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Exhibit 10.4
FORM OF LEASEHOLD IMPROVEMENT AGREEMENT
AMONG
MEDITRUST COMPANY LLC
AND
BCC DEVELOPMENT AND MANAGEMENT CO.
AND
TC REALTY OF ____________, INC.
DATED AS OF JUNE 30, 1998
(____________)
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LEASEHOLD IMPROVEMENT AGREEMENT
AMONG
MEDITRUST COMPANY LLC
AND
BCC DEVELOPMENT AND MANAGEMENT CO.
AND
______________________________
SUMMARY OF TABLE OF CONTENTS
1. BACKGROUND
1.1 The Parties
1.1 The Land and Existing Improvements
1.3 The Facility Lease
1.4 Project
1.5 Lessor's Agreement to Fund the Project and Developer's
Agreement to Supervise the Project
1.6 Plans; the Architect and Architect's Contract
1.7 Construction Contracts
1.8 Schedule of Work and Completion Date; Schedule of Draws
1.9 Project Budget
1.10 Use of Project Funds
1.11 Lessee's Agreement to Pay Rent
1.12 Guarantees, Indemnities and Other Agreements
1.13 Access to the Leased Property
2. DEFINITIONS
3. FEES
3.1 Leasehold Improvement Fee
3.2 Development Fee
4. LEASE DOCUMENTS AND DEVELOPMENT DOCUMENTS; COLLATERAL
SECURITY
4.1 Lease Documents
4.2 Lease Obligations and Development Obligations
4.3 Collateral Security
5. REPRESENTATIONS AND WARRANTIES
5.1 Architect's Contract
5.2 Project Plans
5.3 Prior Construction Work
5.4 Suitability of Project Plans
5.5 Compliance with Legal Requirements and Applicable Agreements
5.6 Permits and Contracts
5.7 First Advance
5.8 Prior Services
6. COVENANTS
6.1 Collection and Enforcement Costs
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6.2 Agreements to Perform Certain Obligations
6.3 Continuing Effect of Representation and Warranties
6.4 Construction Covenants
6.4.01 Commencement of Construction
6.4.02 Quality of Materials and Workmanship
6.4.03 Project Budget
6.4.04 Architect Certificates
6.4.05 Subcontractors
6.4.06 The Lessor's Consultant
6.4.07 Title To Materials and Security Interest Granted
to Lessor
6.4.08 Compliance With Legal Requirements And Applicable
Agreements
6.4.09 Liens
6.4.10 Books And Records
6.4.11 Inspection Of Construction
6.4.12 Notice Of Delay
6.4.13 Bonds
6.4.14 Use of Project Funds
6.4.15 Occupancy of the Project
7. ADVANCES OF PROJECT FUNDS
7.1 Conditions Precedent to First Advance of Project Funds
7.2 The Lessor's Right to Advance
7.3 Submission of Requests for Advances
7.4 Advances by Wire Transfer
7.5 Conditions Precedent to All Advances
7.6 Completion of the Project
7.7 Condition of the Project
8. THE LESSOR'S RIGHT TO MAKE PAYMENTS AND TAKE OTHER ACTION
9. INSURANCE; CASUALTY; TAKING
9.1 General Insurance Requirements
9.2 Fire or Other Casualty or Condemnation
10. EVENTS OF DEFAULT
11. REMEDIES IN EVENT OF DEFAULT
12. GENERAL
13. TERM
EXHIBIT A DESCRIPTION OF THE LAND
EXHIBIT B PLANS AND SPECIFICATIONS
EXHIBIT C SCHEDULE OF CONSTRUCTION
EXHIBIT D PROJECT BUDGET
EXHIBIT E DEFINITIONS
EXHIBIT F FUTURE PERMITS AND CONTRACTS REQUIRED FOR COMPLETION OF
CONSTRUCTION AND COMMENCEMENT OF OPERATION
EXHIBIT G SURVEY
EXHIBIT H SURVEYOR'S CERTIFICATE
EXHIBIT I ARCHITECT'S CERTIFICATE AND CIVIL ENGINEER'S CERTIFICATE
EXHIBIT J BCC DEVELOPMENT AND MANAGEMENT CO. REQUISITION CERTIFICATE
EXHIBIT K GENERAL CONTRACTOR'S REQUISITION CERTIFICATE
EXHIBIT L ARCHITECT'S REQUISITION CERTIFICATE
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LEASEHOLD IMPROVEMENT AGREEMENT (____________)
THIS LEASEHOLD IMPROVEMENT AGREEMENT is made as of June 30, 1998 by and
among BCC DEVELOPMENT AND MANAGEMENT CO., a Delaware corporation (the
"Developer"), TC REALTY OF ____________ INC., a Delaware corporation (the
"Lessee"), and MEDITRUST COMPANY LLC, a Delaware limited liability company (the
"Lessor").
1. BACKGROUND
1.1. THE PARTIES.
The Lessee is a Delaware corporation. The Developer is (a) a Delaware
corporation with a principal place of business at 0000 Xxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000 and (b) a wholly-owned subsidiary of the
Guarantor (as hereinafter defined). The Guarantor is a Delaware corporation with
a principal place of business at 0000 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxxxx,
Xxxxxxxxxxxx 00000.
1.2. THE LAND AND EXISTING IMPROVEMENTS.
The Lessor is the owner of a certain parcel of land located in
_____________________________ and more particularly described on EXHIBIT A (the
"Land"), together with the existing buildings and other improvements, if any,
located thereon (collectively, the "Existing Improvements")
1.3. THE FACILITY LEASE.
The Lessor and the Lessee have entered into that certain Facility Lease
Agreement of even date herewith (the "Facility Lease") relating to the Land and
the Improvements (as hereinafter defined), a notice of which is to be recorded
with the Clerk of Circuit Court in and for _____________________________.
1.4. PROJECT.
The Lessor proposes to cause the Developer to construct an adult care
residence with ______ (__) licensed beds (located in ______ (__) units) and
certain other
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improvements more particularly described on the Project Plans (as hereinafter
defined), including, without limitation, accessory parking and landscaping on
the Land (collectively, the "Improvements"). The Land, the Existing Improvements
and the Improvements are collectively referred to herein as the "Project".
1.5. LESSOR'S AGREEMENT TO FUND THE PROJECT AND DEVELOPER'S
AGREEMENT TO SUPERVISE THE PROJECT.
The Lessee and the Lessor have agreed that the Project will be a
benefit to the premises demised under the Facility Lease and to the Lessee's and
the Lessor's respective interests therein. The Lessor and the Lessee have
further agreed that, pursuant to, and in accordance with, the terms and
conditions of this Agreement, the Lessor shall fund to the Developer an amount
not to exceed _____________________________________________________ DOLLARS
($_________.00) of the cost of the Project (the "Project Funds") and, in
accordance with the terms hereof, the Developer has agreed to supervise and
manage, the construction of the Project. Subject to the terms and conditions
hereof, the Lessor hereby agrees to advance to the Developer an amount not to
exceed the Project Funds to pay for the cost of the construction of the Project
and the Developer hereby agrees to supervise and manage the construction of the
Project; all pursuant to the terms and conditions of this Agreement.
1.6. PLANS; THE ARCHITECT AND ARCHITECT'S CONTRACT.
The Project is to be constructed and equipped in accordance with the
plans and specifications (collectively, the "Project Plans"), listed on EXHIBIT
B prepared by __________________________________ (the "Architect") pursuant to
the contract dated ________________, by and between the Developer and the
Architect (the "Architect's Contract"), as the same may be revised in accordance
with the terms hereof.
1.7. CONSTRUCTION CONTRACT.
All of the Improvements are to be constructed pursuant to a stipulated
sum contract (the "Construction Contract") dated ______________ by and between
the Developer and __________________________ (the "General Contractor"), as the
same may be revised in accordance with the terms hereof.
1.8. SCHEDULE OF WORK AND COMPLETION DATE; SCHEDULE OF DRAWS.
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The work necessary to complete and fully equip the Project is to be
(a) undertaken and completed in accordance with the schedule which is annexed
hereto as EXHIBIT C and (b) substantially completed by December 31, 1999 (the
"Completion Date").
1.9. PROJECT BUDGET.
The Developer has submitted to the Lessor and the Lessee a line item
budget (the "Project Budget"), a copy of which is annexed hereto as EXHIBIT D,
setting forth a total cost of ___________________________________ DOLLARS
($_________.00) for the acquisition cost of the Land and the design and
construction of the Project, including (a) the cost of the Land, (b) a breakdown
of construction costs (itemized as to trade category, subdivision of the work to
be performed and the names of each contractor), (c) a breakdown of all soft
costs in connection with the construction of the Project, including, without
limitation, costs for such items as real estate taxes, legal and accounting
fees, survey costs, permits and inspection fees, insurance premiums, architect's
and engineer's fees, marketing, management, leasing and advertising expenses,
and all amounts due in connection with the advance of Project Funds pursuant to
this Agreement, (d) the Working Capital Reserve (as hereinafter defined) in an
amount equal to the original principal balance of the Note (as hereinafter
defined), (e) a projected draw schedule and (f) a projected progress schedule
for the construction of the Project.
1.10. USE OF PROJECT FUNDS.
The Project Funds are to be used, to the extent sufficient therefore,
solely for the payment of Project costs set forth in the Project Budget. Without
limiting any other provision set forth herein, in the event that the total
amount of the Project Funds is not sufficient for the payment of the Project
costs set forth in the Project Budget (or the actual costs incurred in
connection with the completion of construction of the Project), the Developer
shall, nevertheless, remain obligated, at its sole cost and expense, to complete
the construction of the Project in accordance with the terms hereof.
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1.11. LESSEE'S AGREEMENT TO PAY RENT.
Subject to all of the terms, conditions and provisions of this
Agreement, and of the agreements and instruments referred to herein, the Lessee,
in consideration of the Lessor (a) arranging for the construction of the
Project, which shall inure to the benefit of the Lessee, and (b) advancing sums
hereunder to fund such construction, agrees to pay the Rent (as hereinafter
defined) due under the Facility Lease (as the same may from time to time be
adjusted pursuant to the terms and conditions set forth therein); it being
understood that the Lessee shall be liable for the payment of Rent regarding all
such sums as shall have been advanced by the Lessor from time to time under this
Agreement, including, without limitations, all amounts which the Lessor may,
but, is not obligated to advance, in excess of the Project Funds, pursuant to
the provisions of Section 6.1, Section 6.4.06, Section 8 and/or Section 11
hereof.
1.12. GUARANTIES, INDEMNITIES AND OTHER AGREEMENTS.
As an inducement to the Lessor to acquire the Land, enter into this
Agreement, advance the Project Funds and enter into the Facility Lease, (i) the
Guarantor has agreed to furnish certain guaranties as hereinafter described and
certain working capital loans as more particularly described in the Working
Capital Assurance Agreement (as hereinafter defined) and (ii) the Pledgor (as
hereinafter defined) has agreed to make equity contributions to the Lessee, in
amounts equal to the advances from time to time made to the Pledgor by the
Lessor under the Note, to provide the Lessee with funds to fulfill its working
capital obligations.
1.13. ACCESS TO THE LEASED PROPERTY.
Without limiting any provisions set forth in this Agreement or any of
the other Lease Documents with respect to the Lessor's rights of access to the
Leased Property, the Lessee shall allow the Developer and the Developer's
agents, contractors, subcontractors, employees, representatives, consultants and
invitees to have such access to the Leased Property as the Developer deems
necessary in order to allow the Developer to complete the construction of the
Project in accordance with the terms hereof and to perform all of its
obligations hereunder.
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2. DEFINITIONS
In this Agreement, except as otherwise expressly provided in the text
of this Agreement or unless the context otherwise requires, all capitalized
terms shall have the meaning ascribed to them in EXHIBIT E.
3. FEES.
3.1. LEASEHOLD IMPROVEMENT FEE.
The Lessee shall pay the Leasehold Improvement Fee to the Lessor
simultaneously with the execution of this Agreement (which Leasehold Improvement
Fee shall be included in the Project Budget and shall be advanced hereunder in
connection with the initial advance of the Project Funds); provided, however,
that, at the Lessor's option, the Leasehold Improvement Fee shall be held in an
escrow account established with a Person designated by the Lessor pursuant to an
escrow arrangement satisfactory to the Lessor, with interest thereon benefiting
the Lessor. If the Lessor exercises its option to require that the Leasehold
Improvement Fee be held in such an escrow account (a) the Leasehold Improvement
Fee shall be disbursed from said escrow account only upon the joint instructions
of the Lessee and the Lessor (which instructions from the Lessee shall be
immediately given upon the request of the Lessor) and in no event shall the
Leasehold Improvement Fee be disbursed therefrom, in whole or in part, unless
and until so requested by the Lessor and (b) the Lessor shall bear the risk of
loss of or misappropriation of the Leasehold Improvement Fee by such escrow
agent.
3.2. DEVELOPMENT FEE.
As compensation for the performance of the Developer's obligations
hereunder, the Lessor agrees that the Development Fee shall be included within
the Project Budget and shall be payable to the Developer, subject to the
Lessor's right to set-off any amounts owed to the Lessor by the Developer
hereunder or under any of the other Development Documents, as follows: (a)
___________________________ DOLLARS ($_______.00) upon the first advance of
Project Funds hereunder and (b) from and after the completion of seventy-five
percent (75%) of the Project, the remainder of the Development Fee shall be
disbursed in equal installments in connection with the monthly advances of
Project Funds. Notwithstanding the foregoing, the Lessee acknowledges and agrees
that any amounts that are set-off by the Lessor against the sums that are due
hereunder from the Developer to the Lessor, shall nevertheless, for all purposes
of this Agreement, be deemed to have been advanced hereunder (even if the
aggregate amount of
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such sums so advanced and all amounts previously advanced hereunder exceed the
amount of the Project Funds which the Lessor has agreed to advance hereunder)
and the Lessee agrees to pay to the Lessor Rent under the Facility Lease,
calculated, in part, thereunder based upon all sums advanced hereunder.
4. LEASE DOCUMENTS; COLLATERAL SECURITY
4.1. LEASE DOCUMENTS AND DEVELOPMENT DOCUMENTS.
The Project Funds shall be advanced, evidenced and administered, in
accordance with the terms of this Agreement and shall be secured and governed by
all of the terms, conditions and provisions of each of the following:
A. this Agreement;
B. a Collateral Assignment of Permits, Approvals, Licenses,
and Contracts of even date granted by the Developer to the
Lessor (the "Developer Permits Assignment") and related UCC
Financing Statements;
C. an Environmental Indemnity Agreement of even date by and
among the Lessee, the Developer, and the Lessor (the
"Environmental Indemnity Agreement");
D. a Guaranty of even date executed by the Guarantor for the
benefit of the Lessor guarantying the completion of the
Project and the satisfaction of the other Guarantied
Obligations (the "Guaranty");
E. an Assignment of Construction Contract granted by the
Developer to the Lessor and containing the consent of the
General Contractor (the "Construction Assignment");
F. an Assignment of Architect's Contract of even date
granted by the Developer to the Lessor and containing the
consent of the Architect (the "Architect's Assignment"); and
G. all other documents, instruments, or agreements now or
hereafter evidencing or securing the obligations of the
Developer under this Agreement.
Items (A) through (G) above, as the same from time to time may be hereinafter
amended, modified or supplemented, are referred to herein as the "Development
Documents".
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The Lessee's obligations with respect to the Land and the Project shall
be evidenced, administered, secured and governed by all of the terms, conditions
and provisions of each of the following:
i. this Agreement;
ii. the Facility Lease;
iii. a Collateral Assignment of Permits, Approvals, Licenses,
and Contracts of even date granted by the Lessee to the Lessor
(the "Lessee Permits Assignment") and related UCC Financing
Statements;
iv. a Security Agreement of even date by and between the
Lessee and the Lessor (the "Security Agreement");
v. the Environmental Indemnity Agreement;
vi. a Deposit Pledge Agreement of even date by and between
the Lessee and the Lessor (the "Deposit Pledge Agreement");
vii. a Pledge Agreement of even date by and among the Lessee,
the Lessor and TC Realty Holding Company (the "Pledgor"),
pursuant to which the Pledgor granted the Lessor a security
interest in all of the outstanding capital stock of the Lessee
(the "Pledge Agreement") and related stock powers;
viii. an Affiliated Party Subordination Agreement of even date
by and among the Lessee, the Guarantor, the Current Manager,
the TC Realty Parties (as hereinafter defined) and the Lessor
(the "Affiliated Party Subordination Agreement");
ix. the Amended and Restated Agreement Regarding Related
Lease Transactions of even date by and among the Lessee, the
Tenant Parties and the Lessor (the "Agreement Regarding
Related Lease Transactions"); and
x. all other documents, instruments, or agreements now or
hereafter evidencing or securing the obligations of the Lessee
under this Agreement and/or the Facility Lease, including,
without limitation, the First Leasehold Mortgage (as
hereinafter defined) and the Lessee's Guaranty (as hereinafter
defined).
Items (i) through (x) above, as the same from time to time may be hereinafter
amended, modified or supplemented, are referred to herein as the "Lease
Documents".
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4.2. LEASE OBLIGATIONS AND DEVELOPMENT OBLIGATIONS.
The Lessee agrees to pay and perform all of its indebtedness,
covenants, liabilities, obligations, agreements and undertakings under this
Agreement and all of the other Lease Documents (collectively, the "Lease
Obligations"). The Developer agrees to pay and perform all of its indebtedness,
covenants, liabilities, obligations, agreements and undertakings under this
Agreement and all of the other Development Documents (collectively, the
"Development Obligations").
4.3. COLLATERAL SECURITY.
The Lease Obligations shall be secured by the following:
A. a perfected first priority security interest in the Lessee's
interest in all Permits and Contracts pursuant to the Lessee
Permits Assignment;
B. a perfected first priority security interest in Tangible
Personal Property, Receivables and certain other Collateral
pursuant to the Security Agreement;
C. the Environmental Indemnity Agreement;
D. a perfected first priority security interest in all of the
outstanding capital stock of the Lessee pursuant to the Pledge
Agreement;
E. a perfected first priority interest in the Cash Collateral
pursuant to the Deposit Pledge Agreement;
F. all other security interests in such other property for which
provision is made in the Lease Documents or at law or in
equity; and
G. certain other Related Party Agreements.
All of the property in which security interests are granted (i) as described in
items (A) through (G) above and (ii) pursuant to any other Lease Document is
collectively referred to herein as the "Lessee Collateral".
The Development Obligations shall be secured by the following:
1. a perfected first security interest in the Developer's
interest in all Permits and Contracts pursuant to the
Developer Permits Assignment;
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2. the Guaranty;
3. the Environmental Indemnity Agreement; and
4. all other security interests in such other property for
which provision is made in the Development Documents or at law
or in equity.
All of the property in which security interests are granted (i) as
described in items (1) through (4) above and (ii) pursuant to any other
Development Document is collectively referred to herein as the "Developer
Collateral."
5. REPRESENTATIONS AND WARRANTIES
In order to induce (a) the Lessor to advance the Project Funds pursuant
to the terms and conditions of this Agreement and (b) the Lessee to agree to be
liable for the payment of Rent regarding such sums as shall have been advanced
from time to time under this Agreement, the Developer represents and warrants to
the Lessor and the Lessee that:
5.1. ARCHITECT'S CONTRACT.
The Architect's Contract has been validly executed by and is binding
upon the parties thereto and is in full force and effect in accordance with the
terms thereof. All of the parties to the Architect's Contract have faithfully
performed all of their respective obligations thereunder to the extent accrued
as of the date hereof, and none of the parties to the Architect's Contract has
asserted any claim of default thereunder.
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5.2. PROJECT PLANS.
The two (2) copies of the Project Plans delivered to the Lessor and the
Lessee by the Developer (a) are true and correct and satisfactory to the
Developer and (b) have been filed with and approved by all appropriate
Governmental Authorities. All necessary Permits relating to the Project Plans to
be issued or granted by any applicable Governmental Authority having or claiming
jurisdiction over the Leased Property have been obtained and all such Permits
are in full force and effect, are not subject to any unexpired appeal periods or
any appeals or challenges which have not been fully resolved in favor of the
Leased Property, the Project or Developer, as the case may be, and do not
contain any conditions or terms relating to the Leased Property which have not
been fully satisfied or which will not be fully satisfied by the completion of
the construction of the Project (in accordance with the Project Plans and the
terms and provisions of this Agreement). Furthermore, the Project Plans have
been approved in writing by the Lessor and the Lessee, any construction
heretofore performed on the Project has been performed in accordance with the
Project Plans and all future construction on the Project shall be performed in
accordance with the Project Plans and the terms and conditions of this
Agreement. There are no structural defects in the Project of which the Developer
has been advised or of which the Developer has notice or knowledge. The
Developer has not received any notice claiming that, and the Developer has no
knowledge that, the Project Plans violate any Legal Requirement.
5.3. PRIOR CONSTRUCTION WORK.
No Person has commenced or performed any construction work or furnished
any services in connection with any construction carried on or to be carried on
at the Leased Property meaning, without limitation, that no lumber, brick, pipe,
tile or other building material has been delivered to the Leased Property, there
has been no grading or excavating of the Leased Property, no lines or grade
stakes have been laid out, and no existing structure has been demolished, and no
Person will commence or perform any such construction work or services or
furnish such materials on the Leased Property until after this Agreement, the
Facility Lease and the other Lease Documents have been executed by all parties
thereto and a memorandum or notice of the Facility Lease has been filed of
record in the office of the Clerk of the Circuit Court in the county in which
the Leased Property is situated.
5.4. SUITABILITY OF PROJECT PLANS.
The Project Plans provide (a) for the construction and renovation of
all buildings and related improvements necessary, both legally and practically,
for the proper and
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efficient construction of the Project in accordance with the terms of this
Agreement and (b) after the completion of the construction of the Project, for
the operation of the Project for its Primary Intended Use.
5.5. COMPLIANCE WITH LEGAL REQUIREMENTS AND APPLICABLE
AGREEMENTS.
Upon the completion of construction of the Project, which shall be
constructed in accordance with the Project Plans and the terms and provisions of
this Agreement, the Project shall be in compliance with (a) all Legal
Requirements; (b) all Permits and Contracts and (c) all applicable by-laws,
codes, rules, regulations and restrictions of the Board of Fire Underwriters or
other insurance underwriters or similar bodies.
5.6. PERMITS AND CONTRACTS.
All Permits and Contracts required by or entered into with any
Governmental Authority or quasi-governmental authority or agency for, or in
connection with, the construction of the Project that can be obtained in the
ordinary course as of the date hereof have been obtained or executed, as the
case may be. All such Permits and Contracts are in full force and effect, are
not subject to any unexpired appeal periods or any appeals or challenges which
have not been conclusively resolved in favor of any member of the Leasing Group,
and do not contain any conditions or terms which have not been fully satisfied
or which will not be fully satisfied by the completion of the construction of
the Project (if constructed in accordance with the Project Plans and the terms
and provisions of this Agreement). There is no action pending, or, to the best
knowledge and belief of the Developer, recommended by the applicable
Governmental Authority having jurisdiction thereof, either to revoke, repeal,
cancel, modify, withdraw or suspend any such Permit or Contract relating to the
construction of the Project, or any other action of any other type which would
have a material adverse effect on the Project. All other Permits and Contracts
required for the completion of the construction of the Project and the
commencement of the operation of the Facility are described on EXHIBIT F and the
Developer knows of no impediment to the future issuance or execution of such
Permits and Contracts and has no reason to believe that such Permits and
Contracts will not be obtained as and when needed.
5.7. FIRST ADVANCE.
As of the date of the first advance of Project Funds to the Developer
pursuant to this Agreement, the amount of the money expended by the Developer on
account of the construction of the Project in accordance with the Project Plans
and the items listed on Project Budget will not be less than the amount of such
first advance.
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5.8. PRIOR SERVICES.
Prior to the date of this Agreement, the Developer has performed the
following services in connection with the Project:
(a) completing a market analysis to confirm bed need;
(b) finding a suitable site and obtaining rights thereto;
(c) obtaining the Project Plans;
(d) retaining and supervising engineers, architects, land
planners, surveyors, consultants, independent contractors,
subcontractors, attorneys, service agents, suppliers and other
providers of materials or services;
(e) pursuing with the appropriate Governmental Authorities
obtaining any necessary Permits to allow the use and
development of the Project in a manner reflected in the
Project Plans and as required hereunder;
(f) negotiating and/or entering into contracts for labor,
materials and services;
(g) coordinating with all applicable Governmental Authorities
and securing all necessary Permits to allow the use of the
Project in accordance with its Primary Intended Use;
(h) negotiating for the provision of utilities to serve the
Leased Property and the Project;
(i) creating and filing and, where required, arranging for the
execution of any easements, plats, maps, plans, declarations
of covenants and restrictions, right-of-way deeds and other
similar instruments necessary to the development of the
Project.
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6. COVENANTS
6.1. COLLECTION AND ENFORCEMENT COSTS.
Upon demand, the Developer and the Lessee shall reimburse the Lessor
for all costs and expenses, including, without limitation, attorneys' fees and
expenses and court costs, paid or reasonably incurred by the Lessor in
connection with the collection of any sum due hereunder, or in connection with
the enforcement of (a) any of the Lessor's rights under this Agreement and/or
any of the other Development Documents and/or (b) the obligations of the
Developer and/or any other member of the Leasing Group under this Agreement or
any of the other Development Documents. Any amount due and payable to the Lessor
pursuant to the provisions of this Section shall be a demand obligation and, to
the extent permitted by law, shall be added to the Development Obligations and
the Lease Obligations and shall be secured by the Liens created by the
Development Documents and the Lease Documents as fully and effectively and with
the same priority as every other obligation of the Developer and/or the Lessee,
as the case may be, secured thereby and, if not paid within ten (10) days after
demand, shall thereafter, to the extent permitted by applicable law, bear
interest at the Overdue Rate until the date of payment. The obligations of the
Developer and the Lessee to pay all costs, charges and sums due hereunder shall
continue in full force and effect and in no way shall be impaired, until the
actual payment thereof to the Lessor. In the event of (a) a sale, conveyance,
transfer or other disposition of the Leased Property, (b) any further agreement
given to secure the payment of the obligations set forth herein or (c) any
agreement or stipulation extending the time or modifying the terms of payment
set forth herein; the Developer and the Lessee shall nevertheless remain
obligated to pay their respective indebtedness evidenced by this Agreement, as
extended or modified by any such agreement or stipulation, unless the Developer
and/or the Lessee, as the case may be, are released and discharged from such
obligation by a written agreement executed by the Lessor. Notwithstanding the
foregoing, and without limiting any other provision set forth in this Agreement,
at the Lessor's option, all amounts due and payable hereunder may be advanced by
Lessor (even if the aggregate amount of such sums expended and all amounts
previously advanced hereunder exceed the amount of the Project Funds which the
Lessor has agreed to advance hereunder) and the Lessee agrees to pay to the
Lessor Rent under the Facility Lease, calculated, in part, thereunder based upon
all sums advanced hereunder.
6.2. AGREEMENTS TO PERFORM CERTAIN OBLIGATIONS.
(a) The Developer agrees faithfully to perform, pay and observe all
agreements, covenants, indebtedness, obligations and liabilities of the
Developer to the Lessor, whether such agreements, covenants, indebtedness,
obligations and liabilities are direct or indirect, absolute or contingent, due
or to become due, existing or hereafter arising, including,
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without limitation, all of the Developer's obligations under all of the
Development Documents. The payment of all obligations and the performance of all
covenants of and agreements by the Developer under the Development Documents
shall be absolute and unconditional, irrespective of any defense or any rights
or set-off, recoupment or counterclaim the Developer might otherwise have
against the Lessor, and the Developer shall pay absolutely net during the Term
all payments to be made as prescribed in all of the Development Documents, free
of any deductions and without abatement, diminution or set-off.
(b) The Lessee agrees faithfully to perform, pay and observe all
agreements, covenants, indebtedness, obligations and liabilities of the Lessee
to the Lessor, whether such agreements, covenants, indebtedness, obligations and
liabilities are direct or indirect, absolute or contingent, due or to become
due, existing or hereafter arising, including, without limitation, all of the
Lessee's obligations under all of the Lease Documents. The payment of all
obligations and the performance of all covenants of and agreements by the Lessee
under the Lease Documents shall be absolute and unconditional, irrespective of
any defense or any rights or set-off, recoupment or counterclaim the Lessee
might otherwise have against the Lessor, and the Lessee shall pay absolutely net
during the Term all payments to be made as prescribed in the all of the Lease
Documents, free of any deductions and without abatement, diminution or set-off.
6.3. CONTINUING EFFECT OF REPRESENTATION AND WARRANTIES.
All representations and warranties contained in this Agreement shall
constitute continuing representations and warranties which shall remain true,
correct and complete throughout the Term and shall survive the expiration of the
Term.
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6.4. CONSTRUCTION COVENANTS.
6.4.1. COMMENCEMENT OF CONSTRUCTION.
The Developer shall commence construction of the Project
immediately upon the execution and delivery of this Agreement. The
Developer shall diligently and continuously cause the Project to be
constructed and completed and made ready for occupancy and use in
accordance with the Project Plans all in a manner satisfactory to the
Lessor on or before the Completion Date. Notwithstanding anything to
the contrary contained herein, the Developer shall be and shall remain
unconditionally liable to the Lessor for (a) the complete construction
of the Project in accordance with the Project Plans on or before the
Completion Date and whether or not proceeds of the Project Funds
remaining to be disbursed hereunder, if any, are sufficient to cover
all costs of construction and (b) the complete performance of all other
obligations, covenants, agreements and liabilities of the Developer
hereunder.
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6.4.2. QUALITY OF MATERIALS AND WORKMANSHIP.
The materials used in the Project shall be of the quality
called for by the Project Plans, and the workmanship shall be in
conformity with the Construction Contract and this Agreement, and both
the quality of such materials and such workmanship shall be
satisfactory to the Lessor. The Developer shall not make any changes
in, and shall not permit the General Contractor or the Architect to
make any changes in, the quality of such materials, the Project Plans
or the Project Budget, whether by change order or otherwise, without
the prior written consent of the Lessor, in each instance (which
consent may be withheld in the Lessor's sole and absolute discretion);
provided, however, that such consent shall not be required for any
individual change (necessitated by job conditions) which has been
approved by the Architect, which does not materially affect the
structure or exterior of the Project, and the cost of which does not
exceed TWENTY-FIVE THOUSAND DOLLARS ($25,000) or which changes, in the
aggregate, do not exceed TWO HUNDRED THOUSAND DOLLARS ($200,000) in
cost. Notwithstanding the foregoing, prior to making any change in the
Project Plans, copies of all change orders shall be submitted by the
Developer to the Lessor and the Lessee, and the Developer shall also
deliver to the Lessor and the Lessee evidence satisfactory to the
Lessor, in its reasonable discretion, that all necessary Permits and/or
Contracts required by any Governmental Authority in connection
therewith have been obtained or entered into, as the case may be. The
Lessee acknowledges and agrees that the Developer may make any changes
in, and may permit the General Contractor and the Architect to make any
changes in, the quality of the materials for the Project, the Project
Plans or the Project Budget without the Lessee's consent provided that
(a) the Lessor's consent to any such change is not required hereunder
or (b) the Developer has obtained the Lessor's consent to any such
change.
6.4.3. PROJECT BUDGET.
Upon the request of the Lessor, the Developer shall furnish
the Lessor and the Lessee with revisions for the Project Budget to
reflect (a) any changes approved by the Lessor to the Project Budget,
(b) the total cost of the construction of the Project completed through
any specific date and (c) the remaining cost to complete the
construction of the Project in accordance with the Project Plans and
the terms and provisions of this Agreement. The Lessee acknowledges
that any such revisions to the Project Budget that are provided to it
pursuant to the terms hereof shall be furnished to the Lessee for
informational purposes only.
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6.4.4. ARCHITECT CERTIFICATES.
The Developer agrees to cause the Architect to furnish to the
Lessor and the Lessee such statements as to progress and certificates
of completion as the Lessor may reasonably require from time to time
during such period as this Agreement may be in effect, all without
expense to the Lessor or the Lessee. The Lessee acknowledges that any
such statements and certificates that are provided to it pursuant to
the terms hereof shall be furnished to the Lessee for informational
purposes only. The Developer agrees to cause the Architect to make the
Project Plans available to the Lessor without expense to the Lessor,
and to agree that, in the event that the Lessor shall take over the
Project by reason of an occurrence of an Event of Default, the Lessor
shall be entitled to use said Project Plans without any additional
compensation to the Architect above what is required (and was not
previously paid) under the Architect's Contract.
6.4.5. SUBCONTRACTORS.
Within sixty (60) days after the date of the execution of this
Agreement, the Developer agrees to provide the Lessor with a list of
the major subcontractors working on the Project, including an
identification by trade and the amount of each subcontract. The Lessor
reserves the right of reasonable approval of all subcontractors
(collectively, the "Major Subcontractors") under any subcontract the
aggregate amount due under which is equal to or greater than ONE
HUNDRED THOUSAND DOLLARS ($100,000). The Lessee acknowledges that the
Lessee shall have no rights of approval with respect to any
subcontractor. The Developer further agrees that the Developer shall
not permit any Major Subcontractors working on the Project to change
without the Lessor's prior written consent, in each instance, which
consent shall not be unreasonably withheld.
6.4.6. THE LESSOR'S CONSULTANT.
The Developer agrees to pay, from the Project Funds to be
advanced hereunder, the costs and expenses reasonably incurred by the
Lessor to retain the Consultants to perform various services to the
Lessor in connection with the construction of the Project and the
advances of Project Funds contemplated hereunder (or, to pay the Lessor
to perform the services that would otherwise be performed by the
Consultants), including, without limitation, the following:
A. to review and analyze the Project Plans and advise
the Lessor whether the same are satisfactory for the
intended purposes thereof;
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B. to make periodic inspections of the Leased Property
for the purpose of assuring that construction
performed in connection with the Project prior to the
date of such inspection has been completed in
accordance with the Project Plans and this Agreement;
C. to review the Developer's then current requisition to
determine whether it is consistent with the
obligations of the Developer under this Agreement,
and to advise the Lessor of the anticipated costs of,
and the time for, the completion of the Project in
accordance with the Project Plans, and the adequacy
of reserves and contingencies related thereto;
D. to review and analyze any proposed changes to the
Project Plans and advise the Lessor regarding the
same;
E. to review and analyze the Project Budget and advise
the Lessor as to the sufficiency thereof; and
F. to review and analyze the Architect's Contract,
Construction Contract and all subcontracts entered
into by the Developer or the General Contractor in
connection with the construction of the Project and
advise the Lessor regarding the same.
Except as otherwise expressly provided herein, the Developer
agrees promptly to make such changes or corrections, or to cause the
General Contractor to make such changes or corrections, in the
construction of the Project as may be required by the Lessor, based on
the recommendation of any of the Consultants, unless the Developer
demonstrates to the Lessor's satisfaction that such corrective work is
inconsistent with the Project Plans.
6.4.7. TITLE TO MATERIALS AND SECURITY INTEREST GRANTED
TO LESSOR.
Except as otherwise expressly provided herein, the Developer
shall not suffer or permit the use in connection with any construction
relating to the Project of any materials, fixtures or equipment
intended to become part of the Project which are purchased upon lease
or conditional xxxx of sale or to which the Developer does not have
absolute and unencumbered title. The Developer covenants to cause to be
paid punctually all sums becoming due for labor, materials, fixtures or
equipment used or purchased in connection with any such construction
and, in recognition of the fact that it is intended that the Project
Funds be used to pay for the cost of the construction of the Project on
behalf of the Lessor, the Developer agrees that title to all materials,
fixtures and equipment that are incorporated into the Improvements
shall automatically pass to the Lessor
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upon such incorporation without the need for the execution or delivery
of any further instrument of conveyance.
Notwithstanding the foregoing, in order to more fully secure
the Lessor with reference to all advances of Project Funds made
hereunder, the Developer hereby conveys to the Lessor a security
interest in all of the Developer's right, title and interest in
materials on the Leased Property which are not at any relevant time
incorporated into the Project and materials, wherever located, intended
for incorporation into the Project. The Developer agrees:
A. that the Lessor shall have all the
rights, with reference to such security, as a secured
party is entitled to hold with reference to any
security interest under the UCC;
B. that such security interest shall cover
cash and non-cash proceeds of such materials;
C. that such materials will not be held for
sale to others or disposed of by the Developer
without the prior written consent of the Lessor and,
if at any time located on the Leased Property shall
be suitably stored, secured and insured and
furthermore, shall not be removed from the Leased
Property; and
D. that such security interest shall be
prior to the rights of any other Person.
The undertakings of the Developer in this Section shall also
be applicable to any personal property owned by the Developer and used
(or to be used) in connection with the Project, whether or not the
purchase thereof was financed by advances of Project Funds made by the
Lessor.
The Developer agrees to execute such instruments as the Lessor
may from time to time request to perfect the security interest of the
Lessor in any and all rights under this Agreement and the other
Development Documents, and any and all property of the Developer which,
under applicable provisions of this Agreement and/or any of the other
Developer Documents, may or shall stand as security for advances of
Project Funds under this Agreement and for the complete payment and
performance of the Development Obligations.
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6.4.8. COMPLIANCE WITH LEGAL REQUIREMENTS AND APPLICABLE
AGREEMENTS.
The Developer, the Lessee, the Project Plans and the Leased
Property and all uses thereof (including, without limitation, the
construction of the Project) shall comply with (a) all Legal
Requirements, (b) all Permits and Contracts, (c) all applicable
by-laws, codes, rules, regulations and restrictions of the Board of
Fire Underwriters or other insurance underwriters or similar body, (d)
the Development Documents and (e) the Lease Documents.
6.4.9. LIENS.
The Leased Property shall at all times be free from any
attachment, encumbrance, lis pendens, mechanic's or materialmen's lien
or notice arising from the furnishing of materials or labor and, with
the exception of the Permitted Encumbrances, all other Liens of any
kind, except to the extent that any such Liens are being duly contested
in accordance with the terms of the Facility Lease or the terms hereof.
The Developer shall not permit the recording of any notice of contract
or mechanic's or materialmen's lien relating to construction of the
Project. Notwithstanding the foregoing provisions of this Section
6.4.09, the existence of an attachment or lis pendens for a period not
in excess of thirty (30) days shall not be deemed to be a default
hereunder provided that (a) there shall be no cessation of construction
of the Project, (b) an Event of Default has not occurred and (c) the
Developer shall proceed promptly to cause such attachment or lis
pendens to be removed, but the Lessor shall not be obliged to make any
further advance under this Agreement while such attachment or lis
pendens remains outstanding, unless a bond, satisfactory to the Lessor,
has been posted as security for such attachment or lis pendens.
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6.4.10. BOOKS AND RECORDS.
The Developer shall cause to be kept and maintained, and shall
permit the Lessor and its representatives to inspect at all reasonable
times, accurate books of accounts in which complete entries will be
made in accordance with GAAP reflecting all financial transactions of
the Developer (showing, without limitation, all materials ordered and
received and all disbursements, accounts payable and accounts
receivable in connection with the construction of the Project of the
Leased Property). Such books and records must accurately reflect that
all funds advanced hereunder for construction of the Project have been
used solely for the payment of obligations and expenses properly
incurred in connection with said construction in accordance with the
terms of the Project Budget.
6.4.11. INSPECTION OF CONSTRUCTION.
The Lessor and its representatives including, without
limitation, the Consultants, shall, at all times as long as this
Agreement remains in effect, have the right to enter the Leased
Property, upon reasonable notice to the Developer and at reasonable
times (except in the event of an emergency) for the purpose of
inspecting the Project and the progress of the work and materials
thereon, and if any such inspection reveals that the Developer is not
in compliance herewith (in its sole and absolute discretion), then the
Lessor shall not be obligated to make any further advances under this
Agreement to the Developer.
6.4.12. NOTICE OF DELAY.
The Developer shall give to the Lessor and the Lessee prompt
written notice of any fire, explosion, accident, flood, storm,
earthquake or other casualty or strike, lock out, act of God or
interruption of the construction of the Project which is reasonably
anticipated to interfere with the ability of the Developer to complete
the Project by the Completion Date.
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6.14.13. BONDS.
Within thirty (30) days after the execution of this Agreement,
performance, payment and xxxx xxxxx, in form and substance and
guaranteed by sureties satisfactory to the Lessor (in its sole and
absolute discretion), shall be obtained by the Developer in connection
with the Construction Contract in an amount at least equivalent to the
contract sum due under the Construction Contract, naming the Lessor as
a dual obligee and shall be furnished to the Lessor.
6.14.14. USE OF PROJECT FUNDS.
The Developer shall utilize all advances by the Lessor
pursuant to the terms of this Agreement only for those items for which
requisitions are permitted under this Agreement or for reimbursement of
expenditures already made for items for which requisitions are so
permitted. The Developer agrees to hold all advances by the Lessor
hereunder as a trust fund for the purpose of payment of the costs and
expenses permitted under this Agreement.
6.4.15. OCCUPANCY OF THE PROJECT.
The Developer and the Lessee shall not permit any occupancy of
the Project (other than such occupancy as is required in connection
with the construction thereto) prior to (a) the substantial completion
of that portion of the Project being occupied and (b) the issuance by
the appropriate Governmental Authorities of a Certificate of Occupancy
(or its equivalent) permitting the occupancy of the Project for its
Primary Intended Use. The Project shall not be deemed to have been
completed unless and until constructed in accordance with this
Agreement and a Certificate of Occupancy (or its equivalent) permitting
the occupancy of the Project for its Primary Intended Use has been
issued by the applicable Governmental Authorities.
6.5 CONSTRUCTION CONTRACT.
The Construction Contract is binding upon the parties thereto in
accordance with the terms thereof and shall remain in full force and effect. All
of the parties to the Construction Contract shall faithfully perform all of
their obligations thereunder.
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7. ADVANCES OF PROJECT FUNDS
7.1. CONDITIONS PRECEDENT TO FIRST ADVANCE OF PROJECT FUNDS.
Prior to the first advance of Project Funds contemplated by this
Agreement, and as a condition of the Developer's right to receive any of the
proceeds of the Project Funds, the following items shall have been furnished to
the Lessor at the Developer's sole cost and expense (which may be paid from the
initial advance of the Project Funds as long as such costs are included in the
Project Budget):
A. An owner's title insurance policy in form and substance
satisfactory to the Lessor, in its sole and absolute
discretion, issued by a title insurance company or companies
satisfactory to the Lessor (the "Title Company") with such
endorsements, reinsurance and/or co-insurance as the Lessor
may require, insuring the Lessor's fee title to the Leased
Property free from all Liens and without exception for (i)
filed or unfiled mechanics' liens, (ii) survey matters, (iii)
rights of parties in possession, (iv) environmental liens and
(v) any other matters of any kind or nature whatsoever other
than the Permitted Encumbrances (the "Title Policy");
B. Such evidence as the Lessor may require that the use
contemplated for the Project, and all of the improvements and
construction contemplated by the Project Plans, comply with
all applicable Legal Requirements, to the extent in force and
applicable;
C. Insurance policies and/or Certificates of Insurance
required pursuant to the terms and provisions of the Facility
Lease and this Agreement;
D. Such evidence as the Lessor may require to determine that
the total cost of completion of the Project in all respects,
including all related direct and indirect costs as previously
approved by the Lessor, will not exceed the total amount set
forth in the Project Budget;
E. Such evidence as the Lessor may require that the
Developer's representations and warranties contained herein
and in all of the other Development Documents are true and
correct in every material respect and such evidence as the
Lessor may require that the Lessee's representations and
warranties set forth in the Lease Documents are true and
correct in every material respect;
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F. Such evidence as the Lessor may require as to the
satisfaction of such of the terms and conditions of this
Agreement and of the other Development Documents as may by
their nature be satisfied prior to the making of such advance;
G. Such evidence as the Lessor may require that all
outstanding Impositions pertaining to the Leased Property have
been paid in full;
H. A current instrument survey, satisfactory in form and
content to the Lessor, prepared in accordance with the
requirements set forth in EXHIBIT G (the "Survey") and a
certificate substantially in the form of EXHIBIT H (the
"Surveyor's Certificate"), prepared and signed by a surveyor
licensed to do business in the state where the Leased Property
is located with his or her seal affixed thereto;
I. True and correct copies of the executed Architect's
Contract, all major subcontracts in effect with respect to the
Project and the executed Construction Contract, as well as all
receipted bills paid by the Developer to the General
Contractor and the Architect for goods and/or services
rendered with respect to the Project prior to the date hereof;
J. True and correct copies of (i) the Project Budget and
(ii) the Project Plans, each of which shall be in form and
content satisfactory to the Lessor (in its sole and absolute
discretion);
K. Certificates from engineers and an architect, registered as
such in the state where the Leased Property is located,
substantially in the forms attached hereto as EXHIBIT I,
certifying as to the (i) compliance of the Leased Property
with all applicable Legal Requirements, (ii) the availability
and adequacy of access/egress to and from the Leased Property
and (iii) the availability and adequacy of sewer, drainage,
water, electric and other utility services to the lot line of
the Leased Property; together with such other assurances
concerning the design of the Project as the Lessor may
require;
L. Opinions, in forms satisfactory to the Lessor (in its sole
and absolute discretion), addressed to the Lessor and the
Lessee from the Developer's counsel, the Lessee's counsel and
the Guarantor's counsel, regarding (i) the due execution,
authority and enforceability of the Development Documents and
the Lease Documents; (ii) the valid issuance of all Permits
required for the construction of the Project, the continuing
effectiveness of said Permits and the Developer's and
Project's compliance therewith and (iii) such other matters as
the Lessor may reasonably request (collectively, the
"Opinions");
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M. Payment of the Leasehold Improvement Fee (subject, however,
to the provisions of Section 3.1 hereof);
N. True and correct copies of all Permits and Contracts
relating to the construction and operation of the Project
(including, without limitation, an unconditional building
permit or a building permit that is subject only to such
conditions as will be fully satisfied by the completion of the
construction of the Project in accordance with the Project
Plans and this Agreement);
O. Such evidence as the Lessor may require that there has been
no material adverse change in the financial condition and
strength of the Lessee, the Guarantor and the Developer, and
that the Leased Property shall have sustained no impairment,
reduction, loss or damage which has not been fully restored
and repaired, and that no Condemnation proceedings or other
governmental action is or shall be pending against or with
respect thereto;
P. Such evidence as the Lessor may require that the General
Contractor and the Architect maintain adequate insurance, as
determined in the Lessor's reasonable discretion;
Q. A fully-executed and authorized Architect's Assignment, in
form and substance satisfactory to the Lessor; and
R. A fully-executed and authorized Construction Assignment, in
form and substance satisfactory to the Lessor.
7.2. THE LESSOR'S RIGHT TO ADVANCE THE PROJECT FUNDS.
Without at any time waiving any of the Lessor's rights hereunder, the
Lessor shall have the right to make the first advance of a portion of the
Project Funds hereunder without the satisfaction of each and every condition
precedent to the Lessor's obligation to make such advance, and the Developer
agrees to accept such advance as the Lessor may elect to make. The making of any
advance hereunder shall not constitute an approval or acceptance by the Lessor
of any work on the Project theretofore completed.
7.3. SUBMISSION OF REQUESTS FOR ADVANCES OF THE PROJECT FUNDS.
Advances under this Agreement shall be made not more than once each
month and at least ten (10) Business Days before the date upon which an advance
is requested, the Developer shall give notice to the Lessor, specifying the
total advance which will be desired, accompanied by:
29
A. Itemized requisitions for advances or, at the Developer's
option, for reimbursements to the Developer for prepaid items,
signed by the Developer, the Architect and the General
Contractor on A.I.A. Forms G702, G702A or G703 or such other
form(s) as the Lessor may reasonably require (together with
copies of invoices or receipted bills relating to items
covered by such requisitions when so requested by the Lessor).
All such requisitions shall include an indemnification of the
Lessor by the Developer and the General Contractor, jointly
and severally, to the extent such indemnification is available
from the General Contractor upon the Developer's best efforts
to obtain such indemnification, against any and all claims of
any subcontractors, laborers and suppliers;
B. A certificate executed by the Developer substantially in
the form attached hereto as EXHIBIT J;
C. A certificate executed by the General Contractor
substantially in the form attached hereto as EXHIBIT K;
D. A certificate executed by the Architect substantially in
the form attached hereto as EXHIBIT L;
E. At the Lessor's request, certificates executed by the
Consultants in such form as the Lessor may reasonably require;
F. An endorsement of the Title Policy issued by the Title
Company, satisfactory in form and substance to the Lessor,
redating the Title Policy to the date that the then current
advance will be made, increasing the coverage afforded by the
Title Policy so that the same shall constitute insurance in an
amount at least equal to the sum of the amount of the
insurance then existing under the Title Policy plus the amount
of the then current advance of Project Funds to be disbursed
under this Agreement and subject to no additional exceptions
other than the Permitted Encumbrances;
G. If and when reasonably requested by the Lessor,
satisfactory assurance that the construction of the Project
has been performed in accordance with the requirements of the
Construction Contract, the Project Plans, this Agreement and
all of the other Lease Documents and has been inspected and
found satisfactory by the parties hereto;
H. If and when reasonably requested by the Lessor, an updated
Surveyor's Certificate substantially in the form attached
hereto as EXHIBIT H and/or updated Engineer's/Architect's
Certificates substantially in the forms attached hereto as
EXHIBIT I;
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I. If and when reasonably requested by the Lessor, updated
Opinions from the Developer's counsel and the Guarantor's
counsel (in form and substance satisfactory to the Lessor in
its sole and absolute discretion);
J. If and when requested by the Lessor, satisfactory evidence
that the Project Funds remaining unadvanced under this
Agreement are sufficient for the payment of all related direct
and indirect costs for the completion of the Project in
accordance with the terms and provisions hereof. If the
evidence furnished shall not be reasonably satisfactory to the
Lessor, in its sole and absolute discretion, it shall be a
condition to the making of any further advance hereunder that
the Developer will provide the Lessor with such financial
guaranties (whether in the form of a bond, cash deposit,
letter of credit or otherwise) as are acceptable to the
Lessor, in its sole and absolute discretion, to assure the
completion of the construction of the Project in accordance
with the Project Plans and the terms and conditions of this
Agreement. In the event that the Lessor requires a cash
deposit from the Developer, the Developer shall deposit with
the Lessor such funds, to be held in an interest bearing
account with the interest accruing thereon to the benefit of
the Developer, which, together with such unadvanced Project
Funds, shall be sufficient to pay all of the aforesaid costs.
All funds so deposited with the Lessor, along with the
proceeds thereof, shall be disbursed prior to any further
advance hereunder;
K. A certification of work completed by any Major
Subcontractor working on the Project, together with a
statement of the payment due therefor; L. Partial lien waivers
from the General Contractor, all other contractors and all
subcontractors and suppliers for all work theretofore
performed;
M. If and when reasonably requested, the Developer shall
deliver to the Lessor an updated Survey of the Leased
Property, acceptable to the Lessor (in its reasonable
discretion); and
N. Such evidence as the Lessor may require that there has been
no material adverse change in the financial condition and
strength of the Lessee, the Developer and the Guarantor, and
that the Leased Property shall have sustained no impairment,
reduction, loss or damage which has not been fully restored
and repaired and that no condemnation is or shall be pending
against or with respect thereto.
The Developer hereby designates Xxxxx Xxxxxx with authority to approve
requisitions and to execute certificates to be delivered pursuant to Section
7.3B on behalf of the Developer.
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7.4. ADVANCES BY WIRE TRANSFER.
All advances hereunder shall be made by wire transfer of funds into a
bank account maintained by either the Developer or an authorized agent of the
Developer.
7.5. CONDITIONS PRECEDENT TO ALL ADVANCES.
A. Advances hereunder shall be made solely for the payment of
the costs and expenses incurred by the Developer directly in
connection with the construction of the Project, consistent
with the Project Budget, which are required to be paid
out-of-pocket to all other Persons and no advances of Project
Funds may be used to refund any part of expenditures from the
Developer's own resources on the Project, except to the extent
that any Project Funds are used to reimburse the Developer for
out-of-pocket expenses incurred by it in accordance with the
terms of the Project Budget. No funds advanced by the Lessor
shall be utilized for any purpose other than as specified
herein and none of the Project Funds shall be paid over to any
officer, partner, stockholder or employee of any member of the
Leasing Group or to any of the Persons collectively
constituting any member of the Leasing Group or those holding
a beneficial interest in any member of the Leasing Group, or
any employee thereof, except to the extent that Project Funds
are used to pay compensation to an employee for and with
respect to activity of such employee in construction of the
Project.
B. The amount of each requisition shall represent (i) the cost
of the work completed on the Project as of the date of such
requisition which has not been covered by prior requisitions,
(ii) the cost of all equipment, fixtures and furnishings
included within the Project Budget, but not incorporated into
any contract approved by the Lessor, which have been delivered
to the Leased Property for incorporation into the Project and
have not been covered by prior requisitions; provided, that,
in the Lessor's judgment, such materials are suitably stored,
secured and insured and that the Developer can furnish the
Lessor with evidence satisfactory to the Lessor of the
Developer's unencumbered title thereto and (iii) approved soft
costs, which have not been covered by prior requisitions.
C. All requisitions shall be subject to a ten percent (10%)
retainage for the completion of the Project. It is understood
that such retainage is intended to provide a contingency fund
to assure that the construction of the Project shall be fully
completed in accordance with the Project Plans and the terms
and provisions of this Agreement. All amounts so withheld
shall
32
be disbursed after (i) construction of the Project has been
fully completed in accordance with the Project Plans and the
terms and provisions of this Agreement, (ii) all of the items
set forth in Section 7.6 hereof have been delivered to the
Lessor and (iii) the expiration of the period during which
liens may be perfected with respect to any work performed or
labor or materials supplied in connection with the
construction of the Project or the receipt of such evidence as
may be required to assure the Lessor that no claim may
thereafter arise with respect to any work performed or labor
or materials supplied in connection with the construction of
the Project.
D. At the time of each advance, no event which constitutes, or
which, with notice or lapse of time, or both, could
constitute, an Event of Default or a Lease Default shall have
occurred and be continuing.
E. Without at any time waiving any of the Lessor's rights
under this Agreement, the Lessor shall always have the right
to make an advance hereunder without satisfaction of each and
every condition upon the Lessor's obligation to make an
advance under this Agreement, and (i) the Developer and the
Lessee, as the case may be, agree to accept any advance which
the Lessor may elect to make under this Agreement and (ii) the
Lessee agrees to be liable for the payment of Rent regarding
all such sums as the Lessor may elect to advance under this
Agreement. Notwithstanding the foregoing, the Lessor shall
have the right, notwithstanding a waiver relative to the first
advance or any subsequent advance hereunder, to refuse to make
any and all subsequent advances under this Agreement until
each and every condition set forth in this Section has been
satisfied. The making of any advance hereunder shall not
constitute an approval or acceptance by the Lessor of any work
on the Project theretofore completed.
F. If, while this Agreement is in effect, a claim is made that
the Project does not comply with any Legal Requirement or an
action is instituted before any Governmental Authority with
jurisdiction over the Leased Property or the Developer in
which a claim is made as to whether the Project does so
comply, the Lessor shall have the right to defer any advance
of Project Funds which the Lessor would otherwise be obligated
to make until such time as any such claim is finally disposed
of favorably to the position of the Developer (or any other
member of the Leasing Group), without any obligation on the
part of the Lessor to make a determination of, or judgment on,
the merits of any such claim. For the purposes of the
foregoing sentence, the term "claim" shall mean an assertion
by any Governmental Authority or Person as to which, in each
case, the Lessor has made a good faith determination that the
assertion may properly be made by the party asserting the
same, that the assertion, on its face, is not without
foundation and that the interests of the Lessor require that
the assertion be
33
treated as presenting a bona fide risk of liability or adverse
effect on the Project.
If any such proceeding is not favorably resolved within thirty
(30) days after the commencement thereof, the Lessor shall
also have the right, at its option, to treat the commencement
of such action as an Event of Default, for which the Lessor
shall have all rights herein specified for an Event of
Default. As aforesaid, the Lessor shall have no obligation to
make a determination with reference to the merits of any such
claim. No waiver of the foregoing right shall be implied from
any forbearance by the Lessor in making such election or any
continuation by the Lessor in making advances under this
Agreement.
In all events, the Developer agrees to notify the Lessor and
the Lessee forthwith upon learning of the assertion of any
such claim or the commencement of any such proceedings.
G. It is contemplated, except with respect to the Leasehold
Improvement Fee and advances made under Sections 6.1, 6.4.06,
8 and/or 11 hereof, that all advances of the Project Funds
will be made by the Lessor to the Developer pursuant to this
Agreement.
7.6. COMPLETION OF THE PROJECT.
Upon the completion of the construction of the Project in accordance
with the Project Plans and the terms and provisions of this Agreement, the
Developer shall provide the Lessor with (a) true, correct and complete copies of
(i) a final unconditional Certificate of Occupancy (or its equivalent) issued by
the appropriate Governmental Authorities, permitting the occupancy and use of
the Project for its Primary Intended Use and (ii) all Permits issued by the
appropriate Governmental Authorities which are necessary in order to operate the
Project as an adult care residence with eighty (80) licensed beds (located in
eighty (80) units), (b) a certification from the Architect or the Consultants
stating that the Project was completed in accordance with the Project Plans,
(c) an updated Survey of the Leased Property, acceptable to the Lessor (in its
sole and absolute discretion), (d) updated Opinions and (e) such other items
relating to the operation and/or construction of the Project as may be
reasonably requested by the Lessor.
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7.7. CONDITION OF THE PROJECT.
The Developer and the Lessee each acknowledge and agree that: (a) no
inspections or any approvals of the Project during or after construction shall
constitute a warranty or representation by the Lessor or any of the Consultants
as to the technical sufficiency, adequacy or safety of any structure or any of
its component parts, including, without limitation, any fixtures, equipment or
furnishings, or as to the subsoil conditions or any other physical condition or
feature pertaining to the Leased Property and (b) all acts, including any
failure to act, relating to the Leased Property by any agent, representative or
designee of the Lessor (including, without limitation, the Consultants) are
performed solely for the benefit of the Lessor to assure the payment and
performance of the Development Obligations and are not for the benefit of the
Lessee or the benefit of any other Person.
WITHOUT LIMITING THE FOREGOING, THE LESSOR MAKES NO WARRANTY OR
REPRESENTATION TO THE LESSEE OR THE DEVELOPER, EXPRESS OR IMPLIED, WITH RESPECT
TO THE LEASED PROPERTY OR THE PROJECT, EITHER AS TO ITS FITNESS FOR ANY
PARTICULAR PURPOSE OR USE, ITS DESIGN OR CONDITION OR OTHERWISE, OR AS TO
DEFECTS IN THE QUALITY OF THE MATERIAL OR WORKMANSHIP NOW OR HEREAFTER, LATENT
OR PATENT; IT BEING AGREED BY AND BETWEEN THE LESSOR AND THE LESSEE, THAT ALL
RISKS RELATING TO THE DESIGN, CONDITION AND/OR USE OF THE LEASED PROPERTY AND
THE PROJECT ARE, AS BETWEEN THE LESSOR AND THE LESSEE, TO BE BORNE BY LESSEE. IN
ADDITION, AS BETWEEN THE LESSOR AND THE LESSEE, THE LESSEE HEREBY ASSUMES ALL
RISK OF THE PHYSICAL CONDITION OF THE LEASED PROPERTY AND THE PROJECT, THE
SUITABILITY OF THE LEASED PROPERTY AND THE PROJECT FOR LESSEE'S PURPOSES, AND
THE COMPLIANCE OR NON-COMPLIANCE OF THE LEASED PROPERTY AND THE PROJECT WITH ALL
APPLICABLE REQUIREMENTS OF LAW, INCLUDING BUT NOT LIMITED TO ENVIRONMENTAL LAWS
AND ZONING OR LAND USE LAWS.
Nothing set forth in this Section 7.7 shall, however, limit in any
manner whatsoever (i) any of the Developer's obligations hereunder or any of the
other Development Documents, including, without limitation, the Developer's
obligations to construct the Project in accordance with the terms hereof and
(ii) any claims that the Lessor and/or the Lessee may now or hereafter have
against the Developer hereunder or at law or in equity as a result of any acts
or omissions by the Developer.
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8. THE LESSOR'S RIGHT TO MAKE PAYMENTS AND TAKE OTHER ACTION
The Developer and the Lessee acknowledge and agree that the Lessor may,
after ten (10) Business Days' prior notice to the Developer and Lessee of its
intention so to do (except in an emergency when such shorter notice shall be
given as is reasonable under the circumstances), pay any sums due or claimed to
be due for labor or materials furnished in connection with the ownership,
construction, development, maintenance, management, repair, use or operation of
the Leased Property, and any other sums which in the reasonable opinion of the
Lessor, or its attorneys, it is expedient to pay, and may take such other and
further action which in the reasonable opinion of the Lessor is necessary in
order to secure (A) the completion of the Project in accordance with the Project
Plans and the terms and conditions of this Agreement, (B) the protection and
priority of the security interests granted to the Lessor pursuant to the Lease
Documents and the Development Documents and (C) the performance of all
obligations under the Lease Documents and the Development Documents. The Lessor,
in its sole and absolute discretion, may charge any such payments against any
advance that may otherwise be due hereunder to the Developer or may otherwise
collect such amounts from the Developer, and the Lessee agrees to be liable for
the payment of Rent regarding all such amounts advanced hereunder,
notwithstanding that the aggregate amount that may be advanced hereunder may
exceed the aggregate amount the Lessor has agreed to advance hereunder as the
Project Funds. Any amount which is not so charged against advances due hereunder
and all costs and expenses reasonably incurred by the Lessor in connection
therewith (including, without limitation, attorneys' fees and expenses and court
costs) shall be a demand obligation of the Developer and, to the extent
permitted by applicable law, shall be added to the Development Obligations and
secured by the Liens created by the Development Documents, as fully and
effectively and with the same priority as every other obligation of the
Developer thereunder and, if not paid within ten (10) days after demand, shall
thereafter, to the extent permitted under applicable law, bear interest at the
Overdue Rate until the date of payment.
If the Developer fails to observe or cause to be observed any of the
provisions of this Agreement and such failure continues beyond any applicable
notice or cure period provided for under this Agreement, the Lessor or a
lawfully appointed receiver of the Leased Property, at their respective options,
from time to time may perform, or cause to be performed, any and all repairs and
such other work as they deem necessary to bring the Leased Property into
compliance with the provisions of this Agreement and may enter upon the Leased
Property for any of the foregoing purposes, and the Lessee hereby waives any
claim against the Lessor or such receiver arising out of such entry or out of
any other act carried out pursuant to this Section. All amounts so expended or
incurred by the Lessor and by such receiver and all costs and expenses
reasonably incurred in connection therewith (including, without limitation,
attorneys' fees and expenses and court costs),
36
shall be, at the option of the Lessor, which may be exercised from time to time
(i) a demand obligation of the Developer to the Lessor or such receiver, and, to
the extent permitted by law, shall be added to the Development Obligations and
shall be secured by the Liens created by the Development Documents as fully and
effectively and with the same priority as every other obligation of the Lessee
secured thereunder and, if not paid within ten (10) days after demand, shall
thereafter, to the extent permitted by applicable law, bear interest at the
Overdue Rate until the date of payment or (ii) may be advanced hereunder (even
if the aggregate amount of such sums so advanced and all amounts previously
advanced hereunder exceed the amount of the Project Funds which the Lessor has
agreed to advance hereunder) and the Lessee agrees to pay to the Lessor Rent
under the Facility Lease, calculated, in part, thereunder based upon all sums
advanced hereunder.
9. INSURANCE; CASUALTY; TAKING
9.1. GENERAL INSURANCE REQUIREMENTS.
The Lessee, at its sole cost and expense, shall keep the Leased
Property and the business operations conducted thereon insured as required under
the Facility Lease.
9.2. FIRE OR OTHER CASUALTY OR CONDEMNATION.
In the event of any damage or destruction to the Leased Property by
reason of fire or other hazard or casualty (a "Casualty") or a taking by power
of eminent domain or conveyance in lieu thereof of all or any portion of the
Leased Property (a "Condemnation"), the Developer shall give immediate written
notice thereof to the Lessor and the Lessee and the Lessee and the Developer
shall comply with the provisions of the Facility Lease governing Casualties and
Condemnations, mutatis, mutandis. Notwithstanding the foregoing, in no event
shall the Completion Date be extended as a result of any Casualty or
Condemnation.
10. EVENTS OF DEFAULT
Each of the following shall constitute an "Event of Default" hereunder
and shall entitle the Lessor to exercise its remedies hereunder and under any of
the other Development Documents and/or Lease Documents:
A. any failure of the Developer to pay any amount due
hereunder or under any of the other Development Documents or
any failure of the Lessee to pay any amount due under any of
the Lease Documents within ten (10) days following the date
when such payment was due;
37
B. any failure in the observance or performance of any other
covenant, term, condition or warranty provided in this
Agreement, any of the other Development Documents or any of
the Lease Documents, other than the payment of any monetary
obligation and other than as specified in subsections (C)
through (G) below (referred to herein as a "Failure to
Perform"), continuing for thirty (30) days after the giving of
notice by the Lessor to the Developer and/or the Lessee, as
the case may be, specifying the nature of the Failure to
Perform; except as to matters not susceptible to cure within
thirty (30) days, provided that with respect to such matters,
(I) the Developer and/or the Lessee, as the case may be,
commences the cure thereof within thirty (30) days after the
giving of such notice by the Lessor to the Developer and/or
the Lessee, as the case may be, (II) the Developer and/or the
Lessee, as the case may be, continuously prosecutes such cure
to completion, (III) such cure is completed within ninety (90)
days after the giving of such notice by the Lessor to the
Developer and/or the Lessee, as the case may be, and (IV) such
Failure to Perform does not impair the Lessor's rights with
respect to the Leased Property or otherwise impair any of the
Collateral or the Lessor's security interest therein;
C. the occurrence of any default or breach of condition
continuing beyond the expiration of the applicable notice and
grace periods, if any, under any of the Development Documents
or any of the Lease Documents;
D. if any representation, warranty or statement contained
herein proves to be untrue in any material respect as of the
date when made or at any time during the Term if such
representation or warranty, other than those contained in
Sections 5.2, 5.5 and in the third sentence of Section 5.6, is
a continuing representation or warranty pursuant to Section
6.3;
E. without limiting any of the terms of the other Development
Documents or the Lease Documents, if any representation,
warranty or statement contained in Section 5.2, 5.5 or in the
third sentence of Section 5.6 proves to be untrue in any
material respect at any time during the Term after the date
when made, beyond the notice and grace periods set forth in
Section 10(B);
F. except as a result of any Casualty or a partial or complete
Condemnation, if a suspension of any work in connection with
the construction of the Project occurs for a period in excess
of ten (10) Business Days, irrespective of the cause thereof,
provided that the Developer shall not be deemed to be in
default under this Subsection if such suspension is for
circumstances not reasonably within its control, but only if
the Lessor, in its sole and absolute discretion, shall
determine that such suspension shall not create any risk that
the construction of the Project will not be completed (in
38
accordance with the Project Plans and the terms and conditions
of this Agreement) on or before the Completion Date; and
G. if construction of the Project shall not be completed in
accordance with the Project Plans and this Agreement
(including, without limitation, satisfaction of the conditions
set forth in Section 7.6) on or before the Completion Date.
11. REMEDIES IN EVENT OF DEFAULT
Upon the occurrence of an Event of Default, at the option of the
Lessor, which may be exercised at any time after an Event of Default shall have
occurred, the Lessor shall have all rights and remedies available to it, at law
or in equity, including, without limitation, all of the rights and remedies
under the Development Documents and the Lease Documents. Subject to the
requirements of applicable law, all materials at that time on or near the Leased
Property which are the property of the Developer and which are to be used in
connection with the completion of the Project shall be subject to the Liens
created by the Development Documents.
In addition to, and without limitation of, the foregoing, the Lessor is
authorized, at the Lessor's option, which may be exercised from time to time,
(a) to offset all amounts expended hereunder by the Lessor to complete the
construction of the Project and/or exercise any of its other remedies hereunder
against any portion of the Development Fee due hereunder and (b) to charge all
money expended for completion of the Project against sums hereunder which have
not already been advanced (even if the aggregate amount of such sums expended
and all amounts previously advanced hereunder exceed the amount of the Project
Funds which the Lessor has agreed to advance hereunder); and the Lessee agrees
to pay to the Lessor Rent under the Facility Lease, calculated, in part,
thereunder based upon all sums advanced hereunder (including, without
limitation, all sums expended in good faith by the Lessor in connection with the
completion of the Project), and, in addition thereto, the Lessee agrees to pay
to the Lessor (as Rent under the Facility Lease), for services in connection
with said completion of the Project, such additional sums as shall compensate
the Lessor for the time and effort the Lessor and its employees shall have
expended in connection therewith. The Lessor is authorized, but not obligated in
any event, to do all such things in connection with the construction of the
Project as the Lessor, in its sole and absolute discretion, may deem advisable,
including, without limitation, the right to make any payments with respect to
any obligation of the Developer to the Lessor or to any other Person in
connection with the completion of construction of the Project and to make
additions and changes in the Project Plans to employ contractors, subcontractors
and agents and to take any and all such action, either in the Lessor's own name
or in the name of the Developer, and the Developer hereby grants the Lessor an
irrevocable power of attorney to act in its name in connection with the
foregoing. This power of attorney, being coupled with an interest, shall be
irrevocable until all of the
39
Development Obligations are fully paid and performed and shall not be affected
by any disability or incapacity which the Developer may suffer and shall survive
the same. The power of attorney conferred on the Lessor by the provisions of
this Section 11 is provided solely to protect the interests of the Lessor and
shall not impose any duty on the Lessor to exercise any such power and neither
the Lessor nor such attorney-in-fact shall be liable for any act, omission,
error in judgment or mistake of law, except as the same may result from its
gross negligence or wilful misconduct. Notwithstanding the foregoing, the Lessee
and the Developer acknowledge and agree that, in the event that the Lessor takes
possession of the Leased Property and assumes control of the Project as
aforesaid, the Lessor shall not be obligated to continue the construction of the
Project for any period of time longer than the Lessor shall see fit (in its sole
and absolute discretion), and the Lessor may thereafter, at any time, abandon
its efforts and refuse to make further payments for the account of the Project,
whether or not the Project has been completed.
In addition, at the Lessor's option and without demand, notice or
protest, the occurrence of any Event of Default shall also constitute a default
under any one or more of the Related Party Agreements.
12. GENERAL
The provisions set forth in Articles 22 and 23 and Sections 2.2, 16.8
through 16.10, 24.2 through 24.6, and 24.8 through 24.12 of the Facility Lease
are hereby incorporated herein by reference, mutatis, mutandis, and shall be
applicable to this Agreement as if set forth in full herein.
13. TERM
This Agreement shall remain in force and effect until such time as the
Project is constructed in accordance with the terms hereof and, without limiting
the foregoing, the obligations set forth under Section 7.6 have been satisfied.
The period from the date hereof until such time as the construction of the
Project shall have been completed as aforesaid shall be referred to herein as
the "Term."
40
EXECUTED as a sealed instrument as of the day and year first above
mentioned.
WITNESS: LESSOR:
MEDITRUST COMPANY LLC,
a Delaware limited liability company
________________________ By:
Name: Name:
DEVELOPER:
WITNESS: BCC DEVELOPMENT AND MANAGEMENT CO.,
a Delaware corporation
_________________________ By:
Name: Name:
WITNESS: LESSEE:
__________________________________
_________________________ By:
Name: Name:
Title:
41
EXHIBIT E
DEFINITIONS
AFFILIATE: As defined in the Facility Lease.
AFFILIATED PARTY SUBORDINATION AGREEMENT: As defined in Section 4.1.
AGREEMENT REGARDING RELATED LEASE TRANSACTIONS: As defined in Section 4.1.
ARCHITECT: As defined in Section 1.6.
ARCHITECT'S ASSIGNMENT: As defined in Section 4.1.
ARCHITECT'S CONTRACT: As defined in Section 1.6.
ASSIGNMENT AND AMENDMENT AGREEMENT: As defined in the Facility Lease.
BUSINESS DAY: As defined in the Facility Lease.
CASH COLLATERAL: As defined in the Deposit Pledge Agreement.
CASUALTY: As defined in Section 9.2.
COLLATERAL: Collectively, the Developer Collateral and the Lessee Collateral.
COMPLETION DATE: As defined in Section 1.8.
CONDEMNATION: As defined in Section 9.2.
CONSTRUCTION ASSIGNMENT: As defined in Section 4.1.
CONSTRUCTION CONTRACT: As defined in Section 1.7.
CONSULTANTS: Collectively, the architects, engineers, inspectors, surveyors and
other consultants that are engaged, from time to time, by the Lessor to perform
services for the Lessor in connection with the construction of the Project
contemplated under this Agreement.
CONTRACTS: As defined in the Facility Lease.
CURRENT MANAGER: As defined in the Facility Lease.
DEPOSIT PLEDGE AGREEMENT: As defined in Section 4.1.
42
DEVELOPER: As defined in the Preamble to Section 1 and its successors and
assigns.
DEVELOPER COLLATERAL: As defined in Section 4.3.
DEVELOPER PERMITS ASSIGNMENT: As defined in Section 4.1.
DEVELOPMENT DOCUMENTS: As defined in Section 4.1
DEVELOPMENT FEE: FOUR HUNDRED THOUSAND AND NO/100 DOLLARS ($400,000.00)
DEVELOPMENT OBLIGATIONS: As defined in Section 4.2 and, including, without
limitation, the Guarantied Obligations.
DOLLARS: Lawful money of the United States of America.
ENVIRONMENTAL INDEMNITY AGREEMENT: As defined in Section 4.1.
EVENT OF DEFAULT: As defined in Section 10.
EXISTING IMPROVEMENTS: As defined in Section 1.2.
FACILITY LEASE: As defined in Section 1.3.
FAILURE TO PERFORM: As defined in Section 10.
FINANCING STATEMENTS: Collectively, the Uniform Commercial Code financing
statements evidencing the security interests granted to the Lessor in connection
with the Lease Documents and the Development Documents.
FIRST LEASEHOLD MORTGAGE: As defined in the Facility Lease.
GENERAL CONTRACTOR: As defined in Section 1.7.
GOVERNMENTAL AUTHORITIES: As defined in the Facility Lease.
GUARANTOR: Balanced Care Corporation, a Delaware corporation, and its successors
and assigns.
GUARANTIED OBLIGATIONS: As defined in the Guaranty.
GUARANTY: As defined in Section 4.1.
IMPOSITIONS: As defined in the Facility Lease.
43
IMPROVEMENTS: As defined in Section 1.4.
INSURANCE REQUIREMENTS: As defined in the Facility Lease.
LAND: As defined in Section 1.2.
LEASE DEFAULT: As defined in the Facility Lease.
LEASE DOCUMENTS: As defined in Section 4.1.
LEASE OBLIGATIONS: As defined in Section 4.2.
LEASED PROPERTY: As defined in the Facility Lease.
LEASEHOLD IMPROVEMENT FEE: ____________________________________________________
LEASING GROUP: As defined in the Facility Lease.
LEGAL REQUIREMENTS: As defined in the Facility Lease.
LESSEE: As defined in the preamble of this Agreement and its successors and
assigns.
LESSEE COLLATERAL: As defined in Section 4.3.
LESSEE'S GUARANTY: As defined in the Facility Lease.
LESSEE PERMITS ASSIGNMENT: As defined in Section 4.1.
LESSOR: As defined in the preamble of this Agreement and its successors and
assigns.
LESSOR'S ADDRESS: 000 Xxxxx Xxxxxx, Xxxxxxx Xxxxxxx, XX 00000 or such other
address as the Lessor shall designate in writing.
LIEN: With respect to any real or personal property, any mortgage, easement,
restriction, lien, pledge, collateral assignment, hypothecation, charge,
security interest, title retention agreement, levy, execution, seizure,
attachment, garnishment or other encumbrance of any kind in respect of such
property, whether or not xxxxxx, vested or perfected.
MAJOR SUBCONTRACTORS: As defined in Section 6.4.05.
NOTE: As defined in the Facility Lease.
OPINIONS: As defined in Section 7.1.
OVERDUE RATE: As defined in the Facility Lease.
44
PERMITS: As defined in the Facility Lease.
PERMITS ASSIGNMENTS: Collectively, the Lessee Permits Assignment and the
Developer Permits Assignment.
PERMITTED ENCUMBRANCES: As defined in the Facility Lease.
PERSON: As defined in the Facility Lease.
PLEDGE AGREEMENT: As defined in Section 4.1.
PLEDGOR: As defined in section 4.1.
PRIMARY INTENDED USE: The use of the Project an adult care residence with eighty
(80) licensed beds (located in eighty (80) units) and such ancillary uses as are
permitted by applicable law and may be necessary in connection therewith or
incidental thereto.
PROJECT: As defined in Section 1.4.
PROJECT BUDGET: As defined in Section 1.7.
PROJECT FUNDS: As defined in Section 1.5.
PROJECT PLANS: As defined in Section 1.6.
RECEIVABLES: As defined in the Security Agreement.
RELATED PARTY AGREEMENT: As defined in the Facility Lease.
RENT: As defined in the Facility Lease.
SECURITY AGREEMENT: As defined in Section 4.1
SUBSIDIARY: As defined in the Facility Lease.
SURVEY: As defined in Section 17.1.
SURVEYOR'S CERTIFICATE: As defined in Section 17.1.
TANGIBLE PERSONAL PROPERTY: As defined in the Facility Lease.
TC REALTY PARTIES: As defined in the Facility Lease.
TENANT PARTIES: As defined in the Facility Lease.
45
TERM: As defined in Section 13.
TITLE COMPANY: As defined in Section 7.1.
TITLE POLICY: As defined in Section 7.1.
UCC: Uniform Commercial Code as adopted in the ______________________ .
WORKING CAPITAL ASSURANCE AGREEMENT: As defined in the Facility Lease.
WORKING CAPITAL RESERVE: As defined in the Facility Lease.
