1
Exhibit 10.1
$15,000,000.00
LOAN AND SECURITY AGREEMENT
by and between
BALANCED CARE CORPORATION,
BCC AT HERMITAGE PARK CARE CENTER, INC.,
BCC AT LEBANON CARE CENTER, INC.,
BCC AT LEBANON PARK MANOR, INC.,
BCC AT MT. XXXXXX XXXX CARE CENTER, INC.,
BCC AT MT. XXXXXX XXXX CARE CENTER WEST, INC.,
BCC AT NEVADA PARK CARE CENTER, INC.,
BCC AT NIXA PARK CENTER, INC.,
BCC AT REPUBLIC PARK CENTER, INC.,
BCC AT SPRINGFIELD CARE CENTER, INC.,
XXXXX MANAGEMENT INC.,
BCC AT DARLINGTON, INC.,
BALANCED CARE AT EYERS GROVE, INC.,
BALANCED CARE AT XXXXXX, INC.,
BALANCED CARE AT XXXXXX, INC.,
BALANCED CARE AT NORTH RIDGE, INC.
and
HCFP FUNDING, INC.
April 22, 1999
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement") is made as of April
22, 1999, by and among BALANCED CARE CORPORATION, a Delaware corporation, BCC AT
HERMITAGE PARK CARE CENTER, INC., a Delaware corporation, BCC AT LEBANON CARE
CENTER, INC., a Delaware corporation, BCC AT LEBANON PARK MANOR, INC., a
Delaware corporation, BCC AT MT. XXXXXX XXXX CARE CENTER, INC., a Delaware
corporation, BCC AT MT. XXXXXX XXXX CARE CENTER WEST, INC., a Delaware
corporation, BCC AT NEVADA PARK CARE CENTER, INC., a Delaware corporation, BCC
AT NIXA PARK CENTER, INC., a Delaware corporation, BCC AT REPUBLIC PARK CENTER,
INC., a Delaware corporation, BCC AT SPRINGFIELD CARE CENTER, INC., a Delaware
corporation, XXXXX MANAGEMENT INC., a Missouri corporation, BCC AT DARLINGTON,
INC., a Delaware corporation, BALANCED CARE AT EYERS GROVE, INC., a Delaware
corporation, BALANCED CARE AT XXXXXX, INC., a Delaware corporation, BALANCED
CARE AT XXXXXX, INC., a Delaware corporation, BALANCED CARE AT NORTH RIDGE,
INC., a Delaware corporation (collectively and individually, the "Borrower"),
and HCFP FUNDING, INC., a Delaware corporation (the "Lender").
RECITALS
The Borrower has requested that the Lender make available to the Borrower
a revolving credit facility in the maximum principal amount of Fifteen Million
Dollars ($15,000,000) at any one time outstanding (the "Loan"), and the Lender
has agreed to make the Loan on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and covenants contained
in this Agreement, and for other consideration, the receipt and sufficiency of
which are acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 As used in this Agreement, the following terms shall have the
following meanings:
Account. "Account" means any and all of the Borrower's now-owned and
hereafter acquired or arising accounts, accounts receivable and rights to
payment for goods sold or leased or services rendered, of every kind and
description, whether or not
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evidenced by an instrument or chattel paper, and whether or not earned by
performance, and all of the Borrower's contract rights, chattel paper, documents
and instruments with respect thereto, and all of Borrower's rights, remedies,
security and liens, in, to and in respect of the Accounts, including, without
limitation, rights of stoppage in transit, replevin, repossession and
reclamation and other rights and remedies of an unpaid vendor, lienor or secured
party, guaranties or other contracts of suretyship with respect to the Accounts,
deposits or other security for the obligation of any Account Debtor, and credit
and other insurance.
Account Debtor. "Account Debtor" means any Person obligated on any
Account of Borrower.
1.1 Accounts Receivable Advance. "Accounts Receivable Advance" means,
collectively and individually, any and all advances made hereunder based on
Qualified Accounts. Accounts Receivable Borrower. "Accounts Receivable Borrower"
means, collectively, all of the borrowers listed on Exhibit F attached hereto
and made a part hereof, and each of such borrowers individually, together with
their respective permitted successors and assigns. Accounts Receivable
Facilities. "Accounts Receivable Facilities" means the facilities listed and
described in Exhibit F attached hereto and made a part hereof.
Affiliate. "Affiliate" means, with respect to a specified Person, any
Person directly or indirectly controlling, controlled by, or under common
control with the specified Person, including without limitation their
stockholders and any Affiliates thereof. A Person shall be deemed to control a
corporation or other entity if the Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and business of the
corporation or other entity, whether through the ownership of voting securities,
by contract, or otherwise.
Agreement. "Agreement" means this Loan and Security Agreement, as it
may be amended, modified, supplemented or restated from time to time.
Applicable Environmental Law. "Applicable Environmental Law" shall mean
any applicable federal, state or local laws, rules or regulations pertaining to
health or the environment, or petroleum products, or radon radiation, or oil or
hazardous substances, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
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as amended ("CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended ("RCRA") and the Federal Emergency Planning and Community Right-To-Know
Act of 1986, as amended. The terms "hazardous substance" and "release" shall
have the meanings specified in CERCLA, and the terms "solid waste," "disposal,"
"dispose," and "disposed" shall have the meanings specified in RCRA, except that
if such acts are amended to broaden the meanings thereof, the broader meaning
shall apply herein prospectively from and after the date of such amendments;
notwithstanding the foregoing, to the extent that any state in which any portion
of the Property is located establishes a meaning for "hazardous substance" or
"release" which is broader than that specified in CERCLA, as CERCLA may be
amended from time to time, or a meaning for "solid waste", "disposal" and
"disposed" which is broader than specified in RCRA, as RCRA may be amended from
time to time, such broader meanings under such state law shall apply in all
matters relating to the laws of such state.
Base Rate. "Base Rate" means a rate of interest equal to two and
three quarters of one percent (2.75%) above the Prime Rate of Interest.
Borrowed Money. "Borrowed Money" means any obligation to repay borrowed
money, any indebtedness evidenced by notes, bonds, debentures or similar
obligations, any obligation under a conditional sale or other title retention
agreement and the net aggregate rentals under any lease which under GAAP would
be capitalized on the books of the Borrower or which is the substantial
equivalent of the financing of the property so leased.
Borrower. "Borrower" means, individually, each the Accounts
Receivable Borrowers and each of the Real Estate Borrowers, and all of such
parties collectively.
Borrowing Base. "Borrowing Base" has the meaning set forth in Section
2.1(d) hereof.
Borrowing Base Certificate. "Borrowing Base Certificate" means each
borrowing base certificate submitted by Borrower to Lender pursuant to the
requirements hereof.
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Business Day. "Business Day" means any day on which financial institutions
are open for business in the State of Maryland, excluding Saturdays and Sundays.
Closing Date. "Closing Date" means the date of execution and delivery of
this Agreement.
Collateral. "Collateral" means, collectively, the Pledgor Collateral and
the Accounts Receivable Collateral, as such capitalized terms are defined in
Sections 3.1A and 3.1B hereof.
Commitment Fee. "Commitment Fee" means a commitment fee payable by the
Borrower to the Lender in an amount equal to $100,000.00.
Concentration Account. "Concentration Account" has the meaning set forth
in Section 2.3 hereof.
Conditions to Real Estate Advance. "Conditions to Real Estate Advances"
means all of those Conditions to Real Estate Advances set forth in Exhibit E
attached hereto and made a part hereof by this reference.
Conditions for Closing. "Conditions for Closing" means all of those
conditions for closing set forth and described in Article V hereof.
Controlled Group. "Controlled Group" means a "controlled group" within the
meaning of Section 4001(b) of ERISA.
Cost Report Settlement Account. "Cost Report Settlement Account" means an
Account owed to the Accounts Receivable Borrower by a Medicaid/Medicare Account
Debtor pursuant to any cost report, either interim, filed or audited, as the
context may require.
Default Rate. "Default Rate" means a rate per annum equal to three percent
(3%) above the then applicable Base Rate.
Depository Account. "Depository Account" shall have the meaning assigned
to such term in Section 2.3 hereof.
Depository Account Bank. "Depository Account Bank" shall have the meaning
assigned to such term in Section 2.3 hereof.
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EBITDA. "EBITDA" means, the sum of the following, calculated individually
with respect to each Real Estate Borrower, and then added together for all Real
Estate Borrowers, as determined in accordance with GAAP and reflected in
Borrower's most current consolidated financial statements: (a) net income (after
rental expense with respect to each Leasehold Facility), plus (b) interest
expense, plus (c) depreciation and amortization, plus (d) income tax expense,
plus (e) fifty percent (50%) of the management fee expense, for (i) at all times
during the period starting on the Closing Date and ending on October 31, 1999
the twelve (12) most recently completed calendar months, and (ii) at all times
during the period starting on November 1, 1999 and ending on the last day of the
Term, the six (6) most recently completed calendar months on annualized basis.
If any Property has a negative EBITDA for any period, then for purposes of this
definition, EBITDA for that period for such Property shall equal zero. For
purposes of this definition, management fee expense shall be limited as
described in Section 7.6 hereof.
Exhibit. "Exhibit" means an Exhibit to this Agreement, unless the context
refers to another document, and each such Exhibit shall be deemed a part of this
Agreement to the same extent as if it were set forth in its entirety wherever
reference is made thereto.
ERISA. "ERISA" has the meaning set forth in Section 4.12.
Event of Default. "Event of Default" and "Events of Default" have the
meanings set forth in Section 8.1 hereof.
Eyers Grove Property. "Eyers Grove Property" means that portion of the
Property owned by BCC at Eyers Grove, Inc.
Facility. "Facility" means collectively, all of the Accounts Receivable
Facilities, and each of such facilities individually.
GAAP. "GAAP" means generally accepted accounting principles applied in a
manner consistent with the financial statements referred to in Section 4.7.
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Governmental Authority. "Governmental Authority" means and includes any
federal, state, District of Columbia, county, municipal, or other government and
any department, commission, board, bureau, agency or instrumentality thereof,
whether domestic or foreign.
Hazardous Material. "Hazardous Material" means any substances defined or
designated as hazardous or toxic waste, hazardous or toxic material, hazardous
or toxic substance, or similar term, by any environmental statute, rule or
regulation or any Governmental Authority.
Highest Lawful Rate. "Highest Lawful Rate" means the maximum lawful
rate of interest referred to in Section 2.7 that may accrue pursuant to this
Agreement.
Indebtedness. "Indebtedness" means any (i) obligations for borrowed money,
or obligations of any Person, (ii) obligations representing the deferred
purchase price of property other than accounts payable arising in connection
with the purchase of inventory customary in the trade, (iii) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from property now or hereafter owned or acquired, (iv) the amount of
any other obligation (including obligations under financing leases) which would
be shown as a liability on a balance sheet prepared in accordance with GAAP or
(v) all or any portion of the Obligations.
Indemnity Agreement. "Indemnity Agreement" means, collectively, (i) that
certain Environmental Indemnity Agreement of even date herewith from each Real
Estate Borrower and the Parent in favor of Lender, and (ii) any and all other
Environmental Indemnity Agreements that may hereafter be executed and delivered
by any Real Estate Borrower and the Parent in favor of the Lender, as the same
may be amended, modified and restated from time to time.
Insurer. "Insurer" means a Person that insures a Patient against certain
of the costs incurred in the receipt by such Patient of Medical Services, or
that has an agreement with Borrower to compensate Borrower for providing
services to a Patient.
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Instruments. "Instruments" means all instruments, chattel paper, documents
or other writings obtained from or used in connection with the Accounts
(including, without limitation, all ledger sheets, computer records and
printouts, data bases, programs, books of account and files relating thereto).
Leasehold Borrower. "Leasehold Borrower" means, collectively and
individually, those borrowers described in Exhibit I attached hereto and made a
part hereof, as the same may be amended from time to time; provided, however,
any such borrower shall not constitute a "Borrower" or "Real Estate Borrower"
hereunder, or be subject to any terms and conditions hereof, unless and until
such borrower becomes a "Borrower" and joins in this Agreement, as contemplated
herein.
Leasehold Facility. "Leasehold Facility" means, individually and
collectively, each Property covered by a Leasehold Mortgage, as described in
Exhibit I attached hereto.
Leasehold Mortgage. "Leasehold Mortgage" means, individually and
collectively, each leasehold mortgage, deed of trust or other real estate
security instrument granting the leasehold interest of the Grantor thereunder
executed and delivered by the Leasehold Borrower to secure the Obligations, as
amended, modified and restated.
Leases. "Leases" means each existing or future lease, any sublease,
tenancy, use, occupancy or other agreements under the terms of which any person
or entity has or acquires any right to occupy or use the Property or any portion
thereof, or interest therein, and each existing or future guaranty of payment or
performance thereunder, and all extensions, renewals, modifications and
replacements of each such lease, sublease, guaranty or other agreement.
Lender's Affiliate. "Lender's Affiliate" means any parent, subsidiary
or other affiliate of the Lender, and their respective successors and assigns.
Lien. "Lien" means any voluntary or involuntary mortgage, security deed,
deed of trust, deed to secure debt, lien, pledge, assignment, security interest,
title retention agreement, financing lease, levy, execution, seizure, judgment,
attachment, garnishment, charge, lien or other encumbrance of any kind,
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including those contemplated by or permitted in this Agreement and the other
Loan Documents.
Lender. "Lender" has the meaning set forth in the Preamble of this
Agreement.
Loan. "Loan" has the meaning set forth in the Preamble of this Agreement.
Loan Documents. "Loan Documents" means and includes this Agreement, the
Note, the Mortgage (including the Leasehold Mortgage), the Indemnity Agreement,
the Subordination Agreement, together with all other notes, security agreements,
deeds of trust, mortgages, collateral assignments, assignments of rents,
depository agreements, financing statements, letter agreements or other
documents now or hereafter executed and delivered to evidence, secure, guaranty,
or in connection with, the Loan or the Obligations, as the same may be amended,
modified, supplemented, restated or replaced from time to time.
Maturity Date. "Maturity Date" means the date which all of the Obligations
are due and payable, which date is three (3) years after the date of this
Agreement, unless earlier accelerated following an Event of Default, or unless
extended pursuant to a written agreement between the Borrower and the Lender.
Maximum Loan Amount. "Maximum Loan Amount" shall have the meaning set
forth in Section 2.1 hereof.
Medicaid/Medicare Account Debtor. "Medicaid/ Medicare Account Debtor"
means any Account Debtor which is (i) the United States of America acting under
the Medicaid/Medicare program established pursuant to the Social Security Act,
(ii) any state or the District of Columbia acting pursuant to a health plan
adopted pursuant to Title XIX of the Social Security Act, or (iii) any agent,
carrier, administrator or intermediary for any of the foregoing.
Medical Services. Medical and health care services provided to a Patient,
including, but not limited to, medical and health care services provided to a
Patient and performed by Borrower which are covered by a policy of insurance
issued by an Insurer, and includes physician services, nurse and therapist
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services, dental services, hospital services, skilled nursing facility services,
comprehensive outpatient rehabilitation services, home health care services,
residential and out-patient behavioral healthcare services, and medicine or
health care equipment provided by Borrower to a Patient for a necessary or
specifically requested valid and proper medical or health purpose.
Meditrust. "Meditrust" means Meditrust Mortgage Investments, Inc., a
Delaware corporation, and its successors and assigns.
Mortgage. "Mortgage" means, individually, each of the mortgages, deeds of
trust, amendments to mortgages and amendments to deeds of trust listed and
described in Exhibit G attached hereto and made a part hereof by this reference,
and all of such mortgages collectively, as the same may be amended, modified,
supplemented, restated and replaced from time to time, together with any and all
other mortgages, deeds of trust and leasehold mortgages and deeds of trust which
may hereafter be executed and delivered by any Borrower (whether now existing as
a Borrower hereunder or hereafter added as a Borrower hereunder pursuant to an
amendment hereto) in favor of Lender to secure the Obligations. "Mortgage"
includes the Leasehold Mortgage.
Note. "Note" means that certain Revolving Credit of even date herewith in
the principal amount of the Loan made by the Borrower payable to the Lender, as
the same may be amended, modified, restated and replaced from time to time.
Obligations. "Obligations" has the meaning set forth in Section 3.1
hereof.
Parent. "Parent" means Balanced Care Corporation, a Delaware corporation,
together with its permitted successors and assigns.
Patient. "Patient" means any Person receiving Medical Services from
Borrower and all Persons legally liable to pay Borrower for such Medical
Services other than Insurers.
Permits. "Permits" means all licenses, permits, certificates, approvals,
authorizations and registrations obtained from any governmental or
quasi-governmental authority
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and required, used or useful in connection with the ownership, operation, use or
occupancy of the Property or the Facility, including, without limitation,
environmental permits, business licenses, state health department licenses, food
service licenses, licenses to conduct business, certificates of need, regulatory
approvals and all such other permits, licenses, rights and approvals.
Permitted Liens. "Permitted Liens" means: (a) liens for taxes, assessments
or governmental charges and levies not delinquent, or which are being contested
in good faith and by appropriate proceedings which suspend the collection
thereof and in respect of which adequate reserves have been made (provided that
such proceedings do not, in Lender's reasonable discretion, involve any
substantial danger of the sale, loss or forfeiture of such property or assets or
any interest therein); (b) deposits or pledges to secure obligations under
workmen's compensation, social security or similar laws, or under unemployment
insurance; (c) deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory obligations, surety
and appeal bonds and other obligations of like nature arising in the ordinary
course of business; (d) mechanic's, workmen's, materialmen's or other like liens
arising in the ordinary course of business with respect to obligations which are
not due, or which are being contested in good faith by appropriate proceedings
which suspend the collection thereof and in respect of which adequate reserves
have been made (provided that such proceedings do not, in Lender's sole
discretion, involve any substantial danger of the sale, loss or forfeiture of
such property or assets or any interest therein); (e) liens and encumbrances in
favor of Lender or Lender's Affiliate; (f) liens granted in connection with the
lease or purchase of property or assets financed by borrowings permitted by
Section 7.1 (provided, however, that no such borrowings permitted by Section 7.1
may be secured by liens on any of the Collateral except for borrowings permitted
under Section 7.1); (vi) which may be secured by a purchase money lien against
the equipment acquired); (g) all existing liens and encumbrances against the
Property not removed from the Lender's applicable title policy or policies for
the Property; and (h) liens set forth on Schedule 1.1 attached hereto and made
part hereof; (i) future liens and security interests which replace the existing
liens described on Schedule 1.1 provided the
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principal amount secured by any such new lien does not exceed the principal
amount secured by the replaced lien.
Person. "Person" means an individual, partnership, corporation, trust,
joint venture, joint stock company, limited liability company, association,
unincorporated organization, Governmental Authority, or any other entity.
Plan. "Plan" has the meaning set forth in Section 4.12.
Prime Rate of Interest. "Prime Rate of Interest" means that rate of
interest designated as such by Fleet National Bank of Connecticut, N.A., or any
successor thereto, as the same may from time to time fluctuate.
Proceeds. "Proceeds" means all proceeds (whether cash or non-cash,
moveable or immoveable, tangible or intangible), including proceeds of insurance
and condemnation, from the sale, exchange, transfer, collection, loss, damage,
disposition, substitution or replacement of any of the Collateral.
Prohibited Transaction. "Prohibited Transaction" means a "prohibited
transaction" within the meaning of Section 406 of ERISA or Section 4975(C)(1)
of the Internal Revenue Code.
Property. "Property" means, individually, each of the parcels of real
property described in the Mortgages (as described in Exhibit I attached hereto
and made a part hereof), and all of such parcels, collectively, together with
all other personal property described in the Mortgage.
Qualified Account. "Qualified Account" means an Account of the Accounts
Receivable Borrower generated in the ordinary course of the Accounts Receivable
Borrower's business and which is not excluded from the criteria set forth below.
No Account shall be a Qualified Account if: (a) the Account or any portion
thereof is payable by an individual beneficiary, recipient or subscriber
individually and not directly to Accounts Receivable Borrower by a
Medicaid/Medicare Account Debtor, commercial medical insurance carrier, health
maintenance organization or other commercial third party payor acceptable to
Lender in its sole discretion; (b) the Account remains unpaid more than ninety
(90) days past the claim or invoice date (but in no event more than one hundred
and five (105) days after the applicable
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Medical Services have been rendered); (c) the Account is subject to any defense,
set-off, counterclaim, deduction, discount, credit, chargeback, freight claim,
allowance, or adjustment of any kind; (d) if the Account arises from the sale of
goods by Borrower, such sale was not an absolute sale or on consignment or on
approval or on a sale-or-return basis or subject to any other repurchase or
return agreement, or such goods have not been shipped to the Account Debtor or
its designee; (e) if the Account arises from the performance of services, such
services have not been actually been performed or were undertaken in violation
of any law; (f) the Account is subject to a lien other than a Permitted Lien;
(g) the Accounts Receivable Borrower knows of the bankruptcy, receivership,
reorganization, or insolvency of the Account Debtor; (h) the Account is
evidenced by chattel paper or an instrument of any kind, or has been reduced to
judgment; (i) the Account is an Account of an Account Debtor having its
principal place of business or executive office outside the United States; (j)
the Account Debtor is an Affiliate or Subsidiary of the Accounts Receivable
Borrower; (k) more than twenty-five percent (25%) of the aggregate balance of
all Accounts owing from the Account Debtor obligated on the Account are
outstanding more than one hundred and twenty (120) days past their invoice date;
(l) fifty percent (50%) or more of the aggregate unpaid Accounts from any
individual Account Debtor are not deemed Qualified Accounts hereunder; (m) any
covenant, representation or warranty contained in Section 4.3 of the Loan
Agreement with respect to such Account has been breached; or (n) the Account
fails to meet such other reasonable specifications and requirements which may
from time to time be established by Lender.
Real Estate Advance. "Real Estate Advance" means any advance made
hereunder based on the Real Estate Borrowing Base described in Section 2.1(d)
hereof of any Property covered by the Mortgage.
Real Estate Borrowers. "Real Estate Borrowers" means each and all of the
grantors of the Mortgages, as described in Exhibit G and Exhibit I (including
each Leasehold Borrower) attached hereto and made a part hereof, together with
their permitted successors and assigns.
Reimbursement Contracts. "Reimbursement Contracts" shall
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mean all contracts and rights pursuant to reimbursement or third party payor
programs and contracts for the Facility which are now or hereafter in effect
with respect to patients qualifying for coverage under the same, including, but
not limited to, Medicare, Medicaid, any successor program or other similar
reimbursement program (whether operated by a governmental or quasi-governmental
agency or by a private Person) and private insurance agreements.
Rents. "Rents" means all rent and other payments of whatever nature from
time to time payable pursuant to any lease of the Property, or any part thereof,
including (without limitation) leases of individual apartments or units to
residents and leases of retail space for businesses such as pharmacies, stores,
beauty shops, xxxxxx shops, newsstands, physicians' offices, and specialty
shops.
Reportable Event. "Reportable Event" means a "reportable event" as defined
in Section 4043(b) of ERISA.
Revolving Credit Loan. "Revolving Credit Loan" shall have the meaning set
forth in Section 2.1(b) hereof, and shall include (without limitation) all Real
Estate Advances and all Accounts Receivable Advances.
Subordination Agreement. "Subordination Agreement" means that certain
Accounts Receivable Intercreditor Agreement by and among the Borrower, the
Lender and Meditrust pursuant to which Meditrust shall agree (among other
things) to subordinate its lien on and security interest in the Collateral of
the Accounts Receivable Borrowers (or some portion thereof) to the lien and
security interests granted in favor of Lender in this Agreement and/or in the
Mortgage and to such other matters as may be required by Lender, as the same may
be amended from time to time.
Term. "Term" means the time period commencing on the date of this
Agreement and ending on the Maturity Date.
Termination Fee. "Termination Fee" means the termination fee described in
Section 2.8 hereof.
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Term Loan. "Term Loan" means the $5,000,000 term loan previously made by
Lender to the Borrower, as evidenced by the Term Note.
Term Note. "Term Note" means that certain Secured Term Note dated March
15, 1999 in the principal amount of $5,000,000 made by Borrower to Lender.
Title Company. "Title Company" means First American Title Insurance
Company or such other title insurance company as may be approved by Lender.
Section 1.2 Singular terms shall include the plural forms and vice versa,
as applicable, of the terms defined.
Section 1.3 Terms contained in this Agreement shall, unless otherwise
defined herein or unless the context otherwise indicates, have the meanings, if
any, assigned to them by the Uniform Commercial Code in effect in the state in
which any Collateral for the Obligations is located.
Section 1.4 All accounting terms used in this Agreement shall be construed
in accordance with GAAP, except as otherwise defined.
Section 1.5 All references to other documents or instruments shall be
deemed to refer to such documents or instruments as they may hereafter be
extended, renewed, modified, or amended and all replacements and substitutions
therefor.
ARTICLE II
TERMS OF THE LOAN
Section 2.1 Terms.
(a) Subject to the availability under the Borrowing Base, the
maximum aggregate principal amount of the Loan which may be extended by Lender
to Borrower under this Agreement and remain outstanding at any time is Fifteen
Million and No/100 Dollars ($15,000,000.00) (the "Maximum Loan Amount").
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Notwithstanding the foregoing, provided no Event of Default has occurred,
the Borrower shall be permitted to reduce the Maximum Loan Amount subject to the
following conditions:
(a) At any time during the period commencing October 1 and ending on
October 31 of each year during the Term of the Loan, but no more than once
during such period, the Borrower may deliver to Lender a written request to
reduce the Maximum Loan Amount (such request being hereinafter referred to as a
"Reduction Notice").
(b) Following Lender's receipt of a Reduction Notice, the Maximum Loan
Amount shall be reduced as of November 1 of the year in which the Reduction
Notice is delivered.
(c) The Maximum Loan Amount may be reduced by no more than $5,000,000.00
per year.
(d) Once the Maximum Loan Amount is reduced, it may not be increased.
(e) Any reduction of the Maximum Loan Amount (i) shall not effect the
calculation of the Termination Fee described in Section 2.8(c) hereof (i.e., any
Termination Fee shall be calculated based on the original Maximum Loan Amount
equal to $15,000,000); and (ii) shall effect the calculation of the Usage Fee
(i.e., the Usage Fee shall be calculated on the Maximum Loan Amount in effect
from time to time).
(b) The Loan shall be in the nature of a revolving line of credit,
and shall include sums advanced and other credit extended by Lender to or for
the benefit of Borrower from time to time under this Article II (each such
advance being hereinafter referred to as a "Revolving Credit Loan"), up to the
Maximum Loan Amount and subject to the availability under the Borrowing Base,
and the requests of Borrower pursuant to the terms and conditions of Section 2.2
below. The outstanding principal balance of the Loan may fluctuate from time to
time, to be reduced by repayments made by Borrower (which may be made without
penalty or premium), and to be increased by future Revolving Credit Loans,
advances and other extensions of credit to or for the benefit of Borrower, and
shall be due and payable in full upon the Maturity Date, unless earlier
terminated or accelerated by Lender in accordance with the terms of this
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Agreement. For purposes of this Agreement, any determination as to whether there
is availability under the Borrowing Base for advances shall be made by Lender in
its reasonable discretion.
(c) On the Closing Date, in addition to satisfying the Conditions
for Closing and the Conditions to Real Estate Advances (if any Real Estate
Advance shall be made on the Closing Date), Borrower shall execute and deliver
to Lender the Promissory Note evidencing Borrower's unconditional obligation to
repay Lender for all Revolving Credit Loans, advances, and other extensions of
credit made under the Loan, in the form of Exhibit A to this Agreement. The Note
shall bear interest from the date of the first advance made hereunder until
repaid, with interest payable monthly in arrears on the first Business Day of
each month, at a rate per annum (on the basis of the actual number of days
elapsed over a year of 360 days) equal to the Base Rate, provided that after an
Event of Default the applicable interest rate shall be equal to the Default
Rate. Each Revolving Credit Loan, advance and other extension of credit shall be
deemed evidenced by the Note, which is deemed incorporated herein and made a
part hereof.
(d) The maximum aggregate principal balance of all Revolving Credit
Loans outstanding at any time hereunder shall not exceed the Borrowing Base. The
Borrowing Base shall equal the sum of the following: (i) with respect to each
Property covered by a first priority fee simple Mortgage in favor of Lender, an
amount not to exceed eighty percent (80%) of the product of 8.0 times EBITDA,
plus (ii) with respect to each Leasehold Facility, an amount not to exceed the
lesser of eighty percent (80%) of the product of 5.0 times EBITDA, or eighty
percent (80%) of the product of the number of years remaining under the
applicable lease times EBITDA (such formulas described in subparagraphs (i) and
(ii) above being referred to herein as the "Real Estate Borrowing Base"); plus
(ii) eighty percent (80%) of the Qualified Accounts due and owing from any
Medicaid/Medicare Insurer or other Account Debtor (such formula being referred
to herein as the "Accounts Receivable Borrowing Base"). Notwithstanding the
foregoing, that portion of the Real Estate Borrowing Base attributable to the
Leasehold Borrowers shall not exceed fifteen percent (15%) of the Real Estate
Borrowing Base, and any advances made against any of the Leasehold Facilities
shall be conditioned upon Lender obtaining a written agreement from the
applicable fee owner, which
18
agreement shall provide appropriate consents and lease protection deemed
appropriate by Lender in its sole credit judgment. Calculation of the Borrowing
Base shall be subject to Lender's reasonable review.
(e) Borrower shall deliver a complete and accurate Borrowing Base
Certificate, in the form attached hereto as Exhibit H, reflecting its most
recent calculation of the Borrowing Base (i) immediately prior to any advance of
Loan proceeds provided that such Borrowing Base Certificate shall be based on
Borrower's financial data for the latest month which is closed in the Borrower's
ordinary course of business which shall in no event be later than 30 days after
the end of each month, and (ii) on the 30th day of each month (for the previous
month) throughout the Term.
Section 2.2 Loan Administration. Borrowings under the Loan shall be as
follows:
(a) A request for a Revolving Credit Loan shall be made, or shall be
deemed to be made, in either of the following manners:
(i) not later than 2:00 pm Eastern time at least one (1)
Business Day prior to the proposed date of advance, Borrower shall give Lender
notice of its intention to borrow, which notice shall (A) be in the form of the
Borrowing Base Certificate, (B) specify the amount of the proposed Revolving
Credit Loan and the proposed borrowing date, and (C) specify whether the advance
shall be an Accounts Receivable Advance or a Real Estate Advance, or a
combination of both; provided, however, that no such request may be made at a
time when there exists an Event of Default; and
(ii) in the event that any amount becomes due under the terms
of this Agreement which is not paid within any applicable grace or cure period,
whether such amount is interest, principal, fees or any other portion of the
Obligations, such event shall be deemed to constitute an irrevocable request for
a Revolving Credit Loan on the due date in the amount required to pay such
Obligation (provided, however, Borrower shall not be liable for an Event of
Default arising from the failure of a representation or warranty deemed
19
to have been made at the time any Revolving Credit Loan is made under this
Section 2.2(a)(ii).
(b) Borrower hereby irrevocably authorizes Lender to disburse the
proceeds of each Revolving Credit Loan requested, or deemed to be requested, as
follows:
(i) the proceeds of each Revolving Credit Loan requested under
subsection 2.2(a)(i) shall be disbursed by Lender by wire transfer to such bank
account as may be directed by Borrower from time to time or elsewhere if
pursuant to written direction from Borrower; and
(ii) the proceeds of each Revolving Credit Loan requested
under subsection 2.2(a)(ii) shall be disbursed by Lender by way of direct
payment by Lender of the relevant interest or other Obligation; provided,
however, that Lender agrees that it shall provide Borrower with an invoice
specifying the amounts to be disbursed pursuant to this Section 2.2(b)(ii).
(c) All Revolving Credit Loans, advances and other extensions of
credit to or for the benefit of Borrower (including, without limitation, all
Real Estate Advances and all Accounts Receivable Advances) shall constitute one
general Obligation of Borrower, and shall be secured by the lien on, and
security interest in, the Collateral.
(d) Lender shall enter all Revolving Credit Loans as debits to a
loan account in the name of Borrower and shall also record in such loan account
all payments made by Borrower on any Obligations and all proceeds of Collateral
which are paid to Lender, and may record therein, in accordance with customary
accounting practice, other debits and credits, including interest and all
charges and expenses properly chargeable to Borrower. All collections into the
Concentration Account pursuant to Section 2.3 hereof shall be applied first to
fees, costs and expenses due and owing under the Loan Documents, then to
interest due and owing under the Loan Documents, and then to principal
outstanding with respect to Revolving Credit Loans.
(e) On a monthly basis, Lender will provide to Borrower a statement
of Revolving Credit Loans, charges and payments made pursuant to this Agreement,
and such accounting rendered by Lender shall be deemed final, binding and
conclusive
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upon Borrower unless Lender is notified by Borrower in writing to the contrary
within thirty (30) days of the date each accounting is received by Borrower
(which receipt may be confirmed by Lender either by an overnight delivery
service, facsimile confirmation or U.S. mail return receipt). Such notice shall
be deemed an objection to those items specifically objected to therein.
Section 2.3 Collections, Disbursements, Borrowing Availability, and
Depository Account.
(a) Each Accounts Receivable Borrower shall maintain a Depository
Account (the "Depository Account") with Financial Trust and/or such other
institution as may be approved by Lender (the "Depository Bank"), subject to the
provisions of this Agreement, and shall execute, together with the Depository
Bank, a Depository Agreement in the form attached as Exhibit B (or such other
form as may be approved by Lender), and such other agreements related thereto as
Lender may require (collectively, the "Depository Agreement"). Each Accounts
Receivable Borrower shall direct all Account Debtors to make all payments on the
Accounts attributable to Medicaid/Medicare Accounts of such Accounts Receivable
Borrower (collectively, the "Depository Receipts") into the Depository Account.
(b) Upon (i) the occurrence of an Event of Default, or (ii)
Borrower's submission of a request for an Accounts Receivable Advance, Lender
shall deliver a copy of a written notice to the Depository Bank and to the
Accounts Receivable Borrower, whereupon, as set forth in the Depository
Agreement, the Depository Bank will immediately pay over to Lender, as received,
all Depository Account Receipts, until (A) the full amount of all outstanding
Obligations has been received by Lender and this Loan Agreement has been
terminated, or (B) no Accounts Receivable Advances (or any other amounts due in
connection therewith pursuant to this Agreement) remain outstanding and Borrower
no longer desires any Accounts Receivable Advances. Prior to any such notice
being delivered, and prior to any Event of Default, if Borrower has not
requested an Accounts Receivable Advance, all Depository Account Receipts shall
be transferred automatically by the Depository Bank to the account designated by
Borrower.
(c) If an Event of Default has occurred, or the
21
Borrower has requested an Accounts Receivable Advance, and Lender has provided
the notice described in subsection (b) above, all Depository Account Receipts
shall be immediately transferred into a depository account maintained and
controlled by Lender (the "Concentration Account"). Lender shall apply, on a
daily basis, all funds transferred into the Concentration Account pursuant to
this Section 2.3 to reduce the outstanding Obligations. To the extent that any
Depository Account Receipts or proceeds thereof are not sent directly to the
Depository Account but are received by Borrower, such collections shall be held
in trust for the benefit of Lender and immediately remitted, in the form
received, to the Depository Account Bank for transfer to the Concentration
Account immediately upon receipt by Borrower. Borrower acknowledges and agrees
that (i) its compliance with the terms of this Section 2.3 is essential; and
(ii) in the event that the Borrower collects in excess of $100,000 of Depository
Accounts Receipts and fails to remit such collections to the Collection Account
in accordance with this Section 2.3, then upon its failure to comply with any
such terms, Lender shall be entitled to assess a non-compliance fee which shall
operate to increase the Base Rate by two percent (2%) per annum during any
period of non-compliance. All funds transferred from the Concentration Account
for application to Borrower's indebtedness to Lender shall be applied to reduce
the Loan balance, but for purposes of calculating interest shall be subject to a
five (5) Business Day clearance period.
(d) Notwithstanding the foregoing provisions of this Section, Lender
and Borrower acknowledge and agree that the Account Receivable Collateral is
subject to the Subordination Agreement by and among Meditrust, Lender and the
Accounts Receivable Borrowers.
Section 2.4 Fees.
(a) On the Closing Date, the Borrower shall unconditionally pay to
Lender the Commitment Fee.
(b) For so long as the Loan is available to Borrower, Borrower
unconditionally shall pay Lender a monthly usage fee (the "Usage Fee") equal to
.15% of the average amount by which the Maximum Loan Amount exceeds the average
amount of the outstanding principal balance of the Revolving Credit Loans during
the preceding month. The Usage Fee shall be payable
22
monthly in arrears on the first Business Day of each successive calendar month.
(c) Subject to the limitations set forth herein and in Section 9.1,
Borrower shall pay to Lender all reasonable out-of-pocket costs and expenses
incurred in connection with the closing of the Loan, the making of any Revolving
Credit Loan, the administration of the Loan, the modification of the Loan or the
Loan Documents, including (without limitation) all audit and appraisal fees in
connection with audits and appraisals of Borrower's books and records, any
Facility or Property, all title premiums, recordation and transfer taxes,
recordation fees, search fees, surveys, attorney's fees and disbursements, which
amounts shall be due and payable on the first Business Day of the month
following the date of issuance by Lender of a request for payment thereof to
Borrower.
(d) Provided no Event of Default has occurred and is continuing,
Borrower and Lender agree that, provided the terms of this Agreement or any
other Loan document are not amended, for any twelve (12) month period during the
Loan Term, the Lender's expenses and costs for which Borrower shall be
responsible (as described in Section 2.4(b) above) and all other pre-default
costs and expenses payable to Lender hereunder or under any of the other Loan
Documents, shall not exceed $9,500 provided no Accounts Receivable Advances have
been made and remain outstanding. In the event that any Loan Document is amended
or any additional property is added to the Real Estate Borrowing Base, including
any property owned by any Leasehold Borrower, Borrower agrees to pay Lender's
reasonable costs and expenses in connection therewith.
Section 2.5 Payments. Principal payable on account of Revolving Credit
Loans shall be payable by Borrower to Lender immediately upon the earliest of
(i) the receipt by Borrower of any payments made on any Qualified Account
against which any Accounts Receivable Advance has been made, to the extent of
such proceeds, (ii) the occurrence of an Event of Default and the acceleration
of the Maturity Date pursuant to the terms of the Loan Documents as a result of
such Event of Default, or (iii) the termination of this Agreement pursuant to
Section 2.8 hereof; provided, however, that if a Revolving Credit Loan made by
Lender in excess of the Borrowing Base shall exist at any time, not later than
five (5) Business Days following written
23
notice from the Lender, Borrower shall repay such overadvance by delivering to
Lender immediately available funds in the amount of such overadvance. Interest
accrued on the Revolving Credit Loans shall be due on the earliest of (i) the
first Business Day of each month (for the immediately preceding month), computed
on the last calendar day of the preceding month, (ii) the occurrence of an Event
of Default in consequence of which the Loan and the Maturity Date is
accelerated, or (iii) the termination of this Agreement pursuant to Section 2.8
hereof. Except to the extent otherwise set forth in this Agreement, all payments
of principal and of interest on the Loan, all other charges and any other
obligations of Borrower hereunder, shall be made to Lender in immediately
available funds.
Section 2.6 Use of Proceeds. The proceeds of Lender's advances under the
Loan shall be used (i) on the Closing Date, to pay off in full all of the
obligations of the Borrower to Lender under the Term Note, and (ii) on or after
the Closing Date, for any legal purpose, including (without limitation) the
acquisition of Facilities, Properties and other assets, for working capital, for
other costs of Borrower arising in the ordinary course of Borrower's business,
for advances among Borrowers, and for the acquisition of leasehold interests in
facilities now or hereafter managed by Borrower or any Affiliate of Borrower.
Section 2.7 Interest Rate Limitation. The parties intend to conform
strictly to the applicable usury laws in effect from time to time during the
term of the Loan. Accordingly, if any transaction contemplated hereby would be
usurious under such laws, then notwithstanding any other provision hereof: (i)
the aggregate of all interest that is contracted for, charged, or received under
this Agreement or under any other Loan Document shall not exceed the maximum
amount of interest allowed by applicable law (the "Highest Lawful Rate"), and
any excess shall be promptly credited to Borrower by Lender (or, to the extent
that such consideration shall have been paid, such excess shall be promptly
refunded to Borrower by Lender); (ii) neither Borrower nor any other Person now
or hereafter liable hereunder shall be obligated to pay the amount of such
interest to the extent that it is in excess of the Highest Lawful Rate; and
(iii) the effective rate of interest shall be reduced to the Highest Lawful
Rate. All sums paid, or agreed to be paid, to Lender for the use, forbearance,
24
and detention of the debt of Borrower to Lender shall, to the extent permitted
by applicable law, be allocated throughout the full term of the Note until
payment is made in full so that the actual rate of interest does not exceed the
Highest Lawful Rate in effect at any particular time during the full term
thereof. If at any time the rate of interest under the Note exceeds the Highest
Lawful Rate, the rate of interest to accrue pursuant to this Agreement shall be
limited, notwithstanding anything to the contrary herein, to the Highest Lawful
Rate, but any subsequent reductions in the Base Rate shall not reduce the
interest to accrue pursuant to this Agreement below the Highest Lawful Rate
until the total amount of interest accrued equals the amount of interest that
would have accrued if a varying rate per annum equal to the interest rate under
the Note had at all times been in effect.
Section 2.8 Term.
(a) Subject to Lender's right to cease making Revolving Credit Loans
to Borrower upon or after any Event of Default, this Agreement shall be
effective for a period of three (3) years from the Closing Date, unless earlier
terminated as provided in this Section 2.8 hereof. This Agreement shall
terminate on the last day of such three (3) year period.
(b) Notwithstanding anything herein to the contrary, Lender may
terminate this Agreement without notice upon or after the occurrence of an Event
of Default.
(c) Upon at least thirty (30) days prior written notice to Lender
(the "Termination Notice Period"), Borrower may terminate this Agreement prior
to the third annual anniversary of the Closing Date, provided that, at the
effective date of such termination, Borrower shall pay to Lender (in addition to
the then outstanding principal, accrued interest and other Obligations owing
under the terms of this Agreement and any other Loan Documents) as liquidated
damages for the loss of bargain and not as a penalty, an amount equal to
$150,000.00 (the "Termination Fee").
(d) All of the Obligations shall be immediately due and payable upon
the termination date stated in any notice of termination of this Agreement
delivered by Borrower to Lender as described in Subparagraph (C) above (the
"Termination Date");
25
provided, however, that notwithstanding anything in Section 2.8(C) to the
contrary the Termination Date shall be effective no earlier than the first
Business Day of the month following the expiration of the Termination Notice
Period. All undertakings, agreements, covenants, warranties, and representations
of Borrower contained in the Loan Documents shall survive any such termination
and Lender shall retain its liens in the Collateral and all of its rights and
remedies under the Loan Documents notwithstanding such termination until
Borrower has paid the Obligations to Lender, in full, in immediately available
funds.
(e) Notwithstanding any provision of this Agreement which makes
reference to the continuance of an Event of Default, nothing in this Agreement
shall be construed to permit Borrower to cure an Event of Default following the
lapse of the applicable cure period, and Borrower shall have no such right in
any instance unless specifically granted in writing by Lender.
(f) Notwithstanding the foregoing, in the event that the Borrower
requests Lender's consent to do any act prohibited by the terms of this
Agreement, or to do anything which requires Lender's prior consent pursuant to
the provisions hereof, except for any of the acts described in Section 7.4
hereof, and Lender fails to provide such consent, then Borrower may terminate
this Agreement and no Termination Fee shall be payable by Borrower.
Section 2.9 Joint and Several Liability; Binding Obligations. Each entity
comprising Borrower and executing this Agreement on behalf of Borrower shall be
jointly and severally liable for all of the Obligations. In addition, each
entity comprising Borrower hereby acknowledges and agrees that all of the
representations, warranties, covenants, obligations, conditions, agreements and
other terms contained in this Agreement shall be applicable to and shall be
binding upon each individual entity comprising Borrower, and shall be binding
upon all such entities when taken together.
Section 2.10 Release of Real Estate Borrower and Mortgage. Lender agrees
to release the Mortgages, as well the grantors of such Mortgages, subject to the
following conditions:
(a) No Event of Default shall have occurred and be continuing;
26
(b) No more than one Mortgage shall be released, unless the Borrower
indefeasibly repays in full all of the Obligations, in which case the Lender
shall release all of the Mortgages;
(c) Upon such release, the Borrower shall be in compliance with the
Borrowing Base;
(d) The proceeds of any sale or refinancing of the Property to be
released giving rise to Borrower's request for release are used by the
applicable Real Estate Borrower to pay off all outstanding Real Estate Advances
made with respect to such Property; and
(e) That portion of the Borrowing Base attributable to the Property
to be released shall not constitute more than forty percent (40%) of the Real
Estate Borrowing Base. Notwithstanding the foregoing, Lender agrees that it will
release the Mortgage covering the Eyers Grove Property upon request by Borrower
if Lender determines that no Real Estate Advances shall be made against the
Eyers Grove Property and such release shall not be considered the one release
permitted under this Section.
Section 2.11 Release of other Collateral of Parent. Upon request by
Borrower, Lender will terminate its security interest covering any portion of
the Parent's Collateral, provided (a) no Event of Default has occurred, (b) such
release is required in connection with bona fide third party financing permitted
pursuant to Section 7.1 hereof which requests a security interest in such
Collateral.
Section 2.12 Release of Collateral and Accounts Receivable Borrower. Upon
request by Borrower, Lender agrees that it shall release its liens and security
interests covering all of the Collateral of a particular Accounts Receivable
Borrower, as well as the applicable Accounts Receivable Borrowers, from its
Obligations hereunder provided (a) no Event of Default has occurred; (b) the
Collateral subject to such release (the "Released Collateral") is required to be
released in connection with the sale or transfer of the rights to operate the
applicable Facility to an unrelated bonafide third party by the applicable
Accounts Receivable Borrower; (c) upon release of the Released Collateral, the
proceeds of such sale are used
27
immediately to reduce the outstanding principal Obligations attributable to such
Accounts Receivable Borrower; and (d) upon release of the Released Collateral,
the outstanding principal balance of all Accounts Receivable Advances does not
exceed the Borrowing Base. In addition, at any time after the date which is one
hundred and twenty (120) days following the date hereof, if the Borrower, Lender
and Meditrust have not entered into a satisfactory intercreditor agreement as to
the Accounts Receivable Collateral despite the good faith best efforts of
Borrower, upon receipt of a request from Borrower, Lender may, in its sole
credit judgment, release the Accounts Receivable Borrowers from the Obligations
and terminate its liens on, and security interests in, the Accounts Receivable
Collateral (it being understood that Lender shall have no obligation to so
release).
ARTICLE III
COLLATERAL
Section 3.1A Real Estate Borrower's Pledge. As security for the payment of
all liabilities of Borrower to Lender under the Note, this Agreement and all
other Loan Documents, including but not limited to any extensions,
modifications, substitutions, increases and renewals thereof, (a) the payment of
all amounts advanced by Lender to preserve, protect, defend, and enforce its
rights hereunder and in the Collateral (as hereinafter defined) in accordance
with the terms of this Agreement and all other Loan Documents, including
(without limitation) the Mortgage, and (b) the payment of all reasonable
expenses incurred by Lender in connection therewith (collectively, the
"Obligations"), each Real Estate Borrower and the Parent (collectively, the
"Pledgor") hereby assigns and grants to Lender a continuing first priority lien
on and security interest in, upon, and to each and every portion of the
following property (the "Pledgor Collateral"):
(i) All of the Pledgor's now-owned and hereafter acquired or arising
Accounts, accounts receivable and rights to payment of every kind and
description, and all of Borrower's contract rights, chattel paper, documents and
instruments with respect thereto, and all of the Pledgor's rights, remedies,
security and liens, in, to and in respect of the Accounts, including, without
limitation, rights of stoppage in transit, replevin, repossession and
reclamation and other rights and
28
remedies of an unpaid vendor, lienor or secured party, guaranties or other
contracts of suretyship with respect to the Accounts, deposits or other security
for the obligation of any Account Debtor, and credit and other insurance;
(ii) All moneys, securities and other property and the proceeds
thereof, now or hereafter held or received by, in transit to, in possession of,
or under the control of Lender or a bailee or Affiliate of Lender, from or for
the Pledgor, whether for safekeeping, pledge, custody, transmission, collection
or otherwise, and all of the Pledgor's deposits (general or special), balances,
sums and credits with Lender at any time existing;
(iii) All of the Pledgor's right, title and interest in, to and in
respect of all goods relating to, or which by sale have resulted in, Accounts,
including, without limitation, all goods described in invoices or other
documents or instruments with respect to, or otherwise representing or
evidencing, any Account, and all returned, reclaimed or repossessed goods;
(iv) All of the Pledgor's now or hereafter acquired deposit accounts
into which Accounts are deposited;
(v) All of the Pledgor's now owned and hereafter acquired or arising
general intangibles and other property of every kind and description with
respect to, evidencing or relating to its Accounts, accounts receivable and
other rights to payment, including, but not limited to, all existing and future
customer lists, choses in action, claims, books, records, ledger cards,
contracts, licenses, formulae, tax and other types of refunds, returned and
unearned insurance premiums, rights and claims under insurance policies, and
computer programs, information, software, records, and data, as the same relates
to the Accounts; and
(vi) The proceeds (including, without limitation, insurance
proceeds) of all of the foregoing.
Section 3.1B. As security for the Obligations, each Accounts Receivable
Borrower hereby assigns and grants to Lender a continuing first priority lien on
and security interest in,
29
upon, and to each and every portion of the following property (the "Accounts
Receivable Collateral")
(i) All of such Accounts Receivable Borrower's now-owned and
hereafter acquired or arising accounts, as such term is defined in the UCC,
based on or arising in connection with any obligations for the payment of money
arising out of an Accounts Receivable Borrower's sale of goods or rendition of
services (for purposes of this Section 3.1B, the "Accounts"), and all of an
Accounts Receivable Borrower's rights, remedies, security and liens, in, to and
in respect of the Accounts, including, without limitation, rights of stoppage in
transit, replevin, repossession and reclamation and other rights and remedies of
an unpaid vendor, lienor or secured party, guaranties or other contracts of
suretyship with respect to the Accounts, deposits or other security for the
obligation of any Account Debtor (hereinafter defined), and credit and other
insurance.
(ii) With respect to Accounts only, all moneys, securities and
other property and the proceeds thereof, now or hereafter held or received by,
in transit to, in possession of, or under the control of Lender or a bailee or
Affiliate of Lender, from or for such Accounts Receivable Borrower, whether for
safekeeping, pledge, custody, transmission, collection or otherwise, and all of
such Accounts Receivable Borrower's deposits (general or special), balances,
sums and credits with Lender at any time existing.
(iii) All of such Accounts Receivable Borrower's now or
hereafter acquired deposit accounts into which Accounts are deposited, including
the Depository Account.
(iv) All of such Accounts Receivable Borrower's now owned and
hereafter acquired or arising general intangibles with respect to, evidencing or
relating to its Accounts, including, but not limited to, all existing and future
choses in action, claims, books, records, ledger cards, contracts, licenses,
formulae, tax and other types of refunds, returned and unearned insurance
premiums, rights and claims under insurance policies, and computer programs,
information, software, records, and data, as the same relates to the Accounts.
30
(v) The proceeds (including, without limitation, insurance
proceeds) of all of the foregoing.
Section 3.2 Lien Documents With Respect to Personal Property. On the
Closing Date, with respect to all Collateral which constitutes personal
property, and thereafter as Lender deems necessary in its sole discretion, the
Borrower shall execute and deliver to Lender, or have executed and delivered
(all in form and substance satisfactory to Lender in its sole discretion)
(a) UCC-1 Financing statements pursuant to the Uniform Commercial
Code in effect in the jurisdiction(s) in which the Borrower operates, which
Lender may file in any jurisdiction where any Collateral is or may be located
and in any other jurisdiction that Lender deems appropriate; provided that a
carbon, photographic, or other reproduction or other copy of this Agreement or
of a financing statement is sufficient as and may be filed in lieu of a
financing statement; and
(b) Any other agreements, documents, instruments, deeds of trust,
mortgages, security agreements, and writings reasonably deemed necessary by
Lender or as Lender may otherwise request from time to time in its sole
discretion to evidence, perfect, or protect Lender's lien and security interest
in the Collateral reasonably required hereunder.
Section 3.3 Collateral Administration.
(a) All Collateral (except the Depository Account) will at all times
be kept by the applicable Borrower at its principal office(s) as set forth on
Schedule 4.15 hereto, or at the applicable Facility or Property (as the case may
be), and shall not, without the prior written approval of Lender, be moved
therefrom.
(b) If Qualified Accounts in an aggregate face amount in excess of
$50,000.00 become ineligible because they fall within one of the specified
categories of ineligibility set forth in the definition of Qualified Accounts or
otherwise, the Accounts Receivable Borrower shall notify Lender of such
occurrence on the third Business Day following such occurrence and the Borrowing
Base shall thereupon be adjusted to reflect such occurrence.
31
(c) Whether or not an Event of Default has occurred, any of Lender's
officers, employees or agents shall have the right, at any time or times
hereafter, in the name of Lender, any designee of Lender or the Borrower, to
verify the validity, amount or any other matter relating to any Accounts of
Accounts Receivable Borrowers by mail, telephone, telegraph or otherwise
(provided, however, Lender agrees that prior to the occurrence of an Event of
Default, Lender agrees to verify any such matter in the name of the Parent or
the applicable Accounts Receivable Borrower). Borrower shall cooperate fully
with Lender in an effort to facilitate and promptly conclude such verification
process.
(d) To expedite collection, the Accounts Receivable Borrower shall
endeavor in the first instance to make collection of its Accounts for Lender.
Lender retains the right at all times after the occurrence of an Event of
Default, subject to applicable law regarding Medicaid/Medicare Account Debtors,
to notify Account Debtors that Accounts have been assigned to Lender and to
collect Accounts directly in its own name and to charge the collection costs and
expenses, including attorneys' fees, to the Accounts Receivable Borrower.
Notwithstanding the foregoing, Lender and Borrower acknowledge and agree that
the Accounts Receivable Collateral is subject to the Subordination Agreement by
and among Meditrust, Lender and the Accounts Receivable Borrowers.
Section 3.4 Other Actions. In addition to the foregoing, the Accounts
Receivable Borrower (i) shall provide written notice to each private indemnity,
managed care or other Insurer who either is currently an Account Debtor or
becomes an Account Debtor at any time following the date hereof that Lender has
been granted a first priority lien and security interest in, upon and to all
Accounts applicable to such Insurer, and hereby authorizes Lender to send any
and all similar notices to such Insurers by Lender, which notice shall be
delivered promptly after any Accounts Receivable Advance is made by Lender to
the applicable Accounts Receivable Borrower, and (ii) shall do anything further
that may be lawfully and reasonably required by Lender to perfect Lender's
security interest and effectuate the intentions and objects of this Agreement,
including but not limited to the execution and delivery of depository
agreements, continuation statements, amendments to financing statements, and
32
any other documents required hereunder. At Lender's request, the Accounts
Receivable Borrower shall also immediately deliver to Lender all items for which
Lender must receive possession to obtain a perfected security interest. The
Borrower shall, on Lender's demand, deliver to Lender all notes, certificates,
and documents of title, chattel paper, warehouse receipts, instruments, and any
other similar instruments constituting Collateral. Notwithstanding the
foregoing, Lender and Borrower acknowledge and agree that the Accounts
Receivable Collateral is subject to the Subordination Agreement by and among
Meditrust, Lender and the Accounts Receivable Borrowers.
Section 3.5 Searches. As and when requested by Lender in its reasonable
discretion, prior to the Closing Date and thereafter, and in addition to any
title or other searches which may be required under the Conditions to Real
Estate Advances, Lender may obtain the following searches against Borrower (the
results of which are to be consistent with Borrower's representations and
warranties under this Agreement), all at Borrower's expense (but subject to the
limitation set forth in Section 2.4(d) hereof):
(e) Uniform Commercial Code searches with the Secretary of State and
local filing offices of each jurisdiction (i) in which any portion of the
Property is located, and (ii) where Borrower maintains its executive offices,
any Facility, place of business, or assets;
(f) Judgment, federal tax lien and corporate and partnership (as the
case may be) tax lien searches, in each jurisdiction searched under clause (a)
above; and
(g) Good standing certificates showing each Borrower to be in good
standing in its state of formation and in each other state in which it is doing
and presently intends to do business for which qualification is required.
Section 3.6 Power of Attorney. Each of the officers of Lender is hereby
irrevocably made, constituted and appointed the true and lawful attorney for the
Borrower (without requiring any of them to act as such) with full power of
substitution to do the following at any time following the occurrence of an
Event of Default: (i) endorse the name of Borrower upon any and all checks,
drafts, money orders, and other instruments for the
33
payment of money that are payable to Borrower and constitute collections on
Borrower's Accounts; (ii) execute in the name of Borrower any financing
statements, schedules, assignments, instruments, documents, and statements that
Borrower is obligated to give Lender hereunder; and (iii) do such other and
further acts and deeds in the name of Borrower that Lender may reasonably deem
necessary or desirable to enforce any Account or other Collateral or perfect
Lender's security interest or lien in any Collateral.
Section 3.7 Real Property Collateral. Prior to the first Real Estate
Advance against any particular Property, the applicable Real Estate Borrower
shall deliver to the Lender the applicable Mortgage, applicable financing
statements (if required by Lender), applicable written consents of all holders
of any interest in such Property (if applicable), and all other items listed and
described in the Conditions to Real Estate Advances with respect to the
applicable Property.
Section 3.8 Accounts Receivable Collateral. Prior to the first Accounts
Receivable Advance, in addition to satisfying the other conditions for advances
set forth herein, the Borrower shall cause to be executed and delivered by
Meditrust the Subordination Agreement, which shall be in form and substance
satisfactory to the Lender (it being understood that the Accounts Receivable
Intercreditor Agreement dated March 15, 1999 by and among Meditrust, Lender and
certain of the Borrowers is not satisfactory for purposes of Lender making
Accounts Receivable Advances hereunder).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each entity comprising Borrower represents and warrants to Lender,
and shall be deemed to represent and warrant on each day on which any
Obligations shall be outstanding hereunder, that:
Section 4.1 Subsidiaries. Except as set forth in Schedule 4.1, Borrower
has no subsidiaries.
Section 4.2 Organization and Good Standing. Borrower is a corporation duly
organized, validly existing, and in good standing under the laws of its state of
formation, is in good
34
standing as a foreign corporation in each jurisdiction in which the character of
the properties owned or leased by it therein or the nature of its business makes
such qualification necessary, has the corporate power and authority to own its
assets and transact the business in which it is engaged, and has obtained all
certificates, licenses and qualifications required under all applicable laws,
regulations, ordinances, or orders of public authorities necessary for the
ownership and operation of all of its properties and transaction of all of its
business.
Section 4.3 Authority. Borrower has full corporate power and authority to
enter into, execute, and deliver this Agreement and to perform its obligations
hereunder, to borrow the Loan, to execute and deliver the Note, to execute and
deliver the Mortgage and grant the liens described therein, and to incur and
perform the obligations provided for in the Loan Documents, all of which have
been duly authorized by all necessary corporate action. Except for such consents
and approvals as have been obtained, and subject to the federal Assignment of
Claims Act, no consent or approval of shareholders of, or lenders to, Borrower
and no consent, approval, filing or registration with any Governmental Authority
is required as a condition to the validity of the Loan Documents or the
performance by Borrower of its obligations thereunder. 1.1 Section Binding
Agreement. This Agreement and all other Loan Documents constitute, and the Note,
when issued and delivered pursuant hereto for value received, will constitute,
the valid and legally binding obligations of Borrower, enforceable against
Borrower in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the rights of creditors generally.
Section 4.5 Litigation. Except as disclosed in Schedule 4.5, to Borrower's
knowledge, there are no actions, suits, proceedings or investigations pending or
threatened against Borrower before any court or arbitrator or before or by any
Governmental Authority which, in any one case or in the aggregate, if determined
adversely to the interests of Borrower, could have a material adverse effect on
the business, properties, condition (financial or otherwise) or operations,
present or prospective, of Borrower taken as a whole, or upon its ability to
perform its obligations under the Loan Documents. To Borrower's knowledge,
Borrower is not in default with respect
35
to any order of any court, arbitrator, or Governmental Authority applicable to
Borrower or its properties, which default could reasonably be expected to have a
material adverse effect on the Borrower's business, assets or financial
conditions.
Section 4.6 No Conflicts. The execution and delivery by Borrower of this
Agreement and the other Loan Documents do not, and the performance of its
obligations thereunder will not, violate, conflict with, constitute a default
under, or result in the creation of a lien or encumbrance upon the Property of
any Borrower under: (i) any provision of Borrower's articles of incorporation or
bylaws, (ii) any provision of any law, rule, or regulation applicable to
Borrower, or (iii) any of the following: (A) any indenture or other agreement or
instrument to which Borrower is a party or by which Borrower or such property is
bound; or (B) any judgment, order or decree of any court, arbitrator, or
Governmental Authority having jurisdiction over Borrower which is applicable to
Borrower.
Section 4.7 Financial Condition. The annual consolidated financial
statements of Parent and its subsidiaries as of December 31, 1998 certified by
the chief financial officer of Parent, which were previously delivered to
Lender, fairly present the financial condition of Parent and its subsidiaries
and the results of its operations and changes in financial condition as of the
dates and for the periods referred to, and have been prepared in accordance with
GAAP. There are no material unrealized or anticipated liabilities, direct or
indirect, fixed or contingent, of Borrower as of the dates of such financial
statements which are not reflected therein or in the notes thereto. There has
been no material adverse change in the business, properties, condition
(financial or otherwise) or operations (present or prospective) of Borrower
since December 31, 1998, except as shown on Schedule 4.7 hereof. Borrower's
fiscal year ends on June 30. The federal tax identification number of each
entity comprising Borrower is as described on Schedule 4.7.
Section 4.8 No Default. To the Borrower's knowledge, Borrower is not in
default under or with respect to any obligation in any respect which could be
materially adverse to its business, operations, property or financial condition,
or which could materially and adversely affect the ability of Borrower to
perform its obligations under the Loan Documents.
36
To Borrower's knowledge, no Event of Default or event which, with the giving of
notice or lapse of time, or both, could become an Event of Default, has occurred
and is continuing.
Section 4.9 Title to Properties. Borrower has good and marketable title to
the Collateral and the Property, subject to no lien, mortgage, pledge,
encumbrance or charge of any kind, other than the Permitted Liens. Borrower has
not agreed or consented to cause any of the Collateral whether owned now or
hereafter acquired to be subject in the future (upon the happening of a
contingency or otherwise) to any lien, mortgage, pledge, encumbrance or charge
of any kind other than Permitted Liens.
Section 4.10 Taxes. Borrower has filed, or has obtained extensions for the
filing of, all federal, state and other tax returns which are required to be
filed, and has paid all taxes shown as due on those returns and all assessments,
fees and other amounts due as of the date hereof. All tax liabilities of
Borrower are now adequately provided for on Borrower's books. To Borrower's
knowledge, no tax liability has been asserted by the Internal Revenue Service or
other taxing authority against Borrower for taxes in excess of those already
paid.
Section 4.11 Securities and Banking Laws and Regulations.
(a) The use of the proceeds of the Loan and Borrower's issuance of
the Note will not directly or indirectly violate or result in a violation of the
Securities Act of 1933 or the Securities Exchange Act of 1934, as amended, or
any regulations issued pursuant thereto, including without limitation
Regulations U, T, G, or X of the Board of Governors of the Federal Reserve
System. Borrower is not engaged in the business of extending credit for the
purpose of the purchasing or carrying "margin stock" within the meaning of those
regulations. No part of the proceeds of the Loan hereunder will be used to
purchase or carry any margin stock or to extend credit to others for such
purpose.
(b) Borrower is not an investment company within the meaning of the
Investment Company Act of 1940, as amended, nor is it, directly or indirectly,
controlled by or acting on behalf of any Person which is an investment company
within the meaning of that Act.
37
Section 4.12 ERISA. No employee benefit plan (a "Plan") subject to the
Employee Retirement Income Security Act of 1974 ("ERISA") and regulations issued
pursuant thereto that is maintained by Borrower or under which Borrower could
have any liability under ERISA (a) has failed to meet minimum funding standards
established in Section 302 of ERISA, (b) has failed to comply with all
applicable requirements of ERISA and of the Internal Revenue Code, including all
applicable rulings and regulations thereunder, (c) has engaged in or been
involved in a prohibited transaction (as defined in ERISA) under ERISA or under
the Internal Revenue Code, or (d) has been terminated. Borrower has not assumed,
or received notice of a claim asserted against Borrower for, withdrawal
liability (as defined in the Multi-Employer Pension Plan Amendments Act of 1980,
as amended) with respect to any multi-employer pension plan and is not a member
of any Controlled Group (as defined in ERISA). Borrower has timely made when due
all contributions with respect to any multi-employer pension plan in which it
participates and no event has occurred triggering a claim against Borrower for
withdrawal liability with respect to any multi-employer pension plan in which
Borrower participates.
Section 4.13 Compliance with Law. Except as described in Schedule 4.13, to
Borrower's knowledge, Borrower is not in violation of any statute, rule or
regulation of any Governmental Authority (including, without limitation, any
statute, rule or regulation relating to employment practices or to
environmental, occupational and health standards and controls) where such
violation could reasonably be expected to have a materially adverse effect on
the business, assets or financial condition of the Borrower taken as a whole.
Borrower has obtained all licenses, permits, franchises, and other governmental
authorizations necessary for the ownership and/or operation of each Facility,
each Property and all other of its properties and the conduct of its business.
Borrower is current with all reports and documents required to be filed with any
state or federal securities commission or similar Governmental Authority and is
in full compliance with all applicable rules and regulations of such commissions
where such non-compliance could reasonably be expected to have a materially
adverse effect on the business, assets or financial condition of Borrower when
taken as a whole.
38
Section 4.14 Environmental Matters. The representations and warranties of
the Borrower set forth in the Indemnity Agreement are true and correct, the
Borrower hereby agrees to comply with the provisions of the Environmental
Agreement.
Section 4.15 Places of Business. The only places of business of Borrower,
and the places where it keeps and intends to keep the Collateral and records
concerning the Collateral, are at the addresses set forth in Schedule 4.15. Such
Schedule 4.15 also lists the owner of record of each Accounts Receivable
Facility.
Section 4.16 Intellectual Property. Borrower exclusively owns, licenses,
possesses or otherwise has a right to use all the patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights,
franchises, licenses, and rights with respect to the foregoing necessary for the
present and planned future conduct of its business, without any conflict with
the rights of others, except as described in Schedule 4.16 hereof. To Borrower's
knowledge, Borrower is not in default of any obligation or undertaking with
respect to such intellectual property or rights.
Section 4.17 SECTION INTENTIONALLY DELETED.
Section 4.18 Material Facts. Neither this Agreement nor any other Loan
Document nor any other agreement, document, certificate, or statement furnished
to Lender by or on behalf of Borrower by a representative of Borrower in
connection with the transactions contemplated hereby contains any untrue
statement of material fact or omits to state a material fact necessary in order
to make the statements contained herein or therein not misleading. There is no
fact known to Borrower that materially and adversely affects or in the future
may materially adversely affect the business, operations, affairs or financial
condition of Borrower, or any of its properties or assets.
Section 4.19 Certain Contracts. Borrower is not a party to any contract or
agreement, or subject to any corporate restriction, which materially adversely
affects its business as a whole.
Section 4.20 Business Interruptions. Within five years prior to the date
hereof, neither the business, property or
39
assets, or operations of Borrower has been adversely affected in any way by any
casualty, strike, lockout, combination of workers, or order of the United States
of America or other Governmental Authority, directed against Borrower. To
Borrower's knowledge, there are no pending or threatened labor disputes,
strikes, lockouts, or similar occurrences or grievances against Borrower or its
business which could reasonably be expected to have a material adverse effect on
the business, assets or financial condition of the Borrower taken as a whole.
Section 4.21 Names. Within five years prior to the date hereof, Borrower
has not conducted business, other than through a subsidiary or partnership under
or used any other name other than as shown on Schedule 4.21. All Accounts are
generated under the names listed on Schedule 4.21. Unless otherwise indicated on
such Schedule, each trade name of Borrower represents a division or trading
style of Borrower and not a separate Person or independent Affiliate.
Section 4.22 Joint Ventures. Borrower is not engaged in any joint venture
or partnership with any other Person, except as set forth on Schedule 4.22.
Section 4.23 Accounts. Lender may rely, in determining which Accounts are
Qualified Accounts, on all statements and representations made by Borrower with
respect to any Account or Accounts. Unless otherwise indicated in writing to
Lender, with respect to each Account of an Accounts Receivable Borrower:
(a) It is genuine and in all respects what it purports to be, and is
not evidenced by a judgment;
(b) It arises out of a completed, bona fide sale and delivery of
goods or rendition of services by Borrower in the ordinary course of its
business and in accordance with the terms and conditions of all purchase orders,
contracts, certification, participation, certificate of need, or other documents
relating thereto and forming a part of the contract between Borrower and the
Account Debtor;
(c) It is for a liquidated amount maturing as stated in a duplicate
claim or invoice covering such sale or rendition
40
of services, a copy of which has been furnished or is available to Lender;
(d) Subject to compliance with the federal Assignment of Claims Act
and other applicable laws, such Account, and Lender's security interest therein,
is not, and will not (by voluntary act or omission by Borrower), be in the
future, subject to any offset, lien, deduction, defense, dispute, counterclaim
or any other adverse condition, and each such Account is absolutely owing to
Borrower and is not contingent in any respect or for any reason;
(e) There are no facts, events or occurrences known to Borrower and
not disclosed to Lender which in any way impair the validity or enforceability
of any Accounts or tend to reduce the amount payable thereunder from the face
amount of the claim or invoice and statements delivered to Lender with respect
thereto;
(f) To Borrower's knowledge, (i) the Account Debtor thereunder had
the capacity to contract at the time any contract or other document giving rise
to the Account was executed and (ii) such Account Debtor is solvent;
(g) To Borrower's knowledge, there are no proceedings or actions
which are threatened or pending against any Account Debtor thereunder which
might result in any material adverse change in such Account Debtor's financial
condition or the collectibility of such Account;
(h) Subject to compliance with the federal Assignment of Claims Act,
it has been billed and forwarded to the Account Debtor for payment in accordance
with applicable laws and compliance and conformance with any requisite
procedures, requirements and regulations governing payment by such Account
Debtor with respect to such Account, and such Account if due from a
Medicaid/Medicare Account Debtor is properly payable directly to Borrower; and
(i) Borrower has obtained and currently has all certificates of
need, Medicaid and Medicare provider numbers, licenses, permits and
authorizations as necessary in the generation of such Accounts.
41
Notwithstanding the foregoing, the Borrower and Lender agree and
acknowledge that the Accounts Receivable Collateral is subject to the provisions
of the Subordination Agreement by and among Meditrust, Lender and Borrower.
Section 4.24 Solvency. Both before and after giving effect to the
transactions contemplated by the terms and provisions of this Agreement, (i)
Borrower (taken as a whole) owns property whose fair saleable value is greater
than the amount required to pay all of Borrower's Indebtedness, (ii) Borrower
(taken as a whole) was and is able to pay all of its Indebtedness as such
Indebtedness matures, and (iii) Borrower (taken as a whole) had and has capital
sufficient to carry on its business and transactions and all business and
transactions in which it about to engage. 1.2
ARTICLE V
CLOSING AND CONDITIONS OF LENDING
Section 5.1 Conditions Precedent to Agreement. The obligation of Lender to
enter into and perform this Agreement is subject to satisfaction of the
following conditions precedent:
(a) Lender shall have received two (2) originals of this Agreement
and all other Loan Documents required to be executed and delivered at or prior
to Closing (other than the Note, as to which Lender shall receive only one
original, executed by Borrower and any other required Persons, as applicable.
(b) Lender shall have received all searches and good standing
certificates required by Section 3.5 hereof.
(c) If a Real Estate Advance shall be made, the Borrower shall have
complied with all Conditions to Real Estate Advances.
(d) If an Accounts Receivable Advance shall be made, the Borrower
shall have complied with all conditions set forth herein for an Accounts
Receivable Advance, including the execution and delivery of the Subordination
Agreement.
42
(e) Borrower shall have complied and shall then be in compliance
with all the terms, covenants and conditions of the Loan Documents.
(f) There shall have occurred no Event of Default and no event
which, with the giving of notice or the lapse of time, or both, could constitute
such an Event of Default.
(g) The representations and warranties contained in Article IV shall
be true and correct.
(h) Lender shall have received copies of all board of directors
resolutions of Borrower, and other corporate action taken by Borrower to
authorize the execution, delivery and performance of the Loan Documents and the
borrowing of the Loan thereunder, as well as the names and signatures of the
officers of Borrower authorized to execute documents on its behalf in connection
herewith, all as also certified as of the date hereof by Borrower's chief
financial officer, and such other papers as Lender may reasonably require.
(i) Lender shall have received copies, certified as true, correct
and complete by a corporate officer of each Borrower, of the articles of
incorporation of each Borrower, with any amendments to any of the foregoing, and
all other documents reasonably necessary for performance of the obligations of
Borrower under this Agreement and the other Loan Documents.
(j) Lender shall have received a written opinion of counsel for
Borrower, dated the date hereof, substantially in the form delivered to Lender
in connection with the Term Loan.
(k) Lender shall have received such financial statements, reports,
certifications, and other operational information required to be delivered
hereunder, including without limitation an initial Borrowing Base Certificate
calculating the Borrowing Base.
(l) Lender shall have received the Commitment Fee.
(m) If an Accounts Receivable Advance is requested, Lender shall
have received (i) an estoppel certificate substantially in the form of Exhibit D
attached hereto from
43
Borrower's landlord or sublandlord, as the case may be, with respect to each of
the Accounts Receivable Facilities; and (ii) the Depository Agreement.
(n) Lender shall have received a certificate of Borrower's chief
financial officer, dated the Closing Date, certifying that to his/her best
knowledge all of the conditions specified in this Section have been fulfilled.
Section 5.2 Conditions Precedent to Advances. Notwithstanding any other
provision of this Agreement, no proceeds of any Revolving Credit Loan under the
Loan Documents shall be disbursed hereunder unless the following conditions have
been satisfied or waived immediately prior to such disbursement:
(a) The representations and warranties on the part of Borrower
contained in Article IV (except with respect to Sections 4.1, 4.21 and 4.22) of
this Agreement shall be true and correct in all respects at and as of the date
of disbursement or advance, as though made on and as of such date (except to the
extent that such representations and warranties expressly relate solely to an
earlier date and except that the references in Section 4.7 to financial
statements shall be deemed to be a reference to the then most recent annual and
interim financial statements of Borrower furnished to Lender pursuant to Section
6.1 hereof).
(b) No Event of Default or event which, with the giving of notice of
the lapse of time, or both, could become an Event of Default shall have occurred
and be continuing or would result from the making of the disbursement or
advance.
(c) No material adverse change in the condition (financial or
otherwise), properties, business, or operations of Borrower taken as a whole
shall have occurred and be continuing with respect to Borrower since the date
hereof.
(d) If the advance is an Accounts Receivable Advance, the
Subordination Agreement which shall be satisfactory to Lender shall have been
executed and delivered to Lender by Meditrust and Borrower.
44
Section 5.3 Closing. Subject to satisfaction of all of the conditions of
this Article V, the Loan shall be made available on Closing Date or such other
date as is mutually agreed by the parties at such time as may be mutually
agreeable to the parties upon the execution hereof at such place as may be
requested by Lender (the "Closing").
Section 5.4 Waiver of Rights. By completing the Closing hereunder, or by
making advances under the Loan, Lender does not waive a breach of any
representation or warranty of Borrower hereunder or under any other Loan
Document, and all of Lender's claims and rights resulting from any breach or
misrepresentation by Borrower are specifically reserved by Lender.
Section 5.5 Depository Agreement. No later than thirty (30) calendar days
following the execution and delivery of this Agreement, Borrower shall cause to
be executed and delivered to the Lender the Depository Agreement.
ARTICLE VI
AFFIRMATIVE COVENANTS
Each entity constituting Borrower covenants and agrees that for so long as
Borrower may borrow hereunder and until payment in full of the Note and
performance of all other obligations of Borrower under the Loan Documents:
Section 6.1 Financial Statements and Collateral Reports. Borrower will
furnish to Lender (i) with a request for the first Accounts Receivable Advance
and during any period that any Accounts Receivable Advance remains outstanding,
a sales and collections report and accounts receivable aging schedule for each
Accounts Receivable Borrower on a form acceptable to Lender within thirty (30)
days after the end of each calendar month, which shall include, but not be
limited to, a report of sales, credits issued, and collections received; (ii)
with a request for the first Accounts Receivable Advance and during any period
that any Accounts Receivable Advance remains outstanding, for each Accounts
Receivable Borrower, payable aging schedules within thirty (30) days after the
end of each calendar month; (iii) internally prepared monthly financial
statements for Borrower with respect to each Facility and each Property,
certified by the chief financial officer of Borrower, within (A)
45
thirty (30) days of the end of each month, and (B) within forty-five (45) days
of the end of each fiscal quarter, accompanied by management analysis and actual
vs. budget variance reports for the home division of Borrower and its Affiliates
in total; (iv) to the extent prepared by Borrower, annual budgets, profit and
loss statements, balance sheets, and cash flow reports (prepared on a monthly
basis) for the succeeding fiscal year within thirty (30) days before the end of
each of Borrower's fiscal years (which may be in draft form if the final form is
not yet available); (v) annual internally prepared financial statements for
Borrower within sixty (60) days after the end of each of Borrower's fiscal
years; (vi) annual audited consolidated and consolidating financial statements
for Borrower prepared by KPMG Peat Marwick LLP, or a firm of independent public
accountants satisfactory to Lender, within one hundred thirty-five (135) days
after the end of each of Borrower's fiscal years; (vii) promptly upon receipt
thereof, copies of any reports submitted to Borrower by the independent
accountants in connection with any interim audit of the books of Borrower and
copies of each management control letter provided to Borrower by independent
accountants; (viii) as soon as available, copies of all financial statements and
notices provided by Borrower to all of its stockholders; (ix) copies of all Form
10-Ks and 10-Qs; (x) the Borrowing Base Certificates described in Section 2.1
hereof; and (xi) such additional information, reports or statements as Lender
may from time to time reasonably request. Annual financial statements shall set
forth in comparative form figures for the corresponding periods in the prior
fiscal year. All financial statements shall include a balance sheet and
statement of earnings and shall be prepared in accordance with GAAP.
Section 6.2 Payments Hereunder. Borrower will make all payments of
principal, interest, fees, and all other payments required hereunder, under the
Loan, and under any other agreements with Lender to which Borrower is a party,
as and when due.
Section 6.3 Existence, Good Standing, and Compliance with Laws. Borrower
will do or cause to be done all things necessary (a) to obtain and keep in full
force and effect all corporate existence, rights, licenses, privileges, and
franchises of Borrower necessary to the ownership of its property (including the
Property and the Facilities) or the conduct of its business, and comply with all
applicable present
46
and future laws, ordinances, rules, regulations, orders and decrees of any
Governmental Authority having or claiming jurisdiction over Borrower where such
failure to comply with the foregoing would have a material adverse effect on the
business, assets or financial condition of Borrower taken as a whole; and (b) to
maintain and protect the properties (including the Property and the Facilities)
used or useful in the conduct of the operations of Borrower, in a prudent
manner, including without limitation the maintenance at all times of such
insurance upon its insurable property and operations as required by law or by
Section 6.7 hereof.
Section 6.4 Legality. The making of the Loan and each disbursement or
advance under the Loan shall not be subject to any penalty or special tax, shall
not be prohibited by any governmental order or regulation applicable to
Borrower, and shall not violate any rule or regulation of any Governmental
Authority, and subject to compliance with the federal Assignment of Claims Act,
necessary consents, approvals and authorizations of any Governmental Authority
to or of any such disbursement or advance shall have been obtained.
Section 6.5 SECTION INTENTIONALLY DELETED.
Section 6.6 Taxes and Charges. Borrower will timely file all tax reports
and pay and discharge all taxes, assessments and governmental charges or levies
imposed upon Borrower, or its income or profits or upon its properties or any
part thereof (including the Property), before the same shall be in default and
prior to the date on which penalties attach thereto, as well as all lawful
claims for labor, material, supplies or otherwise which, if unpaid, might become
a lien or charge upon the properties or any part thereof of Borrower; provided,
however, that Borrower shall not be required to pay and discharge or cause to be
paid and discharged any such tax, assessment, charge, levy or claim so long as
the validity or amount thereof shall be contested in good faith and by
appropriate proceedings by Borrower, and Borrower shall have set aside on their
books adequate reserve therefor; and provided further, that such deferment of
payment is permissible only so long as Borrower's title to, and its right to
use, the Collateral is not adversely affected thereby and Lender's lien and
priority on the Collateral are not adversely affected, altered or impaired
thereby.
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Section 6.7 Insurance. At all times during the Term of the Loan, the
Borrower shall maintain the following insurance with respect to each Property:
(a) Liability insurance (including professional liability) for
Borrower in an amount equal to at least $1,000,000 per occurrence, $3,000,000
aggregate, with a $10,000,000 umbrella policy per Property, and all such
liability insurance shall be written on an occurrence basis and name the Lender
as an additional insured;
(b) "All-risk" (including builder's risk) broad form coverage on the
Property in an amount not less than the replacement cost thereof, with
endorsements insuring against such potential causes of loss as shall be required
by Lender, including, but not limited to, loss or damage from flood, unless
evidence satisfactory to Lender is provided that all of the Property is located
in an area which is designated as not being in a flood hazard area;
(c) Workers' compensation insurance for Borrower as required by the
laws of the state in which the Property is located.
Each of the policies described in 6.7(b) shall name Lender as mortgagee
and loss payee under a standard non-contributory mortgagee and lender loss
payable clause, and shall provide that Lender shall receive not less than thirty
(30) days written notice prior to cancellation. The proceeds of either of the
policies described in 6.7(b) shall be payable by check payable to Lender or
jointly payable to Borrower and to Lender, and shall be delivered to Lender, and
such proceeds (after deducting reasonable Lender's costs and expenses of
obtaining such proceeds) shall be applied by Lender, at Lender's sole option,
either (i) to the full or partial payment or prepayment of the Loan Obligations
(without premium), or (ii) to the repair and/or restoration of the Property
damaged, or Lender may release the net proceeds to the Borrower; provided,
however, for so long as no Event of Default exists and the insurance proceeds,
together with any other sums made available by Borrower for repair and/or
restoration of the damaged Property are sufficient to make such
repairs/restoration, Lender shall make such insurance proceeds available to the
Borrower for such purposes.
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Borrower appoints Lender as Borrower's attorney-in-fact to cause the
issuance of or an endorsement of any policy to bring Borrower into compliance
herewith and, as limited above, at Lender's sole option, to make any claim for,
receive payment for, and execute and endorse any documents, checks or other
instruments in payment for loss, theft, or damage covered under any such
insurance policy for the Collateral; however, in no event will Lender be liable
for failure to collect any amounts payable under any insurance policy.
Section 6.8 General Information. Borrower will furnish to Lender such
information as Lender may from time to time reasonably request with respect to
the business or financial affairs of Borrower, and permit any officer, employee
or agent of Lender, during normal business hours and after reasonable prior
notice to visit and inspect any of the properties, to examine the minute books,
books of account and other records, including management letters prepared by
Borrower's auditors, of Borrower, and make copies thereof or extracts therefrom,
and to discuss its and their business affairs, finances and accounts with, and
be advised as to the same by, the accountants and officers of Borrower.
Section 6.9 Maintenance of Property. Borrower will maintain, keep and
preserve the Property, the Facilities, the Collateral and all of its properties
in good repair, working order and condition and from time to time make all
needful and proper repairs, renewals, replacements, betterments and improvements
thereto, so that the business carried on in connection therewith may be properly
conducted at all times.
Section 6.10 Notification of Events of Default and Adverse Developments.
Borrower promptly will notify Lender upon the occurrence of: (i) any Event of
Default; (ii) any event which, with the giving of notice or lapse of time, or
both, could constitute an Event of Default; (iii) any event, development or
circumstance whereby the financial statements previously furnished to Lender
fail in any material respect to present fairly, in accordance with GAAP, the
financial condition and operational results of Borrower; (iv) any judicial,
administrative or arbitration proceeding pending against Borrower, and any
judicial or administrative proceeding known by Borrower to be threatened against
it, which in any case, if
49
adversely decided, could materially and adversely affect its condition
(financial or otherwise) or operations (present or prospective) or which may
expose Borrower to uninsured liability of $500,000.00 or more; (v) any default
claimed by any other creditor for Borrowed Money of Borrower other than Lender
in excess of $500,000.00; and (vi) any other development in the business or
affairs of Borrower which may be adverse in a material respect to the business,
assets or financial condition of Borrower; in each case describing the nature
thereof and (in the case of notification under clauses (i) and (ii)) the action
Borrower proposes to take with respect thereto.
Section 6.11 Employee Benefit Plans. Borrower will (i) comply with the
funding requirements of ERISA with respect to the Plans for its employees, or
will promptly satisfy any accumulated funding deficiency that arises under
Section 302 of ERISA; (ii) furnish Lender, promptly after filing the same, with
copies of all reports or other statements filed with the United States
Department of Labor, the Pension Benefit Guaranty Corporation, or the Internal
Revenue Service with respect to all Plans, or which Borrower, or any member of a
Controlled Group, may receive from such Governmental Authority with respect to
any such Plans, and (iii) promptly advise Lender of the occurrence of any
Reportable Event or Prohibited Transaction with respect to any such Plan and the
action which Borrower proposes to take with respect thereto. Borrower will make
all contributions when due with respect to any multi-employer pension plan in
which it participates and will promptly advise Lender: (i) upon its receipt of
notice of the assertion against Borrower of a claim for withdrawal liability;
(ii) upon the occurrence of any event which could trigger the assertion of a
claim for withdrawal liability against Borrower; and (iii) upon the occurrence
of any event which would place Borrower in a Controlled Group as a result of
which any member (including Borrower) thereof may be subject to a claim for
withdrawal liability, whether liquidated or contingent.
Section 6.12 Financing Statements. Borrower shall provide to Lender
evidence satisfactory to Lender as to the due recording of termination
statements, releases of collateral, releases of liens and Forms UCC-3, and shall
cause to be recorded financing statements on Form UCC-1, duly executed by
Borrower and Lender, in all places necessary to release all existing security
interests and other liens in the Collateral
50
(other than as permitted hereby) and to perfect and protect Lender's first
priority lien and security interest in the Collateral, as contemplated herein.
Section 6.13 Financial Records. Borrower shall keep current and accurate
books of records and accounts in which full and correct entries will be made of
all of its business transactions, and will reflect in its financial statements
adequate accruals and appropriations to reserves, all in accordance with GAAP.
Section 6.14 Collection of Accounts. Borrower shall continue to collect
its Accounts in the ordinary course of business.
Section 6.15 Places of Business. Borrower shall give thirty (30) days'
prior written notice to Lender of any change in the location of any of its
Facilities, places of business, of the places where its records concerning its
Accounts are kept, of the places where the Collateral is kept, or of the
establishment of any new, or the discontinuance of any existing, places of
business from or at which Accounts are generated.
Section 6.16 Business Conducted. Borrower shall continue in the business
presently conducted by it using its best efforts to maintain its customers and
goodwill. Borrower shall not engage, directly or indirectly, in any line of
business substantially different from the business conducted by it immediately
prior to the Closing Date, or engage in business or lines of business which are
not reasonably related thereto.
Section 6.17 SECTION INTENTIONALLY DELETED.
Section 6.18 SECTION INTENTIONALLY DELETED.
Section 6.19 Submission of Collateral Documents. Borrower will, upon
Lender's reasonable request and subject to applicable laws, make available to
Lender copies of medical records, insurance verification forms, assignment of
benefits, in-take forms or other proof of the satisfactory performance of
services that gave rise to an Account, a copy of the claim or invoice for each
Account and copies of any written contract or order from which the Account
arose. Borrower shall promptly notify Lender if an Account becomes evidenced or
secured by an
51
instrument or chattel paper and upon request of Lender, will promptly deliver
any such instrument or chattel paper to Lender.
Section 6.20 Licensure; Medicaid/Medicare Cost Reports. Borrower will
maintain all certificates of need, provider numbers and licenses necessary to
conduct its business as presently conducted, and take any steps required to
comply with any such new or additional requirements that may be imposed on
providers of medical products and services by Account Debtors. If required, all
Medicaid/Medicare cost reports will be properly filed.
Section 6.21 Officer's Certificates. Together with the monthly financial
statements delivered pursuant to clause (iii) of Section 6.1, and together with
the audited annual financial statements delivered pursuant to clause (vi) of
that Section, Borrower shall deliver to Lender a certificate of its chief
financial officer, in form and substance satisfactory to Lender:
(a) Setting forth the information (including detailed calculations)
required to establish whether Borrower is in compliance with the requirements of
Articles VI and VII as of the end of the period covered by the financial
statements then being furnished; and
(b) Stating that the signer has reviewed the relevant terms of this
Agreement, and has made (or caused to be made under his supervision) a review of
the transactions and conditions of Borrower from the beginning of the accounting
period covered by the income statements being delivered to the date of the
certificate, and that such review has not disclosed, to such officer's knowledge
the existence during such period of any condition or event which constitutes an
Event of Default or which is then, or with the passage of time or giving of
notice or both, could become an Event of Default, and if any such condition or
event existed during such period or now exists, specifying the nature and period
of existence thereof and what action Borrower has taken or proposes to take with
respect thereto.
Section 6.22 SECTION INTENTIONALLY DELETED.
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Section 6.23 Net Worth. Borrower will at all times maintain its
consolidated net worth, as computed in accordance with GAAP, in an amount equal
to at least $30,000,000
Section 6.24 Ownership of Additional Property. In the event that
Borrower acquires the fee simple title to any additional real property for the
operation of any nursing home or assisted living facility and Borrower desires
to obtain a Real Estate Advance with respect thereto, the Borrower shall cause
to be delivered to the Lender an amendment to the Mortgage or an additional lien
instrument (as appropriate based on the location of such additional real
property), pursuant to which the Borrower shall grant to the Lender a first
priority lien on such additional real property, together with all improvements
and fixtures thereon. In addition, with respect to all such additional real
property for which Borrower desires to obtain a Real Estate Advance, the
Borrower shall comply with all provisions of this Agreement as if such real
property were originally described herein, and satisfy all Conditions to Real
Estate Advances with respect thereto. Notwithstanding the foregoing, Lender
acknowledges and agrees that, with respect to all Leasehold Borrowers, the
interest being granted is a Leasehold Mortgage.
Section 6.25 Updated Appraisals. If any Event of Default has occurred,
or if in Lender's reasonable judgment, a material depreciation in the value of
the Property shall have occurred, then in any such event, Lender may cause the
Property or any portion thereof to be appraised by an appraiser selected by
Lender and acceptable to Borrower, and in accordance with Lender's appraisal
guidelines and procedures then in effect, and Borrower agrees to cooperate in
all respects with such appraisers and furnish to the appraisers all requested
information regarding the Property. Lender shall pay all costs incurred by
Lender in connection with any such appraisal.
Section 6.26 Leases. Borrower shall require any lessees of any Property
(but not individual residents) to execute a full subordination of its lease, as
well as an estoppel certificate with respect to such lease. Borrower shall
require any manager to enter into a subordination agreement with Lender in a
form generally used in the industry. Borrower must provide copies of any
manager's organizational documents, certificates evidencing existence,
qualification, and good standing, and appropriate
53
resolutions authorizing the subordination herein described to Lender for its
review and approval.
ARTICLE VII
NEGATIVE COVENANTS
Each entity constituting Borrower covenants and agrees that so long as
Borrower may borrow hereunder and until payment and performance in full of all
of the Obligations:
Section 7.1 Borrowing. Borrower will not create, incur, assume or
suffer to exist any liability for Borrowed Money except: (i) indebtedness to
Lender; (ii) indebtedness of Borrower secured by Permitted Liens and any
refinancing thereof as long as the principal amount of such Indebtedness does
not exceed the principal amount of the Indebtedness being refinanced or
replaced; (iii) accounts payable to trade creditors and current operating
expenses (other than for borrowed money) which are not aged more than one
hundred twenty (120) days from the billing date or more than thirty (30) days
from the due date, in each case incurred in the ordinary course of business and
paid within such time period, unless the same are being contested in good faith
and by appropriate and lawful proceedings, and Borrower shall have set aside
such reserves, if any, with respect thereto as are required by GAAP and deemed
adequate by Borrower and its independent accountants; (iv) borrowings incurred
in the ordinary course of its business and not exceeding $500,000.00 in the
aggregate outstanding at any one time; (v) borrowings incurred by the Parent not
exceeding $500,000 in the aggregate and, subject to the Lender's prior written
consent which shall not be unreasonably withheld, borrowings of the Parent
exceeding $500,000 in the aggregate incurred for working capital, capital
expenditures and general corporate purposes in order to finance (A) the
development, leasing, management or operation of assisted living facilities, and
(B) the development, purchase, leasing, construction or renovation of the
Parent's corporate headquarters facility; and (vi) borrowings pursuant to an
equipment lease facility pursuant to which Borrower shall lease or purchase
equipment for use at the Property or any Facility; and (vii) borrowings secured
by the Mortgage. Borrower will not make prepayments on any existing or future
indebtedness for Borrowed Money in excess of $500,000.00 to any Person (other
than Lender, to the extent
54
permitted by this Agreement or any subsequent agreement between Borrower and
Lender).
Section 7.2 Borrowing Base Covenant. Borrower will not permit the
aggregate outstanding principal balance of all Revolving Credit Loans to exceeds
the applicable Accounts Receivable Borrowing Base and the applicable Real Estate
Borrowing Base then in effect.
Section 7.3 Liens and Encumbrances. Borrower will not create, incur,
assume or suffer to exist any mortgage, pledge, lien or other encumbrance of any
kind (including the charge upon property purchased under a conditional sale or
other title retention agreement) upon, or any security interest in, any of its
Collateral or the Property, whether now owned or hereafter acquired, except for
the Permitted Liens and liens securing any liability for Borrowed Money
permitted under Section 7.1 hereof.
Section 7.4 Restriction on Fundamental Changes. Except as described in
Sections 7.7 and 7.12 hereof, Borrower will not: (i) enter into any transaction
of merger or consolidation except with another Borrower without Lender's
consent, which shall not be unreasonably withheld; (ii) liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution); or (iii) except
between Borrowers, convey, sell, lease, sublease, transfer or otherwise dispose
of, in one transaction or a series of transactions, any substantial amount of
its assets (and in no event shall any Borrower dispose of the Property or any
portion thereof), or the capital stock of any subsidiary of Borrower, whether
now owned or hereafter acquired. Consistent with the foregoing, until the
Obligations are repaid in full, none of the entities comprising Borrower shall
transfer, assign, convey or grant to any other Person the right to operate or
control any Property or any Accounts Receivable Facility, whether by lease,
sublease, management agreement, joint venture agreement or otherwise except to
another Borrower and/or an Affiliate of Borrower; provided, however that
Borrower may dispose of any Property (and any collateral associated with such
Property) so long as the Borrower complies with the requirements set forth in
Section 2.10.
Section 7.5 SECTION INTENTIONALLY DELETED.
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Section 7.6 Dividends, Distributions and Management Fees. Upon notice
from Lender to Borrower of the existence of an uncured Event of Default
hereunder, Borrower will not declare or pay any dividends or other distributions
with respect to, purchase, redeem or otherwise acquire for value any of its
outstanding stock now or hereafter outstanding, or return any capital of its
stockholders, nor shall Borrower pay management fees or fees of a similar nature
to any Affiliate. So long as no Event of Default has occurred and is continuing,
each Borrower may pay management fees to any affiliate in an amount not to
exceed 6% of the gross revenues of such Borrower.
Section 7.7 Loans. No Borrower will make loans or advances to any
Person, other than (a) trade credit extended in the ordinary course of its
business, (b) advances for business travel and similar temporary advances in the
ordinary course of business to officers, stockholders, directors, and employees,
(c) loans to other Borrowers, and (d) transactions with Affiliates that are not
prohibited by Section 7.12
Section 7.8 SECTION INTENTIONALLY DELETED.
Section 7.9 SECTION INTENTIONALLY DELETED.
Section 7.10 Compliance with ERISA. Borrower will not permit with
respect to any Plan covered by Title IV of ERISA any Prohibited Transaction or
any Reportable Event.
Section 7.11 Certificates of Need. Borrower will not amend, alter or
suspend or terminate or make provisional in any material way, any certificate of
need or provider number without the prior written consent of Lender, which shall
not be unreasonably withheld.
Section 7.12 Transactions with Affiliates. No Borrower other than the
Parent will enter into any transaction with any Affiliate, including without
limitation the purchase, sale, or exchange of property, except in the ordinary
course of business and pursuant to the reasonable requirements of such
Borrower's business and upon terms substantially the same and not materially
less favorable to such Borrower as it would obtain in a comparable arm's length
transaction with any Person not an Affiliate or subsidiary, and so long as the
transaction is not
56
otherwise prohibited hereunder. For purposes of the foregoing, Lender consents
to the transactions described on Schedule 7.12.
Section 7.13 Use of Lender's Name. Borrower will not use Lender's name
(or the name of any of Lender's affiliates) in connection with any of its
business operations. Borrower may disclose to third parties that Borrower has a
borrowing relationship with Lender. Nothing herein contained is intended to
permit or authorize Borrower to make any contract on behalf of Lender.
Section 7.14 Change in Capital Structure. There shall occur no change
in Borrower's capital structure as set forth in Schedule 4.17 which results in
the Parent or any other Borrower failing to control or own any Borrower.
Section 7.15 Contracts and Agreements. Borrower will not become or be a
party to any contract or agreement which would breach this Agreement.
Section 7.16 SECTION INTENTIONALLY DELETED.
Section 7.17 Truth of Statements and Certificates. Borrower will not
knowingly furnish to Lender any certificate or other document that contains any
untrue statement of a material fact or that omits to state a material fact
necessary to make it not misleading in light of the circumstances under which it
was furnished.
Section 7.18 SECTION INTENTIONALLY DELETED.
Section 7.19 Change of Use or Entering into Lease or Management
Agreement. The Borrower shall not materially alter or change the use of any
Property or enter into any management agreement or lease for any Property,
unless Borrower first notifies Lender and provides Lender a copy of the proposed
management agreement or lease and obtains Lender's written consent thereto,
which consent shall not be unreasonably withheld. Lender shall be deemed to have
consented to any proposed agreement unless Lender notifies Borrower in writing
of its specific objections thereto within 15 days of receipt thereof.
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ARTICLE VIII
EVENTS OF DEFAULT
Section 8.1 Events of Default. Each of the following (individually, an
"Event of Default" and collectively, the "Events of Default") shall constitute
an event of default hereunder:
(a) A default in the payment of any installment of principal
of, or interest upon, the Note when due and payable, whether at maturity or
otherwise, or any breach of Section 2.3 of this Agreement, which default or
breach, as applicable, shall have continued unremedied for a period of five (5)
days after written notice thereof from Lender to Borrower;
(b) A default in the payment of any other charges, fees, or
other monetary obligations owing to Lender arising out of or incurred in
connection with this Agreement or the Mortgage when such payment is due and
payable, which default shall have continued unremedied for a period of five (5)
days after written notice from Lender;
(c) A default in the due observance or performance by Borrower
of any other term, covenant or agreement contained in this Agreement, the
Mortgage or any of the other Loan Documents, which default shall have continued
unremedied for a period of twenty (20) days after written notice from Lender;
provided, however, that no such Event of Default shall occur if Borrower
diligently, continuously and in good faith pursues such cure and such cure is
capable of cure within 90 days;
(d) If any representation or warranty made by Borrower herein
or in any of the other Loan Documents, any financial statement, or any statement
or representation made in any other certificate, report or opinion delivered by
Borrower in connection herewith or therewith proves to have been incorrect or
misleading in any material respect when made, which default shall have continued
unremedied for a period of twenty (20) days after written notice from Lender;
(e) If any obligation of Borrower (other than its Obligations
hereunder) for the payment of Borrowed Money in excess of $500,000.00 is not
paid when due or within any applicable grace period, or such obligation becomes
or is
58
declared to be due and payable prior to the expressed maturity thereof, or
there shall have occurred an event which, with the giving of notice or lapse of
time, or both, would cause any such obligation to become, or allow any such
obligation to be declared to be, due and payable;
(f) If Borrower makes an assignment for the benefit of
creditors, offers a composition or extension to creditors, or makes or sends
notice of an intended bulk sale of any business or assets now or hereafter
conducted by Borrower to any Person other than another Borrower;
(g) If Borrower files a petition in bankruptcy, is adjudicated
insolvent or bankrupt, petitions or applies to any tribunal for any receiver of
or any trustee for itself or any substantial part of its property, commences any
proceeding relating to itself under any reorganization, arrangement,
readjustment or debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect, or there is commenced against
Borrower any such proceeding which remains undismissed for a period of sixty
(60) days, or any Borrower by any act indicates its consent to, approval of, or
acquiescence in, any such proceeding or the appointment of any receiver of or
any trustee for a Borrower or any substantial part of its property, or suffers
any such receivership or trusteeship to continue undischarged for a period of
sixty (60) days;
(h) If one or more final judgments against Borrower in excess
of $500,000.00 or attachments against its property not fully and unconditionally
covered by insurance shall be rendered by a court of record and shall remain
unpaid, unstayed on appeal, undischarged, unbonded and undismissed for a period
of twenty (20) days;
(i) A Reportable Event which might constitute grounds for
termination of any Plan covered by Title IV of ERISA or for the appointment by
the appropriate United States District Court of a trustee to administer any such
Plan or for the entry of a lien or encumbrance to secure any deficiency, has
occurred and is continuing thirty (30) days after its occurrence, or any such
Plan is terminated, or a trustee is appointed by an appropriate United States
District Court to administer any such Plan, or the Pension Benefit Guaranty
Corporation institutes proceedings to
59
terminate any such Plan or to appoint a trustee to administer any such Plan,
or a lien or encumbrance is entered to secure any deficiency or claim;
(j) If a default or event of default occurs under any
mortgage, deed of trust or security instrument granted by any Borrower and
covering any Property, which is not cured within the applicable cure or grace
period thereunder;
(k) If there shall occur any uninsured damage to or loss,
theft or destruction of any portion of the Collateral in excess of $500,000.00;
(l) An Event of Default occurs under any other existing or
future agreement (related or unrelated) between Borrower and Lender, or between
Borrower and any Affiliate of Lender and such Event of Default is not cured
within any applicable cure or grace period;
(m) Upon the issuance of any execution or distraint process
against Borrower or a material portion of the Collateral any of its property or
assets;
(n) If Borrower ceases any material portion of its business
operations as presently conducted;
(o) Borrower or any Affiliate of Borrower, shall challenge or
contest, in any action, suit or proceeding, the validity or enforceability of
this Agreement, or any of the other Loan Documents, the legality or the
enforceability of any of the Obligations or the perfection or priority of any
Lien granted to Lender;
(p) Borrower shall be criminally indicted or convicted under
any law that could lead to a forfeiture of any Collateral;
(q) There shall occur a material adverse change in the
financial condition or business prospects of Borrower as a whole, which default
shall have continued unremedied for a period of fifteen (15) days after written
notice from Lender; or
(r) An Event of Default occurs under any other Loan Document.
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Section 8.2 Acceleration. Upon the occurrence of any of the foregoing
Events of Default, the Note shall become and be immediately due and payable upon
declaration to that effect delivered by Lender to Borrower; provided that, upon
the happening of any event specified in Section 8.1(g) hereof, the Note shall be
immediately due and payable without declaration or other notice to Borrower.
Section 8.2 Remedies.
(a) In addition to all other rights, options, and remedies
granted to Lender under this Agreement, upon the occurrence of an Event of
Default Lender may (i) terminate the Loan, whereupon all outstanding Obligations
shall be immediately due and payable, (ii) exercise all other rights granted to
it hereunder and all rights under the Uniform Commercial Code in effect in the
applicable jurisdiction(s) and under any other applicable law, and (iii)
exercise all rights and remedies under the Mortgage and all other Loan Documents
now or hereafter in effect, including the following rights and remedies (which
list is given by way of example and is not intended to be an exhaustive list of
all such rights and remedies):
(i) The right to take possession of, send notices
regarding, and collect directly the Collateral, with or without judicial
process, and to exercise all rights and remedies available to Lender with
respect to the Collateral under the Uniform Commercial Code in effect in the
jurisdiction(s) in which such Collateral is located;
(ii) The right to (by its own means or with judicial
assistance) enter any of Borrower's premises and take possession of the
Collateral, or render it unusable, or dispose of the Collateral on such premises
in compliance with subsection (b), without any liability for rent, storage,
utilities, or other sums, and Borrower shall not resist or interfere with such
action;
(iii) The right to require Borrower at Borrower's
expense to assemble all or any part of the Collateral and make it available to
Lender at any place designated by Lender;
61
(iv) The right to reduce the Maximum Loan Amount or
to use the Collateral and/or funds in the Depository Account and/or
Concentration Account to reduce the Obligations;
(v) The right to relinquish or abandon any
Collateral or any security interest therein; and
(vi) The right to foreclose its lien upon all or any
other portion of the Property and otherwise exercise its rights and remedies
under the Mortgage and applicable law.
(b) Borrower agrees that a notice received by it at least ten
(10) days before the time of any intended public sale, or the time after which
any private sale or other disposition of the Collateral is to be made, shall be
deemed to be reasonable notice of such sale or other disposition. If permitted
by applicable law, any perishable Collateral which threatens to speedily decline
in value or which is sold on a recognized marked may be sold immediately by
Lender without prior notice to Borrower. At any sale or disposition of
Collateral, Lender may (to the extent permitted by applicable law) purchase all
or any part of the Collateral, free from any right of redemption by Borrower,
which right is hereby waived and released. Borrower covenants and agrees not to
interfere with or impose any obstacle to Lender's exercise of its rights and
remedies with respect to the Collateral in accordance with applicable law.
Section 8.4 Nature of Remedies. Lender shall have the right to proceed
against all or any portion of the Collateral to satisfy the liabilities and
Obligations of Borrower to Lender in any order. All rights and remedies granted
Lender hereunder and under any agreement referred to herein, or otherwise
available at law or in equity, shall be deemed concurrent and cumulative, and
not alternative remedies, and Lender may proceed with any number of remedies at
the same time until the Loans, and all other existing and future liabilities and
obligations of Borrower to Lender, are satisfied in full. The exercise of any
one right or remedy shall not be deemed a waiver or release of any other right
or remedy, and Lender, upon the occurrence of an Event of Default, may proceed
against Borrower, and/or the Collateral, at any time, under any agreement, with
any available remedy and in any order.
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ARTICLE IX
MISCELLANEOUS
Section 9.1 Expenses and Taxes.
(a) Borrower agrees to pay, whether or not the Closing occurs,
a reasonable documentation preparation fee equal to $17,000, together with
actual audit and appraisal fees and all other out-of-pocket charges and expenses
incurred by Lender in connection with the negotiation, preparation, execution
and recordation of the Loan Documents and preparation for Closing, including
(without limitation) all title premiums and search charges, recordation and
transfer taxes and fees, UCC filing fees, and all other amounts incurred in
connection therewith. The maximum amount of such closing costs for which
Borrower shall be responsible shall not exceed $17,000, excluding the Commitment
Fee and the Structuring Fee (as defined in the Term Note) equal to $50,000,
minus $10,000 (i.e., $40,000) credited by Lender, all title premiums, title
search costs and other charges of the Title Company, recording fees and
recordation and transfer taxes (if any), for which the Borrower shall be
responsible. In addition, Borrower shall pay all reasonable fees associated with
any amendments to the Loan Documents following Closing. Borrower also agrees to
pay all reasonable out-of-pocket charges and expenses incurred by Lender
(including the fees and expenses of Lender's counsel) in connection with the
enforcement, protection or preservation of any right or claim of Lender and the
collection of any amounts due under the Loan Documents.
(b) Borrower shall pay all taxes (other than taxes based upon
or measured by Lender's income or revenues or any personal property tax), if
any, in connection with the issuance of the Note and the recording of the
security documents therefor. The obligations of Borrower under this clause (b)
shall survive the payment of Borrower's indebtedness hereunder and the
termination of this Agreement.
Section 9.2 Entire Agreement; Amendments. This Agreement and the other
Loan Documents constitute the full and entire understanding and agreement among
the parties with regard to their subject matter and supersede all prior written
or oral agreements, understandings, representations and warranties made with
respect thereto. No amendment, supplement or modification
63
of this Agreement nor any waiver of any provision thereof shall be made except
in writing executed by the party against whom enforcement is sought.
Section 9.3 No Waiver; Cumulative Rights. No waiver by any party hereto
of any one or more defaults by the other party in the performance of any of the
provisions of this Agreement shall operate or be construed as a waiver of any
future default or defaults, whether of a like or different nature. No failure or
delay on the part of any party in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to any party hereto at law, in equity or
otherwise.
Section 9.4 Notices. Any notice or other communication required or
permitted hereunder shall be in writing and personally delivered, mailed by
registered or certified mail (return receipt requested and postage prepaid),
sent by telecopier (with a confirming copy sent by regular mail), or sent by
prepaid overnight courier service, and addressed to the relevant party at its
address set forth below, or at such other address as such party may, by written
notice, designate as its address for purposes of notice hereunder:
(a) If to Lender, at:
HCFP Funding, Inc.
0 Xxxxxxxxx Xxxxxx, 0xx xxxxx
Xxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(b) If to Borrower, at:
c/o Balanced Care Corporation
0000 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx, Chief Financial Officer
64
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
With a copy to:
Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP
00xx Xxxxx Xxxxxxx Xxxxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxx, Xx., Esquire
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If mailed, notice shall be deemed to be given five (5) days after being sent, if
sent by personal delivery or telecopier, notice shall be deemed to be given when
delivered, and if sent by prepaid courier, notice shall be deemed to be given on
the next Business Day following deposit with the courier.
Section 9.5 Severability. If any term, covenant or condition of this
Agreement, or the application of such term, covenant or condition to any party
or circumstance shall be found by a court of competent jurisdiction to be, to
any extent, invalid or unenforceable, the remainder of this Agreement and the
application of such term, covenant, or condition to parties or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each term, covenant or condition shall be valid and
enforced to the fullest extent permitted by law. Upon determination that any
such term is invalid, illegal or unenforceable, the parties hereto shall amend
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner.
Section 9.6 Successors and Assigns. This Agreement, the Note, the
Mortgage and the other Loan Documents shall be binding upon and inure to the
benefit of Borrower and Lender and their respective successors and assigns.
Notwithstanding the foregoing, Borrower may not assign any of its rights or
delegate any of its obligations hereunder without the prior written consent of
Lender, which may be withheld in its sole discretion. Lender may sell, assign,
transfer, or participate any or all of its rights or obligations hereunder
without notice to or consent of Borrower.
65
Section 9.7 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one instrument.
Section 9.8 Interpretation. No provision of this Agreement or any other
Loan Document shall be interpreted or construed against any party because that
party or its legal representative drafted that provision. The titles of the
paragraphs of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement. Any pronoun used in this
Agreement shall be deemed to include singular and plural and masculine, feminine
and neuter gender as the case may be. The words "herein," "hereof," and
"hereunder" shall be deemed to refer to this entire Agreement, except as the
context otherwise requires.
Section 9.9 Survival of Terms. All covenants, agreements,
representations and warranties made in this Agreement, any other Loan Document,
and in any certificates and other instruments delivered in connection therewith
shall be considered to have been relied upon by Lender and shall survive the
making by Lender of the Loans herein contemplated and the execution and delivery
to Lender of the Note, and shall continue in full force and effect until all
liabilities and obligations of Borrower to Lender are satisfied in full.
Section 9.10 Release of Lender. Borrower releases Lender, its officers,
employees, and agents, of and from any claims for loss or damage resulting from
acts or conduct of any or all of them, unless caused by Lender's recklessness,
gross negligence, or willful misconduct.
Section 9.11 Time. Whenever Borrower is required to make any payment or
perform any act on a Saturday, Sunday, or a legal holiday under the laws of the
State of Maryland (or other jurisdiction where Borrower is required to make the
payment or perform the act), the payment may be made or the act performed on the
next Business Day. Time is of the essence in Borrower's performance under this
Agreement and all other Loan Documents.
Section 9.12 Commissions. The transaction contemplated by this
Agreement was brought about by Lender and Borrower acting as principals and
without any brokers, agents, or finders
66
being the effective procuring cause. Borrower represents that it has not
committed Lender to the payment of any brokerage fee, commission, or charge in
connection with this transaction. If any such claim is made on Lender by any
broker, finder, or agent or other person claiming by or through Borrower,
Borrower will indemnify, defend, and hold Lender harmless from and against the
claim and will defend any action to recover on that claim, at Borrower's cost
and expense, including Lender's counsel fees. Borrower further agrees that until
any such claim or demand is adjudicated in Lender's favor, the amount demanded
will be deemed a liability of Borrower under this Agreement, secured by the
Collateral.
Section 9.13 Third Parties. No rights are intended to be created
hereunder or under any other Loan Document for the benefit of any third party
donee, creditor, or incidental beneficiary of Borrower. Nothing contained in
this Agreement shall be construed as a delegation to Lender of Borrower's duty
of performance, including without limitation Borrower's duties under any account
or contract in which Lender has a security interest.
Section 9.14 Discharge of Borrower's Obligations. Lender, in its sole
discretion, shall have the right at any time, and from time to time, following
prior notice to Borrower if Borrower fails to do so, to: (i) obtain insurance
covering any of the Collateral as required hereunder; (ii) pay for the
performance of any of Borrower's obligations hereunder; (iii) discharge taxes,
liens, security interests, or other encumbrances at any time levied or placed on
any of the Collateral in violation of this Agreement unless Borrower is in good
faith with due diligence by appropriate proceedings contesting those items; and
(iv) pay for the maintenance and preservation of any of the Collateral. Expenses
and advances shall be added to the Loan, until reimbursed to Lender and shall be
secured by the Collateral. Any such payments and advances by Lender shall not be
construed as a waiver by Lender of an Event of Default.
Section 9.14 Information to Participants. Lender may divulge to any
participant it may obtain in the Loan, or any portion thereof, all information,
and furnish to such participant copies of reports, financial statements,
certificates, and documents obtained under any provision of this
67
Agreement or any other Loan Document, provided Lender obtains the written
consent of such participant to hold such items as confidential and proprietary
information of Borrower.
Section 9.15 Indemnity. Borrower hereby agrees to indemnify and hold
harmless Lender, its partners, officers, agents and employees (collectively,
"Indemnitee") from and against any liability, loss, cost, expense, claim,
damage, suit, action or proceeding ever suffered or incurred by Lender
(including reasonable attorneys' fees and expenses) arising from an Event of
Default. In addition, Borrower shall defend Indemnitee against and save it
harmless from all claims of any Person with respect to the Collateral.
Notwithstanding any contrary provision in this Agreement, the obligation of
Borrower under this Section 9.16 shall survive the payment in full of the
Obligations and the termination of this Agreement.
Section 9.16 Choice of Law; Consent to Jurisdiction. THIS AGREEMENT AND
THE NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF MARYLAND, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF
CONFLICTS OF LAWS. IF ANY ACTION ARISING OUT OF THIS AGREEMENT OR THE NOTE IS
COMMENCED BY LENDER IN THE STATE COURTS OF THE STATE OF MARYLAND OR IN THE U.S.
DISTRICT COURT FOR THE DISTRICT OF MARYLAND, BORROWER HEREBY CONSENTS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUCH ACTION AND TO THE LAYING OF VENUE IN
THE STATE OF MARYLAND. ANY PROCESS IN ANY SUCH ACTION SHALL BE DULY SERVED IF
MAILED BY REGISTERED MAIL, POSTAGE PREPAID, TO BORROWER AT ITS ADDRESS DESCRIBED
IN SECTION 9.4 HEREOF.
Section 9.17 Waiver of Trial by Jury. BORROWER HEREBY (A) COVENANTS AND
AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND
(B) WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT
SHALL NOW OR HEREAFTER EXIST. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
SEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY, BY BORROWER, AND THIS WAIVER IS
INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE
RIGHT TO A JURY TRIAL WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED AND
REQUESTED TO SUBMIT THIS AGREEMENT TO ANY COURT HAVING JURISDICTION OVER THE
SUBJECT MATTER AND THE PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF
BORROWER'S WAIVER OF THE RIGHT TO JURY TRIAL. FURTHER, BORROWER HEREBY CERTIFIES
THAT NO REPRESENTATIVE OR AGENT OF LENDER (INCLUDING LENDER'S COUNSEL)
68
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO BORROWER THAT LENDER WILL NOT SEEK
TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
[SIGNATURES ON FOLLOWING PAGE]
69
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above.
LENDER:
ATTEST: HCFP FUNDING, INC.
a Delaware corporation
By: /s/ Xxxxx X. Xxx Xxxxxxx By: /s/ Xxxxxxx Xxxxxxxx [SEAL]
Name: Xxxxx X. Xxx Xxxxxxx Name: Xxxxxxx Xxxxxxxx
Title: Vice President Title: Vice President
BORROWER:
ATTEST: BALANCED CARE CORPORATION
a Delaware corporation
By:/s/ Xxxxx X. Xxxxxx By:/s/ Xxxxxx X. Xxxxxx[SEAL]
Name: Xxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
Title: Vice President - Title: Vice President -
Legal Affairs, Corporate Services and
Assistant Secretary Secretary
ATTEST: BCC AT HERMITAGE PARK CARE CENTER,
INC.
a Delaware corporation
By:/s/ Xxxxxx X. Xxxxxx By:/s/ Xxxxx X. Xxxxxx [SEAL]
Name: Xxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President - Title: Vice President and
Corporate Services Secretary
and Secretary
70
ATTEST: BCC AT LEBANON CARE CENTER, INC.
a Delaware corporation
By:/s/ Xxxxxx X. Xxxxxx By:/s/ Xxxxx X. Xxxxxx [SEAL]
Name: Xxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President - Title: Vice President and
Corporate Services Secretary
and Secretary
ATTEST: BCC AT LEBANON PARK MANOR, INC.
a Delaware corporation
By:/s/ Xxxxxx X. Xxxxxx By:/s/ Xxxxx X. Xxxxxx [SEAL]
Name: Xxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President - Title: Vice President and
Corporate Services Secretary
and Secretary
ATTEST: BCC AT MT. XXXXXX XXXX CARE CENTER, INC.
a Delaware corporation
By:/s/ Xxxxxx X. Xxxxxx By:/s/ Xxxxx X. Xxxxxx [SEAL]
Name: Xxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President - Title: Vice President and
Corporate Services Secretary
and Secretary
ATTEST: BCC AT MT. XXXXXX XXXX CARE CENTER WEST, INC.
a Delaware corporation
By:/s/ Xxxxxx X. Xxxxxx By:/s/ Xxxxx X. Xxxxxx [SEAL]
Name: Xxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President - Title: Vice President and
Corporate Services Secretary
and Secretary
71
ATTEST: BCC AT NEVADA PARK CARE CENTER, INC.
a Delaware corporation
By:/s/ Xxxxxx X. Xxxxxx By:/s/ Xxxxx X. Xxxxxx [SEAL]
Name: Xxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President - Title: Vice President and
Corporate Services Secretary
and Secretary
ATTEST: BCC AT NIXA PARK CENTER, INC.
a Delaware corporation
By:/s/ Xxxxxx X. Xxxxxx By:/s/ Xxxxx X. Xxxxxx [SEAL]
Name: Xxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President - Title: Vice President and
Corporate Services Secretary
and Secretary
ATTEST: BCC AT REPUBLIC PARK CENTER, INC.
a Delaware corporation
By:/s/ Xxxxxx X. Xxxxxx By:/s/ Xxxxx X. Xxxxxx [SEAL]
Name: Xxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President - Title: Vice President and
Corporate Services Secretary
and Secretary
ATTEST: BCC AT SPRINGFIELD CARE CENTER, INC.
a Delaware corporation
By:/s/ Xxxxxx X. Xxxxxx By:/s/ Xxxxx X. Xxxxxx [SEAL]
Name: Xxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President - Title: Vice President and
Corporate Services Secretary
and Secretary
72
ATTEST: DIXON MANAGEMENT, INC.
a Missouri corporation
By:/s/ Xxxxxx X. Xxxxxx By:/s/ Xxxxx X. Xxxxxx [SEAL]
Name: Xxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President - Title: Vice President and
Corporate Services Secretary
and Secretary
ATTEST: BCC AT DARLINGTON, INC.
a Delaware corporation
By:/s/ Xxxxxx X. Xxxxxx By:/s/ Xxxxx X. Xxxxxx [SEAL]
Name: Xxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President - Title: Vice President and
Corporate Services Secretary
and Secretary
ATTEST: BALANCED CARE AT EYERS GROVE, INC.
a Delaware corporation
By:/s/ Xxxxxx X. Xxxxxx By:/s/ Xxxxx X. Xxxxxx [SEAL]
Name: Xxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President - Title: Vice President and
Corporate Services Secretary
and Secretary
ATTEST: BALANCED CARE AT XXXXXX, INC.
a Delaware corporation
By:/s/ Xxxxxx X. Xxxxxx By:/s/ Xxxxx X. Xxxxxx [SEAL]
Name: Xxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President - Title: Vice President and
Corporate Services Secretary
and Secretary
73
ATTEST: BALANCED CARE AT XXXXXX, INC.
a Delaware corporation
By:/s/ Xxxxxx X. Xxxxxx By:/s/ Xxxxx X. Xxxxxx [SEAL]
Name: Xxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President - Title: Vice President and
Corporate Services Secretary
and Secretary
ATTEST: BALANCED CARE AT NORTH RIDGE, INC.
a Delaware corporation
By:/s/ Xxxxxx X. Xxxxxx By:/s/ Xxxxx X. Xxxxxx [SEAL]
Name: Xxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President - Title: Vice President and
Corporate Services Secretary
and Secretary
74
EXHIBIT F
LIST OF ACCOUNTS RECEIVABLE FACILITIES
and
ACCOUNTS RECEIVABLE BORROWERS
1. The "Accounts Receivable Facilities" and the "Accounts Receivable Borrowers"
are as follows:
BCC AT HERMITAGE PARK CARE CENTER, INC., doing business as
Balanced Care, Hermitage
Highway 54 and 0xx Xxxxxx
Xxxxxxxxx, XX 00000
BCC AT LEBANON CARE CENTER, INC., doing business as Balanced Care, Lebanon North
000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
BCC AT LEBANON PARK MANOR, INC., doing business as Balanced Care, Lebanon South
000 X. Xxxxxxx Xxxx
Xxxxxxx, XX 00000
BCC AT MT. XXXXXX XXXX CARE CENTER, INC., doing business as
Balanced Care, Springfield West II
0000 Xxxx Xx. Xxxxxx
Xxxxxxxxxxx, XX 00000
BCC AT MT. XXXXXX XXXX CARE CENTER WEST, INC., doing business as
Balanced Care, Springfield West I
0000 Xxxx Xx. Xxxxxx
Xxxxxxxxxxx, XX 00000
BCC AT NEVADA PARK CARE CENTER, INC., doing business as
Balanced Care, Nevada
000 Xxxx Xxxxxxxx
Xxxxxx, XX 00000
BCC AT NIXA PARK CENTER, INC., doing business as
Balanced Care, Nixa
0000 Xxxxx Xxxx
Xxxx, XX 00000
00
XXX XX XXXXXXXX XXXX XXXXXX, XXX., doing business as
Balanced Care, Republic
000 Xxxx Xxxxxxx 000
Xxxxxxxx, XX 00000
BCC AT SPRINGFIELD CARE CENTER, INC., doing business as Balanced Care,
Springfield East
0000 Xxxx Xxxxxxxx
Xxxxxxxxxxx XX 00000
DIXON MANAGEMENT INC., doing business as
Balanced Care, Dixon
000 Xxxx 00xx Xxxxxx
Xxxxx, XX 00000
