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EXHIBIT 10.3
FORM OF HCRI CONSTRUCTION DISBURSING AGREEMENT
THIS CONSTRUCTION DISBURSING AGREEMENT ("Agreement") is made and
entered into effective as of September 22, 1998 (the "Effective Date") between
BCC DEVELOPMENT AND MANAGEMENT CO., a corporation organized under the laws of
the State of Delaware ("Developer"), having its chief executive office at 0000
Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000, and [_____________],
a corporation organized under the laws of the State of Pennsylvania
("Landlord"), having an address of Xxx XxxXxxx, Xxxxx 0000, X.X. Xxx 0000,
Xxxxxx, Xxxx 00000.
RECITALS:
A. As of the date hereof, Landlord acquired and leased to
Financial Care Investors of [__________], LLC, a limited liability company
organized under the laws of the State of Delaware ("Tenant") the Land (defined
below) located in Lebanon, Pennsylvania pursuant to a Lease Agreement between
Landlord and Tenant ("Lease").
B. Tenant desires to cause Developer to construct a [__]-unit
personal care facility ("Facility") on the Land. Landlord has agreed to pay for
the development and construction costs of the Facility up to a maximum amount of
$[_______________], subject to the terms and conditions of the Lease and this
Agreement.
C. All Improvements constructed on the Land and all Fixtures
installed into the Improvements shall be the property of Landlord and shall be
part of the "Leased Property" under the Lease.
NOW, THEREFORE, in consideration of the mutual covenants and the
premises contained herein, and intending to be legally bound hereby, the parties
agree as follows:
ARTICLE 1: PURPOSE AND DEFINITIONS
1.1 Purpose. The purpose of this Agreement is to establish the terms and
conditions for disbursing Lease Advances under the Lease.
1.2 Definitions. Except as otherwise expressly provided, [i] the terms
defined in this section have the meanings assigned to them in this section and
include the plural as well as the singular; [ii] all accounting terms not
otherwise defined herein have the meanings assigned to them in accordance with
generally accepted accounting principles as of the time applicable; [iii] the
words "herein", "hereof", and "hereunder" and similar words refer to this
Agreement as a whole and not to any particular section; and [iv] any capitalized
term not defined in this Agreement which is defined in the Lease shall have the
meaning set forth in the Lease.
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"Appraisal" means an "as-built" appraisal setting forth the fair market
value of the Facility upon completion thereof in accordance with the Plans and
Specifications.
"Architect" means Bink Architectural Partnership, the architect for the
design of the Improvements.
"Architect's Certificate" means a certificate of the Architect in favor
of Landlord in form and substance satisfactory to Landlord.
"Architect's Contract" means the contract between the Architect and
Developer for the design of the Improvements, as it may be amended from time to
time, and any other material agreements entered into between Developer and
design professionals.
"Bonds" means a labor and material payment bond and a performance bond
issued by the Surety with a dual obligee rider naming Landlord and Developer as
joint and several obligees. The Bonds shall each be in an amount not less than
the amount payable under the Construction Contract.
"Business Day" means any day which is not a Saturday or Sunday or a
public holiday under the laws of the United States of America or the State of
Ohio.
"Closing" means the closing of the Lease.
"Collateral Assignment of Architect's Contract" means the Collateral
Assignment of Architect's Contract between Landlord and Developer and the
Consent of Architect attached thereto.
"Collateral Assignment of Construction Contract" means the Collateral
Assignment of Construction Contract by Developer in favor of Landlord and the
Consent of Contractor attached thereto.
"Commitment" means the commitment letter for the Lease dated September
22, 1998.
"Commitment Fee" means the commitment fee for the Lease payable to
Landlord by Tenant in an amount equal to 2% of the Maximum Lease Amount.
"Construction Contract" means the construction contract between
Developer and the General Contractor for the construction of the Improvements,
as it may be amended from time to time, and any other contracts entered into
between Developer and any contractors for the construction of the Improvements.
"Construction Documents" means the Architect's Contract, the
Construction Contract and any other material contracts entered into by Developer
relating to the development, design or construction of the Improvements.
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"Construction Term" means the term of the Lease commencing on the
Effective Date and expiring on the Conversion Date.
"Conversion Date" means the date on which the final Lease Advance is
disbursed to Developer.
"Developer Documents" means [i] this Agreement; [ii] the Collateral
Assignment of Construction Contract; [iii] the Collateral Assignment of
Architect's Contract; and [iv] all other documents executed by Developer and
Landlord in connection with the Lease.
"Developer's Obligations" means all payment and performance obligations
of Developer under this Agreement.
"Developer's Organizational Documents" means the Articles of
Incorporation of Developer certified by the Secretary of State of the state of
organization, as amended to date, and the Bylaws of Developer certified by
Developer, as amended to date.
"Development Fees" means the fees paid to Developer not to exceed
$[__________], for services rendered in connection with the acquisition and
development of the Facility, payable as follows: 1/2 at Closing and 1/2 upon
completion of construction of the Facility and issuance of a certificate of
occupancy for the Facility.
"Disbursement Schedule" means the Disbursement Schedule attached hereto
as Exhibit C setting forth Developer's estimate of the dates and amounts of the
disbursements required hereunder.
"Disbursement Voucher" means Developer's written request for a
disbursement set forth on a form satisfactory to Landlord.
"Environmental Assessment" means an environmental assessment of the
Land meeting the Landlord's Requirements for Environmental Assessments,
including all agreements, contracts, reports, sampling results, amendments and
addenda relating thereto.
"Environmental Consultant" means a registered engineer in the State or
other consultant approved by Landlord.
"Event of Default" has the meaning set forth in Section 4.1.
"Facility" means the Real Property and Personal Property comprising
each facility located on any of the Leased Property.
"Facility Costs" means the following: [i] the organizational,
acquisition and construction costs for the Facility; [ii] all costs and expenses
in connection with the Lease; [iii] Development Fees; and [iv] other Facility
costs and expenses, direct and indirect, as set forth in the Project Budget.
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"Financial Statements" has the meaning set forth in the Lease.
"Fixtures" means all fixtures now or hereafter installed or located in,
on or about the Land or the Improvements and any replacements, substitutions and
additions thereto.
"Force Majeure" means any delay due to strikes, riots, acts of God,
shortages of labor or materials, governmental law, regulations or restrictions
or other similar cause which is beyond the control of Developer.
"General Contractor" means [____________________], the general
contractor for the construction of the Improvements.
"Government Authorizations" means all permits, licenses, approvals,
consents, and authorizations required to be obtained by Tenant, Manager or
Developer to comply with all Legal Requirements, including but not limited to,
[i] zoning permits, variances, exceptions, special use permits, conditional use
permits, and consents; [ii] environmental, ecological, coastal, wetlands, air,
and water permits, licenses, and consents; [iii] curb cut, subdivision, land
use, and planning permits, licenses, approvals and consents; [iv] building,
sign, fire, health, and safety permits, licenses, approvals, and consents; and
[v] architectural reviews, approvals, and consents required under restrictive
covenants.
"Guarantor" means Balanced Care Corporation, a corporation organized
under the laws of the State of Delaware.
"Guaranty" means the Guaranty entered into by the Guarantor, and any
amendments thereto or substitutions or replacements therefor.
"Guaranty Documents" means the Guaranty, the Working Capital Documents
(as defined in the Lease), and any other agreement or instrument to be executed
by Guarantor in accordance with the requirements of any Lease Document or the
Commitment.
"Improvements" means all buildings, structures, additions, renovations
and improvements now or hereafter erected or placed upon the Land and the
offsite improvements, if any, necessary for the operation of the Facility.
"Initial Term" has the meaning set forth in Section 1.2 of the Lease.
"Insurance Requirements" means [i] all terms of any insurance policy
required by the Lease; [ii] all requirements of the issuer of any such policy;
and [iii] the requirements of any Board of Insurance Underwriters or similar
organization.
"Intangible Personal Property" means Tenant's, Manager's or Developer's
rights in the following: [i] all accounts, contract rights, general intangibles,
instruments, documents, Receivables, and chattel paper (as "accounts", "contract
rights", "general intangibles",
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"instruments", "documents", and "chattel paper" are defined for purposes of
Article 9) now or hereafter arising in connection with the business located in
or on or used or usable in connection with the Real Property and replacements,
additions, and accessions thereto; [ii] unless prohibited by law, all
franchises, permits, licenses and rights therein regarding the use, occupancy or
operation of the Improvements, or any part thereof; [iii] unless expressly
prohibited by the terms thereof, all contracts, agreements, contract rights and
materials relating to the design, construction or operation of the Improvements,
including but not limited to, plans, specifications, drawings, blueprints,
models and mock-ups, and all brochures, flyers, advertising and promotional
materials and mailing lists; and [iv] all ledger sheets, files, records,
computer programs, tapes, other electronic data processing materials, and other
documentation relating to the preceding listed property.
"Issuer" means a financial institution satisfactory to Landlord issuing
the Letter of Credit and such Issuer's successors and assigns. Any "Issuer"
shall have a Lace Financial Service Rating of "C+" or higher at all times
throughout the term of the Lease.
"Land" means the land described on Exhibit A.
"Landlord's Inspector" means the consulting inspector designated by
Landlord to inspect the Facility and review documentation in connection with the
Facility on behalf of Landlord.
"Lease" means the Lease Agreement between Landlord and Tenant dated the
date hereof, as amended from time to time.
"Lease Advance" means each advance of funds by Landlord pursuant to the
Lease and this Agreement but excluding any Earnout Lease Advance that may be
made by Landlord pursuant to the Lease.
"Lease Documents" means [i] this Agreement; [ii] the Lease; [iii] the
Collateral Assignment of Construction Contract; [iv] the Collateral Assignment
of Architect's Contract; [v] the Collateral Assignment of Management Agreement
and Consent of Manager to Collateral Assignment of Management Agreement and
Security Agreement; and [vi] all other documents and instruments executed by
Tenant, Manager or Developer and Landlord in connection with the Lease.
"Lease Expenses" means all reasonable costs and expenses incurred by
Landlord in investigating, making and administering the Lease, including but not
limited to, [i] attorneys' and paralegals' fees and costs; [ii] the fees of the
Landlord's Inspector; and [iii] travel, transportation, food, and lodging costs
and expenses incurred by Landlord, the Landlord's Inspector and Landlord's
attorneys and paralegals.
"Legal Requirements" means all laws, regulations, rules, orders, writs,
injunctions, decrees, certificates, material requirements, material agreements,
conditions of participation and standards of any federal, state, county,
municipal or other governmental entity, administrative agency, insurance
underwriting board, architectural control board, and any restrictive covenants
applicable to the development, construction, renovation and operation of each
Facility as an assisted living facility,
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including but not limited to, [i] zoning, building, fire, health, safety, sign,
and subdivision regulations and codes; and [ii] the Environmental Laws.
"Letter of Credit" means an irrevocable and transferable Letter of
Credit in the aggregate amount equal to 5% of the Maximum Lease Amount issued by
Issuer in favor of Landlord as security for the Lease and in form acceptable to
Landlord, and any amendments thereto or replacements or substitutions therefor.
"List of Leases and Contracts" means the List of Leases and Contracts
set forth on Exhibit G of the Lease.
"Mandatory Completion Date" means the earlier of [i] the date which is
18 months after the Effective Date, provided that such date shall be extended by
the number of days' delay caused by Force Majeure to the extent permitted under
Section 5.2; or [ii] the completion date required by the Department of Health or
any other governmental authority.
"Maximum Guarantied Amount" means an amount equal to [i] 89% of Project
Costs incurred at the time of the calculation of the Maximum Guarantied Amount,
minus [ii] any amounts previously paid by Guarantor, Developer or Tenant in
connection with the exercise by Landlord of its remedies under the Lease and
other Lease Documents, including but not limited to [a] indemnification payments
arising from any claim or loss asserted against Landlord resulting from the acts
or omissions of Developer, Guarantor or Tenant in connection with the
construction of the Facility including without limitation, insurance deductibles
actually paid by Guarantor, Developer or Tenant under insurance policies, [b]
amounts drawn by Landlord on the Letter of Credit, [c] amounts deposited with
Landlord under Section 2.5 of this Agreement, and [d] amounts paid by Guarantor
under Section 8.2(l) of the Lease plus [iii] 100% of all losses suffered or
incurred by Landlord exclusively in connection with the acquisition of the Land.
"Maximum Lease Amount" means $[_______________].
"Permitted Exceptions" means the exceptions to title set forth on
Exhibit B of the Lease.
"Personal Property" means the Tangible Personal Property and Intangible
Personal Property.
"Plans and Specifications" means the plans and specifications for the
Facility approved by Landlord, including but not limited to, plans, drawings,
specifications, details, models and mock-ups for the Improvements.
"Pro Forma Statement" means a financial forecast for the Facility for
the five year period commencing on the anticipated date when the Facility
commences operations prepared in accordance with the standards for forecasts
established by the American Institute of Certified Public Accountants.
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"Project Budget" means the budget of the total costs of acquiring,
developing, constructing, furnishing and equipping the Facility prepared by
Tenant and Developer and approved by Landlord, as the same may be modified from
time to time as provided herein. The initial Project Budget is attached hereto
as Exhibit B.
"Project Costs" means all costs of the Facility (exclusive of the costs
of acquisition of the Land) that are properly capitalized in accordance with
generally accepted accounting principles consistently applied.
"Real Property" means, collectively, the Land, Improvements and
Fixtures.
"Reserves" has the meaning set forth in Section 2.5.3.
"Secured Obligations" means all of the obligations of Tenant, Manager
or Developer under the Lease Documents.
"State" means the State of [___________].
"Surety" means the issuer of the Bonds, and it shall have a Best's
Rating of B+ or better and a Best's Financial Category of XII or larger.
"Survey" means a survey of the Land prepared in accordance with the
Minimum Detail Requirements for Land Title Surveys jointly adopted by ALTA/ACSM
in 1992 and such other requirements as may be required by Landlord or Title
Company.
"Tangible Personal Property" means all machinery, furniture, equipment,
trade fixtures, appliances, inventory, and other goods (as "equipment",
"inventory", and "goods" are defined for purposes of Article 9) now or hereafter
located in or on or used or usable in connection with the Real Property and
replacements, additions, and accessions thereto, including without limitation
those items which are to become Fixtures or which are building supplies and
materials to be incorporated into an Improvement or Fixture, but excluding any
equipment, furniture, and trade fixtures leased under the equipment financing
permitted under the Lease.
"Tenant's Equity" means Tenant's cash and other liquid assets dedicated
for payment of Working Capital in an amount not less than $[_____________].
"Tenant's Organizational Documents" means [i] for a corporate Tenant,
the Articles of Incorporation of Tenant certified by the Secretary of State of
the state of organization, as amended to date, and the Bylaws of Tenant
certified by Tenant, as amended to date; [ii] for a partnership Tenant, the
Partnership Agreement of Tenant certified by Tenant, as amended to date and the
Partnership Certificate, certified by the appropriate authority, as amended to
date; and [iii] for a limited liability company Tenant, the Certificate of
Formation of Tenant certified by the Secretary of State of the state of
organization, as amended to date and the Operating Agreement of Tenant certified
by Tenant, as amended to date.
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"Title Commitment" means an ALTA Form B Commitment, 1970 form as
revised 10-17-84, for owner's title insurance issued by the Title Company for
the Facility.
"Title Company" means Lawyers Title Insurance Corporation.
"Title Policy" means the final title policy issued by the Title Company
to Landlord pursuant to the Title Commitment for the Facility.
"Working Capital" means the capital to be invested by Tenant to be used
for pre-opening, pre-marketing, opening, start-up, and other similar costs and
expenses in connection with the Facility.
1.3 Incorporation of Amendments. The definition of any agreement, document,
or instrument set forth in this Agreement or in any other Lease Document shall
be deemed to incorporate all amendments, modifications, and renewals thereof and
all substitutions and replacements therefor.
1.4 Exhibits. The following exhibits are attached hereto and incorporated
herein:
Exhibit A: Legal Description
Exhibit B: Project Budget
Exhibit C: Disbursement Schedule
Exhibit D: Litigation
ARTICLE 2: LEASE ADVANCES
2.1 Obligation to Advance Funds. Subject to the terms and upon the
conditions set forth in the Lease Documents, Landlord shall make Lease Advances
up to the Maximum Lease Amount.
2.2 Use of Proceeds. Developer shall use the proceeds of the Lease Advances
solely for the following purposes: [i] pay or reimburse Developer for the
acquisition cost of the Land; [ii] pay or reimburse Developer for all hard and
soft expenses and costs of the design, development and construction of the
Improvements; [iii] pay for the costs of the Tangible Personal Property not to
exceed 10% of the Maximum Lease Amount; [iv] the closing costs for the Lease
(including without limitation the Commitment Fee and any other fees payable to
Landlord under the Commitment); [v] the Development Fee, and [vi] all items
specified in the Project Budget.
2.3 Commitment Fee. The Commitment Fee shall be paid at Closing as a Lease
Advance.
2.4 Lease Expenses. At the Closing, Landlord shall make a Lease Advance for
any Lease Expenses incurred up to the Effective Date. Within 30 days after
receipt of an invoice therefor, Landlord shall make a Lease Advance for any
Lease Expenses incurred by Landlord. Landlord shall apply proceeds of the Lease
Advances to pay the Commitment Fee, Development Fee, and Lease Expenses.
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2.5 Disbursements. Upon satisfaction of all conditions precedent, Landlord
shall make the initial Lease Advance and continue to disburse the Lease Advances
in accordance with the terms and conditions of this Agreement. Landlord may make
disbursements from time to time as construction progresses, but shall not be
obligated to disburse more frequently than once in each calendar month and shall
not be obligated to disburse until at least eight Business Days following
receipt of all documentation required for such disbursement. As of the Effective
Date, Developer estimates that the disbursements will be in accordance with the
Disbursement Schedule. In the event that the undisbursed proceeds of the Maximum
Lease Amount are not sufficient to pay all unpaid items set forth on the Project
Budget (after adjustment for any permitted change orders), Landlord may require
Developer to deposit with Landlord a sum sufficient so that the deposit,
together with the remaining Maximum Lease Amount to be advanced, will be
sufficient to complete the Facility in accordance with the Plans and
Specifications, all as certified by the Architect; provided, however, Developer
and Guarantor shall never be required to deposit with Landlord a sum in excess
of the Maximum Guarantied Amount. Developer and Landlord each acknowledge that
the deposit is in no manner a loan to Landlord or an investment in the Leased
Property and instead is Additional Rent that will not be returned or reimbursed.
If, during the Construction Term, Developer has not made a disbursement request
and Rent remains unpaid under the Lease for more than a one month period,
Landlord shall make a Lease Advance to pay unpaid Rent and Landlord shall give
Tenant prompt notice of such disbursement.
2.5.1 Amount of Periodic Disbursements. Disbursement of the available
proceeds of the Maximum Lease Amount (after deduction for Reserves and after
payment of the Commitment Fee, Development Fee, and Lease Expenses) shall not
exceed [i] the amount due under the Construction Contract at the time of the
disbursement after deduction for 10% retainage (whether or not such retainage is
required under the Construction Contract); plus [ii] 100% of the amounts
previously paid by Tenant or currently due and payable for architectural fees,
permits and other development soft costs; plus [iii] 100% of the Rent payable
during the Construction Term.
2.5.2 Amount of Final Disbursement. The final Lease Advance made on the
Conversion Date shall not exceed the lesser of [i] the balance of the amount due
under the Construction Documents plus all other Facility Costs; or [ii] the
undisbursed balance of the Maximum Lease Amount.
2.5.3 Reserves. After the occurrence and during the continuance of an Event
of Default, Landlord may set aside reserves (the "Reserves") from the Lease
Advances for the Commitment Fee, Lease Expenses or any of the following: [i]
Rent during the estimated construction period; [ii] real estate taxes accrued
and accruing during the estimated construction period; and [iii] premiums on
insurance policies required to be furnished by Tenant hereunder, accruing during
the estimated construction period. Landlord shall disburse the Reserves, for the
purpose for which they have been set aside, from time to time, either by paying
for the items for which the Reserve has been established or reimbursing Tenant
for payments so made by Tenant. No Reserve held by Landlord shall be considered
a Lease Advance until disbursement thereof, whereupon such disbursement shall be
deemed to be a Lease Advance.
2.5.4 Disbursing Agent. Landlord may elect to have the Lease Advances
disbursed by the Title Company or a disbursing agent pursuant to the provisions
of a disbursing agreement. If Landlord
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so elects, Tenant and Developer each shall join as a party to such agreement and
shall comply with its requirements (which shall be in addition to and not in
substitution for the requirements of this Agreement) and shall pay the fees and
expenses of the disbursing agent. If Developer is required to join as a party to
such agreement, the agreement shall be in a form acceptable to Developer, Tenant
and Landlord.
2.5.5 Direct Payments. After the occurrence and during the continuance of an
Event of Default, Landlord may, but shall have no obligation to do so, make
payments for the cost of construction directly to any contractor, subcontractor,
materialmen, vendor, or supplier.
2.6 Closing. The Closing shall occur at a time and place mutually agreed
upon by Landlord, Developer, and Tenant. Landlord may elect to close by
exchanging executed counterparts of one or more of the Lease Documents and other
closing documents by mail or a national courier service, or by telecopier
followed by exchanging documents by mail or national courier service.
ARTICLE 3: CONDITIONS PRECEDENT TO DISBURSEMENT
3.1 Conditions Precedent to Initial Disbursement. Developer shall comply
with, and Landlord's obligation to make the initial Lease Advance shall be
conditioned upon Developer's performance of the following conditions precedent:
3.1.1 Title Commitment. Developer shall have delivered to Landlord the Title
Commitment issued by the Title Company committing to insure Landlord's fee
simple interest in the Land subject only to Permitted Exceptions. The Title
Commitment shall be in form and substance satisfactory to Landlord.
3.1.2 Survey. Developer shall have delivered to Landlord the Survey. The
Survey shall be in form and substance satisfactory to Landlord and shall satisfy
the requirements of the Title Company to delete the survey exception from the
Title Policy.
3.1.3 Environmental Assessment. Developer shall have delivered to Landlord
the Environmental Assessment prepared by the Environmental Consultant, in form,
scope and substance reasonably satisfactory to Landlord.
3.1.4 Legal Opinion. Developer shall have delivered to Landlord one or more
opinions of counsel, in form and substance reasonably satisfactory to Landlord,
covering the law of the State and such other federal and state laws as Landlord
may reasonably require.
3.1.5 Appraisal. Developer shall have delivered to Landlord the Appraisal
prepared by an MAI appraiser, addressed to Landlord, and in form and substance
satisfactory to Landlord.
3.1.6 Insurance. Developer shall have delivered to Landlord satisfactory
evidence of the builder's risk and liability insurance coverage reasonably
required by Landlord.
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3.1.7 Lease Documents; Deed. Tenant and Developer shall have delivered to
Landlord fully executed originals of the Lease Documents and Guaranty Documents.
The deed conveying the Land to Landlord shall have been recorded in the
appropriate recorder's office.
3.1.8 Organizational Documents; Resolutions. Tenant, Manager, and Developer
shall have delivered to Landlord copies of Tenant's, Manager's, and Developer's
Organizational Documents. Tenant, Manager, Guarantor, and Developer shall have
delivered to Landlord copies of resolutions authorizing the Lease Documents and
Guaranty Documents, certified by Tenant, Manager, Guarantor, and Developer,
respectively. All of the foregoing shall be certified to be true and complete
and not revoked or amended since the respective dates thereof.
3.1.9 Flood Plain. Developer shall have delivered evidence satisfactory to
Landlord that the Land is not located in a flood-prone area as defined by the
United States Department of Housing and Urban Development in the Flood Disaster
Protection Act of 1973, as amended, or if the Land is located in a flood-prone
area, that appropriate flood insurance is in effect for the Facility.
3.1.10 Zoning. Developer shall have delivered to Landlord a certificate of the
zoning official having jurisdiction over the Facility in form and substance
satisfactory to Landlord and such other evidence as may be reasonably required
by Landlord to show that the Facility complies with applicable zoning, land use
and subdivision laws, rules and regulations.
3.1.11 Soil Report. Developer shall have delivered to Landlord's Inspector a
soil report or other evidence satisfactory to Landlord that the Land is suitable
for the construction of the Facility.
3.1.12 List of Leases and Contracts. Developer shall have delivered to
Landlord the List of Leases and Contracts.
3.1.13 Licenses and Permits. Tenant and Developer shall have delivered to
Landlord copies of all required licenses, permits, consents, and approvals, and
other Government Authorizations as may be needed for Tenant or Developer or
Manager to comply with all Legal Requirements as of the Effective Date and such
items shall be in full force and effect.
3.1.14 Eminent Domain. No eminent domain proceedings shall have been
threatened or be pending with respect to a substantial or material part of the
Land.
3.1.15 Plans and Specifications. Developer shall have delivered to Landlord's
Inspector a duplicate set of the Plans and Specifications.
3.1.16 Financial Statements. Tenant shall have delivered to Landlord the
Financial Statements and the Pro Forma Statement.
3.1.17 Architect's Certificate. Developer shall have delivered to Landlord the
Architect's Certificate.
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3.1.18 Construction Documents. Developer shall have delivered to Landlord and
Landlord shall have approved all contracts and agreements entered into by
Developer and the form of all contracts and agreements entered into by the
General Contractor on behalf of Developer in connection with the design and
construction of the Facility, including, without limitation, the Architect's
Contract, the Construction Contract and the form of subcontractor contracts. The
Construction Contract shall provide for retainage of at least 10%.
3.1.19 Consents. Developer shall have delivered to Landlord executed originals
of the Consent of Contractor to the Collateral Assignment of Construction
Contract, the Consent of Architect to the Collateral Assignment of Architect's
Contract, and the Consent of Manager to the Collateral Assignment of Management
Agreement.
3.1.20 Disbursement Voucher. Developer shall have delivered a Disbursement
Voucher to Landlord.
3.1.21 Budget and Schedule. Developer shall have delivered to Landlord the
Project Budget and the Disbursement Schedule in form and substance satisfactory
to Landlord.
3.1.22 Bonds. Developer shall have delivered to Landlord the Bonds in form and
substance satisfactory to Landlord.
3.1.23 Equity. Developer shall have delivered evidence reasonably satisfactory
to Landlord of Tenant's ability to fund Tenant's Equity.
3.1.24 Letter of Credit. Tenant shall have delivered to Landlord the original
Letter of Credit.
3.1.25 No Event of Default. There shall be no uncured Event of Default under
this Agreement or the Lease.
3.1.26 Other Closing Requirements. Tenant and Developer shall have satisfied
all other closing requirements of the Lease Documents and the Commitment.
3.2 Conditions Precedent to All Disbursements. Tenant and Developer shall
perform, and Landlord's obligation to make subsequent Lease Advances shall be
conditioned upon Tenant's and Developer's performance of, the following
conditions precedent:
3.2.1 Title Endorsement. Landlord shall have received an endorsement to the
Title Policy that brings forward the effective date of the Title Policy with no
change in the status of title, insuring that there are no mechanics' liens and
increasing the coverage by an amount equal to the disbursement then being made.
3.2.2 Foundation Survey. After the foundation is installed, Developer shall
have delivered to Landlord an updated Survey showing the foundation and
certifying that the foundation is located on the Land and does not encroach on
any easements, building lines, setbacks, or other restrictions.
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3.2.3 Disbursement Voucher. Developer shall have delivered a Disbursement
Voucher to Landlord.
3.2.4 Lien Waivers. Developer shall have delivered to Landlord sworn
statements, waivers of lien, or such other documents as may be required to
insure Landlord that there are no mechanics' liens.
3.2.5 Inspector's Report. Landlord shall have received a satisfactory report
from Landlord's Inspector describing the construction that has been completed
since the last inspection, stating that the construction has been in accordance
with the Plans and Specifications, indicating the percentage of completion of
construction, stating that the construction can be completed by the Mandatory
Completion Date, that the costs of the Facility are not, and are not expected to
be, in excess of the costs set forth on the Project Budget and that the
undisbursed balance of the Maximum Lease Amount is sufficient to pay the costs
to complete construction of the Facility.
3.2.6 Updated List and Schedule. Developer shall have delivered to Landlord
an update of the List of Contracts and the Disbursement Schedule.
3.2.7 Licenses and Permits. Tenant, Manager, and Developer shall have
delivered to Landlord copies of all required licenses, permits, consents, and
approvals, and other Government Authorizations as may be needed to comply with
all Legal Requirements at the time of such disbursement and such items shall be
in full force and effect.
3.2.8 No Damage. The Facility shall not have been substantially or materially
damaged or destroyed, in whole or in part, by fire or other casualty which is
not covered by insurance nor shall eminent domain proceedings have been
threatened or be pending with respect to a substantial or material part of the
Facility.
3.2.9 No Event of Default. There shall be no uncured Event of Default under
this Agreement or the Lease.
3.3 Conditions Precedent to Final Disbursement. Tenant, Manager or
Developer shall perform, and Landlord's obligation to make the final Lease
Advance, shall be conditioned upon the performance of the following conditions
precedent:
3.3.1 Final Title Policy. Developer shall have delivered to Landlord the
Title Policy and [i] an endorsement which brings forward the effective date of
the Title Policy with no change in the status of title and insuring that there
are no mechanics' liens; and [ii] if available, an updated zoning endorsement on
the ALTA 3.1 form and in substance satisfactory to Landlord.
3.3.2 As-Built Survey. Developer shall have delivered to Landlord an updated
"As-Built" Survey, in form and substance satisfactory to Landlord and the Title
Company, showing the location of all Improvements, including the driveways and
parking lot and the number of spaces thereon, and certifying that the
Improvements do not encroach on adjoining property, streets, alleys, or
easements, and do not violate any building line, setback, or other title or
zoning restrictions.
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3.3.3 Other Conditions. The conditions set forth in Section 3.2 shall have
been fulfilled.
3.3.4 Completion Certificate. Developer shall have delivered to Landlord the
AIA form of Certificate of Substantial Completion from Developer, the Architect
and the General Contractor certifying that the Facility has been completed in
accordance with the Plans and Specifications, except as otherwise noted thereon.
3.3.5 Certificate of Occupancy. Developer shall have delivered to Landlord an
unconditional, permanent and final certificate of occupancy and certified copies
of all other Government Authorizations with respect to the occupancy and
operation of the Facility.
3.3.6 Legal Opinion. Developer shall have delivered to Landlord an opinion of
counsel, in form and substance satisfactory to Landlord, with the following
opinions: [i] to counsel's knowledge, the Facility has been constructed in
accordance with and complies with all Legal Requirements relating to licensure
of the Facility; and [ii] to counsel's knowledge, all applicable Government
Authorizations required for the occupancy and operation of the Facility have
been procured and are in full force and effect.
3.3.7 License. Tenant, Manager or Developer shall have delivered to Landlord,
if applicable, a copy of the license to operate the Facility as a [__]-unit
personal care facility or, if such a license has not yet been issued, evidence
satisfactory to Landlord that the Facility meets all requirements for the
issuance of such a license.
3.3.8 Facility Equipped. Developer shall have delivered to Landlord a
certificate from Tenant that the Facility is fully equipped and ready to
operate.
3.3.9 Consent of Surety. Developer shall have delivered to Landlord the
consent of the Surety to final payment, if required under the Bonds.
3.3.10 Insurance. Developer shall have delivered to Landlord satisfactory
evidence of the property and liability insurance coverage required by Landlord.
3.3.11 Xxxx of Sale. Tenant and Developer, as applicable, shall have delivered
to Landlord a xxxx of sale conveying all of the Tangible Personal Property and a
schedule thereof.
3.3.12 Expenses. Landlord shall make a Lease Advance to pay such additional
Lease Expenses incurred by Landlord in connection with the conversion to the
Initial Term and the disbursement of the Lease Advances.
ARTICLE 4: DEFAULT AND REMEDIES
4.1 Event of Default. Any one or more of the following events shall
constitute an "Event of Default" hereunder:
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4.1.1 The occurrence of an Event of Default (after expiration of any
applicable grace or cure period) under the Lease.
4.1.2 The disapproval by Landlord or Landlord's Inspector at any time of any
construction work and Developer's failure to cause the same to be corrected to
the satisfaction of Landlord and Landlord's Inspector within 30 days, or if by
reason of the nature of the problem the same cannot be corrected within 30 days,
Developer's failure to proceed with reasonable diligence (satisfactory to
Landlord) to correct the same or, in any event, failure to correct the same
within 90 days after receipt of the notice.
4.1.3 [i] An unreasonable delay in the construction of the Improvements or a
discontinuance of construction for a period of 45 days unless Developer, in
Landlord's reasonable judgment, is proceeding diligently and in good faith to
resume construction, or [ii] a delay in construction of the Improvements so that
the same may not, in Landlord's and Architect's judgment, be completed on or
before the Mandatory Completion Date (which shall be extended due to Force
Majeure to the extent permitted under Section 5.1).
4.1.4 Developer's failure to complete construction of the Improvements and to
satisfy all of the conditions precedent to final disbursement set forth in
Section 3.3 no later than the Mandatory Completion Date (which shall be extended
due to Force Majeure to the extent permitted under Section 5.1).
4.1.5 The bankruptcy or insolvency of the General Contractor and the failure
of Developer to procure a contract with a new contractor satisfactory to
Landlord within 45 days from the occurrence of such bankruptcy or insolvency.
4.1.6 Any Government Authorization for the Facility, is canceled, suspended
or otherwise invalidated and not reinstated or reissued within 30 days.
4.2 Remedies. Upon the occurrence of an Event of Default, Landlord may
exercise any one or more of the remedies provided in Section 8.2 of the Lease
subject to the limitations specified in Section 8.10 of the Lease.
ARTICLE 5: CONSTRUCTION
5.1 Construction of Improvements. Developer shall commence construction of
the Improvements within 30 days after the Effective Date. Developer shall
construct the Improvements in a good and workmanlike manner with materials of
high quality, in accordance with the Plans and Specifications (or in accordance
with any changes permitted under Section 5.3), and all Legal Requirements.
Developer shall complete construction of the Facility and satisfy all of the
conditions precedent to final disbursement set forth in Section 3.3 not later
than the Mandatory Completion Date. If all such conditions are not satisfied by
the date the Facility opens for business and first accepts residents, at
Landlord's option [i] the undisbursed balance of the Maximum Lease Amount may be
disbursed into an escrow account in the name of Tenant; [ii] the Initial Term of
the Lease shall commence on the date the funds are disbursed into an escrow
account, which date shall be deemed the Conversion Date; and [iii] Tenant shall
pay Base Rent based upon the Maximum
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Lease Amount in accordance with Section 2.4 of the Lease. The interest earned on
the escrow funds shall belong to Tenant. The escrow funds shall be disbursed to
Tenant upon satisfaction of all of the conditions set forth in Section 3.3 of
this Agreement.
5.2 Force Majeure. The Mandatory Completion Date may be extended due to
Force Majeure on the following conditions:
(a) Developer gives Landlord written notice of the Force Majeure event
within 5 days of Developer's knowledge of its occurrence;
(b) Developer complies with all requirements under the certificate of
need laws (if applicable) and all other applicable laws and regulations,
including, without limitation, the filing of all required notices, reports, and
certificates with respect to a work stoppage; and
(c) In Landlord's reasonable judgment, Developer diligently works to
minimize the delay caused by Force Majeure and to resume construction.
The extension of time shall be equal to the period of delay caused
by Force Majeure provided, however, that in no event shall the extension of time
[i] exceed 60 days; or [ii] cause the construction completion date to be later
than the completion date required by the Department of Health or any other
governmental authority.
5.3 Modifications. Developer shall not materially change the Plans and
Specifications, Architect's Contract, Construction Contract or any other
Construction Document without the prior written consent of Landlord. A material
change shall include an increase in the amount payable under such contract of
more than 1% in any one instance or of more than 3% in the aggregate or a change
in the scope of work or services. Developer will furnish Landlord with copies of
all proposed material contracts between Developer and architects, engineers, and
contractors, and all of the contracts shall be subject to Landlord's approval as
to form, amount and the contractor employed. Developer will promptly furnish to
Landlord true and complete copies of all such contracts as executed.
5.4 Inspections. Developer shall cooperate with Landlord in arranging for
inspections by Landlord, Landlord's Inspector, and their representatives of the
progress of construction from time to time. Developer shall promptly correct any
defects or nonconforming construction. During the course of construction,
Landlord's Inspector will visit the Facility monthly, or more often as Landlord
reasonably deems necessary to review the progress of the construction. Landlord
shall make a Lease Advance to pay the $750.00 per day plus out-of-pocket
expenses for travel, lodging, food and transportation for Landlord's Inspector.
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ARTICLE 6: MISCELLANEOUS
6.1 Advances by Landlord. At any time and from time to time, Landlord may
incur and/or pay and/or advance costs or expenses: [i] incurred or advanced by
Landlord which Landlord is authorized or has the right (but not necessarily the
obligation) to incur or may incur under any Lease Document or any law; [ii] of
whatever nature incurred or advanced by Landlord in exercising any right or
remedy provided under any Lease Document or in taking any action which Landlord
is authorized to take under any Lease Document; [iii] required to be paid by
Tenant or Developer under any Lease Document, but which Tenant or Developer
fails to pay within the time period required; or [iv] any and all costs and
expenses from which Tenant or Developer is required to hold Landlord harmless
under any Lease Document, but from which Tenant fails to hold Landlord harmless.
Any costs, expenses, or advances incurred or paid by Landlord shall, upon
demand, be paid to Landlord together with interest thereon at the Overdue Rate
from the date of disbursement by Landlord. Payment of such costs, expenses, or
advances shall be secured by the security interest granted to Landlord in the
Lease Documents.
6.2 Entire Agreement. The Commitment, this Agreement and the other Lease
Documents, the Working Capital Documents, the Equity Loan Documents, and the
Guaranty Documents constitute the entire agreement between Developer, Guarantor,
Tenant, any Affiliate, and Landlord with respect to the subject matter hereof.
No representations, warranties, and agreements have been made by Landlord except
as set forth in the Commitment, this Agreement and the Lease. If there is any
direct conflict between the terms and provisions of the Commitment and the terms
of this Agreement, this Agreement shall govern. Tenant and Developer hereby
reaffirm the Commitment and all provisions thereof. The Commitment shall survive
the execution of this Agreement.
6.3 Severability. If any term or provision of this Agreement is held or
deemed by Landlord to be invalid or unenforceable, such holding shall not affect
the remainder of this Agreement and the same shall remain in full force and
effect.
6.4 Captions and Headings. The captions and headings are inserted only as a
matter of convenience and for reference and in no way define, limit or describe
the scope of this Agreement or the intent of any provision thereof.
6.5 Governing Law. This Agreement shall be governed by and construed under
the laws of the State.
6.6 Binding Effect. This Agreement will be binding upon and inure to the
benefit of the heirs, successors, personal representatives, and permitted
assigns of Landlord and Developer.
6.7 Modification. This Agreement may only be modified by a writing signed
by both Landlord and Developer. All references to this Agreement, whether in
this Agreement or in any other document or instrument, shall be deemed to
incorporate all amendments, modifications, and renewals of this Agreement made
after the date hereof.
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6.8 Construction of Agreement. This Agreement has been prepared by Landlord
and its professional advisors and reviewed by Developer and its professional
advisors. Landlord, Developer and their advisors believe that this Agreement is
the product of all their efforts, it expresses their agreement, and that it
shall not be interpreted in favor of either Landlord or Developer or against
either Landlord or Developer merely because of their efforts in preparing it.
6.9 Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original hereof.
6.10 No Third-Party Beneficiary Rights. No person not a party to this
Agreement shall have or enjoy any rights hereunder and all third-party
beneficiary rights are expressly negated. Without limiting the generality of the
foregoing, no one other than Developer shall have any rights to obtain or compel
a disbursement of a Lease Advance.
6.11 No Obligations of Landlord.
6.11.1 No agency. Landlord is not and will not be in any way the agent for or
trustee of developer. Landlord does not intend to act in any way for or on
behalf of developer in disbursing the lease advances. Landlord's purpose in
making the requirements set forth in this agreement is to protect landlord's
interest in the facility. Except as expressly provided in this agreement and the
other lease documents, landlord does not intend to be and is not and will not be
responsible for the completion of any improvements erected or to be erected upon
the land; the payment of bills or any other details in connection with the land
and improvements; any plans and specifications prepared in connection with the
land and improvements; or developer's relations and contracts with any
contractors, subcontractors, materialmen, or laborers performing work or
supplying materials for the land and improvements.
6.11.2 No obligation to pay. Except as expressly provided herein or in the
other lease documents, the lease and this agreement are not to be construed by
tenant or developer or anyone furnishing labor, materials, or any other work or
product for improving the land as an agreement upon the part of landlord to
assure that anyone will be paid for furnishing such labor, materials, or any
other work or product. Landlord will not be responsible for such payments.
6.11.3 No responsibility for construction. Landlord is not responsible for
construction of the improvements. Notwithstanding inspection of the land and the
improvements, landlord and landlord's inspector assume no responsibility for the
quality of construction or workmanship or for the architectural or structural
soundness of any improvements or for the adherence to or approval of any plans
and specifications in connection therewith or for any improvements.
6.11.4 No reliance on landlord's inspector. Tenant hereby acknowledges that
the architect and the general contractor are solely responsible for the quality
of construction and workmanship and the architectural and structural soundness
of the improvements and for
19
the adherence to the plans and specifications in the construction of the
improvements. All actions, inspections and reports of landlord's inspector are
solely for the benefit of landlord. Developer, tenant, architect and general
contractor shall not be entitled to rely upon any action, inspection or report
of landlord's inspector.
6.12 Miscellaneous Provisions.
6.12.1 Confidentiality. Landlord shall use reasonable efforts not to disclose
the information provided by Developer, Manager, Guarantor or Tenant to Landlord
pursuant to the Lease Documents; provided, however, that Landlord may disclose
such information to any person or entity to whom Landlord is required to make
such disclosure; to governmental authorities; and to any other person or entity
having a legitimate business interest in Landlord, including, but not limited
to, regulators, auditors, accountants, attorneys, investors, underwriters,
rating agencies, bond or surety companies, and lenders of Landlord (including,
but not limited to, collateral pool lenders and line of credit lenders).
6.12.2 Plans and Specifications. The Plans and Specifications shall at all
times remain the property of Developer, and neither Landlord nor Tenant nor any
other party shall acquire any ownership interest in the Plans and
Specifications. Landlord shall not utilize the Plans and Specifications for any
purpose whatsoever in connection with any development other than a development
in which Developer acts as developer for such development. Notwithstanding the
foregoing, Landlord shall have the right to utilize the Plans and Specifications
for all purposes related to the Facility, including without limitation the
making of alterations and repairs thereto.
6.12.3 Project Budget. Developer and Landlord have agreed to an initial
Project Budget, as described on Exhibit B attached hereto and made a part
hereof. Should Developer and Landlord determine that the contingencies set forth
in the Project Budget will not be needed for the completion of the Facility in
accordance with the Plans and Specifications, Developer and Landlord shall
negotiate in good faith to amend the Project Budget to provide for the funding
by Landlord of furniture, fixtures and equipment not originally included in the
Project Budget, but which are otherwise desirable for the Facility.
ARTICLE 7: REPRESENTATIONS
AND WARRANTIES
Developer hereby makes the following representations and
warranties, as of the Effective Date, to Landlord and acknowledges that Landlord
is entering into this Agreement and the Lease in reliance upon such
representations and warranties. Developer representations and warranties shall
survive the Closing and, except to the extent made as of a specific date, shall
continue in full force and effect until Developer's Obligations have been
performed in full.
7.1 Organization and Good Standing. Developer is a corporation,
duly organized, validly existing and in good standing under the laws of the
State of Delaware and is qualified to do business in and is in good standing
under the laws of the State.
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7.2 Power and Authority. Developer has the power and authority to
execute, deliver and perform the Developer Documents. Developer has taken all
requisite action necessary to authorize the execution, delivery and performance
of Developer's obligations under the Developer Documents.
7.3 Enforceability. The Developer Documents constitute the legal,
valid, and binding obligations of Developer enforceable in accordance with their
respective terms, except as enforceability may be limited by creditor's rights
laws, equitable principles, and the effect of judicial discretion.
7.4 Government Authorizations. The Land and the Plans and
Specifications conform in all material respects with all Legal Requirements for
the construction and development of the Facility. Upon completion of the
Facility in accordance with the Plans and Specifications, the Facility will
conform in all material respects to all Legal Requirements. Except as otherwise
noted in Exhibit E, Developer holds all Government Authorizations required to
commence construction of the Facility.
7.5 Condition of Facility. To Developer's knowledge, upon
completion of the Facility in accordance with the Plans and Specifications, all
of the mechanical and electrical systems, heating and air-conditioning systems,
plumbing, water and sewer systems, and all other items of mechanical equipment
or appliances will be in good working order, condition and repair, will be of
sufficient size and capacity to service the Facility for the Facility Uses, and
will conform with all applicable ordinances and regulations, and with all
building, zoning, fire, safety, and other codes, laws and orders. The
Improvements, including the roof and foundation, will be structurally sound and
free from leaks and other defects.
7.6 Compliance with Laws. To Developer's knowledge, there is no
violation of, or noncompliance with, [i] any laws, orders, rules or regulations,
ordinances or codes of any kind or nature whatsoever relating to the Facility or
the ownership or operation thereof (including without limitation, building,
fire, health, occupational safety and health, zoning and land use, planning and
environmental laws, orders, rules and regulations); [ii] any covenants,
conditions, restrictions or agreements affecting or relating to the ownership,
use or occupancy of the Facility; or [iii] any order, writ, regulation or decree
relating to any matter referred to in [i] or [ii] above.
7.7 No Litigation. As of the Effective Date and except as
disclosed on Exhibit D, [i] there are no actions or suits, or any proceedings or
investigations by any governmental agency or regulatory body pending against
Developer or the Facility; [ii] Developer has not received notice of any
threatened actions, suits, proceedings or investigations against Developer or
the Facility at law or in equity, or before any governmental board, agency or
authority which, if determined adversely to Developer, would materially and
adversely affect Developer's performance of the Developer's Obligations; [iii]
there are no unsatisfied or outstanding judgments against Developer (that are
not being contested in good faith) or the Facility; [iv] there is no labor
dispute materially and adversely affecting the operation or business conducted
by Developer or the Facility; and [v] Developer does not have knowledge of any
facts or circumstances which might reasonably form the basis for any such
action, suit, or proceeding.
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7.8 Consents. The execution, delivery and performance of the
Developer Documents will not require any consent, approval, authorization,
order, or declaration of, or any filing or registration with, any court, any
federal, state, or local governmental or regulatory authority, or any other
person or entity, the absence of which would materially impair the ability of
Developer to perform the Developer's Obligations.
7.9 No Violation. The execution, delivery and performance of the
Developer Documents [i] do not and will not conflict with, and do not and will
not result in a breach of Developer's Organizational Documents; [ii] do not and
will not conflict with, and do not and will not result in a breach of, and do
not and will not constitute a default under (or an event which, with or without
notice or lapse of time, or both, would constitute a default under), any of the
terms, conditions or provisions of any agreement or other instrument or
obligation to which Developer is a party or by which its assets are bound; and
[iii] do not and will not violate any order, writ, injunction, decree, statute,
rule or regulation applicable to Developer or the Facility.
7.10 Reports and Statements. All reports, statements, certificates
and other data furnished by or on behalf of Developer to Landlord in connection
with the Developer Documents, and all representations and warranties made herein
or in any certificate or other instrument delivered in connection herewith and
therewith, are true and correct in all material respects and do not omit to
state any material fact or circumstance necessary to make the statements
contained herein or therein, in light of the circumstances under which they are
made, not misleading as of the date of such report, statement, certificate or
other data. The copies of all agreements and instruments submitted to Landlord
are true, correct and complete copies and include all amendments and
modifications of such agreements.
7.11 ERISA. All plans (as defined in Section 4021(a) of the
Employee Retirement Income Security Act of 1974, as amended or supplemented from
time to time ("ERISA")) for which Developer is an "employer" or a "substantial
employer" (as defined in Sections 3(5) and 4001(a)(2) of ERISA,
respectively) are in compliance with ERISA and the regulations and published
interpretations thereunder. To the extent Developer maintains a qualified
defined benefit pension plan: [i] there exists no accumulated funding
deficiency; [ii] no reportable event and no prohibited transaction has occurred;
[iii] no lien has been filed or threatened to be filed by the Pension Benefit
Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA;
and [iv] Developer has not been deemed to be a substantial employer.
7.12 Chief Executive Office. Developer maintains its chief
executive office and its books and records at the address set forth in the
introductory paragraph of this Agreement.
7.13 Access. Except as otherwise disclosed in writing to Landlord,
access to the Land is directly from a dedicated public right-of-way without any
easement. To the knowledge of Developer, there is no fact or condition which
would result in the termination or reduction of the current access to and from
the Land to such right-of-way.
22
7.14 Utilities. Except as otherwise disclosed in writing to
Landlord, there are available at the Land gas, municipal water, and sanitary
sewer lines, storm sewers, electrical and telephone services in operating
condition which are adequate for the operation of the Facility at a reasonable
cost. The Land has direct access to utility lines located in a dedicated public
right-of-way without any easement. As of the Effective Date, there is no pending
or, to the knowledge of Developer, threatened governmental or third party
proceeding which would impair or result in the termination of such utility
availability.
7.15 Condemnation and Assessments. As of the Effective Date,
Developer has not received notice of, and there are no pending or, to
Developer's knowledge, threatened, condemnation, assessment or similar
proceedings affecting or relating to the Facility, or any portion thereof, or
any utilities, sewers, roadways or other public improvements serving the
Facility.
7.16 Zoning. As of the Effective Date, [i] except as otherwise
disclosed in writing to Landlord, the use and operation of the Facility for the
Facility Uses is a permitted use under the applicable zoning code; [ii] except
as disclosed on Exhibit E of the Lease, no special use permits, conditional use
permits, variances, or exceptions have been granted or are needed for such use
of the Facility; [iii] the Land is not located in any special districts such as
historical districts or overlay districts; and [iv] the Facility once
constructed according to the Plans and Specifications will comply with all
applicable zoning laws, including but not limited to, dimensional, parking,
setback, screening, landscaping, sign and curb cut requirements.
7.17 Pro Forma Statement. Developer has delivered to Landlord a
true, correct and complete copy of the Pro Forma Statement. The Pro Forma
Statement shows Developer's reasonable expectation of the most likely results of
Facility operations for the next 5 year period commencing on the anticipated
date when the Facility commences operations.
7.18 Environmental Matters. To Developer's knowledge, [i] the
Leased Property is in compliance with all Environmental Laws; [ii] there were no
releases or threatened releases of Hazardous Materials on, from, or under the
Leased Property, except in compliance with all Environmental Laws; [iii] no
Hazardous Materials have been, are or will be used, generated, stored, or
disposed of at the Leased Property, except in compliance with all Environmental
Laws; [iv] asbestos has not been and will not be used in the construction of any
Improvements; [v] no permit is or has been required from the Environmental
Protection Agency or any similar agency or department of any state or local
government for the use or maintenance of any Improvements; [vi] underground
storage tanks on or under the Land, if any, have been and currently are being
operated in compliance with all applicable Environmental Laws; [vii] any
closure, abandonment in place or removal of an underground storage tank on or
from the Land was performed in compliance with applicable Environmental Laws and
any such tank had no release contaminating the Leased Property or, if there had
been a release, the release was remediated in compliance with applicable
Environmental Laws to the satisfaction of regulatory authorities; [viii] no
summons, citation or inquiry has been made by any such environmental unit, body
or agency or a third party demanding any right of recovery for payment or
reimbursement for costs incurred under CERCLA or any other Environmental Laws
and the Land is not subject to the lien of any such agency; and [ix] to Tenant's
23
knowledge, the Environmental Assessment is true, complete and accurate.
"Disposal" and "release" shall have the meanings set forth in CERCLA.
7.19 Leases and Contracts. As of the Effective Date and except for
the Working Capital Documents and as disclosed on Exhibit G of the Lease, there
are no leases or contracts (including but not limited to, insurance contracts,
maintenance contracts, construction contracts, employee benefit plans,
employment contracts, equipment leases, security agreements, architect
agreements, and management contracts) to which Developer is a party relating to
any part of the ownership, operation, possession, construction, management or
administration of the Land or the Facility.
7.20 No Default. As of the Effective Date, [i] there is no
existing Event of Default under this Agreement; and [ii] no event has occurred
which, with the giving of notice or the passage of time, or both, would
constitute or result in such an Event of Default.
7.21 Project Budget. The Project Budget sets forth all anticipated
costs, direct and indirect, of developing and constructing the Facility.
7.22 Lease Covenants. Throughout the term of the Lease, Developer
shall comply with the provisions of the Lease applicable to Developer.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Landlord and Developer have executed and
delivered this Agreement effective as of the Effective Date.
LANDLORD: [_________________________]
By:_________________________________
Title:_________________________
DEVELOPER: BCC DEVELOPMENT AND
MANAGEMENT CO.
By:_________________________________
Title:_________________________
CONSENT AND AGREEMENT OF TENANT
Tenant consents to the foregoing Agreement and agrees to be bound
by the provisions therein applicable to Tenant as of the Effective Date.
TENANT: FINANCIAL CARE INVESTORS OF
[___________], LLC
By: Financial Care Investors, LLC, Member
By:_________________________________
Title:_________________________
