AMENDED AND RESTATED LOAN AGREEMENT
BETWEEN
HEALTH CARE REIT, INC.
AND
EMERITUS CORPORATION
SEPTEMBER 30, 2003
oml\hcri\emeritus-ml\Loan-Amend - 17 - 9/11/03
oml\hcri\emeritus-ml\Loan-Amend 9/11/03
TABLE OF CONTENTS
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SECTION PAGE
ARTICLE 1: PURPOSE AND DEFINITIONS 1
1.1 Purpose 1
1.2 Definitions 1
1.3 Incorporation of Amendments 4
1.4 Exhibits 4
ARTICLE 2: LOAN AND LOAN DOCUMENTS 4
2.1 Obligation to Lend 4
2.2 Obligation to Repay 4
2.2.1 Term of the Loan 4
2.2.2 Interest and Payments 4
2.3 Use of Proceeds 4
2.4 Loan Expenses 4
2.5 Disbursements 4
2.5.4 Accrued Interest Payment 5
2.6 Closing 5
ARTICLE 3: CONDITIONS PRECEDENT TO DISBURSEMENT 5
3.1 Conditions Precedent to Initial Disbursement 5
3.1.1 Legal Opinion 5
3.1.2 Lender's Documents 5
3.1.3 Organizational Documents 5
3.1.4 Financial Statements 5
3.1.6 Other Closing Requirements 5
3.2 Conditions Precedent to Each Disbursement 5
3.2.2 Post-Closing Obligations 5
3.2.3 Damage and Destruction 5
3.2.4 No Event of Default 6
ARTICLE 4: BORROWER'S REPRESENTATIONS AND WARRANTIES 6
4.1 Organization and Good Standing 6
4.2 Power and Authority 6
4.3 Enforceability 6
4.4 No Violation 6
4.5 No Litigation 6
4.6 Financial Statements 7
4.7 Reports, Statements and Copies 7
4.8 No Default 7
4.9 ERISA 7
4.10 Chief Executive Office 7
4.11 Affirmation of Lease 7
ARTICLE 5: AFFIRMATIVE COVENANTS 8
5.1 Perform Obligations 8
5.2 Documents and Information 8
5.2.1 Furnish Documents 8
5.2.2 Furnish Information 8
5.2.3 Further Assurances and Information 8
5.2.4 Material Communications 8
5.2.5 Requirements for Financial Statements 8
5.3 Broker's Commission 9
5.4 Existence 9
5.5 Financial Covenants 9
ARTICLE 6: NEGATIVE COVENANTS 9
ARTICLE 7: DEFAULT AND REMEDIES 9
7.1 Event of Default 9
7.2 Remedies on Default 10
7.2.1 Acceleration 10
7.2.2 Other Remedies 11
7.2.3 Waiver 11
7.2.4 Terminate Disbursement 11
ARTICLE 8: MISCELLANEOUS 11
8.1 Advances by Lender 11
8.2 [DELETED] 11
8.3 Construction of Rights and Remedies and Waiver of Notice and Consent
11
8.3.1 Applicability 11
8.3.2 Waiver of Notices and Consent to Remedies 11
8.3.3 Cumulative Rights 11
8.3.4 Extension or Modification of Loan 11
8.3.5 Right to Select Security 11
8.3.6 Forbearance Not a Waiver 12
8.3.7 No Waiver 12
8.3.8 No Continuing Waivers 12
8.3.9 Approval Not a Waiver 12
8.3.10 No Release 12
8.4 Assignment 12
8.4.1 Assignment by Lender 12
8.4.2 Assignment by Borrower 13
8.5 Notices 13
8.6 Entire Agreement 13
8.7 Severability 13
8.8 Captions and Headings 13
8.9 Governing Law 13
8.10 Binding Effect 13
8.11 Modification 13
8.12 Construction of Agreement 14
8.13 Counterparts 14
8.14 No Third-Party Beneficiary Rights 14
8.15 Lender's Authority to Furnish Copies of Loan Documents 14
8.16 LENDER MERELY A LENDER 14
8.16.1 NO AGENCY 14
8.16.2 NO OBLIGATION TO PAY 14
ARTICLE 9: SECURITY 14
9.1 Secured by Mortgage 14
9.2 Oral Agreements 15
EXHIBITS
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EXHIBIT A: RESERVED
EXHIBIT B: DISBURSEMENT SCHEDULE
EXHIBIT C: PENDING LITIGATION
EXHIBIT D: DOCUMENTS TO BE DELIVERED
EXHIBIT E: BORROWER'S CERTIFICATE
AMENDED AND RESTATED
LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT ("Agreement") is made and entered
into effective as of September 30, 2003 (the "Effective Date") between EMERITUS
CORPORATION, a corporation organized under the laws of the State of Washington
(the "Borrower"), having its chief executive office at 0000 Xxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000, and HEALTH CARE REIT, INC., a corporation
organized under the laws of the State of Delaware (the "Lender"), having an
address of Xxx XxxXxxx, Xxxxx 0000, X.X. Xxx 0000, Xxxxxx, Xxxx 00000.
R E C I T A L S:
A. Lender purchased four certain properties for a purchase price of
$39,700,000.00 and leased said properties to Borrower pursuant to a Master Lease
Agreement dated March 28, 2002 ("Master Lease") and Lender provided a line
of credit to Borrower in the maximum amount of $6,800,000.00 ("Original Loan"),
subject to the terms and conditions of a Loan Agreement dated effective as of
April 1, 2002.
B. Lender has purchased 19 additional properties for a purchase price of
$110,000,000.00 and leased said properties to Borrower by amending and restating
the Master Lease. Lender agreed to increase the line of credit in an
amount of $11,500,000.00 ("Additional Loan") and to consolidate two additional
loans made on August 28, 2003 in the amount of $3,100,000.00 and $4,400,000.00
for a total of $25,800,000.00 ("Loan") subject to the terms of this Amended and
Restated Loan Agreement.
C. The Loan shall be secured by a leasehold deed of trust ("Mortgage") from
Borrower to Lender on the interest of Borrower in the Facility.
NOW, THEREFORE, in consideration of the mutual covenants and the premises
contained herein, the parties agree as follows:
ARTICLE 1: PURPOSE AND DEFINITIONSARTICLE 1: PURPOSE AND DEFINITIONS
1.1 Purpose1.1 Purpose. The purpose of this Agreement is to establish
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the terms and conditions of the Loan with Lender.
1.2 Definitions1.2 Definitions. Except as otherwise expressly provided,
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[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; and [iii] the words "herein", "hereof", and "hereunder" and similar
words refer to this Agreement as a whole and not to any particular section.
"Affiliate" means any person, corporation, partnership, limited liability
company, trust, or other legal entity that, directly or indirectly, controls, or
is controlled by, or is under common control with Borrower. "Control" (and the
correlative meanings of the terms "controlled by" and "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such entity. "Affiliate"
includes, without limitation, Guarantor. An Affiliate of Tenant shall
specifically exclude Columbia Pacific Management, Inc., or any Affiliate
thereof, Holiday Retirement Corporation, or any Affiliate thereof, and Alterra
Healthcare Corporation, or any Affiliate thereof, but only prior to the date of
Tenant's acquisition thereof.
"Affiliate Obligation" means all indebtedness and obligations of Borrower
and any Affiliate to Lender or any Lender Affiliate now existing or hereafter
arising, including, without limitation, the Lease Documents, indebtedness
evidenced by promissory notes, lease agreements, guaranties or otherwise and
obligations under such indebtedness documents and all other documents executed
by Borrower or any Affiliate in connection therewith, and any extensions,
modifications, substitutions or renewals thereof.
"Annual Financial Statements" means for Borrower, the audited balance sheet
and statement of income of Borrower for the most recent fiscal year.
"Borrower" means Emeritus Corporation, a corporation organized under the
laws of the State of Washington, its successors and permitted assigns.
"Borrower's Organizational Documents" means the Articles of Incorporation
of Borrower certified by the Secretary of State of the state of organization, as
amended to date, and the Bylaws of Borrower certified by Borrower, as amended to
date.
"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 and initial disbursement of the Loan.
"Commitment" means the Commitment Letter dated August 15, 2003.
"Disbursement Schedule" means the Disbursement Schedule attached hereto as
Exhibit B setting forth Borrower's estimate of the dates and amounts of the
disbursements required hereunder.
"Disbursement Voucher" means Borrower's written request for a Loan Advance
set forth on a form satisfactory to Lender.
"Effective Date" means the date of this Agreement.
"Event of Default" has the meaning set forth in 7.1.
"Facility" means each skilled nursing, assisted living or retirement
facility leased to Borrower pursuant to a Lease.
"Financial Statements" means the annual, quarterly and year-to-date
financial statements of Borrower submitted to Lender prior to Closing.
"Guarantor" means Texas-ESC-Lubbock, L.P., a Washington limited
partnership.
"Lease" means the Amended and Restated Master Lease Agreement dated
September 30, 2003 by which Lender leased each Facility to Borrower, as amended
from time to time.
"Lease Documents" means the Lease and all other documents executed by
Borrower in connection with the Lease, each as amended from time to time.
"Lender" means Health Care REIT, Inc., its successors and assigns.
"Lender Affiliate" means any person, corporation, partnership, limited
liability company, trust or other legal entity that, directly or indirectly,
controls or is controlled by, or is under common control with Lender. "Control"
(and the correlative meanings of the terms "controlled by" and "under common
control with") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such entity.
"Lender Affiliate" includes without limitation, HCRI Mississippi Properties,
Inc.
"Loan" means the loan by Lender to Borrower in the amount up to the Loan
Amount.
"Loan Amount" means $25,800,000.00.
"Loan Advance" means each advance of proceeds of the Loan.
"Loan Documents" means [i] this Agreement; [ii] the Note; and [iii] all
other documents and instruments executed by Borrower in connection with the
Loan, each as amended from time to time.
"Loan Expenses" means all reasonable costs and expenses incurred by Lender
in investigating, making and administering the Loan, including but not limited
to, [i] reasonable attorneys' and paralegals' fees and costs; and [ii]
reasonable travel, transportation, food, and lodging costs and expenses incurred
by Lender and Lender's attorneys and paralegals.
"Material Obligation" means [i] any indebtedness in excess of $250,000.00
secured by a security interest in or a lien, deed of trust or mortgage on any of
the Facility (or any part thereof, including any Personal Property) and any
agreement relating thereto; [ii] any obligation or agreement that is material to
the construction or operation of the Facility or that is material to Borrower's
business or financial condition and where a breach thereunder, if not cured
within any applicable cure period, would have a material adverse affect on the
financial condition of Borrower or the results of operations at the Facility;
[iii] any unsecured indebtedness or lease of Borrower that has an outstanding
principal balance or obligation of at least $1,000,000.00 and any agreement
relating thereto; and [vi] any indebtedness or lease of Borrower or of any other
party that has been guaranteed by Borrower, that has an outstanding principal
balance or obligation of at least $250,000.00.
"Mortgage" means the Amended and Restated Leasehold Mortgage/Deed of Trust,
Security Agreement, Assignment of Leases and Rents, Financing Statement and
Fixture Filing of even date granted by Borrower to Lender.
"Note" means the Amended and Restated Note of even date made by Borrower in
favor of Lender for a principal amount equal to the Loan Amount, and any
extensions, modifications, substitutions or renewals thereof.
"Periodic Financial Statements" means for Borrower, the unaudited balance
sheet and statement of income of Borrower for the most recent month and quarter.
"State" means the State of Ohio.
1.3 Incorporation of Amendments1.3 Incorporation of Amendments.
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The definition of any agreement, document, or instrument set forth in this
Agreement or in any other Loan Document shall be deemed to incorporate all
amendments, modifications, and renewals thereof and all substitutions and
replacements therefor.
1.4 Exhibits1.4 Exhibits. The following exhibits are attached hereto
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and incorporated herein:
Exhibit A: Reserved
Exhibit B: Disbursement Schedule
Exhibit C: Pending Litigation
Exhibit D: Documents to be Delivered
Exhibit E: Borrower's Certificate
ARTICLE 2: LOAN AND LOAN DOCUMENTSARTICLE 2: LOAN AND LOAN DOCUMENTS
2.1 Obligation to Lend2.1 Obligation to Lend. Subject to the terms and
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upon the conditions set forth in the Loan Documents, Lender shall lend to
Borrower up to the Loan Amount. The indebtedness of Borrower to Lender for the
Loan is evidenced by the Note.
2.2 Obligation to Repay2.2 Obligation to Repay. Borrower shall repay
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the Loan in accordance with the terms of the Note and the other Loan Documents.
2.2.1 Term of the Loan2.2.1 Term of the Loan. The term of the Loan will
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expire on the Maturity Date set forth in the Note.
2.2.2 Interest and Payments2.2.2 Interest and Payments. Borrower shall
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make payments in accordance with the Note at the rate set forth in the Note.
2.3 Use of Proceeds2.3 Use of Proceeds. The Loan proceeds shall be used
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by Borrower and/or Guarantor, as the case may be, in connection with a Facility
and such other uses as Borrower deems appropriate.
2.4 Loan Expenses2.4 Loan Expenses. At the Closing, Borrower shall pay
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or reimburse Lender for any Loan Expenses incurred up to the Effective Date.
Within 30 days after receipt of an invoice therefor, Borrower shall reimburse
Lender for any Loan Expenses incurred by Lender. Lender may, at Lender's
option, apply proceeds of the Loan to pay the Loan Expenses.
2.5 Disbursements2.5 Disbursements. The Loan shall be disbursed at
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Closing.
2.5.3 [RESERVED]
2.5.4 Accrued Interest Payment2.5.4 Accrued Interest Payment. If
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Borrower fails to pay all accrued interest on the Loan within 10 days after the
monthly due date set forth in the Note, whether due to inadequate cash flow of
any Facility or otherwise, Lender may, at its option, advance Loan proceeds to
pay the accrued interest.
2.6 Closing2.6 Closing. The Closing shall occur on the Effective Date.
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Lender may elect to close by exchanging executed counterparts of one or more of
the Loan 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 DISBURSEMENTARTICLE 3: CONDITIONS PRECEDENT
TO DISBURSEMENT
3.1 Conditions Precedent to Initial Disbursement3.1 Conditions Precedent
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to Initial Disbursement. Borrower shall comply with, and Lender's obligation to
disburse the first Loan Advance shall be conditioned upon Borrower's performance
of the following conditions precedent:
3.1.1 Legal Opinion3.1.1 Legal Opinion. Borrower shall have delivered
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to Lender an opinion of counsel, in form and substance satisfactory to Lender.
3.1.2 Lender's Documents3.1.2 Lender's Documents. Borrower shall have
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delivered to Lender fully executed originals of the Loan Documents.
3.1.3 Organizational Documents3.1.3 Organizational Documents. Borrower
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shall have delivered to Lender copies of Borrower's Organizational Documents, in
form and substance satisfactory to Lender, and Borrower's resolutions
authorizing the Loan Documents, certified by Borrower to be true and complete
and not revoked or amended since the respective dates thereof.
3.1.4 Financial Statements3.1.4 Financial Statements. Borrower shall
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have delivered to Lender the Financial Statements, all in form and substance
satisfactory to Lender.
3.1.5 [RESERVED]
3.1.6 Other Closing Requirements3.1.6 Other Closing Requirements.
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Borrower shall have satisfied the requirements of 3.2.4 and all other closing
requirements of the Loan Documents, Lease Documents and the Commitment.
3.2 Conditions Precedent to Each Disbursement3.2 Conditions Precedent to
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Each Disbursement. Borrower shall comply with, and Lender's obligation to
disburse each Loan Advance shall be conditioned upon Borrower's performance of
the following conditions precedent:
3.2.1 [RESERVED]
3.2.2 Post-Closing Obligations3.2.2 Post-Closing Obligations. Borrower
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shall have satisfied all post-closing obligations under the Borrower Documents
to be performed as of the date of such Loan Advance request.
3.2.3 Damage and Destruction3.2.3 Damage and Destruction. The Facility
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for which the Loan Advance is drawn shall not have been substantially or
materially damaged or destroyed, in whole or in part, by fire or other casualty
nor shall eminent domain proceedings have been threatened or be pending with
respect to a substantial or material part of the Facility.
3.2.4 No Event of Default3.2.4 No Event of Default. There shall be no
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uncured Event of Default under any Borrower Document or Lease Document or any
event which with the giving of notice or the passage of time would constitute an
Event of Default.
ARTICLE 4: BORROWER'S REPRESENTATIONS AND WARRANTIESARTICLE 4: BORROWER'S
REPRESENTATIONS AND WARRANTIES
Borrower hereby makes the following representations and warranties, as of
the Effective Date and the date of each Loan Advance, to Lender and acknowledges
that Lender is making the Loan in reliance upon such representations and
warranties. Borrower's representations and warranties shall survive the Closing
and, except as specifically provided below, shall continue in full force and
effect until Borrower has repaid the Loan in full and performed all other
obligations under the Loan Documents.
4.1 Organization and Good Standing4.1 Organization and Good Standing.
---------------------------------
Borrower is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Washington.
4.2 Power and Authority4.2 Power and Authority. Borrower has the power
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and authority to execute, deliver, and perform Borrower's obligations under the
Borrower Documents and has taken all requisite action to authorize the
execution, delivery and performance of Borrower's obligations under such
documents.
4.3 Enforceability4.3 Enforceability. The Borrower Documents constitute
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valid and binding obligations of Borrower, enforceable in accordance with their
terms except as such enforceability may be limited by creditors rights laws and
general principles of equity.
4.4 No Violation4.4 No Violation. The execution, delivery and
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performance of the Borrower Documents and the consummation of the transactions
-
contemplated by the Borrower Documents [i] do not conflict with and will not
conflict with, and do not result and will not result in a breach of Borrower's
Organizational Documents; [ii] do not conflict with and will not conflict with,
and do not result and will not result in a breach of, or constitute or will
constitute a default (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 Borrower
is a party or by which its assets are bound; and [iii] do not violate and will
not violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Borrower.
4.5 No Litigation4.5 No Litigation. As of the Effective Date and except
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as disclosed on Exhibit C, [i] to the best of Borrower's knowledge there are no
actions, suits, proceedings or investigations by any governmental agency or
regulatory body pending against Borrower or any existing Facility; [ii] Borrower
has not received notice of any threatened actions, suits or proceeding or
investigations against Borrower or any existing Facility at law or in equity, or
before any governmental board, agency or authority which, if determined
adversely to Borrower, would materially and adversely affect an existing
Facility or title to a Facility (or any part thereof), the right to operate a
Facility as presently operated, or the financial condition of Borrower; [iii]
there are no unsatisfied or outstanding judgments against Borrower or any
existing Facility; [iv] there is no labor dispute materially and adversely
affecting the operation or business conducted by Borrower or any existing
Facility; and [v] Borrower does not have knowledge of any facts or circumstances
which might reasonably form the basis for any such action, suit, or proceeding.
4.6 Financial Statements4.6 Financial Statements. Borrower has
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furnished Lender with true, correct and complete copies of the Financial
Statements. The Financial Statements fairly present the financial position of
Borrower as of the respective dates and the results of operations for the
periods then ended in conformance with generally accepted accounting principles
applied on a basis consistent with prior periods. The Financial Statements are
true, complete and correct and, as of the Effective Date, no material adverse
change has occurred since the furnishing of such statements and information. As
of the Effective Date, the Financial Statements and other information do not
contain any material untrue statement or omission of a material fact and are not
misleading in any material respect. Borrower is solvent, and no bankruptcy,
insolvency, or similar proceeding is pending or contemplated by or, to the best
of its knowledge, against Borrower.
4.7 Reports, Statements and Copies4.7 Reports, Statements and Copies.
---------------------------------
All reports, statements, certificates and other data furnished by or on behalf
of Borrower to Lender in connection with the Loan Documents, or the transactions
contemplated thereunder, and all representations and warranties made therein, or
any certificate or other instrument delivered in connection 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 therein, in light of
the circumstances under which they are made, not misleading as of the date of
such reports, statements or certificates or other data. The copies of all
agreements and instruments submitted to Lender are true, correct and complete
copies and include all material amendments and modifications of such agreements.
4.8 No Default4.8 No Default. As of the Effective Date, there is no
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existing Event of Default by Borrower under the Loan Documents and Borrower has
no knowledge that any event has occurred which, with the giving of notice or the
passage of time, would constitute or result in such an Event of Default.
4.9 ERISA4.9 ERISA. All plans [as defined in 4021(a) of the Employee
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Retirement Income Security Act of 1974 as amended or supplemented from time to
time ("ERISA")] for which Borrower is an "employer" or a "substantial employer"
[as defined in 3(5) and 4001(a)(2) of ERISA, respectively] are in compliance
with ERISA and the regulations and published interpretations thereunder. To the
extent Borrower 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] Borrower has not been deemed to be a
substantial employer as of the Effective Date.
4.10 Chief Executive Office4.10 Chief Executive Office. Borrower
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maintains its chief executive office and its books and records at the address
set forth in the introductory paragraph of this Agreement.
4.11 Affirmation of Lease4.11 Affirmation of Lease. Borrower affirms to
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Lender that all representations and warranties set forth in the Lease Documents
are true, complete and accurate.
ARTICLE 5: AFFIRMATIVE COVENANTSARTICLE 5: AFFIRMATIVE COVENANTS
5.1 Perform Obligations5.1 Perform Obligations. Borrower shall in
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accordance with the terms of the Loan Documents perform in all material respects
all of its obligations under the Loan Documents and the Lease Documents.
5.2 Documents and Information5.2 Documents and Information.
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5.2.1 Furnish Documents5.2.1 Furnish Documents. Borrower shall
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periodically during the term of the Loan deliver to Lender the Annual Financial
Statements, Periodic Financial Statements and other documents described on
Exhibit D within the specified time periods. With each delivery of Annual
Financial Statements and Periodic Financial Statements to Lender, Borrower shall
also deliver to Lender a certificate signed by the Chief Financial Officer of
Borrower in the form of Exhibit E.
5.2.2 Furnish Information5.2.2 Furnish Information. Borrower shall [i]
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promptly supply Lender with such information concerning its financial condition,
affairs and property, as Lender may reasonably request from time to time
hereafter; [ii] promptly notify Lender in writing of any condition or event that
constitutes a breach or event of default of any term, condition, warranty,
representation, or provisions of any Loan Document or any other Material
Obligation, and of any material adverse change in its financial condition; [iii]
maintain a standard and modern system of accounting; [iv] permit Lender or any
of its agents or representatives to have access to and to examine all of its
books and records regarding the financial condition of the Facility at any time
or times hereafter during business hours and on reasonable advance notice
subject to any applicable state or federal laws governing confidentiality of
patient or employee records; and [v] permit Lender to copy and make abstracts
from any and all of said books and records subject to any applicable state or
federal laws governing confidentiality of patient and employee records.
5.2.3 Further Assurances and Information5.2.3 Further Assurances and
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Information. Borrower shall, on request of Lender from time to time, execute,
deliver, and furnish documents as may be reasonably necessary to fully
consummate the transactions contemplated under this Agreement. Within 10
Business Days after a request from Lender, Borrower shall provide to Lender such
additional information in Borrower's control or possession regarding Borrower or
Borrower's financial condition as Lender, or any existing or proposed creditor
of Lender, or any auditor or underwriter of Lender, may reasonably require from
time to time, including, without limitation, a current Borrower's Certificate in
the form of Exhibit E.
5.2.4 Material Communications5.2.4 Material Communications. Borrower
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shall transmit to Lender, within five Business Days after receipt thereof, any
material communication affecting any existing Facility, the Loan Documents or
the Lease Documents and Borrower will promptly respond to Lender's inquiry with
respect to such information. Borrower shall promptly notify Lender in writing
after Borrower has actual knowledge of any threatened or existing litigation or
proceeding against, or investigation of, Borrower or any Facility that may
affect the right to operate a Facility or title to a Facility or Lender's
interest therein.
5.2.5 Requirements for Financial Statements5.2.5 Requirements for
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Financial Statements. Borrower shall meet the following requirements in
connection with the preparation of the financial statements: [i] all audited
financial statements shall be prepared in accordance with generally accepted
accounting principles consistently applied; [ii] all unaudited financial
statements shall be prepared in a manner substantially consistent with prior
audited and unaudited financial statements submitted to Lender; [iii] all
financial statements shall fairly present the financial condition and
performance for the relevant period in all material respects; [iv] the audited
financial statements shall include all notes to the financial statements and a
complete schedule of contingent liabilities and transactions with Affiliates;
and [v] the audited financial statements shall contain an unqualified opinion to
the extent set forth in the Lease.
5.3 Broker's Commission5.3 Broker's Commission. Borrower shall
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indemnify Lender from claims of brokers arising by the execution hereof or the
consummation of the transactions contemplated hereby and from expenses incurred
by Lender in connection with any such claims (including reasonable attorneys'
fees).
5.4 Existence5.4 Existence. Borrower shall maintain its existence to
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the extent and in accordance with the provisions set forth in the Lease.
5.5 Financial Covenants5.5 Financial Covenants. Borrower shall comply
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with the financial covenants applicable to Borrower as set forth in the Lease.
ARTICLE 6: NEGATIVE COVENANTSARTICLE 6: NEGATIVE COVENANTS
Until the Loan has been paid in full, Borrower covenants and agrees that
Borrower shall comply with each Negative Covenant applicable to Borrower as set
forth in the Lease.
ARTICLE 7: DEFAULT AND REMEDIESARTICLE 7: DEFAULT AND REMEDIES
7.1 Event of Default7.1 Event of Default. Any one or more of the
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following events shall constitute an "Event of Default" hereunder:
7.1.1 Borrower fails to pay any installment on the Note or any other
monetary obligation payable by Borrower under the Loan Documents within 10 days
after such payment is due.
7.1.2 Borrower fails to comply with any covenant set forth in 5.4, 5.5 or
Article 6 of this Agreement.
7.1.3 Borrower fails to observe and perform any other covenant, condition or
agreement under the Loan Documents to be performed by Borrower and [i] such
failure continuous for a period of 30 days after written notice thereof is given
to the Borrower by the Lender; or [ii] if, by reason of the nature of such
default the same cannot be remedied within the said 30 days, Borrower fails to
proceed with diligence reasonably satisfactory to Lender after receipt of the
notice to cure the same or, in any event, fails to cure such default within 60
days after receipt of the notice. The foregoing notice and cure provisions do
not apply to any Event of Default otherwise specifically described in any other
subsection of 7.1.
7.1.4 [i] The filing by Borrower of a petition under 11 U.S.C. or the
commencement of a bankruptcy or similar proceeding by Borrower; [ii] the failure
by Borrower within 60 days to dismiss an involuntary bankruptcy petition or
other commencement of a bankruptcy, reorganization or similar proceeding against
Borrower, or to lift or stay any execution, garnishment or attachment of such
consequences as will impair its ability to carry on its operation at a Facility;
[iii] the entry of an order for relief under 11 U.S.C. in respect of Borrower;
[iv] any assignment by Borrower for the benefit of its creditors; [v] the entry
by Borrower into an agreement of composition with its creditors; [vi] the
approval by a court of competent jurisdiction of a petition applicable to
Borrower in any proceeding for its reorganization instituted under the
provisions of any state or federal bankruptcy, insolvency, or similar laws; or
[vii] appointment by final order, judgment or decree of a court of competent
jurisdiction of a receiver of the whole or any substantial part of the
properties of Borrower (provided such receiver shall not have been removed or
discharged within 60 days of the date of his qualification).
7.1.5 [i] Any receiver, administrator, custodian or other person takes
possession or control of all or part of any Facility and continues in possession
for 60 days; [ii] any writ against all or part of any Facility is not released
within 60 days; [iii] any final judgment is rendered against all or part of any
Facility or Borrower which affects all or part of a Facility for the payment of
money in excess of $250,000.00 (exclusive of judgment amounts covered by
insurance) which is undismissed for 60 days (except as otherwise provided in
this Agreement) or such longer period during which execution of the same shall
have been stayed, appealed therefrom and cause the execution thereof to be
stayed during such appeal; [iv] all or a substantial part of the assets of
Borrower are attached, seized, subjected to a writ or distress warrant, or are
levied upon, or come into the possession of any receiver, trustee, custodian, or
assignee for the benefit of creditors and are not released within 60 days; [v]
Borrower is enjoined, restrained, or in any way prevented by court order, or any
proceeding is filed or commenced seeking to enjoin, restrain, or in any way
prevent Borrower from conducting all or a substantial part of its business or
affairs; or [vi] except as otherwise permitted hereunder, a final notice of
lien, levy, or assessment is filed of record with respect to all or any part of
a Facility and is not dismissed within 30 days.
7.1.6 Any material representation or warranty made by Borrower in the Loan
Documents, any security for the Loan, or any report, certificate, application,
financial statement or other instrument furnished by Borrower pursuant hereto or
thereto shall prove to be false, misleading or incorrect in any material respect
as of the date made.
7.1.7 [i] Borrower or any Affiliate defaults on any indebtedness or
obligation to Lender or any Lender Affiliate, any agreement with Lender or any
Lender Affiliate or any Affiliate Obligation; or [ii] Borrower defaults on any
Material Obligation which results in a material adverse effect on Borrower, and
any applicable grace or cure period with respect to default under such
indebtedness, obligation or agreement expires without such default having been
cured. This provision applies to all such indebtedness, obligations and
agreements as they may be amended, modified, extended, or renewed from time to
time.
7.2 Remedies on Default7.2 Remedies on Default. Whenever any Event of
---------------------
Default occurs, Lender may, in addition to any other remedies under the Loan
Documents, at law or in equity, take any one or more of the following remedial
steps concurrently or successively:
7.2.1 Acceleration7.2.1 Acceleration. Lender may declare the Loan to be
------------
immediately due and payable, without presentment of any kind, demand, notice of
dishonor, protest or other notice of any kind, all of which Borrower hereby
waives.
7.2.2 Other Remedies7.2.2 Other Remedies. Lender may take whatever
---------------
action at law or in equity as may appear necessary or desirable to collect any
monies then due and/or thereafter to become due.
7.2.3 Waiver7.2.3 Waiver. Without waiving any prior or subsequent Event
------
of Default, Lender may waive any Event of Default or, with or without waiving
any Event of Default, remedy any default.
7.2.4 Terminate Disbursement7.2.4 Terminate Disbursement. Lender may
-----------------------
terminate its obligation to disburse Loan proceeds.
ARTICLE 8: MISCELLANEOUSARTICLE 8: MISCELLANEOUS
8.1 Advances by Lender8.1 Advances by Lender. At any time and from time
------------------
to time, Lender may incur and/or pay and/or advance costs or expenses: [i]
which Lender is authorized or has the right (but not necessarily the obligation)
to incur or may incur under any Loan Document or any law; [ii] in exercising any
right or remedy provided under any Loan Document or in taking any action which
Lender is authorized to take under any Loan Document; [iii] which are required
to be paid by Borrower under any Loan Document, but which Borrower fails to pay
upon demand; or [iv] from which Borrower is required to hold Lender harmless
under any Loan Document, but from which Borrower fails to hold Lender harmless.
Any costs, expenses, or advances incurred or paid by Lender shall become part of
the Loan and, upon demand, shall be paid to Lender together with interest
thereon at the Default Rate (as defined in the Note) from the date of
disbursement by Lender.
8.2 [DELETED]8.2 [DELETED]
8.3 Construction of Rights and Remedies and Waiver of Notice and Consent8.3
---------------------------------------------------------------------
Construction of Rights and Remedies and Waiver of Notice and Consent.
8.3.1 Applicability8.3.1 Applicability. The provisions of this 8.3
-------------
shall apply to all rights and remedies provided by any Loan Document or by law
or equity.
8.3.2 Waiver of Notices and Consent to Remedies8.3.2 Waiver of Notices
-------------------------------------------
and Consent to Remedies. Unless otherwise expressly provided herein, any right
or remedy may be pursued without notice to or further consent of Borrower, both
of which Borrower waives.
8.3.3 Cumulative Rights8.3.3 Cumulative Rights. Each right or remedy
------------------
under the Loan Documents is distinct from but cumulative to each other right or
remedy and may be exercised independently of, concurrently with, or successively
to any other rights and remedies.
8.3.4 Extension or Modification of Loan8.3.4 Extension or Modification
-----------------------------------
of Loan. No extension of time for or modification of amortization of the Loan
shall release the liability or bar the availability of any right or remedy
against Borrower or any successor in interest, and Lender shall not be required
to commence proceedings against Borrower or any successor or to extend time for
payment or otherwise to modify amortization of the Loan secured by this
Agreement by reason of any demand by Borrower or any successor.
8.3.5 Right to Select Security8.3.5 Right to Select Security. Lender
---------------------------
has the right to proceed at its election against all security or against any
item or items of such security from time to time, and no action against any item
or items of security shall bar subsequent actions against any item or items of
security.
8.3.6 Forbearance Not a Waiver8.3.6 Forbearance Not a Waiver. No
---------------------------
forbearance in exercising any right or remedy shall operate as a waiver thereof;
no forbearance in exercising any right or remedy on any one or more occasion
shall operate as a waiver thereof on any further occasion; and no single or
partial exercise of any right or remedy shall preclude any other exercise
thereof or the exercise of any other right or remedy.
8.3.7 No Waiver8.3.7 No Waiver. Failure by Lender to insist upon the
----------
strict performance of any of the covenants and agreements herein set forth or to
exercise any rights or remedies upon default by Borrower hereunder shall not be
considered or taken as a waiver or relinquishment for the future of the right to
insist upon and to enforce by mandamus or other appropriate legal or equitable
remedy strict compliance by Borrower with all of the covenants and conditions
hereof, or of the rights to exercise any such rights or remedies, if such
default by Borrower is continued or repeated, or of the right to recover
possession of the Facility by reason thereof. To the extent permitted by law,
any two or more of such rights or remedies may be exercised at the same time.
8.3.8 No Continuing Waivers8.3.8 No Continuing Waivers. If any covenant
---------------------
or agreement contained in the Loan Documents is breached by Borrower and
thereafter waived by Lender, such waiver shall be limited to the particular
breach so waived and shall not be deemed to waive any other breach hereunder.
No waiver shall be binding unless it is in writing and signed by Lender. No
course of dealing between Lender and Borrower, nor any delay nor omission on the
part of Lender in exercising any rights under the Loan Documents, shall operate
as a waiver.
8.3.9 Approval Not a Waiver8.3.9 Approval Not a Waiver. Lender's review
---------------------
and approval of any contracts relating to a Facility shall not constitute a
waiver by Lender of any of the terms or requirements of the Loan Documents which
may conflict with any provision of any such contracts.
8.3.10 No Release8.3.10 No Release. Borrower and any other person now
-----------
or hereafter obligated for the payment or performance of all or any part of the
Note shall not be released from paying and performing under the Note by reason
of [i] the failure of Lender to comply with any request of Borrower (or of any
other person so obligated), to take action to enforce any of the provisions of
the Loan Documents, or [ii] the release, regardless of consideration, of the
obligations of any person liable for payment or performance of the Note, or any
part thereof, or [iii] any agreement or stipulation extending the time of
payment or modifying the terms of the Note, and in the event of such agreement
or stipulation, Borrower and all such other persons shall continue to be liable
under such documents, as amended by such agreement or stipulation, unless
expressly released and discharged in writing by Lender.
8.4 Assignment8.4 Assignment.
----------
8.4.1 Assignment by Lender8.4.1 Assignment by Lender. Lender may
----------------------
assign, negotiate, pledge, or transfer this Agreement, the Note and all other
Loan Documents to any creditors to secure a loan from such creditors to Lender
and, in case of such assignment, the rights and remedies of Lender shall be
enforceable against Borrower by such creditors with the same force and effect
and to the same extent as the same would have been enforceable by Lender but for
such assignment. Lender shall have the right to sell participation interests in
the Loan provided that Lender shall be designated the agent for all participants
in the Loan.
8.4.2 Assignment by Borrower8.4.2 Assignment by Borrower. Borrower
------------------------
shall not assign or attempt to assign its rights nor delegate its obligations
under this Agreement.
8.5 Notices8.5 Notices. Borrower and Lender hereby agree that all
-------
notices, demands, requests, and consents (hereinafter "notices") given pursuant
to the terms of this Agreement shall be in writing, shall be addressed to the
addresses set forth in the introductory paragraph of this Agreement and shall be
served by [i] personal delivery; [ii] United States mail, postage prepaid; [iii]
nationally recognized overnight courier; or [iv] by facsimile, provided that a
copy thereof is mailed by certified mail promptly thereafter. All notices shall
be deemed to be given upon the earlier of actual receipt (provided, that in the
case of facsimiles, any facsimile received after 5:00 p.m. local time shall be
deemed received on the next Business Day) or three days after deposit in the
United States mail or one Business Day after deposit with the overnight courier.
Any notices meeting the requirements of this Section shall be effective,
regardless of whether or not actually received. Lender and Borrower may change
their notice address at any time by giving the other party notice of such
change.
8.6 Entire Agreement8.6 Entire Agreement. This Agreement and the other
-----------------
Loan Documents constitute the entire agreement between Borrower and Lender with
respect to the subject matter hereof and supersedes all prior negotiations,
discussions or writings with respect thereto. No representations, warranties,
and agreements have been made by Lender except as set forth in this Agreement.
If there is any conflict between the terms and provisions of the Commitment and
the terms of this Agreement, this Agreement shall govern.
8.7 Severability8.7 Severability. If any term or provision of this
------------
Agreement is held or deemed by Lender 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.
8.8 Captions and Headings8.8 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.
8.9 Governing Law8.9 Governing Law. This Agreement shall be governed by
-------------
and construed under the laws of the State.
8.10 Binding Effect8.10 Binding Effect. This Agreement will be binding
---------------
upon and inure to the benefit of the successors and permitted assigns of Lender
and Borrower.
8.11 Modification8.11 Modification. This Agreement may only be modified
------------
by a writing signed by both Lender and Borrower. 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. If Borrower requests Lender's
consent to any change in ownership, merger or consolidation of Borrower, any
assumption of the Loan, or any modification of the Loan Documents, Borrower
shall provide Lender all relevant information and documents sufficient to enable
Lender to evaluate the request. In connection with any such request, Borrower
shall pay to Lender a fee in an amount equal to the lesser of $2,500.00 and
Lender's actual reasonable attorney's fees and expenses and other reasonable
out-of-pocket expenses incurred in connection with Lender's evaluation of
Borrower's request, the preparation of any documents and amendments, the
subsequent amendment of any documents between Lender and its collateral pool
lenders (if applicable), and all related matters.
8.12 Construction of Agreement8.12 Construction of Agreement. This
---------------------------
Agreement has been prepared by Lender and its professional advisors and reviewed
by Borrower and its professional advisors. Lender, Borrower 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 Lender
or Borrower or against either Lender or Borrower merely because of their efforts
in preparing it.
8.13 Counterparts8.13 Counterparts. This Agreement may be executed in
------------
multiple counterparts, each of which shall be deemed an original hereof.
8.14 No Third-Party Beneficiary Rights8.14 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 Borrower shall have
any rights to obtain or compel a disbursement of proceeds of the Loan hereunder.
8.15 Lender's Authority to Furnish Copies of Loan Documents8.15 Lender's
------------------------------------------------------
Authority to Furnish Copies of Loan Documents. Lender may exhibit or furnish
the Loan Documents or copies thereof to any potential transferee of the Secured
Obligations (whether such transfer is absolute or collateral), to any
governmental or regulatory authority in connection with any legal,
administrative or regulatory proceedings requiring the disclosure of the terms
of the Loan Documents, to Lender's attorneys, auditors and underwriters, and to
any other person or entity for which there is a legitimate business purpose for
such disclosure.
8.16 LENDER MERELY A LENDER8.16 LENDER MERELY A LENDER.
-------------------------
8.16.1 NO AGENCY8.16.1 NO AGENCY. LENDER IS NOT AND WILL NOT BE IN ANY
----------
WAY THE AGENT FOR OR TRUSTEE OF BORROWER. LENDER DOES NOT INTEND TO ACT IN ANY
WAY FOR OR ON BEHALF OF BORROWER IN DISBURSING THE PROCEEDS OF THE LOAN. LENDER
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
BORROWER'S RELATIONS WITH ANY CONTRACTORS, SUBCONTRACTORS, MATERIALMEN, OR
LABORERS PERFORMING WORK OR SUPPLYING MATERIALS FOR THE LAND AND IMPROVEMENTS.
8.16.2 NO OBLIGATION TO PAY8.16.2 NO OBLIGATION TO PAY. THIS AGREEMENT
---------------------
IS NOT TO BE CONSTRUED BY BORROWER OR ANYONE FURNISHING LABOR, MATERIALS, OR ANY
OTHER WORK OR PRODUCT FOR IMPROVING THE LAND AS AN AGREEMENT UPON THE PART OF
LENDER TO ASSURE THAT ANYONE WILL BE PAID FOR FURNISHING SUCH LABOR, MATERIALS,
OR ANY OTHER WORK OR PRODUCT. BORROWER SHALL BE SOLELY RESPONSIBLE FOR SUCH
PAYMENTS.
ARTICLE 9: SECURITYARTICLE 9: SECURITY
9.1 Secured by Mortgage9.1 Secured by Mortgage. This Loan shall be
---------------------
secured by the Mortgage.
9.2 Oral Agreements9.2 Oral Agreements. ORAL AGREEMENTS OR ORAL
----------------
COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FOREBEAR FROM ENFORCING REPAYMENT
OF A DEBT ARE NOT ENFORCEABLE UNDER THE LAWS OF THE STATE OF WASHINGTON.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Lender and Borrower have executed and delivered this
Agreement effective as of the Effective Date.
LENDER: HEALTH CARE REIT, INC.
By:
Title:
BORROWER: EMERITUS CORPORATION
By: Xxxxxxx X. Xxxxxxx
Tax I.D. No. 00-0000000 Title: Director of Real Estate Finance
ACKNOWLEDGEMENT OF AFFILIATES
The undersigned acknowledge the foregoing Loan Agreement and agree to
comply with all provisions of the Loan Agreement applicable to the undersigned,
including, without limitation, 2.3.
This acknowledgement is executed as of the Effective Date.
TEXAS-ESC-LUBBOCK, L.P.
By: ESC X.X. XX, Inc., its General Partner
By: Xxxxxxx X. Xxxxxxx
Title: Director of Real Estate Finance
EXHIBIT A: RESERVED
EXHIBIT B: DISBURSEMENT SCHEDULE
DISBURSED IN FULL ON EFFECTIVE DATE
EXHIBIT C: PENDING LITIGATION
[TO BE PROVIDED PER FACILITY]
EXHIBIT D: DOCUMENTS TO BE DELIVERED
Borrower shall deliver each of the following documents to Lender no
later than the date specified for each document:
1. Annual Financial Statement of Borrower - within 90 days after the end of
each fiscal year.
2. Periodic Financial Statement of Borrower - within 45 days after the end
of each quarter and 30 days after the end of each month.
3. Borrower's Certificate - with each delivery of Borrower's financial
statements.
4. Federal tax returns of Borrower - within 15 days after the filing of the
return. If the filing date is extended, also provide a copy of the extension
application within 15 days after filing.
oml\hcri\emeritus-ml\Loan-Amend - 3 - 9/11/03
EXHIBIT E: BORROWER'S CERTIFICATE
Report Period: Commencing _______________ and ending _______________
Loan: $25,800,000.00 loan made by Health Care REIT, Inc. ("Lender") to
Emeritus Corporation ("Borrower")
Borrower hereby certifies to Lender to the best of its knowledge as
follows:
1. The attached [specify audited or unaudited and annual or quarterly, and
------- --------- ------ ---------
if consolidated, so state] financial statements of Borrower [i] have been
------------
prepared in accordance with generally accepted accounting principles
---
consistently applied; [ii] have been prepared in a manner substantially
---
consistent with prior financial statements submitted to Lender; and [iii] fairly
---
present the financial condition and performance of Borrower in all material
respects.
2. To the best of my knowledge, Borrower was in compliance with all of the
provisions of the Loan Agreement and all other loan documents executed by
Borrower in connection with the Loan at all times during the Report Period, and
no default, or any event which with the passage of time or the giving of notice
or both would constitute a default, has occurred under the Loan.
Executed this ___ day of _______________, _____.
EMERITUS CORPORATION
By:
Name:
Title:
