CONSTRUCTION LOAN ADMINISTRATION AGREEMENT
|
Exhibit
10.5
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THIS
CONSTRUCTION LOAN ADMINISTRATION AGREEMENT ("Agreement") is made as of the
7th
day of July, 2005, by Bank of America, N.A. ("Bank"),
and
the Borrower identified in Exhibit B
("Borrower"),
who
agree as follows:
RECITALS:
WHEREAS,
Bank has agreed to loan to Borrower amounts up to an aggregate of Twenty Three
Million Two Hundred Twelve Thousand Five Hundred Fifty and No/100 Dollars
($23,180,008.00) of which of up to $18,721,550 shall be available on a term
loan
basis for the purposes of financing and/or refinancing the acquisition costs
of
a skilled nursing facility known as Hacienda De Vida, consisting of a 128 bed
skilled nursing facility and a 44 unit assisted living facility, and up to
$4,458,458 shall be available for providing financing for the construction
of a
21-unit assisted living expansion and a connected 20-unit Alzheimer’s building
(the "Project"); and
WHEREAS,
the foregoing loans from Bank shall be evidenced by three (3) notes, being
a
$4,458,458.00 construction loan note, a $9,360,775.00 floating rate term note
and a $9,360,775.00 fixed rate term note; and
WHEREAS,
the $4,458,458.00 Construction Loan Promissory Note evidencing the construction
loan (the "Construction Loan") from Bank to Borrower shall be disbursed by
Bank
to enable Borrower to construct the 21-unit assisted living expansion and a
connected 20-unit Alzheimer’s building contiguous to Hacienda De Vida;
and
WHEREAS,
Bank requires that disbursements from the Construction Loan be approved by
Bank
pursuant to criteria hereinafter set forth; and
WHEREAS,
the purpose of this Agreement is to set forth the terms and conditions related
to administration and disbursement of the Construction Loan.
Section 1. -
ADMINISTRATION OF THE CONSTRUCTION LOAN
Section
1.1. General
Information and Purpose.
The
Basic Information attached as Exhibit "B"
and all
other exhibits, which are made a part of this Agreement and incorporated herein
by reference, contain definitions of certain terms used herein, and also contain
other terms, provisions, and conditions applicable to the Construction Loan.
The
proceeds of the Construction Loan are to be used by Borrower to pay the cost
of
the construction of the Improvements on the Land, and other costs regarding
the
Property if and to the extent that such costs are specifically provided for
in
the Budget. The Loan Documents, which must be in form, detail and substance
satisfactory to Bank, evidence the agreements of Borrower and Bank with respect
to the Construction Loan. Borrower shall comply with all Loan
Documents.
Section
1.2. Administration
of Construction Loan.
Bank
agrees to administer the Construction Loan in accordance with the terms and
conditions of this Agreement.
-1-
Section
1.3. Budget.
The
Construction Loan amounts are allocated for the costs of the Project shown
in
the Budget attached as Exhibit "D".
The
Budget has been prepared by the Borrower, and Borrower represents to Bank that
it includes all projected costs and expenses (the "Aggregate
Cost")
incident to the Project, after taking into account the requirements of this
Agreement. Bank shall not be required to approve a Requisition which includes
(a) any advance for any cost not set forth in the Budget, (b) any
advance for any line item in the Budget that, when added to all prior advances
for that line item, would exceed the lesser of (i) the actual cost incurred
by Borrower for such line item or (ii) the sum allocated in the Budget
for
that line item, (c) any advance for any contingency line item unless
Bank
consents to such advance in its sole discretion, reasonably exercised, or
(d) any advance other than as provided in the Budget or to make any
advance
for interest on the Construction Loan after commencement of operations in the
Improvements if and to the extent that there is sufficient net operating income
from the Property to cover any such interest. Bank may approve Requisitions
for
advances allocated to line items in the Budget for other purposes or in
different proportions as Bank in its sole discretion deems necessary or
advisable. Any reallocation of Construction Loan amounts from one Budget line
item to another, or any other amendment to the Budget, shall be subject to
Bank's approval prior to the making of any advance of the Construction Loan
based upon such reallocation or amendment.
Section
1.4. Borrower's
Deposit.
If at
any time Bank determines that the sum of (i) the unadvanced portion
of the
Construction Loan to which Borrower is entitled, plus (ii) the amounts
of
the Aggregate Cost which are scheduled to be paid by Borrower from funds which
are available, set aside and committed, to Bank's satisfaction, is or will
be
insufficient to pay the unpaid actual Aggregate Cost, Borrower shall, within
seven (7) days after written notice from Bank, deposit with Bank the amount
of
the deficiency ("Borrower's
Deposit")
in an
interest-bearing account of Bank's selection with interest earned thereon to
be
part of the Borrower's Deposit. Such Borrower's Deposit shall be advanced as
construction progresses in accordance with this Agreement before any, or any
additional, Construction Loan disbursements are made. Upon a Default, Bank
may
(but shall have no obligation to) apply all or any part of the Borrower's
Deposit against the unpaid Obligations in such order as Bank
determines.
Section 2. -
ADDITIONAL COVENANTS AND AGREEMENTS
Section
2.1. Plans.
Borrower assumes full responsibility for the compliance of the Plans and the
Property and the construction of the Improvements in accordance with all laws,
governmental requirements and sound building and engineering practices. No
construction shall be undertaken on the Land except as shown in the Plans.
No
plans or specifications, or any changes thereto, except Permitted Changes,
shall
be included as part of the Plans until consented to by Bank, all applicable
governmental authorities, and all parties required under the Loan Documents.
Section
2.2. Contracts.
Bank
shall have the right of approval as to parties, terms, and all other matters,
with respect to (a) any contract for the performance of any work or
the
supplying of any labor, materials, or services for the design or construction
of
the Improvements, (b) any management, leasing, maintenance or other
contract pertaining to the Property and (c) the modification, amendment
or
termination of any such contracts. Borrower shall not default under any
contract, Borrower shall not permit any contract to terminate by reason of
any
failure of Borrower to perform thereunder, and Borrower shall promptly notify
Bank of any material default thereunder. Borrower will deliver to Bank, upon
request of Bank, the names of all persons or entities with whom each contractor
has contracted or intends to contract for the construction of the Improvements
or for the furnishing of labor or materials therefore.
-2-
Section
2.3. Construction
of the Improvements.
Borrower shall complete construction of the Improvements, and shall obtain
a
permanent unconditional certificate of occupancy and all other permits,
licenses, and approvals for the occupancy, use and operation of the Improvements
from all applicable governmental authorities on or before the Completion Date,
free and clear of all liens except the Loan Documents. Borrower shall correct
promptly (a) any material defect in the Improvements, (b) any
material
departure from the Plans, law, or governmental requirements, or (c) any
encroachment by any Improvements or structure on any building setback line,
easement, property line or restricted area. Borrower shall not permit cessation
of work for a period in excess of fifteen (15) consecutive days.
Section
2.4. Changes.
Without
Bank's prior written consent, Borrower shall not change or modify the Plans,
agree to any change order, or allow any extras to any contractor or any
subcontractor, except that Borrower may make the Permitted Changes if:
i) Borrower
notifies Bank in writing of the change or extra with appropriate supporting
documentation and information; ii) Borrower
obtains the approval of the applicable contractor, Borrower's architect, and
all
sureties; iii) the
structural integrity, quality and standard of workmanship of the Improvements
is
not impaired; iv) no
substantial change in architectural appearance is affected; v) no
default in any obligation to any person or violation of any law or governmental
requirement would result from such change or extra; vi) Borrower
complies with Section 1.4 of this Agreement to cover any excess cost resulting
from the change or extra; and vii) completion
of the Improvements by the Completion Date will not be affected. Bank shall
not
be obligated to review a proposed change unless it has received all documents
necessary to review such change, such as the change order, cost estimates,
plans
and specifications, and evidence that all approvals by all applicable parties
have been obtained.
Section
2.5. Storage
of Materials.
Borrower shall cause all materials supplied for, or intended to be utilized
in
the construction of the Improvements, but not yet affixed to or incorporated
into the Improvements on the Land, to be stored on the Land with adequate
safeguards as required by Bank to prevent loss, theft, damage or commingling
with other materials or projects. Borrower shall not purchase or order materials
for delivery more than forty-five (45) days prior to the scheduled incorporation
of such materials into the Improvements.
Section
2.6. Inspection.
Bank or
Bank's agent may enter upon the Property to inspect the Property and any
materials at any reasonable time. Borrower will furnish to Bank at any time
for
inspection and copying all Plans, shop drawings, specifications, books and
records, and other documents and information required by Bank.
Section
2.7. Notice
to Bank.
Borrower shall promptly notify Bank in writing of any of the following events,
specifying in each case the action Borrower has taken or will take with respect
thereto: viii)any
violation of any law or governmental requirement; ix)any
litigation, arbitration or governmental investigation or proceeding instituted
or threatened against Borrower or the Property or any material development
therein; x)any
actual or threatened condemnation of any portion of the Property, any
negotiations with respect to any such taking, or any loss of or substantial
damage to the Property; xi)any
labor
controversy pending or threatened against Borrower or any contractor or any
material development in any labor controversy; xii) any
notice received by Borrower with respect to the cancellation, alteration or
non-renewal of any insurance coverage maintained with respect to the Property;
or xiii)any
failure by Borrower or any contractor to perform any material obligation under
any construction contract, any event or condition which would permit termination
of a construction contract or suspension of work thereunder, or any notice
given
by Borrower or any contractor with respect to any of the foregoing.
-3-
Section
2.8. Assignment
of Contracts and Plans.
As
additional security for the payment of the Construction Loan, at Bank's request
Borrower agrees to transfer and assign to Bank together with such consents
thereto as Bank may request all of Borrower's rights and interest, but not
its
liability, in, under, all existing or future construction, architectural and
design contracts, and the Plans, and further agrees that all of the same shall
be covered by the security agreement provisions of the Deed of Trust. Borrower
represents and warrants that the copy of any contract furnished or to be
furnished to Bank is and shall be a true and complete copy thereof, that the
copies of the Plans delivered to Bank are and shall be true and complete copies
of the Plans, that there have been no modifications thereof which are not fully
set forth in the copies delivered, and that Borrower's interest therein is
not
subject to any claim, setoff, or encumbrance. Neither this assignment nor any
action by Bank shall constitute an assumption by Bank of any obligation under
any contract or with respect to the Plans, and Borrower shall continue to be
liable for all obligations of Borrower with respect thereto, Borrower hereby
agreeing to perform all of its obligations under any contract. Bank shall have
the right at any time (but shall have no obligation) to take in its name or
in
the name of Borrower such action Bank may determine necessary to cure any
default under any contract or with respect to the Plans or to protect the rights
of Borrower or Bank with respect thereto. Bank shall incur no liability if
any
action so taken by it or on its behalf shall prove to be inadequate or invalid.
Borrower indemnifies and holds Bank harmless against and from any loss, cost,
liability or expense (including, but not limited to, attorneys' fees and
expenses) incurred in connection with Borrower's failure to perform such
contracts or any action taken by Bank. Bank may use the Plans for any purpose
relating to the Improvements. Borrower irrevocably constitutes and appoints
Bank
as Borrower's attorney-in-fact, which power of attorney shall be irrevocable
and
coupled with an interest, in Borrower's name or in Bank's name to enforce all
rights of Borrower under any contract or with respect to the Plans.
Section
2.9. Omitted.
Section
2.10. Financial
Statements.
Borrower shall deliver to Bank the Financial Statements and other statements
and
information at the times and for the periods described in the Basic Information,
as otherwise required by any other Loan Documents and from time to time such
additional financial statements and information Bank requests.
Section
2.11. Annual
Appraisal.
Bank
may obtain at Borrower's expense, as required by Bank's policy from time to
time, an appraisal of any part of the Property prepared in accordance with
written instructions from Bank by a third-party appraiser engaged directly
by
Bank; provided, Borrower will not be required to pay for more than one (1)
appraisal in any twelve (12) month period. Each such appraiser and appraisal
shall be satisfactory to Bank (including satisfaction of applicable regulatory
requirements). The cost of each such appraisal shall be due and payable by
Borrower on demand and shall be secured by the Loan Documents.
-4-
Section
2.12. Reports
and Vouchers.
Borrower shall (a) promptly deliver to Bank copies of all reports, studies,
inspections and tests made on the Land, the Improvements or the materials to
be
incorporated into the Improvements; and (b) make additional tests Bank
reasonably requires. Borrower shall immediately notify Bank of such report,
study, inspection or test that indicates any adverse condition in the Land
or
the Improvements.
Section
2.13. Payment
of Withholding Taxes.
Borrower shall not use, or knowingly permit any contractor or subcontractor
to
use, any portion of the proceeds of any advance to pay the wages of employees
unless a portion of the proceeds or other funds are also used to make timely
payment to or deposit with the United States all amounts of tax required to
be
deducted and withheld with respect to such wages under the Internal Revenue
Code, and to make timely payment to or deposit with any local and/or state
governmental authority or agency having jurisdiction all amounts of tax required
to be deducted and withheld with respect to such wages under any applicable
local and/or state laws.
Section
2.14. Representations
and Warranties.
Borrower hereby represents and warrants to Bank that xiv) to
the extent required by applicable law, Borrower has filed all necessary tax
returns and reports and has paid all taxes and governmental charges thereby
shown to be owing; xv) the
Plans have been or will, prior to commencement of construction, be approved
by
all applicable governmental authorities, accepted by each contractor, complete
in all material respects, adequate for the construction of the Improvements
(containing all necessary detail), and in compliance with the Loan Documents,
all applicable laws, restrictive covenants, and governmental requirements,
rules, and regulations; xvi) the
Land is, or will be, separately assessed for tax purposes; xvii) the
Land and Improvements comply with all laws and governmental requirements,
including all subdivision and platting requirements, without reliance on any
adjoining or neighboring property; xviii) the
Plans will and the Improvements when constructed will comply with all legal
requirements regarding access and facilities for handicapped or disabled
persons; xix) Borrower
has not directly or indirectly conveyed, assigned or otherwise disposed of
or
transferred (or agreed to do so) any air rights or other similar rights,
privileges or attributes with respect to the Property, including those arising
under any zoning or land use ordinance or other law or governmental requirement;
xx) the
construction schedule for the Project is realistic and the Completion Date
is a
reasonable estimate of the time required to complete the Project; and
xxi) the
Financial Statements delivered to Bank are true and correct, and there has
been
no material change of Borrower's financial condition from the financial
condition of Borrower indicated in such Financial Statements.
Section 3. -
DEFAULT AND REMEDIES
Section
3.1. Events
of Default.
"Default" shall have the meaning set forth in the Loan Agreement.
Section
3.2. Remedies.
Upon a
Default Bank may, at its election, but without any obligation to do so, pursue
the remedies set forth in the Loan Agreement or in any of the other Loan
Documents.
-5-
Section 4. -
GENERAL TERMS AND CONDITIONS
Section
4.1. Omitted.
Section
4.2. Bank's
Consent.
Except
where otherwise expressly provided in the Loan Documents, in any instance where
the approval, consent or the exercise of judgment of Bank is required, the
granting or denial of such approval or consent and the exercise of such judgment
shall be (a) within the sole reasonable discretion of Bank; and
(b) deemed to have been given only by a specific writing intended for
the
purpose given and executed by Bank. Notwithstanding any approvals or consents
by
Bank, Bank has no obligation or responsibility whatsoever for the adequacy,
form
or content of the Plans, the Budget, any contract, any change order, any lease,
or any other matter incident to the Property or the construction of the
Improvements. Bank's acceptance of an assignment of the Plans shall not
constitute approval of the Plans. Any inspection or audit of the Property or
the
books and records of Borrower, or the procuring of documents and financial
and
other information, by or on behalf of Bank shall be for Bank's protection only,
and shall not constitute any assumption of responsibility to Borrower or anyone
else with regard to the condition, construction, maintenance or operation of
the
Property, or relieve Borrower of any of Borrower's obligations. Borrower has
selected all surveyors, architects, engineers, contractors, materialmen and
all
other persons or entities furnishing services or materials to the Project.
Bank
has no duty to supervise or to inspect the Property or the construction of
the
Improvements nor any duty of care to Borrower or any other person to protect
against, or inform Borrower or any other person of, the existence of negligent,
faulty, inadequate or defective design or construction of the Improvements.
Bank
shall not be liable or responsible for any defect in the Property or the
Improvements, the performance or default of Borrower, Borrower's architect,
engineer and contractor, or any other party, or for any failure to construct,
complete, protect or insure the Improvements, or for the payment of costs of
labor, materials, or services supplied for the construction of the Improvements,
or for the performance of any obligation of Borrower whatsoever. Nothing,
including any advance or acceptance of any document or instrument, shall be
construed as a representation or warranty, express or implied, to any party
by
Bank. Inspection shall not constitute an acknowledgment or representation by
Bank that there has been or will be compliance with the Plans, Loan Documents,
applicable laws and governmental requirements or that the construction is free
from defective materials or workmanship. Inspection whether or not followed
by
notice of Default shall not constitute a waiver of any Default then existing,
or
a waiver of Bank's right thereafter to insist that the Improvements be
constructed in accordance with the Plans, Loan Documents, applicable laws,
and
governmental requirements. Bank's failure to inspect shall not constitute a
waiver of any of Bank's rights under the Loan Documents or at law or in
equity.
Section
4.3. Miscellaneous.
This
Agreement may be executed in several counterparts, all of which are identical,
and all of which counterparts together shall constitute one and the same
instrument. A determination that any provision of this Agreement is
unenforceable or invalid shall not affect the enforceability or validity of
any
other provision and the determination that the application of any provision
of
this Agreement to any person or circumstance is illegal or unenforceable shall
not affect the enforceability or validity of such provision as it may apply
to
other persons or circumstances. Time shall be of the essence with respect to
Borrower's obligations under the Loan Documents. This Agreement, and its
validity, enforcement and interpretation, shall be governed by Tennessee law
(without regard to any conflict of laws principles) and applicable United States
federal law.
-6-
Section
4.4. Notices.
Unless
specifically provided otherwise, any notice for purposes of this agreement
or
any other Loan Document shall be given in accordance with the provisions of
the
Loan Agreement.
Section
4.5. Successors
and Assigns.
This
Agreement shall be binding upon Borrower, and Borrower's heirs, devisees,
representatives, successors and assigns, and shall inure to the benefit of
Bank
and its successors and assigns, provided, however, that Borrower shall not
assign or encumber any interest of Borrower under any Loan Document or in any
proceeds of the Construction Loan without the prior written consent of Bank.
Section
4.6. Modification
or Termination.
The
Loan Documents may only be modified or terminated by a written instrument or
instruments intended for that purpose and executed by the party against which
enforcement thereof is asserted. This Agreement shall continue in full force
and
effect until the Obligations are paid in full; and all representations and
warranties and all provisions herein for indemnity of Bank (and any other
provisions herein specified to survive) shall survive payment in full of the
Obligations and any release or termination of this Agreement or of any other
Loan Documents.
Section
4.7. Costs
and Expenses.
Without
limitation of any Loan Document and to the extent not prohibited by applicable
laws, Borrower shall pay when due, and reimburse to Bank on demand, and
indemnify Bank from, all out-of-pocket fees, costs, and expenses paid or
incurred by Bank in connection with the negotiation, preparation and execution
of this Agreement and the other Loan Documents (and any amendments, approvals,
consents, waivers and releases requested, required, proposed or done from time
to time), or in connection with the disbursement, administration or collection
of the Construction Loan or the enforcement of the obligations or the exercise
of any right or remedy of Bank, including xxii) fees
and expenses of Bank's counsel; xxiii) appraisal,
re-appraisal and survey costs; xxiv) title
insurance charges and premiums; xxv) title
search or examination costs, including abstracts, abstractors' certificates
and
uniform commercial code searches; xxvi) judgment
and tax lien searches for Borrower; xxvii) escrow
fees; xxviii) fees
and costs of environmental investigations and site assessments; xxix) recordation
taxes, documentary taxes, transfer taxes, mortgage taxes and intangible
recording taxes xxx) filing
and recording fees, and xxxi) brokerage
fees. Borrower shall pay all costs and expenses incurred by Bank, including
attorneys' fees, if the obligations or any part thereof are sought to be
collected by or through an attorney at law, whether or not involving probate,
appellate, administrative or bankruptcy proceedings. Borrower shall pay all
costs and expenses of complying with the Loan Documents, whether or not such
costs and expenses are included in the Budget. Borrower's obligations under
this
Section shall survive the delivery of the Loan Documents, the making of
advances, the payment in full of the obligations, the release or termination
of
the Loan Documents, the foreclosure of the Deed of Trust or conveyance in lieu
of foreclosure, any bankruptcy or other debtor relief proceeding, and any other
event whatsoever.
Section
4.8. Further
Assurances.
Borrower will, on request of Bank, xxxii) promptly
correct any defect, error or omission in any Loan Document; xxxiii) execute,
acknowledge, deliver, procure, record or file such further instruments and
do
such further acts deemed necessary, desirable or proper by Bank to carry out
the
purposes of the Loan Documents and to identify and subject to the liens and
security interest of the Loan Documents any property intended to be covered
thereby, including any renewals, additions, substitutions, replacements, or
appurtenances to the Property; xxxiv) execute,
acknowledge, deliver, procure, file or record any document or instrument deemed
necessary, desirable, or proper by Bank and to protect the liens or the security
interest under the Loan Documents against the rights or interests of third
persons; and xxxv) provide
such certificates, documents, reports, information, affidavits and other
instruments and do such further acts deemed necessary, desirable or proper
by
Bank to comply with the requirements of any agency having jurisdiction over
Bank
or any examiners of such agencies with respect to the Construction Loan,
Borrower or the Property. Borrower shall pay all costs connected with any of
the
foregoing, which shall be a demand obligation owing by Borrower (which Borrower
hereby promises to pay) to Bank pursuant to this Agreement.
-7-
Section
4.9. No
Assignment.
Borrower shall not assign, transfer or encumber its rights or obligations under
any Loan Document or any proceeds of the Construction Loan without the prior
written consent of Bank.
Section
4.10. Inducement
to Bank.
The
representations and warranties contained in the Loan Documents xxxvi) are
made to induce Bank to make the Construction Loan and Bank is relying thereon,
and xxxvii) shall
survive any bankruptcy proceedings involving Borrower or the Property,
foreclosure, or conveyance in lieu of foreclosure.
Section
4.11. Omitted.
Section
4.12. Interpretation.
References to "Dollars," "$," "money," "payments" or other similar financial
or
monetary terms are references to lawful money of the United States of America.
References to Articles, Sections, and Exhibits are, unless specified otherwise,
references to articles, sections and exhibits of this Agreement. Words of any
gender shall include each other gender. Words in the singular shall include
the
plural and words in the plural shall include the singular. References to
Borrower shall mean, each person comprising same, jointly and severally.
References to persons shall include any legal entities, including public or
governmental bodies, agencies or instrumentalities, and natural persons. The
words "herein," "hereof," "hereunder" and other similar compounds of the word
"here" shall refer to the entire Agreement and not to any particular provision
or section. The words "include" and "including" shall be interpreted as if
followed by the words "without limitation". Captions and headings in the Loan
Documents are for convenience only and shall not affect the construction of
the
Loan Documents.
Section
4.13. No
Partnership, etc.
The
relationship between Bank and Borrower is solely that of Bank and borrower.
Bank
has no fiduciary or other special relationship with or duty to Borrower and
none
is created by the Loan Documents. Nothing contained in the Loan Documents,
and
no action taken or omitted pursuant to the Loan Documents, is intended or shall
be construed to create any partnership, joint venture, association, or special
relationship between Borrower and Bank or in any way make Bank a co-principal
with Borrower with reference to the Project, the Property or otherwise. In
no
event shall Bank's rights and interests under the Loan Documents be construed
to
give Bank the right to control, or be deemed to indicate that Bank is in control
of, the business, properties, management or operations of Borrower.
-8-
Section
4.14. Records.
The
unpaid amount of the Construction Loan set forth on the books and records of
Bank maintained in the ordinary course of its business shall be presumptive
evidence of the amount thereof owing and unpaid, but failure to record any
such
amount on the books and records shall not limit or affect the obligations of
Borrower under the Loan Documents to make payments on the Construction Loan
when
due.
Section
4.15. Exhibits.
This
Agreement includes the Exhibits listed below which are marked by "X", all of
which Exhibits are attached hereto and made a part hereof for all purposes,
it
being agreed that if any Exhibit to be executed and delivered contains blanks,
the same shall be completed correctly and in accordance with this Agreement
prior to or at the time of the execution and delivery thereof.
| X |
Exhibit
"A"
|
- |
Legal
description of the Land
|
| X |
Exhibit
"B"
|
- |
Basic
Information
|
| X |
Exhibit
"C"
|
- |
Certain
Conditions to Initial Funding
|
| X |
Exhibit
"D"
|
- |
Budget
|
| X |
Exhibit
"E"
|
- |
Plans
|
| X |
Exhibit
"F"
|
- |
Requisitions
|
| X |
Exhibit
"F-1"
|
- |
Requisition
- Draw Request Information
|
| X |
Exhibit
"G"
|
- |
Survey
Requirements
|
| X |
Exhibit
"H"
|
- |
Architect's
Certificate
|
Section
4.16. Entire
Agreement.
The
Loan Documents constitute the entire understanding and agreement between
Borrower and Bank with respect to the transactions arising in connection with
the Construction Loan and supersede all prior written or oral understandings
and
agreements between Borrower and Bank with respect to the matters addressed
in
the Loan Documents.
Section
4.17. Mandatory
Arbitration.
Any
controversy or claim between or among the parties hereto including but not
limited to those arising out of or relating to this Agreement or any related
agreements or instruments, including any claim based on or arising from an
alleged tort, shall be determined by binding arbitration in accordance with
the
Federal Arbitration Act (or if not applicable, the applicable state law), the
Rules of Practice and Procedure for the Arbitration of Commercial Disputes
of
Endispute, Inc., doing business as J.A.M.A./Endispute (J.A.M.S.), as amended
from time to time, and the "Special Rules" set forth below. In the event of
any
inconsistency, the Special Rules shall control. Judgment upon any arbitration
award may be entered in any court having jurisdiction. Any party to this
Agreement may bring an action, including a summary or expedited proceeding,
to
compel arbitration of any controversy or claim to which this agreement applies
in any court having jurisdiction over such action.
(a)
Special
Rules.
The
arbitration shall be conducted in Nashville, Davidson County, Tennessee and
administered by J.A.M.S. who will appoint an arbitrator; if J.A.M.S. is unable
or legally precluded from administering the arbitration, then the American
Arbitration Association will serve. All arbitration hearings will be commenced
within 90 days of the demand for arbitration; further, the arbitrator
shall
only, upon a showing of cause, be permitted to extend the commencement of such
hearing for up to an additional 60 days.
-9-
(b)
Reservations
of Rights.
Nothing
in this Agreement shall be deemed to (i) limit the applicability of
any
otherwise applicable statutes of limitation or repose and any waivers contained
in this Agreement; or (ii) be a waiver by Bank of the protection afforded
to it by 12 U.S.C. § 91 or any substantially equivalent state law; or
(iii) limit the right of Bank (A) to exercise self help remedies
such
as (but not limited to) setoff, or (B) to foreclose against any real
or
personal property collateral, or (C) to obtain from a court provisional
or
ancillary remedies such as (but not limited to) injunctive relief or the
appointment of a receiver. Bank may exercise such self help rights, foreclose
upon such property, or obtain such provisional or ancillary remedies before,
during or after the pendency of any arbitration proceeding brought pursuant
to
this Agreement. At Bank's option, foreclosure under a deed of trust or mortgage
may be accomplished by any of the following: the exercise of a power of sale
under the deed of trust or mortgage, or by judicial sale under the deed of
trust
or mortgage, or by judicial foreclosure. Neither the exercise of self help
remedies nor the institution or maintenance of an action for foreclosure or
provisional or ancillary remedies shall constitute a waiver of the right of
any
party, including the claimant in any such action, to arbitrate the merits of
the
controversy or claim occasioning resort to such remedies.
No
provision in the Loan Documents regarding submission to jurisdiction and/or
venue in any court is intended or shall be construed to be in derogation of
the
provisions in any Loan Document for arbitration of any controversy or
claim.
(Remainder
of
Page Intentionally Left Blank)
-10-
THE
WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED
and DELIVERED as of the ___ day of ___________, 2005.
|
Borrower’s
Address
for
Notices:
|
BORROWER:
|
||
|
000
Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx,
Xxxxxxxxx 00000
|
ARC
HDV, LLC
|
||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
|
The
Federal Tax Identification
Number
of Borrower: _______________
|
|||
|
Bank’s
Address
for
Notices:
|
BANK:
|
||
|
TN1-100-08-07
000
Xxxxx Xxxxxx, 0xx Xx.
Xxxxxxxxx,
XX 00000-0000
Attention:
Healthcare Lending
|
BANK
OF AMERICA, N.A.
|
||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
-11-
EXHIBIT
"A"
PARCEL
NO. 1:
THAT
PORTION OF THE NORTHEAST QUARTER OF SECTION 16, TOWNSHIP 3 NORTH, RANGE 1 EAST
OF THE GILA AND SALT RIVER BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA,
DESCRIBED AS FOLLOWS:
COMMENCING
AT A HALF-INCH REBAR FOUND AT THE NORTH QUARTER CORNER OF SAID SECTION 16,
FROM
WHICH A ONE-INCH IRON BAR AT THE NORTHEAST CORNER OF SAID SECTION BEARS NORTH
87
DEGREES 41 MINUTES 30 SECONDS EAST, A DISTANCE OF 2691.76 FEET;
THENCE
NORTH 87 DEGREES 41 MINUTES 30 SECONDS EAST, ALONG THE NORTH LINE OF THE
NORTHEAST QUARTER OF SAID SECTION, A DISTANCE OF 1043.98 FEET TO THE POINT
OF
BEGINNING;
THENCE
CONTINUING NORTH 87 DEGREES 41 MINUTES 30 SECONDS EAST, ALONG THE NORTH LINE
OF
SAID NORTHEAST QUARTER, A DISTANCE OF 827.66 FEET TO THE CENTERLINE OF PLAZA
DEL
RIO BOULEVARD AS SHOWN ON THE PLAZA DEL RIO MAP OF DEDICATION, ACCORDING TO
BOOK
344 OF MAPS, PAGE 47;
THENCE
SOUTH 02 DEGREES 18 MINUTES 30 SECONDS EAST, ALONG SAID CENTERLINE, A DISTANCE
OF 658.71 FEET TO A HALF-INCH REBAR FOUND AT THE NORTHEAST CORNER OF THAT PARCEL
OF LAND DESCRIBED AS 88-331437 OF OFFICIAL RECORDS OF MARICOPA
COUNTY;
THENCE
SOUTH 87 DEGREES 41 MINUTES 30 SECONDS WEST, ALONG THE NORTH LINE OF SAID
PARCEL, A DISTANCE OF 692.63 FEET TO A COTTON-SPINDLE WITH TAG (#24738) FOUND
AT
THE NORTHWEST CORNER OF SAID PARCEL;
THENCE
SOUTH 02 DEGREES 18 MINUTES 30 SECONDS EAST, ALONG THE WEST LINE OF SAID PARCEL,
A DISTANCE OF 41.30 FEET TO A HALF-INCH REBAR FOUND;
THENCE
SOUTH 87 DEGREES 41 MINUTES 30 SECONDS WEST, A DISTANCE OF 105.01 FEET TO A
POINT;
THENCE
NORTH 02 DEGREES 18 MINUTES 30 SECONDS WEST, A DISTANCE OF 307.06 FEET TO A
BRASS CAP FOUND FLUSH;
THENCE
SOUTH 87 DEGREES 41 MINUTES 30 SECONDS WEST, A DISTANCE OF 30.02 FEET TO A
HALF-INCH REBAR WITH CAP (LS #13562) FOUND AT THE SOUTHEAST CORNER OF THAT
PARCEL DESCRIBED IN 89-277884 OF OFFICIAL RECORDS OF MARICOPA
COUNTY;
THENCE
NORTH 02 DEGREES 18 MINUTES 30 SECONDS WEST, A DISTANCE OF 392.95 FEET TO THE
POINT OF BEGINNING.
PARCEL
NO. 2:
NON-EXCLUSIVE
EASEMENTS FOR DRAINAGE, WALKWAY, PARKING AND ACCESS AS SET FORTH IN EASEMENT
AGREEMENT RECORDED MARCH 31, 1997 AS 97-0763185 OF OFFICIAL RECORDS AND
RE-RECORDED AS 97-0769793 OF OFFICIAL RECORDS; ASSIGNMENT OF EASEMENT RECORDED
AS 00-0000000 OF OFFICIAL RECORDS AND FIRST AMENDMENT RECORDED AS 2000-0123884
OF OFFICIAL RECORDS.
Exhibit
A
- Page 1
EXHIBIT
"B"
BASIC
INFORMATION
|
SPECIFIC
DEFINITIONS:
|
1. "Additional
Land"
means
certain individual parcels that bisect the Land including closure of an existing
public right-of-way, all as reflected in the approved Plans.
2. "Agent
to Request Advance"
means
Xxxx Xxxxxxx and/or Xxxx Xxxxxxx.
3. "Appraised
Value"
means
$33,075,000.
4. "Architect"
means
The Xxxxxx/Xxxxxxx Partnership.
5. "Borrower"
means
ARC HDV, LLC.
6. "Completion
Date"
means
November 1, 2006.
7. "Construction
Account"
means
account no. _________________.
8. "Improvements"
means
all on-site and off-site improvements to the Land for a 40-unit assisted living
facility, all as reflected in the approved Plans for the Project, to be
constructed on the Land, together with all fixtures, tenant improvements, and
appurtenances now or later to be located on the Land and/or in such
improvements.
9. "Permitted
Changes"
means
changes to the Plans or Improvements, provided the cost of any single change
or
extra does not exceed $50,000.00 and the aggregate amount of all such changes
and extras (whether positive or negative) does not exceed
$200,000.00.
10. "Project"
means
the Land, the construction of the Improvements, and if applicable, the leasing
and operation of the Improvements.
11. "Title
Insurer"
means
First American Title Insurance Company.
|
B.
|
GENERAL
DEFINITIONS:
|
1. "Architect's
Certificate"
means
the Architect's Certificate attached hereto as Exhibit
"H".
2. "Budget"
means
the budget and cost itemization for the Project attached as Exhibit "D".
3. "Deed
of Trust"
means
the Deed of Trust, Assignment of Rents, Security Agreement and Financing
Statement described in the Loan Agreement.
4. "Default"
is
defined in Section 3.1.
5. "Environmental
Agreement"
means
the Environmental Indemnity Agreement dated of even date herewith, between
Borrower and Bank.
Exhibit
B
- Page 1
6. "Land"
means
the real estate described in Exhibit "A".
7. "Loan
Agreement"
means
the Loan Agreement of even date herewith between Bank and Borrower, as the
same
may be amended, modified or restated from time to time.
8. "Plans"
means
the plans and specifications listed in Exhibit "E".
9. "Property"
means
Borrower's estate in the Land, the Improvements and all other property
constituting the Project.
10. "Title
Insurance"
means
the title insurance described in Exhibit "C".
Capitalized
terms not otherwise defined herein shall have the meaning ascribed to such
terms
in the Loan Agreement.
Exhibit
B
- Page 2
EXHIBIT
"C"
CERTAIN
CONDITIONS PRECEDENT TO INITIAL FUNDING
1. Fees
and Expenses.
Borrower shall have paid all other fees, costs and expenses then required to
be
paid pursuant to this Agreement and any other Loan Documents.
2. Financial
Statements.
Bank
shall have received and approved the Financial Statements of Borrower or any
other party required by any loan application or commitment or otherwise required
by Bank.
3. Appraisal.
Bank
shall have received and approved a market value appraisal which appraises the
Property on a "completed value" basis at not less than the Appraised Value.
The
appraiser and appraisal must be satisfactory to Bank (including satisfaction
of
applicable regulatory requirements) and the appraiser must be engaged directly
by Bank.
4. Draw
Schedule and Budget.
Bank
shall have received and approved Borrower's proposed cash flow, draw schedule,
and construction schedule, for the Project.
5. Architect's
Certificate; Budget.
Bank
shall have received the executed Architect's Certificate from the Architect.
To
the extent not previously delivered in final form, Borrower shall also prepare
and deliver the final Budget to be attached as Exhibit “D”.
6. Authorization.
Bank
shall have received and approved evidence Bank requires of the existence, good
standing, authority and capacity of Borrower and American Retirement Corporation
to execute, deliver, and perform the Loan Documents, including but not limited
to:
(a) For
each
partnership (including a joint venture): (i) a true and certified copy
of
an executed copy of the partnership agreement and all amendments thereto, and
(ii) for each limited partnership, an original of the certificate of
limited partnership accompanied by a certificate, dated within sixty (60) days
of the Construction Loan closing, that the copy is true and complete issued
by
the appropriate governmental official of the jurisdiction of formation, and
satisfactory evidence of registration or qualification to do business in the
state where Borrower's principal place of business is located and the State
where the Project is located.
(b) For
each
corporation: (i) a certified copy of its articles of incorporation and
by-laws, and all amendments thereto, (ii) a certificate of incumbency
of
all of its officers who will be authorized to execute or attest any of the
Loan
Documents, (iii) a copy of resolutions approving the Loan Documents
and
authorizing the transactions contemplated in this Agreement,
(iv) certificates, dated within sixty (60) days of the Construction
Loan
closing, of existence, good standing and qualification to do business in the
state of its creation and, if different, in the state where the Project is
located, issued by the appropriate governmental officials.
(c) For
each
limited liability company: (i) a certified copy of its Articles of
Organization and Operating Agreement, and all amendments thereof, (ii) a
Certificate of Incumbency of its managers or other individuals who will be
authorized to execute or attest any of the Loan Documents, (iii) a copy
of
Resolutions approving the Loan Documents and authorizing the transactions
contemplated in this Agreement, (iv) Certificates, dated within sixty
(60)
days of the Construction Loan Closing, of existence, good standing and
qualification to do business in the state of its creation, and, if different,
in
the state where the project is located, issued by the appropriate governmental
officials.
Exhibit C
- Page 1
(d) All
certificates, resolutions, and consents required by Bank applicable to the
foregoing.
7. Loan
Documents.
Borrower and each other person or entity required by Bank shall have duly
executed, acknowledged and/or sworn to as required, recorded or filed, and
delivered to Bank all Loan Documents then required by Bank, dated the date
of
this Agreement, all in form and content satisfactory to Bank.
8. Opinions.
Bank
shall have received the written opinion of counsel satisfactory to Bank for
the
Borrower, addressed to Bank, dated the date of this Agreement.
9. Survey;
No Special Flood Hazard.
Bank
shall have received two (2) prints of an original survey of the Land and
improvements thereon dated not more than sixty (60) days prior to the date
of
this Agreement (or dated such earlier date, if any, as is satisfactory to the
Title Insurer, but in any event not more than one hundred eighty (180) days
prior to the date of this Agreement) satisfactory to Bank and the Title Insurer
and otherwise complying with Exhibit "G",
together with a flood insurance policy in an amount equal to the lesser of
the
maximum Construction Loan amount or the maximum amount of flood insurance
available under the Flood Disaster Protection Act of 1973, as amended, and
otherwise in compliance with the requirements of the Loan Documents, or evidence
satisfactory to Bank that none of the Land is located in a flood hazard
area.
10. Title
Insurance.
Bank
shall have received and approved one or more title insurance policies, as Bank
may require, issued by the Title Insurer, on a coinsurance and/or reinsurance
basis if and as required by Bank, insuring that the Deed of Trust constitutes
a
valid first lien covering the Borrower's fee simple estates and all improvements
thereon, and subject only to those exceptions and encumbrances (regardless
of
rank or priority) Bank approves, in a form acceptable to Bank and containing
such affirmative coverages as may be required by Bank, and with all "standard"
exceptions which can be deleted, including the exception for matters which
a
current survey would show, deleted to the fullest extent authorized under
applicable title insurance rules, and Borrower shall satisfy all requirements
therefore; containing no exception for standby fees or real estate taxes other
than those for 2005 and no exception for subsequent assessments for prior years;
providing full coverage against mechanics' and materialmen's liens to the extent
authorized under applicable title insurance rules, and Borrower shall satisfy
all requirements therefore; insuring that no restrictive covenants shown in
the
Title Insurance have been violated, and that no violation of the restrictions
will result in a reversion or forfeiture of title; insuring that fee simple
indefeasible or marketable (as coverage is available) fee simple title to the
Land and Improvements is vested in Borrower; containing such endorsements as
Bank may require and are available under applicable title insurance rules,
and
Borrower shall satisfy all requirements therefore; insuring any easements,
leasehold estates or other matters appurtenant to or benefiting the Land and/or
the Improvements as part of the insured estate; insuring the right of access
to
the Land to the extent authorized under applicable title insurance rules, and
Borrower shall satisfy all requirements therefore; and containing provisions
acceptable to Bank regarding advances of Construction Loan amounts after
closing.
Exhibit C
- Page 2
11. Plans.
Bank
shall have received and approved two (2) true and correct copies of all existing
Plans (including the site plan), together with satisfactory evidence that all
applicable governmental authorities, Borrower, Borrower's architect, engineer,
and contractors have approved the same.
12. Contracts.
At the
request of Bank, Bank shall have received and approved (a) a list
containing the names and addresses of all existing contractors, architects,
engineers, and other suppliers of services and materials for the Project, their
respective contract amounts, and a copy of their contracts; and (b) duly
executed, acknowledged and delivered originals from each contractor, architect,
engineer, subcontractor, or supplier of services or materials required by Bank,
of (i) consents or other agreements satisfactory to Bank and
(ii) agreements satisfactory to Bank subordinating all rights, liens,
claims and charges they may have or acquire against Borrower or the Property
to
the rights, liens and security interests of Bank.
13. Insurance
Policies.
Bank
shall have received and approved the insurance policies initially required
by
Bank, pursuant to the Loan Documents, together with evidence satisfactory to
Bank that all premiums therefore have been paid and that the policies are in
full force and effect.
14. Environmental
Compliance/Report.
Bank
shall have received and approved evidence satisfactory to Bank that no portion
of the Land is "wetlands" under any applicable law and that the Land does not
contain and is not within or near any area designated as a hazardous waste
site
by any governmental authority, that neither the Property nor any adjoining
property contains or has ever contained any substance classified as hazardous
or
toxic (or otherwise regulated, such as, without limitation, asbestos, radon
and/or petroleum products) under, and that neither the Property nor any use
or
activity thereon violates or is or could be subject to any response,
remediation, clean-up or other obligation under, any law or governmental
requirement pertaining to health or the environment, including without
limitation, a written report of an environmental assessment of the Property,
made by an engineering firm, and of a scope and in form and content satisfactory
to Bank, complying with Bank's established guidelines, showing that there is
no
evidence of any such substance which has been generated, treated, stored,
released or disposed of in the Property, and such additional evidence as may
be
required by Bank. All reports, drafts of reports, and recommendations, whether
written or oral, from such engineering firm shall be made available and
communicated to Bank.
15. Soil
Reports.
Bank
shall have received and approved a soil composition test and any other tests
reasonably deemed necessary by Bank, satisfactory to Bank, and performed by
a
licensed professional engineer satisfactory to Bank, if requested by
Bank.
16. Access,
Utilities, and Laws.
Bank
shall have received and approved (a) satisfactory evidence that the
Property abuts and has fully adequate direct and free access to one or more
public streets, dedicated to public use, fully installed and accepted by the
appropriate governmental authority, that all costs and expenses of the
installation and acceptance thereof have been paid in full, and that there
are
no restrictions on the use and enjoyment of such streets which would adversely
affect the Project; (b) letters from the applicable utility companies
or
governmental authorities confirming that all utilities necessary for the
Improvements are available at the Land in sufficient capacity, together with
evidence satisfactory to Bank of paid impact fees or utility reservation
deposits or connection fees required to assure the timely availability of such
services; (c) satisfactory evidence that all applicable zoning ordinances,
restrictive covenants and governmental requirements affecting the Property
permit the use for which the Property is intended and have been or will be
complied with without the necessity of variance and without the Property being
a
nonconforming use; (d) evidence satisfactory to Bank that the Land and
Improvements comply and will comply with all laws and governmental requirements
regarding subdivision and platting and would so comply if the Land and the
Improvements thereon were conveyed as a separate parcel; (e) a true
and
correct copy of a valid building permit for the Improvements, together with
all
other permits and approvals necessary for construction of the Improvements;
and
(f) evidence satisfactory to Bank of compliance by Borrower and the
Property, and the proposed construction, use and occupancy of the Improvements,
with such other applicable laws and governmental requirements as Bank may
request, including all laws and governmental requirements regarding access
and
facilities for handicapped or disabled persons including, without limitation
and
to the extent applicable, The Federal Architectural Barriers Act (42 U.S.C.
§ 4151 et seq.), The Fair Housing Amendments Act of 1988 (42 U.S.C.
§ 3601 et seq.), The Americans With Disabilities Act of 1990 (42 U.S.C.
§ 12101 et seq.), The Rehabilitation Act of 1973 (29 U.S.C. § 794) and
any applicable state requirements.
Exhibit C
- Page 3
17. Parking.
Bank
shall have received evidence satisfactory to the Bank that there is sufficient
onsite parking for the improvements to be constructed thereon.
18. Omitted.
19. Tax
and Standby Fee Certificates.
Bank
shall have received and approved satisfactory evidence (a) of the identity
of all taxing authorities and utility districts (or similar authorities) having
jurisdiction over the Property or any portion thereof; (b) that all
taxes,
standby fees, impact fees, and any other similar charges have been paid,
including copies of receipts or statements marked "paid" by the appropriate
authority; and (c) that the Land is a separate tax lot or lots with
separate assessment or assessments of the Land and Improvements, independent
of
any other land or improvements, or will be reassessed shortly after Closing
to
reflect same.
20. Omitted.
21. Compliance
With Warranties.
All
representations and warranties of the Borrower contained in this Agreement
shall
be true and correct as of the date of disbursement.
22. Omitted.
23. Other
Documents.
Borrower and any other person or entity, shall have delivered to Bank, in form
and content satisfactory to Bank, such other documents and certificates as
Bank
may reasonably request.
Exhibit C
- Page 4
EXHIBIT
"D"
BUDGET
Certified
Cost Breakdown to be supplied by Borrower
Exhibit D
- Page 1
EXHIBIT
"E"
PLANS
(See
Bank
file)
Exhibit E
- Page 1
EXHIBIT
"F"
ADVANCES
1. Requisition.
A
"Requisition" means a properly completed and executed written application by
the
Agent to Request Advance to Bank in the form of Exhibit
"F-1"
(or in
another form approved by Bank) setting forth the amount of Construction Loan
proceeds desired, together with such schedules, affidavits, releases, waivers,
statements, invoices, bills, and other documents, certificates and information
required by Bank. At least five (5) business days before the requested date
of
each advance, Borrower shall deliver a Requisition to Bank. Borrower shall
be
entitled to an advance only in an amount approved by Bank in accordance with
the
terms of this Agreement and the Loan Documents. Bank shall not be required
to
make advances more frequently than once each calendar month. Bank shall, only
upon the satisfaction of all applicable conditions of this Agreement and the
Loan Documents, make the requested advance to Borrower on a business day within
five (5) business days after such satisfaction. Each Requisition, and Borrower's
acceptance of any advance, shall be deemed to ratify and confirm that all
representations and warranties in the Loan Documents remain true and correct
as
of the date of the Requisition and the advance, respectively.
2. Advances.
Subject
to Section 6 of this Exhibit "F"
all
advances made to Borrower shall be disbursed in accordance with the terms
hereof. All such advances shall be for payments of the costs and expenses
specified in the Budget for which the advances were made, and for no other
purpose. Following receipt and approval of a Requisition, all supporting
documentation and information, Bank will determine the amount of the advance
it
will make in accordance with this Agreement, the Loan Documents and the Budget
and the following standards:
(a) For
construction work advances will initially be made on the basis of ninety percent
(90%) of the costs shown on the application for payment from the contractor
reviewed and approved by Bank of the work or material in place on the
Improvements that comply with the terms of the Loan Documents, minus all
previous advances and all amounts required to be paid by Borrower, as described
in Columns (B) and (C) of the Budget, until the Project is fifty percent
(50%) complete; thereafter, no additional retainage will be required and
advances will be funded on the basis of one hundred percent (100%) of the costs
shown on the application.
(b) Advances
will not be made for building materials or furnishings that are not yet
incorporated into the Improvements ("stored materials") unless the stored
materials are in Borrower's possession and satisfactorily stored on the
Land.
3. Omitted.
4. Conditions
to All Advances. As conditions precedent to Bank’s approval of each advance made
pursuant to a Requisition in addition to all other requirements contained in
the
other Loan Documents, Borrower must satisfy the following conditions as
determined by Bank:
(a) properly
completed Requisition with all supporting information.
Exhibit F
- Page 1
(b) No
Default or any event which, with the giving of notice or the lapse of time,
or
both, could become a Default exists.
(c) The
representations and warranties made in the Loan Documents must be true and
correct on and as of the date of each advance.
(d) Each
subcontract or other contract for labor, materials, services and/or other work
included in a Draw Request shall have been duly executed and delivered by all
parties thereto and shall be effective, and Bank shall have received a true,
complete copy of a fully executed copy of each such subcontract or other
contract as Bank may have requested.
(e) No
mechanics or materialmen's lien or other encumbrance shall have been filed
and
remain in effect against the Property, and releases or waivers of mechanics'
liens and receipted bills showing payment of all amounts due to all parties
who
have furnished materials or services or performed labor of any kind in
connection with the Property shall have been obtained or Borrower shall bond
off
under the provisions of applicable law any lien or claim of lien filed for
record, within thirty (30) days of the date of notice to Borrower of filing
of
said claim.
(f) The
Title
Insurance shall have been endorsed and down-dated in a manner satisfactory
to
Bank to increase the coverage by the amount of each advance through the date
of
each such advance with no additional title change or exception not approved
by
Bank.
(g) To
the
extent requested by Bank, Bank shall have received written certification by
Borrower's architect, that to the best of such party's knowledge, information,
and belief, construction is in accordance with the Plans, the quality of the
work for which the advance is requested is in accordance with the applicable
contract, the amount of the advance requested represents work in place based
on
on-site observations and the data compromising the Draw Request, the work has
progressed as indicated, and the applicable contractor is entitled to payment
of
the amount certified.
(h) To
the
extent requested by Bank, Bank shall have received (i) a foundation
survey
made immediately after, but in no event later than ten (10) days after, the
laying of the foundation of each building or structure of the Improvements
satisfactory to Bank complying with Exhibit "G",
(ii) a certificate of Borrower's architect stating that based on personal
inspection, the foundations have been completed in accordance with the Plans
and
are satisfactory in all respects, and (iii) a bearing-capacity test
report
with respect to the excavated footings and foundations, reviewed and approved
by
the Borrower's architect.
(i) To
the
extent requested by Bank, Bank shall have received within ten (10) days after
the pouring of concrete for any Improvements, a report satisfactory to Bank
of
the results of concrete tests made at the time the concrete is
poured.
(j) Bank
shall have received within ten (10) days after the compaction of any soil for
construction, a report satisfactory to Bank of the results of soil tests, if
applicable.
(k) As
of the
date of making such advance, no event shall have occurred, nor shall any
condition exist, that could have an adverse effect on the enforceability of
the
Loan Documents, be materially adverse to the financial condition of Borrower,
impair the ability of Borrower to fulfill its material obligations under the
Loan Documents, or otherwise have any adverse effect whatsoever on the
Property.
Exhibit F
- Page 2
(l) The
Improvements shall not have been damaged and not repaired.
(m) Borrower
shall have paid all amounts required to be paid by Borrower under the
Budget.
(n) Borrower
shall have made the Borrower's Deposit if required by Section 1.4 of
this
Agreement.
(o) Borrower
shall have delivered to Bank such other information, documents and supplemental
legal opinions as may be required by Bank.
(p) With
respect to any advance to pay a contractor, Bank shall have received original
applications for payments in form approved by Bank, containing a breakdown
by
trade and/or other categories acceptable to Bank, executed and certified by
each
contractor and Borrower's architect, accompanied by invoices.
(q) Borrower
shall provide Bank with copies of all field reports of the Project architect
and
engineer at Bank's request.
5. Final
Advance for Improvements. The final advance for the Improvements (including
retainage) shall not be made until thirty (30) days after the Bank shall have
received the following:
(a) Certificates
from Borrower's architect, engineer and contractor, certifying that the
Improvements (including any off-site improvements) have been completed in
accordance with, and as completed comply with, the Plans and all laws and
governmental requirements; and Bank shall have received two (2) sets of detailed
"as built" Plans approved in writing by Borrower, Borrower's architect, and
each
contractor, including plans and specifications for architectural, structural,
mechanical, plumbing, electrical and site development (including storm drainage,
utility lines and landscaping) work.
(b) Final
affidavits (in a form approved by Bank) from Borrower's architect, engineer,
and
each contractor certifying that each of them and their subcontractors, laborers,
and materialmen has been paid in full for all labor and materials for
construction of the Improvements; and final lien releases or waivers (in a
form
approved by Bank) by Borrower's architect, engineer, contractor, and all
subcontractors, materialmen, and other parties who have supplied labor,
materials, or services for the construction of the Improvements, or who
otherwise might be entitled to claim a contractual, statutory or constitutional
lien against the Property.
(c) The
Title
Insurance shall be endorsed to remove any exception for mechanics' or
materialmen's liens or pending disbursements, with no additional title change
or
exception objectionable to Bank, and with such other endorsements required
by
Bank.
(d) Evidence
satisfactory to Bank that all laws and governmental requirements have been
satisfied, including receipt by Borrower of all necessary governmental licenses,
certificates of need and permits (including certificates of occupancy) with
respect to the completion, use, occupancy and operation of the Improvements,
together with evidence satisfactory to Bank that all such licenses,
certificates, and permits are in full force and effect and have not been
revoked, canceled or modified.
Exhibit F
- Page 3
(e) Two
(2)
copies of a final as-built survey satisfactory to Bank and complying with
Exhibit
"G".
6. Omitted.
7. Conditions
and Waivers.
All
conditions precedent to the obligation of Bank to approve any advance are
imposed hereby solely for the benefit of Bank and the parties under the Loan
Documents, and no other party may require satisfaction of any such condition
precedent or be entitled to assume that Bank will refuse to make any advance
in
the absence of strict compliance with such conditions precedent. Any requirement
of this Agreement may be waived, in whole or in part, in a specific written
waiver intended for that purpose and signed by Bank. Bank shall have the right
to approve and verify the periodic progress, costs incurred by Borrower, and
the
estimated costs remaining to be incurred. No advance shall constitute an
approval or acceptance by Bank of any construction work, a waiver of any
condition precedent to any further advance, or preclude Bank from thereafter
declaring the failure of Borrower to satisfy such condition precedent to be
a
Default. No waiver by Bank of any condition precedent or obligation shall
preclude Bank from requiring such condition or obligation to be met prior to
making any other advance or from thereafter declaring the failure to satisfy
such condition or obligation to be a Default.
Exhibit F
- Page 4
EXHIBIT
"F-1"
REQUISITION
Borrower
shall use AIA Forms G702 and G703 for all draw requests.
Exhibit F
- Page 5
EXHIBIT
"G"
SURVEY
REQUIREMENTS
1. Field
Note Description.
The
Survey shall contain a certified metes and bounds description complying with
the
following: (i) the beginning point shall be established by a monument
located at the beginning point, or by reference to a nearby monument;
(ii) the sides of the Land shall be described by giving the distances
and
bearings of each; (iii) the distances, bearings, and angles shall be
taken
from an instrument survey by a registered professional engineer or registered
professional land surveyor; (iv) curved sides shall be described by
data
including: length of arc, central angle, radius of circle for the arc and chord
distance, and bearing; (v) the description shall be a single perimeter
description of the entire Land. If and as instructed, there shall also be a
separate metes and bounds description of one or more constituent tracts out
of
the Land; (vi) the description shall include a reference to all streets,
alleys, and other rights-of-way that abut the Land, and the width of all
rights-of-way mentioned shall be given the first time these rights-of-way are
referred to; (vii) for each boundary line abutting a street, road, alley
or
other means of access, the description must, in calling the boundary line,
state
that the boundary line and the right-of-way line are the same; (viii) if
the Land has been recorded on a map or plat as part of an abstract or
subdivision, reference to such recording data shall be made; and (ix) the
total acreage and square footage of the Land shall be certified.
2. Lot
and Block Description.
If the
Land consists of one or more complete lots or blocks included within a properly
established recorded subdivision or addition, then a lot and block description
will be an acceptable substitute for a metes and bounds description, provided
that the lot and block description must completely and properly identify the
name or designation of the recorded subdivision or addition and give the
recording information therefore.
3. Map
or
Plat.
The
Survey shall also contain a certified map or plat clearly showing the following:
(i) the Land; (ii) the relation of the point of beginning of
the Land
to the monument from which it is fixed; (iii) all easements, streets,
roads, alleys and rights-of-way on or abutting the Land, showing recording
information therefore by volume and page; (iv) if the Land has been
recorded on a map or plat as part of an abstract or subdivision, all survey
lines must be shown, and all lot and block lines (with distances and bearings)
and numbers, must be shown; (v) the established building setback lines,
if
any, including those by restrictive covenant, recorded plat and zoning ordinance
(identifying the source in each case, by volume and page reference if
applicable); (vi) all easements appurtenant to said Land, with recording
information by volume and page; (vii) the boundary lines of the street
or
streets abutting the Land and the width of said streets and the width of the
rights-of-way therefore; (viii) the distance from the nearest intersecting
street or road to the Land; (ix) all structures and improvements on
the
Land (with designation and dimensions of each party wall, if any) with
horizontal lengths of all sides and the relation thereof by distances to
(A) all boundary lines of the Land, (B) easements,
(C) established building lines and (D) street lines; (x) the
types of materials comprising the exterior walls and roofs of all buildings;
(xi) all street addresses of improvements on the Land; (xii) all
curb
cuts, driveways, fences, sidewalks, xxxxxx and landscaping; (xiii) the
number of stories of all multi-story structures; (xiv) the location,
type
and size of all utility lines as they service the Land and improvements (sewer,
water, gas, electric and telephone); (xv) all encroachments and
protrusions, if any, from or upon the Land or any improvements thereon or upon
any easement, building setback line or other restricted area, with exact
measurements; (xvi) all parking and paved areas, including the number
of
vehicles that may be parked; (xvii) all distances, angles and other
calls
contained in the legal description; (xviii) the location, type and size
of
all monuments, and as to each monument, indication whether it was found or
placed by the surveyor; (xix) the boundaries of any flood hazard area
or
flood plain area in which any part of the Land lies, with the map number, date
and source (governmental authority) of each flood map shown; (xx) all
surface water bodies or courses; (xxi) the date of any revisions subsequent
to the initial survey prepared pursuant to these requirements; (xxii) a
legend explaining the meaning of all symbols used on the plat; and
(xxiii) the scale of all distances and dimensions on the plat.
Exhibit G
- Page 1
4. Certification.
The
certification for the property description and the map or plat shall be
addressed to Bank, Borrower and the Title Insurer, signed by the surveyor (a
registered professional land surveyor or registered professional engineer),
bearing current date, registration number, and seal, and shall be in form
reasonably acceptable to Bank.
Exhibit G
- Page 2
EXHIBIT
"H"
ARCHITECT'S
CERTIFICATE
The
undersigned ("Architect") hereby states the following to Bank of America, N.A.,
a national banking association ("Lender"), regarding the Plans and
Specifications described on the Schedule
of Plans and Specifications
attached
hereto ("Plans and Specifications"), and any agreements ("Agreements") between
Architect and ARC HDV, LLC ("Borrower") or American Retirement Corporation
pertaining to the construction of the improvements described in the Plans and
Specifications (the "Improvements"), such Improvements to be located upon
certain land in Peoria, Maricopa County, Arizona, as more particularly described
in Exhibit "A",
attached hereto and made a part hereof by reference (said land and the
Improvements being collectively referred to as the "Property"). Architect
further represents and warrants to and agrees with Lender as
follows:
1. Architect
is licensed and authorized to practice architecture under the laws of the State
of Arizona and is familiar with the federal, state, and local laws and
ordinances relevant to the construction of the Improvements. Architect prepared
all of the Plans and Specifications or such Plans and Specifications were
prepared under Architect's supervision and direction, and Architect is
responsible therefore.
2. Attached
hereto as Exhibit "B"
is a
true and complete copy of all written Agreements.
3. The
Plans
and Specifications are final, complete and adequate for the construction of
the
Improvements, and, as of the date hereof, there have been no modifications
thereof except as described on the attached Schedule.
4. To
the
best of Architect's professional knowledge (a) the Improvements, if
constructed in accordance with the Plans and Specifications, will fully comply
with all applicable governmental statutes, ordinances, codes, and regulations
(including but not limited to those relating to access and facilities for
handicapped persons), applicable restrictive covenants and the approved site
plan; and (b) the structural design of the Improvements, the proposed
method of construction, the foundation plan, and the materials specified by
the
Plans and Specifications for the project are adequate and appropriate for the
contemplated Improvements and for the soil conditions at the construction
site.
5. Architect
has no counterclaim, right of set-off, defense or like right against Lender
or
Borrower, and Architect acknowledges that Architect has been paid in full for
all services and costs in connection with the Agreements and the Plans and
Specifications and the preparation thereof except fees to be paid hereafter
for
additions or changes thereto or for inspection of construction of the
Improvements.
6. If
Borrower defaults in making any payment or in performing any other obligation
under the Agreements, Architect shall promptly give Lender written notice
thereof. If Architect learns of any default in payment due to any subcontractor
or other person supplying labor or materials in connection with the
architectural work for the project, Architect shall similarly advise Lender
thereof.
Exhibit H
- Page 1
7. Nothing
herein shall be construed to create any duty owing by Lender to Architect.
Architect is executing this Certificate to induce Lender to make a loan to
Borrower pursuant to that certain Loan Agreement by and between Borrower and
Lender, and Architect understands that Lender would not do so but for
Architect's execution and delivery of this Certificate.
Executed
this _____ day of ___________, 2005.
|
ARCHITECT
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
Exhibit H
- Page 2
EXHIBIT
"A"
Property
Exhibit H
- Page 3
EXHIBIT
"B"
Agreements
Exhibit H
- Page 4
