal overhead, administrative and
similar costs of Lender and the Deed of Trust Trustee), asserted
against, resulting to, imposed on, or incurred by Lender and the Deed
of Trust Trustee, directly or indirectly, in connection with any of the
following, (except to the extent the same are directly and solely
caused by Lender's and the Deed of Trust Trustee's gross negligence or
willful misconduct):
(i) events, circumstances, or conditions which are
alleged to, or do, form the basis for an Environmental Claim;
(ii) the presence, Use or Release of Hazardous
Substances at, on, in, under or from any Facility which presence, Use
or Release requires or would require Remedial Work;
(iii) any Environmental Claim against Borrower,
Lender, Deed of Trust Trustee or any Person whose liability for such
Environmental Claim Borrower has or may have assumed or retained either
contractually or by operation of law; or
(iv) the breach of any representation, warranty or
covenant set forth in Section 4.1(d)(U) and Sections 5.1(A),(D) through
5.1(I), inclusive.
Nothing in this Section 5.1(I) shall be deemed to deprive
Lender of any rights or remedies provided to it elsewhere in this
Agreement or the other Loan Documents or otherwise available to it
under law. Borrower waives and releases Lender and any Deed of Trust
Trustee from any rights or defenses Borrower may have under common law
or Environmental Laws for liability arising or resulting from the
presence, Use or Release of Hazardous Substances except to the extent
caused by the gross negligence or willful misconduct of Lender or Deed
of Trust Trustee.
(J) Access to Facilities. Borrower shall permit agents,
representatives and employees of Lender to inspect Borrower's Facility
or any part thereof at such reasonable times as may be requested by
Lender upon advance notice, subject, however, to the rights of the
tenants, occupants and guests of such Facility.
(K) Notice of Default. Borrower shall promptly advise Lender
of any material adverse change in Borrower's condition, financial or
otherwise, or of the occurrence of any Event of Default, or of the
occurrence of any Default.
(L) Cooperate in Legal Proceedings. Except with respect to any
claim by Borrowers against Lender, Borrower shall cooperate fully with
Lender with respect to any proceedings before any Governmental
Authority which may in any way affect the rights of Lender hereunder or
any rights obtained by Lender under any of the Loan Documents and, in
connection therewith, not prohibit Lender, at its election, from
participating in any such proceedings.
(M) Perform Loan Documents. Borrower shall observe, perform
and satisfy all the terms, provisions, covenants and conditions
required to be observed, performed or satisfied by it, and shall pay
when due all costs, fees and expenses required to be paid by it, under
the Loan Documents executed and delivered by Borrower.
(N) Insurance Benefits. Borrower shall cooperate with Lender
in obtaining for Lender the benefits of any Insurance Proceeds lawfully
or equitably payable to Lender in connection with Borrower's Facility,
and Lender shall be reimbursed for any expenses incurred in connection
therewith (including attorneys' fees and disbursements and the payment
by Borrower of the expense of an Appraisal on behalf of Lender in case
of a fire or other casualty affecting such Facility or any part
thereof, but excluding internal overhead, administrative and similar
costs of Lender) out of such Insurance Proceeds, all as more
specifically provided in the Related Mortgage.
(O) Further Assurances. Borrower shall, at Borrower's sole
cost and expense:
(i) upon Lender's request therefor given from time to
time during the continuation of any Default pay for (a) reports of UCC,
federal tax lien, state tax lien, judgment and pending litigation
searches with respect to Borrower and (b) searches of title to
Borrower's Facility, each such search to be conducted by search firms
designated by Lender in each of the locations designated by Lender;
(ii) furnish to Lender all instruments, documents,
boundary surveys, footing or foundation surveys, certificates, plans
and specifications, Appraisals, title and other insurance reports and
agreements, and each and every other document, certificate, agreement
and instrument required to be furnished pursuant to the terms of the
Loan Documents;
(iii) execute and deliver to Lender such documents,
instruments, certificates, assignments and other writings, and do such
other acts necessary, to evidence, preserve and/or protect the
Collateral at any time securing or intended to secure Borrower's Note,
as Lender may require; and
(iv) do and execute all and such further lawful acts,
conveyances and assurances for the better and more effective carrying
out of the intents and purposes of this Agreement and the other Loan
Documents, as Lender shall require from time to time.
(P) Management of Mortgaged Property. (i) Borrower's Facility
will be managed at all times by a Manager pursuant to a Management
Agreement unless terminated as herein provided. Pursuant to each
Manager's Subordination, Manager will agree that the applicable
Management Agreement is subject and subordinate in all respects to the
Lien of the Related Mortgage. Each Management Agreement shall be
terminated by Borrower, at Lender's request, upon 30 days prior written
notice to the relevant Borrower and Manager (a) upon the occurrence and
continuance of an Event of Default, (b) if Manager commits any act
which would permit termination by the relevant Borrower under the
Management Agreement or (c) in the event that the Adjusted Net
Operating Income for all Facilities calculated as of the end of any
Interest Accrual Period, computed on the basis of the prior twelve (12)
months, is less than 80% of the Base NOI for all Facilities, provided
that, under a termination under clause (c), Borrower shall have thirty
(30) days to find a replacement Manager acceptable to Lender in
Lender's sole discretion. A Borrower may from time to time appoint a
successor manager to manage its Facility which successor manager shall
be satisfactory to Lender in Lender's discretion, as evidenced in
writing. Notwithstanding the foregoing, any successor property manager
selected hereunder by Lender or any Borrower to serve as Manager shall
be a reputable management company having at least seven years'
experience in the management of nursing homes in the state in which
such Facility is located.
(ii) Xxxxxxx will be operated at all times by an
Operator pursuant to a Master Lease unless terminated as herein
provided. Such Master Lease shall be terminated by Borrower, at
Lender's request, upon 30 days prior written notice to Xxxxxxx and
Operator (a) upon the occurrence and continuance of an Event of
Default, (b) if Operator commits any act which would permit termination
by Xxxxxxx under the Master Lease or (c) in the event that the Adjusted
Net Operating Income for all Facilities calculated as of the end of any
Interest Accrual Period, computed on the basis of the prior twelve (12)
months, is less than 80% of the Base NOI for all Facilities, provided
that, under a termination under clause (c), Borrower shall have thirty
(30) days to find a replacement Operator acceptable to Lender in
Lender's sole discretion.. Xxxxxxx may from time to time appoint a
successor operator to operate its Facility which successor operator
shall be satisfactory to Lender in Lender's discretion, as evidenced in
writing.
(Q) Financial Reporting.
(i) Borrower shall keep and maintain or shall cause
to be kept and maintained on a Fiscal Year basis, in accordance with
GAAP books, records and accounts reflecting in reasonable detail all of
the financial affairs of Borrower and all items of income and expense
in connection with the operation of Borrower's Facility and in
connection with any services, equipment or furnishings provided in
connection with the operation of Borrower's Facility, whether such
income or expense may be realized by Borrower or by any other Person
whatsoever. Lender shall have the right from time to time at all times
during normal business hours upon reasonable prior written notice to
Borrower to examine such books, records and accounts at the office of
Borrower or other Person maintaining such books, records and accounts
and to make such copies or extracts thereof as Lender shall desire.
After the occurrence and continuance of an Event of Default with
respect to Borrower or its Facility, Borrower shall pay any costs and
expenses incurred by Lender to examine Borrower's accounting records
with respect to Borrower's Facility, as Lender shall determine to be
necessary or appropriate in the protection of Lender's interest.
(ii) Borrower shall furnish to Lender annually,
within 90 days following the end of each Fiscal Year, a complete copy
of Borrower's financial statement audited by an Independent certified
public accountant acceptable to Lender (Lender hereby agreeing that any
"Big Six" certified public accounting firm or Xxxxxxx Xxxxxxxxx &
Company shall be acceptable to Lender) in accordance with GAAP (or such
other accounting basis reasonably acceptable to Lender) covering
Borrower's financial position and results of operations for such Fiscal
Year and containing a statement of revenues and expenses, a statement
of assets and liabilities and a statement of Borrower's equity.
Notwithstanding the foregoing, Borrower's annual financial statement
does not need to be audited by an Independent certified public
accountant for so long as Continental Health Affiliates (i) owns the
same stock in Borrower as of the date hereof and (ii) provides Lender
with annual financial statements audited by an Independent certified
public accountant pursuant to, and in accordance with, a letter
agreement by and between Continental Health Affiliates and Lender.
Together with Borrower's annual financial statements, Borrower shall
furnish to Lender an Officer's Certificate certifying as of the date
thereof (x) that the annual financial statements present fairly in all
material respects the results of operations and financial condition of
Borrower all in accordance with GAAP, and (y) whether there exists an
Event of Default or Default, and if such Event of Default or Default
exists, the nature thereof, the period of time it has existed and the
action then being taken to remedy same.
(iii) Borrower shall furnish to Lender, within 45
days following the end of each Fiscal Year quarter, a true, complete
and correct cash flow statement with respect to Borrower's Facility for
that quarter.
(iv) Borrower shall furnish to Lender, within 45 days
after the end of each Fiscal Year quarter, an aged accounts receivable
report for its Facility.
(v) Borrower shall furnish to Lender, within 15
Business Days after request, such further information with respect to
the operation of its Facility and the financial affairs of Borrower as
may be requested by Lender, including all business plans prepared for
Borrower.
(vi) Borrower shall furnish to Lender, within 15
Business Days after request, such further information regarding any
Plan or Multiemployer Plan and any reports or other information
required to be filed under ERISA as may be requested by Lender.
(vii) Borrower shall, concurrently with Borrower's
delivery to Lender, provide a copy of the items required to be
delivered to Lender hereunder to the Rating Agencies, the trustee, and
any servicer and/or special servicer that may be retained in
conjunction with the Loan or any Securitization.
(viii) Borrower shall furnish or shall cause to be
furnished to Lender, within five (5) days of the receipt by Borrower,
Manager or Operator, if any, any and all notices (regardless of form)
from any licensing and/or certifying agency that the Licenses of such
Borrower's Facility or Medicare or Medicaid certification of the
Facility is being downgraded to a substandard category, revoked, or
suspended, or that action is pending or being considered to downgrade
to a substandard category, revoke, or suspend the nursing home's
license or certification;
(ix) Borrower shall furnish to Lender, within one
hundred twenty (120) Business Days after the fiscal year of the Manager
and Operator, if any, compilation statements of such Manager or
Operator, if any, in form and substance satisfactory to Lender,
certified by the relevant chief financial officer as true and correct;
(x) Borrower shall furnish to Lender, within ten (10)
Business Days of the date of the required filing of cost reports of
Borrower's Facility with the Medicaid agency or the date of actual
filing of such cost report of the Facility with such agency, whichever
is earlier, a complete and accurate copy of the annual Medicaid cost
report for the Facility, which will be prepared by an Independent
certified public accountant or by an experienced cost report preparer
acceptable to Lender, and promptly furnish Lender any amendments filed
with respect to such reports and all responses, audit reports or
inquiries with respect to such reports; and
(xi) Borrower shall furnish to Lender, within five
(5) Business Days of receipt, a copy of any Medicare, Medicaid or other
licensing agency survey or report and any statement of deficiencies,
and within the time period required by the particular agency for
furnishing a plan of correction also furnish or cause to be furnished
to Lender a copy of the plan of correction generated from such survey
or report for Borrower's Facility, and correct or cause to be corrected
any deficiency, the curing of which is a condition of continued
licensure or for full participation in Medicare and Medicaid for
existing patients or for new patients to be admitted with Medicare or
Medicaid coverage, by the date required for cure by such agency (plus
extensions granted by such agency).
(xii) Notwithstanding anything herein to the
contrary, Borrower shall furnish to Lender 1995 Unaudited Financial
Statements on or before January 20, 1995.
(R) Conduct of Business. Borrower shall cause the operation of
Borrower's Facility to be conducted at all times in a manner consistent
with at least the level of operation of Borrower's Facility as of the
Closing Date, including, without limitation, the following:
(i) to maintain or cause to be maintained the
standard of operations at Borrower's Facility at all times at a level
necessary to insure a level of quality for such nursing home Facility
consistent with similar nursing home facilities in the same competitive
market;
(ii) to operate or cause to be operated Borrower's
Facility in a prudent manner in compliance in all material respects
with applicable Legal Requirements and Insurance Requirements relating
thereto and cause all licenses, Permits, and any other agreements
necessary for the continued use and operation of such Facility to
remain in effect; and
(iii) to maintain or cause to be maintained
sufficient Inventory and Equipment of types and quantities at
Borrower's Facility to enable Borrower or Manager to operate Borrower's
Facility.
(S) Intentionally Omitted.
(T) ERISA. Borrower shall deliver to Lender as soon as
possible, and in any event within ten days after Borrower knows or has
reason to believe that any of the events or conditions specified below
with respect to any Plan or Multiemployer Plan has occurred or exists,
a statement signed by a senior financial officer of Borrower setting
forth details respecting such event or condition and the action, if
any, that Borrower or its ERISA Affiliate proposes to take with respect
thereto (and a copy of any report or notice required to be filed with
or given to PBGC by Borrower or an ERISA Affiliate with respect to such
event or condition):
(i) any reportable event, as defined in Section
4043(b) of ERISA and the regulations issued thereunder, with respect to
a Plan, as to which PBGC has not by regulation waived the requirement
of Section 4043(a) of ERISA that it be notified within 30 days of the
occurrence of such event (provided that a failure to meet the minimum
funding standard of Section 412 of the Code or Section 302 of ERISA,
including, without limitation, the failure to make on or before its due
date a required installment under Section 412(m) of the Code or Section
302(e) of ERISA, shall be a reportable event regardless of the issuance
of any waivers in accordance with Section 412(d) of the Code); and any
request for a waiver under Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of
a notice of intent to terminate any Plan or any action taken by
Borrower or an ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by Borrower or any
ERISA Affiliate of a notice from a Multiemployer Plan that such action
has been taken by PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a
Multiemployer Plan by Borrower or any ERISA Affiliate that results in
liability under Section 4201 or 4204 of ERISA (including the obligation
to satisfy secondary liability as a result of a purchaser default) or
the receipt by Borrower or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or insolvency pursuant
to Section 4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of
any Multiemployer Plan against Borrower or any ERISA Affiliate to
enforce Section 515 of ERISA, which proceeding is not dismissed within
30 days;
(vi) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA,
would result in the loss of tax-exempt status of the trust of which
such Plan is a part if Borrower or an ERISA Affiliate fails to timely
provide security to the Plan in accordance with the provisions of said
Sections; and
(vii) the imposition of a lien or a security
interest in connection with a Plan.
(U) Single Purpose Entity. Borrower shall at all times be
a Single Purpose Entity.
(V) Nursing Home Covenants. Borrower shall:
(1) operate Borrower's Facility in full compliance
with the laws and requirements referred to in Section 4.1(d)(AG)(i);
(2) operate Borrower's Facility or cause Borrower's
Facility to be operated in a manner such that the Licenses shall remain
in full force and effect; and
(3) comply with all requirements for participation in
Medicare and Medicaid, and shall keep in full force and effect a
current provider agreement under Medicare and Medicaid.
(W) Trade Indebtedness. Borrower will pay its trade payables
within sixty (60) days of the date incurred except for outstanding
trade payables existing as of the Closing Date which do not require
payment within sixty (60) days, unless Borrower is in good faith
contesting Borrower's obligation to pay such trade payables in a manner
satisfactory to Lender (which may include Lender's requirement that
Borrower post security with respect to the contested trade payable).
ARTICLE VI
NEGATIVE COVENANTS
Section 6.1. Borrower Negative Covenants. Each Borrower
covenants and agrees that, until payment in full of the Indebtedness (or, with
respect to any particular Facility, the earlier release of the Related
Mortgage), it will not do, directly or indirectly, any of the following unless
Lender consents thereto in writing:
(A) Liens on the Mortgaged Property. Incur, create, assume,
become or be liable in any manner with respect to, or permit to exist,
any Lien with respect to Borrower's Facility, except: (i) Liens in
favor of Lender, and (ii) the Permitted Encumbrances.
(B) Transfer. Except as expressly permitted by or pursuant to
this Agreement or the Related Mortgage, or except as otherwise approved
by Lender in writing in Lender's sole discretion, allow any Transfer to
occur, terminate the Management Agreement, or enter into a management
contract with respect to Borrower's Facility.
(C) Other Borrowings. Incur, except for unsecured trade
payables incurred in the ordinary course of business relating to the
ownership and operation of Borrower's Facility which are paid within
sixty (60) days of the date incurred, except for outstanding trade
payables existing as of the Closing Date which do not required payment
within sixty (60) days, create, assume, become or be liable in any
manner with respect to Other Borrowings.
(D) Intentionally omitted.
(E) Change In Business. Cease to be a Single-Purpose Entity,
or make any material change in the scope or nature of its business
objectives, purposes or operations, or undertake or participate in
activities other than the continuance of its present business.
(F) Debt Cancellation. Cancel or otherwise forgive or release
any material claim or debt owed to Borrower by any Person, except for
adequate consideration or in the ordinary course of Borrower's
business.
(G) Affiliate Transactions. Enter into, or be a party to, any
transaction with an Affiliate of Borrower, except (i) for a Master
Lease or (ii) in the ordinary course of business and on terms which are
no less favorable to Borrower or such Affiliate than would be obtained
in a comparable arm's length transaction with an unrelated third party
and, if the amount to be paid to the Affiliate pursuant to the
transaction or series of related transactions is greater than $50,000
(determined annually on an aggregate basis) fully disclosed to Lender
in advance; provided, however, that Lender hereby agrees that, provided
no Event of Default shall have occurred with respect to Borrower or
Borrower's Facility, and subject to the provisions of Section 5.1(P)
and the relevant Manager's Subordination, nothing contained in the
foregoing shall prohibit payment by Borrower of any fees or expenses to
Manager in accordance with the terms of the Management Agreement, and
Lender hereby consents to Manager serving as manager of Borrower's
Facility; provided, further, however, that the management fees charged
by Manager shall not be more than the amounts provided for in the
relevant Management Agreement as of the Closing Date with respect to
Borrower's Facility covered by such Management Agreement.
(H) Creation of Easements. Create, or permit Borrower's
Facility or any part thereof to become subject to, any easement,
license or restrictive covenant, other than a Permitted Encumbrance.
(I) Misapplication of Funds. Distribute any Rents or Money
received from Accounts in violation of the provisions of Section 2.12.
(J) Certain Restrictions. Enter into any agreement which
expressly restricts the ability of Borrower to enter into amendments,
modifications or waivers of any of the Loan Documents.
(K) Issuance of Equity Interests. Issue or allow to be created
any shareholder interests other than the shareholder interests which
are outstanding or exist on the Closing Date or any security or other
instrument which by its terms is convertible into or exercisable or
exchangeable for any shareholder interests in Borrower.
(L) Assignment of Licenses and Permits. Assign or transfer any
of its interest in any Permits pertaining to Borrower's Facility
(except to the Manager in the ordinary course of Borrower's business),
or assign, transfer or remove or permit any other Person to assign,
transfer or remove any records pertaining to Borrower's Facility
without Lender's prior written consent, which consent may be granted or
refused in Lender's sole discretion.
(M) Place of Business. Change its chief executive office or
its principal place of business or place where its books and records
are kept without giving Lender at least 30 days' prior written notice
thereof and promptly providing Lender such information as Lender may
request in connection therewith.
(N) Nursing Home Negative Covenants: Borrower shall not:
(1) transfer the Licenses to any location other than
Borrower's Facility nor shall Borrower pledge the Licenses as
collateral security for any other loan or indebtedness;
(2) rescind, withdraw, revoke, amend, modify,
supplement, or otherwise alter the nature, tenor or scope of the
Licenses for Borrower's Facility;
(3) amend or otherwise change Borrower's Facility's
authorized bed capacity and/or the number of beds approved by the DOH;
(4) replace or transfer all or any part of
Borrower's Facility's beds to another site or location;
(5) jeopardize in any manner Borrower's
participation with any Third-Party Payors' Programs to which
Borrower is subject as of the Closing Date;
(6) pledge its receivables as collateral security
for any other loan or indebtedness;
(7) enter into any patient or resident care
agreements with patients or residents or with any other persons which
deviate in any material adverse respect in the standard form
customarily used at Borrower's Facility; or
(8) other than in the normal course of business,
change the terms of any of the Third Party Payors' Programs or its
normal billing payment or reimbursement policies and procedures with
respect thereto (including without limitation the amount and timing of
finance charges, fees and write-offs).
ARTICLE VII
DEFAULTS
Section 7.1. Event of Default. The occurrence of one or more
of the following events shall be an "Event of Default" hereunder:
(i) if on any Payment Date the funds in any Debt
Service Payment Sub-Account are insufficient to pay any relevant
Required Debt Service Payment due on such Payment Date;
(ii) if any Borrower fails to pay the outstanding
Indebtedness on the Maturity Date;
(iii) if on the date any payment of a Basic Carrying
Cost would become delinquent, the funds in the relevant Basic Carrying
Costs Sub-Account required to be reserved pursuant to Section
2.12(g)(ii) together with any funds in the relevant Cash Collateral
Account not allocated to another Sub-Account are insufficient to make
such payment;
(iv) the occurrence of the events identified
elsewhere in the Loan Documents as constituting an "Event of Default";
(v) except as expressly permitted by the Loan
Documents, a Transfer, unless the prior written consent of Lender is
obtained (which consent may be withheld with or without cause in
Lender's discretion);
(vi) if any Borrower fails to pay any other amount
(other than amounts referred to in Sections 7.1(i), 7.1(ii) and
7.1(iii)) payable pursuant to this Agreement or any other Loan Document
when due and payable in accordance with the provisions hereof or
thereof, as the case may be, and such failure continues for ten (10)
days after Lender delivers written notice thereof to any Borrower;
(vii) if any representation or warranty made herein
or in any other Loan Document, or in any report, certificate, financial
statement or other Instrument, agreement or document furnished by any
Borrower in connection with this Agreement, the Notes or any other Loan
Document executed and delivered by any Borrower, shall be false in any
material respect as of the date such representation or warranty was
made or remade and such Borrower fails to remedy such matters as to
make such representation or warranty true and correct within ten (10)
days after notice to such Borrower from Lender or its successors or
assigns in the case of any matter which can be remedied by the payment
of a sum of money or for thirty (30) days after notice from Lender or
its successors or assigns, in the case of any other matter;
(viii) if any Borrower or any Borrower's shareholders
(other than Nomura Asset Capital Corporation) makes an assignment for
the benefit of creditors;
(ix) if a receiver, liquidator or trustee shall be
appointed for any Borrower, or any Borrower's shareholders (other than
Nomura Asset Capital Corporation) or if any Borrower, or Borrower's
shareholders (other than Nomura Asset Capital Corporation) shall be
adjudicated as bankrupt or insolvent, or if any petition for
bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by
or against, consented to, or acquiesced in by any Borrower, or any
Borrower's shareholders (other than Nomura Asset Capital Corporation)
or if any proceeding for the dissolution or liquidation of any
Borrower, or any Borrower's shareholders (other than Nomura Asset
Capital Corporation) shall be instituted; provided, however, that if
such appointment, adjudication, petition or proceeding was involuntary
and not consented to by such Borrower, or such Borrower's shareholder
as the case may be, upon the same not being discharged, stayed or
dismissed within 90 days, or if any Borrower, or any Borrower's
shareholders (other than Nomura Asset Capital Corporation) shall
generally not be paying its debts as they become due;
(x) if any Borrower attempts to delegate its
obligations or assign its rights under this Agreement, any of the other
Loan Documents or any interest herein or therein, or if any Transfer
occurs other than in accordance with the Related Mortgage or any other
Loan Document;
(xi) if any provision of the articles of
incorporation or bylaws of any Borrower is amended or modified in any
material respect which may adversely affect Lender, or if any Borrower
or Borrower's shareholder fails to perform or enforce the provisions of
such organizational documents or attempts to dissolve such Borrower; or
if any Borrower breaches any of its representations, warranties or
covenants set forth in Sections 4.1(d)(I), 4.1(d)(K), 5.1(U), or
6.1(E).
(xii) if an Event of Default as defined or described
in any Loan Document (other than this Agreement) occurs, whether as to
any Borrower or any Facility or all or any portion of the Mortgaged
Property;
(xiii) if any Borrower shall be in default under any
of the other obligations, agreements, undertakings terms, covenants,
provisions or conditions of this Agreement, the Notes, the Mortgages or
the other Loan Documents, not otherwise referred to above in this
Section 7.1, for ten (10) days after notice to such Borrower from
Lender or its successors or assigns, in the case of any default which
can be cured by the payment of a sum of money or for thirty (30) days
after notice from Lender or its successors or assigns, in the case of
any other default (unless otherwise provided herein or in such other
Loan Document); provided, however, that if such non-monetary default
under this subparagraph (xiii) is susceptible of cure but cannot
reasonably be cured within such 30 day period and provided further that
such Borrower shall have commenced to cure such default within such 30
day period and thereafter diligently and expeditiously proceeds to cure
the same, such 30 day period shall be extended for such time as is
reasonably necessary for such Borrower in the exercise of due diligence
to cure such default, but in no event shall such period exceed 180 days
after the original notice from Lender;
(xiv) if an event or condition specified in Section
5.1(T) shall occur or exist with respect to any Plan or Multiemployer
Plan and, as a result of such event or condition, together with all
other such events or conditions, any Borrower or any ERISA Affiliate
shall incur or in the opinion of Lender shall be reasonably likely to
incur a liability to a Plan, a Multiemployer Plan or PBGC (or any
combination of the foregoing) which would constitute, in the
determination of Lender, a Material Adverse Effect;
(xv) if an Event of Default occurs and is
continuing as to any Borrower or any Operator under any Master Lease;
(xvi) if without Lender's prior consent (i) any
Manager or Operator, if any, resigns or is removed, or (ii) the
management or control of such Manager or Operator, if any, is
transferred or (iii) there is any change in any Management Agreement or
Master Lease for any Facility;
(xvii) if any Borrower shall fail to correct, within
the time deadlines set by any Medicare, Medicaid or licensing agency,
any deficiency that justifies either of the following actions by such
agency with respect to any Facility:
(i) a termination of any Medicare contract,
Medicaid contract or License;
(ii) a ban on new admissions generally or on
admission of patients otherwise qualifying for
Medicaid or Medicare coverage for a period greater
than six (6) months;
(xviii) if any Facility is assessed fines or
penalties in excess of $50,000 in the aggregate in any calendar year by
any state or any Medicare, Medicaid, health, reimbursement or licensing
agency having jurisdiction over the Borrower or the Facility.
Section 7.2. Remedies. (a) Upon the occurrence of an Event of
Default, all or any one or more of the rights, powers and other remedies
available to Lender against any Borrower under this Agreement, the Notes, the
Mortgages or any of the other Loan Documents executed by or with respect to any
Borrower, or at law or in equity may be exercised by Lender at any time and from
time to time (including, without limitation, the right to declare the
outstanding principal amount, unpaid interest, Default Rate interest, Late
Charges, Yield Maintenance Premium, Hedge Loss and any other amounts owing by
one or more Borrowers to be immediately due and payable), without notice or
demand, whether or not all or any portion of the Indebtedness shall be declared
due and payable, and whether or not Lender shall have commenced any foreclosure
proceeding or other action for the enforcement of its rights and remedies under
any of the Loan Documents with respect to any Facility or all or any portion of
the Collateral. Any such actions taken by Lender shall be cumulative and
concurrent and may be pursued independently, singly, successively, together or
otherwise, at such time and in such order as Lender may determine in its sole
discretion, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of Lender permitted by law,
equity or contract or as set forth herein or in the other Loan Documents.
Notwithstanding that this Agreement may refer to a continuing Event of Default,
Borrower shall have no right pursuant to this Agreement to cure any Event of
Default unless this Agreement unless consented to by Lender in its sole
discretion.
(b) In the event of the foreclosure or other action by Lender
to enforce its remedies in connection with one or more of the Facilities or all
or any portion of the Mortgaged Property, whether such foreclosure sale (or
other remedy) yields Net Proceeds in an amount less than, equal to or more than
the Allocated Loan Amount of such Facility or Mortgaged Property, Lender may, in
Lender's sole discretion, apply such Net Proceeds received to repay the
Indebtedness in accordance with Section 2.8, and, in such event, the remaining
portion of the Indebtedness shall remain outstanding and secured by the Related
Mortgage and the other Loan Documents, it being understood and agreed by the
Borrowers that the Borrowers are liable for the repayment of all the
Indebtedness and that any "excess" foreclosure proceeds are part of the
cross-collateralized and cross-defaulted security granted to Lender pursuant to
the Related Mortgage.
Section 7.3. Remedies Cumulative. The rights, powers and
remedies of Lender under this Agreement shall be cumulative and not exclusive of
any other right, power or remedy which Lender may have against any Borrower
pursuant to this Agreement or the other Loan Documents executed by or with
respect to any Borrower, or existing at law or in equity or otherwise. Lender's
rights, powers and remedies may be pursued singly, concurrently or otherwise, at
such time and in such order as Lender may determine in Lender's sole discretion.
No delay or omission to exercise any remedy, right or power accruing upon an
Event of Default shall impair any such remedy, right or power or shall be
construed as a waiver thereof, but any such remedy, right or power may be
exercised from time to time and as often as may be deemed expedient. A waiver of
any Default or Event of Default shall not be construed to be a waiver of any
subsequent Default or Event of Default or to impair any remedy, right or power
consequent thereon. Notwithstanding any other provision of this Agreement,
Lender reserves the right to seek a deficiency judgment or preserve a deficiency
claim, in connection with the foreclosure of a Mortgage on a Facility, to the
extent necessary to foreclose on other parts of the Mortgaged Property.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Survival. Subject to Section 4.2, this Agreement
and all covenants, agreements, representations and warranties made herein and in
the certificates delivered pursuant hereto shall survive the execution and
delivery of this Agreement and the execution and delivery by each Borrower to
Lender of each Note, and shall continue in full force and effect so long as any
portion of the Indebtedness is outstanding and unpaid. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party. All covenants,
promises and agreements in this Agreement contained, by or on behalf of each
Borrower, shall inure to the benefit of the respective successors and assigns of
Lender. Nothing in this Agreement or in any other Loan Document, express or
implied, shall give to any Person other than the parties and the holder(s) of
the Notes, the Mortgages and the other Loan Documents, and their legal
representatives, successors and assigns, any benefit or any legal or equitable
right, remedy or claim hereunder.
Section 8.2. Lender's Discretion. Whenever pursuant to this
Agreement, Lender exercises any right given to it to approve or disapprove, or
any arrangement or term is to be satisfactory to Lender, the decision of Lender
to approve or disapprove or to decide whether arrangements or terms are
satisfactory or not satisfactory shall (except as is otherwise specifically
herein provided) be in the sole discretion of Lender.
Section 8.3. Governing Law. (a) This Agreement was negotiated
in New York, and made by Lender and accepted by each Borrower in the State of
New York, and the proceeds of the Notes delivered pursuant hereto were disbursed
from New York, which State the parties agree has a substantial relationship to
the parties and to the underlying transaction embodied hereby, and in all
respects, including, without limitation, matters of construction, validity and
performance, this Agreement and the obligations arising hereunder shall be
governed by, and construed in accordance with, the laws of the State of New York
applicable to contracts made and performed in such State and any applicable law
of the United States of America. To the fullest extent permitted by law, each
Borrower hereby unconditionally and irrevocably waives any claim to assert that
the law of any other jurisdiction governs this Agreement and the Notes, and this
Agreement and the Notes shall be governed by and construed in accordance with
the laws of the State of New York pursuant to ss. 5-1401 of the New York General
Obligations Law.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR
EACH BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE INSTITUTED
IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, PURSUANT TO ss. 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW OR IN ANY FEDERAL OR STATE COURT IN THE
JURISDICTION IN WHICH THE RELEVANT COLLATERAL IS LOCATED AND EACH BORROWER
WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND EACH BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING.
EACH BORROWER DOES HEREBY DESIGNATE AND APPOINT SCHEPISI & XXXXXXXXXX,
ATTENTION: XXXX X. XXXXXXXX AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON
ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS (OR AT SUCH OTHER OFFICE AS MAY BE
DESIGNATED BY EACH BORROWER FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS
HEREOF) WITH A COPY TO EACH BORROWER AT ITS PRINCIPAL EXECUTIVE OFFICES,
ATTENTION: GENERAL COUNSEL, AND WRITTEN NOTICE OF SAID SERVICE OF EACH BORROWER
MAILED OR DELIVERED TO EACH BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE
DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON EACH BORROWER, IN ANY
SUCH SUIT, ACTION OR PROCEEDING. EACH BORROWER (I) SHALL GIVE PROMPT NOTICE TO
LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY
TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT (WHICH OFFICE
SHALL BE DESIGNATED AS THE ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
Section 8.4. Modification, Waiver in Writing. No modification,
amendment, extension, discharge, termination or waiver of any provision of this
Agreement, the Notes or any other Loan Document, or consent to any departure by
any Borrower therefrom, shall in any event be effective unless the same shall be
in a writing signed by the party against whom enforcement is sought, and then
such waiver or consent shall be effective only in the specific instance, and for
the purpose, for which given. Except as otherwise expressly provided herein, no
notice to or demand on any Borrower shall entitle any Borrower to any other or
future notice or demand in the same, similar or other circumstances.
Section 8.5. Delay Not a Waiver. Neither any failure nor any
delay on the part of Lender in insisting upon strict performance of any term,
condition, covenant or agreement, or exercising any right, power, remedy or
privilege hereunder, or under the Notes, or of any other Loan Document, or any
other instrument given as security therefor, shall operate as or constitute a
waiver thereof, nor shall a single or partial exercise thereof preclude any
other future exercise, or the exercise of any other right, power, remedy or
privilege. In particular, and not by way of limitation, by accepting payment
after the due date of any amount payable under this Agreement, the Notes or any
other Loan Document, Lender shall not be deemed to have waived any right either
to require prompt payment when due of all other amounts due under this
Agreement, the Notes or the other Loan Documents, or to declare a default for
failure to effect prompt payment of any such other amount.
Section 8.6. Notices. All notices, consents, approvals and
requests required or permitted hereunder or under any other Loan Document shall
be given in writing and shall be effective for all purposes if hand delivered or
sent by (a) hand delivery, with proof of attempted delivery, (b) certified or
registered United States mail, postage prepaid, (c) expedited prepaid delivery
service, either commercial or United States Postal Service, with proof of
attempted delivery, or (d) by telecopier (with answerback acknowledged) provided
that such telecopied notice must also be delivered by one of the means set forth
in (a), (b) or (c) above, addressed if to Lender at its address set forth on the
first page hereof, and if to any Borrower at its designated address set forth on
the first page hereof, or at such other address and Person as shall be
designated from time to time by any party hereto, as the case may be, in a
written notice to the other parties hereto in the manner provided for in this
Section 8.6. A copy of all notices, consents, approvals and requests directed to
Lender shall be delivered concurrently to Xxxxxx X. Xxxx, Esquire, Dechert Price
& Xxxxxx, 0000 Xxxx Xxxxxx, 0000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxxxxxxx, XX 00000,
Telefax Number (000) 000-0000 and a copy of all notices, consents, approvals and
requests directed to any Borrower (other than statements setting forth the
monthly amount payable under the Notes) shall be delivered to Schepisi &
XxXxxxxxxx, P.O. Box 1313, 611 Palisades Avenue, Englewood Cliffs, NJ
07632-1313, Attention: Xxxx X. Xxxxxxxx, Telefax Number (000) 000-0000. A copy
of all notices, approvals and requests directed to Lender shall be delivered
concurrently to any servicer, trustee, or other agent of Lender by any Borrower
as designated by Lender in writing. A notice shall be deemed to have been given:
(a) in the case of hand delivery, at the time of delivery; (b) in the case of
registered or certified mail, when delivered or the first attempted delivery on
a Business Day; (c) in the case of expedited prepaid delivery, upon the first
attempted delivery on a Business Day; or (d) in the case of telecopier, upon
receipt of answerback confirmation, provided that such telecopied notice was
also delivered as required in this Section 8.6. A party receiving a notice which
does not comply with the technical requirements for notice under this Section
8.6 may elect to waive any deficiencies and treat the notice as having been
properly given. Notice to one Borrower hereunder shall be deemed to be effective
notice to all other Borrowers.
SECTION 8.7. TRIAL BY JURY. EACH BORROWER AND LENDER, TO THE
FULLEST EXTENT THAT IT MAY LAWFULLY DO SO, WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY TORT ACTION, BROUGHT BY ANY PARTY
HERETO WITH RESPECT TO THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS.
Section 8.8. Headings. The Article and Section headings in
this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.
Section 8.9. Assignment. Lender shall have the right to assign
in whole or in part this Agreement and/or any of the other Loan Documents and
the obligations hereunder to any Person and to participate all or any portion of
the Loan evidenced hereby, including, without limitation, any servicer or
trustee.
Section 8.10. Severability. Wherever possible, each provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
Section 8.11. Preferences. Lender shall have no obligation to
marshal any assets in favor of any Borrower or any other party or against or in
payment of any or all of the obligations of any Borrower pursuant to this
Agreement, the Notes or any other Loan Document. Lender shall have the
continuing and exclusive right to apply or reverse and reapply any and all
payments by any Borrower to any portion of the obligations of any Borrower
hereunder. To the extent any Borrower makes a payment or payments to Lender for
such Borrower's benefit, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligations hereunder or
part thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by
Lender.
Section 8.12. Waiver of Notice. No Borrower shall be entitled
to any notices of any nature whatsoever from Lender except with respect to
matters for which this Agreement or the other Loan Documents specifically and
expressly provide for the giving of notice by Lender to such Borrower and except
with respect to matters for which such Borrower is not, pursuant to applicable
Legal Requirements, permitted to waive the giving of notice. Each Borrower
hereby expressly waives the right to receive any notice from Lender with respect
to any matter for which this Agreement or the other Loan Documents does not
specifically and expressly provide for the giving of notice by Lender to such
Borrower.
Section 8.13. Remedies of Borrowers. In the event that a claim
or adjudication is made that Lender or its agents, has acted unreasonably or
unreasonably delayed acting in any case where by law or under this Agreement,
the Notes, the Mortgages or the other Loan Documents, Lender or such agent, as
the case may be, has an obligation to act reasonably or promptly, the Borrowers
agree that neither Lender nor its agents, shall be liable for any monetary
damages, and Borrowers' sole remedies shall be limited to commencing an action
seeking injunctive relief or declaratory judgment. The parties hereto agree that
any action or proceeding to determine whether Lender has acted reasonably shall
be determined by an action seeking declaratory judgment.
Section 8.14. Exculpation as to Borrowers' Shareholders.
Notwithstanding anything herein or in any other Loan Document to the contrary,
except as otherwise set forth in this Section 8.14 to the contrary, Lender shall
not enforce the liability and obligation of any Borrower to perform and observe
the obligations contained in this Agreement, the Notes, the Mortgages or any of
the other Loan Documents executed and delivered by any Borrower by any action or
proceeding wherein a money judgment shall be sought against any Borrower's
shareholders, except that Lender may pursue any power of sale, bring a
foreclosure action, action for specific performance, action for money judgment,
or other appropriate action or proceeding (including, without limitation, to
obtain a deficiency judgment) against such shareholders solely for the purpose
of enabling Lender to realize upon (i) intentionally omitted, (ii) the
Borrower's interest in the Mortgaged Property, (iii) the Rents and Accounts
arising from Borrower's Facility to the extent (x) received by each Borrower,
the Manager or Operator, if any, after the occurrence and continuance of an
Event of Default or (y) distributed to the Borrower or Operator, if any, or its
shareholders during or with respect to any period for which Lender did not
receive the full amounts it was entitled to receive as prepayments of the Loan
pursuant to Section 2.7 (all Rents and Accounts covered by clauses (x) and (y)
being hereinafter referred to as the "Recourse Distributions") and (iv) any
other collateral given to Lender under the Loan Documents ((i), (ii), (iii) and
(iv) collectively, the "Default Collateral"); provided, however, that any
judgment in any such action or proceeding shall be enforceable only to the
extent of any such Default Collateral. The provisions of this Section 8.14 shall
not, however, (a) impair the validity of the Indebtedness evidenced by the Loan
Documents or in any way affect or impair the Liens of the Mortgages or any of
the other Loan Documents or the right of Lender to foreclose the Mortgages
following an Event of Default and continuance thereof; (b) impair the right of
Lender to name any Person as a party defendant in any action or suit for
judicial foreclosure and sale under any of the Mortgages; (c) affect the
validity or enforceability of the Notes, the Mortgages or the other Loan
Documents; (d) impair the right of Lender to obtain the appointment of a
receiver; (e) impair the enforcement of the Assignments of Leases, the
Assignments of Agreements, or the Manager's Subordinations; (f) impair the right
of Lender to bring suit for actual damages, losses and costs resulting from
fraud or intentional misrepresentation by any Borrower or Operator, if any, or
any shareholder of Borrower (each a "Borrowing Party"), in connection with this
Agreement, the Notes, the Mortgages or the other Loan Documents; (g) impair the
right of Lender to obtain the Recourse Distributions received by any Borrowing
Party, to the extent any such Recourse Distributions have actually theretofore
been distributed to such Borrowing Party (h) impair the right of Lender to bring
suit with respect to any misappropriation of security deposits or Rents
collected more than one month in advance; (i) impair the right of Lender to
obtain Insurance Proceeds or Condemnation Proceeds due to Lender pursuant to the
Mortgages; (j) impair the right of Lender to enforce the provisions of Sections
4.2(c)(J) or 5.1(D)-(I) even after repayment in full by the Borrowers of the
Indebtedness; (k) prevent or in any way hinder Lender from exercising, or
constitute a defense, or counterclaim, or other basis for relief in respect of
the exercise of, any other remedy against any or all of the Collateral securing
the Notes as provided in the Loan Documents; (l) impair the right of Lender to
bring suit with respect to any misapplication of any funds; (m) intentionally
omitted; or (n) impair the right of Lender to xxx for, seek or demand a
deficiency judgment against any Person solely for the purpose of foreclosing the
Mortgaged Property or any part thereof, or realizing upon the Default
Collateral; provided, however, that any such deficiency judgment referred to in
this clause (n) shall be enforceable only to the extent of any of the Default
Collateral. The provisions of this Section 8.14 shall be inapplicable to any
Borrowing Party if any petition for bankruptcy, reorganization or arrangement
pursuant to federal or state law shall be filed by, consented to or acquiesced
in by or with respect to any Borrower, or if any Borrower shall institute any
proceeding for the dissolution or liquidation of such Borrower, or if any
Borrower shall make an assignment for the benefit of creditors, in which event
Lender shall have recourse against all of the assets of such Borrower and the
interests in such Borrower owned by, and the Recourse Distributions received by,
such Borrower's shareholders. Notwithstanding the foregoing, in the event a
Facility is released from the lien created by the Related Mortgage, the Borrower
who owns such Facility shall be released in all respects from any further
liability with respect to the Loan other than any further liability for certain
kinds of environmental matters arising under Sections 4.2(c)(J) or 5.1(D)-(I)
as the same applies to such Facility.
Section 8.15. Exhibits Incorporated. The information set forth
on the cover, heading and recitals hereof, and the Exhibits attached hereto, are
hereby incorporated herein as a part of this Agreement with the same effect as
if set forth in the body hereof.
Section 8.16. Offsets, Counterclaims and Defenses. Any
assignee of Lender's interest in and to this Agreement, the Notes, the Mortgages
and the other Loan Documents shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to the Loan, this Agreement, the
Notes, the Mortgages and the other Loan Documents which any Borrower may
otherwise have against any assignor, and no such unrelated counterclaim or
defense shall be interposed or asserted by any Borrower in any action or
proceeding brought by any such assignee upon this Agreement, the Notes, the
Mortgages and other Loan Documents and any such right to interpose or assert any
such unrelated offset, counterclaim or defense in any such action or proceeding
is hereby expressly waived by each Borrower.
Section 8.17. No Joint Venture or Partnership. The Borrowers
and Lender intend that the relationship created hereunder be solely that of
borrower and lender. Nothing herein is intended to create a joint venture,
partnership, tenancy-in-common, or joint tenancy relationship between any
Borrower and Lender nor to grant Lender any interest in the Mortgaged Property
other than that of mortgagee or lender.
Section 8.18. Waiver of Marshalling of Assets Defense. To the
fullest extent that any Borrower may legally do so, each Borrower waives all
rights to a marshalling of the assets of such Borrower, and others with
interests in such Borrower, and of the Mortgaged Property, or to a sale in
inverse order of alienation in the event of foreclosure of the interests hereby
created, and agrees not to assert any right under any laws pertaining to the
marshalling of assets, the sale in inverse order of alienation, homestead
exemption, the administration of estates of decedents, or any other matters
whatsoever to defeat, reduce or affect the right of Lender under the Loan
Documents to a sale of its Facility for the collection of the Indebtedness
without any prior or different resort for collection, or the right of Lender or
Deed of Trust Trustee to the payment of the Indebtedness out of the Net Proceeds
of the Facility in preference to every other claimant whatsoever.
Section 8.19. Waiver of Counterclaim. Each Borrower hereby
waives the right to assert a counterclaim, other than compulsory counterclaim,
in any action or proceeding brought against it by Lender or its agents.
Section 8.20. Conflict; Construction of Documents. In the
event of any conflict between the provisions of this Agreement and the
provisions of the Notes, the Mortgages or any of the other Loan Documents, the
provisions of this Agreement shall prevail. The parties hereto acknowledge that
they were represented by counsel in connection with the negotiation and drafting
of the Loan Documents and that the Loan Documents shall not be subject to the
principle of construing their meaning against the party which drafted same.
Section 8.21. Brokers and Financial Advisors. The Borrowers
and Lender hereby represent that they have dealt with no financial advisors,
brokers, underwriters, placement agents, agents or finders in connection with
the transactions contemplated by this Agreement except for Peregrine Mortgage
Company, Inc., Love Funding Corporation and Arcadia Capital Corp. The Lender
shall pay the fees of Peregrine Mortgage Company, Inc. and Love Funding
Corporation ("Lender's Brokers") pursuant to a separate agreement with each. The
Borrowers shall pay the fees of Arcadia Capital Corp. ("Borrowers' Broker")
pursuant to a separate agreement with such party. The Borrowers hereby agree to
indemnify and hold the Lender harmless from and against any and all claims,
liabilities, costs and expenses of any kind in any way relating to or arising
from a claim by any Person (other than Lender's Brokers) that such Person acted
on behalf of the indemnifying party in connection with the transactions
contemplated herein. The Lender hereby agrees to indemnify and hold harmless the
Borrowers from and against any and all claims, liabilities, costs and expenses
of any kind in any way relating to or arising from a claim by any Person (other
than Borrowers' Broker) that such Person acted on behalf of the indemnifying
party in connection with the transactions contemplated herein. The provisions of
this Section 8.21 shall survive the expiration and termination of this Agreement
and the repayment of the Indebtedness.
Section 8.22. Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed and delivered
shall be an original, but all of which shall together constitute one and
the same instrument.
Section 8.23. Estoppel Certificates. Each Borrower and Lender
each hereby agree at any time and from time to time upon not less than 15 days
prior written notice by a Borrower or Lender to execute, acknowledge and deliver
to the party specified in such notice, a statement, in writing, certifying that
this Agreement is unmodified and in full force and effect (or if there have been
modifications, that the same, as modified, is in full force and effect and
stating the modifications hereto), and stating whether or not, to the knowledge
of such certifying party, any Default or Event of Default has occurred and is
then continuing and, if so, specifying each such Default or Event of Default;
provided, however, that it shall be a condition precedent to Lender's obligation
to deliver the statement pursuant to this Section 8.23, that Lender shall have
received, together with such Borrower's request for such statement, an Officer's
Certificate stating that no Default or Event of Default exists as of the date of
such certificate (or specifying such Default or Event of Default).
Section 8.24. Payment of Expenses. Borrowers shall, whether or
not the Transactions are consummated, pay all Transaction Costs, which shall
include, without limitation, out-of-pocket costs, expenses, and disbursements of
Lender and its attorneys, accountants and other contractors in connection with
(i) the negotiation, preparation, execution and delivery of the Loan Documents
and the documents and instruments referred to therein, (ii) the creation,
perfection or protection of Lender's Liens in the Collateral (including, without
limitation, fees and expenses for title and lien searches and filing and
recording fees, intangibles taxes, personal property taxes, mortgage recording
taxes, third party due diligence expenses, travel expenses, accounting firm
fees, costs of the Appraisals, Environmental Reports (and an environmental
consultant), and the Engineering Reports), (iii) the negotiation, preparation,
execution and delivery of any amendment, waiver or consent relating to any of
the Loan Documents, and (iv) the preservation of rights under and enforcement of
the Loan Documents and the documents and instruments referred to therein,
including any restructuring or rescheduling of the Indebtedness.
Section 8.25. Bankruptcy Waiver. Each Borrower hereby agrees
that, in consideration of the recitals and mutual covenants contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, in the event such Borrower shall (i) file with
any bankruptcy court of competent jurisdiction or be the subject of any petition
under Title 11 of the U.S. Code, as amended, (ii) be the subject of any order
for relief issued under Title 11 of the U.S. Code, as amended, (iii) file or be
the subject of any petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or law relating to bankruptcy, insolvency or other relief of debtors,
(iv) have sought or consented to or acquiesced in the appointment of any
trustee, receiver, conservator or liquidator or (v) be the subject of any order,
judgment or decree entered by any court of competent jurisdiction approving a
petition filed against such party for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future federal or state act or law relating to bankruptcy, insolvency
or other relief for debtors, the automatic stay provided by the Federal
Bankruptcy Code shall be modified and annulled as to Lender, so as to permit
Lender to exercise any and all of its remedies, upon request of Lender made on
notice to such Borrower and any other party in interest but without the need of
further proof or hearing. No Borrower nor any Affiliate of any Borrower shall
contest the enforceability of this Section 8.25.
Section 8.26. [Intentionally Deleted].
Section 8.27. Entire Agreement. This Agreement, together with
the Exhibits hereto and the other Loan Documents constitutes the entire
agreement among the parties hereto with respect to the subject matter contained
in this Agreement, the Exhibits hereto and the other Loan Documents and
supersedes all prior agreements, understandings and negotiations between the
parties.
Section 8.28 Cross Collateralization. Without limitation to
any other right or remedy provided to Lender in this Agreement or any of the
other Loan Documents, each Borrower covenants and agrees that upon the
occurrence and continuance of an Event of Default, (i) Lender shall have the
right to pursue all of its rights and remedies in one proceeding, or separately
and independently in separate proceedings which it, as Lender, in its sole and
absolute discretion, shall determine from time to time, (ii) Lender is not
required to either xxxxxxxx assets, sell Collateral in any inverse order of
alienation, or be subjected to any "one action" or "election of remedies" law or
rule, (iii) the exercise by Lender of any remedies against any Collateral will
not impede Lender from subsequently or simultaneously exercising remedies
against any other Collateral, (iv) all Liens and other rights, remedies and
privileges provided to Lender in this Agreement and in the other Loan Documents
or otherwise shall remain in full force and effect until Lender has exhausted
all of its remedies against the Collateral and all Collateral has been
foreclosed, sold and/or otherwise realized upon in satisfaction of the Loan and
(v) such Borrower's Facility shall be security for the payment and performance
of all obligations of all Borrowers hereunder, and (vi) each Borrower shall be
jointly and severally liable for payment of the Indebtedness and performance of
the obligations under the Loan Documents.
Section 8.29. Limitation of Interest. It is the intent of each
Borrower and Lender in the execution of this Loan Agreement and all the other
Loan Documents to contract in strict compliance with the usury laws governing
the Loan. In furtherance thereof each Borrower and Lender stipulate and agree
that none of the terms and provisions contained in the Loan Documents shall ever
be construed to create a contract for the use, forbearance or detention of money
requiring payment of interest at a rate in excess of the Maximum Rate. Each
Borrower or any endorser or other party now or hereafter becoming liable for the
payment of the relevant Note and shall never be required to pay interest on the
relevant Note at a rate in excess of the Maximum Rate, and the provisions of
this Section 8.29 shall control over all other provisions of the relevant Note
and any other Loan Document which may be in apparent conflict herewith. In the
event any holder of a Note shall collect monies that are deemed to constitute
interest and that would otherwise increase the effective interest rate on the
relevant Note to a rate in excess of the Maximum Rate, all such sums deemed to
constitute interest in excess of the Maximum Rate shall be applied to the unpaid
principal balance of the relevant Note and if in excess of such balance, shall
be immediately returned to the relevant Borrower upon such determination.
Section 8.30 [Intentionally Deleted.]
Section 8.31. Indemnification. Borrowers shall indemnify and
hold Lender and each of its affiliates (including its officers, directors,
partners, employees and agents and each other person, if any, controlling Lender
or any of its affiliates within the meaning of either Section 15 of the
Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act
of 1934, as amended) (each, including Lender, an "Indemnified Party") harmless
against any and all losses, claims, damages, costs, expenses (including the fees
and disbursements of outside counsel retained by any such person) or liabilities
in connection with, arising out of or as a result of the transactions and
matters referred to or contemplated by this Agreement, except to the extent that
it is finally judicially determined that any such loss, claim, damage, cost,
expense or liability results from the gross negligence or bad faith of such
Indemnified Party or any of its agents or representatives. In the event that any
Indemnified Party becomes involved in any action, proceeding or investigation in
connection with any transaction or matter referred to or contemplated in this
Agreement, the Borrowers shall periodically reimburse any Indemnified Party upon
demand therefor in an amount equal to its reasonable outside legal and other
expenses (including the costs of any investigation and preparation) incurred in
connection therewith to the extent such legal or other expenses are the subject
of indemnification hereunder.
Section 8.32. Borrowers' Acknowledgments. Each Borrower hereby
acknowledges to and agrees with Lender that (i) the scope of Lender's business
is wide and includes, but is not limited to, financing real estate financing,
investment in real estate and other real estate transactions which may be viewed
as adverse to or competitive with the business of such Borrower or its
Affiliates and (ii) such Borrower has been represented by competent legal
counsel and has consulted with such counsel prior to executing this Loan
Agreement and any of the other Loan Documents.
Section 8.33. Lender as Shareholder. Each Borrower
acknowledges that Lender is a shareholder of such Borrower and that Lender in
its capacity as shareholder has no fiduciary duty to such Borrower to take any
action or refrain from taking any action hereunder or under any of the Loan
Documents.
Section 8.34. Release of Acreage at Xxxxxxx Facility. Provided
that no Default has occurred and that no Event of Default has occurred, Xxxxxxx
may obtain a partial release of approximately three (3) acres of raw land (the
"Released Land") encumbered by the Mortgage on the Xxxxxxx Facility. Xxxxxxx
shall deliver to Lender: (i) not less than sixty (60) days prior written notice
to the Lender, (ii) a copy of the subdivision plan of the Released Land, (iii)
evidence that the Released Land will not have any material adverse effect on the
value, use or operation of the Xxxxxxx Facility, (iv) a title update, bringdown
and endorsement on the Xxxxxxx Facility showing no adverse change to the Title
Insurance Policy delivered on the Closing Date, (v) an Officer's Certificate
from Xxxxxxx certifying that the requirements set forth in this Section have
been satisfied and (vi) such other certificates, documents or instruments as the
Lender or the Rating Agencies may request. Xxxxxxx shall pay any and all of
Lender's legal fees relating to the release of acreage at the Xxxxxxx Facility.
[Signatures on the following pages]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized representatives, all as
of the day and year first above written.
LENDER:
NOMURA ASSET CAPITAL CORPORATION, a
Delaware corporation
By:-----------------------------
Title:
BORROWER:
JAYBER, INC.
a New Jersey corporation
By:-----------------------------
Name:
Title:
BORROWER:
P.V.M. ASSOCIATES, INC.
a Florida corporation
By:-----------------------------
Name:
Title:
[Signatures continue on the following page]
BORROWER:
POMPTON AVENUE ASSOCIATES, INC.
a New Jersey corporation
By:-----------------------------
Name:
Title:
BORROWER:
CONTINENTAL XXXXXXX HOLDINGS, INC.
a New Jersey corporation
By:-----------------------------
Name:
Title:
