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EXHIBIT 10.93
Regulatory Agreement
NURSING HOMES
U.S. DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT
Office of Housing
Federal Housing Commissioner
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Project Number Mortgagee
121-22032-ALF/REF Red Capital Mortgage, Inc., an Ohio
corporation
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Amount of Mortgage Note Date
$11,369,500.00 December 12, 2000
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Mortgage Recorded (State) County Date
California Contra Costa December 12, 2000
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Book Page
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This Agreement entered into as of this 12th day of December, 2000
between RETIREMENT INNS II, LLC, a Delaware limited liability company whose
address is 000 Xxxxxxx Xxxxxx, Xxxxx X-0, Xxxxx Xxxx, Xxxxxxxxxx 00000 (jointly
and severally, hereinafter referred to as Lessee) and the undersigned FEDERAL
HOUSING COMMISSIONER, (hereinafter called Commissioner).
In consideration of the consent of the Commissioner to the leasing of
the aforesaid project by ARV VALLEY VIEW, L.P., a California limited
partnership, Mortgagor, and in order to comply with the requirements of the
National Housing Act and the Regulations adopted by the Commissioner pursuant
thereto, Lessees agree for themselves, their successors, heirs and assigns, that
in connection with the mortgaged property and the project operated thereon and
so long as the Contract of Mortgage Insurance continues in effect, and during
such further period of time as the Commissioner shall be the owner, holder or
reinsurer of the mortgage, or during any time the Commissioner is obligated to
insure a mortgage on the mortgaged property:
(1) The lease shall be subject and subordinate to the mortgage securing
the note or other obligation endorsed for insurance by the
commissioner;
(2) Lessee shall make payments under lease when due;
(3) Payments by the lessee to the lessor shall be sufficient to pay all
mortgage payments including payments to reserves for taxes,
insurance, etc., payments to the Reserve for Replacements, and to
take care of necessary maintenance. If at the end of any calendar
year, or any fiscal year if the project operates on the basis of a
fiscal year, payments under the lease have not been sufficient to
take care of the above items, the lessor and lessee upon request in
writing from the Commissioner shall renegotiate the amounts due
under the lease so that such amounts shall be sufficient to take
care of such items; the Commissioner shall be furnished by the
lessee, within thirty days after being called upon to do so, with a
financial report in form satisfactory to the Commissioner covering
the operations of the mortgaged property and of the project;
(4) The lessee shall not sublease the project or any part thereof
without the consent of the Commissioner;
(5) The lessee shall at all times maintain in full force and effect a
license from the State or other licensing authority to operate the
project as a nursing home, but the owner shall not be required to
maintain such a license;
(6) Lessee shall maintain in good repair and condition any parts of the
project for the maintenance of which lessee is responsible under
the terms of the lease;
(7) Lessee shall not remodel, reconstruct, add to, or demolish any part
of the mortgaged property or subtract from any real or personal
property of the project;
(8) Lessee shall not use the project for any purpose except the
operation of a nursing home;
(9) If a default is declared by the Commissioner under the provisions
of Paragraph 10 of the Regulatory Agreement entered into by the
lessor-mortgagor and the Commissioner on the 12th day of December,
2000, a copy of notice of default having been given to the lessee,
the lessee will thereafter make all future payments under the lease
to the Commissioner;
(10) The lease may be cancelled upon thirty days written notice by the
Commissioner given to the lessor and the lessee for a violation of
any of the above provisions unless the violation is corrected to
the satisfaction of the Commissioner within said thirty day period.
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(11) The Commissioner must approve any change in or transfer of
ownership of the lessee entity, and any change in or transfer of
the management operation, or control of the project.
(12) The lessee shall not reduce or expand, allow to be reduced or
expanded, or cause the expansion or reduction of the bed capacity
of the project without the consent of the Commissioner. Any change
in the bed capacity shall violate this Regulatory Agreement.
(13) The lessee shall not enter into any management contract involving
the project, unless such shall contain a provision that, in the
event of default under the Regulatory Agreement as recited in
paragraph 9 (above) of this Agreement, the management agreement
shall be subject to termination without penalty upon written
request of the Commissioner. Upon such request the lessee shall
immediately arrange to terminate the contract within a period of
not more than thirty (30) days and shall make arrangements
satisfactory to the Commissioner for continuing proper management
of the project.
(14) The mortgaged property, equipment, buildings, plans, offices,
apparatus, devices, books, contracts, records, documents, and other
papers relating thereto shall at all times be maintained in
reasonable condition for proper audit and subject to examination
and inspection at any reasonable time by the Commissioner or his
duly authorized agents. Lessee shall keep copies of all written
contracts or other instruments which affect the mortgaged property,
all or any of which may be subject to inspection and examination by
the Commissioner or his/her duly authorized agents.
(15) There shall be full compliance with the provisions of (1) any State
or local laws prohibiting discrimination in housing on the basis of
race, color, creed, or national origin; and (2) with the
Regulations of the Federal Housing Administration providing for
non-discrimination and equal opportunity in housing. It is
understood and agreed that failure or refusal to comply with any
such provisions shall be a proper basis for the Commissioner to
take any corrective action he may deem necessary including, but not
limited to, the refusal to consent to a further renewal of the
lease between the mortgagor-lessor and the lessee, the rejection of
applications for FHA mortgage insurance and the refusal to enter
into future contracts of any kind with which the lessee is
identified; and further, if the lessee is a corporation or any
other type of business association or organization which may fail
or refuse to comply with the aforementioned provisions, the
Commissioner shall have a similar right of corrective action (1)
with respect to any individuals who are officers, directors,
trustees, managers, partners, associates or principal stockholders
of the lessee; and (2) with respect to any other type of business
association, or organization with which the officers, directors,
trustees, managers, partners, associates or principal stockholders
of the lessee may be identified.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals on
the date first hereinabove written.
RETIREMENT INNS II, LLC
a Delaware limited liability company
By: ___________________________
Xxxx X. Xxxxxx
Manager
December 12, 2000
SECRETARY OF HOUSING AND URBAN
DEVELOPMENT ACTING BY AND
THROUGH THE FEDERAL HOUSING
COMMISSIONER
By: ________________________________
Authorized Agent
December 12, 2000
