Exhibit: 10.38
[XXXXXXX XXXXX LOGO]
MEZZANINE LOAN AGREEMENT
FOR A LOAN IN THE AMOUNT OF
$10,000,000
MADE BY AND BETWEEN
AHC PURCHASER HOLDING II, INC.
A DELAWARE CORPORATION
AS "BORROWER"
AND
XXXXXXX XXXXX CAPITAL,
A DIVISION OF XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC.,
A DELAWARE CORPORATION
000 XXXXX XXXXXXX XXXXXX - 00XX XXXXX
XXXXXXX, XXXXXXXX 00000
AS "LENDER"
A PORTFOLIO OF TWENTY-ONE ASSISTED LIVING FACILITIES
Dated as of December 31, 2004
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TABLE OF CONTENTS
Page
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ARTICLE I INCORPORATION OF RECITALS, EXHIBITS AND SCHEDULES.................................................. 2
Section 1.1 Incorporation of Recitals............................................................. 2
Section 1.2 Incorporation of Exhibits and Schedule................................................ 2
Section 1.3 Definitional Provisions............................................................... 2
ARTICLE II LOAN AND LOAN DOCUMENTS........................................................................... 2
Section 2.1 Conditions Precedent.................................................................. 2
Section 2.2 Loan Documents........................................................................ 2
Section 2.3 Disbursements......................................................................... 3
Section 2.4 Term of the Loan...................................................................... 3
Section 2.5 Prepayments........................................................................... 4
Section 2.6 Interest.............................................................................. 4
Section 2.7 Monthly Payments...................................................................... 4
Section 2.8 Exit Fee.............................................................................. 5
Section 2.9 Default Interest and Late Charge...................................................... 6
ARTICLE III FINANCIAL REPORTING COVENANTS.................................................................... 6
Section 3.1 Financial Information Reporting....................................................... 6
Section 3.2 Financial Information Form and Examination............................................ 7
ARTICLE IV OPERATIONAL AND OTHER COVENANTS................................................................... 8
Section 4.1 Leasing and Operational Covenants..................................................... 8
Section 4.2 Other Borrower Covenants.............................................................. 11
Section 4.3 Authorized Representative............................................................. 17
Section 4.4 Health Care Matters................................................................... 18
ARTICLE V BORROWER'S REPRESENTATIONS AND WARRANTIES.......................................................... 22
Section 5.1 Borrower's Representations and Warranties............................................. 22
ARTICLE VI ENVIRONMENTAL MATTERS............................................................................. 28
Section 6.1 Environmental Representations and Warranties.......................................... 28
Section 6.2 Environmental Covenants............................................................... 28
Section 6.3 Right of Entry and Disclosure of Environmental Reports................................ 29
Section 6.4 Environmental Indemnitor's Remedial Work.............................................. 30
Section 6.5 Environmental Indemnity............................................................... 31
Section 6.6 Remedies Upon an Environmental Default................................................ 32
Section 6.7 Unconditional Environmental Obligations............................................... 33
Section 6.8 Assignment of Environmental Obligations Prohibited.................................... 33
Section 6.9 Indemnification Separate from the Loan................................................ 33
Section 6.10 Further Security...................................................................... 34
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ARTICLE VII CASUALTIES AND CONDEMNATION...................................................................... 34
Section 7.1 Lender's Election to Apply Insurance Proceeds on Indebtedness......................... 34
Section 7.2 Borrower's Obligation to Rebuild and Use of Insurance Proceeds Therefor............... 35
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES.................................................................. 36
Section 8.1 Events of Default..................................................................... 36
Section 8.2 Remedies Conferred Upon Lender........................................................ 37
ARTICLE IX LOAN EXPENSE, COSTS AND ADVANCES.................................................................. 38
Section 9.1 Loan and Administration Expenses...................................................... 38
Section 9.2 Right of Lender to Make Advances to Cure Borrower's Defaults.......................... 39
Section 9.3 Increased Costs....................................................................... 39
Section 9.4 Borrower Withholding.................................................................. 40
Section 9.5 Document and Recording Tax Indemnification............................................ 40
ARTICLE X ASSIGNMENTS BY LENDER AND DISCLOSURE............................................................... 40
Section 10.1 Assignments and Participations........................................................ 40
Section 10.2 Disclosure of Information and Confidentiality......................................... 41
ARTICLE XI GENERAL PROVISIONS................................................................................ 41
Section 11.1 Captions.............................................................................. 41
Section 11.2 Waiver of Jury Trial.................................................................. 41
Section 11.3 Jurisdiction.......................................................................... 42
Section 11.4 Governing Law......................................................................... 43
Section 11.5 Lawful Rate of Interest............................................................... 43
Section 11.6 Modification; Consent................................................................. 43
Section 11.7 Waivers; Acquiescence or Forbearance Not to Constitute Waiver
of Lender's Requirements.............................................................. 43
Section 11.8 Disclaimer by Lender.................................................................. 44
Section 11.9 Partial Invalidity; Severability...................................................... 45
Section 11.10 Definitions Include Amendments........................................................ 45
Section 11.11 Execution in Counterparts............................................................. 45
Section 11.12 Entire Agreement...................................................................... 45
Section 11.13 Waiver of Damages..................................................................... 46
Section 11.14 Claims Against Lender................................................................. 46
Section 11.15 Set-Offs.............................................................................. 46
Section 11.16 Relationship.......................................................................... 46
Section 11.17 Agents................................................................................ 47
Section 11.18 Interpretation........................................................................ 47
Section 11.19 Successors and Assigns................................................................ 47
Section 11.20 Time is of the Essence................................................................ 47
Section 11.21 Lender's Consultation Rights.......................................................... 47
Section 11.22 Notices............................................................................... 48
Section 11.23 Joint and Several Liability........................................................... 49
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LEGAL DESCRIPTION ...................................................... 1
LEGAL DESCRIPTION ...................................................... 1
LEGAL DESCRIPTION ...................................................... 1
LEGAL DESCRIPTION ...................................................... 1
LEGAL DESCRIPTION ...................................................... 1
STERLING HOUSE ITHACA, NY............................................... 1
LEGAL DESCRIPTION ...................................................... 0
XXXXX XXXXXX XXXXXXX XXXXXX, NY....................................... . 0
XXXXX XXXXXX XXXXXXX XXXXXXX, NY...................................... . 1
LEGAL DESCRIPTION ...................................................... 1
STERLING HOUSE NIAGARA, NY.............................................. 1
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LIST OF EXHIBITS AND SCHEDULES TO LOAN AGREEMENT
Exhibits A-1 - A-21 The Projects
Exhibit B Provider Payment/Reimbursement Programs
Exhibit C Government Approvals
Exhibit D Litigation
Exhibit E Insurance Requirements
Exhibit F Environmental Documents
Exhibit G Violations
Exhibit H Intellectual Property
Exhibit I Deferred Maintenance Items
Exhibit J Ownership Chart
Schedule I Definitions
Schedule II Principal Amortization Schedule
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LOAN AGREEMENT
THIS LOAN AGREEMENT ("AGREEMENT") is made as of December 31, 2004,
by and between AHC PURCHASER HOLDING II, INC., a Delaware corporation
("BORROWER"), and XXXXXXX XXXXX CAPITAL, a Division of Xxxxxxx Xxxxx Business
Financial Services Inc., a Delaware corporation (collectively, with its
successors and assigns, "LENDER").
RECITALS
A. Borrower is the sole shareholder of AHC Purchaser Holding, Inc.,
a Delaware corporation ("HOLDING"). Holding is the sole shareholder of AHC
Purchaser, Inc., a Delaware corporation ("OWNER"). Owner is or on the closing
date will be the owner in fee simple of the land described on Exhibits A-1
through A-21, respectively (the "LAND"). Each described parcel of Land contains
improvements generally consisting of (i) an assisted living facility containing
approximately the number of beds/units described on Exhibits A-1 through A-21
(collectively, the "IMPROVEMENTS").
B. Borrower has applied to Lender for a loan in the amount of up to
TEN MILLION and NO/100THS DOLLARS ($10,000,000.00) (the "LOAN") to allow Owner
to refinance the Projects, and Lender is willing to make the Loan on the terms
and conditions hereinafter set forth. The Loan is evidenced by that certain
Promissory Note of even date herewith made by Borrower in the original principal
amount of TEN MILLION and NO/100THS DOLLARS ($10,000,000.00) and payable to
Lender (the Promissory Note and all amendments thereto and substitutions
therefor are hereinafter referred to collectively as the "NOTE"). The terms and
provisions of the Note are hereby incorporated by reference, in this Agreement.
C. Borrower's obligations under the Loan will be secured by, among
other items, (i) a first priority collateral assignment of the issued and
outstanding stock of Borrower of even date herewith (the "ASSIGNMENT"), and (ii)
a guaranty (the "GUARANTY") from Guarantor.
D. This Agreement, the Note, the Assignment, the Guaranty and any
other documents evidencing or securing the Loan or executed in connection
therewith, and any modifications, renewals and extensions thereof, are referred
to herein collectively as the "LOAN DOCUMENTS."
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
ARTICLE I
INCORPORATION OF RECITALS, EXHIBITS AND SCHEDULES
SECTION 1.1 INCORPORATION OF RECITALS.
The foregoing preambles and all other recitals set forth herein are
made a part hereof by this reference.
SECTION 1.2 INCORPORATION OF EXHIBITS AND SCHEDULE.
Exhibits A-1 through J, and Schedules I and II to this Agreement,
attached hereto are incorporated in this Agreement and expressly made a part
hereof by this reference.
SECTION 1.3 DEFINITIONAL PROVISIONS.
All terms defined in Schedule I of this Agreement or otherwise in
this Agreement shall, unless otherwise defined therein, have the same meanings
when used in the Note, Assignment, any other Loan Documents, or any certificate
or other document made or delivered pursuant hereto. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement. The word "include(s)" when used in this Agreement
and the other Loan Documents means "include(s), without limitation," and the
word "including" means "including, but not limited to."
ARTICLE II
LOAN AND LOAN DOCUMENTS
SECTION 2.1 CONDITIONS PRECEDENT.
(a) Borrower agrees that Lender's obligation to close the Loan is
conditioned upon Borrower's delivery, performance and satisfaction, in Lender's
sole discretion, of all items set forth (i) in that certain term sheet dated
August 29, 2004 and accepted by Alterra Healthcare Corporation (the "TERM
SHEET") and (ii) on that certain Closing Checklist issued with respect to such
Term Sheet.
(b) As a condition to the Closing, Owner shall have obtained the
Senior Loan in the principal amount of $62,500,000.00 from Xxxxxxx Xxxxx
Capital, a Division of Xxxxxxx Xxxxx Business Financial Services, Inc., a
Delaware corporation (in such capacity, "SENIOR LENDER"). Lender has received
copies of all documents that evidence and secure the Senior Loan (collectively
the "SENIOR LOAN DOCUMENTS").
SECTION 2.2 LOAN DOCUMENTS.
Borrower agrees that it will, on or before the Closing Date, execute
and deliver or cause to be executed and delivered to Lender this Agreement and
the other Loan Documents in form and substance acceptable to Lender. In
addition, Borrower shall deliver such other documents, instruments or
certificates as Lender and its counsel may reasonably require, including such
documents as Lender in its sole discretion deems necessary or
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appropriate to effectuate the terms and conditions of this Agreement and the
other Loan Documents, and to comply with the laws of the state of Illinois.
Furthermore, Borrower acknowledges that it is obligated to cause its counsel,
and counsel for Guarantor to issue a legal opinion (in form reasonably
satisfactory to Lender) for the benefit of Lender.
SECTION 2.3 DISBURSEMENTS.
(a) Subject to the terms, provisions and conditions of this
Agreement and the other Loan Documents, on the Closing Date, Borrower agrees to
borrow from Lender and Lender shall disburse to Borrower from the proceeds of
the Loan the sum of Ten Million and No/100 Dollars ($10,000,000.00) (the
"FUNDING AMOUNT").
SECTION 2.4 TERM OF THE LOAN.
(a) Unless due and payable sooner pursuant to Section 2.7 or Article
8, all principal, interest and other sums due under the Loan Documents shall be
due and payable in full on December 31, 2007 (the "INITIAL MATURITY DATE"),
provided that Borrower shall have the right to extend the Maturity Date (the
"EXTENSION OPTION") for two additional twelve (12) month terms (each such twelve
(12) month period is hereinafter referred to as an "EXTENSION TERM"), thereby
extending the Maturity Date to the twelve (12) or twenty-four (24) month
anniversary of the Initial Maturity Date (each, an "EXTENDED MATURITY DATE").
(b) Borrower may only exercise an Extension Option upon satisfying
the following conditions:
(i) Borrower shall have delivered to Lender written notice of
such election no earlier than ninety (90) days and no later than
forty-five (45) days prior to the Initial Maturity Date or the first
Extended Maturity Date, as applicable;
(ii) Lender shall have received Borrower's and Alterra's
current financial statements, certified as correct by Borrower and
Alterra, as applicable. There must be no Material Adverse Change in
Borrower's, Owner's, Holding's, Guarantor's, Manager's or Master
Tenant's financial condition or with respect to any Project;
(iii) Such notice is accompanied by a non-refundable extension
fee equal to $100,000;
(iv) No Default exists and no monetary Default or other
material Default has previously occurred under the Loan Documents or
under the Senior Loan Documents;
(v) The maturity date of the Senior Loan has been (or will be,
concurrently with the extension of the Loan) extended to the
proposed Extended Maturity Date;
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(vi) Project Yield must be equal to or greater than thirteen
percent (13%); and
(vii) The Debt Service Coverage Ratio is not less than
1.30:1.00 based on the lesser of the trailing twelve (12) or
trailing three (3) months ending one month prior to the then
scheduled Maturity Date.
SECTION 2.5 PREPAYMENTS.
The Loan may not be voluntarily prepaid in full or in part prior to
July 1, 2006 (the "LOCKOUT PERIOD"). Thereafter, Borrower shall have the right
to make prepayments of the Loan, in whole, but not in part, at any time provided
Borrower (a) gives Lender at least seven (7) days' prior written notice, (b)
pays all accrued and unpaid interest, (c) pays the Exit Fee due hereunder, and
(d) pays all other fees and costs due from Borrower to Lender including any
attorneys' fees and disbursements incurred by Lender as a result of the
prepayment. In the event Lender declares the Loan immediately due and payable at
a time when an Exit Fee would be due, or during the Lockout Period, such Exit
Fee shall be paid upon any tender of payment at any time or upon acceleration of
the Loan or foreclosure of the Assignment. Notwithstanding the foregoing to the
contrary, Borrower shall have the right to prepay the Loan in full, but not in
part, during the Lockout Period provided that such prepayment occurs solely in
connection with a Transfer (other than a Permitted Transfer) to which Lender has
refused to consent (a "LOCKOUT TRANSFER"), and upon payment to Lender of the
Exit Fee.
Notwithstanding any of the foregoing to the contrary, in no event
whatsoever may Borrower prepay the Loan unless the Senior Loan and all other
amounts payable under the Senior Loan Documents (including any exit fee) are
paid in full concurrently therewith.
SECTION 2.6 INTEREST.
Provided that no Event of Default exists, the principal amount of
the Loan outstanding from time to time shall bear interest until paid at a
floating rate per annum equal to nine and one-half percent (9.5%) plus the Base
Rate (the aggregate rate referred to as the "INTEREST RATE"). Interest shall be
calculated based on a three hundred sixty (360) day year and charged for the
actual number of days elapsed.
SECTION 2.7 MONTHLY PAYMENTS.
Commencing on February 1, 2005, Borrower shall pay (a) interest
computed on the outstanding principal balance of the Loan at the Interest Rate
monthly in arrears, plus (b) a monthly principal amortization payment in the
amount set forth on Schedule II attached hereto on the first (1st) day of each
month.
Commencing on January 1, 2008 and continuing on the first day of
each month thereafter until all amounts due under the Loan Documents are repaid,
if Project Yield for any calendar month (measured on a trailing six month basis)
is less than fourteen percent
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(14.0%), then in addition to any payments due as described elsewhere in this
Section 2.7, Borrower shall make monthly payments to Lender in an amount equal
to Junior Lender's Percentage of Excess Cash Flow. Provided, however, that if
Project Yield (measured on a trailing six month basis) for any calendar month is
equal to or greater than fourteen percent (14%), then payments of Excess Cash
Flow shall be suspended with respect to such month. All payments of Excess Cash
Flow shall be applied to reduce the outstanding principal balance of the Loan.
Payment of Junior Lender's Percentage of Excess Cash Flow due the first (1st)
day of a month shall be an amount equal to Junior Lender's Percentage of Excess
Cash Flow for the month which is two months in arrears (for example, on June
1st, a monthly payment equal to the Junior Lender's Percentage of Excess Cash
Flow for the month of April shall be due).
Monthly payments of interest, amortization and, if applicable,
Excess Cash Flow due to Lender as described in this Section 2.7 shall be paid to
Lender by Automated Clearing House debit of immediately available funds from the
financial institution account designated by Borrower in the Automated Clearing
House debit authorization executed by Borrower in connection with this
Agreement; and shall be effective upon receipt. Borrower shall execute any and
all forms and documentation necessary from time to time to effectuate such
automatic debiting. In no event shall any such payments be refunded to Borrower.
SECTION 2.8 EXIT FEE.
Upon the repayment of the Loan (whether at Maturity Date or at any
other date) or upon the acceleration of the Loan by Lender as provided herein,
Borrower will pay to Lender an exit fee equal to the amount set forth below for
the respective period in which such payment or acceleration occurs (the "EXIT
FEE"). The Exit Fee shall be deemed to be earned upon the execution of this
Agreement.
PERIOD IN WHICH LOAN IS REPAID EXIT FEE
OR ACCELERATED
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On or prior to June 30, 2006 The sum of (i) $300,000 plus (ii) unless the Loan is
being prepaid in full in connection with a Lockout
Transfer, an amount equal to the amount of interest
(including Additional Interest) that would have accrued
during the remainder of the Lockout Period from and
after the date of payment (as estimated by Lender in
good faith)
On or after July 1, 2006 and on or prior to December 31, $300,000
2006
On or after January 1, 2007 $150,000
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SECTION 2.9 DEFAULT INTEREST AND LATE CHARGE.
(a) So long as an Event of Default remains outstanding, interest
shall accrue at a rate per annum equal to five percentage points (500 basis
points) in excess of the Interest Rate otherwise applicable on each outstanding
advance of the Loan, but shall not at any time exceed the highest rate permitted
by law (the "DEFAULT RATE").
(b) If payments of principal, interest due on the Loan, or any other
amounts due hereunder or per the Note or the other Loan Documents are not timely
made and remain overdue for a period of five (5) days, Borrower, without notice
or demand by Lender, promptly shall pay an amount (the "LATE CHARGE") equal to
five percent (5%) of each delinquent payment.
ARTICLE III
FINANCIAL REPORTING COVENANTS
SECTION 3.1 FINANCIAL INFORMATION REPORTING.
(a) Monthly Information. Within twenty (20) days following the end
of each month, Borrower shall deliver to Lender: (i) monthly unaudited operating
cash flow statements for the Projects, certified as true, complete and correct
by Alterra, showing actual sources and uses of cash during the preceding month
and fiscal year-to-date, in comparison to the same month and year-to-date for
the prior fiscal year, (ii) a current revenue journal (including monthly
delinquency reports and a monthly schedule of delinquency receipts and
payments), (iii) a summary of all resident move-in and move-out activity then
taking place with respect to the Projects, and (iv) such other information as
Lender may reasonably request. Within twenty (20) days after the end of every
calendar month during the term of the Loan, Borrower shall deliver to Lender (i)
a statement and report, on a form approved by Lender in its sole and absolute
discretion, detailing Borrower's or Owner's calculation of Revenue and Net Cash
Flow for such month and (ii) if requested by Lender, back-up documentation
(including, without limitation, invoices, receipts and other evidence of costs
incurred during such month as Lender shall reasonably require) evidencing the
propriety of the deductions from revenues in determining such Net Cash Flow.
(b) Quarterly Information. Borrower shall deliver to Lender
certified quarterly financial statements (including, balance sheet, an income
statement and a statement of cash flows) of Borrower and Owner within thirty
(30) days after the end of each calendar quarter. Borrower shall cause Alterra
and each other Master Tenant to provide Lender with their respective quarterly
financial statements certified by such Person (or by Alterra) on or before the
thirtieth (30th) day after each fiscal quarter of such Person.
(c) Annual Information. Prior to the Closing Date, Borrower shall
deliver to Lender each Project's updated annual operating budget for the first
fiscal year. No later than three (3) Business Days after approval by Alterra's
board of directors but in no event later than the end of each fiscal year of
Borrower, Borrower shall deliver to Lender each Project's updated annual
operating budget for the following fiscal year. Within ninety (90)
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days after the end of each calendar year, Borrower shall deliver or cause to be
delivered to Lender annual financial statements (including, balance sheet, an
income statement and a statement of cash flows) of Borrower and Owner. Borrower
shall cause Alterra to provide Lender with its (i) annual Federal Income Tax
Returns within ten (10) days after timely filing thereof, and (ii) annual
audited financial statements within ninety (90) days after each fiscal year of
Alterra.
(d) The information described in this Section 3.1 or elsewhere in
the Loan Documents as it pertains to the Projects shall not be limited in any
respect to Borrower's or Owner's interest in the Projects, but shall include all
information described with respect to the Projects as if Owner owned and
operated each Project, without any Master Lease or Management Agreement
existing. Borrower shall cause Owner and each Master Tenant and Manager to
cooperate to provide to Lender such information as is described in this Section
3.1 or elsewhere in the Loan Documents in a timely manner.
SECTION 3.2 FINANCIAL INFORMATION FORM AND EXAMINATION.
All financial statements to be provided to Lender as described
herein shall be in a format approved in writing by Lender in Lender's reasonable
discretion, in accordance with generally accepted accounting principles prepared
on a consistent basis (and with respect to annual financial statements of
Alterra, such statements shall be audited by an independent certified public
accountant reasonably acceptable to Lender), which fairly present the financial
condition(s) as of the date(s) indicated. Each financial statement shall be
certified as true, complete and correct by its preparer and by Borrower or, in
the case of each of Alterra's financial statements, by Alterra. Borrower shall,
and shall cause Owner, Alterra and each other Master Tenant to provide such
additional financial information as Lender reasonably requires. Borrower shall,
and shall cause Owner, Holding and each Master Tenant (as it pertains to the
Projects) to during regular business hours permit or cause to permit Lender or
any of Lender's representatives (including an independent firm of certified
public accountants) to have access to and examine all of the books and records
regarding Borrower, Holding and Master Tenant (as it pertains to the Projects)
and/or Guarantor and the development and operation of the Projects, subject to
any applicable government laws or regulations (including HIPAA) pertaining to
resident medical information. The costs and expenses of the examination shall be
paid by Borrower if (i) the examination discloses a monetary variance in any
financial information or computation submitted by Borrower, Holding, Master
Tenant or Guarantor equal to or greater than the greater of: (A) five percent
(5%); or (B) (1) if at a Project level, $5,000.00; or (2) if at the Borrower or
Owner level, an amount equal to $5,000.00 times the number of Projects; or (3)
if at the Guarantor level, $400,000.00, (ii) such inspection is done as the
result of a failure to provide Lender with the financial statements and
reporting required herein. Borrower shall within ten (10) days after Lender's
request, furnish Lender with a written statement, duly acknowledged, setting
forth the sums according to Borrower's books and records owed by Borrower under
the Loan Documents and any right of set-off, counterclaim or other defense that
exists against such sums and Borrower's obligations under the Loan Documents.
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ARTICLE IV
OPERATIONAL AND OTHER COVENANTS
SECTION 4.1 LEASING AND OPERATIONAL COVENANTS.
(a) Leasing Restrictions. Without the prior written consent of
Lender, Borrower shall not permit Owner or Master Tenant to (i) enter into any
non-residential Leases, (ii) modify the form of Lease previously approved by
Lender, (iii) modify, amend or terminate any non-residential Lease, (iv) accept
any rental payment in advance of its due date or (v) enter into any ground lease
of any Project; provided, however, that clauses (i) and (ii) of this Section
4.1(a) shall not apply to subleases of space at a Project for use as a beauty
salon, barbershop, commissary, concessions or other services in the ordinary
course of business which can be terminated by Owner or Master Tenant on 30 days'
notice without extra fee or penalty and are for a maximum of 500 square feet
("SERVICES SUBLEASES"). Borrower shall cause Lender to be provided with a copy
of all non-residential Leases, other than Services Subleases, no less than ten
(10) days prior to execution of such Leases by Owner or Master Tenant, and such
Leases shall be on the form of lease previously approved by Lender (if such form
lease does not already contain such a provision, Borrower shall cause an
automatic attornment provision to be added to such form lease whereby in the
event of a foreclosure, the tenant automatically shall recognize the successor
owner as landlord and such tenant shall have no right to terminate its lease in
the event of such foreclosure). If Lender consents to any new non-residential
Lease or the modification or renewal of any existing non-residential Lease (or
if Owner or Master Tenant enters into or modifies a non-residential Lease that
does not require Lender's prior consent thereto), at Lender's request, Borrower
shall or shall cause Owner or Master Tenant to cause the Tenant thereunder to
execute a subordination and attornment agreement in form and substance
satisfactory to Lender. Borrower shall and shall cause Owner or Master Tenant to
provide Lender with a copy of the fully executed original of all non-residential
Leases, other than Services Subleases, promptly following their execution.
Borrower will not permit Master Tenant or Owner to enter into any residential
Leases for a term of more than one (1) year and all such residential Leases
shall be at market rates on the form previously approved by Lender without
material modification. Upon request from time to time, Borrower shall deliver to
Lender copies of all Services Subleases.
(b) Defaults Under Leases. Borrower will not suffer or permit any
breach or default to occur in any of Owner's or Master Tenant's obligations
under any of the Leases (including the Master Leases) nor suffer or permit the
same to terminate by reason of any failure of Owner or Master Tenant to meet any
requirement of any Lease (including any Master Lease). Borrower shall notify
Lender promptly in writing in the event a non-residential Tenant commits a
material default under a Lease, other than Services Subleases, or in the event
that Master Tenant commits a default under any Master Lease.
(c) Management Contracts. Borrower, shall not change or permit the
change of the manager of any NY Project currently subject to a Management
Agreement or enter into, modify, amend, terminate or cancel (or permit such
action with respect to) any
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Management Agreement for any Project or agreements with lenders or brokers,
without the prior written approval of Lender. Borrower shall cause the NY
Projects currently subject to a Management Agreement at all times to be managed
by Manager pursuant to a Management Agreement satisfactory to Lender, subject to
applicable regulatory requirements.
(d) Furnishing Notices.
(i) Borrower shall provide Lender with (or cause Lender to be
provided with) copies of all material notices pertaining to
Borrower, Owner, Holding, Manager (with respect to a Project), each
Master Tenant (with respect to a Project), Guarantor (with respect
to a Project), or a Project received by Borrower, Owner, Holding, a
Manager, a Master Tenant or Guarantor from Borrower, Owner, Holding,
a Manager, a Master Tenant, a Tenant, Guarantor, any Governmental
Authority or insurance company within seven (7) days after such
notice is received, other than survey reports or other survey
deficiency notices from any Governmental Authority, notice of which
shall be provided to Lender as set forth in clause (iii) below, and
other than the matters referenced in clause (ii) below (as to which
clause (ii) shall control).
(ii) Borrower shall promptly provide Lender with (or cause
Lender to be promptly provided with) written notice of any
litigation, arbitration, or other proceeding or governmental
investigation (including as a result of any survey results or
inspection reports from any Governmental Authority) pending, or to
Borrower's, a Master Tenant's, Guarantor's, Owner's, Holding's or a
Manager's knowledge, threatened in writing against or relating to
Borrower, a Master Tenant, a Manager, Guarantor, Holding or Owner,
or any Project; provided, that with respect to any such litigation,
arbitration or other proceeding relating solely to (A) a monetary
claim for specified damages of less than $250,000 in aggregate
arising out of all related claims, or (B) a monetary claim for
unspecified damages other than a claim relating to wrongful death or
patient/resident abuse, each of which claim for such specified or
unspecified damages is covered in its entirety by insurance (and as
to which the insurance carrier has not tendered a defense to
coverage), Borrower shall not be required to provide notice (written
or otherwise) of such claim.
(iii) Borrower shall deliver to Lender (or cause to be
delivered to Lender) (i) within (30) days after the end of each
calendar quarter, a Detail Survey Report for each Project in the
form provided to Lender on or prior to the date hereof generated by
the survey tracking system employed by a Master Tenant or Manager,
as applicable, on the date hereof or other comparable report, (ii)
within three (3) Business Days after (a) the notice of a revocation
or suspension of a license at any Project, (b) notice of a ban on
new admissions at any Project, (c) notice of the reduction in the
licensure category at any Project to a provisional or probationary
license or (d) notice of a fine or monetary
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penalty at any Project in excess of $5000 (a "MAJOR MONETARY
CITATION"), (the matters in (a-d) are referred to collectively, as a
"REPORTABLE EVENT") is reported to the national office of Alterra,
written notice of such Reportable Event, (iii) promptly after
receipt by Borrower, Owner, a Master Tenant or a Manager a copy of
each notice of termination under any license or permit necessary for
the operation of the Project substantially as it operates on the
date hereof; and in the case of clauses (i), (ii) and (iii),
promptly provide such further information as Lender may request with
respect to the matters reported pursuant to such clauses.
Notwithstanding anything contained in this Section 4.1(a) to the
contrary, Borrower shall in all cases deliver (or cause to be
delivered) written notice of any Reportable Event to Lender within
ten (10) Business Days (or within thirty (30) calendar days in the
case of Major Monetary Citation) after delivery of written notice of
such Reportable Event to any Project or to any regional director or
residence director. In addition, Borrower shall, and shall cause
Owner, each Manager and Master Tenant to, promptly provide such
other information as to the regulatory and legal compliance of each
of the Projects as Lender may reasonably request from time to time
and which such Person is legally able to provide.
(iv) Borrower shall promptly provide Lender with prior written
notice of any (and a statement detailing all) capital or other
equity contributions to Borrower.
(e) Alterations. Without the prior written consent of Lender,
Borrower shall not make or permit to be made any material alterations to any
Project.
(f) Cash Distributions. At any time an Event of Default exists,
Borrower shall not make any distributions or payment of any kind to shareholders
or Affiliates of Borrower.
(g) Condominium Agreements. Borrower shall not amend, modify or
terminate, or permit the amendment, modification or termination of any
condominium association declaration, master deed or similar agreement affecting
any portion of any Project.
(h) Master Leases. Borrower shall not permit or suffer Owner to
modify, amend, terminate or cancel, or grant any waivers or forbearance with
respect to, or consents or approvals under, any Master Lease, without the prior
written approval of Lender.
(i) Reserved.
(j) Compliance With Laws. Borrower, Owner, Holding, Master Tenant,
Manager (as it relates to the Projects) and the Projects shall comply in all
material respects with all applicable requirements (including applicable Laws,
condominium agreements, declarations, or master deeds) of any condominium or
similar association or Governmental Authority having jurisdiction over Borrower,
Owner, Holding, Manager, Master Tenant or
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any Project including all building, zoning, density, land use, covenants,
conditions and restrictions, subdivision requirements (including parcel maps and
environmental impact and other environmental requirements), quality and safety
standards, accreditation standards and requirements of the applicable state
department of health or other applicable state regulatory agency (each a "STATE
REGULATOR"), quality and adequacy of medical care, distribution of
pharmaceuticals, rate setting, equipment, personnel, operating policies,
additions to facilities and services and fee splitting, whether now existing or
later to be enacted or promulgated and whether foreseen or unforeseen.
(k) Use of Projects; No Conversion. Unless required by applicable
Law, Borrower shall not permit and shall not allow Owner to permit changes in
the use of any Project from that of the time this Agreement was executed.
Borrower shall not and shall not permit Owner to either (i) initiate or
acquiesce in a change in the plat of subdivision, or zoning classification or
use of any Project without Lender's prior written consent, or (ii) grant any
encumbrances or easements burdening any Project. Borrower shall not, and shall
not allow Owner to, convert, nor permit or take any preliminary action which
could lead to, any Project or any portion thereof after the Closing Date being
converted to condominium or cooperative form of ownership.
(l) No Commingling of Funds. Borrower shall not commingle nor shall
it permit Master Tenant, Owner, Holding or Manager to commingle the funds
related to the Projects with funds from any other property other than as
permitted by the Cash Management Agreements executed in connection with the
Senior Loan.
(m) Maintenance and Preservation of the Projects. Borrower shall
cause Owner to keep the Projects in good condition and repair and if all or part
of any Project becomes damaged or destroyed, Borrower shall cause Owner to
promptly and completely repair and/or restore such Project in a good and
workmanlike manner in accordance with sound building practices, regardless of
whether Lender agrees to disburse Insurance Proceeds or other sums to pay costs
of the work of repair or reconstruction under Article 7 hereof. Borrower shall
not commit or allow waste or permit impairment or deterioration of any Project.
Borrower shall perform (or shall cause Owner to perform) such acts to preserve
the value of the Projects and Borrower shall not permit Owner to abandon any
Project.
(n) Senior Loan. Borrower shall not make or enter into any changes
to the terms of the Senior Loan Documents without Lender's prior written
consent. Borrower shall fully and timely comply with all of the terms and
provisions of the Senior Loan Documents.
(o) Copies of Senior Loan Notices. Borrower shall provide Lender, on
a monthly basis, but without duplication, with copies of all notices that are
provided to or from Senior Lender.
Section 4.2 OTHER BORROWER COVENANTS.
Borrower further covenants and agrees as follows:
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(a) Loan Closing. All conditions precedent to the closing of the
Loan shall be complied with on or prior to the Closing Date. If such conditions
are not complied with as of the Closing Date, Lender may terminate Lender's
obligation to fund the Loan by written notice to Borrower.
(b) Prohibition of Assignments and Transfers by Borrower.
(i) Generally. Borrower shall not assign or attempt to assign
its rights under this Agreement and any purported assignment shall
be void. Without the prior written consent of Lender, which consent
may be withheld in Lender's sole discretion, Borrower shall not
suffer or permit (a) the termination of any existing Management
Agreement or Master Lease or any change in the Owner, Manager or
Master Tenant thereunder with respect to any Project, or (b) any
Transfer. Notwithstanding the foregoing, Permitted Transfers shall
be permitted with ten (10) days prior written notice to Lender. In
addition, if Alterra fails to continue to Control (i) the day to day
management and operation of Owner's, Holding's and Borrower's
business' and (ii) all material business decisions (including a sale
or refinance) for Owner, Holding and Borrower during the term of the
Loan, then Lender may, at Lender's option, declare the Loan to be
immediately due and payable, and Lender may invoke any remedies
permitted by the Loan Documents.
(ii) Transfers Prohibited by ERISA. In addition to the
prohibitions set forth in Section 4.2(b)(i), above, Borrower shall
not engage in or permit a Transfer that would constitute or result
in the occurrence of one or more non-exempt prohibited transactions
under ERISA or the Internal Revenue Code. Borrower agrees to unwind
any such Transfer upon notice from Lender or, at Lender's option, to
assist Lender in obtaining such prohibited transaction exemption(s)
from the United States Pension and Welfare Benefits Administration
with respect to such Transfer as are necessary to remedy such
prohibited transactions. In addition to its general obligation to
indemnify Lender under Section 4.2(k), Borrower shall reimburse
Lender for any Expenses incurred by Lender to obtain any such
prohibited transaction exemptions. Borrower's obligations under this
Section 4.2(b)(ii) shall survive the expiration of this Agreement
and the other Loan Documents.
(c) Mechanics' Liens and Contest Thereof. Borrower will not suffer
or permit any mechanics' lien claims to be filed or otherwise asserted against
any Project and will promptly discharge the same in case of the filing of any
claims for lien or proceedings for the enforcement thereof, provided, however,
that Owner shall have the right to contest in good faith and with reasonable
diligence the validity of any such lien or claim provided that Borrower notify
Lender of Owner's desire to do so in writing and posts a statutory xxxx xxxx
that removes such lien from title to the applicable Project within twenty (20)
days of the earlier of written notice by Borrower to Lender of the existence of
such lien or written notice by Lender to Borrower of the existence of the lien.
Lender will not be required to make any
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further disbursements of the proceeds of the Loan until any mechanics' lien
claims have been removed and Lender may, at its option, restrict disbursements
to reserve sufficient sums to pay 150% of all such lien claims. In the event
Borrower or Owner shall fail to discharge any such lien or fail to prosecute
such contest as set forth above, Lender may, at its election in its sole
discretion, cause such lien to be satisfied and released or otherwise provide
security to the Title Insurer to indemnify over such lien, and any amounts so
expended by Lender, including premiums paid or security furnished in connection
with the issuance of any surety company bonds, shall be deemed to constitute
disbursement of the proceeds of the Loan hereunder owing to Lender by Borrower.
In settling, compromising or discharging any claims for lien, Lender shall not
be required to inquire into the validity or amount of any such claim.
(d) Renewal of Insurance. Borrower shall cause Owner to timely pay (
or cause to be paid) all premiums on all insurance policies to assure that at
all times Owner and each Master Tenant and Manager have in effect insurance as
required pursuant to the Senior Loan Documents and as otherwise required by the
Insurance Requirements attached hereto as Exhibit E, and as and when additional
insurance is required, from time to time, and as and when any policies of
insurance may expire, furnish ( or cause to be furnished) to Lender, premiums
prepaid, additional and renewal insurance policies with companies, coverage and
in amounts reasonably satisfactory to Lender based on customary practices of
assisted living operators comparable to Alterra. Borrower shall not, and shall
not permit Owner to, bring or keep, or permit to be brought or kept, any article
on any Project or cause or allow any condition to exist on it, if that could
invalidate or would be prohibited by any insurance coverage required to be
maintained by Borrower or Owner and each Master Tenant and Manager on the
Projects. Unless Borrower provides Lender with appropriate evidence of the
insurance coverage required by this Agreement, Lender may purchase insurance at
Borrower's expense to protect Lender's interests in the Projects and to maintain
the insurance required by this Agreement. This insurance may, but need not,
protect Borrower's, Owner's or any Master Tenant's or Manager's interests. The
coverage purchased by Lender may not pay any claim made by Borrower, Owner or
any Master Tenant or Manager or any claim that is made against Borrower, Owner
or any Master Tenant or Manager in connection with the Projects or any required
insurance policy. Borrower may later cancel any insurance purchased by Lender,
but only after providing Lender with appropriate evidence that Borrower or Owner
and each Master Tenant and Manager have obtained insurance as required by this
Agreement. If Lender purchases insurance for any Project or insurance otherwise
required by this Agreement, Borrower will be responsible for the costs of that
insurance and other charges imposed by Lender in connection with the placement
of the insurance until the effective date of the cancellation or expiration of
the insurance. The costs of the insurance may be added to the Indebtedness
effective as of the date Lender purchases such insurance and such costs may be
more than the cost of insurance Borrower or Owner or any Master Tenant or
Manager is able to obtain on its own. The effective date of coverage may be the
date the prior coverage lapsed or the date on which Borrower failed to provide
Lender proof of coverage.
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(e) Payment of Taxes. Borrower shall, subject to the terms of
Section 4.2(f) of the Senior Loan Agreement, pay, or cause Owner to pay, all
real estate taxes and assessments and charges of every kind upon the Projects
before the same become delinquent, provided, however, that Borrower or Owner
shall have the right to pay such tax under protest or to otherwise contest any
such tax or assessment, but only if (i) such contest has the effect of
preventing the collection of such taxes so contested and also of preventing the
sale or forfeiture of any Project or any part thereof or any interest therein,
(ii) Borrower has notified Lender of Borrower's or Owner's intent to contest
such taxes, and (iii) Borrower has deposited security with Senior Lender or
Lender in form and amount satisfactory to Lender, in its sole discretion, and
has increased the amount of such security so deposited promptly after Lender's
request therefor (in the event the Senior Loan Documents require the posting of
such security, such security shall be deposited with Senior Lender in form and
amount acceptable to Senior Lender). If Borrower or Owner fails to commence such
contest or, having commenced to contest the same, and Borrower or Owner having
deposited such security required by Lender for its full amount, shall thereafter
fail to prosecute such contest in good faith or with due diligence, or, upon
adverse conclusion of any such contest, shall fail to pay such tax, assessment
or charge, Lender may, at its election (but shall not be required to), pay and
discharge any such tax, assessment or charge, and any interest or penalty
thereon, and any amounts so expended by Lender shall be deemed to constitute
disbursements of the Loan proceeds hereunder (even if the total amount of
disbursements would exceed the face amount of the Note). Borrower shall, unless
Lender has paid such taxes directly or on Borrower's behalf, furnish to Lender
evidence that taxes are paid at least five business (5) days prior to the last
date for payment of such taxes and before imposition of any penalty or accrual
of interest.
(f) Reserved.
(g) Personal Property. All of Owner's and each Master Tenant's
personal property, fixtures, attachments and equipment delivered upon, attached
to, used or required to be used in connection with the operation of a Project
(collectively, the "PERSONAL PROPERTY") shall always be located at such Project
and shall be kept free and clear of all liens, encumbrances and security
interests, except for the Senior Loan Documents and the liens created thereby
and equipment Leases and vehicle Leases aggregating not more than $50,000 in
capital amounts for each Project ("PERMITTED EQUIPMENT LEASES"). Borrower shall
not (nor shall it permit Owner, Holding, Manager, Master Tenant or any Tenant
to), without the prior written consent of Lender, sell, assign, transfer,
encumber, remove or permit to be removed from any Project any of the Personal
Property. So long as no Event of Default exists, Borrower may, and may permit
Owner or a Master Tenant to, sell or otherwise dispose of its Personal Property
when obsolete, worn out, inadequate, unserviceable or unnecessary for use in the
operation of a Project, but only upon replacing the same with other Personal
Property at least equal in value and utility to the Personal Property that is
disposed.
(h) Appraisals. Lender shall have the right to obtain a new or
updated Appraisal of the Projects from time to time. Borrower shall (and shall
cause Owner to)
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cooperate with Lender in this regard. If the Appraisal is obtained to comply
with this Agreement or any applicable law or regulatory requirement, or bank
policy promulgated to comply therewith, or if an Event of Default exists,
Borrower shall pay for any such Appraisal upon Lender's request.
(i) Loss of Note or other Loan Documents. Upon notice from Lender of
the loss, theft, or destruction of the Note and upon receipt of an affidavit of
lost note and an indemnity reasonably satisfactory to Borrower from Lender, or
in the case of mutilation of the Note, upon surrender of the mutilated Note,
Borrower shall make and deliver a new note of like tenor in lieu of the then to
be superseded Note. If any of the other Loan Documents were lost or mutilated,
Borrower agrees to execute and deliver replacement Loan Documents in the same
form of such Loan Document(s) that were lost or mutilated.
(j) Publicity. Lender reserves the right to publicize the making of
the Loan and, in such publicity, may include a brief description of the Projects
and the Loan.
(k) Indemnification. Borrower shall indemnify Lender, including each
party owning an interest in the Loan and their respective successors, assigns,
officers, directors, employees and consultants (each, an "INDEMNIFIED PARTY")
and defend and hold each Indemnified Party harmless from and against all claims,
injury, damage, liability, criminal and civil penalties, excise taxes and
Expenses of any and every kind to any persons or property by reason of (i) the
operation or maintenance of the Projects; (ii) any breach of representation or
warranty, default or Event of Default hereunder or under any of the other Loan
Documents or the Senior Loan Documents; or (iii) any claims or suits brought by
any Tenant; or (iv) any other matter arising in connection with the Loan,
Borrower, Owner, Holding, Manager, Guarantor, any Lease (including any Master
Lease) any Tenant (including any Master Tenant) or any Project. No Indemnified
Party shall be entitled to be indemnified against its own gross negligence or
willful misconduct. Upon written request by an Indemnified Party, Borrower will
undertake, at its own costs and expense, on behalf of such Indemnified Party,
using counsel reasonably satisfactory to the Indemnified Party, the defense of
any legal action or proceeding whether or not such Indemnified Party shall be a
party and for which such Indemnified Party is entitled to be indemnified
pursuant to this section. At Lender's option, Lender may, at Borrower's expense,
prosecute or defend any action involving the priority, validity or
enforceability of any of the Loan Documents.
(l) No Additional Debt or Encumbrances. Except for the Loan,
Borrower shall not incur and shall not permit Owner, Holding, Master Tenant or
Manager (with respect to the Projects) to incur any indebtedness (whether
personal or nonrecourse, secured or unsecured) including without limitation, for
borrowed money, liabilities under guaranties, or reimbursement obligations or as
lessee under capital or operating leases other than Permitted Equipment Leases
and as permitted by the Guaranty. Capital or operating leases of any items of
Personal Property shall be deemed to be additional indebtedness for borrowed
money and, except for Permitted Equipment Leases, shall require Lender's prior
written consent. Borrower shall not permit there to be any other encumbrances
against any Project. Borrower shall not default, and shall not permit Owner to
default, on the payment of any
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indebtedness that is not cured within the time, if any, specified therefor in
any agreement governing the same.
(m) Organizational Documents. Borrower shall not, and shall not
permit Owner, Holding or Master Tenant to, without the prior written consent of
Lender, permit or suffer (i) a material amendment or modification of its or such
entity's Organizational Documents or the organizational documents of any
constituent entity within Borrower, Holding, Owner or Master Tenant, (ii) the
admission of any new member, partner or shareholder to Borrower, Holding or
Owner, (iii) any dissolution or termination of the existence of Borrower,
Holding or Owner, or (iv) change in its or Owner's state of formation or
incorporation or its, Holding or Owner's name.
(n) Single Purpose Entity. Each of Borrower and Holding is and at
all times shall remain a Single Purpose Entity until after the Indebtedness has
been repaid in full.
(o) Furnishing Reports. Upon Lender's request, and subject to the
provisions of Section 4.1(d), Borrower shall promptly provide Lender with copies
of all material inspections, reports, test results and other information
received by Borrower, Owner, Holding, any Master Tenant or any Manager which in
any way relate to a Project or any part thereof. Without limiting the preceding
sentence, but subject to the provisions of Section 4.1(d), Borrower shall
promptly provide Lender with copies of all of the foregoing received from any
Governmental Agency.
(p) Affiliate Transactions. Prior to entering into any agreement
with an Affiliate pertaining to any Project, Borrower, Holding and Owner shall
deliver to Lender a copy of such agreement, which shall be satisfactory to
Lender in its sole discretion. If requested by Lender, such agreement shall
provide Lender the right to terminate it upon Lender's (or its designee's)
acquisition of the ownership interests in Borrower through a UCC sale or
otherwise.
(q) Employees. None of Borrower, Holding nor Owner has any
employees, nor will have any employees until after the Indebtedness has been
repaid in full.
(r) Compliance With Anti-Terrorism Orders. Borrower will not permit
the transfer of any interest in Borrower, Holding or Owner to any person or
entity (or any beneficial owner of such entity) who is listed on the specially
Designated Nationals and Blocked Persons List maintained by the Office of
Foreign Asset Control, Department of the Treasury pursuant to Executive Order
No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of
terrorists or terrorist organizations maintained pursuant to any of the rules
and regulations of the Office of Foreign Asset Control, Department of the
Treasury or pursuant to any other applicable Executive Orders (such lists are
collectively referred to as the "OFAC LISTS"). Borrower will not permit Owner to
knowingly enter into a Lease with any party who is listed on the OFAC Lists.
Borrower shall immediately notify Lender if Borrower has knowledge that Owner,
Holding, Master Tenant or Guarantor or any member or beneficial owner of
Borrower, Owner, Holding, Master Tenant or Guarantor is listed on
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the OFAC Lists or (A) is indicted on or (B) arraigned and held over on charges
involving money laundering or predicate crimes to money laundering. Borrower
shall immediately notify Lender if Borrower knows that any Tenant is listed on
the OFAC Lists or (A) is convicted on, (B) pleads nolo contendere to, (C) is
indicted on or (D) is arraigned and held over on charges involving money
laundering or predicate crimes to money laundering.
(s) Notice of Change. Borrower shall give Lender prior written
notice of any change in: (i) the location of its place of business or its chief
executive office if it has more than one place of business; (ii) the location of
any of the Personal Property, including Borrower's, Holding's or Owner's books
and records; and (iii) Borrower's, Holding's or Owner's name or business
structure. Unless otherwise approved by Lender in writing, all Personal Property
(other than the books and records) will be located at the Projects and all books
and records will be located at Borrower's Holding's or Owner's place of business
or chief executive office if Borrower has more than one place of business.
(t) No Use of Xxxxxxx Xxxxx Name. Borrower shall not directly or
indirectly publish, disclose or otherwise use in any advertising or promotional
material, or press release or interview, the name, logo or any trademark of
Lender, Xxxxxxx Xxxxx & Co., Inc. or any of their affiliates.
(u) Bank Accounts. Borrower will maintain one or more separate bank
accounts in its own name, and will cause Owner to maintain sufficient liquidity
in order to satisfy the working capital needs of the Projects.
(v) Financial Covenants.
(i) The Debt Service Coverage Ratio at the end of any calendar
month (measured on a combined trailing three month basis) shall be
equal to or greater than 1.30:1.00.
(ii) The Project Yield at the end of any calendar month
(measured on a combined trailing three month basis) shall be equal
to or greater than (i) 10.25% at all times during the first Loan
Year, (ii) 11.0% at all times during the second Loan Year, (iii)
12.0% at all times during the third Loan Year, and (iv) 13.0% at all
time during the fourth or fifth Loan Years and thereafter.
SECTION 4.3 AUTHORIZED REPRESENTATIVE.
Borrower hereby appoints Xxxxxxx Xxxxx as its "AUTHORIZED
REPRESENTATIVE" for purposes of dealing with Lender on behalf of Borrower in
respect of any and all matters in connection with this Agreement, the other Loan
Documents, and the Loan. Subject to the terms of Section 4.2(b) above
(concerning transfers), the Authorized Representative shall have the power, in
his discretion, to give and receive all notices, monies, approvals, and other
documents and instruments, and to take any other action on behalf of Borrower.
All actions by the Authorized Representative shall be final and binding on
Borrower. Lender may rely on the authority given to the Authorized
Representative until actual receipt by Lender of a
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duly authorized resolution substituting a different person as the Authorized
Representative whom Lender has previously approved. No more than one person
shall serve as Authorized Representative at any given time.
SECTION 4.4 HEALTH CARE MATTERS.
(a) Without limiting the generality of any other provision of this
Agreement, Borrower, Owner, Holding, each Master Tenant and Manager and their
employees and contractors (other than contracted agencies) in the exercise of
their duties on behalf of Borrower, Owner, Holding, and such Master Tenant or
Manager (with respect to their respective operation of the Projects) shall be in
compliance in all material respects with all applicable Laws relating to patient
healthcare and/or patient healthcare information, including without limitation
the Health Insurance Portability and Accountability Act of 1996, as amended, and
the rules and regulations promulgated thereunder ("HIPAA") (collectively,
"HEALTHCARE LAWS")). Borrower, Owner, Holding, and each Master Tenant and
Manager have maintained and shall continue to maintain in all material respects
all records required to be maintained by any Governmental Authority or otherwise
under the Healthcare Laws and there are no presently existing circumstances
which would result or likely would result in material violations of the
Healthcare Laws. Borrower, Owner, Holding, and each Master Tenant and Manager
have and will maintain all Governmental Approvals necessary under applicable
Laws to own and/or operate the Projects, as applicable (including such
Governmental Approvals as are required under such Healthcare Laws).
(b) If (i) Borrower, Owner, Holding, or any Master Tenant or Manager
is a "covered entity" within the meaning of HIPAA or (ii) Borrower, Owner,
Holding, or any Master Tenant or Manager (with respect to its operation of the
Project) are subject to the "Administrative Simplification" provisions of HIPAA,
then Borrower, Owner, Holding, or such Master Tenant and/or Manager, as
applicable (x) have undertaken or will promptly undertake all necessary surveys,
audits, inventories, reviews, analyses and/or assessments (including any
necessary risk assessments) of all areas of its business and operations required
by HIPAA and/or that could be adversely affected by the failure of Borrower,
Owner, Holding, or any Master Tenant or Manager to be HIPAA Compliant (as
defined below); (y) have developed or will promptly develop a detailed plan and
time line for becoming HIPAA Compliant (a "HIPAA COMPLIANCE PLAN"); and (x) have
implemented or will implement those provisions of such HIPAA Compliance Plan in
all material respects necessary to ensure that Borrower, Owner, Holding, and
each Master Tenant or Manager, as applicable, are or become HIPAA Compliant. For
purposes hereof, "HIPAA COMPLIANT" shall mean that Borrower, Owner, Holding,
and/or each Master Tenant and Manager, as applicable (x) are or will be in
compliance with each of the applicable requirements of the so-called
"Administrative Simplification" provisions of HIPAA on and as of each date that
any part thereof, or any final rule or regulation thereunder, becomes effective
in accordance with its or their terms, as the case may be (each such date, a
"HIPAA COMPLIANCE DATE") and (y) are not and could not reasonably be expected to
become, as of any date following any such HIPAA Compliance Date, the subject of
any civil or criminal penalty, process, claim, action or proceeding, or any
administrative or other regulatory review, survey, process or
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proceeding (other than routine surveys or reviews conducted by any government
health plan or other accreditation entity) that could result in any of the
foregoing or that could reasonably be expected to adversely affect Borrower's,
Owner's, Holding's, or any Master Tenant's or Manager's business, operations,
assets, properties or condition (financial or otherwise), in connection with any
actual or potential violation by Borrower, Owner, Holding, Master Tenant or
Manager of the then effective provisions of HIPAA.
(c) If required under applicable Law, Borrower and/or Owner or a
Master Tenant has and shall maintain in full force and effect a valid
certificate of need ("CON") or similar certificate, license, or approval issued
by the State Regulator for the requisite number of beds and units in the
Projects, and a provider agreement or other required documentation of approved
provider status for each provider payment or reimbursement program listed in
Exhibit B hereto, if applicable. All required Government Approvals necessary for
operation of the Projects are listed on Exhibit C hereto (collectively, the
"LICENSES"). Borrower, Owner, Holding, and each Master Tenant and Manager shall
operate the Projects in a manner such that the Licenses shall remain in full
force and effect. True and complete copies of the Licenses have been delivered
to Lender.
(d) The Licenses shall continue in full force and effect throughout
the term of the Loan and shall be free from restrictions or known conflicts
which would materially impair the use or operation of any Project for its
current use, and shall not be provisional, probationary or restricted in any way
; provided, however, Licenses with respect to no more than two Projects at any
one time may be subject to temporary restrictions or conditions (including being
put on probationary status), so long as it does not have a material adverse
effect on operation of the affected Project and, in any event, all such
restrictions and conditions are removed within ninety (90) days after the
imposition thereof.
(e) None of Borrower, Owner, Holding, or any Master Tenant or
Manager shall do (or suffer to be done) any of the following:
(i) Rescind, withdraw, revoke, amend, modify, supplement, or
otherwise alter the nature, tenor or scope of the Licenses for the
Projects without Lender's consent;
(ii) Amend or otherwise change any Project's authorized
units/beds capacity and/or the number of units/beds approved by the
State Regulator;
(iii) Replace or transfer all or any part of any Project's
units or beds to another site or location; or
(iv) Voluntarily transfer or encourage the transfer of any
resident of any Project to any other facility, unless such transfer
is at the request of the resident or is for reasons relating to the
health, required level of medical care or safety of the resident to
be transferred.
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(f) If and when Borrower, Owner, Holding or any Master Tenant or
Manager, in its sole discretion (subject to 4.4(g) below) participates in any
Medicare or Medicaid or other third party payor program with respect to any
Project, the Project will remain in compliance with all requirements for
participation in Medicare and Medicaid, including the Medicare and Medicaid
Patient Protection Act of 1987, as it may be amended, and such other third party
payor programs. Each Project is and will remain in conformance in all material
respects with all insurance, reimbursement and cost reporting requirements, and,
if applicable, have a current provider agreement that is in full force and
effect under Medicare and Medicaid.
(g) There is no, and during the term of the Loan there shall be no,
threatened, existing or pending revocation, suspension, termination, probation,
restriction, limitation, or nonrenewal affecting Borrower, Owner, Holding or any
Master Tenant, Manager or any Project or any participation or provider agreement
with any third-party payor, including Medicare, Medicaid, Blue Cross and/or Blue
Shield, and any other private commercial insurance managed care and employee
assistance program (such programs, the "THIRD-PARTY PAYOR PROGRAMS") to which
Borrower, Owner, Holding or any Master Tenant or Manager may presently be
subject with respect to any Project, or at any time hereafter is subject. None
of Borrower, Owner, Holding or any Master Tenant or Manager, other than in the
normal course of business, shall change the terms of any of the Third-Party
Payor Programs now or hereinafter in effect or their normal billing payment or
reimbursement policies and procedures with respect thereto (including the amount
and timing of finance charges, fees and write-offs). Notwithstanding the
foregoing, Borrower, Owner, Holding or any Master Tenant or Manager may
voluntarily withdraw from or terminate any Third-Party Payor Program to which
they may be subject to with respect to any Project. From and after the Closing
Date, none of Borrower, Owner, Holding or any Master Tenant or Manager shall,
without Lender's prior consent, enter into any new Third-Party Payor Programs
with respect to any Project if, as a result of such new Third-Party Payor
Program, twenty percent (20%) or more of the Revenue from such Project would be
derived from the payments under such Third-Party Payor Program, or five percent
(5%) or more of the aggregate Revenue of the Projects would be derived from
payments under all Third-Party Payor Programs. All Medicaid, Medicare and
private insurance cost reports and financial reports submitted by Borrower,
Owner, Holding or any Master Tenant or Manager with respect to a Project, if
any, are and will be materially accurate and complete and have not been and will
not be misleading in any material respects. No cost reports for any Project
remain open or unsettled.
(h) None of Borrower, Owner, Holding, any Project or, to Borrower's
knowledge, any Master Tenant or Manager is or will be the subject of any
proceeding by any Governmental Authority with respect to a Project, and no
notice of any violation has been or will be issued by a Governmental Authority
that would, directly or indirectly, or with the passage of time:
(i) Have a material adverse impact on Borrower's, Owner's,
Holding's, or any Master Tenant's or Manager's ability to accept
and/or retain
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patients or residents or operate the Projects for their current use
or result in the imposition of a fine or sanction in excess of
$5,000.00, a lower rate certification or a lower reimbursement rate
for services rendered to eligible patients or residents;
(ii) Modify, limit or annul or result in the transfer,
suspension, revocation or imposition of probationary use (subject to
Section 4.4(d) above) of any of the Licenses; or
(iii) If applicable, affect Borrower's, Owner's, Holding's, or
any Master Tenant's or Manager's continued participation in the
Medicaid or Medicare programs or any other of the Third-Party Payors
Programs, or any successor programs thereto, at then current rate
certifications.
(i) No Project has received a "Class 1" (or equivalent) violation,
and no statement of charges or deficiencies has been made or penalty enforcement
action has been undertaken against any Project, Borrower, Owner, Holding, any
Master Tenant (with respect to the Projects) or any Manager (with respect to the
Projects) or against any officer, director, partner, member or stockholder of
Borrower, Owner, Holding, or any Master Tenant or Manager, by any Governmental
Authority during the last five calendar years, and there have been no violations
over the past five years which have threatened any Project's, or any Manager's,
Master Tenant's, Owner's, Holding's or Borrower's certification for
participation in Medicare or Medicaid or the other Third-Party Payor Programs.
(j) There are no current, pending or outstanding Medicaid, Medicare
or Third-Party Payor Programs reimbursement audits or appeals pending at the
Projects, and there are no years that are subject to audit.
(k) There are no current or pending Medicaid or Medicare or
Third-Party Payor Programs recoupment efforts at the Projects. None of Borrower,
Owner, Holding, or any Master Tenant or Manager is a participant in any federal
program whereby any Governmental Authority may have the right to recover funds
by reason of the advance of federal funds, including those authorized under the
Xxxx-Xxxxxx Act (42 U.S.C. 291, et seq.), as it may be amended.
(l) There are no and there will remain no patient or resident care
agreements with patients or residents which deviate in any material adverse
respect from the form agreements which have been delivered to and approved by
Lender prior to closing.
(m) In the event any Master Lease or Management Agreement is
terminated or in the event of foreclosure of the Assignment or other acquisition
of the Projects by Lender or its designee or any purchaser at a foreclosure
sale, Borrower, Owner, Holding, Lender, any subsequent lessee or manager or any
subsequent purchaser need not obtain a CON prior to applying for and receiving
Medicare or Medicaid payments.
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From time to time, upon the request of Lender during the continuance of an Event
of Default hereunder or under the other Loan Documents, Borrower shall, and
shall cause Owner, Holding, each Master Tenant or Manager, as applicable to
complete, execute and deliver to Lender any applications, notices,
documentation, and other information necessary or desirable, in Lender's
judgment, to permit Lender or its designee (including a receiver) to obtain,
maintain or renew any one or more of the Licenses for the Projects (or to become
the owner of the existing Licenses for the Projects) and to the extent permitted
by applicable Laws to obtain any other provider agreements or Governmental
Approvals then necessary or desirable for the operation of the Projects by
Lender or its designee for their current use (including, without limitation, any
applications for change of ownership of the existing Licenses or change of
control of the owner of the existing Licenses). To the extent permitted by
applicable Laws and during the continuance of an Event of Default, (i) Lender is
hereby authorized (without the consent of Borrower, Owner, Holding, or any
Master Tenant or Manager) to submit any such applications, notices,
documentation or other information which Borrower caused to be delivered to
Lender in accordance with the above provisions to the applicable Governmental
Authorities, or to take such other steps as Lender may deem advisable to obtain,
maintain or renew any License or other Governmental Approvals in connection with
the operation of the Projects for their current use, and Borrower agrees to
cooperate and to cause Owner, Holding, each Manager and Master Tenant to
cooperate with Lender in connection with the same and (ii) Borrower, upon demand
by Lender, shall take any action and cause Owner, Holding, each Manager and
Master Tenant to take any action necessary or desirable, in Lender's sole
judgment, to permit Lender or its designee (including a receiver) to use,
operate and maintain the Projects for their current use. If Borrower, Owner,
Holding or any Master Tenant or Manager, as applicable fails to comply with the
provisions of this subsection (n) for any reason whatsoever, such entity hereby
irrevocably appoints Lender and its designee as its attorney-in-fact, with full
power of substitution, to take any action and execute any documents and
instruments necessary or desirable in Lender's sole judgment to permit Lender or
its designee to undertake Borrower's or Owner's, Holding's or any Master
Tenant's or Manager's, as applicable, obligations under this subsection (n),
including obtaining any Licenses or Governmental Approvals then required for the
operation of the Projects by Lender or its designee for their current use. The
foregoing power of attorney is coupled with an interest and is irrevocable and
Lender may exercise its rights thereunder in addition to any other remedies
which Lender may have against Borrower, Owner, Holding, any Master Tenant,
Manager or Guarantor as a result of Borrower's, Owner's, Holding's or any Master
Tenant's or Manager's breach of the obligations contained in this subsection
(n).
ARTICLE V
BORROWER'S REPRESENTATIONS AND WARRANTIES
SECTION 5.1 BORROWER'S REPRESENTATIONS AND WARRANTIES.
To induce Lender to execute this Agreement and perform its
obligations hereunder, Borrower hereby represents and warrants to Lender as
follows:
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(a) Owner lawfully possesses and holds fee simple title to each
Project, free and clear of all liens, claims, encumbrances, covenants,
conditions and restrictions, security interest and claims of others, except only
the Permitted Exceptions. Each of Borrower and Holding is a Single Purpose
Entity.
(b) Except as set forth in Exhibit D, there is no litigation or
proceedings pending, or to the best of Borrower's knowledge threatened, against
any Project, Borrower, Owner, Holding, Master Tenant (with respect to the
Projects), Manager (with respect to the Projects) or Guarantor (with respect to
the Projects), which could, if adversely determined, cause a Material Adverse
Change with respect to Borrower, Holding, Owner, or any Master Tenant, Manager
or Guarantor or any Project. There are no Environmental Proceedings and Borrower
has no knowledge of any threatened Environmental Proceedings with respect to the
Projects or any facts or circumstances which may give rise to any future
Environmental Proceedings with respect to the Projects.
(c) Borrower is duly organized, validly existing corporation and in
good standing under the laws of the State of Delaware with its principal place
of business at 0000 X. Xxxxxxxxxx Xx., Xxxxxxxxx, Xxxxxxxxx. Borrower has full
power and authority to execute, deliver and perform all Loan Documents to which
Borrower is a party, and such execution, delivery and performance have been duly
authorized by all requisite action on the part of Borrower. The Loan Documents
have each been duly executed and delivered and each constitutes the duly
authorized, valid and legally binding obligation of Borrower and the Guarantor,
as the case may be, enforceable against Borrower and the Guarantor, as the case
may be, in accordance with their respective terms. Borrower does not use any
trade names other than its actual name set forth herein. Borrower has full
right, power and authority to execute the Loan Documents on its own behalf.
(d) Owner is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with its principal place
of business at 0000 X. Xxxxxxxxxx Xx., Xxxxxxxxx, Xxxxxxxxx and is authorized to
transact business in the States of New York, Florida, Pennsylvania, Kansas,
Michigan, Wisconsin, Ohio and Texas. Holding is the sole shareholder of Owner
and owns one-hundred percent (100%) of the ownership interests in Owner free and
clear of all liens, claims, encumbrances and rights of others except for the
liens of Senior Lender pursuant to the Senior Loan Documents. Borrower is the
sole shareholder of Holding and owns one-hundred percent (100%) of the ownership
interests in Holding free and clear of all liens, claims, encumbrances and
rights of others except for the liens of Lender pursuant to the Loan Documents.
Holding is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware with its principal place of business at
0000 X. Xxxxxxxxxx Xx., Xxxxxxxxx, Xxxxxxxxx.
(e) Guarantor is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware with its principal
place of business at 0000 X. Xxxxxxxxxx Xx., Xxxxxxxxx, Xxxxxxxxx. Guarantor
owns one-hundred percent (100%) of the ownership interests in Borrower, and
directly owns one-hundred percent (100%) of the
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ownership interests in Alternative Living Services -- New York, Inc., in each
case free and clear of all liens, claims, encumbrances, and rights of others.
Guarantor has full right, power and authority to execute the Loan Documents on
its own behalf. Attached as Exhibit J is a true, complete and correct chart
showing the ownership structure of Borrower, Owner, Holding, each Master Tenant
and Guarantor.
(f) A true and complete copy the articles of incorporation and
by-laws creating Borrower, Owner, Holding and Guarantor, and all other documents
creating and governing Borrower, Owner, Holding and Guarantor and any and all
amendments thereto (collectively, the "ORGANIZATIONAL DOCUMENTS") has been
furnished to Lender. There are no other agreements, oral or written, among any
of the shareholders of Borrower relating to Borrower, Owner, Holding or
Guarantor. The Organizational Documents were duly executed and delivered, are in
full force and effect, and binding upon and enforceable in accordance with their
terms. The Organizational Documents constitute the entire understanding among
the shareholders of Borrower, Owner, Holding and Guarantor. No breach exists
under the Organizational Documents and no act has occurred and no condition
exists which, with the giving of notice or the passage of time would constitute
a breach under the Organizational Documents.
(g) No consent, approval or authorization of or declaration,
registration or filing with any Governmental Authority or nongovernmental person
or entity, including any creditor, partner, or member of Borrower, Owner,
Holding, any Master Tenant, any Manager or Guarantor, is required in connection
with the execution, delivery and performance of this Agreement or any of the
other Loan Documents other than the filing of UCC Financing Statements, except
for such consents, approvals or authorizations of or declarations or filings
with any Governmental Authority or non-governmental person or entity where the
failure to so obtain would not have an adverse effect on Borrower, Owner,
Holding, or any Manager, Master Tenant or Guarantor or which have been obtained
as of any date on which this representation is made or remade. None of the
Borrower, Owner, Holding, any Manager, any Master Tenant, nor Guarantor is
insolvent and there has been no: (i) assignment made for the benefit of the
creditors of any of them; (ii) appointment of a receiver for any of them or for
the property of any of them; or (iii) bankruptcy, reorganization, or liquidation
proceeding instituted by or against any of them, except as disclosed in writing
to Lender.
(h) There is no default under the Senior Loan Documents, this
Agreement or the other Loan Documents, nor any condition, which, after notice or
the passage of time or both, would constitute a default or an Event of Default
under, said documents. In addition, none of Borrower, Holding nor Owner is in
default under any contract, agreement or commitment to which it is a party. The
execution, delivery and compliance with the terms and provisions of this
Agreement and the other Loan Documents will not (i) to the best of Borrower's
knowledge, violate any provisions of law or any applicable regulation, order or
other decree of any court or governmental entity, or (ii) conflict or be
inconsistent with, or result in any default under, any contract, agreement or
commitment to which Borrower, Holding or Owner is bound. Borrower has delivered
to Lender copies of any agreements (including Leases and the Management
Agreements) between Borrower and any Affiliate of
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Borrower, Owner, Holding, Manager, Master Tenant, or Guarantor related in any
way to any Project and any other agreements or documents materially affecting
the use and operation of any Project.
(i) To the best of Borrower's and Guarantor's knowledge, (1) no
condemnation of any portion of any Project, (2) no condemnation or relocation of
any roadways abutting any Project, and (3) no proceeding to deny access to any
Project from any point or planned point of access to any Project, has commenced
or is contemplated by any Governmental Authority.
(j) The use of the Projects as assisted living facilities and the
contemplated accessory uses do not violate (i) any Laws (including subdivision,
zoning, building, environmental protection and wetland protection Laws), or (ii)
any building permits, covenants, conditions and restrictions of record, or
agreements affecting any Project or any part thereof. Except as shown on the
zoning reports obtained by Lender and the pro forma title policies in favor of
Lender, neither the zoning authorizations, subdivision approvals or variances
nor any other right to construct or to use any Project is to any extent
dependent upon or related to any real estate other than the Land. Except as
shown on the Surveys delivered to Lenders no building or other improvement
encroaches upon any property line, building line, set back line, side yard line
or any recorded or visible easement (or other easement of which Borrower is
aware or has reason to believe may exist) with respect to any Project. Except as
shown on the Surveys delivered to Lenders no Project is situated in an area
designated as having special flood hazards as defined by the Flood Disaster
Protection Act of 1973, as amended, or as a wetland by any governmental entity
having jurisdiction over a Project. All Governmental Approvals required for the
operation of the Projects have been obtained. All Laws relating to the operation
of the Improvements have been complied with in all material respects and all
permits and licenses required for the operation of the Projects have been
obtained except Licenses with respect to the Projects described on Exhibits A-17
and A-20 for which applications are pending. Each Project is accessible through
fully improved and dedicated roads, accepted for maintenance and public use by
public authority having jurisdiction. Each Project has adequate water, gas and
electrical supply, storm and sanitary sewerage facilities, telephone facilities,
other required public utilities, fire and police protection, and means of access
between the Project and public highways; none of the foregoing will be
foreseeably delayed or impeded by virtue of any requirements under any
applicable Laws. Each Project includes all property and rights that may be
reasonably necessary or desirable to promote the present and any reasonable
future beneficial uses and enjoyment thereof. To the best of Borrower's
knowledge, except as disclosed on Exhibit G, there are no, nor are there any
alleged or asserted, violations of law, regulations, ordinances, codes, permits,
licenses, declarations, covenants, conditions or restrictions of record, or
other agreements relating to any Project, or any part thereof, in any material
respect.
(k) No brokerage fees or commissions are payable by or to any person
in connection with this Agreement or the Loan to be disbursed.
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(l) All financial statements and other documents and information
previously furnished by Borrower, Owner, Holding, or any Manager, Master Tenant
or Guarantor to Lender in connection with the Loan are true, complete and
correct in all material respects and fairly present on a consistent basis the
financial conditions of the subjects thereof for the immediately prior periods
as of the respective dates thereof and do not fail to state any material fact
necessary to make such statements or information not misleading, and no Material
Adverse Change with respect to Borrower, Owner, Holding, or any Manager, Master
Tenant or Guarantor or any Tenant or any Project has occurred since the
respective dates of such statements and information. None of Borrower, Owner,
Holding, or any Manager, Master Tenant or Guarantor or any Tenant has any
material liability, contingent or otherwise, not disclosed in such financial
statements.
(m) Each Project is taxed separately without regard to any other
property and for all purposes each Project may be mortgaged, conveyed and
otherwise dealt with as an independent parcel. There are no unpaid or
outstanding real estate or other taxes or assessments on or against the Projects
or any part thereof, except general real estate taxes for 2005 not yet due or
payable. To Borrower's or Guarantor's knowledge, there is no pending or
contemplated action pursuant to which any special assessment may be levied
against any portion of the Projects.
(n) Except for Leases which have been provided to and approved by
Lender in writing, there are no Leases, subleases or other arrangements for
occupancy of space within any Project that are currently in effect other than as
set forth on the revenue journal delivered by Borrower to Lender prior to the
closing of the Loan, which Borrower certifies is true and correct in all
material respects. True, correct and complete copies of Owner's or each Master
Tenant's (as applicable) form resident agreement and all Leases (other than
Services Subleases), including the Master Leases, as amended, have been
delivered to Lender. All Leases, including the Master Leases, are in full force
and effect. None of Borrower, Owner, Holding, or any Manager, Master Tenant nor
any Tenant is in default under any Lease, including the Master Leases. Borrower
has disclosed to Lender in writing any material default by any Tenant under any
Lease and no notice of termination has been issued under any Lease, including
the Master Leases.
(o) The proceeds of the Loan shall be used for proper business
purposes. The Loan is not being made for the purpose of purchasing or carrying
"margin stock" within the meaning of Regulation T, U or X issued by the Board of
Governors of the Federal Reserve System and no portion of the proceeds of the
Loan shall be used in any matter that would violate such Regulations or
otherwise violate the Securities Act of 1933 or the Securities Exchange Act of
1934, and Borrower agrees to execute all instruments necessary to comply with
all the requirements of Regulation U of the Federal Reserve System.
(p) Borrower is not a party in interest to any plan defined or
regulated under ERISA, and no assets of Borrower are "plan assets" of any
employee benefit plan covered by ERISA or Section 4975 of the Internal Revenue
Code.
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(q) Neither Borrower nor any stockholder in Borrower, Holding, Owner
nor Guarantor is or will be, and no legal or beneficial interest of a
stockholder in Borrower is or will be held, directly or indirectly, by a
"foreign corporation", "foreign partnership", "foreign trust", "foreign estate",
"foreign person", "affiliate" of a "foreign person" or a "United States
intermediary" of a "foreign person" within the meaning of the Internal Revenue
Code Sections 897, 1445 or 7701, the Foreign Investments in Real Property Tax
Act of 1980, the International Foreign Investment Survey Act of 1976, the
Agricultural Foreign Investment Disclosure Act of 1978, or the regulations
promulgated pursuant to such Acts or any amendments to such Acts.
(r) Borrower and Guarantor have furnished Lender with a true and
complete copy of all of the Senior Loan Documents.
(s) None of Borrower, Owner, Holding, or any Manager, Master Tenant
nor Guarantor, nor any beneficial owner of any of them, is currently listed on
the OFAC Lists.
(t) All statements set forth in the Recitals are true and correct.
(u) There has been no damage or destruction of any part of any
Project by fire or other casualty that has not been repaired. Except as part of
routine maintenance, there are presently no existing defects in the Projects and
no repairs or alterations thereof are reasonably necessary or appropriate other
than proposed capital expenditures disclosed to and approved by Lender and the
Deferred Maintenance Items.
To the best of Borrower's knowledge, there are no strikes, boycotts,
or labor disputes which could reasonably be anticipated to have a material
adverse effect on the operation of any Project.
(v) None of Borrower, Holding or Owner has employees.
(w) Borrower has no interest in any trademarks, copyrights, patents
or other intellectual property with respect to Holding, Owner or the Projects.
(x) The Management Agreements are in full force and effect.
(y) The Master Leases are in full force and effect.
Borrower agrees that all of the representations and warranties set
forth above and elsewhere in this Agreement are true as of the date hereof, will
be true at the Closing Date and, except for matters which have been disclosed by
Borrower and approved by Lender in writing, at all times thereafter. It shall be
a condition precedent to the Closing and each subsequent disbursement, if any,
that each of said representations and warranties is true and correct as of the
date of such requested disbursement. Each disbursement from any escrows or
reserves held by or on behalf of Lender shall be deemed to be a reaffirmation by
Borrower that each of the representations and warranties is true and correct as
of the date of
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such disbursement. In addition, at Lender's request, Borrower shall reaffirm
such representations and warranties in writing prior to each such disbursement.
ARTICLE VI
ENVIRONMENTAL MATTERS
SECTION 6.1 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.
Each Environmental Indemnitor hereby represents and warrants to and
Lender that (i) except as specifically disclosed in the documents listed in
Exhibit F attached hereto (the "ENVIRONMENTAL DOCUMENTS"), to the best of
Environmental Indemnitor's knowledge, (a) each Project is in a clean, safe and
healthful condition and, except for materials used in the ordinary course of
maintenance and operation (and in compliance with all Laws) of such Project, has
been and is free of all Hazardous Material, and (b) no release of any Hazardous
Material has occurred on, onto or about the Projects; (ii) none of Borrower nor
Owner nor, to the best of Environmental Indemnitor's knowledge, any other person
or entity, has ever caused or permitted any Hazardous Material to be placed,
held, located or disposed of on, under, at or in a manner to affect any Project,
or any part thereof, and no Project has ever been used (whether by Borrower,
Owner or, to the best of Environmental Indemnitor's knowledge, by any other
person or entity) for any activities involving, directly or indirectly, the use,
generation, treatment, storage, transportation, or disposal of any Hazardous
Material, except for materials used in the ordinary course of maintenance and
operation (and in compliance with all Laws) of the Projects; (iii) except as
specifically disclosed in the Environmental Documents, each Project currently
complies, and will comply based on its anticipated use, with all Laws relating
to Hazardous Material; (iv) to the best of Environmental Indemnitor's knowledge
in connection with the ownership, operation, and use of the Projects, all
necessary notices have been filed and all required permits, licenses and other
authorizations have been obtained, including those relating to the generation,
treatment, storage, disposal or use of Hazardous Material; (v) to the best of
Environmental Indemnitor's knowledge, there is no present, past or threatened
investigation, inquiry or proceeding relating to the environmental condition of,
or to events on or about any Project; (vi) neither any Project nor Owner is
subject to any remedial obligations under any Laws relating to Hazardous
Material, health or the environment; (vii) there are no underground tanks,
vessels, or similar facilities for the storage, containment or accumulation of
Hazardous Materials of any sort on, under or affecting any Project; and (viii)
it has not, nor will it, release or waive the liability of any previous owner,
lessee or operator of any Project or any party who may be potentially
responsible for the presence of or removal of Hazardous Material from any
Project, nor has it made promises of indemnification regarding Hazardous
Material on any Project to any party, except as contained herein and in the Loan
Documents.
SECTION 6.2 ENVIRONMENTAL COVENANTS.
Environmental Indemnitors shall:
(a) comply, and cause all other persons on or occupying any Project
to comply, with all Laws relating to Hazardous Material;
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(b) not install, use, generate, manufacture, store, treat, release
or dispose of, nor permit the installation, use, generation, storage, treatment,
release or disposal of, Hazardous Material on, under or about any Project,
except for materials used in the ordinary course of maintenance and operation
(and in compliance with all Laws) of the Projects;
(c) immediately advise Lender in writing of: (i) any and all
Environmental Proceedings;(ii) the presence of any Hazardous Material on, under
or about any Project of which Lender has not previously been advised in writing,
except for materials used in the ordinary course of maintenance and operation
(and in compliance with all Laws) of the Projects; (iii) any remedial action
taken by, or on behalf of, any Environmental Indemnitor in response to any
Hazardous Material on, under or about any Project or to any Environmental
Proceedings of which Lender has not previously been advised in writing; (iv) the
discovery by any Environmental Indemnitor of the presence of any Hazardous
Material on, under or about any real property or bodies of water adjoining or in
the vicinity of any Project; and (v) the discovery by any Environmental
Indemnitor of any occurrence or condition on any real property adjoining or in
the vicinity of any Project that could cause any Project or any part thereof to
be subject to any restrictions on the ownership, occupancy, transferability or
use of such Project under any Laws relating to Hazardous Material;
(d) provide Lender with copies of all reports, analyses, notices,
licenses, approvals, orders, correspondences or other written materials in its
possession or control relating to the environmental condition of each Project or
real property or bodies of water adjoining or in the vicinity of each Project or
Environmental Proceedings immediately upon receipt, completion or delivery of
such materials;
(e) not install or allow to be installed any tanks on, at or under
any Project;
(f) not create or permit to continue in existence any lien (whether
or not such lien has priority over the lien created by the Mortgage) upon any
Project imposed pursuant to any Laws relating to Hazardous Material; and
(g) not change or alter the present use of any Project unless
Environmental Indemnitors shall have notified Lender thereof in writing and
Lender shall have determined, in its sole and absolute discretion, that such
change or modification will not result in the presence of Hazardous Material on
the Project in question in such a level that would increase the potential
liability for Environmental Proceedings.
SECTION 6.3 RIGHT OF ENTRY AND DISCLOSURE OF ENVIRONMENTAL REPORTS.
Borrower hereby grants to Lender its agents, employees, consultants
and contractors, an irrevocable license and authorization to enter upon and
inspect the Projects at reasonable times and upon reasonable advance notice, and
conduct such environmental audits and tests, including, without limitation,
subsurface testing, soils and groundwater testing, and other tests which may
physically invade a Project, which Lender, in its sole and absolute discretion,
determines are necessary or desirable. With respect to invasive testing, such as
soil borings, Lender shall consult with Borrower in advance of such tests.
Lender
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agrees, however, that it shall not conduct any such audits or tests, unless a
default exists under the Loan Documents or Lender has reason to believe that
such audit or test may disclose the presence or release of Hazardous Material or
unless an environmental audit deems further testing necessary. Without limiting
the generality of the foregoing, Borrower agrees that Lender shall have the
right to appoint a receiver to enforce this right to enter and inspect the
Projects to the extent such authority is provided under applicable Laws. All
reasonable out-of-pocket costs and expenses incurred by Lender in connection
with any inspection, audit or testing conducted in accordance with this Section
6.3 shall be paid by Borrower. The results of all investigations and reports
prepared by Lender shall be and at all times remain the property of Lender and
under no circumstances shall Lender have any obligation whatsoever to disclose
or otherwise make available to Environmental Indemnitors or any other party such
results or any other information obtained by it in connection with such
investigations and reports; provided, however, that if there exists no Event of
Default under the Loan Documents, if requested by Borrower, Lender shall provide
to Borrower a copy of the written report with respect to any inspection, audit
or testing for which Borrower has paid hereunder. Lender hereby reserves the
right, and Environmental Indemnitors hereby expressly authorize Lender to make
available to any party in connection with a sale of any Project any and all
environmental reports, whether prepared by Lender or prepared by any Borrower
and provided to Lender (collectively, the "ENVIRONMENTAL REPORTS"), which Lender
may have with respect to the Project. Borrower consents to Lender notifying any
party under such circumstances of the availability of any or all of the
Environmental Reports and the information contained therein. Each Environmental
Indemnitor further agrees that Lender may disclose such Environmental Reports to
any governmental agency or authority if they reasonably believe that they are
required to disclose any matter contained therein to such agency or authority;
provided that Lender shall give Borrower at least 48 hours' prior written notice
before so doing. Each Environmental Indemnitor acknowledges that Lender cannot
control or otherwise assure the truthfulness or accuracy of the Environmental
Reports, and that the release of the Environmental Reports, or any information
contained therein, to prospective bidders at any foreclosure sale of any Project
may have a material and adverse effect upon the amount, which a party may bid at
such sale. Each Environmental Indemnitor agrees that Lender shall not have any
liability whatsoever as a result of delivering any or all of the Environmental
Reports or any information contained therein to any third party, and each
Environmental Indemnitor hereby releases and forever discharges Lender from any
and all claims, damages, or causes of action arising out of connected with or
incidental to the Environmental Reports or the delivery thereof.
SECTION 6.4 ENVIRONMENTAL INDEMNITOR'S REMEDIAL WORK.
Environmental Indemnitors shall promptly perform any and all
necessary remedial work ("REMEDIAL WORK") in response to any Environmental
Proceedings or the presence, storage, use, disposal, transportation, discharge
or release of any Hazardous Material on, under or about any of the Projects;
provided, however, that Borrower shall perform or cause to be performed such
Remedial Work so as to minimize any impairment to Lender's security under the
Loan Documents.
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All Remedial Work shall be conducted: (a) in a diligent and timely
fashion by licensed contractors acting under the supervision of a consulting
environmental engineer; (b) pursuant to a detailed written plan for the Remedial
Work approved by any public or private agencies or persons with a legal or
contractual right to such approval; (c) with such insurance coverage pertaining
to liabilities arising out of the Remedial Work as is then customarily
maintained with respect to such activities; and (d) only following receipt of
any required permits, licenses or approvals. The selection of the Remedial Work
contractors and consulting environmental engineer, the contracts entered into
with such parties, any disclosures to or agreements with any public or private
agencies or parties relating to Remedial Work and the written plan for the
Remedial Work (and any changes thereto) shall each be subject to Lender's prior
written approval, which shall not be unreasonably withheld or delayed. In
addition, Environmental Indemnitors shall submit to Lender, promptly upon
receipt or preparation, copies of any and all reports, studies, analyses,
correspondence, governmental comments or approvals, proposed removal or other
Remedial Work contracts and similar information prepared or received by
Environmental Indemnitors in connection with any Remedial Work, or Hazardous
Material relating to a Project. All costs and expenses of such Remedial Work
shall be paid by Environmental Indemnitors, including, without limitation, the
charges of the Remedial Work contractors and the consulting environmental
engineer, any taxes or penalties assessed in connection with the Remedial Work
and Lender's reasonable fees and out-of-pocket costs incurred in connection with
monitoring or review of such Remedial Work. Lender shall have the right but not
the obligation to join and participate in, as a party if it so elects, any legal
proceedings or actions initiated in connection with any Environmental
Proceedings.
SECTION 6.5 ENVIRONMENTAL INDEMNITY.
Environmental Indemnitors shall protect, indemnify, defend and hold
Lender and any successors to Lender's interest in the Projects, and any other
party who acquires any portion of any Project at a foreclosure sale or otherwise
through the exercise of Lender's rights and remedies under the Loan Documents,
and all directors, officers, employees and agents of all of the aforementioned
indemnified parties, harmless from and against any and all actual or potential
claims, liabilities, damages (direct or indirect), and Expenses which arise out
of or relate in any way to any breach of any representation, warranty or
covenant contained herein, or any Environmental Proceedings or any use,
handling, production, transportation, disposal, release or storage of any
Hazardous Material in, under or on any Project, whether by any Environmental
Indemnitor or any other person, including, without limitation:
(a) all foreseeable and all unforeseeable Expenses (including any
loss of principal and interest due and owing on the Loan) arising out of: (i)
Environmental Proceedings or the use, generation, storage, discharge or disposal
of Hazardous Material by Environmental Indemnitors, any prior owner or operator
of any Project or any person on or about any Project; (ii) any residual
contamination affecting any natural resource or the environment; or (iii) any
exercise by Lender of any of its rights and remedies hereunder; and
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(b) the costs of any required or necessary investigation,
assessment, testing, remediation, repair, cleanup, or detoxification of any
Project and the preparation of any closure or other required plans.
Environmental Indemnitors' liability to the aforementioned
indemnified parties shall arise upon the earlier to occur of (1) discovery of
any Hazardous Material on, under or about any Project, or (2) the institution of
any Environmental Proceedings, and not upon the realization of loss or damage,
and Environmental Indemnitors shall pay to Lender from time to time, immediately
upon request, an amount equal to such Expenses, as reasonably determined by
Lender. In addition, in the event any Hazardous Material is removed, or caused
to be removed from any Project, by Environmental Indemnitors, Lender or any
other person, the number assigned by the U.S. Environmental Protection Agency to
such Environmental Proceedings or any similar identification shall in no event
be in the name of Lender or identify the Lender as a generator, arranger or
other designation. The foregoing indemnity shall not include Expenses arising
solely from Hazardous Material which first exists on any Project following the
date on which the Lender takes title to such Project, whether by foreclosure of
the applicable Mortgage, deed-in-lieu thereof or otherwise.
SECTION 6.6 REMEDIES UPON AN ENVIRONMENTAL DEFAULT.
In addition to any other rights or remedies Lender may have under
this Article 6, at law or in equity, in the event that Environmental Indemnitors
shall fail to timely comply with any of the provisions of this Article 6, or in
the event that any representation or warranty made in this Article 6 proves to
be false or misleading, then, in such event, after (i) delivering written notice
to Environmental Indemnitors, which notice specifically states that
Environmental Indemnitors have failed to comply with the provisions of this
Article 6; and (ii) the expiration of the earlier to occur of (A) a thirty (30)
day period after receipt of such notice and (B) the cure period, if any,
permitted under any applicable law, rule, regulation or order with which
Environmental Indemnitors shall have failed to comply, Lender may declare an
Event of Default in this Agreement or any other Loan Documents and exercise any
and all remedies provided for therein, and/or do or cause to be done whatever is
reasonably necessary to cause the Projects to comply with all Laws relating to
Hazardous Material and other applicable Laws, rules, regulations or orders and
the cost thereof shall constitute an Expense hereunder and shall become
immediately due and payable without notice and with interest thereon at the
Default Rate until paid. Environmental Indemnitors shall give to Lender and its
agents and employees access to the Projects for the purpose of effecting such
compliance and hereby specifically grant to Lender a license, effective upon
expiration of the applicable period as described above, if any, to do whatever
is necessary to cause the Projects to so comply, including, without limitation,
to enter the Projects and remove therefrom any Hazardous Material or otherwise
comply with any Laws relating to Hazardous Material.
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SECTION 6.7 UNCONDITIONAL ENVIRONMENTAL OBLIGATIONS.
Notwithstanding any term or provision contained herein or in the
other Loan Documents, the covenants and obligations of the Environmental
Indemnitors under this Article 6 (the "ENVIRONMENTAL OBLIGATIONS") are
unconditional. Environmental Indemnitors shall be fully, personally, jointly and
severally liable for the Environmental Obligations, and such liability shall not
be limited to the original principal amount of the Loan. The Environmental
Obligations shall be enforceable by Lender, its Affiliates, and its successors
and assigns. The Environmental Obligations shall survive the repayment of the
Loan and any foreclosure, deed-in-lieu or transfer in lieu of foreclosure or
similar proceedings or any transfer of title to the Projects or any portion
thereof.
SECTION 6.8 ASSIGNMENT OF ENVIRONMENTAL OBLIGATIONS PROHIBITED.
The Environmental Obligations may not be assigned or transferred, in
whole or in part, by Environmental Indemnitors and any purported assignment by
Environmental Indemnitors of the Environmental Obligations shall be void ab
initio and of no force or effect.
SECTION 6.9 INDEMNIFICATION SEPARATE FROM THE LOAN.
(a) The Environmental Indemnitors agree that the Environmental
Obligations are separate, independent of and in addition to the undertakings of
the Environmental Indemnitors, as applicable, pursuant to the Loan, the Note,
the other provisions of this Agreement and the other Loan Documents. A separate
action may be brought to enforce the provisions of this Article 6, which shall
in no way be deemed to be an action on the Note, whether or not the Loan has
been repaid and whether or not Lender would be entitled to a deficiency judgment
following a judicial foreclosure, trustee's sale or UCC sale. The Environmental
Obligations shall not be affected by any exculpatory provisions contained in the
Note, this Agreement or any of the other Loan Documents. All rights and
obligations of this Article 6 shall survive performance and repayment of the
obligations evidenced by and arising under the Loan Documents, surrender of the
Note, reconveyance of the Assignment, release of other security provided in
connection with the Loan, trustee's sale or foreclosure under the Assignment
and/or any of the other Loan Documents (whether by assignment in lieu of
foreclosure, or otherwise, acquisition of the ownership interests in the
Borrower by Lender, any transfer of any Project, and transfer of all of Lender's
rights in the Loan, the Loan Documents, and the ownership interests in Borrower.
(b) The Environmental Indemnitors may not assign or delegate their
covenants, agreements and obligations hereunder without the prior written
consent of Lender. The covenants, agreements and obligations of the
Environmental Indemnitors hereunder shall be binding upon the Environmental
Indemnitors, their heirs, administrators, legal representatives, successors and
assigns. The rights, remedies and benefits of Lender hereunder shall inure to
the benefit of Lender, its legal representatives and the successors and assigns
of its interest under any or all of the Loan Documents and its Affiliates, it
being the
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intention hereof that the covenants and indemnities of the Environmental
Indemnitors shall, without limitation, further extend to any person or entity
who holds an interest in the Note without in any way terminating, limiting or
diminishing the benefits to any previous or existing beneficiary of this Article
6.
(c) Environmental Indemnitors waive all rights to require Lender to
(i) proceed against or exhaust any security for the Loan or (ii) pursue any
remedy in Lender's power whatsoever. Borrower waives all defenses by reason of
any disability or other defense under the Loan or by reason of the cessation
from any cause whatsoever of its liability under the Loan, or that it may
acquire by reason of Lender's election of any remedy against it including,
without limitation, Lender's exercise of its rights to foreclose under the
Assignment.
SECTION 6.10 FURTHER SECURITY.
As further security for the Environmental Obligations, Environmental
Indemnitors do hereby assign to Lender all of Environmental Indemnitors' rights
and benefits under any right of indemnification or right to contribution to
which Environmental Indemnitors may be entitled (whether under Hazardous
Materials law, by contract or otherwise) with respect to any Hazardous Materials
or environmental condition (collectively, the "INDEMNIFICATION RIGHTS") and
Environmental Indemnitors hereby covenant to take such further actions and to
execute such further instruments as are necessary to transfer to Lender all
rights and benefits accruing in favor of Environmental Indemnitors under any of
the Indemnification Rights. Notwithstanding the foregoing, Environmental
Indemnitors shall continue to fully perform all of their respective covenants
and obligations under such Indemnification Rights and shall continue to enforce
the terms of the Indemnification Rights, and Lender shall have no liabilities or
obligations under the Indemnification Rights or for enforcement of the
Indemnification Rights by reason of the foregoing assignment. The assignment and
covenants in this Section 6.10 shall survive in perpetuity.
ARTICLE VII
CASUALTIES AND CONDEMNATION
SECTION 7.1 LENDER'S ELECTION TO APPLY INSURANCE PROCEEDS ON
INDEBTEDNESS.
(a) Until the Senior Loan is repaid in full, all proceeds of
insurance resulting from any loss at any Project or condemnation or other taking
of a Project or a portion thereof (individually and collectively referred to as
"INSURANCE PROCEEDS") shall be applied in accordance with the Senior Loan
Documents (whether in repayment of the Senior Loan, restoration of the Projects,
or otherwise). After the Senior Loan is repaid in full and subject to the
provisions of Section 7.1(b) below, Lender may elect to collect, retain and
apply upon the Indebtedness of Borrower under this Agreement or any of the other
Loan Documents all Insurance Proceeds after deduction of all expenses of
collection and settlement, including attorneys' and adjusters' fees and charges.
Any proceeds remaining after repayment of the Indebtedness shall be paid by
Lender to Borrower.
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(b) After the Senior Loan is repaid in full and notwithstanding
anything in Section 7.1(a) to the contrary, in the event of any casualty to any
Improvements or any condemnation of part of any Project, Lender agrees to make
available the Insurance Proceeds for restoration of such Improvements if (i) no
Event of Default exists, (ii) all Insurance Proceeds are deposited with Lender,
(iii) in Lender's reasonable judgment, the amount of Insurance Proceeds
available for restoration of the Improvements is sufficient to pay the full and
complete costs of such restoration, (iv) no material Leases (which for this
purpose shall mean Leases demising more than five percent (5%) of the rentable
square feet of space at the affected Project) in effect at the time of such
casualty or condemnation are or will be terminated as a result of such casualty
or condemnation, (v) the income from the affected Project will not decrease more
than five percent (5%) as a result of such casualty or condemnation, (vi) the
cost of restoration does not exceed ten percent (10%) of the Loan Amount, (vii)
in Lender's sole determination after completion of restoration, the Loan Amount
will not exceed seventy-five percent (75%) of the fair market value of the
affected Project, (viii) in Lender's reasonable determination, such Project can
be restored to an architecturally and economically viable project in compliance
with applicable Laws, (ix) Guarantor reaffirms its guaranty, as applicable, in
writing, (x) in Lender's reasonable determination, such restoration is likely to
be completed not later than six (6) months prior to the Maturity Date and (xi)
no Master Lease or Management Agreement with respect to the affected Project is
terminated.
SECTION 7.2 BORROWER'S OBLIGATION TO REBUILD AND USE OF INSURANCE
PROCEEDS THEREFOR.
Subject to the terms of the Senior Loan, in case Lender does not
elect to apply or does not have the right to apply the Insurance Proceeds to the
Indebtedness, as provided in Section 7.1 above, Borrower shall:
(a) Proceed or cause Owner or the applicable Master Tenant to
proceed with diligence to make settlement with insurers or the appropriate
governmental authorities and cause the Insurance Proceeds to be deposited with
the Senior Lender, if the Senior Loan is outstanding, otherwise with Lender;
(b) In the event of any delay in making settlement with insurers or
the appropriate governmental authorities or effecting collection of the
Insurance Proceeds, deposit with Senior Lender, if the Senior Loan is
outstanding (otherwise with Lender), the full amount required to complete
construction as aforesaid;
(c) In the event the Insurance Proceeds and the available proceeds
of the Loan are insufficient to assure Lender that all contemplated repairs or
construction will be completed, promptly deposit with Lender or the holder of
the Senior Loan any amount necessary to assure that such contemplated repairs or
construction will be completed; and
(d) Promptly cause Owner or the applicable Master Tenant to proceed
with the assumption of construction of the Improvements, including the repair of
all damage resulting from such fire, condemnation or other cause and restoration
to its former condition.
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Any request by Borrower for a disbursement by Lender of Insurance
Proceeds and funds deposited by Borrower shall be treated by Lender as if such
request were for an advance of the Loan hereunder, and the disbursement thereof
shall be conditioned upon Borrower's compliance with and satisfaction of the
same conditions precedent as would be applicable under this Agreement for an
advance of the Loan.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.1 EVENTS OF DEFAULT.
The occurrence of any one or more of the following shall constitute
an "EVENT OF DEFAULT" as said term is used herein:
(a) Failure of Borrower to pay the outstanding principal amount, all
interest thereon and all other amounts owing hereunder or the other Loan
Documents (the "INDEBTEDNESS") on the Maturity Date or the failure to pay,
within five (5) days of the due date, any of other payment obligations of
Borrower to Lender, including any payments of interest, principal, amortization,
Excess Cash Flow or Exit Fee due pursuant to this Agreement;
(b) Failure of Borrower to strictly comply with the provisions of
Section 4.1(n) (Senior Loan), Section 4.2(b) (transfers), Section 4.2(d)
(insurance), Section 4.2(l) (no additional debt), Section 4.2(m) (organizational
documents), Section 4.2(n) (single purpose entity), Section 4.2(v) (financial
covenants), Section 4.4(d) (licenses), Section 4.4(e) (licenses and other
matters), and Article 6 (environmental matters).
(c) Failure of Borrower for a period of thirty (30) days after
written notice from Lender, to observe or perform any non-monetary covenant or
condition contained in this Agreement or any other Loan Documents not set forth
in the subsections above; provided that if any such failure concerning a
non-monetary covenant or condition is susceptible to cure and cannot reasonably
be cured within said thirty (30) day period, then Borrower shall have an
additional sixty (60) day period to cure such failure and no Event of Default
shall be deemed to exist hereunder so long as (Y) Borrower commences such cure
within the initial thirty (30) day period and diligently and in good faith
pursues such cure to completion within such resulting ninety (90) day period
from the date of Lender's notice, and (Z) the existence of such default will not
result in any Tenant having the right to terminate its Lease due to such
default; and provided further that if a different notice or grace period is
specified under any other subsection of this Section 8.1 with respect to a
particular breach, or if another subsection of this Section 8.1 applies to a
particular breach and does not expressly provide for a notice or grace period,
the specific provision shall control;
(d) Any material default by Owner, as lessor, under the terms of any
Lease (including the Master Leases) following the expiration of any applicable
notice and cure period, provided that if the Lease (including the Master Leases)
does not provide a notice and cure period, then the notice and cure period
provided in (a) above will apply to any such
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monetary default, and the notice and cure period provided in (c) will apply to
any such non-monetary default (which respective periods shall commence upon
written notice of default from Lender or the applicable Tenant, whichever occurs
first);
(e) If any warranty, representation, statement, report or
certificate made now or hereafter by Borrower or Guarantor is untrue or
incorrect in any material respect at the time made or delivered, provided that
if such breach is reasonably susceptible of cure, then no Event of Default shall
exist so long as the applicable party cures said breach (i) by the due date
provided in (a) above for a breach that can be cured by the payment of money or
(ii) within the notice and cure period provided in (c) above for any other
breach;
(f) A petition under any Chapter of Title 11 of the United States
Code or any similar law or regulation is filed by or against Borrower, Owner,
Holding, any Manager, Master Tenant or Guarantor (and in the case of an
involuntary petition in bankruptcy, such petition is not discharged within sixty
(60) days of its filing), or a custodian, receiver or trustee for any Project or
any portion thereof is appointed, or Borrower, Owner, Holding, any Manager,
Master Tenant or Guarantor makes an assignment for the benefit of creditors, or
any of them are adjudged insolvent by any state or federal court of competent
jurisdiction, or any of them admit their insolvency or inability to pay their
debts as they become due or an attachment or execution is levied against any
Project or any portion thereof;
(g) The occurrence of a default and the expiration of any cure
period available to the applicable Master Tenant applicable thereto under any
Master Lease;
(h) The occurrence of a default and the expiration of any cure
period available to a Manager under any Management Agreement;
(i) The occurrence of any other event or circumstance constituting a
default under any of the other Loan Documents and the expiration of any
applicable grace or cure periods, if any, specified for such default therein; or
(j) The occurrence of a default under the Senior Loan Documents (i)
which continues beyond the expiration of any applicable cure periods or (ii)
which is cured by Lender.
SECTION 8.2 REMEDIES CONFERRED UPON LENDER.
Lender's rights, remedies and powers, as provided herein and the
other Loan Documents, are cumulative and concurrent, and may be pursued singly,
successively or together against Borrower, any guarantor of the Loan, the
security described in the Loan Documents, and any other security given at any
time to secure the payment hereof, all at the sole discretion of Lender.
Additionally, Lender may resort to every other right or remedy available at law
or in equity without first exhausting the rights and remedies contained herein,
all in Lender's sole discretion. Failure of Lender, for any period of time or on
more than one occasion, to exercise its option to accelerate the Maturity Date
shall not constitute a waiver of the right to exercise the same at any time
during the continued existence of any
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Event of Default or any subsequent Event of Default. Upon the occurrence of any
Event of Default, Lender may pursue any one or more of the following remedies
concurrently or successively, it being the intent hereof that none of such
remedies shall be to the exclusion of any other:
(a) Foreclose the Assignment and do anything that is necessary or
appropriate in its sole judgment to fulfill the obligations of Borrower under
this Agreement and the other Loan Documents. Without restricting the generality
of the foregoing and for the purposes aforesaid, Borrower hereby appoints and
constitutes Lender its lawful attorney-in-fact with full power of substitution
in the Projects to use unadvanced funds remaining under the Note or which may be
reserved, escrowed or set aside for any purposes hereunder at any time, or to
advance funds in excess of the face amount of the Note, to pay, settle or
compromise all existing bills and claims, which may be liens or security
interests, or to avoid such bills and claims becoming liens against any
Projects; to execute all applications and certificates in the name of Borrower
prosecute and defend all actions or proceedings in connection with any of the
Improvements or Project; and to do any and every act which Borrower might do in
its own behalf; it being understood and agreed that this power of attorney shall
be a power coupled with an interest and cannot be revoked;
(b) Declare the Note or the Indebtedness to be immediately due and
payable;
(c) Use and apply any monies or letters of credit deposited by
Borrower with Lender, including all escrows and reserves, if any, regardless of
the purposes for which the same was deposited, to cure any such default or to
apply on account of any Indebtedness under this Agreement which is due and owing
to Lender;
(d) Exercise or pursue any other remedy or cause of action permitted
under this Agreement or any other Loan Documents, or conferred upon Lender by
operation of Law.
Notwithstanding the foregoing, upon the occurrence of any Event of
Default under Section 8.1(f) all amounts evidenced by the Note shall
automatically become due and payable, without any presentment, demand, protest
or notice of any kind to Borrower.
ARTICLE IX
LOAN EXPENSE, COSTS AND ADVANCES
SECTION 9.1 LOAN AND ADMINISTRATION EXPENSES.
Whether or not the Loan is made, Borrower unconditionally agrees to
pay all costs and expenses of the Loan, including all amounts payable pursuant
to Sections 2.7, 2.8 and 9.3 and any and all other fees owing to Lender pursuant
to the Loan Documents, and also including all documentation, modification, or
workout costs relating to the Loan, recording, filing and registration fees and
charges, mortgage or documentary taxes, UCC searches, title and survey charges,
all fees and disbursements of Lender's consultants, any costs involved in
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the disbursement, syndication and administration of the Loan, any repair or
maintenance costs or payments made to remove or protect against liens, all costs
and expenses incurred by Lender in connection with the determination of whether
or not Borrower has performed the obligations undertaken by Borrower hereunder
or has satisfied any conditions precedent to the obligations of Lender hereunder
and, if any default or Event of Default occurs hereunder or under any of the
Loan Documents or if the Loan or Note or any portion thereof is not paid in full
when and as due, all costs and expenses of Lender incurred in attempting to
enforce or collect payment of the Loan or enforce any rights of Lender or
Borrower's obligations hereunder and expenses of Lender incurred (including
expenses relating to documentary and expert evidence, publication costs) in
attempting to realize, while a default or Event of Default exists, on any
security or incurred in connection with the sale, disposition (or preparation
for sale or disposition) or liquidation of any security for the Loan (including
any foreclosure sale of the issued and outstanding stock of Borrower, assignment
in lieu transaction or costs incurred in connection with any litigation or
bankruptcy or administrative hearing and any appeals therefrom and any
post-judgment enforcement action including, without limitation, supplementary
proceedings in connection with the enforcement of this Agreement). All such
costs or expenses incurred or advances or payments made by Lender shall also
include court costs, legal fees and disbursements relating thereto and shall be
included as additional Indebtedness evidenced by the Note and secured by the
Assignment and the other Loan Documents bearing interest at the Default Rate set
forth in the Note until paid. Borrower agrees to pay all brokerage, finder or
similar fees or commissions payable in connection with the transactions
contemplated hereby and shall indemnify, defend and hold Lender harmless against
all claims, liabilities, and Expenses arising in relation to any claim by
broker, finder or similar person. Lender may require the payment of Lender's
outstanding fees and expenses as a condition to any disbursement of the Loan.
Lender is hereby authorized, without any specific request or direction by
Borrower, to make disbursements from time to time in payment of or to reimburse
Lender for all Loan expenses and fees.
SECTION 9.2 RIGHT OF LENDER TO MAKE ADVANCES TO CURE BORROWER'S
DEFAULTS.
In the event that Borrower fails to perform any of Borrower's
covenants, agreements or obligations contained in this Agreement or any of the
other Loan Documents (after the expiration of applicable grace periods, except
in the event of an emergency or other exigent circumstances), Lender may (but
shall not be required to) perform any of such covenants, agreements and
obligations, and any amounts expended by Lender in so doing and shall constitute
additional Indebtedness evidenced by the Note and secured by the Assignment and
the other Loan Documents and shall bear interest at a rate per annum equal to
the Interest Rate (or Default Rate following an Event of Default).
SECTION 9.3 INCREASED COSTS.
Borrower agrees to pay Lender additional amounts to compensate
Lender for any increase in its actual costs incurred in maintaining the Loan or
any portion thereof outstanding or for the reduction of any amounts received or
receivable from Borrower as a
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result of any change after the date hereof in any applicable Law, regulation or
treaty, or in the interpretation or administration thereof, or by any domestic
or foreign court, changing the basis of taxation of payments under this
Agreement to Lender (other than taxes imposed on or measured by the net income
or receipts of Lender or any franchise tax imposed on Lender). Any amount
payable by Borrower under this Article 9 shall be paid within five (5) days of
receipt by Borrower of a notice by Lender setting forth the amount due and the
basis for the determination of such amount, which statement shall be conclusive
and binding upon Borrower, absent manifest error. Failure on the part of Lender
to demand payment from Borrower for any such amount attributable to any
particular period shall not constitute a waiver of Lender's right to demand
payment of such amount for any subsequent or prior period.
SECTION 9.4 BORROWER WITHHOLDING.
If by reason of a change in any applicable Laws occurring after the
date hereof, Borrower is required by Law to make any deduction or withholding in
respect of any taxes (other than taxes imposed on or measured by the net income
of or receipts of Lender or any franchise tax imposed on Lender), duties or
other charges from any payment due under the Note, the sum due from Borrower in
respect of such payment shall be increased to the extent necessary to ensure
that, after the making of such deduction or withholding, Lender receives and
retains a net sum equal to the sum which it would have received had no such
deduction or withholding been required to be made.
SECTION 9.5 DOCUMENT AND RECORDING TAX INDEMNIFICATION.
Borrower agrees to indemnify, defend and hold harmless Lender from
and against any claim that any documentary or mortgage tax is due and payable in
connection with the Loan or the execution, delivery or recording of the Loan
Documents and to pay such taxes and Expenses incurred by Lender in connection
therewith. Borrower may contest any determination that any such taxes are due,
but shall pay any such taxes (including penalties and interest) when legally
required. This paragraph shall survive repayment of the Loan.
ARTICLE X
ASSIGNMENTS BY LENDER AND DISCLOSURE
SECTION 10.1 ASSIGNMENTS AND PARTICIPATIONS.
Lender may from time to time, without the consent of Borrower, sell,
transfer, pledge, assign and convey the Loan and the Loan Documents (or any
interest therein) and may grant participations in the Loan. Borrower agrees to
cooperate with Lender's efforts to do any of the foregoing and to execute all
documents reasonably required by Lender in connection therewith which do not
materially adversely affect Borrower's rights under the Loan Documents and
Borrower shall be responsible only for payment of all of its own fees and
expenses in connection therewith (including attorneys' fees).
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SECTION 10.2 DISCLOSURE OF INFORMATION AND CONFIDENTIALITY.
Lender shall have the right (but shall be under no obligation) to
make available to (i) agents, employees, Affiliates, attorneys, advisors of
Lender and any regulator, governmental agency or authority and (ii) prospective
transferees, participants or purchasers of any interest in the Loan or any
prospective bidder at any foreclosure sale of a Project, any and all information
that Lender may have with respect to the Projects, Master Tenant, Borrower,
Owner, Holding and Guarantor, whether provided by such Person or any third
party, including, without limitation, (A) as required by law, regulation, rule,
request or order, subpoena, judicial order or similar order and in connection
with any litigation and (B) as may be required in connection with the
examination, audit or similar investigation of such Person, provided, that
Lender exercise the same degree of care that it exercises with respect to its
own proprietary information to maintain the confidentiality of any confidential
information thereby received or received with respect to the Projects, the
Borrower, Owner, Holding or Guarantor. Confidential information shall include
only such information identified as such at the time provided to Lender and
shall not include information that either: (i) is in the public domain, or
becomes part of the public domain after disclosure to such Person through no
fault of such person or (ii) is disclosed to such Person by a third party
(including information obtained as a result of any environmental assessments),
provided Lender does not have actual knowledge that such third party is
prohibited from disclosing such information. Borrower, Owner, Holding and
Guarantor agree that Lender shall have no liability whatsoever as a result of
delivering any such information to any third party as described above, and
Borrower and Guarantor, on behalf of themselves and their successors and
assigns, hereby release and discharge Lender from any and all liability, claims,
damages, or causes of action, arising out of, connected with or incidental to
the delivery of any such information to any third party.
ARTICLE XI
GENERAL PROVISIONS
SECTION 11.1 CAPTIONS.
The captions and headings of various Articles, Sections and
subsections of this Agreement and the other Loan Documents and the Exhibits and
Schedules pertaining thereto are for convenience only and are not to be
considered as defining or limiting in any way the scope or intent of the
provisions hereof or thereof.
SECTION 11.2 WAIVER OF JURY TRIAL.
BORROWER, LENDER AND GUARANTOR EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY CLAIM, CONTROVERSY
DISPUTE, ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS (INCLUDING WITHOUT LIMITATION ANY ACTIONS OR
PROCEEDINGS FOR ENFORCEMENT OF THE LOAN DOCUMENTS) AND AGREE THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
BORROWER, LENDER AND GUARANTOR EACH
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ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH OF THEM HAS RELIED ON THIS WAIVER IN ENTERING INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THAT EACH OF THEM WILL CONTINUE TO
RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. BORROWER, LENDER AND
GUARANTOR EACH WARRANT AND REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF
REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
SECTION 11.3 JURISDICTION.
TO THE GREATEST EXTENT PERMITTED BY LAW, BORROWER AND GUARANTOR
HEREBY WAIVES ANY AND ALL RIGHTS TO REQUIRE MARSHALLING OF ASSETS BY LENDER.
WITH RESPECT TO ANY SUIT, ACTION OR PROCEEDINGS RELATING TO THIS AGREEMENT
(EACH, A "PROCEEDING"), BORROWER AND GUARANTOR IRREVOCABLY (A) SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS HAVING JURISDICTION
IN THE CITY OF CHICAGO, COUNTY OF XXXX AND STATE OF ILLINOIS, AND (B) WAIVES ANY
OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING
BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY PROCEEDING HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM AND FURTHER WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO
SUCH PROCEEDING, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY.
NOTHING IN THIS AGREEMENT SHALL PRECLUDE LENDER FROM BRINGING A PROCEEDING IN
ANY OTHER JURISDICTION NOR WILL THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE
JURISDICTIONS PRECLUDE THE BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION.
BORROWER AND GUARANTOR HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND
FURTHER AGREES AND CONSENTS THAT, IN ADDITION TO ANY METHODS OF SERVICE OF
PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY
PROCEEDING IN ANY ILLINOIS STATE OR UNITED STATES COURT SITTING IN THE CITY OF
CHICAGO AND COUNTY OF XXXX MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, DIRECTED TO BORROWER OR, AS APPLICABLE, TO GUARANTOR, AT THE
ADDRESS INDICATED BELOW OR AT THE ADDRESS ON THE GUARANTY, AND SERVICE SO MADE
SHALL BE COMPLETE UPON RECEIPT; EXCEPT THAT IF BORROWER OR GUARANTOR SHALL
REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE FIVE (5) DAYS AFTER
THE SAME SHALL HAVE BEEN SO MAILED.
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SECTION 11.4 GOVERNING LAW.
IRRESPECTIVE OF THE PLACE OF EXECUTION AND/OR DELIVERY, THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
SECTION 11.5 LAWFUL RATE OF INTEREST.
In no event whatsoever shall the amount of interest paid or agreed
to be paid to Lender pursuant to this Loan Agreement, the Note or any of the
Loan Documents exceed the highest lawful rate of interest permissible under
applicable law. If, from any circumstances whatsoever, fulfillment of any
provision of this Loan Agreement, the Note and the other Loan Documents shall
involve exceeding the lawful rate of interest which a court of competent
jurisdiction may deem applicable hereto ("EXCESS INTEREST"), then ipso facto,
the obligation to be fulfilled shall be reduced to the highest lawful rate of
interest permissible under such law and if, for any reason whatsoever, Lender
shall receive, as interest, an amount which would be deemed unlawful under such
applicable law, such interest shall be applied to the Loan (whether or not due
and payable), and not to the payment of interest, or refunded to Borrower if
such Loan has been paid in full. Neither Borrower nor any Guarantor, other
guarantor, endorser or surety nor their heirs, legal representatives, successors
or assigns shall have any action against Lender for any damages whatsoever
arising out of the payment or collection of any such Excess Interest.
SECTION 11.6 MODIFICATION; CONSENT.
No modification, waiver, amendment or discharge of this Agreement or
any other Loan Document shall be valid unless the same is in writing and signed
by the party against which the enforcement of such modification, waiver,
amendment or discharge is sought. Consent by Lender to any act or omission by
Borrower shall not be construed as a consent to any other or subsequent act or
omission or to waive the requirement for Lender's consent to be obtained in any
future or other instance.
SECTION 11.7 WAIVERS; ACQUIESCENCE OR FORBEARANCE NOT TO CONSTITUTE
WAIVER OF LENDER'S REQUIREMENTS.
(a) Borrower for itself, Guarantor, and all endorsers, guarantors
and sureties and their heirs, legal representatives, successors and assigns, (i)
waives presentment for payment, demand, notice of nonpayment or dishonor,
protest of any dishonor, protest and notice of protest and all other notices in
connection with the delivery, acceptance, performance, default or enforcement of
the payment of the Loan; (ii) waives and renounces all rights to the benefits of
any statute of limitations and any moratorium, reinstatement, marshalling,
forbearance, valuation, stay, extension, redemption, appraisement, or exemption
and homestead laws now provided, or which may hereafter be provided, by the laws
of the United States and of any state thereof against the enforcement and
collection of the
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obligations evidenced by the Note or this Loan Agreement or as a bar to the
enforcement of the lien created by any of the Loan Documents.
(b) Borrower for itself, Guarantor, and all endorsers, guarantors
and sureties and their heirs, legal representatives, successors and assigns, (i)
agrees that its liability shall not be in any manner affected by any indulgence,
extension of time, renewal, waiver, or modification granted or consented to by
Lender; (ii) consents to any indulgences and all extensions of time, renewals,
waivers, or modifications that may be granted by Lender with respect to the
payment or other provisions of this Loan Agreement, the Note, and to any
substitution, exchange or release of the collateral, or any part thereof, with
or without substitution, and agrees to the addition or release of any Borrower,
Guarantor, endorsers, guarantors, or sureties, whether primarily or secondarily
liable, without notice to Borrower and without affecting its liability
hereunder; (iii) agrees that its liability shall be unconditional and without
regard to the liability of any other Person; and (iv) expressly waives the
benefit of any statute or rule of law or equity now provided, or which may
hereafter be provided, which would produce a result contrary to or in conflict
with the foregoing.
(c) Each and every covenant and condition for the benefit of Lender
contained in this Agreement and the other Loan Documents may be waived by
Lender, provided, however, that to the extent that Lender may have acquiesced in
any noncompliance with any requirements or conditions precedent to the closing
of the Loan or to any subsequent disbursement of Loan proceeds, such
acquiescence shall not be deemed to constitute a waiver by Lender of such
requirements with respect to any future disbursements of Loan proceeds and
Lender may at any time after such acquiescence require Borrower to comply with
all such requirements. Any forbearance by Lender in exercising any right or
remedy under any of the Loan Documents, or otherwise afforded by applicable law,
including any failure to accelerate the Maturity Date shall not be a waiver of
or preclude the exercise of any right or remedy nor shall it serve as a novation
of the Note or as a reinstatement of the Loan or a waiver of such right of
acceleration or the right to insist upon strict compliance of the terms of the
Loan Documents. Lender's acceptance of payment of any sum secured by any of the
Loan Documents after the due date of such payment shall not be a waiver of
Lender's right to either require prompt payment when due of all other sums so
secured or to declare a default for failure to make prompt payment. The
procurement of insurance or the payment of taxes or other liens or charges by
Lender shall not be a waiver of Lender's right to accelerate the maturity of the
Loan, nor shall Lender's receipt of any awards, proceeds, or damages under
Article 7 of this Agreement operate to cure or waive Borrower's or the
Guarantor's default in payment of sums secured by any of the Loan Documents.
SECTION 11.8 DISCLAIMER BY LENDER.
This Agreement and the other Loan Documents are made for the sole
benefit of Borrower and Lender, and no other person or persons shall have any
benefits, rights or remedies under or by reason of this Agreement or the other
Loan Documents, or by reason of
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any actions taken by Lender pursuant to this Agreement or the other Loan
Documents. Lender shall not be liable to any contractors, subcontractors,
supplier, architect, engineer, Tenant or other party for labor or services
performed or materials supplied in connection with the Project. Lender shall not
be liable for any debts or claims accruing in favor of any such parties against
Borrower or others or against Owner or any Project. Lender neither undertakes
nor assumes any responsibility or duty to Borrower to select, review, inspect,
supervise, pass judgment upon or inform Borrower of any matter in connection
with Owner or the Projects. Borrower shall rely entirely upon its own judgment
with respect to such matters, and any review, inspection, supervision, exercise
of judgment or supply of information to Borrower by Lender in connection with
such matters is for the protection of Lender only, and neither Borrower nor any
third party is entitled to rely thereon.
SECTION 11.9 PARTIAL INVALIDITY; SEVERABILITY.
If any of the provisions of this Agreement or the other Loan
Documents, or the application thereof to any person, party or circumstances,
shall, to any extent, be invalid or unenforceable, the remainder of this
Agreement or the other Loan Documents, or the application of such provision or
provisions to persons, parties or circumstances other than those as to whom or
which it is held invalid or unenforceable, shall not be affected thereby, and
every provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law and to this end, the provisions of this Agreement and
all the other Loan Documents are declared to be severable. All covenants and
agreements of Borrower and Guarantor shall be joint and several.
SECTION 11.10 DEFINITIONS INCLUDE AMENDMENTS.
Definitions contained in this Agreement which identify documents,
including, but not limited to, the Loan Documents, shall be deemed to include
all amendments and supplements to such documents from the date hereof, and all
future amendments, modifications, and supplements thereto entered into from time
to time to satisfy the requirements of this Agreement or otherwise with the
consent of Lender. Reference to this Agreement contained in any of the foregoing
documents shall be deemed to include all amendments and supplements to this
Agreement.
SECTION 11.11 EXECUTION IN COUNTERPARTS.
This Agreement and the other Loan Documents may be executed in any
number of counterparts and by different parties hereto or thereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
SECTION 11.12 ENTIRE AGREEMENT.
This Agreement, taken together with all of the other Loan Documents
and all certificates and other documents delivered by Borrower or Guarantor to
Lender, embody the entire agreement and supersede all prior commitments,
agreements, representations, and
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understandings, written or oral, relating to the subject matter hereof, and may
not be contradicted or varied by evidence of prior, contemporaneous, or
subsequent oral agreements or discussions of the parties hereto.
SECTION 11.13 WAIVER OF DAMAGES.
In no event shall Lender be liable to Borrower for punitive,
exemplary or consequential damages, including, without limitation, lost profits,
whatever the nature of a breach by Lender of its obligations under this
Agreement or any of the Loan Documents, and Borrower for itself and Guarantor
waive all claims for punitive, exemplary or consequential damages.
SECTION 11.14 CLAIMS AGAINST LENDER.
Lender shall not be in default under this Agreement, or under any
other Loan Documents, unless a written notice specifically setting forth the
claim of Borrower shall have been given to Lender within three (3) months after
Borrower first had knowledge of the occurrence of the event which Borrower
alleges gave rise to such claim and Lender does not remedy or cure the default,
if any there be, promptly thereafter. Borrower waives any claim, set-off or
defense against Lender arising by reason of any alleged default by Lender as to
which Borrower does not give such notice timely as aforesaid. Borrower
acknowledges that such waiver is or may be essential to Lender's ability to
enforce its remedies without delay and that such waiver therefore constitutes a
substantial part of the bargain between Lender and Borrower with regard to the
Loan. No Guarantor or Tenant is intended to have any rights as a third-party
beneficiary of the provisions of this Section 11.14.
SECTION 11.15 SET-OFFS.
After the occurrence and during the continuance of an Event of
Default, Borrower hereby irrevocably authorizes and directs Lender from time to
time to charge Borrower's accounts and deposits with Lender (or its Affiliates),
and to pay over to Lender an amount equal to any amounts from time to time due
and payable to Lender hereunder, under the Note or under any other Loan
Document. Borrower hereby grants to Lender a security interest in and to all
such accounts and deposits maintained by Borrower with Lender (or its
Affiliates).
SECTION 11.16 RELATIONSHIP.
The relationship between Lender and Borrower shall be that of
creditor-debtor only. No term in this Agreement or in the other Loan Documents
and no course of dealing between the parties shall be deemed to create any
relationship of agency, partnership or joint venture or any fiduciary duty by
Lender to Borrower or any other party.
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SECTION 11.17 AGENTS.
In exercising any rights under the Loan Documents or taking any
actions provided for therein, Lender may act through its employees, agents or
independent contractors as authorized by Lender.
SECTION 11.18 INTERPRETATION.
With respect to all Loan Documents, whenever the context requires,
all words used in the singular will be construed to have been used in the
plural, and vice versa, and each gender will include any other gender. The word
"obligations" is used in its broadest and most comprehensive sense, and includes
all primary, secondary, direct, indirect, fixed and contingent obligations. It
further includes all principal, interest, prepayment charges, late charges, loan
fees and any other fees and charges accruing or assessed at any time, as well as
all obligations to perform acts or satisfy conditions. No listing of specific
instances, items or matters in any way limits the scope or generality of any
language in the Loan Documents. This Agreement and all of the other Loan
Documents shall not be construed more strictly against one party than against
the other, merely by virtue of the fact that it may have been prepared primarily
by counsel for one of the parties.
SECTION 11.19 SUCCESSORS AND ASSIGNS.
Subject to the restrictions on transfer and assignment contained in
Section 4.2(b) of this Agreement, this Agreement and the other Loan Documents
shall inure to the benefit of and shall be binding on Lender, Borrower and
Guarantor and their respective heirs, successors and permitted assigns.
SECTION 11.20 TIME IS OF THE ESSENCE.
Borrower agrees that time is of the essence under this Agreement and
the other Loan Documents and the performance of each of the covenants and
agreements contained herein and therein.
SECTION 11.21 LENDER'S CONSULTATION RIGHTS.
Except with respect to compliance with environmental laws and the
handling and disposal of Hazardous Material, Lender shall have the right from
time to time (i) to consult with Borrower regarding the business operation of
the Projects, and the financial and other condition of Borrower, Owner, Holding
or the Projects with Borrower's officers, employees, directors and managers,
(ii) to receive notice from Borrower from time to time of any material
development affecting Borrower, Owner, Holding or the Projects and the right to
consult with Borrower with respect to such matter, (iii) to discuss with
Borrower any significant business issues involved in negotiating a plan of
reorganization for Borrower, Holding or Owner including proposed reorganization
plans and operating plans for proceeding following such plan of reorganization
coming into effect, and (iv) to request from
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Borrower such forecasts, projections and other financial and business data as
Lender may deem reasonably appropriate.
SECTION 11.22 NOTICES.
Any notice, demand, request or other communication which any party
hereto may be required or may desire to give hereunder shall be in writing and
shall be deemed to have been properly given (a) if hand delivered, when
delivered; (b) if mailed by United States Certified Mail (postage prepaid,
return receipt requested), three (3) Business Days after mailing (c) if by FedEx
or other reliable overnight courier service, on the next Business Day after
delivered to such courier service or (d) if by telecopier on the day of
transmission if before 3:00 p.m. (Chicago time) on a Business Day so long as
copy is sent on the same day by overnight courier as set forth below:
If to Borrower:
AHC Purchaser, Inc.
c/o Alterra Healthcare Corporation
0000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Chief Financial Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
With a copy to:
Xxxxxx & Xxxxxx
0000 Xxxxxxxxxxxxx Xxxxx, Xxxxxxxxx Xxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to Lender:
Xxxxxxx Xxxxx Capital, a Division of
Xxxxxxx Xxxxx Business Financial Services Inc.
000 Xxxxx XxXxxxx Xxxxxx - 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Vice President, Portfolio Manager
Telephone: 000-000-0000
Facsimile: 000-000-0000
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With a copy to:
Xxxxxxx Xxxxx Capital, a Division of
Xxxxxxx Xxxxx Business Financial Services Inc.
0000 Xxxxxxxxx Xxxxxx - Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Vice President, Portfolio Manager
Telephone: 000-000-0000
Facsimile: 000-000-0000
or at such other address as the party to be served with notice may
have furnished in writing to the party seeking or desiring to serve notice as a
place for the service of notice. Any notice or demand delivered to the person or
entity named above to accept notices and demands for such party shall constitute
notice or demand duly delivered to such party, even if delivery is refused.
SECTION 11.23 JOINT AND SEVERAL LIABILITY.
The Indebtedness and all other obligations of Borrower under the
Loan Documents (collectively, the "OBLIGATIONS") shall be the joint and several
obligations and liabilities of all Borrowers (if more than one). Hence, each
Borrower shall be primarily and directly liable for repayment of the
Indebtedness and all other Obligations.
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EXECUTED as of the date first set forth above.
BORROWER: AHC PURCHASER HOLDING II, INC.
By: /s/ Xxxx Xxxxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxxxx
Title: President
Borrower's Tax ID No. 00-0000000
LENDER: XXXXXXX XXXXX CAPITAL, a Division of
Xxxxxxx Xxxxx Business Financial Services
Inc., a Delaware corporation
By: /s/ Xxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxxx
------------------------------------
Title: Vice President
-----------------------------------
Signature Page to Loan Agreement
EXHIBIT A-1
THE PROJECTS
Name of Facility: Clare Bridge of Xxx Arbor
Master Tenant: Alterra Healthcare Corporation d/b/a Alterra
Assisted Living Services, Inc.
Address of Land: 000 Xxxx Xxxxxxxxxx Xxxxxxx, Xxx Xxxxx, XX
00000
County: Washtenaw
Number of Beds: 36
Number of Units: 36
Legal Description of Land: See Attached
LEGAL DESCRIPTION
EXHIBIT A-2
THE PROJECTS
Name of Facility: Sterling House of Leesburg
Master Tenant: Alterra Healthcare Corporation
Address of Land: 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, XX 00000
County: Lake
Number of Beds: 60
Number of Units: 42
Legal Description of Land: See Attached
LEGAL DESCRIPTION
(ALTERRA STERLING HOUSE OF LEESBURG)
PARCEL 1:
The South 300.00 feet of the North 950.00 feet of the West 435.60 feet of that
part of Government Xxx 0 xx Xxxxxxx 00, Xxxxxxxx 00 Xxxxx, Xxxxx 24 East, in the
City of Leesburg, Florida, lying South of the South line of the right-of-way of
Xxxxx Avenue and East of the East line of the right-of-way of Lake Street as
said streets existed on January 2, 1974.
Also described as:
That part of Government Xxx 0 xx Xxxxxxx 00, Xxxxxxxx 00 Xxxxx, Xxxxx 24 East,
in the City of Leesburg, Florida, described as follows: Commence at the
intersection of the South right-of-way line of Xxxxx Avenue with the East
right-of-way line of Lake Street; thence run S 00 degrees 22' 04" E along the
East right-of-way of Lake Street to a point on a line, said line being 650.00
feet South of (by perpendicular measure) the above said South right-of-way line
of Xxxxx Avenue and the point of beginning; thence departing said East
right-of-way line run N 89 degrees 59' 32" E parallel with the South
right-of-way line of Xxxxx Avenue a distance of 435.61 feet; thence run S 00
degrees 22' 04" E parallel with the above said East right-of-way line of Lake
Street a distance of 300.01 feet to a point on a line, said line being 950.00
feet South of (by perpendicular measure), the above said South right-of-way line
of Xxxxx Avenue; thence run S 89 degrees 59' 32" W along said line a distance of
435.61 feet to the above mentioned East right-of-way line of Lake Street; thence
run N 00 degrees 22' 04" W said East right-of-way line a distance of 300.01 feet
to the point of beginning.
INFORMATIONAL NOTE: TAX PARCEL NO. 25-19-24-0003-000-206-00
PARCEL 2:
TOGETHER WITH rights of owner of Parcel 1 in a non-exclusive easement
appurtenant to Parcel 1 created under that certain Reciprocal Retention and
Drainage Easement recorded December 8, 1998, in Official Records Book 1667, Page
1595, Public Records of Lake County, Florida.
EXHIBIT A-3
THE PROJECTS
Name of Facility: Sterling House I of West Melbourne
Master Tenant: Alterra Healthcare Corporation
Address of Land: 0000 Xxxxxxxxxx Xxxxx, Xxxx Xxxxxxxxx, XX
00000
County: Brevard
Number of Beds: 55
Number of Units: 42
Legal Description of Land: See Attached
LEGAL DESCRIPTION
(ALTERRA STERLING HOUSE I OF WEST MELBOURNE
(TOGETHER WITH STERLING HOUSE II OF WEST MELBOURNE))
PARCEL 1:
Part of Xxxxx 0, XXXXXXXXX XXXXX, according to the plat thereof as recorded on
May 4, 1983, in Plat Book 29, pages 66 and 67 of the Public Records of Brevard
County, Florida, being more particularly described as follows:
Commence at the Northeast corner of said tract for the Point of Beginning and
run South 01 degrees 00'02" West a distance of 134.49 feet; thence North 88
degrees 38'22" West a distance of 11.39 feet to a point of curvature of a
circular curve concave to the South having a radius of 210.00 feet and a central
angle of 45 degrees 54'08"; thence Southwesterly along said curve an arc
distance of 168.24 feet to a point of tangency; thence South 45 degrees 27'30"
West a distance of 46.07 feet to a point of curvature of a circular curve
concave to the Northwest having a radius of 150.00 feet and a central angle of
43 degrees 46'03"; thence Southwesterly along said curve an arc distance of
114.58 feet; thence North 00 degrees 48'31" East a distance of 265.75 feet;
thence North 89 degrees 12'27" East a distance of 298.32 feet to the Point of
Beginning.
INFORMATIONAL NOTE: Tax Parcel No. 27-36-36-25-1.2.
PARCEL 2:
The West 605.07 feet of Xxxxx 0, XXXXXXXXX XXXXX, according to the plat thereof
as recorded on May 4, 1983, in Plat Book 29, pages 66 and 67, of the Public
Records of Brevard County, Florida.
INFORMATIONAL NOTE: Tax Parcel No. 27-36-36-25-1.1.
Also Described As:
Xxxxx 0, XXXXXXXXX XXXXX, according to the plat thereof as recorded on May 4,
1983, in Plat Book 29, pages 66 and 67, of the Public Records of Brevard County,
Florida.
EXHIBIT A-4
THE PROJECTS
Name of Facility: Sterling House II of West Melbourne
Master Tenant: Alterra Healthcare Corporation
Address of Land: 0000 Xxxxxxxxxx Xxxxx, Xxxx Xxxxxxxxx, XX
00000
County: Brevard
Number of Beds: 55
Number of Units: 42
Legal Description of Land: See Attached
LEGAL DESCRIPTION
(ALTERRA STERLING HOUSE II OF WEST MELBOURNE
(TOGETHER WITH STERLING HOUSE I OF WEST MELBOURNE))
PARCEL 1:
Part of Xxxxx 0, XXXXXXXXX XXXXX, according to the plat thereof as recorded on
May 4, 1983, in Plat Book 29, pages 66 and 67 of the Public Records of Brevard
County, Florida, being more particularly described as follows:
Commence at the Northeast corner of said tract for the Point of Beginning and
run South 01 degrees 00'02" West a distance of 134.49 feet; thence North 88
degrees 38'22" West a distance of 11.39 feet to a point of curvature of a
circular curve concave to the South having a radius of 210.00 feet and a central
angle of 45 degrees 54'08"; thence Southwesterly along said curve an arc
distance of 168.24 feet to a point of tangency; thence South 45 degrees 27'30"
West a distance of 46.07 feet to a point of curvature of a circular curve
concave to the Northwest having a radius of 150.00 feet and a central angle of
43 degrees 46'03"; thence Southwesterly along said curve an arc distance of
114.58 feet; thence North 00 degrees 48'31" East a distance of 265.75 feet;
thence North 89 degrees 12'27" East a distance of 298.32 feet to the Point of
Beginning.
INFORMATIONAL NOTE: Tax Parcel No. 27-36-36-25-1.2.
PARCEL 2:
The West 605.07 feet of Xxxxx 0, XXXXXXXXX XXXXX, according to the plat thereof
as recorded on May 4, 1983, in Plat Book 29, pages 66 and 67, of the Public
Records of Brevard County, Florida.
INFORMATIONAL NOTE: Tax Parcel No. 27-36-36-25-1.1.
Also Described As:
Xxxxx 0, XXXXXXXXX XXXXX, according to the plat thereof as recorded on May 4,
1983, in Plat Book 29, pages 66 and 67, of the Public Records of Brevard County,
Florida.
EXHIBIT A-5
THE PROJECTS
Name of Facility: Sterling House of Port Orange
Master Tenant: Alterra Healthcare Corporation
Address of Land: 000 Xxxxxxx Xxxxx Xxxxx, Xxxx Xxxxxx, XX
00000
County: Volusia
Number of Beds: 60
Number of Units: 42
Legal Description of Land: See Attached
LEGAL DESCRIPTION
(ALTERRA STERLING HOUSE OF PORT ORANGE)
Xxx 0, XXXXXXXXXXX XXXXXXXXXX XXXXXX, XXXX XX, XXX 0, REPLAT as recorded in Map
Book 45, Page 161, Public Records of Volusia County, Florida.
EXHIBIT A-6
THE PROJECTS
Name of Facility: Sterling House of Stuart
Master Tenant: Alterra Healthcare Corporation
Address of Land: 0000 X.X. Xxxxx Xxxx, Xxxxxx, Xx 00000
County: Xxxxxx
Number of Beds: 55
Number of Units: 42
Legal Description of Land: See Attached
LEGAL DESCRIPTION
(Alterra Sterling House of Stuart)
PARCEL 1:
A portion of Tracts 51, 52 and 00, Xxxx xx Xxxx Xxxxxx "XXXXXX'X POINT LAND
COMPANY SUBDIVISION", as recorded in Plat Book 3, Page 7, of the Public Records
of Palm Beach (now Xxxxxx) County, Florida, being more particularly described as
follows:
Begin at the intersection of the Easterly right-of-way line of S.E. Xxxxx Xxxx
and the Northerly right-of-way line of S.E. Indian Street (said point being the
S.W. corner of Tract 51 of said Plat); thence along said Easterly right-of-way
line of S.E. Xxxxx Xxxx, North 23 degrees 16'48" West a distance of 340.21 feet
to the point and place of beginning; thence continuing North 23 degrees 16'48"
West a distance of 260.00 feet to a point; thence North 66 degrees 42'08" East,
586.50 feet to a point; thence South 23 degrees 16'48" East, 260.00 feet to a
point; thence South 66 degrees 42'08" West, 586.50 feet to the Point of
Beginning.
INFORMATIONAL NOTE: Tax Parcel No. 38-38-41-002-051-00010.0
PARCEL 2:
TOGETHER WITH a drainage easement appurtenant to Parcel 1 granted by, or created
under, that certain Declaration of Common Use; Access and Maintenance for Lift
Station; Water Mains and Drainage Easement recorded in Official Records Book
1154, Page 2617, Public Records of Xxxxxx County, Florida burdening the lands
described therein, LESS AND EXCEPT any part of said burdened parcel also
contained in the legal description in that certain Warranty Deed from D&R
Properties, Inc., a Florida corporation to Xxxxxx County, a political
subdivision of the State of Florida, filed September 13, 1995, Official Records
Book 1139, Page 2831, Public Records of Xxxxxx County, Florida.
EXHIBIT A-7
THE PROJECTS
Name of Facility: Sterling House I of Tequesta
Master Tenant: Alterra Healthcare Corporation
Address of Land: 000 Xxxxxxx Xxxxxxxxx, Xxxxxxxx, XX 00000
County: Palm Beach
Number of Beds: 55
Number of Units: 42
Legal Description of Land: See Attached
LEGAL DESCRIPTION
(ALTERRA STERLING HOUSE OF TEQUESTA I
(TOGETHER WITH ALTERRA STERLING HOUSE OF TEQUESTA II))
Parcel 1 of ALS PLAT OF VILLAGE OF TEQUESTA, according to the Plat thereof, as
recorded in Plat Book 89, Pages 108 through 111, inclusive, of the public
records of Palm Beach County, Florida.
TOGETHER WITH non-exclusive easement rights created by that certain Reciprocal
Retention and Drainage Easement by and between Meditrust Company, LLC, a
Delaware limited liability company (successor by merger to Meditrust of Florida,
Inc.) and ALS-Clare Bridge, Inc., a Delaware corporation, recorded in Official
Records Book 10845, Page 137, of the Public Records of Palm Beach County,
Florida.
EXHIBIT A-8
THE PROJECTS
Name of Facility: Sterling House II of Tequesta
Master Tenant: Alterra Healthcare Corporation
Address of Land: 000 Xxxxxxx Xxxxxxxxx, Xxxxxxxx, XX 00000
County: Palm Beach
Number of Beds: 55
Number of Units: 42
Legal Description of Land: See Attached
LEGAL DESCRIPTION
(ALTERRA STERLING HOUSE OF TEQUESTA II
(TOGETHER WITH ALTERRA STERLING HOUSE OF TEQUESTA I))
Parcel 1 of ALS PLAT OF VILLAGE OF TEQUESTA, according to the Plat thereof, as
recorded in Plat Book 89, Pages 108 through 111, inclusive, of the public
records of Palm Beach County, Florida.
TOGETHER WITH non-exclusive easement rights created by that certain Reciprocal
Retention and Drainage Easement by and between Meditrust Company, LLC, a
Delaware limited liability company (successor by merger to Meditrust of Florida,
Inc.) and ALS-Clare Bridge, Inc., a Delaware corporation, recorded in Official
Records Book 10845, Page 137, of the Public Records of Palm Beach County,
Florida.
EXHIBIT A-9
THE PROJECTS
Name of Facility: Clare Bridge of Xxxxxxxxxx
Master Tenant: Alterra Healthcare Corporation
Address of Land: 0000 Xxxxxxx Xxxx, Xxxxx Xxxxx, XX 00000
County: Xxxxxxxxxx
Number of Beds: 48
Number of Units: 48
Legal Description of Land: See Attached
LEGAL DESCRIPTION
(ALTERRA CLARE BRIDGE OF XXXXXXXXXX)
ALL THAT CERTAIN tract or piece of land, SITUATE in Xxxxxxxxxx Township,
Xxxxxxxxxx County, Pennsylvania, bounded and described in that certain Plan of
Survey made for Clare Bridge of Xxxxxxxxxx, an Assisted Living Facility, by
Xxxxxxx & Associates, Inc., Consulting Engineers & Land Surveyors, Xxxxxxxxxx
Township, Xxxxxxxxxx County, Pennsylvania, dated 10/29/1996, last revised
11/27/1996, Job No. 94-1114, as follows, to wit:
BEGINNING at a point on the Northwesterly right-of-way (50 feet wide) of Horsham
Road (S.R. 463) said point marking the most Westerly corner of land now or late
of Xxxxxx XxxXxxxxx; thence along the Northeasterly side of Horsham Road (S.R.
463), North 50 degrees 15 minutes 00 seconds West, 479 and 80/100 feet to a
point in line of land now or late of Xxxxx X. Xxxx; thence the two following
courses and distances along lands now or late of Xxxxx X. Xxxx;
(1) North 39 degrees 47 minutes 32 seconds East, crossing a concrete monument
set 20 and 91/100 feet from the beginning of this for a distance of 284
and 26/100 feet to a point a stone found;
(2) North 50 degrees 12 minutes 28 seconds West 148 and 50/100 feet to a point
in line of lands now or late of Xxxxxx X. and Xxxxx X. Xxxxx a concrete
monument set;
Thence along said lands of Xxxxx, North 39 degrees 47 minutes 32 seconds East
194 and 12/100 feet to a point a concrete monument set in line of lands now or
late of XxXxx Group, Village of Neshaminy Falls;
Thence the three following courses and distances along said lands of XxXxx;
(1) South 50 degrees 15 minutes 00 seconds East 185 and 96/100 feet to a point
a corner;
(2) North 39 degrees 35 minutes 00 seconds East 372 and 91/100 feet to a point
a concrete monument set;
(3) South 50 degrees 15 minutes 00 seconds East 440 and 60/100 feet to a point
a concrete monument set in line of lands now or late of Xxxx Xxxx Xx Xxxx
Xxx;
THENCE along said lands of Dong and Xxx and also along lands now or late of
Xxxxxx and Xxxxx Xxxxxx and lands now or late of Seth and Xxxxx Xxxxxxxxx and
lands now or late of Xxxxxx XxxXxxxxx South 39 degrees 35 minutes 00 seconds
West 851 and 40/100 feet crossing a concrete monument 24 and 11/100 feet from
the end of this line to the point of beginning.
TAX MAP PARCEL #46-00-01108-00-7.
EXHIBIT A-10
THE PROJECTS
Name of Facility: Wynwood of Xxxxxxxxxx
Master Tenant: Alterra Healthcare Corporation
Address of Land: 0000 Xxxxxxx Xxxx, Xxxxx Xxxxx, XX 00000
County: Xxxxxxxxxx
Number of Beds: 72
Number of Units: 72
Legal Description of Land: See Attached
LEGAL DESCRIPTION
(ALTERRA WYNWOOD OF XXXXXXXXXX)
ALL THAT CERTAIN tract or piece of land, SITUATE in Xxxxxxxxxx Township,
Xxxxxxxxxx County, Pennsylvania, bounded and described in that certain Plan of
Survey made for Clare Bridge of Xxxxxxxxxx, an Assisted Living Facility, by
Xxxxxxx & Associates, Inc., Consulting Engineers & Land Surveyors, Xxxxxxxxxx
Township, Xxxxxxxxxx County, Pennsylvania, dated 10/29/1996, last revised
11/27/1996, Job No. 94-1114, as follows, to wit:
BEGINNING at a point on the Northwesterly right-of-way (50 feet wide) of Horsham
Road (S.R. 463) said point marking the most Westerly corner of land now or late
of Xxxxxx XxxXxxxxx; thence along the Northeasterly side of Horsham Road (S.R.
463), North 50 degrees 15 minutes 00 seconds West, 479 and 80/100 feet to a
point in line of land now or late of Xxxxx X. Xxxx; thence the two following
courses and distances along lands now or late of Xxxxx X. Xxxx;
(3) North 39 degrees 47 minutes 32 seconds East, crossing a concrete monument
set 20 and 91/100 feet from the beginning of this for a distance of 284
and 26/100 feet to a point a stone found;
(4) North 50 degrees 12 minutes 28 seconds West 148 and 50/100 feet to a point
in line of lands now or late of Xxxxxx X. and Xxxxx X. Xxxxx a concrete
monument set;
Thence along said lands of Xxxxx, North 39 degrees 47 minutes 32 seconds East
194 and 12/100 feet to a point a concrete monument set in line of lands now or
late of XxXxx Group, Village of Neshaminy Falls;
Thence the three following courses and distances along said lands of XxXxx;
(4) South 50 degrees 15 minutes 00 seconds East 185 and 96/100 feet to a point
a corner;
(5) North 39 degrees 35 minutes 00 seconds East 372 and 91/100 feet to a point
a concrete monument set;
(6) South 50 degrees 15 minutes 00 seconds East 440 and 60/100 feet to a point
a concrete monument set in line of lands now or late of Xxxx Xxxx Xx Xxxx
Xxx;
THENCE along said lands of Dong and Xxx and also along lands now or late of
Xxxxxx and Xxxxx Xxxxxx and lands now or late of Seth and Xxxxx Xxxxxxxxx and
lands now or late of Xxxxxx XxxXxxxxx South 39 degrees 35 minutes 00 seconds
West 851 and 40/100 feet crossing a concrete monument 24 and 11/100 feet from
the end of this line to the point of beginning.
TAX MAP PARCEL #46-00-01108-00-7.
EXHIBIT A-11
THE PROJECTS
Name of Facility: Sterling House of Sussex
Master Tenant: Alterra Healthcare Corporation
Address of Land: X000 X0000 Xxxxx Xxxxxx, Xxxxxx, XX 00000
County: Waukesha
Number of Beds: 20
Number of Units: 20
Legal Description of Land: See Attached
LEGAL DESCRIPTION
(ALTERRA STERLING HOUSE OF SUSSEX)
PARCEL A:
Xxx 0 xx Xxxxxxxxx Xxxxxx Xxx Xx. 0000, recorded on December 1, 1994, in Volume
64 of Certified Survey Maps, on Pages 260-263, as Document No. 2009954, being a
redivision of Xxx 0, Xxxxxxxxx Xxxxxx Xxx Xx. 0000 and that part of the
Northeast 1/4 of the Northeast 1/4 of Section 00, Xxxx 0 Xxxxx, Xxxxx 00 Xxxx,
Xxxxxxx xx Xxxxxx, Xxxxxx of Waukesha, State of Wisconsin.
PARCEL B:
A non-exclusive easement for parking and ingress and egress set forth in
Easement recorded as Document No. 2014740 and First Amendment to Easement
Agreement recorded as Document No. 2163800.
Tax Key No. SUXV 2049.964.002
ADDRESS: W240 X0000 Xxxxx Xxxxxx
EXHIBIT A-12
THE PROJECTS
Name of Facility: Sterling House of Abilene
Master Tenant: Alterra Healthcare Corporation
Address of Land: 0000 X. Xxxx Xxxxxx, Xxxxxxx, XX 00000
County: Xxxxxxxxx
Number of Beds: 33
Number of Units: 33
Legal Description of Land: See Attached
LEGAL DESCRIPTION
(ALTERRA STERLING HOUSE OF ABILENE)
PARCEL A:
A parcel of land located in the Northeast Quarter of Section Seventeen (17),
Township Thirteen (13) South, Range Two (2) East of the 6th Principal Meridian,
Xxxxxxxxx County, Kansas, described as follows:
Commencing at the Northeast corner of said Section 17; thence South along the
East line of said section a distance of 936.70 feet; thence West a distance of
30 feet to the West right-of-way line of Vine Street to the point of beginning;
thence South 89 degrees 57'40" West a distance of 514.50 feet; thence South 00
degrees 00'00" East a distance of 400.00 feet; thence North 89 degrees 57'40"
East a distance of 221.25 feet; thence North 00 degrees 02'20" West a distance
of 197.79 feet; thence North 43 degrees 37'46" East a distance of 108.29 feet;
thence South 44 degrees 53'56" East a distance of 14.28 feet; thence on a curve
with a radius of 5.16 feet and a distance of 10.58 feet; thence on a curve with
a radius of 15.73 feet and a distance of 6.96 feet; thence North 00 degrees
38'31" West a distance of 27.70 feet; thence South 90 degrees 00'00" East a
distance of 199.28 feet; thence North 00 degrees 00'00" East a distance of 97.15
feet to the point of beginning.
PARCEL B:
TOGETHER WITH the rights and benefits of that certain Joint Easement for
ingress, egress and parking, dated November 10, 1997, by and between The City of
Abilene, Kansas, a municipal corporation and Sterling House Corporation, filed
November 13, 1997 and recorded in Misc. Book 237, Page 450.
PARCEL C:
Easement TOGETHER WITH the rights and benefits of that certain Utility Easement,
dated November 10, 1997, and recorded November 13, 1997 in Misc. Book 237, Page
458.
TAX PARCEL NO. AB0001YY
EXHIBIT A-13
THE PROJECTS
Name of Facility: Sterling House of Hays
Master Tenant: Alterra Healthcare Corporation
Address of Land: 0000 X. 00xx Xxxxxx, Xxxx, XX 00000
County: Xxxxx
Number of Beds: 33
Number of Units: 33
Legal Description of Land: See Attached
LEGAL DESCRIPTION
(ALTERRA STERLING HOUSE OF HAYS)
The South Two Hundred Seventy feet (S 270') of Lot One (1), Block One (1),
XXXXXXXXX FIRST ADDITION to the City of Xxxx, Xxxxx County, Kansas, also
described as follows:
A tract of land in the Southeast Quarter (SE/4) of Section Twenty-seven (27),
Township Thirteen (13) South, Range Eighteen (18) West of the 6th P.M., Xxxxx
County, Kansas:
Commencing at the Southeast corner of said Section; thence S 89 degrees 28'28" W
along the South line of said Section a distance of 1,305.63 feet; thence N
00 degrees 31'32" W a distance of 50.00 feet to the point of beginning; thence S
89 degrees 28'28" W along the North right of way line of 00xx Xxxxxx a distance
of 350.00 feet; thence N 00 degrees 31'32" W a distance of 270.00 feet; thence N
89 degrees 28'28" E a distance of 350.00 feet; thence S 00 degrees 31'32" E a
distance of 270.00 feet to the point of beginning.
TAX PARCEL ID #010-73910
EXHIBIT A-14
THE PROJECTS
Name of Facility: Sterling House of Bowling Green
Master Tenant: Alterra Healthcare Corporation
Address of Land: 000 X. Xxxxxxxxxxx Xxxx, Xxxxxxx Xxxxx, XX 00000
County: Wood
Number of Beds: 37
Number of Units: 37
Legal Description of Land: See Attached
LEGAL DESCRIPTION
(ALTERRA STERLING HOUSE OF BOWLING GREEN)
Being a parcel of land located in part of the West 1/2 of the Southeast 1/4 of
Section 23, Town 5 North, Range 10 East, Plain Township, Wood County, Ohio, and
being more particularly described as follows: Commencing at a railroad spike
found marking the southeast corner of the West 1/2 of the Southeast 1/4 of
said Section 23 also the point of intersection of the centerline of Bowling
Green Road (Pearl Street) with that of Wintergarden Road); thence North
00 degrees 00'00" East 323.00 feet, on and along said centerline of Wintergarden
Road also the East line of the West 1/2 of the Southeast 1/4 of said Section
23, to a found PK nail the principal point of beginning for this legal
description; thence South 89 degrees 21'57" West 618.00 feet, on and along the
Northerly line of lands now or formerly of Xxxxxx X. Xxxxxxx as shown on Wood
County Recorder's Deed Volume 669 at Page 663 and of Xxxxxxx X. Xxxxxx as shown
in Wood County Recorder's Deed Volume 682 at Page 906, to a point; thence North
00 degrees 32'26" West 300.00 feet, on and along the Easterly line of Stonegate
Farm Condominium, to a point; thence North 89 degrees 21'57" East 620.83 feet to
a point in the centerline of Wintergarden Road also the East line of the West
1/2 of the Southeast 1/4 of said Section 23; thence on and along said
centerline and East line, South 00 degrees 00'00" West 300.02 feet to the
principal point of beginning enclosing an area of 4.2659 acres of land, more or
less, subject to all legal highways, easements and restrictions written or
recorded. PREMISES NOW IN CITY OF BOWLING GREEN BY ANNEXATION.
The bearings referred to herein are based upon an assumed meridian and are used
solely for the purpose of angular measurement.
Excepting from the above described property, the portion of said property
conveyed by Sterling House Corporation to the City of Bowling Green, Ohio for
use as a right of way pursuant to instrument recorded in Volume 732, Page 426,
Deed Records, Wood County, Ohio which portion of the property is more
particularly described as follows:
Situated in the West 1/2 of the Southeast 1/4 of Section 23, Town 5
North, Range 10 East, in Plain Township, Wood County, Ohio, and being a 40.00
foot wide strip, being described as follows:
Commencing at a railroad spike I previously set marking the southeast
corner of the said West 1/2 of the Southeast 1/4, being also the intersection
of the centerlines of the original right-of-way for Wintergarden Road with Pearl
Street;
Thence on an assumed bearing of N 00 Degress 00 Seconds 00 Minutes East, on the
east line of the said West 1/2, a distance of 323.00 feet to the POINT OF
BEGINNING,
Thence S 89 degrees, 21 minutes, 57 seconds West, on the Grantor's south
property line, 40.00 feet;
Thence North 00 degrees, 00 minutes, 00 seconds East, parallel with said
East line of
the West 1/2, a distance of 300.02 feet to the Grantor's North property line;
Thence North 89 degrees, 21 minutes, 57 seconds East, on the said North
property line, 40.00 feet to the said east line of the West 1/2;
Thence South 00 degrees, 00 minutes, 00 seconds West, on the said East
line,
300.02 feet to the POINT OF BEGINNING.
-2-
EXHIBIT A-15
THE PROJECTS
Name of Facility: Sterling House of Mansfield
Master Tenant: Alterra Healthcare Corporation
Address of Land: 0000 Xxxxxx Xxxxxxxxx, Xxxxxxxxx, XX 00000
County: Richland
Number of Beds: 42
Number of Units: 42
Legal Description of Land: See Attached
LEGAL DESCRIPTION
(ALTERRA STERLING HOUSE OF MANSFIELD)
Situated in the City of Mansfield, County of Richland and State of Ohio and
being a part of Lot Number Nineteen Thousand Four Hundred Thirty-Three (#19433)
of the consecutively numbered lots in said City (Volume 22, Page 83) more
particularly described as follows: Beginning for the same at an iron pin found
marking the southeast corner of said lot; thence North 90 degrees 00 minutes 00
seconds West with the south line of said lot a distance of 420.66 feet to an
iron pin found marking a point of curve; thence northwesterly along a curve
concave to the northeast with a central angle of 89 degrees 03 minutes 07
seconds a radius of 40.00 feet a chord distance of 56.09 feet, which bears North
45 degrees 28 minutes 26 seconds West to an iron pin found marking the point of
tangency of said curve; thence North 00 degrees 56 minutes 53 seconds West with
the west line of said lot a distance of 210.69 feet to an iron pin found; thence
South 90 degrees 00 minutes 00 seconds East a distance of 463.82 feet to an iron
pin found on the east line of said lot; thence South 00 degrees 04 minutes 23
seconds East with said east line of said lot a distance of 250.00 feet to the
place of beginning containing 2.643 acres. NOTE: The bearings on this plat are
based on an assumed meridian and are used only for the purpose of describing
angular measurements. NOTE: This survey and legal description are based on a
survey made by Xxxxxxx X. Xxxxxx, Richland County Deed Referenced Volume 913,
Page 790-792. I.P. found equals 5/8 inch rebar with I.P. Cap stamped "Xxxxxx
6869."
EXHIBIT A-16
THE PROJECTS
Name of Facility: Sterling House of New Braunfels
Master Tenant: Alterra Healthcare Corporation
Address of Land: 0000 Xxxx 000, Xxx Xxxxxxxxx, XX 00000
County: Comal
Number of Beds: 37
Number of Units: 37
Legal Description of Land: See Attached
LEGAL DESCRIPTION
(ALTERRA STERLING HOUSE OF NEW BRAUNFELS)
All that certain tract or parcel of land lying and being situated within the
corporate limits of the City of New Braunfels, Texas, known and designated as
Xxx 0, Xxxxx 0, XXXXXXX XXXXXXX COMMERCIAL UNIT THREE, according to the Map or
Plat recorded in Volume 12, Page 65, Map and Plat Records of Comal County,
Texas.
EXHIBIT A-17
THE PROJECTS
Name of Facility: Sterling House of Ithaca
Master Tenant: Ithaca Xxxxx Tenant, Inc.
Manager: Alterra Healthcare Corporation
Address of Land: 000 Xxxxx Xxxx, Xxxxxx, XX 00000
County: Xxxxxxxx
Number of Beds: 48
Number of Units: 46
Management Agreement: That certain Property Management Services
Agreement dated as of March 12, 1999, which was
originally entered into between Ithaca Xxxxx
Road LLC and Alterra Healthcare Corporation
(formerly known as Alternative Living Services,
Inc.), and as the rights and obligations of
Ithaca Xxxxx Road, LLC under such Agreement were
assumed by Ithaca Xxxxx Tenant, Inc. pursuant to
that certain Novation of Property Management
Agreement dated as of December 7, 2001, and as
such Agreement was further amended by that
certain Amendment of even date herewith.
Legal Description of Land: See Attached
LEGAL DESCRIPTION
STERLING HOUSE ITHACA, NY
ALL that tract or parcel of land situate in the Town of Ithaca, County of
Xxxxxxxx, State of New York, bounded and described as follows:
BEGINNING at an iron pin found in concrete at the intersection of the south
right-of-way of Xxxxx Road with the west highway line of Trumansburg Road (New
York State Route 96);
RUNNING THENCE South 34 degrees 44 minutes 06 seconds East along the west line
of Trumansburg Road a distance of 169.41 feet to an iron pin found in concrete;
RUNNING THENCE South 40 degrees 29 minutes 44 seconds East along the west line
of Trumansburg Road a distance of 20.65 feet to a point;
RUNNING THENCE South 52 degrees 10 minutes 37 seconds West for a distance of
525.52 feet to a point;
RUNNING THENCE North 37 degrees 00 minutes 32 seconds West for a distance of
247.49 feet to a point;
RUNNING THENCE North 07 degrees 59 minutes 28 seconds East for a distance of
337.41 feet to a point in the south line of Xxxxx Road; and
RUNNING THENCE South 82 degrees 22 minutes 00 seconds East, passing through an
iron pin found in concrete at a distance of 150.17 feet, a total distance of
410.88 feet to the point and place of BEGINNING.
TOGETHER WITH the benefit of that certain Reciprocal Easement Agreement made by
and between Ithaca Xxxxx Road, LLC and Ithaca Trumansburg Road, LLC, dated
August 26, 1998, recorded August 26, 1998 in the Xxxxxxxx County Clerk's Office
in Liber 828 of Deeds at page 176.
EXHIBIT A-18
THE PROJECTS
Name of Facility: Clare Bridge Cottage of Ithaca
Master Tenant: Ithaca Sterling Cottage Operator, Inc.
Manager: Alternative Living Services - New York, Inc.
Address of Land: 000 Xxxxx Xxxx, Xxxxxx, XX 00000
County: Xxxxxxxx
Number of Beds: 36
Number of Units: 36
Management Agreement: That certain Management Services Agreement by
and between Ithaca Trumansburg Road Partners and
Alternative Living Services - New York, Inc., as
assigned to Ithaca Sterling Cottage Operator,
Inc. pursuant to that certain Assignment and
Assumption Agreement dated as of November, 1999,
and as further as amended by that certain
Amendment of even date herewith.
Legal Description of Land: See Attached
LEGAL DESCRIPTION
CLARE XXXXXX XXXXXXX XXXXXX, XX
ALL that tract or parcel of land situate in the Town of Ithaca, County of
Xxxxxxxx, State of New York bounded and described as follows:
BEGINNING at an iron pin found in concrete in the west line of Trumansburg Road
(New York State Route 96), said pin being located the following two (2) courses
and distances from the intersection of the south line of Xxxxx Road with the
west line of Trumansburg Road:
(1) South 34 degrees 44 minutes 06 seconds East 169.41 feet; and
(2) South 40 degrees 29 minutes 44 seconds East 389.86 feet;
RUNNING THENCE South 50 degrees 32 minutes 53 seconds West for a distance of
315.55 feet to a point;
RUNNING THENCE North 82 degrees 00 minutes 32 seconds West for a distance of
329.03 feet to a point;
RUNNING THENCE North 37 degrees 00 minutes 32 seconds West for a distance of
141.85 feet to a point;
RUNNING THENCE North 52 degrees 10 minutes 37 seconds East for a distance of
525.52 feet to a point; and
RUNNING THENCE South 40 degrees 29 minutes 44 seconds East along the west line
of Trumansburg Road, passing through an iron pin found in concrete at a distance
of 233.20 feet, a total distance of 369.21 feet to the point and place of
BEGINNING.
TOGETHER WITH the rights created for the benefit of the above described parcel
by that certain Easement Agreement dated August 26, 1998 from Xxxxxxx X. Xxxxx
and Xxxx Xxxxxx Xxxxx to Ithaca Trumansburg Road, LLC recorded in the Xxxxxxxx
County Clerk's Office in Book 828 of Deeds at page 158.
TOGETHER WITH the benefit of that certain Reciprocal Easement made by and
between Ithaca Trumansburg Road, LLC and Ithaca Xxxxx Road LLC, dated August 26,
1998, recorded August 26, 1998 in Book 828 of Deeds at page 176.
EXHIBIT A-19
THE PROJECTS
Name of Facility: Clare Bridge Cottage of Niagara
Master Tenant: Alternative Living Services - New York, Inc.
Manager: Niagara Sterling Cottage Operator, Inc.
Address of Land: 0000 Xxxx Xxxx, Xxxxxxxxxx, XX 00000
County: Niagara
Number of Beds: 42
Number of Units: 40
Management Agreement: Management Services Agreement by and between
Alternative Living Services - New York, Inc. and
Niagara Sterling Cottage Operator, Inc. dated as
of April 18, 2000 as amended by that certain
Amendment of even date herewith.
Legal Description of Land: See Attached
LEGAL DESCRIPTION
CLARE XXXXXX XXXXXXX XXXXXXX, XX
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Town of Wheatfield, County of Niagara and State of New York, being part of Xxx
Xx. 00, Xxxxxxxx 00, Xxxxx 0 of the Holland Land Company's Survey bounded and
described as follows:
COMMENCING at a point in the west line of Lot No. 24, also being the center line
of Xxxx Road (66 feet wide), distant southerly measured along said line 1,117.16
feet from the northwest corner of said Lot No. 24;
THENCE easterly along a line perpendicular to the west line of No. 24 a distance
of 33.00 feet to a point in the easterly line of Xxxx Road, said point being the
point or place of BEGINNING;
THENCE continuing easterly along the aforementioned line a distance of 114.49
feet to a point;
THENCE southeasterly along a line at an interior angle of 150 degrees 00 minutes
13 seconds a distance of 9470 feet to a point;
THENCE easterly along a line at an interior angle of 209 degrees 59 minutes 47
seconds a distance of 470.46 feet to a point;
THENCE southerly along a line parallel with the west line of Lot No. 24 at an
interior angle of 90 degrees 00 minutes 00 seconds a distance of 427.90 feet to
a point;
THENCE westerly along a line parallel with the north line of Lot No. 24 at an
interior angle of 90 degrees 32 minutes 25 seconds a distance of 467.00 feet to
a point in the southeast corner of lands conveyed to Xxxx X. Xxxxxxxxxx as
recorded in the Niagara County Clerk's Office in Liber 1910 of Deeds at page 77;
THENCE northerly along a line parallel with the west line of Lot No. 24 at an
interior angle of 89 degrees 27 minutes 35 seconds a distance of 280.00 feet to
a point;
THENCE westerly along a line parallel with the north line of Lot No. 24 at an
interior angle of 270 degrees 32 minutes 25 seconds a distance of 200.00 feet to
a point in the easterly line of Xxxx Road;
THENCE northerly along the easterly line of Xxxx Road a distance of 201.53 feet
to a point or place of BEGINNING.
TOGETHER WITH the benefit of that certain Access Easement made by and between
Niagara Land Holding Company LLC, Niagara Xxxx Road, LLC and Niagara 50
Wheatfield, LLC, dated as of March 10, 1999, recorded March 11, 1999 in Liber
2906 cp 161.
TOGETHER WITH the benefit of that certain Cross-Easement Agreement made by and
between Niagara SC Wheatfield, LLC and Niagara Xxxx Road LLC, dated as of March
10, 1999, recorded March 11, 1999 in Liber 2906 cp 187.
TOGETHER WITH the benefit of that certain Utility Easement Agreement made by and
between Niagara SC Wheatfield, LLC and Niagara Xxxx Road, LLC, dated as of March
10, 1999, recorded March 11, 1999 in Liber 2906 cp 173.
TOGETHER WITH the benefit of that certain Sanitary Sewer Easement made by and
between Xxxx Xxxxxxxxxx, Niagara SC Wheatfield, LLC, Niagara Xxxx Road LLC and
Niagara Land Holding Company, LLC, dated as of July 22, 1999, recorded on
September 28, 1999 in Liber 2962 page 291.
-2-
EXHIBIT A-20
THE PROJECTS
Name of Facility: Sterling House of Niagara
Master Tenant: Niagara Xxxx Tenant
Manager Alterra Healthcare Corporation
Address of Land: 0000 Xxxx Xxxx, Xxxxxxxxxx, XX 00000
County: Niagara
Number of Beds: 46
Number of Units: 46
Management Agreement: That certain Property Management Services
Agreement dated as of October 18, 1999, which
was originally entered into between Niagara Xxxx
Road, LLC and Alterra Healthcare Corporation,
and as the rights and obligations of Niagara
Xxxx Road, LLC under such Agreement were assumed
by Niagara Xxxx Tenant, Inc. pursuant to that
certain Novation of Property Management
Agreement dated as of December 7, 2001, and as
such Agreement was further amended by that
certain Amendment of even date herewith.
Legal Description of Land: See Attached
LEGAL DESCRIPTION
STERLING HOUSE NIAGARA, NY
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Town of Wheatfield, County of Niagara and State of New York, being part of Xxx
Xx. 00, Xxxxxxxx 00, Xxxxx 0 of the Holland Land Company's Survey bounded and
described as follows:
COMMENCING at a point in the west line of Lot No. 24, also being the center line
of Xxxx Road (66 feet wide), distant southerly measured along said line 890.00
feet from the northwest corner of said Lot No. 24;
THENCE easterly along a line parallel with the north line of Lot No. 24 a
distance of 33.00 feet to a point in the easterly line of Xxxx Road, said point
being the point or place of BEGINNING;
THENCE continuing easterly along the aforementioned line a distance of 667.00
feet to a point;
THENCE southerly along a line parallel with the west line of Lot No. 24 at an
interior angle of 89 degrees 27 minutes 35 seconds a distance of 281.10 feet to
a point;
THENCE westerly along a line at an interior angle of 90 degrees 00 minutes 00
seconds a distance of 470.46 feet to a point;
THENCE northwesterly along a line at an interior angle of 150 degrees 00 minutes
13 seconds a distance of 94.70 feet to a point;
THENCE westerly along a line at an interior angle of 209 degrees 59 minutes 47
seconds a distance of 114.49 feet to a point in the easterly line of Xxxx Road;
THENCE northerly along the easterly line of Xxxx Road a distance of 227.47 feet
to the point or place of BEGINNING.
TOGETHER WITH the benefit of that certain Access Easement made by and between
Niagara Land Holding Company LLC, Niagara Xxxx Road, LLC and Niagara 50
Wheatfield, LLC, dated as of March 10, 1999, recorded March 11, 1999 in Liber
2906 cp 161.
TOGETHER WITH the benefit of that certain Cross-Easement Agreement made by and
between Niagara SC Wheatfield, LLC and Niagara Xxxx Road LLC, dated as of March
10, 1999, recorded March 11, 1999 in Liber 2906 cp. 187.
TOGETHER WITH the benefit of that certain Utility Easement Agreement made by and
between Niagara SC Wheatfield, LLC and Niagara Xxxx Road, LLC, dated as of March
10, 1999, recorded March 11, 1999 in Liber 2906 cp.173.
TOGETHER WITH the benefit of that certain Sanitary Sewer Easement made by and
between Xxxx Xxxxxxxxxx, Niagara SC Wheatfield, LLC, Niagara Xxxx Road LLC and
Niagara Land Holding Company, LLC, dated as of July 22, 1999, recorded on
September 28, 1999 in Liber 2962 page 291.
-2-
EXHIBIT A-21
THE PROJECTS
Name of Facility: Clare Bridge Cottage of Clinton
Master Tenant: Xxxxxxx Xxxxxxxx Cottage Operator, Inc.
Manager: Alternative Living Services - New York, Inc.
Address of Land: 000 Xxxxxxxxx Xxxxx, Xxxxxxx, XX 00000
County: Oneida
Number of Beds: 40
Number of Units: 40
Management Agreement: Management Services Agreement by and between
Alternative Living Services - New York, Inc. and
Xxxxxxx Xxxxxxxx Cottage Operator, Inc. dated as
of April 18, 2000 and as amended by that certain
Amendment of even date herewith.
Legal Description of Land: See Attached
A-1
EXHIBIT B
PROVIDER PAYMENT/REIMBURSEMENT PROGRAMS
The following Projects participate in Provider Payment/Reimbursement Programs as
of the Closing Date.
1. Sterling House of Sussex, WI: Waukesha County Department of Health and
Human Services.
2. Sterling House of Hays, KS: Department of Social and Rehabilitative
Services Kansas Medical Assistance Program.
3. Sterling House of Abiline, KS: Department of Social and Rehabilitative
Services Kansas Medical Assistance Program.
B-1
EXHIBIT C
GOVERNMENTAL APPROVALS
Alterra Sterling House of Leesburg - License to operate an Assisted Living
Facility with Extended Congregate Care, Limited Nursing Services (Standard)
issued by the State of Florida, Agency for Health Care Administration, Division
of Health Quality Assurance
Alterra Sterling House of Port Orange - License to operate an Assisted Living
Facility with Extended Congregate Care, Limited Nursing Services (Standard)
issued by the State of Florida, Agency for Health Care Administration, Division
of Health Quality Assurance
Alterra Sterling House of Stuart - License to operate an Assisted Living
Facility with Extended Congregate Care, Limited Nursing Services (Standard)
issued by the State of Florida, Agency for Health Care Administration, Division
of Health Quality Assurance
Alterra Sterling House of Tequesta - License to operate an Assisted Living
Facility with Extended Congregate Care, Limited Nursing Services (Standard)
issued by the State of Florida, Agency for Health Care Administration, Division
of Health Quality Assurance
Alterra Sterling House of Tequesta II - License to operate an Assisted Living
Facility with Extended Congregate Care, Limited Nursing Services (Standard)
issued by the State of Florida, Agency for Health Care Administration, Division
of Health Quality Assurance
Alterra Sterling House of West Melbourne I - License to operate an Assisted
Living Facility with Extended Congregate Care, Limited Nursing Services
(Standard) issued by the State of Florida, Agency for Health Care
Administration, Division of Health Quality Assurance
Alterra Sterling House of West Melbourne II - License to operate an Assisted
Living Facility with Extended Congregate Care, Limited Nursing Services
(Standard) issued by the State of Florida, Agency for Health Care
Administration, Division of Health Quality Assurance
Alterra Sterling House of Abilene - Adult Care Home License issued to operate an
Assisted Living facility issued by the State of Kansas, Licensure and
Certification Division
Alterra Sterling House of Hays - Adult Care Home License issued to operate an
Assisted Living facility issued by the State of Kansas, Licensure and
Certification Division
Alterra Clare Bridge of Xxx Arbor - License for Home for the Aged issued by the
State of Michigan, Family Independence Agency
Alterra Sterling House of Ithaca - Application pending with the State of New
York, Department of Health for licensure under its Enriched Housing Program
Alterra Clare Bridge Cottage of Ithaca - Operating Certificate to operate a
Private Proprietary Adult Home issued by the New York Department of Health
X-0
Xxxxxxx Xxxxx Xxxxxx Xxxxxxx of Niagara - Operating Certificate to operate a
Private Proprietary Adult Home issued by the New York Department of Health
Alterra Sterling House of Niagara - Application pending with the State of New
York, Department of Health for licensure under its Enriched Housing Program
Alterra Clare Bridge Cottage of Clinton - Operating Certificate to operate a
Private Proprietary Adult Home issued by the New York Department of Health
Alterra Sterling House of Bowling Green - Residential Care Facility License
issued by the State of Ohio, Department of Health
Alterra Sterling House of Mansfield - Residential Care Facility License issued
by the State of Ohio, Department of Health
Alterra Clare Bridge of Xxxxxxxxxx - Certificate of Compliance to provide
Personal Care Services issued by the Commonwealth of Pennsylvania, Department of
Public Welfare
Alterra Wynwood of Xxxxxxxxxx - Certificate of Compliance to provide Personal
Care Services issued by the Commonwealth of Pennsylvania, Department of Public
Welfare
Alterra Sterling House of Xxxxxxxxxx - License to operate an Assisted Living
Facility Type B Large issued by the Texas Department of Human Services
Alterra Sterling House of Sussex - Community-Based Residential Facility License
issued by the State of Wisconsin, Department of Health and Family Services,
Division of Supportive Living
A-2
EXHIBIT D
LITIGATION
Xxxxxxx, Xxxxxx
Residency: 10/1/00-4/11/03
Sterling House of Xxxx Xxxxxxxxx, XX #0000
DOI: 4/10/03 Received notice of intent (pre-suit) alleging fall with injuries,
including fractured hip; no complaint has been filed in this case. Statute of
limitations runs in April 2005.
Xxxxxxx, Xxxxxx
Residency: Respite 8/31/01-9/10/01; Respite 00/0/00-00/0/00
Xxxxx Xxxxxx xx Xxxxxxxxxx, XX #0000
DOI: 12/6/01; claims of negligence, carelessness and recklessness. Suit
commenced pre-petition; case is progressing through ADR process and close to
settlement.
Non-resident; Car accident claim
Driver: Xxxxx Xxxxxxx, LEC at SH of Stuart, FL
Sterling House of Xxxxxx, XX #0000
Auto accident date: 12/11/01; LEC Xxxxx Xxxxxxx was driving Alterra vehicle
which resulted in 4-vehicle collision; plaintiff has made claim for injuries
resulting from accident. Liberty insurance is handling defense of claim.
D-1
EXHIBIT E
MINIMUM INSURANCE REQUIREMENTS
TO COME POST-CLOSING
E-1
EXHIBIT F
ENVIRONMENTAL DOCUMENTS
ALTERRA HEALTHCARE
ENVIRONMENTAL PHASE 1 REPORTS
TITLE DATE OF REPORT
-------------------------------------- -----------------
1 Clare Bridge of Xxx Arbor November 10, 2004
2 Sterling House of Leesburg November 10, 2004
0 Xxxxxxxx Xxxxx xx Xxxx Xxxxxxxxx I November 10, 2004
0 Xxxxxxxx Xxxxx xx Xxxx Xxxxxxxxx II November 10, 2004
5 Sterling House of Port Orange November 10, 2004
6 Sterling House of Stuart November 10, 2004
7 Sterling House of Tequesta I November 10, 2004
8 Sterling House of Tequesta II November 10, 2004
9 Clare Bridge of Xxxxxxxxxx November 10, 2004
10 Wynwood of Xxxxxxxxxx November 10, 2004
11 Sterling House of Ithaca November 10, 2004
00 Xxxxx Xxxxxx Xxxxxxx xx Xxxxxx November 10, 2004
13 Sterling House of Niagara November 10, 2004
14 Clare Bridge Cottage of Niagara November 10, 2004
00 Xxxxx Xxxxxx Xxxxxxx xx Xxxxxxx November 10, 2004
16 Sterling House of Sussex November 10, 2004
17 Sterling House of Abilene II November 10, 2004
18 Sterling House of Xxxx November 10, 2004
19 Sterling House of Bowling Green November 10, 2004
20 Sterling House of Mansfield November 10, 2004
21 Sterling House of New Braunfels November 10, 2004
F-1
EXHIBIT G
VIOLATIONS
REGULATORY REPORTABLE EVENTS
At Alterra Healthcare Corporation, the Regulatory Affairs Department tracks
regulatory issues or concerns through a Reportable Events procedure.
Specifically, the operations' management team is responsible for reporting to
the Regulatory Affairs Department any regulatory citations or deficiencies that
(1) could result or have resulted in a monetary fine or forfeiture, (2) could
have or has had a material effect on the license such as the issuing of a
provisional or probationary license due to a deficiency, or a suspension or
revocation of licensure, (3) could result or have resulted in a curtailment on
admissions, or (4) could result in termination of participation in a government
payment program.
FLORIDA
Alterra Sterling House of Stuart - Based upon Financial Monitoring Surveys on
March 17, 2004, May 27, 2004, and June 29, 2004, AHCA issued notices on 7/2/2004
and 9/9/2004 to impose fines of $500 and $3000, respectively, for an alleged
Class III deficiency for failure to ensure that the residence was maintained in
accordance with general requirements for physical plant safety. The residence
appealed the forfeitures in July and September 2004, respectively, as a finding
of a Class III deficiency may result in a loss of the ECC and/or LNS license.
The bi-annual survey and survey conducted by the Dept. of Health came back with
no citations for cleanliness issues and the financial monitoring surveys should
not have been conducted after April 2004. A proposed settlement agreement was
reached 11/22/04 where Alterra pays a fine of $2625.00 contingent upon no action
regarding Alterra's ECC/LNS license.
Alterra Sterling House of Tequesta I - Based on a July 26, 2004 survey, AHCA
imposed a fine of $500.00 for an alleged Class III deficiency for failing to
ensure that an up-to-date medication observation record (MOR) was maintained.
The residence appealed this fine as it may affect the residence's ECC or LNS
license. The appeal is currently pending.
Alterra Sterling House of Tequesta II - Based on an April 12, 2004 survey, AHCA
imposed a fine of $500.00 for an alleged Class III violation regarding training.
This is a repeat occurrence from an AHCA survey on April 16, 2002. The residence
appealed this fine as it may affect the residence's LNS license. On 8/5/04, an
agreement was made whereby Alterra will pay a fine of $375 to AHCA and Alterra
will not lose its ECC or LNS license. The fine was paid on 12/9/04.
On July 21, 2004, AHCA issued notice based upon an April 12, 2004 survey of
Notice of Intent to Deny its renewal application for the assisted living
licensed based upon previous citations of Alterra's residency agreement where it
states Alterra is not responsible for lost or stolen items. The residence
appealed this citation. On August 20, 2004 AHCA issued a notice stating they
have rescinded the deficiency and as such (through conversations with
G-1
counsel), AHCA is no longer pursing the revocation and the license has been
issued to the residence.
KANSAS
Sterling House of Xxxx - KDHE surveyed the residence on June 16, 2000, and
alleged that the residence failed to update the negotiated service agreement
based upon a change in condition. On July 13, 2000, KDHE imposed a ban on new
admissions which was lifted on July 31, 2000.
NEW YORK
REGULATORY
In June of 2001, the New York Department of Health ("DOH") concluded that
Alterra's look-alike" residences (Sterling House of Niagara and Sterling House
of Ithaca) needed to obtain enriched housing program licensure. The term
"look-alike" refers to the residences in which care is provided by a home care
agency and the residence itself is not licensed, but "looks like" a licensed
residence. Companies other than Alterra operate assisted living in New York on
the "look-alike" model. In October of 2001, the DOH required Alterra to file
applications for EHP licenses for these residences, which Alterra submitted
under protest. DOH has been processing these applications for the past 3 1/2
years. In the meantime, Alterra continues to operate under the "look-alike"
model. Alterra has no reason to believe that DOH will not approve the EHP
licenses.
In August of 2004, the New York legislature passed new assisted living
legislation that will require Alterra's "look-alikes" to become licensed as
Enriched Housing Programs. Fortunately, because of the above circumstances, the
EHP licensure process for the Alterra residences is well underway. Alterra
supported this legislation because it provides for "enhanced licenses" which
will allow the residences to retain the residents who currently exceed EHP
retention standards. The legislation, however, does include very broad "good
standing" language to obtain the "enhanced" licensure. Depending on how these
provisions are interpreted, any provider in New York may face challenges in
getting the "enhanced" licenses in their residences.
The law becomes effective on February 23, 2005. It requires that facilities that
must become licensed under the law must apply to DOH within 60 days of the law's
effective date. However, it is unclear how long it will take the Department of
Health to create a licensure application process. The legislation also creates a
task force to oversee the adult home and enriched housing program regulations,
which are predicted to take over a year. It is still unclear if DOH will approve
any "enhanced" licenses prior to promulgation of regulations to implement the
new law. It is also unclear as to what requirements or restrictions the DOH may
impose with respect to any lease and/or management agreement between the EHP
licensee and the fee owner or manager of the applicable residence.
A-2
PENNSYLVANIA
CLARE BRIDGE OF XXXXXXXXXX - IN OCTOBER 2002 WE RECEIVED NOTICE FROM THE
PENNSYLVANIA DEPT. OF PUBLIC WELFARE OF ITS INTENT TO ISSUE A PROVISIONAL
LICENSE. VIOLATIONS CITED INCLUDE BUT ARE NOT LIMITED TO, INSUFFICIENT NUMBER OF
RETRAINED IN CPR. ON APRIL 29, 2003, THE DEPT. ISSUED A FULL LICENSE TO THE
RESIDENCE WITH AN EFFECTIVE DATE OF JUNE 8, 2003.
WISCONSIN
Sterling House of Sussex - Based on a January 3, 2003 survey, the Dept. alleged
violations related to first aid procedures to alleviate choking and supervision
of residents. The Dept. issued forfeitures totaling $850. The residence's plan
of correction was accepted and the residence is appealing the citations and
forfeitures. After further review, the appeal was not pursued and the fine of
$850 was paid 10/29/03.
A-3
EXHIBIT H
INTELLECTUAL PROPERTY
None
H-1
EXHIBIT I
DEFERRED MAINTENANCE ITEMS
Project Maintenance Item Completion Date
----------------------------------- --------------------------------------- ---------------------------------
Clare Bridge of Xxx Arbor Repair Front Asphalt damage 1 year following the Closing Date
described in the property condition
report prepared for Lender prior to
Closing.
Sterling House of Leesburg Repair landscaping damage, cracks in 1 year following the Closing Date
stucco facade described in the
property condition report prepared
for Lender prior to Closing.
Sterling House of West Melbourne I Repair mold on panels by water 1 year following the Closing Date
heater, asphalt seal coat, fence
repairs, landscaping damage, cracks
in stucco facade described in the
property condition report prepared
for Lender prior to Closing.
Sterling House of West Melbourne II Repair asphalt seal coat, 1 year following the Closing Date
landscaping damage, cracks in stucco
facade described in the property
condition report prepared for Lender
prior to Closing.
Sterling House of Port Orange Repair damage to roof structure, 1 year following the Closing Date
broken window-pane, cracks in stucco
facade described in the property
condition report prepared for Lender
prior to Closing.
Sterling House of Xxxxxxx Repair damage to roof structure, 1 year following the Closing Date
cracks in stucco facade, fence
damage described in the property
condition report prepared for
Lender prior to Closing.
I-1
Sterling House of Tequesta I Repair asphalt seal coat, 1 year following the Closing Date
landscaping damage, cracks in stucco
facade described in the property
condition report prepared for Lender
prior to Closing.
Sterling House of Tequesta II Repair mold in specified apartment, 1 year following the Closing Date
asphalt seal coat, landscaping
damage, cracks in stucco facade
described in the property condition
report prepared for Lender prior to
Closing.
Sterling House of Niagara Repair settlement cracks in 1 year following the Closing Date
maintenance room, asphalt sealant
described in the property condition
report prepared for Lender prior to
Closing.
Sterling House of Abilene Repair significant pothole damage, 1 year following the Closing Date
exterior siding damage described in
the property condition report
prepared for Lender prior to Closing.
Sterling House of Xxxx Repair significant pothole damage 1 year following the Closing Date
described in the property condition
report prepared for Lender prior to
Closing.
Sterling House of Mansfield Repair concrete sidewalk damage 1 year following the Closing Date
described in the property condition
report prepared for Lender prior to
Closing.
A-2
EXHIBIT J
[OWNERSHIP CHART]
SCHEDULE I
DEFINED TERMS.
The following terms as used herein shall have the following meanings:
ADJUSTED ACTUAL RENT: The sum of (a) the annualization of all amounts
collected from Tenants of each Project by (or on behalf of) the Master Tenant
under the Master Lease of such Project for the most current three (3) months,
excluding rent payable to Owner by a Master Tenant and under any Master Lease
nonrecurring income and non-property related income (as determined by Senior
Lender in its sole discretion) and income from Tenants (i) that are sixty (60)
or more days delinquent, (ii) that are in bankruptcy (even if current), (iii)
whose non-residential Leases terminate within six (6) months (as adjusted for
space re-leased upon terms acceptable to Lender in its sole discretion) or (iv)
that have been sixty (60) or more days delinquent four (4) or more times during
the immediately prior twelve (12) month period, and (b) other revenue not to
exceed two percent (2%) of the amounts included in clause (a) for laundry,
vending, parking and other occupancy payments (other than late fees and interest
income) based upon collections for the immediately prior twelve (12) month
period.
AFFILIATE: With respect to a specified person or entity, any individual,
partnership, corporation, limited liability company, trust, unincorporated
organization, association or other entity which, directly or indirectly, through
one or more intermediaries, controls or is controlled by or is under common
control with such person or entity, including, without limitation, any general
or limited partnership in which such person or entity is a partner.
AGREEMENT: This Loan Agreement.
ALTERRA: Alterra Healthcare Corporation, a Delaware corporation.
APPRAISAL: An appraisal of each of the Projects performed in accordance
with FIRREA and Lender's appraisal requirements by an independent appraiser
licensed in the state in which each Project is located and selected and retained
by Lender. Borrower may provide to Lender a copy of any FIRREA appraisal
prepared for another lender within the past six (6) months. Lender may, in its
sole discretion: (a) accept such appraisal; (b) request an update of such
appraisal; and (c) retain a state licensed appraiser to perform a new appraisal.
ASSIGNMENT: As such term is defined in Recital C.
AUTHORIZED REPRESENTATIVE: Xxxxxxx Xxxxx as described in Section 4.3.
BASE RATE: The London Interbank Offered Rate (LIBOR) rate of interest per
annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) equal to the
rate of interest which is identified and normally published by Bloomberg
Professional service Page BBAM 1 (the "PAGE") as the offered rate for loans in
U.S. Dollars under the caption British Bankers Association LIBOR Rates at 11:00
A.M. London time. Throughout the term of the Loan, the Base Rate will float
daily and be determined two (2) Business Days prior to each day of such
calendar month utilizing the one (1) month LIBOR rate set forth on the Page. If
Bloomberg Professional service no longer reports the Base Rate or Lender
determines in good faith that the rate so reported no longer accurately reflects
the rate available to Lender in the London Interbank Market or if such index no
longer exists or if Page BBAM 1 no longer exists or accurately reflects the rate
available to Lender in the London Interbank Market, Lender may select a
replacement index or replacement page, as the case may be.
BORROWER: As such term is defined in the opening paragraph of this
Agreement, and including any successor obligor on the Loan from time to time.
BUSINESS DAY: A day of the year on which banks are not required or
authorized to close in Chicago, Illinois.
CLOSING DATE: The date of the disbursement of the proceeds of the Loan.
CON: As such term is defined in Section 4.4(c).
CONTROL: As such term is used with respect to any person or entity,
including the correlative meanings of the terms "controlled by" and "under
common control with", shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management policies of such person
or entity, whether through the ownership of voting securities, by contract or
otherwise.
DEBT SERVICE COVERAGE RATIO: The ratio of (i) Net Operating Income, to
(ii) Total Debt Service.
DEFAULT OR DEFAULT: Any event, circumstance or condition, which, if it
were to continue uncured, would, with notice or lapse of time or both,
constitute an Event of Default hereunder.
DEFAULT RATE: As such term is defined in Section 2.9(a).
DEFERRED MAINTENANCE ITEMS: As such term is defined in Section 4.2(y).
DETAIL SURVEY REPORT: means that certain State Survey Detail prepared by
Alterra on a quarterly basis in the form approved by Lender prior to Closing.
EFFECTIVE RENTS: The annualized sum of the following quotient for all of
the Leases: except the Master Leases: (x) total rent due over the term of a
Lease less any payments or concessions which Senior Lender, in its sole
discretion, deems to be a rent concession, divided by (y) the total number of
months in the term of such Lease.
ENVIRONMENTAL DOCUMENTS: As such term is defined in Section 6.1.
ENVIRONMENTAL INDEMNITOR: Individually, Borrower and each Guarantor,
collectively referred to as Environmental Indemnitors.
ENVIRONMENTAL OBLIGATIONS: As such term is defined in Section 6.7.
-2-
ENVIRONMENTAL PROCEEDINGS: Any environmental proceedings, whether civil
(including actions by private parties), criminal, or administrative proceedings,
relating to the Project.
ENVIRONMENTAL REPORTS: As such term is defined in Section 6.3.
ERISA: The Employee Retirement Income Security Act of 1974, as amended,
and the regulations promulgated thereunder from time to time.
EVENT OF DEFAULT: As such term is defined in Section 8.1.
EXCESS CASH FLOW: For any period means the Net Cash Flow for such period
less current scheduled principal and interest payments due on the Loan and the
Senior Loan for such period.
EXCESS INTEREST: As such term is defined in Section 11.5.
EXIT FEE: As such term is defined in Section 2.8.
EXPENSES: All losses, fines, penalties, judgments, awards, costs and
expenses (including, without limitation, reasonable attorneys' fees and costs,
the allocated costs for services of in-house counsel, and expenses of
investigation).
EXTENDED MATURITY DATE: As such term is defined in Section 2.4(a).
EXTENSION OPTION: As such term is defined in Section 2.4(a).
EXTENSION TERM: As such term is defined in Section 2.4(a).
FIRREA: The Financial Institutions Reform, Recovery And Enforcement Act of
1989, as amended from time to time.
FUNDING AMOUNT: Is the amount set forth in Section 2.3(a) and disbursed on
the Closing Date.
GOVERNMENTAL APPROVALS: Collectively, all consents, licenses, and permits
and all other authorizations or approvals required from any Governmental
Authority to operate the Project.
GOVERNMENTAL AUTHORITY: Any federal, state, county or municipal
government, or political subdivision thereof, any governmental or
quasi-governmental agency, authority, board, bureau, commission, department,
instrumentality, or public body, or any court, administrative tribunal, or
public utility.
GUARANTOR: Alterra Healthcare Corporation.
GUARANTY: As such term is defined in Recital C.
-3-
HAZARDOUS MATERIAL: Means and includes gasoline, petroleum, asbestos
containing materials, explosives, radioactive materials, microbial matter,
biological toxins, mycotoxins, mold or mold spores or any hazardous or toxic
material, substance or waste which is defined by those or similar terms or is
regulated as such under any Law of any Governmental Authority having
jurisdiction over any of the Projects or any portion thereof or its use,
including: (i) any "hazardous substance" defined as such in (or for purposes of)
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C.A. Section 9601(14) as may be amended from time to time, or any so-called
"superfund" or "superlien" Law, including the judicial interpretation thereof;
(ii) any "pollutant or contaminant" as defined in 42 U.S.C.A. Section 9601(33);
(iii) any material now defined as "hazardous waste" pursuant to 40 C.F.R. Part
260; (iv) any petroleum, including crude oil or any fraction thereof; (v)
natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable
for fuel; (vi) any "hazardous chemical" as defined pursuant to 29 C.F.R. Part
1910; and (vii) any other toxic substance or contaminant that is subject to any
other Law or other past or present requirement of any Governmental Authority.
Any reference above to a Law, includes the same as it may be amended from time
to time, including the judicial interpretation thereof.
HEALTHCARE LAWS: As such term is defined in Section 4.4(a).
HIPAA: As such term is defined in Section 4.4(a).
HIPAA COMPLIANCE DATE: As such term is defined in Section 4.4(b).
HIPAA COMPLIANCE PLAN: As such term is defined in Section 4.4(b).
HIPAA COMPLIANT: As such term is defined in Section 4.4(b).
HOLDING: As such term is defined in Recital A.
IMPROVEMENTS: As such term is defined in Recital A.
INCLUDE OR INCLUDING: Including, but not limited to.
INDEBTEDNESS: As such term is defined in Section 8.1(a).
INDEMNIFICATION RIGHTS: As such term is defined in Section 6.10.
INDEMNIFIED PARTY: As such term is defined in Section 4.2(k).
INITIAL MATURITY DATE: As such term is defined in Section 2.4(a).
INSURANCE PROCEEDS: As such term is defined in Section 7.1(a).
INTEREST RATE: As such term is defined in Section 2.6.
INTERNAL REVENUE CODE: The Internal Revenue Code of 1986, as amended from
time to time.
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JUNIOR LENDER'S PERCENTAGE: An amount equal to seventy-five percent (75%)
of the quotient of (i) ten (10) divided by (ii) seventy-two and one-half (72.5).
LAND: As such term is defined in Recital A.
LATE CHARGE: As such term is defined in Section 2.9(b).
LAWS: Collectively, all federal, state and local laws, statutes, codes,
ordinances, orders, rules and regulations, including judicial opinions or
presidential authority in the applicable jurisdiction.
LEASES: The collective reference to all leases, subleases and occupancy
agreements affecting any of the Projects or any part thereof now existing or
hereafter executed (including all patient and resident care agreements and
service agreements which include an occupancy agreement) and all amendments,
modifications or supplements thereto.
LENDER: As defined in the opening paragraph of this Agreement, and
including any successor holder of the Loan from time to time.
LICENSES: As such term is defined in Section 4.4(c).
LOAN: As such term is defined in Recital B.
LOAN AMOUNT: The maximum amount of the Loan as initially set forth in
Recital B.
LOAN DOCUMENTS: The collective reference to this Agreement, the documents
and instruments described in Recital D and Section 2.1, and all the other
documents and instruments entered into from time to time, evidencing or securing
the Loan or any obligation of payment thereof or performance of Borrower's or
any Guarantor's obligations in connection with the transaction contemplated
hereunder, each as amended.
LOAN YEAR: The period from the Closing Date through the last day of the
same month in the following year and thereafter each successive twelve (12)
month period.
LOCKOUT PERIOD: As such term is defined in Section 2.5.
MAJOR MONETARY CITATION: As such term is defined in Section 4.1(a).
MANAGER: With respect to the Projects described on Exhibits X-00, X-00,
xxx X-00, Xxxxxxxxxxx Living Services-New York, Inc. With respect to the
Projects described on Exhibits A-17 and A-20, Alterra Healthcare Corporation.
MANAGEMENT AGREEMENT: Those certain Management Agreements described on
Exhibits X-00, X-00, X-00, X-00 xxx X-00.
MASTER LEASE AND MASTER LEASES: Those certain Master Leases described on
each of Exhibits A-1 through A-21.
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MASTER TENANT: With respect to each Project, the entity identified as
"Master Tenant" with respect to such Project on each of Exhibits A-1 through
A-21.
MATERIAL ADVERSE CHANGE OR MATERIAL ADVERSE CHANGE: If, in Lender's
reasonable discretion, the business prospects, operations or financial condition
of a person, entity or property has changed in a manner which could impair the
value of Lender's security for the Loan, prevent timely repayment of the Loan or
otherwise prevent the applicable person or entity from timely performing any of
its material obligations under the Loan Documents.
MATURITY DATE: The Initial Maturity Date, or, if Borrower satisfies the
conditions to extend the term of the Loan pursuant to Section 2.4(a), each
Extended Maturity Date.
MORTGAGE AND MORTGAGES: As such terms are defined in Recital C.
NET CASH FLOW: For any period means, all gross revenues of the Projects,
determined on a cash basis, derived from the ownership, operation, use, leasing
and occupancy of the Projects during such period including rents, lease
termination fees, expense reimbursements, interest income and forfeited security
and other deposits for such period (other than rent payable to Owner by a Master
Tenant under a Master Lease) less the actual, customary and reasonable expenses
actually paid in connection with operating the Projects during such period
(including a management fee not to exceed five percent (5%) of effective gross
income), and deposits made into reserves approved by Senior Lender or required
by the Loan Documents (provided, however, that amounts included in such reserves
shall not also be included as an expense upon disbursement from such reserves),
excluding: (A) any loan proceeds, (B) proceeds or payments under insurance
policies (but including proceeds of business interruption insurance); (C)
condemnation proceeds; (D) any security deposits received from Tenants in the
Projects, unless and until the same are forfeited or applied to rent or other
obligations in accordance with the Tenant's Lease; (E) any interest or principal
payments on the Loan or the Senior Loan; or (F) any other extraordinary items,
in Lender's sole discretion.
NET OPERATING INCOME: Revenue for the applicable period, annualized, less
Operating Expenses for the immediately prior twelve (12) month period.
NET WORTH: When applied to an individual, an entity or entities, shall
mean (x) the assets of such individual, entity or entities minus (y) the
liabilities of such individual, entity or entities, all determined in accordance
with GAAP, but excluding goodwill, other intangible assets and any Affiliate
note receivables.
NOTE: As such term is defined in Recital B.
NY PROJECTS: Those Projects described on each of Exhibits A-17 through
A-21.
OFAC LISTS: As such term is defined in Section 4.2(r).
OBLIGATIONS: As such term is defined in Section 11.22.
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OPERATING EXPENSES: For any period, the actual and customary expenses
incurred by (or on behalf of) Owner or a Master Tenant in connection with
operating the Projects, determined on a stabilized accrual basis for such period
(as reasonably adjusted by Senior Lender), including: (i) recurring expenses
(e.g., real estate tax and insurance deposits, leasing commissions, carpeting
replacement, appliance and drapery replacement and such others as determined by
Senior Lender) which are not paid out of the replacement reserve or any other
reserve, (ii) management fees (whether paid or not) in an amount not less than
five percent (5%) of effective gross income, and (iii) a replacement reserve
(whether reserved or not) of not less than $350 per bed, as adjusted by Senior
Lender in its sole discretion for projected capital expenditures excluding
payments due on the Loan or the Senior Loan.
ORGANIZATIONAL DOCUMENTS: As such term is defined in Section 5.1(e).
OWNER: As such term is defined in Recital A.
PERMITTED EXCEPTIONS: Those matters listed on the Title Policy(ies) which
title to the Projects may be subject at the Closing and, thereafter, such other
title exceptions as Lender may reasonably approve in writing.
PERMITTED TRANSFER: The following shall constitute Permitted Transfers,
without the need for consent by Lender:
(A) Any Transfer of direct or indirect ownership interests in
Emeritus Corporation, so long as after giving effect to such Transfer
either (i) Emeritus (or its successor by merger) continues to be a Public
Company or (ii) Emeritus is owned, directly or indirectly, 100% and
Controlled by a Public Company.
(B) Any Transfer of direct or indirect ownership interests in
Fortress Investment Trust II LLC ("FORTRESS") or NW Select LLC.
(C) Any Transfer of the Class B member interests of Emeritus
Corporation or NW Select LLC in FEBC-ALT Investors LLC, so long as after
giving effect to such Transfer, either Fortress or Fortress together with
one or more Public Companies will Control Alterra, Borrower, Holding and
Owner.
(D) A Transfer constituting an initial public offering of Alterra or
any parent or any other direct or indirect owner of 100% of the stock of
Alterra or similar equity sale transaction targeted to raise capital for
Alterra or such parent or other equity owner provided that such shares of
Alterra or such parent or other direct or indirect owner of 100% of the
stock of Alterra are listed or approved for listing on the New York Stock
Exchange, the National Association of Securities Dealers Automated
Quotation System or the American Stock Exchange (a "PUBLICLY LISTED
COMPANY") at the time of such Transfer.
(E) A Transfer pursuant to the equity incentive plan for management
of Alterra as contemplated on the date of this Agreement, provided that,
in the aggregate, (i) such Transfers shall not constitute more than ten
percent (10%) of the equity interests in Alterra or of Alterra's parent,
(ii) such Transfers are of stock of
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Alterra or its parent and shall be made to individuals who are officers of
Alterra and (iii) either Fortress or Fortress together with one or more
Public Companies will continue to Control Alterra, Borrower, Holding and
Owner.
PERSONAL PROPERTY: As such term is defined in Section 4.2(g).
PROCEEDING: As such term is defined in Section 11.3.
PROJECT AND PROJECTS: (i) The Land described on each of Exhibit A-1,
through A-21, respectively, together with all buildings, structures and
improvements located or to be located thereon, including the Improvements
located thereon, (ii) all rights, privileges, easements and hereditaments
relating or appertaining thereto, and (iii) the Personal Property located on
such Land or Improvements or used in connection with the facility thereat or
otherwise owned by Owner, is referred to collectively as a "PROJECT"; and all of
Owner's Projects are referred to collectively as the "PROJECTS".
PROJECT YIELD: The quotient of (i) Net Operating Income from the Projects
as estimated in good faith by Senior Lender or as determined by Senior Lender's
audit, at Borrower's expense, at such time, divided by (i) the sum of the then
current outstanding principal balance of the Loan plus accrued and unpaid
interest thereon plus the then current outstanding principal balance of the
Senior Loan plus accrued and unpaid interest thereon.
PUBLIC COMPANY: Any corporation or other business entity that is a
Publicly Listed Company (as defined in clause (D) of the definition of
"Permitted Transfer" above) and is subject to the public reporting obligations
of Section 13 of the Securities Exchange Act of 1934, as amended (provided,
however, Emeritus shall be deemed to be a Public Company so long as it is
subject to the pubic reporting obligations of Section 13 of the Securities
Exchange Act of 1934, as amended, even if it ceases to be a Publicly Listed
Company).
REMEDIAL WORK: As such term is defined in Section 6.4.
REPORTABLE EVENT: As such term is defined in Section 4.1(a).
REVENUE: The lesser of Adjusted Actual Rent or Effective Rents, both based
on an occupancy factor of the lesser of (i) actual occupancy or (ii) an assumed
ninety-three percent (93%) occupancy rate.
SENIOR LENDER: As such term is defined in Section 2.1(b).
SENIOR LOAN: That certain $62,500,000 first mortgage loan from Senior
Lender to Owner that is secured, in part, by a pledge of the ownership interests
in Owner granted by Holding and by the Senior Mortgage.
SENIOR LOAN AGREEMENT: That certain Loan Agreement of even date herewith
between Owner, as borrower and Senior Lender, as lender, with respect to the
Senior Loan
SENIOR LOAN DOCUMENTS: As such term is defined in Section 2.1(b).
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SENIOR MORTGAGE: As such term is defined in the Senior Loan Agreement.
SINGLE PURPOSE ENTITY: An entity which (i) exists solely for the purpose
of owning and operating Holding (with respect to Borrower) or Owner (with
respect to Holding), (ii) conducts business only in its own name, (iii) does not
engage in any business other than the ownership, management and operation of
Holding (with respect to Borrower) or Owner (with respect to Holding), (iv) does
not have any assets other than those related to its interest in Holding (with
respect to Borrower) or Owner (with respect to Holding) and does not have any
debt other than as permitted by this Agreement and does not guarantee or
otherwise obligate itself with respect to the debts of any other person or
entity, (v) has its own separate books, records, accounts, financial statements
and tax returns (with no commingling by such entity of funds or assets from the
Projects with funds or assets from any other property, except as may be
permitted under the Cash Management Agreements (as defined in the Senior Loan
Agreement)), (vi) holds itself out as being a company separate and apart from
any other entity, (vii) observes limited liability company/partnership/corporate
formalities, as the case may be, independent of any other entity.
TENANT: Any tenant, resident or occupant under any Lease.
TERM SHEET: As such term is defined in Section 2.1.
THIRD-PARTY PAYOR PROGRAMS: As such term is defined in Section 4.4(g).
TITLE INSURER: As such term is defined in the Senior Loan Agreement.
TITLE POLICY(IES): As such term is defined in the Senior Loan Agreement.
TOTAL DEBT SERVICE: The annualized debt service payments (including
principal amortization, if any, and interest) payable on then outstanding
principal balance of the Loan and the Senior Loan during a particular period.
TRANSFER: Any sale, transfer, lease (other than a Lease approved by
Lender), conveyance, alienation, pledge, assignment, mortgage, encumbrance
hypothecation or other disposition of (a) all or any portion of any of the
Projects or any portion of any other security for the Loan, (b) all or any
portion of Borrower's or Owner's right, title and interest (legal or equitable)
in and to any Project or any portion of any security for the Loan, or (c) any
interest in Borrower, Owner, Holding, any Master Tenant or any Guarantor or any
interest in any entity which holds a direct or indirect interest in, or directly
or indirectly controls, Borrower, Owner, Holding, any Master Tenant or
Guarantor.
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SCHEDULE II
PRINCIPAL AMORTIZATION SCHEDULE
Payment Mezzanine Loan
Number Payment Date Amortization
------- ------------ --------------
1 2/1/2005 ($14,430.14)
2 3/1/2005 ($14,502.29)
3 4/1/2005 ($14,574.80)
4 5/1/2005 ($14,647.68)
5 6/1/2005 ($14,720.91)
6 7/1/2005 ($14,794.52)
7 8/1/2005 ($14,868.49)
8 9/1/2005 ($14,942.83)
9 10/1/2005 ($15,017.55)
10 11/1/2005 ($15,092.64)
11 12/1/2005 ($15,168.10)
12 1/1/2006 ($15,243.94)
13 2/1/2006 ($15,320.16)
14 3/1/2006 ($15,396.76)
15 4/1/2006 ($15,473.74)
16 5/1/2006 ($15,551.11)
17 6/1/2006 ($15,628.87)
18 7/1/2006 ($15,707.01)
19 8/1/2006 ($15,785.55)
20 9/1/2006 ($15,864.48)
21 10/1/2006 ($15,943.80)
22 11/1/2006 ($16,023.52)
23 12/1/2006 ($16,103.63)
24 1/1/2007 ($16,184.15)
25 2/1/2007 ($16,265.07)
26 3/1/2007 ($16,346.40)
27 4/1/2007 ($16,428.13)
28 5/1/2007 ($16,510.27)
29 6/1/2007 ($16,592.82)
30 7/1/2007 ($16,675.79)
31 8/1/2007 ($16,759.17)
32 9/1/2007 ($16,842.96)
33 10/1/2007 ($16,927.18)
34 11/1/2007 ($17,011.81)
35 12/1/2007 ($17,096.87)
36 1/1/2008 ($17,182.36)
37 2/1/2008 ($17,268.27)
38 3/1/2008 ($17,354.61)
39 4/1/2008 ($17,441.38)
40 5/1/2008 ($17,528.59)
41 6/1/2008 ($17,616.23)
42 7/1/2008 ($17,704.31)
43 8/1/2008 ($17,792.83)
44 9/1/2008 ($17,881.80)
45 10/1/2008 ($17,971.21)
46 11/1/2008 ($18,061.06)
47 12/1/2008 ($18,151.37)
48 1/1/2009 ($18,242.13)
49 2/1/2009 ($18,333.34)
50 3/1/2009 ($18,425.00)
51 4/1/2009 ($18,517.13)
52 5/1/2009 ($18,609.71)
53 6/1/2009 ($18,702.76)
54 7/1/2009 ($18,796.28)
55 8/1/2009 ($18,890.26)
56 9/1/2009 ($18,984.71)
57 10/1/2009 ($19,079.63)
58 11/1/2009 ($19,175.03)
59 12/1/2009 ($19,270.91)
60 1/1/2010 ($19,367.26)
