LOAN AGREEMENT
Exhibit
10.2
July
7,
2005
This
Loan
Agreement (the “Agreement”) dated as of July 7, 2005, by and between Bank of
America, N.A., a national banking association (“Bank”) and the Borrower
described below:
WHEREAS,
Borrower desires to purchase from Maybrook Realty, Inc., all of its right,
title
and interest in and to a certain leasehold estate and interest in Freedom
Plaza
Care Center, including without limitation all improvements thereon, and Borrower
also desires to purchase from Sun Health Properties, Inc. the fee simple
property associated with the same site, including without limitation all
of the
fee simple property underlying the existing ground lease between Sun Health
Properties, Inc., and Maybrook Realty, Inc., plus some additional
property;
WHEREAS,
Borrower has requested term loans from Bank to fund the costs of said real
estate acquisitions, and Bank has agreed to fund same subject to the terms,
provisions and conditions hereof;
WHERAS,
Borrower has also requested a construction loan to provide funding for the
construction of a 21-unit assisted living expansion and a connected 20-unit
Alzheimer's building, and Bank has also approved of same subject to the terms,
provisions and conditions hereof and also subject to the terms, provisions
and
conditions of a Construction Loan Administration Agreement of even date herewith
between Bank and Borrower;
NOW
THEREFORE, in consideration of these premises and intending to be legally
bound,
Bank and ARC HDV, LLC hereby agree as follows:
I. DEFINITIONS
AND REFERENCE TERMS.
In
addition to any other terms defined herein, the following terms shall have
the
meaning set forth with respect thereto:.
1. Banking
Day.
Banking
Day shall mean a day for dealings by and between banks, excluding Saturday,
Sunday and any day which shall be a legal holiday in the City of Nashville,
Davidson County, Tennessee or a day on which banking institutions in the
City of
Nashville, Davidson County, Tennessee are authorized to close.
2. Borrower.
ARC
HDV, LLC, a Tennessee limited liability company.
3. Borrower’s
Address
shall be
000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000.
4. Collateral.
The
Collateral shall mean and refer to all that property described in the Deed
of
Trust and all other properties of the Borrower in which the Bank may now
or
hereafter be granted a lien and/or security interest or which at any time
are in
the possession or control of the Bank.
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5.
Construction Loan Administration Agreement.
The
Construction Loan Administration Agreement shall mean and refer to that certain
Construction Loan Administration Agreement of even date herewith by and between
Borrower and Bank
6. Deed
of Trust.
Deed of
Trust shall mean and refer to that certain Deed of Trust, Assignment of Rents,
Security Agreement and Financing Statement which is dated of even date herewith
from Borrower to Bank and recorded in the Records of Maricopa County, Arizona
securing, among other Obligations, Notes A , B and C.
7. Default
Rate.
The
Default Rate shall have the meaning given it in the respective
Note.
8. Environmental
Laws.
Environmental Laws shall mean all federal, state, local and foreign laws
relating to pollution or protection of the environment, including laws relating
to emissions, discharges, spills, releases or threatened releases of any
pollutant, contaminant or Hazardous Substance into the environment (including
without limitation indoor air, ambient air, surface water, ground water or
land), or otherwise relating to the generation, manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants or Hazardous Substances including, but not limited
to,
the Comprehensive Environmental Response Compensation and Liability Act,
as
amended (42 U.S.C. §§9601 et
seq.),
the
Resource Conservation and Recovery Act, as amended (42 U.S.C. §§6901
et
seq.),
the
Clean Water Act, as amended (33 U.S.C. §§1251 et
seq.),
the
Clean Air Act, as amended (42 U.S.C. §§7401 et
seq.),
the
Toxic Substance Control Act, as amended (15 U.S.C. §§2601 et
seq.),
and
any and all rules, regulations, codes, standards, plans, orders, decrees,
judgments, injunctions, notices or demand letters issued, entered, promulgated
or approved thereunder.
9. Equipment.
Equipment shall mean all of Borrower’s then owned or existing and future
acquired or arising machinery, apparatus, equipment, fixtures, motor vehicles,
and other tangible personal property of every kind and description used in
the
Borrower’s business operations or owned by the Borrower or in which the Borrower
has an interest, and all parts and accessories and all increases and accessions
thereto and substitutions and replacements therefor.
10. Fixed
Charge Coverage
Ratio.
Fixed
Charge Coverage Ratio shall mean, for any period of determination, that ratio
computed by dividing the sum of Borrower’s net income plus
depreciation/amortization plus rent/lease expense by the sum of Borrower’s
interest expense plus scheduled principal payments plus scheduled rent/lease
payments.
11. Freedom
Plaza Care Center. Freedom
Plaza Care Center shall mean and refer to that certain 128 bed skilled nursing
and 44 unit assisted living facility which Borrower has purchased from Maybrook
Realty, Inc. and Sun Health Properties, Inc. located in Maricopa County,
Arizona.
12. Guarantor.
Guarantor means American Retirement Corporation, a Tennessee
Corporation.
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13. Guaranty.
Guaranty shall mean the limited guaranty of American Retirement Corporation,
a
Tennessee Corporation with respect to the indebtedness evidenced by Notes
A, B
and C in form and substance satisfactory to the Bank guaranteeing the payment
and performance of said indebtedness and any other guaranty of the Obligations
hereafter executed and delivered to Bank.
14. Hazardous
Materials.
Hazardous Materials shall mean any hazardous, toxic or dangerous waste,
substance or material, regulated or controlled pursuant to any Environmental
Law, now or at any time hereafter in effect, including, without limiting
the
generality of the foregoing, asbestos, PCBs, petroleum products (including
crude
oil, natural gas, natural gas liquids, liquefied natural gas or synthetic
gas)
or any other substance defined as a “hazardous substance,”“extremely hazardous
waste,”“restricted hazardous waste,”“hazardous material,”“hazardous
chemical,”“hazardous waste,”“hazardous air pollutant,”“regulated substance,”“toxic chemical,”“toxic substance” or other similar term in any Environmental
Law.
15. Loan(s).
Loan(s)
means collectively any and all loans heretofore or hereafter made by Bank
to the
Borrower pursuant to and in accordance with the terms of this Agreement,
including without limitation those evidenced by Note A, Note B,
and
Note C.
16. Loan
Documents.
Loan
Documents shall mean and refer to this Agreement, Note A, Note B,
Note
C, the Deed of Trust, the Assignment of Rents and Leases, the Security
Agreement, the Guaranty Agreement, the Construction Loan Administration
Agreement, and any and all promissory notes executed and/or assumed by Borrower
in favor of Bank and all other documents, instruments, guarantees, certificates
and agreements executed and/or delivered by Borrower, any guarantor or third
party in connection with the Loan.
17. Note A.
Note A
shall be that certain floating rate Promissory Note dated of even date herewith,
executed by Borrower in the amount of Nine Million Three Hundred Sixty Thousand
Seven Hundred Seventy Five and No/100 Dollars ($9,360,775.00), together with
all
extensions, renewals and modifications thereof.
18. Note B.
Note B
shall be that certain fixed rate Promissory Note dated of even date herewith
executed by Borrower in the amount of Nine Million Three Hundred Sixty Thousand
Seven Hundred Seventy Five and 00/100 Dollars ($9,360,775.00), together with
all
extensions, renewals and modifications thereof.
19. Note
C. Note
C
shall be that certain floating rate Construction Loan Promissory Note dated
of
even date herewith executed by Borrower in the amount of Four Million Four
Hundred Fifty Eight Thousand Four Hundred Fifty Eight and No/100 Dollars
($4,458,458.00), together with all extensions, renewals and modifications
thereof.
20. Obligations.
Obligations shall mean, individually and collectively, the duties, obligations
and liabilities of the Borrower to the Bank described in this Agreement or
in
the other Loan Documents, obligations under all notes, contracts of suretyship,
guaranty or accommodation made by the Borrower in favor of the Bank, letters
of
credit, and all other obligations of the Borrower to the Bank, however and
whenever created, arising, or evidenced, whether direct or indirect, through
assignment from third parties, absolute, contingent, or otherwise, primary
or
secondary, now or hereafter existing, or due or to become due.
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21. Obligor.
Obligor
shall mean the Borrower, the Guarantor under a Guaranty and each other party
at
any time primarily or secondarily, directly or indirectly liable on any of
the
Obligations.
22. Permitted
Liens.
Permitted Liens shall mean:
(a) Liens
or
charges for current taxes, assessments or other governmental charges which
are
not delinquent or remain payable without any penalty, or the validity of
which
is contested in good faith by appropriate proceedings upon stay of execution
of
the enforcement thereof and for which appropriate reserves have been established
in accordance with GAAP;
(b) deposits
or pledges to secure:
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(i)
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statutory
obligations;
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(ii)
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surety
or appeal bonds; or
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(iii)
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bonds
for release of attachment, stay of execution or
injunction;
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(c) statutory
liens on property arising in the ordinary course of business which, in the
aggregate, do not materially impair the use of such property or materially
detract from the value of such property;
(d) Liens
existing on the date hereof and described on Exhibit
“B”,
attached to the Deed of Trust, and Liens created after the date hereof to
which
the Bank has consented in writing;
(e) Purchase
money liens on any equipment hereafter acquired provided that the obligation
secured by such lien does exceed the fair cost of the equipment, the lien
attaches only to the equipment so acquired, and the debt is permitted by
Section
V.4 below; and
(f) Liens
in
favor of the Bank.
23. Person.
Person
shall mean any individual, joint venture, partnership, firm, corporation,
limited liability company, trust, unincorporated organization or other
organization or entity, or a governmental body or any department or agency
thereof.
24. Premises.
Premises shall mean all real properties owned or leased by Borrower or on
which
any of Borrower’s assets may be located from time to time.
25. Subsidiary.
Subsidiary shall mean as to any designated corporation, any other corporation
more than twenty percent (20%) of the shares of voting stock of which is
owned,
directly or indirectly, by such designated corporation, and shall include
subsidiaries of a subsidiary.
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Accounting
Terms.
All
accounting terms not specifically defined or specified herein shall have
the
meanings generally attributed to such terms under generally accepted accounting
principles (“GAAP”), as in effect from time to time, consistently applied, with
respect to the financial statements referenced in Sections III.11and IV.2
below.
II. LOANS.
Bank
hereby agrees to make certain loans to Borrower as follows:
1. Bank
agrees to make term loans to Borrower in the aggregate outstanding principal
amount of Eighteen Million Seven Hundred Twenty One Thousand Five Hundred
Fifty
and No/100 Dollars ($18,721,550.00). The obligation to repay the term Loans
is
evidenced by Note A and Note B, together with any other promissory notes
heretofore or hereafter executed by Borrower in favor of Bank and any and
all
renewals, extensions or rearrangements thereof (being sometimes hereafter
collectively referred to as the “Term Notes”) having a maturity date, repayment
terms and interest rate as set forth in each Note.
2.
The Loan
evidenced by Note C provides for a committed line (the “Line”) in the amount of
up to Four Million Four Hundred Fifty Eight Thousand Four Hundred Fifty Eight
and No/100 Dollars ($4,458,458.00) under which Borrower may borrow funds
pursuant to the Construction Loan Administration Agreement. The Loan is not
revolving. An amount repaid may not be reborrowed.
III. REPRESENTATIONS
AND WARRANTIES.
Borrower hereby represents and warrants to Bank as follows:
1. Good
Standing.
Borrower is a limited liability company, duly organized, validly existing
and in
good standing under the laws of Tennessee and has the power and authority
to own
its property and to carry on its business in each jurisdiction in which Borrower
does business.
2. Authority
and Compliance.
Borrower has full power and authority to execute and deliver the Loan Documents
and to incur and perform the obligations provided for therein, all of which
have
been duly authorized by all proper and necessary action of the appropriate
governing body of Borrower. No consent or approval of any public authority
or
other third party is required as a condition to the validity of any Loan
Document, and Borrower is in compliance with all laws and regulatory
requirements to which it is subject.
3. Foreign
Qualification.
The
Borrower is duly qualified, licensed or domesticated and in good standing
as a
foreign limited liability company, duly authorized to do business in all
jurisdictions in which the character of its properties owned or the nature
of
its activities conducted makes such qualification, licensing or domestication
necessary.
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4. Compliance
with Articles of Organization, Operating Agreement, and Other Instruments,
Etc.
(a) The
Borrower is not in violation of any term of its Articles of Organization,
its
Operating Agreement, and no event, status or condition has occurred or is
existing which upon notice or lapse of time, or both, would constitute a
violation thereof; (b) the Borrower is not in violation of any material term
of
any mortgage, indenture or agreement relating to outstanding borrowings to
which
it is a party, or of any judgment, decree or order to which it is subject,
or of
any other instrument, lease, contract or agreement to which it is a party,
or of
any statute, or governmental rule or regulation applicable to it, and no
event,
status or condition has occurred or is existing which upon the giving of
notice
or lapse of time, or both, would constitute a material violation of any such
term; (c) the execution, delivery and performance of this Agreement and the
other instruments and agreements provided for by this Agreement to which
the
Borrower is, or is to be, a party, and the carrying out of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
action on the part of the Borrower and will not result in any violation of
the
organizational documents of the Borrower, or any violation of or constitute
a
default under any term described in (b) above, or result in the creation
of any
mortgage, lien, encumbrance or charge upon any of the properties or assets
of
the Borrower pursuant to any term described in (b) above; and (d) there is
no
term described in (b) above which materially and adversely affects or in
the
future may (so far as the Borrower can now foresee) materially and adversely
affect the business, prospects, condition, affairs or operations of the Borrower
or any of its properties or assets.
5. Subsidiaries.
The
Borrower has no Subsidiary.
6. Binding
Agreement.
This
Agreement and the other Loan Documents executed by Borrower constitute valid
and
legally binding obligations of Borrower, enforceable in accordance with their
terms.
7. Litigation.
There
is no proceeding involving Borrower pending or, to the knowledge of Borrower,
threatened before any court or governmental authority, agency or arbitration
authority, except as disclosed to Bank in writing and acknowledged by Bank
prior
to the date of this Agreement.
8. No
Conflicting Agreements.
There
is no operating agreement, membership agreement or other document pertaining
to
the organization, power or authority of Borrower and no provision of any
existing agreement, mortgage, indenture or contract binding on Borrower or
affecting its property, which would conflict with or in any way prevent the
execution, delivery or carrying out of the terms of this Agreement and the
other
Loan Documents.
9. Ownership
of Assets.
Borrower has or will acquire (a) good and marketable title to its properties
and
assets, and its assets are free and clear of liens except for Permitted Liens,
(b) good and marketable title to its leasehold estates, and (c) its properties,
assets and leasehold interests are subject to no covenant, restriction,
easement, right, lease, or Lien, other than Permitted Liens.
10. Taxes.
All
taxes and assessments due and payable by Borrower have been paid or are being
contested in good faith by appropriate proceedings and the Borrower has filed
all tax returns which it is required to file.
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11. Financial
Statements.
The
financial statements of Borrower heretofore delivered to Bank have been prepared
in accordance with GAAP applied on a consistent basis throughout the period
involved and fairly present Borrower’s financial condition as of the date or
dates thereof, and there has been no material adverse change in Borrower’s
financial condition or operations since December 31, 2004. To the best of
Borrower’s knowledge, all factual information furnished by Borrower to Bank in
connection with this Agreement and the other Loan Documents is and will be
accurate and complete on the date as of which such information is delivered
to
Bank and is not and will not be incomplete by the omission of any material
fact
necessary to make such information not misleading.
12. Environmental
Laws.
i. The
Borrower has obtained all permits, licenses and other authorizations, if
any,
which are required under Environmental Laws for the operation of the Borrower’s
business and the Borrower is in compliance with all terms and conditions
of
required permits, licenses and authorizations, and is also in compliance
with
all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, notifications, schedules and timetables contained
in
the Environmental Laws;
ii. The
Borrower is not aware of and has not received notice of the disposal or release
or presence of Hazardous Materials (other than in the normal course of business)
on any of its properties, or of any past, present or future events, conditions,
circumstances, activities, practices, incidents, actions or plans which may
interfere with or prevent compliance or continued compliance on the part
of the
Borrower with Environmental Laws, or may give rise to any common law or legal
liability, or otherwise form the basis of any claim, action, demand, suit,
lien,
proceeding, hearing, study or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling, or the emission, discharge, release or threatened
release into the environment, of any Hazardous Materials;
iii. All
assets of the Borrower are free from Hazardous Materials except for Hazardous
Materials used, maintained or handled by the Borrower in the ordinary course
of
business and the use and disposal of any and all such Hazardous Materials
is
effected by the Borrower in compliance with all applicable Environmental
Laws;
and
iv. There
is
not pending or threatened against the Borrower or Guarantor and neither the
Borrower nor Guarantor knows of any facts or circumstances that might give
rise
to, any civil, criminal or administrative action, suit, demand, claim, hearing,
notice or demand letter, notice of violation, environmental lien, investigation,
or proceeding relating in any way to Environmental Laws.
13. Continuation
of Representation and Warranties.
All
representations and warranties made under this Agreement shall be deemed
to be
made at and as of the date hereof and at and as of the date of any future
advance under any Loan.
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IV.
AFFIRMATIVE
COVENANTS.
Until
full payment and performance of all obligations of Borrower under the Loan
Documents, Borrower will, unless Bank consents otherwise in writing (and
without
limiting any requirement of any other Loan Document):
1. Financial
Condition.
Maintain Borrower’s financial condition, determined on a consistent basis
throughout the period involved except to the extent modified by the following
definitions. Borrower shall maintain at all times a positive stockholders’
equity.
2. Financial
Statements and Other Information.
Maintain a system of accounting satisfactory to Bank and applied on a consistent
basis throughout the period involved, permit Bank’s officers or authorized
representatives to visit and inspect Borrower’s books of account and other
records at such reasonable times and as often as Bank may desire, and pay
the
reasonable fees and disbursements of any accountants or other agents of Bank
selected by Bank for the foregoing purposes. Unless written notice of another
location is given to Bank, Borrower’s books and records will be located at
Borrower’s chief executive office set forth above. All financial statements
called for below shall be prepared in form and content acceptable to Bank
and,
in the case of annual statements, prepared in accordance with GAAP and, with
respect to the Guarantor, audited by independent certified public accountants
reasonably acceptable to Bank.
In
addition, Borrower will provide or cause to be provided to Bank the
following:
i. Copies
of
filed federal income tax returns of Borrower for each taxable year, within
twenty (20) days after filing but in any event not later than one hundred
twenty
(120) days after the close of each such taxable year;
ii. Year-end
financial Statements of Borrower, provided annually within sixty (60) days
after
the close of each fiscal year, said statements to include a balance sheet
and
profit and loss statement and to be prepared in accordance with
GAAP;
iii. Financial
statements (including a balance sheet and profit and loss statement) of Borrower
for each quarter of each fiscal year of Borrower, within forty-five (45)
days
after the close of each such period;
iv. Compliance
certificate for (and executed by an authorized representative of) Borrower
concurrently with and dated as of the date of delivery of each of the financial
statements as required in paragraph iii, above, containing (a) a certification
that the financial statements of even date are true and correct and that
the
Borrower is not in default under the terms of this Agreement, and (b)
computations and conclusions, in such detail as Bank may request, with respect
to compliance with this Agreement and the other Loan Documents, including
computations of all quantitative covenants such as the Fixed Charge Coverage
Ratio;
v. Audited
financial statements of Guarantor, for each fiscal year of Guarantor, as
soon as
reasonably practicable and in any event within one hundred (100) days after
the
close of each fiscal year, including an unqualified opinion from an independent
auditor;
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vi. Financial
statements (including a balance sheet and profit and loss statement) of
Guarantor for each quarter of each fiscal year of Guarantor, within forty-five
(45) days after the close of each such period;
vii. Compliance
certificate for (and executed by an authorized representative of) Guarantor
for
significant senior lenders concurrently with and dated as of the date of
delivery of each of the financial statements as required in paragraph vi,
above,
containing (a) a certification that the financial statements of even date
are
true and correct and that the Guarantor is not in default under the terms
of any
agreements with said significant senior lenders, and (b) computations and
conclusions, in such detail as Bank may request, with respect to compliance
with
Guarantor’s agreements with significant senior lenders, including computations
of all quantitative covenants;
viii. Promptly
upon the filing of same with the Health Care Financing Administration (“HCFA”)
and/or any Arizona state survey agency, copies of all reports required to
be
submitted to such agencies including without limitation all reports required
to
continue participation in the Medicare Program under Title XVIII of the Social
Security Act; and
ix. Furnish
to Bank promptly such additional information, reports and statements respecting
the business operations and financial condition of Borrower and Guarantors,
respectively, from time to time, as Bank may reasonably request.
All
financial statements shall be in form and detail satisfactory to Bank and
shall
contain or be attached to the signed and dated written certification of the
reporting party in form specified by Bank to certify that the financial
statements are furnished to Bank in connection with the extension of credit
by
Bank and constitute a true and correct statement of the reporting party’s
financial position. All certifications and signatures on behalf of companies,
partnerships or other entities shall be by a representative of the entity
satisfactory to Bank. All fiscal year-end financial statements of Guarantor
shall be audited and certified, without any qualification or exception not
acceptable to Bank, by independent certified public accountants acceptable
to
Bank, and shall contain all reports and disclosures required by generally
accepted accounting principles for a fair presentation.
3. Insurance.
Maintain insurance with responsible insurance companies on such of its
properties, in such amounts and against such risks as is customarily maintained
by similar businesses operating in the same vicinity, specifically to include
fire and extended coverage insurance covering all assets, business interruption
insurance, workers compensation insurance and liability insurance, all to
be
with such companies and in such amounts as are satisfactory to Bank and with
respect to insurance on the Collateral, to contain a mortgagee clause naming
Bank as a loss payee or an additional insured (as applicable) as its interest
may appear and providing for at least 30 days prior notice to Bank of any
cancellation thereof. Satisfactory evidence of such insurance will be supplied
to Bank prior to funding under the Loan(s) and 30 days prior to each policy
renewal.
4. Existence
and Compliance.
Maintain its existence, good standing and qualification to do business, where
required and comply with all laws, regulations and governmental requirements
including, without limitation, healthcare laws (including without limitation
applicable Medicare and Medicaid laws and regulations) and environmental
laws
applicable to it or to any of its property, business operations and
transactions.
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5. Adverse
Conditions or Events.
Promptly advise Bank in writing of (i) any condition, event or act
which
comes to its attention that would or might materially adversely affect
Borrower’s financial condition or operations, the Collateral, or Bank’s rights
under the Loan Documents, (ii) any litigation filed by or against Borrower
seeking in excess of $100,000 in damages if not otherwise covered by insurance;
(iii) any event that has occurred that would constitute an event of default
under any Loan Documents and (iv) any uninsured or partially uninsured loss
through fire, theft, liability or property damage in excess of an aggregate
of
$100,000.00.
6. Taxes
and Other Obligations.
Pay all
of its taxes, assessments and other obligations, including, but not limited
to
taxes, costs or other expenses arising out of this transaction, as the same
become due and payable (or in any event prior to delinquency), except to
the
extent the same are being contested in good faith by appropriate proceedings
in
a diligent manner.
7. Fixed
Charge Coverage Ratio.
Borrower shall maintain as of the end of each fiscal quarter commencing with
the
fiscal quarter ending September 30, 2005, a Fixed Charge Coverage Ratio computed
for the four (4) fiscal quarters just ended of not less than 1.50 to
1.00.
8. Maintenance
and Licenses.
Maintain, in good repair, working order and condition all properties and
repair
and make all necessary replacements thereof, and preserve and maintain all
licenses, trademarks, privileges, permits, franchises, certificates and the
like
used or useful in its business including permission to participate as a skilled
nursing home in the Medicare Program under Title XVIII of the Social Security
Act as evidenced by that letter dated April, 2003 from The Arizona Department
of
Health Services addressed to the “Freedom Plaza Care Center”, a copy of which
has been provided to Bank.
9. Environmental
Laws.
(a) The
Borrower shall comply with all Environmental Laws now or hereafter in effect
and
maintain all required federal, state and local permits, licenses, certification
and approvals and other authorizations, if any, which are required in connection
with its ownership or use of the Premises and file, when due, all notifications
relating to air emissions, effluent discharges and the generation, storage,
treatment or disposal of any Hazardous Materials.
(b) In
the
event that the Borrower receives notice or otherwise discovers that it is
not in
compliance with any Environmental Law or that there has been a spill, release
or
threatened release of any Hazardous Material onto, from, at or under the
Premises of the Borrower which spill, release or threatened release requires
or
may require notification, response, assessment, investigation or remedial
action
pursuant to any Environmental Law, the Borrower shall immediately notify
the
Bank and all appropriate governmental agencies thereof and proceed with due
diligence and at the Borrower’s cost and expense to respond appropriately, in
accordance with all requirements of the Environmental Laws, provided that
nothing contained in this Section shall be deemed to authorize the Bank to
exercise dominion or control over the Borrower’s operation of the facility or
the Premises or the Borrower’s handling of Hazardous Materials.
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V. NEGATIVE
COVENANTS.
Until
full payment and performance of all obligations of Borrower under the Loan
Documents, Borrower will not, without the prior written consent of Bank (and
without limiting any requirement of any other Loan Documents):
1. Transfer
of Assets or Control.
Sell,
lease, assign or otherwise dispose of or transfer any assets, except inventory
and used equipment in the normal course of its business, or enter into any
merger or consolidation, or transfer control or ownership of the Borrower
or
from or acquire any Subsidiary.
2. Liens.
Grant,
suffer or permit any contractual or noncontractual lien on or security interest
in its assets, or fail to promptly pay when due all lawful claims, whether
for
labor, materials or otherwise, except Permitted Liens.
3. Extensions
of Credit.
Make
any loan or advance to any individual, partnership, corporation or other
entity.
4. Borrowings.
Create,
incur, assume or become liable in any manner for any indebtedness (for borrowed
money, deferred payment for the purchase of assets, lease payments, as surety
or
guarantor for the debt for another, or otherwise) other than to Bank, except
for
normal trade debts incurred in the ordinary course of Borrower’s business,
existing indebtedness disclosed to Bank in writing and acknowledged by Bank
prior to the date of this Agreement, and purchase money indebtedness used
to
finance equipment purchases not to exceed, in the aggregate at any one time
outstanding, a total of $250,000.00.
5. Character
of Business.
Change
the general character of Borrower’s business as conducted at the date hereof, or
engage in any type of business not reasonably related to its business as
presently conducted.
6. Single
Purpose Entity.
Borrower covenants, represents, warrants and agrees that it:
(a) will
not
amend, modify or otherwise change its Articles of Organization or operating
agreement in any material term or manner, or in a manner which adversely
affects
Borrower’s existence as a single purpose entity without the prior written
consent of Bank;
(b) will
not
permit any member of Borrower to amend, modify or otherwise change Borrower’s
Articles of Organization or operating agreement in any material term or manner,
or in a manner which adversely affects Borrower’s existence as a single purpose
entity without the prior written consent of Bank;
-11-
(c) to
the
full extent permitted by law, will not liquidate or dissolve (or suffer any
liquidation or dissolution), or enter into any transaction of merger or
consolidation, or acquire by purchase or otherwise all or substantially all
the
business or assets of, or any stock or other beneficial ownership of, any
entity
without the prior written consent of Bank;
(d) except
for Permitted Liens, will not guarantee, pledge its assets for the benefit
of,
hold its credit as being available to satisfy, or otherwise become liable,
on or
in connection with, any obligation of any other person without the prior
written
consent of Bank;
(e) will
not
own any asset other than the Premises and incidental personal property necessary
for the operation of the Premises;
(f) will
not
engage, either directly or indirectly, in any business other than the
acquisition, development, ownership, operation, leasing and managing and
maintenance of the Premises, and entering into and/or assuming the Loan and
activities incidental thereto, without the prior written consent of
Bank;
(g) will
maintain an arm’s length relationship with its affiliates and its members and
any other parties furnishing services to it;
(h) will
not
incur any debt, secured or unsecured, direct or contingent (including
guaranteeing any obligation) without the prior written consent of Bank (other
than accounts payable incurred in the ordinary course of business and debt
secured by Permitted Liens);
(i) will
not
make any loans or advances to any other person or entity, including, but
not
limited to, the affiliates of Borrower;
(j) will
be
solvent and pay its own liabilities, indebtedness and obligations of any
kind,
including administrative expenses, from its own assets as the same shall
become
due;
(k) will
do
all things necessary to preserve its existence, and will observe all formalities
applicable to it, and will do all things necessary to maintain its identity
as
an entity separate and distinct from any affiliates of Borrower;
(l) will
conduct and operate its business in its own name and as presently conducted
and
operated;
(m) will
maintain financial statements, books and records and bank accounts separate
from
those of its affiliates, including, without limitation, its members; provided,
however, that Borrower may be included in consolidated financial statements
of
another person, provided that such consolidated financial statements contain
a
note indicating that Borrower is a separate legal entity and Borrower’s assets
and liabilities are neither available to pay the debts of the consolidated
entity nor constitute obligations of the consolidated entity and that the
consolidated entity is not liable for any of the liabilities of
Borrower;
-12-
(n) will
be,
and at all times will hold itself out to the public as, a legal entity separate
and distinct from any other entity (including, without limitation, any affiliate
or member of Borrower, or any affiliate of any member of Borrower);
(o) will
file
its own tax returns and pay any taxes so required to be paid under applicable
law; provided, however, that so long as Borrower’s separate tax liability and
its income and expenses are readily determinable based on a review of Borrower’s
books and records, it may file consolidated tax returns;
(p) will
maintain adequate capital for the normal obligations reasonably foreseeable
in a
business of its size and character and in light of its contemplated business
operations;
(q) will
not
commingle the funds and other assets of Borrower with those of any member,
affiliate or any other person;
(r) will
maintain its assets in such a manner that it is not costly or difficult to
segregate, ascertain or identify its individual assets from those of any
affiliate or any other person;
(s) will
not
hold itself out to be responsible for the debts or obligations of any other
person;
(t) will
pay
any liabilities out of its own funds, including salaries of its employees,
not
out of the funds of any affiliate and will not permit any affiliate to guarantee
its debt or obligations (except as may be expressly provided for in this
Agreement);
(u) will
use
stationery, invoices, and checks separate from its affiliates;
(v) will
not
do any act which would make it impossible to carry on the ordinary business
of
Borrower
(w) will
not
hold title to Borrower’s assets other than in Borrower’s name;
(x) will
participate in the fair and reasonable allocation of any and all overhead
expenses and other common expenses for facilities, goods or services provided
to
multiple entities;
(y) will
deposit all of its funds in checking accounts, savings accounts, time deposits
or certificates of deposit in its own name or invest such funds in its own
name;
(z) will
correct any known misunderstanding regarding its separate identity;
-13-
(aa) will
establish and maintain an office through which its business is conducted
separate and apart from that of any other affiliate; provided, however, that
nothing herein shall be construed so as to prevent Borrower from having office
space at the same address as any other affiliate, so long as the costs and
expenses associated with such office space are allocated as set forth in
paragraph (x) above; and
(bb) will
maintain a separate telephone number from that of any other
affiliate.
Notwithstanding
anything herein to the contrary, Borrower may, from time to time, (i) make
lawful distributions in accordance with this Agreement and applicable law,
or
(ii) obtain lawful capital contributions in accordance with applicable
law from
its affiliates to the extent necessary to satisfy its obligations as they
become
due; provided, however, that all such transactions are accurately reflected
in
the books and records of Borrower and each of its applicable
affiliates.
VI.
DEFAULT.
The
occurrence of any one of the following shall be a default under this Agreement
(“Default”):
1. nonpayment
within three (3) days of the date when due of any amount payable on any of
the
Obligations, whether the due date is the scheduled due date or arises by
acceleration or otherwise;
2. any
covenant, agreement or condition in any Loan Document is not fully and timely
performed, observed or kept;
3. any
statement, representation or warranty of the Borrower made in writing herein
or
in any other writing or statement at any time furnished or made by the Borrower
to the Bank is untrue in any material respect as of the date furnished or
made;
4. a
default
under any promissory note, loan agreement, security deed or other agreement,
document or instrument executed by the Borrower;
5. suspension
of the operation of the Borrower’s present business;
6. any
Obligor becomes insolvent or unable to pay its debts as they mature, or admits
in writing that it is so, makes a conveyance fraudulent as to creditors under
any state or federal law, or makes an assignment for the benefit of
creditors;
7. a
proceeding is instituted by or against any Obligor alleging that such Obligor
is
insolvent or unable to pay its debts as they mature, or a petition under
any
provision of Title 11 of the United States Code (entitled “Bankruptcy”), as
amended, is brought by or against any Obligor;
8. entry
of
any uninsured judgment against Borrower in excess of $100,000;
9. Dissolution,
merger, or consolidation of Borrower;
10. termination
or withdrawal of any guaranty for any of the Obligations;
-14-
11. a
proceeding is instituted seeking the appointment of a receiver, liquidator,
custodian, trustee, or other similar official for the Collateral or for any
property in which the Borrower has an interest;
12. seizure
of the Collateral by any third party;
13. the
validity or enforceability of this Agreement, any Note or any of the other
Loan
Documents shall be contested by the Borrower or the Guarantor;
14. the
failure of the Bank to have a first priority perfected security interest
in any
Collateral;
15. the
breach by Guarantor of any condition or covenant contained in any Loan
Document;
16. Guarantor
defaults under any existing or future loan and/or credit agreements in excess
of
Five Million and No/100 Dollars ($5,000,000.00), subject to all applicable
grace
periods therein; however, any periods of forbearance with respect to such
credit
agreements, which arise and continue for more than forty-five (45) consecutive
days, will be deemed as a default hereunder.
VII. REMEDIES
UPON DEFAULT.
Upon a
Default, subject to the terms and conditions of the Deed of Trust, Bank may,
at
its election, but without any obligation to do so, without notice except
to the
extent provided in the Deed of Trust, do any one or more of the
following:
1. Acceleration
of Obligations.
In the
event of the occurrence of (a) a Default set forth in Sections VI.1 or VI.2,
above, the Obligations shall automatically and immediately become due and
payable; and (b) any other Default, the Bank, at its option, may declare
all of
the Obligations to be immediately due and payable, whereupon all of the
Obligations shall become immediately due and payable, in either case without
presentment, demand, protest, notice of non-payment or any other notice required
by law relative thereto, all of which are hereby expressly waived by the
Borrower, anything contained herein to the contrary
notwithstanding.
2. Default
Rate.
The
outstanding principal balance of the Loans shall bear interest at the Default
Rate until paid in full.
3. Take
Possession of Collateral.
The
Borrower agrees, upon the occurrence of a Default, to assemble at the Borrower’s
expense all Equipment, including returned, reclaimed and repossessed goods
and
all books and records relating to the Collateral at a convenient place
acceptable to the Bank, and to surrender such property to the Bank.
4. Sale
of Collateral.
The
Bank shall have the right to sell or to otherwise dispose of all or any of
the
Collateral, at public or private sale or sales, with such notice as may be
required by law, in lots or in bulk, for cash or on credit, all as Bank,
in its
sole discretion, may deem advisable. Such sales may be adjourned from time
to
time with or without notice. Bank shall have the right to conduct such sales
on
the premises of Borrower or elsewhere and shall have the right to use the
premises of Borrower, without charge for such sales for such time or times
as
the Bank may see fit. The Bank is hereby granted a license or other right
to
use, without charge, the labels, patents, copyrights, rights of use of any
name,
trade secrets, trade names, trademarks, service marks and advertising matter,
or
any property of a similar nature, whether owned by Borrower or with respect
to
which Borrower has rights under license, sublicense or other agreements,
as it
pertains to the Collateral, in preparing for sale, advertising for sale and
selling any Collateral and the rights of Borrower under all licenses and
all
franchise agreements shall inure to the benefit of the Bank. The Bank shall
have
the right to sell, lease or otherwise dispose of the Collateral, or any part
thereof; for cash, credit or any combination thereof; and the Bank may purchase
all or any part of the Collateral at public or, if permitted by law, private
sale and, in lieu of actual payment of such purchase price, may set off the
amount of such price against the Obligations. The proceeds realized from
the
sale of any Collateral shall be applied first to the costs, expenses and
attorneys’ fees and expenses incurred by Bank for collection and for
acquisition, completion, protection, removal, storage, sale and delivery
of the
Collateral; second to interest due upon any of the Obligations; and third
to the
principal of the Obligations. The Borrower agrees that the Bank may apply
any
proceeds from the sale of the Collateral to satisfy liens, security interests
or
encumbrances prior to the security interest of the Bank. Any remaining proceeds
shall be remitted to Borrower or other Person legally entitled thereto. If
any
deficiency shall arise, Borrower shall remain liable to the Bank
therefore.
-15-
5. Judicial
Proceedings.
The
Bank shall have the right to proceed by an action or actions at law or in
equity
to obtain possession of the Collateral, to recover the Obligations and amounts
secured hereunder or to foreclose under this Agreement and sell the Collateral
or any portion thereof; pursuant to a judgment or decree of a court or courts
of
competent jurisdiction, all without the necessity of posting any
bond.
6. Notice.
Any
notice required to be given by Bank of a sale, lease, or other disposition
of
the Collateral or any other intended action by Bank, given to Borrower in
the
manner set forth in Section VIII below, at least ten (10) days prior to such
proposed action, shall constitute commercially reasonable and fair notice
thereof to Borrower.
7. Appointment
of Bank as Borrower’s Lawful Attorney.
Borrower irrevocably designates, makes, constitutes and appoints the Bank
(and
all persons designated by the Bank) as the true and lawful attorney of Borrower
and the Bank or the Bank’s agent, may, without notice to Borrower and at such
time or times during the continuance of a Default as the Bank or said agent,
in
its sole discretion, may determine, in the name of Borrower or in the Bank’s
name: (a) do all acts and things necessary, in the Bank’s sole discretion,
to fulfill the obligations of Borrower under this Agreement; (b) endorse
the name of Borrower upon any chattel paper, document, instrument, invoice,
freight xxxx, xxxx of lading or similar document or agreement; and (c) use
the
information recorded on or contained in any data processing equipment and
computer hardware and software relating to the Borrower’s business to which
Borrower has access.
-16-
8. Setoff.
The
Bank shall be entitled to hold or set off any monies and all other property
of
the Borrower, at any time to the credit of the Borrower or in the possession
of
the Bank, whether by pledge or otherwise, or upon or in which the Bank may
have
a lien or security interest.
VIII. NOTICES.
All
notices, requests or demands which any party is required or may desire to
give
to any other party under any provision of this Agreement must be in writing
delivered to the other party at the following address:
Borrower:
ARC
HDV,
LLC
000
Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx,
Xxxxxxxxx 00000
Fax.
No.:
000-000-0000
With
a
copy to:
T.
Xxxxxx
Xxxxx, Esq.
Bass,
Xxxxx & Xxxx PLC
0000
XxXxxxx Xxxxxx
000
Xxxxxxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxxxx 00000-0000
Fax.
No.:
(000) 000-0000
Bank:
Bank
of
America, N.A.
000
Xxxxx
Xxxxxx
Healthcare
Lending
Xxxxxxxxx,
Xxxxxxxxx 00000
Fax.
No.:
(000) 000-0000
With
a
copy to:
Boult,
Cummings, Xxxxxxx & Xxxxx, PLC
0000
Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx,
Xxxxxxxxx 00000
Attn:
Xxxxxxx X. Xxxxxxxx
Fax.
No.
(000) 000-0000
or
to
such other address as any party may designate by written notice to the other
party. Each such notice, request and demand shall be deemed given or made
as
follows:
1. If
sent
by hand delivery, upon delivery;
2. If
sent
by mail, upon the earlier of the date of receipt or five (5) days after deposit
in the U.S. Mail, first class postage prepaid.
-17-
IX. COSTS,
EXPENSES AND ATTORNEY’S FEES.
Borrower shall pay to Bank immediately upon demand the full amount of all
costs
and expenses, including reasonable attorneys’ fees (to include outside counsel
fees and all allocated costs of Bank’s in-house counsel), incurred by Bank in
connection with (a) negotiation and preparation of this Agreement and each
of
the Loan Documents, and (b) Bank’s continued administration and/or amendment
thereof.
X. MISCELLANEOUS.
Borrower and Bank further covenant and agree as follows, without limiting
any
requirement of any other Loan Document:
1. Cumulative
Rights and No Waiver.
Each
and every right granted to Bank under any Loan Document, or allowed it by
law or
equity shall be cumulative of each other and may be exercised in addition
to any
and all other rights of Bank, and no delay in exercising any right shall
operate
as a waiver thereof, nor shall any single or partial exercise by Bank of
any
right preclude any other or future exercise thereof or the exercise of any
other
right. Borrower expressly waives any presentment, demand, protest or other
notice of any kind, including but not limited to notice of intent to accelerate
and notice of acceleration. No notice to or demand on Borrower in any case
shall, of itself, entitle Borrower to any other or future notice or demand
in
similar or other circumstances.
2. Applicable
Law.
This
Loan Agreement and the rights and obligations of the parties hereunder shall
be
governed by and interpreted in accordance with the laws of Tennessee and
applicable United States federal law.
3. Amendment.
No
modification, consent, amendment or waiver of any provision of this Agreement,
nor consent to any departure by Borrower therefrom, shall be effective unless
the same shall be in writing and signed by an officer of Bank, and then shall
be
effective only in the specified instance and for the purpose for which given.
This Agreement is binding upon Borrower, its successors and assigns, and
inures
to the benefit of Bank, its successors and assigns; however, no assignment
or
other transfer of Borrower’s rights or obligations hereunder shall be made or be
effective without Bank’s prior written consent, nor shall it relieve Borrower of
any obligations hereunder. There is no third party beneficiary of this Loan
Agreement.
4. Documents.
All
documents, certificates and other items required under this Agreement to
be
executed and/or delivered to Bank shall be in form and content satisfactory
to
Bank and its counsel.
5. Partial
Invalidity.
The
unenforceability or invalidity of any provision of this Agreement shall not
affect the enforceability or validity of any other provision herein and the
invalidity or unenforceability of any provision of any Loan Document to any
person or circumstance shall not affect the enforceability or validity of
such
provision as it may apply to other persons or circumstances.
-18-
6. Indemnification.
Borrower shall indemnify, defend and hold Bank and its successors and assigns
harmless from and against any and all claims, demands, suits, losses, damages,
assessments, fines, penalties, costs or other expenses (including reasonable
attorneys’ fees and court costs) arising from or in any way related to any of
the transactions contemplated hereby, including but not limited to actual
or
threatened damage to the environment, agency costs of investigation, personal
injury or death, or property damage, due to a release or alleged release
of
Hazardous Materials, arising from Borrower’s business operations, any other
property owned by Borrower or in the surface or ground water arising from
Borrower’s business operations, or gaseous emissions arising from Borrower’s
business operations or any other condition existing or arising from Borrower’s
business operations resulting from the use or existence of Hazardous Materials,
whether such claim proves to be true or false. Borrower further agrees that
its
indemnity obligations shall include, but are not limited to, liability for
damages resulting from the personal injury or death of an employee of the
Borrower, regardless of whether the Borrower has paid the employee under
the
workmen’ s compensation laws of any state or other similar federal or state
legislation for the protection of employees. The term “property damage” as used
in this paragraph includes, but is not limited to, damage to any real or
personal property of the Borrower, the Bank, and of any third parties. The
Borrower’s obligations under this paragraph shall survive the repayment of the
Loan and any deed in lieu of foreclosure or foreclosure of any Deed to Secure
Debt, Deed of Trust, Security Agreement or Mortgage securing the
Loan.
7. Survivability.
All
covenants, agreements, representations and warranties made herein or in the
other Loan Documents shall survive the making of the Loan and shall continue
in
full force and effect so long as the Loan is outstanding or the obligation
of
the Bank to make any advances under the Line shall not have
expired.
8. Appraisal
and Maintenance of Collateral Value.
Bank
may obtain, at Borrower’s expense, but not more often than once annually, an
appraisal of any real property securing payment of the Loan (the “Real
Property”) prepared in accordance with applicable bank regulatory agency
regulations and the written instructions from Bank by a third party appraiser
engaged directly by Bank. The costs of such appraisal shall be payable by
Borrower to Bank on demand. If such appraisal shows that the principal amount
outstanding under the Loan exceeds 80% of the market value of the Real Property
as so appraised, Borrower shall promptly on demand make such payments as
shall
be necessary to reduce the aggregate principal balance of the Loan to an
amount
that is equal to or less than 80% of said appraised value of the Real
Property.
9. Successors
and Assigns.
All of
the terms of this Agreement, and each of the documents and agreements executed
and delivered pursuant hereto and in accordance herewith, shall be binding
upon
and inure to the benefit of and be enforceable by the respective heirs,
representatives, transferees, successors and assignees of the parties hereto,
whether so expressed or not. The Borrower shall not assign or transfer this
Agreement, or any of its rights hereunder, without the prior written consent
of
the Bank.
10. Time
Is of the Essence.
Time is
of the essence of this Agreement.
-19-
11. Headings.
The
headings in this Agreement are intended to be for convenience of reference
only,
and shall not define or limit the scope, extent or intent or otherwise affect
the meaning of any portion hereof.
12. Entire
Agreement.
Except
as otherwise expressly provided in this Agreement, this Agreement and the
other
Loan Documents embody the entire agreement and understanding between the
parties
hereto and thereto and supersede all prior agreements and understandings
relating to the subject matter hereof.
XI.
USURY
LAWS.
Borrower, Bank and all other parties to the Loan Documents intend to conform
to
and contract in strict compliance with applicable usury law from time to
time in
effect. All agreements between Borrower and Bank (or any other party liable
with
respect to any Indebtedness under the Loan Documents) are hereby limited
by the
provisions of this Section which shall override and control all such agreements,
whether now existing or hereafter arising. In no way, nor in any event or
contingency (including but not limited to prepayment, default, demand for
payment, or acceleration of the maturity of any obligation), shall the interest
taken, reserved, contracted for, charged, chargeable, or received under this
Agreement, the Note, any of the other Loan Documents, or otherwise, exceed
the
maximum amount permitted under applicable law (“Maximum Amount”). If, from any
possible construction of any document, interest would otherwise be payable
in
excess of the Maximum Amount, any such construction shall be subject to the
provisions of this Section and such document shall ipso facto be automatically
reformed and the interest payable shall be automatically reduced to the Maximum
Amount, without the necessity of execution of any amendment or new document.
If
Bank shall ever receive anything of value which is characterized as interest
under applicable law and which would apart from this provision be in excess
of
the Maximum Amount, an amount equal to the amount which would have been
excessive interest shall, without penalty, be applied to the reduction of
the
principal amount owing on the Indebtedness in the inverse order of its maturity
and not to the payment of interest, or be refunded to Borrower or the other
payor thereof, at the election of Bank in its sole discretion or as required
by
applicable law. The right to accelerate maturity of the Note or any other
Indebtedness does not include the right to accelerate any interest which
has not
otherwise accrued on the date of such acceleration, and does not intend to
charge or receive any unearned interest in the event of acceleration. All
interest paid or agreed to be paid to Bank shall, to the extent permitted
by
applicable law, be amortized, prorated, allocated and spread throughout the
full
stated term (including any renewal or extension) of such Indebtedness so
that
the amount of interest on account of such Indebtedness does not exceed the
Maximum Amount. As used in this Section, the term “applicable law” shall mean
the laws of the State of Arizona or the federal laws of the United States
applicable to this transaction, whichever laws allow the greater interest,
as
such laws now exist or may be changed or amended or come into effect in the
future.
XII. ARBITRATION.
ANY
CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO INCLUDING BUT NOT
LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS INSTRUMENT, AGREEMENT
OR
DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS, INCLUDING ANY
CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING
ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT
APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND PROCEDURE
FOR
THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE OR ANY SUCCESSOR
THEREOF (“J.A.M.S.”), AND THE “SPECIAL RULES” SET FORTH BELOW. IN THE EVENT OF
ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY
ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY
TO
THIS INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING AN ACTION, INCLUDING A SUMMARY
OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM
TO
WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH
ACTION.
-20-
1. SPECIAL
RULES.
THE
ARBITRATION SHALL BE CONDUCTED IN THE COUNTY OF ANY BORROWER’S DOMICILE AT THE
TIME OF THE EXECUTION OF THIS INSTRUMENT, AGREEMENT OR DOCUMENT AND ADMINISTERED
BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY
PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION
ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN
90
DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON
A
SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING
FOR UP
TO AN ADDITIONAL 60 DAYS.
2. RESERVATION
OF RIGHTS.
NOTHING
IN THIS ARBITRATION PROVISION SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY
OF
ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS
CONTAINED IN THIS INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II) BE A WAIVER
BY BANK
OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY SUBSTANTIALLY
EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF BANK HERETO (A) TO EXERCISE
SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO FORECLOSE
AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A
COURT
PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE
RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A RECEIVER. BANK MAY EXERCISE
SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL
OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION
PROCEEDING BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER
THIS EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF
AN
ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE
A
WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION,
TO
ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH
REMEDIES.
XIII. NO
ORAL AGREEMENT.
THIS
WRITTEN LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
-21-
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their duly authorized representatives as of the date first above
written.
|
BANK:
|
|||
|
Bank
of America, N.A.
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
|
BORROWER:
|
|||
|
ARC
HDV, LLC
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
-22-
