AGREEMENT BETWEEN LIENHOLDERS
THIS AGREEMENT is made December 1, 1997, by and between Church Loans &
Investments Trust (hereinafter "Lender"), having a notice address at 0000
X-00 Xxxx, Xxxxxxxx, Xxxxx 00000, Colonial Trust Company, as Trustee for
the benefit of the Bondholders of Senior Retirement Communities, Inc.
(hereinafter "Trustee"), having a notice address at 0000 Xxxxx 00xx Xxxxxx,
Xxxxxxx, Xxxxxxxx Xxxxxx, Xxxxxxx 00000, and SENIOR RETIREMENT COMMUNITIES,
INC. of c/o The Arbor Group, L.L.C., 000 Xxxxxxx Xxxxxx, Xxxx Xxxxxx, Xxxxxx
of Xxxxxxxx, Xxxxxxxxx 00000 (hereinafter "Borrower").
WHEREAS, Lender has committed to loan and intends to loan to Borrower
the sum of $2,700,000.00 to be evidenced by a promissory note ("the Note")
executed by Borrower payable to Lender and secured by a first lien mortgage
against the real property of Borrower described on EXHIBIT "A" attached, as
well as a security interest in and to certain personal property of Borrower,
all of such real and personal property to be collateral for such loan and
hereinafter collectively referred to as "the collateral;"
WHEREAS, Lender may also make an interim construction loan to Borrower
for two additional projects; one in Bossier City, Louisiana and one in
Shreveport, Louisiana;
WHEREAS, the purpose of the present note is to provide interim financing
for the purposes of construction of the facility commonly referred to as
Senior Retirement Communities, Inc., Ruston, Louisiana to be located on U.S.
Highway 00, 0/0 xxxx xxxx xx Xxxxxx, Xxxxxxxxx; and the Note is to be paid
off from part of the proceeds of a bond offering in the total amount of
$9,000,000.00 ("the bonds") to be made by Borrower through MMR Investment
Bankers, Inc. (hereinafter "MMR") and for which Trustee has agreed to serve
as the Indenture Trustee pursuant to a Trust Indenture dated December 1, 1997
("the Trust Indenture").
WHEREAS, the balance of the bond proceeds are to be used for
construction of the Bossier City, Louisiana and Shreveport, Louisiana
projects or to payoff interim construction loans regarding such projects;
WHEREAS, the bonds are to be secured by the same collateral as that
securing the Note, as well as any other loan made by Lender to Borrower
regarding the Bossier City, Louisiana and Shreveport, Louisiana projects and
such liens securing the bonds are also to be a first lien of equal position
and parity as the liens securing the Note as well as any future interim
construction loans on the above mentioned projects;
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and agreements
herein contained, Lender, Trustee and Borrower do hereby agree as follows:
1. Equity of Liens. The parties do hereby agree that Borrower shall
execute one deed of trust or mortgage and security agreement and other
collateral documents as may be required by Lender or Trustee for the benefit
of both Lender and Trustee and that such collateral documents shall equally
secure both the Note and the bonds. The Note and the bonds shall both be
secured by first liens of equal position and parity and shall be governed by
the provisions of the deed of trust, mortgage, security agreement,
or other documents or instruments creating the same, as well as, the
provisions of this Agreement as hereinafter set forth.
2. Definition of Indebtedness. The indebtedness or loan as
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hereinafter referred to shall consist of both (i) the Note, and (ii) the
bonds. The interest of Lender and Trustee in the indebtedness shall vary as
their respective interests therein may from time to time appear.
3. Application of Payments. The parties agree that the proceeds of the
bonds will be used to pay the principal balance and accrued interest, to the
extent available, of the Note. On the tenth (l0th) day of each calendar
month during the term hereof, or more often at the Trustee's election,
Trustee will deliver to Lender, for payment on the Note, all proceeds
received from the sale of bonds, less brokerage fees and Trustee's fees,
attorney's fees related hereto, other expenses related to the bond offering,
and a sinking fund reserve not to exceed $250,000.00, until the Note is paid
in full. Lender acknowledges that Lender is aware of and consents to the
establishment of the sinking fund reserve in the amount of $250,000.00.
Borrower understands and agrees that bond proceeds may not be used for other
projects until the Note is paid in full. In the event that the Prospectus
pursuant to which the bonds are to be issued is inconsistent herewith, the
Trustee shall give notice of same to Lender and Borrower and all payments and
disbursement of bond proceeds to any person shall be withheld until such
inconsistency is resolved by the parties or court of law having appropriate
jurisdiction of same.
4. Procedures upon Default. Notwithstanding any provisions to the
contrary set forth or contained in (i) the Note, in (ii) the bonds, in (iii)
the Trust Indenture, or in (iv) the mortgage, security agreement or other
security instrument or document securing the payment of the indebtedness, in
the event of a default
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by Borrower under any of the terms and provisions of the instruments or
legal documents described above, at the election of either Lender or
Trustee all of the indebtedness, both the Note and the bonds, shall become
immediately due and payable in full. In the event of a default under either
portion of the loan, the party holding such defaulted portion of the loan
will give written notice to the other party within ten (10) days after
learning of such event of default. If either Trustee or Lender elects to
accelerate its portion of the loan as a result of any default, such party
shall likewise give written notice to the other party of such election prior
to taking any action thereon and, in such event, both Trustee and Lender
agree to accelerate their respective portion of the loan on such election by
either Trustee or Lender. In such event, all collection and foreclosure
actions or proceedings shall be conducted jointly by Lender and Trustee. All
legal fees, court costs and related expenses and all receipts from collection
and foreclosure hereunder shall be shared proportionately between Lender and
Trustee in the same proportion that the unpaid principal balance of each
party's portion of the loan bears to the unpaid principal balance of the
total loan; provided that, if the parties retain separate legal counsel to
assist in collection or foreclosure or if a party retains legal counsel in
addition to jointly-obtained counsel, then the party retaining such separate
or additional legal counsel shall pay the fees and expenses thereof. In the
event of a default under either portions of the loan, the Trustee and Lender
hereto agree to work together in good faith in attempting to make joint
decisions regarding such matters as collection attempts, foreclosure,
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selection of counsel, and maintenance and disposition of the collateral. In
the event of receipt of proceeds from the collateral, any such proceeds shall
be divided between Lender and Trustee based upon the unpaid principal balance
of each party' s portion of the loan bears to the unpaid principal balance of
the total loan.
5. Term. This Agreement shall continue until the earliest to
occur of: (a) payment in full of the Note and transfer of Lender's interest
in the collateral documents to Trustee; (b) a final, nonappealable judgement
has been entered foreclosing the collateral documents and the sale of the
collateral has been made and confirmed as required by law and the proceeds
from such sale disbursed to Lender and Trustee according to the terms hereof;
or (c) the mutual written agreement of the parties to terminate this
Agreement.
6. Enforcement. In any action brought to enforce or defend any of the
provisions of this Agreement, the prevailing party or parties shall be
entitled to recover its reasonable attorney's fees and expenses from any
other party in addition to other relief awarded.
7. Construction. This Agreement does not make any party the employee,
agent, partner or legal representative of any other party for any purpose
whatsoever. No party is granted any right or authority to assume or create
any obligation or responsibility, express or implied, on behalf of or in the
name of any other party.
8. Limitation on Advances By Lender. Lender agrees that the total
advances on its Note to Borrower shall not exceed $2,700,000.00. In the event
that the total advances on the Note by
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Lender to Borrower for purposes of Borrower's Ruston, Louisiana project does
exceed $2,700,000.00, then such advances made in excess of $2,700,000.00
shall be second in priority to the first lien securing the bonds and the
first $2,700,000.00 advanced pursuant to the Note.
9. Borrower's Indemnity. Borrower enters into this agreement hereby
agreeing to the arrangement between Lender and Trustee set forth herein in
all respects. Furthermore, Borrower does hereby agree to indemnify and hold
harmless the Trustee of and from any loss, expense, damages, costs,
attorney's fees or other liability incurred as a result of this agreement and
the transactions contemplated hereby, and does hereby release Trustee from
any liability or duty to inquire as to the validity of the Note owing to
Lender, the proper use of the proceeds of the Note or the adequacy of funding
documentation.
IN WITNESS WHEREOF, the parties have executed this instrument effective
the date first above written.
DATED December 1, 1997.
CHURCH LOANS & INVESTMENTS TRUST,
a Real Estate Investment Trust
BY: /S/XXXXX XXXXXX
------------------------------
M. Xxxxx Xxxxxx, Manager of
operations and Chief Financial
Officer
Colonial Trust Company, as Trustee
for the benefit of the Bondholders
of Senior Retirement Communities,
Inc.
By: /S/XXXXX X XXXXXXXX
--------------------------------
Xxxxx X. Xxxxxxxx, Vice President
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SENIOR RETIREMENT COMMUNITIES, INC.
BY: /S/XXXXXX X XXXXXXXX-XXXXXX
---------------------------------
XxXxxx X. Xxxxxxxx-Xxxxxx,
President
The State of Texas )
)
County of Potter )
This instrument was acknowledged before me on the 25 day of December, 1997
by M. Xxxxx Xxxxxx, Manager of Operations and Chief Financial Officer of
Church Loans & Investments Trust.
/S/XXXXXXXX XXXXXXX
----------------------------
Notary Public, State of Texas
The State of Arizona ) XXXXXXXX XXXXXXX
Notary Public,
County of Maricopa ) STATE OF TEXAS
My Commission Expires 4-14-2001
This instrument was acknowledged before me on the 19th day of December, 1997,
by Xxxxx X. Xxxxxxxx, Vice President of Colonial Trust Company, as Trustee
for the benefit of the Bondholders of Senior Retirement Communities, Inc.
OFFICIAL SEAL
BAHIA XXXXXX-XXXX /S/BAHIA XXXXXX-XXXX
NOTARY PUBLIC - STATE OF ARIZONA -----------------------------
MARICOPA COUNTY Notary Public, State ot Arizona
My Comm. Explres 0-00-00
Xxxxx xx Xxxxxxxxx )
)
Parish of Lincoln )
This instrument was acknowledged before me on the 1st day of December, 1997,
by XxXxxx X. Xxxxxxxx-Xxxxxx, President of SENIOR RETIREMENT COMMUNITIES,
INC.
/S/J XXXX XXXXXXX
--------------------------------
Notary Public, State of Louisiana
J. XXXX XXXXXXX, NOTARY PUBLIC
XXXXXXX PARISH, LOUISIANA
MY COMMISSION IS FOR LIFE
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EXHIBIT "A"
TOWNSHIP 18 NORTH RANGE 2 WEST
SECTION 20 Starting at the NW corner of the NE 1/4 of NW 1/4 and run East
for a distance of 660.00 feet, thence South to the North
Right-of-Way of U.S. Xxxxxxx Xx. 00 a distance of 1850.50 feet,
thence along the North Right of Way of U.S. Xxxxxxx Xx. 00 a
distance of 257.04 feet to the POINT OF BEGINNING, thence
North 00 degrees, 37 minutes, 40 Seconds West a distance of
200.01 feet; Thence South 83 Degrees, 16 Minutes, 18 Seconds
East, a distance of 150.00 feet; Thence North 00 Degrees, 37
Minutes, 40 Seconds West a distance of 532.00 feet; Thence North
83 Degrees, 16 Minutes, 18 Seconds, West a distance of 451.24
feet; Thence South 00 Degrees, 37 Minutes, 40 Seconds, East, a
distance 532.00 feet; Thence South 83 Degrees, 16 Minutes, 18
Seconds, East a distance of 150.00 feet; Thence South 00 Degrees
37 Minutes, 40 Seconds East a distance of 200.01 feet to the
North Right-of-Way Of U.S. Highway 80; Thence South 83 Degrees,
16 Minutes, 18 Seconds, East a distance of 151.04 feet to the
POINT OF BEGINNING, containing 6.2 acres more or less.
Exhibit A
