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EXHIBIT 10.67
This Instrument was prepared
and should be returned after
recording to:
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxxxxxx & Xxxxxxxx, LLP
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000.
OPEN END LEASEHOLD MORTGAGE
THIS INSTRUMENTS SECURES FUTURE ADVANCES
THIS OPEN END LEASEHOLD MORTGAGE ("MORTGAGE") is made as of
February 6, 1998, between Extended Care Operators of Ravenna, LLC, a Delaware
limited liability company (MORTGAGOR") and Balanced Care Corporation, a Delaware
corporation ("MORTGAGEE").
W I T N E S S E T H
WHEREAS, Mortgagor is the assignee of that certain Lease dated as
of March 28, 1997, (the "LEASE") whereby Mortgagor leases from Capstone Capital
Corporation, a Maryland corporation (the "LESSOR") the Land and Improvements;
and
WHEREAS, a memorandum of lease concerning the Lease has been
filed in the Recorder's Office of Portage County, Ohio in Book Volume ___, page
___ and an Assignment, Assumption and Amendment of Lease has been filed in Book
Volume _____, page ___; and
WHEREAS, the Mortgagor and Mortgagee entered into that certain
Shortfall Funding Agreement dated as of February 6, 1998 (the "SHORTFALL
AGREEMENT"); and
WHEREAS, the Mortgagor desires to execute and deliver this
Mortgage to Mortgagee as additional security for the faithful and timely
performance of the obligations of Mortgagor under the Shortfall Agreement and
the other Transaction Documents.
NOW, THEREFORE, in consideration of the obligations of Mortgagee
under the Shortfall Agreement and as security for the Debt (as hereinafter
defined) and the due and punctual payment and performance of the obligations
incurred under the Shortfall Agreement, this Mortgage, and the other Transaction
Documents in accordance with the terms hereof and thereof, Mortgagor, intending
to be legally bound hereby, has given, granted, bargained and sold, aliened,
enfeoffed, released, conveyed, confirmed, mortgaged, assigned, transferred, and
set-over, and by these presents does give, grant, bargain and sell, alien,
release, convey, confirm, enfeoff, mortgage, assign, transfer, and set-over unto
Mortgagee, its successors and assigns forever:
ALL Mortgagor's estate, right, title, interest, claim and demand
in and with respect to the following property (hereinafter called the "MORTGAGED
PROPERTY"):
A. the Lease and the leasehold estate created by the Lease in and
to the parcel of land situate in Xxxxxx County, Ohio and more particularly
described in Exhibit "A" attached hereto
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and made a part hereof and all appurtenant rights thereto;
B. all existing and future amendments, modifications, extensions
and renewals of the Lease; and
C. the privileges, appurtenances, improvements, tenements and
hereditaments thereunto belonging and which may in the future attach to the
leasehold estate.
To have and to hold the same unto Mortgagee, its successors and
assigns, forever.
Mortgagor hereby warrants and covenants that it is the lawful
owner of the Mortgaged Property pursuant to the Lease; that Mortgagor has good,
right and lawful authority to convey and encumber the same; that the Mortgaged
Property is free and clear from all liens and encumbrances, other than Permitted
Encumbrances (as described in Exhibit "B" attached hereto); and that it will
warrant and defend such title to the Mortgaged Property against the claims of
all persons whomsoever.
This conveyance is intended as a mortgage and is given for the
purpose of securing the faithful performance of Mortgagor under the Transaction
Documents and the Debt (as hereinafter defined).
This Mortgage is executed and delivered subject to the following
covenants, conditions and agreements:
1. "DEBT", as used herein, means, collectively, (i) all
Indebtedness, obligations (including the Asset Purchase Option as provided in
Section 1.03 of the Shortfall Agreement and the Option as provided in the Option
Agreement) and liabilities of Mortgagor and the Members to Mortgagee or any BCC
Affiliate whether of principal, interest, fees, expenses, covenants, charges or
otherwise, now existing or hereafter incurred under this Mortgage and the other
Transaction Documents, together with any and all extensions, renewals,
refinancings or refunding thereof in whole or in part, and (ii) all costs and
expenses, liabilities, obligations and advances, including to the extent
permitted by Law, reasonable attorneys' fees and legal expenses, incurred by
Mortgagee in the collection or satisfaction of any of the Indebtedness or other
obligations referred to in clause (i) above.
2. Until payment in full of the Debt and termination of all
obligations, duties and commitments under the Transaction Documents, Mortgagor
shall (i) pay and discharge, when and as the same shall become due and payable,
all taxes, assessments, sewer and water rents, and any and all other charges,
claims and liens assessed, levied, imposed or created from time to time upon the
Mortgaged Property or any part thereof, (ii) pay all ground rents reserved from
the Mortgaged Property and pay and discharge all mechanics' liens which may be
filed against the Mortgaged Property, (iii) pay and discharge any documentary,
stamp or other tax, including interest and penalties thereon, if any, now or
hereafter becoming payable hereon, (iv) provide, renew and keep in force by
paying the necessary premiums and charges thereon such policies of hazard and
liability insurance upon the buildings and Improvements now or hereafter erected
upon the Mortgaged Property in such amounts as are required from time to time by
the Lessor under the Lease. All such insurance policies shall be underwritten by
companies licensed in the state where the Mortgaged Property is located to issue
insurance with a rating by Best's Insurance Rating Service (or such other rating
service as Mortgagee shall direct) of no less than B+, shall be endorsed with a
standard mortgagee clause in favor of Mortgagee as its interest may appear,
shall not be subject to contribution and shall provide (without qualification in
favor of the insurer to use "best efforts" or similar language) for at least
thirty (30) days
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prior written notice of modification or cancellation to Mortgagee. Mortgagor
shall provide certificates evidencing compliance with the foregoing insurance
requirements to Mortgagee promptly upon request.
3. Risk of loss of, damage to or destruction of the Mortgaged
Property is and shall remain upon Mortgagor. Mortgagor shall promptly give
written notice to Mortgagee of damage or destruction to the Mortgaged Property.
If Mortgagor fails to effect and keep in force insurance covering the Mortgaged
Property as required by Mortgagee, or fails to pay the premiums thereon when
due, Mortgagee may, but shall not be obligated to, do so for the account of
Mortgagor and add the cost thereof to the Debt.
4. Mortgagor shall maintain all buildings and Improvements
subject to this Mortgage in good working order and condition, ordinary wear and
tear excepted. Mortgagee shall have the right to enter upon the Mortgaged
Property at any time for the purpose of inspecting the order, condition and
repair of the buildings and Improvements erected thereon.
5. Mortgagor, at its sole cost and expense, shall promptly comply
with (i) all present and future Laws of any governmental authority exercising
jurisdiction over the Mortgaged Property and (ii) all covenants and obligations
of Mortgagor under the Lease.
6. Mortgagor shall ensure, at its sole cost and expense, that the
Mortgaged Property complies and continues to comply in all material respects
with all applicable federal, state and local Laws with respect to the existence
on, discharge from, or removal from the Mortgaged Property of solid wastes,
toxic or hazardous substances, waste, contaminants or other regulated substances
("Hazardous Substances") the release, storage, disposal or transportation of
which is regulated by any federal, state or local law (the "ENVIRONMENTAL
LAWS"). Mortgagor shall notify Mortgagee promptly and in reasonable detail in
the event that Mortgagor becomes aware of the presence of any violation of any
Environmental Law with respect to the Mortgaged Property. Mortgagee shall not be
liable for and Mortgagor shall indemnify, defend and hold Mortgagee harmless
from and against all losses, costs, liabilities, damages and expenses
(including, without limitation, attorneys' and engineers' fees and costs
incurred in the investigation, defense and settlement of claims) that Mortgagee
may suffer or incur (as holder of this Mortgage, as mortgagee in possession or
as successor in interest to Mortgagor as owner of the Mortgaged Property by
virtue of a foreclosure or acceptance of a deed in lieu of foreclosure) as a
result of or in connection with any Environmental Law (including the assertion
that any lien existing or arising pursuant to any Environmental Law takes
priority over the lien of this Mortgage) or breach of any covenant or
undertaking by Mortgagor in this Mortgage. Mortgagor hereby represents and
warrants to Mortgagee that, to the actual knowledge of Mortgagor after due
inquiry, no Hazardous Substances are present on the Mortgaged Property. The
provisions of this paragraph 6 shall survive the termination of this Mortgage,
the foreclosure of this Mortgage and/or the delivery of a deed in lieu of
foreclosure.
7. Mortgagor will, from time to time, make, do, execute and
acknowledge, as the situation may require, such further acts, deeds,
conveyances, mortgages, security agreements, financing statements, continuation
statements and other assurances as may be required for the purpose of
effectuating the intent hereof and for better assuring and confirming to
Mortgagee, its successors and assigns, the lien and security interest created by
this Mortgage.
8. In the event Mortgagor neglects or refuses to pay the charges
mentioned at paragraph 2 of this Mortgage, or fails to maintain the buildings
and Improvements as aforesaid,
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Mortgagee may, but shall not be obligated to, do so, and add to the Debt the
cost thereof together with interest at the maximum lawful rate, and collect the
same as a part of said Debt.
9. Except for Permitted Encumbrances and any security interest in
favor of Lessor or Mortgagee, Mortgagor covenants and agrees not to create, nor
permit to accrue, upon all or any part of the Mortgaged Property, any debt, lien
or charge which would be prior to, or on a parity with, or subordinate to, the
lien of this Mortgage without the prior written consent of Mortgagee.
10. In the event Mortgagee pays any prior lien on the Mortgaged
Property, Mortgagee shall be subrogated to the rights of the holder of such
prior lien as fully as if such lien had been assigned to Mortgagee.
11. Mortgagor shall not lease, license, or sublease all or any
part of the Mortgaged Property, nor shall Mortgagor assign, pledge, hypothocate
or otherwise transfer the Lease, except in strict accordance with the
Transaction Documents and the Lease Documents.
12. This Mortgage and the indebtedness secured hereby may not be
assumed, and (except as otherwise expressly provided in the Transaction
Documents) Mortgagor shall not assign, sell, license, convey or otherwise
transfer the Lease or any interest in the Mortgaged Property, or agree to do so.
Any default under this paragraph 12 shall cause an immediate acceleration of the
Debt without any demand by Mortgagee.
13. "MORTGAGE EVENT OF DEFAULT" shall mean (i) a failure by
Mortgagor to pay when due all sums Mortgagor is obligated to pay pursuant to the
Notes, (ii) the Mortgagor shall breach any representation, warranty, covenant,
agreement or term under this Mortgage or the other Transaction Documents,
including the Lease; (iii) a breach by any Member of the covenants, agreements,
representations and warranties of the Members under the Option Agreement or (iv)
any other default (other than a default by the Lessor, BCC or a BCC Affiliate)
shall occur under any Transaction Document.
14. If a Mortgage Event of Default shall occur then, and in any
such event, all of the Debt shall become immediately due and payable without
presentment, demand or further notice, and Mortgagee shall have such rights,
remedies, powers and privileges as are set forth in this Mortgage and the other
Transaction Documents, or as otherwise provided by Law, including the right:
(i) to institute an action in mortgage foreclosure for
the enforcement of this Mortgage and to prosecute the same to
judgment, execution and sale of the Mortgaged Property, or any
part or parts thereof, until collection of the entire Debt is
realized, together with costs of suit and reasonable attorney's
fees for collection; and Mortgagor hereby waives and releases all
errors in said proceedings (including without limitation defects
in service of process), waives stay of execution, the right of
inquisition and extension of time of payment, agrees to
condemnation of any property levied upon by virtue of any such
execution, and waives all exemption from levy and sale of any
property that now is or hereafter may be exempted by law; and/or
(ii) to immediately sell the Mortgaged Property, or any
part or parts thereof, under power of sale, which power is hereby
granted to Mortgagee to the full extent permitted by law; and/or
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(iii) to be appointed as receiver of the Mortgaged
Property, to enter into possession of the Mortgaged Property, or
any part or parts thereof, and to lease or operate the same and
collect all rents and profits therefrom and, after deducting all
costs of collection, carrying and administration expense, to
apply the net rents and profits to the payment of the Debt as
hereinafter provided.
15. Mortgagee shall apply the proceeds of any foreclosure sale
of, or other disposition or realization upon, or rents or profits from the
Mortgaged Property to satisfy the Debt in the following order:
(a) First: to the payment of all costs and expenses
incurred in connection with such sale or other realization;
(b) Second: to the payment of interest due upon the Note
and any other Debt;
(c) Third: to the payment of the principal due upon the
Note or any other Debt owed to Mortgagee; and
(d) Fourth: the balance (if any) of such proceeds shall be
paid to the Mortgagor subject to any duty imposed by law or otherwise to the
holder of any subordinate lien in the collateral known to the Mortgagee and
subject to the direction of a court of competent jurisdiction.
If any such proceeds from the Mortgaged Property, together with
the proceeds of any other collateral granted to the Mortgagee by Mortgagor,
shall be insufficient to pay the amounts secured hereby, Mortgagor shall be
liable for the deficiency, and any surplus will be distributed as required by
law.
16. Mortgagee shall have the right upon a Mortgage Event of
Default, in connection with the exercise of its remedies hereunder, to the
appointment of a receiver to collect the rents, issues, income and profits of
the Mortgaged Property without notice and without regard to the adequacy of the
Mortgaged Property to secure the Debt.
17. If at any time the Mortgaged Property, or any part thereof,
is taken or damaged by condemnation proceedings under right of eminent domain or
in any other manner, Mortgagee shall, subject to the rights of Lessor under the
Lease, be entitled to receive all compensation, damages, awards, or other
relief. Mortgagor shall promptly assign to Mortgagee all such proceeds to be
applied on account of the Debt after deducting therefrom all expenses incurred,
including reasonable attorneys' fees, and any balance thereafter to be paid to
Mortgagor, and Mortgagee shall be authorized, at its option, to commence, appear
in, and/or prosecute in its own name any action or proceeding or to make any
reasonable compromise or settlement in connection with such taking or damage.
18. Mortgagor will indemnify against, and on demand repay
Mortgagee for, any loss, damage, expense, or attorneys' fees which may be
incurred by reason of any action or proceeding affecting the Mortgaged Property
or the title thereto or Mortgagee's interest under this Mortgage, to which
Mortgagee is made a party (by intervention or otherwise), resulting from any
breach by Mortgagor of any covenant, agreement, representation or warranty under
this Mortgage or any other Transaction Document. Such indemnity obligation shall
be deemed Debt secured by this Mortgage upon demand for indemnification from
Mortgagee to Mortgagor. The provisions of this paragraph 18 shall survive the
termination of this Mortgage, the foreclosure of this Mortgage and/or the
delivery of a
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deed in lieu of foreclosure.
19. The agreements and obligations of Mortgagor hereunder are
continuing, absolute and unconditional irrespective of the genuineness, validity
or enforceability of the Notes or this Mortgage or any other instrument or
instruments now or hereafter evidencing the Debt or any part thereof, or of any
other agreement or agreements now or hereafter entered into by Mortgagee and
Mortgagor pursuant to which the Debt or any part thereof is issued, or of any
other circumstance which might otherwise constitute a legal or equitable
discharge of such agreements and obligations. Without limitation upon the
foregoing, such obligations will not be affected by (i) any renewal, refinancing
or refunding of the Debt in whole or in part, (ii) any extension of the time of
payment of any note or other instrument or instruments now or hereafter
evidencing the Debt or any part thereof, (iii) any amendment to or modification
of the terms of the Note, this Mortgage or other instruments now or hereafter
evidencing the Debt or any part thereof or of any other agreement or agreements
now or hereafter entered into by Mortgagee and Mortgagor pursuant to which the
Debt or any part thereof is issued or secured, (iv) any substitution, exchange
or release of, or failure to preserve, perfect or protect, or other dealing in
respect of, the Mortgaged Property or any other property or any security for the
payment of the Debt or any part thereof, (v) any bankruptcy, insolvency,
arrangement, composition, assignment for the benefit of creditors or similar
proceeding commenced by or against Mortgagor, or (vi) any other matter or thing
whatsoever whereby the agreements and obligations of Mortgagor hereunder would
or might otherwise be released or discharged.
20. The rights and remedies of Mortgagee as provided in this
Mortgage and in the other Transaction Documents, or contained in any of them,
shall be cumulative and concurrent, may be pursued separately, successively or
together against Mortgagor or against the Mortgaged Property at the sole
discretion of Mortgagee, and may be exercised as often as occasion thereof shall
arise. The failure to exercise any such right or remedy shall in no event be
construed as a waiver or release thereof. Any failure by Mortgagee to insist
upon strict performance by Mortgagor of any of the terms and provisions of this
Mortgage shall not be deemed to be a waiver of any of the terms or provisions of
this Mortgage, and Mortgagee shall have the right thereafter to insist upon
strict performance by Mortgagor of any and all of them.
21. Mortgagee may release, regardless of consideration, any part
of the security held for the Debt without, as to the remainder of the security,
in any way impairing or affecting the lien of this Mortgage or its priority over
any subordinate lien. For payment of the Debt secured hereby Mortgagee may
resort to any other security therefor held by Mortgagee in such order and manner
as Mortgagee may elect. All costs related to any release of the lien of this
Mortgage shall be paid by Mortgagor.
22. Mortgagor hereby waives and releases all benefit that might
accrue to Mortgagor by virtue of any present or future law exempting the
Mortgaged Property, or any part of the proceeds arising from any sale thereof,
from attachment, levy or sale on execution, or providing for any stay of
execution, exemption from civil process or extension of time for payment, and,
unless specifically required herein, all notices of Mortgagor's default or of
Mortgagee's election to exercise, or Mortgagee's actual exercise of any option
under this Mortgage or any Document.
23. All notices and other communications provided for under this
Mortgage or any other Transaction Documents shall be in writing and mailed or
delivered, if to the Mortgagor, at its address of: c/o Hakman Capital Corp.,
0000 Xxx Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000, or, if to the
Mortgagee, at its address of: 0000 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxxxx, XX
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17055, or at such other address as shall be designated by such party in a
written notice to the other party from time to time. All such notices and
communications shall, when mailed, be effective three days after being deposited
in the mail.
24. This Mortgage shall be governed by and construed in
accordance with the laws of the State of Ohio. If any provision of this Mortgage
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Mortgage.
25. No provision of this Mortgage may be amended, supplemented,
waived or otherwise modified, except by means of a writing executed by each of
the parties hereto, and then only to the extent set forth in such writing.
26. The covenants, conditions and agreements contained in this
Mortgage shall bind, and the benefits thereof shall inure to, the parties hereto
and their respective successors and assigns; provided, however, that Mortgagor
may not, voluntarily or by operation of law, assign this Mortgage.
27. MORTGAGOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY
FOR ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS MORTGAGE OR
THE NOTE, IN EACH CASE WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
THE MORTGAGOR HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT THE
MORTGAGEE MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS PARAGRAPH 27 WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE MORTGAGOR TO THE WAIVER OF
ITS RIGHT TO TRIAL BY JURY.
28. Mortgagor hereby covenants and agrees to execute and deliver
unto Mortgagee such instruments and documents, and take such further actions, as
Mortgagee may request in connection with this Mortgage and the Notes.
29. Intentionally omitted.
30. This instrument is intended to be an Open-End Mortgage
pursuant to Ohio Rev. Code Xxx. ss. 5301.23.2 (Xxxxxxxx 1997) and, as such, is
entitled to the benefits thereof. The parties to this instrument intend that, in
addition to any other debt or obligations secured hereby, this instrument shall
secure unpaid balances of advances made pursuant to the Shortfall Agreement
after this instrument is left for record with the Recorder's Office of the
County where the Property is located, whether such advances are made pursuant to
an obligation of BCC or otherwise. The maximum principal amount of unpaid
indebtedness secured by this instrument is TEN MILLION DOLLARS ($10,000,000),
plus interest thereon, which indebtedness may consist of present and future
loans made under the Shortfall Agreement, fees payable pursuant thereto,
advances made with respect to any property for the payment of, among other
things, taxes, assessments, maintenance charges, insurance premiums and the
like, and costs and expenses, including but not limited to attorney's fees,
incurred for the protection of the Property or the lien and security of this
instrument or by reason of any default hereunder or under any other Transaction
Document.
31. Capitalized terms used but not otherwise defined in this
Mortgage have the respective meanings specified in Appendix 1 hereto; the rules
of interpretation and other
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provisions set forth in Appendix 1 hereto shall apply to this Mortgage.
32. Notwithstanding any provision to the contrary contained in
this Mortgage, in no event shall the actions or inactions of Mortgagor be deemed
a Mortgage Event of Default hereunder if and to the extent that such actions are
the responsibility of the Management Firm pursuant to the Management Agreement.
33. This Mortgage and the rights of Mortgagee hereunder are
subject in all respects to the Lease and that certain Subordination and
Standstill Agreement dated of even date herewith between Mortgagee and Lessor.
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WITNESS, intending to be legally bound hereby, the due execution
hereof the day and year first above written.
WITNESS: EXTENDED CARE OPERATORS OF
RAVENNA, LLC
By: /s/ Signature Illegible
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Title:
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PRINT NAME
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Schedule to Exhibit 10.67 filed pursuant to Instruction 2 to Item
601(a) of Regulation S-K
Open-End Leasehold Mortgage
Location Entities
Harrisburg, PA BCC at Harrisburg, Inc.;
Extended Care Operators of Harrisburg LLC
Greensboro, NC BCC at Greensboro, Inc.;
Extended Care Operators of Greensboro LLC
