EXHIBIT 10.23
LOAN AGREEMENT
(COMMUNITY HOSPITAL CONSTRUCTION)
THIS LOAN AGREEMENT (this "Agreement") dated effective as of December 17,
2004, is made by and between COLONIAL BANK, N.A. ("Lender") and MPT WEST HOUSTON
HOSPITAL, L.P., a Delaware limited partnership ("Borrower").
ARTICLE I.
DEFINITIONS
For purposes of this Agreement, in addition to other terms defined herein,
the following terms shall have the respective meanings assigned to them.
1.1 Advance. The term "Advance" shall mean a disbursement from Lender's
account to or for the benefit of Borrower of any of the proceeds of the Loan
and/or the Borrower's Deposit in accordance with any of the provisions of this
Agreement or of any of the other Loan Documents.
1.2 Application for Advance. The term "Application for Advance" shall
mean a written application on Lender's prescribed form, a copy of which is
attached hereto as Schedule 2.11(b), certified by Borrower and Architect
addressed to Lender specifying by name, current address, and amount all parties
to whom Borrower is obligated for labor, materials, or services supplied for the
construction of the Improvements and all other expenses incident to the Loan,
the Property, and the construction of the Improvements, whether or not specified
in the Approved Budget, requesting an Advance for the payment of such items,
accompanied by such schedules, affidavits, releases, waivers, statements,
invoices, bills, and other documents as Lender may reasonably request.
1.3 Approved Budget. The term "Approved Budget" shall mean that certain
budget attached hereto as Exhibit B and incorporated herein by reference.
1.4 Approved Contracts. The term "Approved Contracts" shall mean the
Plans, the Construction Contract, the Architect Agreement, and the Development
Agreement, all of which have been approved by the Lender prior to the date
hereof.
1.5 Architect. The term "Architect" shall mean Xxxxx Xxxxxx
Collaborative. P.C., or such other substitute architect as the Borrower may
retain from time to time for purposes of design services and preparing
Applications for Advance.
1.6 Architect Agreement. The term "Architect Agreement" shall mean that
certain AIA Document B141-1997, entitled "Standard Form of Agreement Between
Owner and Architect with Standard Form of Architect's Services," dated as of
August 20, 2003, by and between the Borrower and the Architect, relating to the
community hospital project and the physician office suite project, a copy of
which have been provided to Lender prior to the date hereof.
1.7 Architect's Consent. The term "Architect's Consent" shall mean that
certain Architect's Consent to Assignment of Architect's Agreement, executed in
connection herewith by Architect.
1.8 Assignment of Contracts. The term "Assignment of Contracts" shall
mean the Assignment of Contract Documents dated as of the date hereof, by and
between Borrower and Lender.
1.9 Assignment of Leases. The term "Assignment of Leases" shall mean the
Assignment of Rents and Leases dated as of the date hereof, by and between
Borrower and the Lender.
1.10 Bonds. The term "Bonds" shall mean the Payment Bond and the
Performance Bond, collectively, in form and substance reasonably satisfactory to
Lender, with a surety company reasonably acceptable to Lender and licensed to do
business in the State of Texas, as surety, and with Borrower and Lender as joint
and several obligees.
1.11 Code. The term "Code" shall mean the Uniform Commercial Code of the
State of Texas.
1.12 Completion Date. The term "Completion Date" shall mean the date of
completion of the Improvements as set forth in the Development Agreement.
1.13 Construction Contract. The term "Construction Contract" shall mean
that certain AIA Document A111-1997 "Standard Form of Agreement Between Owner
and Contractor," dated as of July 14, 2004, by and between the Borrower and the
Contractor, a copy of which has been provided to Lender prior to the date
hereof.
1.14 Contractor. The term "Contractor" shall mean Xxxx Southeast, Inc.,
d/b/a X.X. Xxxxxxx & Company, or such other substitute contractor as the
Borrower may retain from time to time to perform labor and other services and
provide materials for the construction of the Improvements.
1.15 Contractor's Consent. The term "Contractor's Consent" shall mean
that certain Contractor's Consent to Assignment of Construction Contract
executed in connection herewith by the Contractor.
1.16 Debtor Relief Laws. The term "Debtor Relief Laws" shall mean any
applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
insolvency, reorganization, or similar laws affecting the rights or remedies of
creditors generally, as in effect from time to time.
1.17 Development Agreement. The term "Development Agreement" shall mean
that certain Development Agreement [Hospital], dated June 17, 2004, by and among
the GP Medical
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Ventures, LLC, a Tennessee limited liability company and Borrower, true, correct
and complete copies of which have been provided to the Lender prior to the date
hereof.
1.18 Environmental Indemnity Agreement. The term "Environmental Indemnity
Agreement" shall mean that certain Hazardous Materials Indemnity Agreement dated
of even date herewith, executed by Borrower.
1.19 Financial Statements. The term "Financial Statements" shall mean (a)
the balance sheet and statement of income and retained earnings and cash flows
of the Borrower for the fiscal year ended December 31, 2003, (b) all unaudited
balance sheets and statements of income and retained earnings and cash flows of
the Borrower for the period beginning January 1, 2004 and ending on October 31,
2004, and (c) all future balance sheets and statements of income and retained
earnings and cash flows of the Borrower required to be furnished to Lender under
the terms of this Agreement or any other of the Loan Documents from time to
time.
1.20 Financing Statements. The term "Financing Statements" shall mean the
Form UCC-1 or other Code financing statements perfecting the security interest
securing the Loan, to be filed with the appropriate offices for the perfection
of a security interest in any of the Property.
1.21 General Partner. The term "General Partner" shall mean MPT West
Houston Hospital, LLC, a Delaware limited liability company.
1.22 Governmental Authority. The term "Governmental Authority" shall mean
the United States, the State of Texas, the County of Xxxxxx, the City of
Houston, or any other political subdivision in which the Property is located,
and any other political subdivision, agency, or instrumentality exercising
jurisdiction over Borrower, the Property or the Improvements.
1.23 Governmental Requirements. The term "Governmental Requirements"
shall mean all laws, ordinances, rules and regulations of any Governmental
Authority applicable to Borrower or the Property.
1.24 Gross Receipts. The term "Gross Receipts" shall mean (i) the total
gross rents received by Borrower, including, but not limited to, base rent and
expense pass-throughs, for each designated period under all Leases, concession
agreements, and parking agreements or arrangements, regardless of what such
rentals may be called, plus (ii) all other revenues of any kind received by
Borrower in such designated period from or with respect to, the Improvements,
including, but not limited to, the proceeds of any rent loss or business
interruption insurance payable for the period in question and security and
cleaning and damage deposits applied to a rental or cost obligation and interest
earned thereon, amounts received by Borrower for common area maintenance,
exclusive, however, of the proceeds from any casualty or condemnation other than
rental loss or business interruption insurance described above, capital
contributions to Borrower from the General Partner, or loans to Borrower by the
General Partner, and unforfeited tenant security deposits.
1.25 Guarantor. The term "Guarantor" shall mean Medical Properties Trust,
Inc., a Maryland corporation.
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1.26 Guaranty. The term "Guaranty" shall mean that certain Limited
Guaranty executed by Guarantor.
1.27 Improvements. The term "Improvements" shall mean a community
hospital containing approximately 129,550 square feet (including the connector
to the adjacent medical office building), built in accordance with the Plans and
in accordance with the Plans and in accordance with all applicable requirements
as to usage, utility hookups, ingress and egress, landscaping and finish work
required under the Plans.
1.28 Inspecting Architects/Engineers. The term "Inspecting
Architects/Engineers" shall mean AECC or its replacement as selected by Lender.
1.29 Interest Reserve. The term "Interest Reserve" shall have the meaning
set forth in Section 2.17 below.
1.30 Knowledge. The term "Knowledge" shall mean (a) with respect to the
Borrower or the Guarantor, the conscious awareness of Xxxxxx X. Xxxxx, Xx.,
Xxxxxx X. XxXxxx, or R. Xxxxxx Xxxxxx, and (b) with respect to any other person
or entity, the conscious awareness of facts or other information by such person
or the principal officers of such entity.
1.31 Laws. The term "Laws" shall mean all applicable statutes, laws,
ordinances, regulations, orders, writs, injunctions, decisions, opinions or
decrees of any Governmental Authority or any Tribunal.
1.32 Leases. The term "Leases" shall mean all leases of space in the
Improvements entered into between Borrower and tenants of the Improvements,
including, without limitation, the Community Hospital Lease (as hereinafter
defined).
1.33 Lien. The term "Lien" shall mean any lien, mortgage, security
interest, pledge, charge, or encumbrance of any kind, including, without
limitation, a mechanic's lien, a materialman's lien, the rights of a vender,
lessor, or similar party under any conditional sales agreement or other title
retention agreement or lease substantially equivalent thereto, and any other
right of or arrangement with any creditor to have his claim satisfied out of any
property or assets, or the proceeds therefrom, prior to the general creditors of
the owner thereof. Notwithstanding the foregoing, the term "Lien" shall not
include any Permitted Encumbrances.
1.34 Loan. The term "Loan" shall mean the loan by Lender to Borrower, in
an amount not to exceed the principal sum set forth in Section 2.18 of this
Agreement, for the payment of the costs of labor, materials, and services
supplied for the construction of the Improvements, specified in the Approved
Budget, and all other expenses incident to the acquisition and the construction
of the Property, all as specified in the Approved Budget, as well as any
involuntarily advanced funds in excess of the principal loan amount which Lender
deems reasonably necessary to preserve and to protect collateral covered by the
Loan Documents and Lender's status as a first lienholder as to the Property,
Improvements and other collateral for the Loan.
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1.35 Loan Documents. The term "Loan Documents" shall mean this Agreement,
the Mortgage, the Note, the Assignment of Leases, the Assignment of Contracts,
the Environmental Indemnity Agreement, the Financing Statements, the Guaranty,
the MOB Note, MOB Loan Agreement, MOB Mortgage, the MOB Loan Documents (as
defined in the MOB Mortgage), and such other instruments evidencing, securing,
or pertaining to the Loan as shall, from time to time, be executed and delivered
by Borrower to Lender pursuant to this Agreement, including, without limitation,
each Application for Advance and the Approved Budget.
1.36 Major Contracts. The term "Major Contracts" shall mean all contracts
comprising the Construction Contract requiring aggregate payments thereunder in
excess of One Hundred Thousand and No/100 Dollars ($100,000.00).
1.37 Material Agreement. The term "Material Agreement" shall mean any
material written or oral agreement, contract, commitment, promissory note, lease
or understanding requiring payments, pledges, or performance executed in
connection with the Property over the term of any such agreement, contract,
commitment or understanding in excess of Fifty Thousand and No/100 Dollars
($50,000.00) to which the person or entity in question is a party, by which such
person or entity is directly or indirectly bound, jointly or severally bound,
contingently or directly liable, or to which any assets of such person or entity
may be subject, which is not cancelable by such person or entity upon thirty
(30) days' or less notice without liability for further payment other than a
nominal penalty; including, but not limited to, the Construction Contract.
1.38 Maximum Rate. The term "Maximum Rate" shall mean during the term of
the Loan the maximum permissible amount which may be paid or agreed to be paid
to Lender or the holder of the Note, or collected by Lender or such holder, for
the use, forbearance, or detention of the Loan or for the payment of or
performance of any covenant obligation contained in any of the Loan Documents
under applicable federal or state usury laws.
1.39 MOB Borrower. The term "MOB Borrower" shall mean MPT West Houston
MOB, L.P., a Delaware limited partnership.
1.40 MOB Lease. The term "MOB Lease" shall mean that certain Lease
Agreement dated June 17, 2004, by and between MOB Borrower, as landlord, and the
MOB Tenant, as tenant, regarding the lease of the Improvements.
1.41 MOB Tenant. The term "MOB Tenant" shall mean Stealth L.P., a
Delaware limited partnership.
1.42 MOB Loan. The term "MOB Loan" shall mean the loan from the Lender to
the MOB Borrower in the original principal amount of Fifteen Million Three
Hundred Fifty-Six Thousand Five Hundred Seventy-Five and No/100 Dollars
($15,356,575.00) pursuant to the MOB Loan Agreement.
1.43 MOB Loan Agreement. The term "MOB Loan Agreement" shall mean that
certain Loan Agreement of even date herewith executed by MOB Borrower and
Lender.
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1.44 MOB Mortgage. The term "MOB Mortgage" shall mean that certain Deed
of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing
dated of even date herewith, executed by MOB Borrower and conveying to Lender
the property more particularly described therein as security for the MOB Note
and the Note and payment and performance of all obligations specified therein,
the MOB Loan Agreement, the Mortgage and this Agreement.
1.45 MOB Note. The term "MOB Note" shall mean that certain Promissory
Note of even date herewith, from MOB Borrower to Lender evidencing the MOB Loan.
1.46 Mortgage. The term "Mortgage" shall mean the Deed of Trust,
Assignment of Leases. Security Agreement and Fixture Filing, of even date
herewith, conveying to Lender the Property as security for the payment of the
Note and the payment and performance of all obligations specified therein, and
in this Agreement, the MOB Mortgage and the MOB Loan Agreement.
1.47 Net Operating Income. The term "Net Operating Income" shall mean,
for any designated period, the amount by which Gross Receipts for the period in
question exceed Operating Expenses.
1.48 Note. The term "Note" shall mean the Promissory Note from Borrower
to Lender of even date herewith in the original principal amount of Twenty-Eight
Million Eighty-Six Thousand Four Hundred Twenty-Five and No/100 Dollars
($28,086,425.00) and evidencing the Loan.
1.49 Operating Expenses. The term "Operating Expenses" shall mean the sum
of the following expenses to the extent such expenses have been paid by Borrower
for the designated period for which the Net Operating Income computation is
being made: (a) all taxes and assessments imposed upon the Project; (b) all
insurance premiums for insurance incurred in connection with the Project,
provided that if insurance on the Project is maintained as part of a blanket
policy covering the Project and other properties, the insurance premium included
in this paragraph shall be the premium fairly allocable to the Project; (c)
operating expenses of the Project (unless such expenses are paid by proceeds of
insurance policies or are paid out of the account) for the operation, cleaning,
leasing, marketing, maintenance and repair, to the extent properly chargeable
against income in accordance with generally accepted accounting practices
including, without limitation, wages and payroll costs, reasonable accounting
and bookkeeping expenses, utilities and hearing charges, material costs,
maintenance costs, costs of services, water and sewer charges, license fees and
business taxes, and such other expenses normally considered as an industry-wide
cost of operating a community hospital; provided that such costs shall not
include (i) any of the foregoing items to the extent paid by a tenant of
Borrower or any other third party which reimburses Borrower for any cost or
expense except to the extent such items paid by a tenant or third party are also
included in gross rental receipts and other receipts generated by the use and
operation of the Project; or (ii) any deduction for depreciation of the Project
taken or noted on the Borrower's income tax returns; or (iii) the cost of
capital improvements made to the Project not taken or noted as a deduction on
the Borrower's federal income tax returns and not included in the operating
budget; or (iv) the cost of the Borrower's federal, state or local income taxes.
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1.50 Origination Fee. The term "Origination Fee" shall mean Two Hundred
Eighty Thousand Eight Hundred Sixty-Four and No/100 Dollars ($280,864.00), plus
an underwriting fee in the amount of Nine Hundred and No/100 Dollars ($900.00),
to be paid to Lender on the date hereof, if not previously paid, in
consideration of Lender's originating the Loan to Borrower and of the commitment
of Lender to make the proceeds of the Loan available to Borrower from time to
time during the term of this Agreement in accordance with the terms hereof. The
Origination Fee will be fully earned on execution of this Agreement and shall be
absolutely non-refundable.
1.51 Payment Bond. The term "Payment Bond" shall mean a bond assuring the
payment of each subcontractor responsible for at least ten percent (10%) of the
aggregate costs of constructing the Improvements from such company(ies) licensed
to do business in the State of Texas and in such form, content and amounts as
are satisfactory to Lender, naming Borrower and Lender as additional obligees.
1.52 Performance Bond. The term "Performance Bond" shall mean a bond
assuring the performance of each subcontractor responsible for at least ten
percent (10%) of the aggregate costs of constructing the Improvements, and which
bond is issued by such company(ies) licensed to do business in the State of
Texas and in such form, content and amounts as are reasonably satisfactory to
Lender, naming Borrower and Lender as an additional obligees.
1.53 Permitted Encumbrance. The term Permitted Encumbrance shall mean (a)
those encumbrances, liens, assignments or security interests currently
outstanding and described on the attached Schedule 1.54, (b) those encumbrances,
liens, assignments or security interests pledged previously to the Lender or
incurred pursuant to this Agreement, (c) deposits regarding workers'
compensation unemployment insurance, pensions, or other employee benefits, (d)
tax liens for taxes not due or which are being contested in good faith, during
any fiscal year, or (e) materialmen's lien for sums not yet due and payable.
1.54 Plans. The term "Plans" shall mean the final working drawings and
specifications, together with any amendments or modifications thereto, for the
construction of the Improvements, prepared by Architect, and approved by Lender,
Borrower, any lessee of the Property, if applicable, and any necessary
Governmental Authority.
1.55 Project. The term "Project" shall mean the proposed Improvements,
and related improvements, to be constructed or installed by Borrower on the
Property together with the Property.
1.56 Property. The term "Property" shall mean the real property described
in Exhibit A attached hereto and incorporated herein by reference, together with
the Improvements.
1.57 Taxes. The term "Taxes" shall mean all taxes, assessments, fees,
levies, imposts, duties, deductions, withholdings, or other charges of any
nature whatsoever from time to time or at any time imposed by any Laws or by any
Tribunal.
1.58 Title Company. The term "Title Company" shall mean First American
Title Insurance Company.
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1.59 Title Policy. The term "Title Policy" shall mean that certain
mortgagee's title insurance policy respecting the Property issued by the Title
Company in accordance with the title commitment no. NCS-129932-ATL dated
November 16, 2004, a copy of which has been delivered to Lender prior to the
date hereof.
1.60 Tribunal. The term "Tribunal" shall mean any court, department,
commission, board, bureau, agency, or instrumentality of any Governmental
Authority.
ARTICLE II.
ADVANCES
2.1 Commitment of Lender. Subject to the provisions of this Agreement,
and provided that an Event of Default has not occurred, and no event or
condition which with the giving of notice or the passage of time or both would
reasonably be expected to constitute an Event of Default has occurred and
remains uncured to Lender's satisfaction, Lender will make Advances to Borrower
up to the maximum principal amount set forth in Section 2.18 hereof. The
obligation of Lender to make Advances to Borrower shall terminate and expire at
1:00 p.m., Dallas. Texas time on April 15, 2006.
2.2 General Conditions Precedent. The following must be satisfied as
conditions precedent to Lender's obligation to make any Advance at any time:
(a) All representations and warranties set forth in this
Agreement, in each Application for Advance and in all other Loan Documents
shall be true and correct, in all material respects, on and as of the date
of any such Advance, with the same effect as if made and repeated on that
date.
(b) As of the date of any such Advance,
(1) Borrower is in material compliance with all of the
covenants, agreements, obligations and undertakings required to be
performed by Borrower under this Agreement and under the other Loan
Documents unless compliance thereof shall have been waived in
writing by Lender;
(2) No Event of Default as defined herein or in any other
Loan Documents, and no event or condition which with the notice or
the passage of time or both as prescribed herein or in such other
Loan Documents, would reasonably be expected to constitute any such
Event of Default has occurred and remains uncured to Lender's
reasonable satisfaction;
(3) There shall have been no material adverse change in the
net income or condition of the Property or in the business or
financial condition or management of Borrower and no material
condemnation or adverse zoning or usage change proceedings shall
have been commenced or, to Borrower's Knowledge, threatened against
the Property;
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(4) All statements contained in Borrower's Application for
Advance are true and correct, in all material respects, and all
other certificates furnished to Lender by or on behalf of Borrower
or in connection with the transactions contemplated by this
Agreement or any of the other Loan Documents are true and correct in
all material respects, and there are no facts or events known to
Borrower which, if disclosed to Lender, would make such statements
or certificates untrue in any material respect; and
(5) All documentation shall at all times be in form and
content reasonably acceptable to Lender.
(c) It shall also be a condition to Lender's obligation to make
any Advance that Lender has received the approval of the Application for
Advance by the Inspecting Architects/Engineers so long as the Inspecting
Architects/Engineers provide such approvals within the time periods
required for such Advance under the Development Agreement.
(d) Lender shall have no obligation: (i) to make any Advance if
any condition precedent set forth herein has not been fully satisfied,
(ii) to make any Advance for a line item which exceeds the sums for such
line item on the Approved Budget (subject to the provisions of Section
2.14 hereof), (iii) to make more than one (1) Advance in any one (1)
month, and (iv) to make any Advance which would cause the aggregate of all
Advances by Lender to exceed the maximum amount set forth in Section 2.18
hereof.
2.3 Payment of Principal and Interest on the Loan. Interest on the Loan,
at the rate specified in the Note, shall be computed on the unpaid principal
balance which exists from time to time, shall be computed with respect to each
Advance only from the date of such Advance. Any payment of principal or interest
on the Loan shall be paid in accordance with the Note.
2.4 Applications for Advances. Advances for the payment of costs of
labor, materials, and services supplied for the construction of the Improvements
shall be made by Lender, not more frequently than once a month, upon compliance
by Borrower with this Agreement after actual commencement of construction of the
Improvements for work actually done during the preceding period. Not more
frequently than once a month, unless Borrower and Lender agree, in writing, on
more frequent Advances, Borrower shall submit an Application for Advance to
Lender requesting an Advance for the payment of costs of labor, materials, and
service supplied for the construction of the Improvements or for the payment of
other costs and expenses incident to the Loan, the acquisition of the Property,
or the construction of the Improvements, and specified in the Approved Budget.
Each Application for Advance shall be submitted by Borrower to Lender in a
reasonable time, but not less than ten (10) days prior to the date on which an
Advance is desired by Borrower. Upon receipt of the Application for Advance.
Lender may request an inspection of and require a favorable report on the
Improvements by the Inspecting Architects/Engineers prior to making any Advance,
provided that such request is made and such report is delivered timely to avoid
any default under the Development Agreement or the Construction Contract. The
Inspecting Architects/Engineers shall certify to Lender that at the time an
Application for Advance is made: (a) the Advance requested is in proportion to
the work completed in accordance with the Development Agreement and the
Construction Contract;
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(b) that all work has been performed in a good and workmanlike manner; (c) that
construction of the Improvements is proceeding diligently and in accordance with
the Plans; and (d) there are sufficient funds remaining to complete the
construction of the Improvements consistent with the line items and aggregate
amounts specified in the Approved Budget. Lender's receipt of any such
certification shall not be deemed as Lender's acceptance of any such work
completed or a waiver by Lender of any of Lender's rights to seek full
performance of the requirements of this Agreement from Borrower.
2.5 Aggregate of Advances. Advances for payment of costs of construction
of the Improvements shall not exceed the aggregate of (a) the costs of labor,
materials, and services incorporated into the Improvements in accordance with
the Development Agreement and the Construction Contract, plus (b) the purchase
price of all uninstalled materials to be utilized in the construction of the
Improvements stored on the Property, or elsewhere in accordance with the
Development Agreement and the Construction Contract, less (c) all prior Advances
for payment of costs of labor, materials, and services for the construction of
the Improvements or in the consummation of this Loan.
2.6 Use of Advances. Borrower shall disburse all Advances for payment of
costs and expenses incurred for the development, financing, and construction of
the Improvements as specified in the Approved Budget, and most recently
requested on an Application for Advance, and for no other purpose.
2.7 The Borrower's Deposit. If Lender and Inspecting
Architects/Engineers at any time make a reasonable good-faith determination that
the amount of the unadvanced portion of the Loan will not be sufficient to pay
fully for all costs required to complete the construction of the Improvements in
accordance with the approved Plans and Approved Budget, whether such deficiency
is attributable to changes in the work of construction or in the Plans or to any
other cause, Lender may make written demand on Borrower to deliver to Lender the
amount of the shortage determined by Lender (the "Borrower's Deposit"), which
Borrower's Deposit shall be placed in an interest bearing account by Lender.
Borrower shall deposit the amount of the Borrower's Deposit within thirty (30)
days after the date of Lender's written demand. No further Advances need be made
by Lender until the Borrower's Deposit is made by Borrower. Borrower shall
promptly notify Lender in writing if and when, to Borrower's Knowledge, the cost
of the construction of the Improvements exceeds, or appears likely to exceed,
the amount of the unadvanced portion of the Loan and the unadvanced portion of
the Borrower's Deposit.
2.8 Direct Disbursement and Application by Lender. Lender shall have the
right, but not the obligation, following at least five (5) days' prior written
notice to Borrower, to disburse and apply the proceeds of any Advance to the
satisfaction of any of Borrower's obligations hereunder directly to Contractor,
the Title Company, and any other person or firm to whom payment is due under
this Agreement or any other Loan Documents, except with respect to any payment
contested by Borrower pursuant to Section 4.22 hereof. Any Advance by Lender for
such purpose, except Borrower's Deposit, shall be part of the Loan and shall be
secured by the Loan Documents. Subject to Borrower's right to contest a claim
pursuant to Section 4.22 hereof, Borrower hereby authorizes Lender, following at
least five (5) business days' prior written notice to Borrower, to hold. use.
disburse, and apply the Loan and the Borrower's Deposit for payment of costs of
construction of the Improvements, expenses incident to the Loan and the
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Property, and the payment or performance of any obligation of Borrower
hereunder, including, without limitation, interest on the Loan, any Loan fees
owing to Lender, legal fees of Lender's attorneys which are payable by Borrower,
and such other sums as may be owing from time to time by Borrower to Lender with
respect to the Loan. Such payments may be made, at the option of Lender
following at least five (5) business days' prior written notice to Borrower, by
(a) debiting or charging Borrower's Loan account in the amount of such payments
without first disbursing such amounts to Borrower, or (b) advancing all or any
part of the amount of such payments to Borrower and then invoicing Borrower
therefor. No further direction or authorization from Borrower shall be necessary
to warrant such direct Advances and all such Advances shall satisfy pro tanto
the obligations of Lender hereunder and shall be secured by the Loan Documents
as fully as if made directly to Borrower. Notwithstanding the other provisions
of this paragraph, nothing in this Agreement is intended to be for the benefit
of, nor may be enforced by. nor should be relied upon by, any person, firm or
corporation other than Borrower.
2.9 Advances Do Not Constitute A Waiver. No Advance shall constitute a
waiver of any of the conditions of Lender's obligations to make further Advances
nor, in the event Borrower is unable to satisfy any such condition, shall any
such waiver have the effect of precluding Lender from thereafter declaring an
Event of Default hereunder with respect to any such inability which shall
constitute an Event of Default.
2.10 Conditions to the First Advance. As a condition precedent to the
first Advance hereunder (the "First Advance"), Borrower must satisfy the
conditions required hereby and set forth elsewhere in this Agreement and deliver
to Lender, the documents, certificates, and other items that are set forth
below:
(a) The Origination Fee;
(b) The Loan Documents duly executed and in recordable form by
Borrower and, other parties thereto, if applicable;
(c) The irrevocable commitment of the Title Company to issue the
Title Policy in the normal course of business after the payment of the
premiums for such policy;
(d) The survey of the Property, dated April 1, 2004 and last
updated on December 10, 2004, and issued by Xxxxxx & Xxxxxxx, Inc., a copy
of which has previously been delivered to Lender, and a certification to
the benefit of Lender and the Title Company by a duly registered land
surveyor or engineer reasonably acceptable to Lender;
(e) The Assignment of Contracts together with the consent of the
Architect and Contractor and any other such party to the assignment
thereof;
(f) The insurance policies or certificates of such insurance
policies as specified in Section 4.13 herein;
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(g) A list of the names and addresses of all parties to Major
Contracts, together with, if requested by Lender, true and correct copies
of all executed contracts and subcontracts;
(h) The Financial Statements;
(i) All governmental permits and approvals necessary or
appropriate to complete development and construction of the Project which
have been issued as of the date hereof, all of which are to be assigned to
Lender as additional security for the Loan, in such manner as shall be
acceptable to Lender's legal counsel;
(j) Estoppel Certificate and SNDA in form and substance reasonably
acceptable to Lender, from the MOB Tenant;
(k) Evidence that all approvals required under the zoning and
property use laws and ordinances applicable to the Property (including any
necessary rezoning or other changes in the property use classifications of
the Property) and all approvals required under State and local Property
subdivision laws and ordinances to acquire the Property in compliance with
such laws and ordinances have been obtained and have been or will be
complied with;
(l) Evidence that tap permits or "connections" for water and
sanitary sewer service to the Property have been obtained or requested;
(m) Evidence that all of the streets providing access to the
Property either have been dedicated to public use or established by
private easement, duly recorded in the records of the County in which the
Property is located, and have been fully installed and accepted by the
applicable Governmental Authority, with all costs and expenses of the
installation and acceptance thereof having been paid in full, and that
there are no restrictions on the use and enjoyment of such streets that
adversely affect, limit, or impair Borrower's ability to develop and
construct the Property or operate the Property for the purposes and in the
manner represented to Lender;
(n) Evidence of the availability for hook-up at the boundaries of
the Property of all utilities and other related services to the Property
including specifically, but without limitation, gas, electricity,
telephone, waste removal, water services and storm and sanitary sewer
facilities;
(o) Evidence reasonably satisfactory to Lender's legal counsel
that all necessary action on the part of Borrower has been taken with
respect to the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, so that this
Agreement and all Loan Documents to be executed and delivered by or on
behalf of Borrower will be valid and binding upon Borrower or the person
or entity executing and delivering such document in accordance with its
terms. Such evidence shall include the legal opinion of legal counsel for
Borrower, as reasonably approved by Lender, and covering such other
matters as Lender may reasonably require in form and
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content reasonably acceptable to Lender's legal counsel and containing no
exceptions other than such as may be reasonably acceptable to Lender and
its legal counsel;
(p) A consulting engineer's report or architect's certification,
including or being accompanied by a soils investigation report from a
soils engineer reasonably satisfactory to Lender;
(q) An environmental engineering report for the Property conducted
by an engineer reasonably acceptable to Lender, in form and content
satisfactory to Lender;
(r) The Approved Budget;
(s) Issuance of the Payment and Performance Bonds;
(t) The fully executed Community Hospital Lease;
(u) Evidence satisfactory to Lender that Nine Million Three Hundred
Sixty-One Thousand Nine Hundred Ninety-Seven and No/100 Dollars
($9,361,997.00) of cash equity has been invested in or loaned to Borrower,
and that such amount will be spent by Borrower to defray the costs of the
Project before any advances are made by Lender to Borrower provided that
Lender hereby acknowledges that certain affiliates of the Borrower have
previously advanced to Borrower the sum of approximately Four Million Four
Hundred Fifty-One Thousand One Hundred Seventy and 24/100 Dollars
($4,451,170.24) to fund initial construction costs of the Improvements and
such advance shall be credited against such total funds required to be
invested in or loaned to Borrower hereunder (with Lender acknowledging
that such amount may increase from time to time hereafter); and
(v) Evidence reasonably satisfactory to the Lender that all
conditions to payment of such Advance as set forth in Section 6(g) of the
Development Agreement have been satisfied in all material respects.
2.11 Conditions to Subsequent Advances. As a condition precedent to each
Advance subsequent to the First Advance, in addition to all other requirements
herein, Borrower must satisfy the following requirements and, if required by
Lender, deliver to Lender evidence of such satisfaction:
(a) The general conditions set forth in Section 2.2 and the
conditions precedent to the first Advance set forth in Section 2.10 shall
have been satisfied, in all material respects, and continue to be
satisfied, in all material respects, as of the date of the disbursement of
any Advance;
(b) Borrower shall deliver to Lender an Application for Advance
accompanied by the documents and schedules set forth below in Lender's
prescribed form, a copy of which is attached hereto as Schedule 2.11(b):
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(1) A "Payment Request" containing a detailed budget breakdown
specifying:
(i) the amount of the Loan proceeds allocated for each
line item on the Approved Budget;
(ii) the amount of the Advance requested from each line
item on the Approved Budget; and
(iii) the total Advances to date from each line item on
the Approved Budget;
(2) A "Payee Schedule" itemizing all parties to be paid with
the Advance and the amounts to be paid to each;
(3) A "Request for Funds Certification", executed by Borrower
and Architect, stating among other matters:
(i) the labor, services and/or materials covered by the
Application for Advance have been performed upon or furnished
in the construction of the Improvements;
(ii) there have been no material changes in the Approved
Budget except those approved by Lender in writing;
(iii) all construction to date has been performed in
accordance with the Plans, and there have been no material
changes in the Plans except as have been approved by Lender in
writing;
(iv) there have been no material changes in the scope of
time of performance of the work of construction, nor any
material extra work, labor or materials ordered or contracted
for, nor are any such material changes or extras contemplated,
except as have been approved by Lender in writing;
(v) subject to Section 2.13 hereof, the payments to be
made with the Advance requested will pay all bills received
and then due to date for any labor, materials and services
furnished in connection with construction of the Improvements;
(vi) subject to Section 2.13 hereof, all Advances
previously disbursed by Lender for labor, services, and/or
materials for construction of the Improvements pursuant to
previous Applications for Advances have been paid to parties
entitled thereto; and
(vii) a certified statement of the Borrower that all
conditions precedent to an Advance have been fulfilled in all
material respects, and,
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to the Knowledge of the Borrower, no Event of Default has
occurred and is continuing and no event which with notice or
lapse of time or both would reasonably be expected to
constitute such an Event of Default has occurred, or if any
such event or Event of Default has occurred, giving the
details of such event;
(c) The representations and warranties made in this Agreement shall
be true and correct, in all material respects, on and as of the date of
each Advance, with the same effect as if made on that date;
(d) If required by Lender, Borrower shall, within sixty (60) days
after notice of the filing of any mechanics' and materialmen's lien,
encumbrance or charge upon the Property or any part thereof, which arises
by reason of any labor, services or materials furnished or claimed to have
been furnished to Borrower or by reason of the development, design or
construction of the Improvements including, without limitation, any tests,
investigations or studies ordered or conducted by Borrower (excluding,
however, any liens filed as a direct result of MOB Owner's failure to
perform its obligations under the terms, conditions and provisions of the
Contracts), (i) cause such lien, encumbrance or charge upon the Property
to be released or discharged with respect to the Property by payment or
bonding, or (ii) contest such lien and provide to Lender reasonably
satisfactory evidence of adequate reserves by Borrower to pay the amount
contested or an indemnity bond pursuant to Section 4.22 hereof;
(e) Evidence that, during the course of construction, Borrower has
obtained an endorsement to the existing Title Policy reflecting that no
mechanics' or materialmen's lien has been filed against the Property
(except as permitted herein), provided that copies of the bring-down
endorsement furnished to Lender shall constitute satisfactory evidence;
(f) True copies of any Material Agreements with third parties
relating to the management or operation of the Property, which must be
approved in advance by Lender and must be subordinated, in all respects,
to the Loan Documents;
(g) Lender shall have received a satisfactory report from the
Inspecting Architects/Engineers that the Improvements are being
constructed in accordance with the Plans and the Approved Budget; and
(h) Evidence reasonably satisfactory to Lender that all conditions
to such Advance set forth in Section 6(g) of the Development Agreement
have been satisfied in all material respects.
2.12 Conditions to the Final Advance. As a condition precedent to the
final Advance hereunder, including all unreleased retainage, Borrower must
satisfy all conditions precedent to Advances set forth in Section 2.11 above and
deliver to Lender the following (the "Completion Requirements"):
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(a) A Completion certificate from the Inspecting
Architects/Engineers certifying that the Project is substantially complete
(within the meaning of Section 5(b) of the Development Agreement);
(b) Any portion of the Project requiring inspection or certification
by any governmental agency shall have been inspected and certified as
complete and all other necessary approvals shall have been duly issued;
(c) Evidence that the Architect, engineer, surveyors and all
contractors and subcontractors have been paid or will be paid in full, or
have otherwise executed sufficient and satisfactory releases of any and
all mechanics' or materialmen's lien or liens which they may have or be
entitled to, or that Borrower has otherwise sufficiently provided for the
satisfaction of all claims or liens by the Architect, engineer, surveyors
or any contractor or subcontractor, which evidence shall include an
endorsement to the Title Policy evidencing that no mechanics' and
materialmen's liens or other encumbrances have been filed against the
Property, except as permitted herein;
(d) Evidence that the Developer, Developer's authorized
representative, Architect and Contractor have certified that (1)
construction of the Improvements has been completed in accordance with the
Plans, (2) all work requested for reimbursement has been completed in
accordance with the Plans, (3) a notice of completion has been filed as
required by any applicable laws, and (4) all applicable time periods shall
have expired for the creation of any mechanics' or materialmen's lien.
(e) An "as built" ALTA survey, certified to ALTA requirements,
prepared by an engineer or surveyor licensed in the State of Texas; and
(f) Evidence reasonably satisfactory to Lender that all conditions
to such Advance set forth in Section 6(g) of the Development Agreement
have been satisfied in all material respects.
2.13 Retainage. The amount designated as retainage under the Construction
Contract shall be retained by Lender from each Application for Advance. Such
retainage will be disbursed by Lender within the time period specified in the
Construction Contract and the delivery to Lender of Lien waivers with respect to
the Improvements applicable thereto.
2.14 Reallocation of Approved Budget. Lender reserves the right, upon
Borrower's prior written consent (which consent may not be unreasonably
withheld, conditioned, or delayed), to make Advances which are allocated to any
of the designated items in the Approved Budget for such other purposes or in
such different proportions as Lender may, in its reasonable discretion, deem
necessary or advisable. With the prior written consent of Lender (which consent
may not be unreasonably withheld, conditioned, or delayed), Borrower shall be
entitled to make reallocations from items in the Approved Budget for which
substantial completion has been achieved as determined by Lender and no further
funds are required, to the extent of any amount remaining in such item.
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2.15 Conditions Precedent for the Benefit of Lender. All conditions
precedent to the obligation of Lender to make any Advance are imposed hereby
solely for the benefit of Lender, and no other party may require satisfaction of
any such condition precedent or be entitled to assume that Lender will refuse to
make any Advance in the absence of strict compliance with such conditions
precedent. All requirements of this Agreement may be waived by Lender, in whole
or in part, at any time.
2.16 Subordination. Lender shall not be obligated to make, nor shall
Borrower be entitled to, any Advance until such time as Lender shall have
received, to the extent requested, by Lender, subordination agreements from
Architect, Contractor, and all other persons furnishing labor, materials, or
services for the design or construction of the Improvements, subordinating to
the lien of the Mortgage any Lien, claim, or charge they may have against
Borrower or the Property.
2.17 Interest Reserve. Borrower acknowledges and agrees that the amount of
Two Million One Hundred Seventy Thousand One Hundred Seventy-Two and No/100
Dollars ($2,170,172.00), as specified in the Approved Budget, represents
reserves for interest on the Loan (the "Interest Reserve"). So long as no Event
of Default exists and no event exists which with the giving of notice or the
passage of time or both would reasonably be expected to constitute an Event of
Default, interest due and payable under the Note may be paid from the Interest
Reserve. Borrower shall notify Lender in writing as to the amount to be
disbursed from the Interest Reserve, subject to verification by Lender. Borrower
hereby authorizes and directs Lender, and Lender shall have the right to
disburse and charge the Interest Reserve for interest due under the Loan on the
seventeenth (17th) day of each month as interest payments become due and payable
pursuant to the terms of the Loan Documents. Such disbursements shall be made by
a bookkeeping entry on Lender's records and shall be reflected as additional
Advances under the Loan, in amounts equal to the accrued interest due and
payable on the seventeenth (17th) day of each month. Such bookkeeping entry
shall be deemed to be as if Borrower had delivered a check to Lender for the
amount in question. Unless otherwise directed by Lender in its sole discretion,
the Interest Reserve shall be available only for disbursements of the periodic
payments of accrued interest due to Lender on the Loan pursuant to the terms of
this Agreement and the other Loan Documents. Any funds disbursed in the manner
provided in this Section 2.17 shall have been deemed paid to and received by
Borrower.
2.18 Maximum Funding Obligation. Lender shall have no obligation to make
Advances in excess of amounts Borrower has properly qualified in advance to
receive, and Lender shall have no obligation to make Advances in excess of
Twenty-Eight Million Eighty-Six Thousand Four Hundred Twenty-Five and No/100
Dollars ($28,086,425.00) (the "Maximum Funding Obligation").
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF BORROWER
3.1 The Financial Statements. The Financial Statements delivered by
Borrower to Lender on or prior to the date hereof were prepared in accordance
with generally accepted accounting principles and fairly present the financial
condition and results of operations of the Borrower for the respective periods
specified therein, except for the absence of footnotes and
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subject to normal year-end adjustments which, in the aggregate, are not
material. To Borrower's Knowledge, no material adverse change has occurred in
the financial condition of Borrower since the period ending as of the last
Financial Statement delivered by Borrower to Lender.
3.2 Suits. Actions. Etc. There are no actions, suits, or proceedings
pending or, to Borrower's Knowledge, threatened in any court or before or by any
Governmental Authority affecting Borrower or the Property, or involving the
validity or enforceability of any of the Loan Documents, at law or in equity.
The consummation of the transactions contemplated hereby, and the performance of
any of the terms and conditions hereof and of the other Loan Documents, will not
result in a material breach of, or constitute a material default in, any
mortgage, deed of trust, deed to secure debt, lease, promissory note, loan
agreement, credit agreement, partnership agreement, or other agreement to which
Borrower is a party or by which Borrower may be bound or affected.
3.3 Valid and Binding Obligation. All of the Loan Documents, and all other
documents referred to herein to which Borrower is a party, upon execution and
delivery will constitute valid and binding obligations of Borrower, enforceable
against the Borrower in accordance with their terms except as limited by Debtor
Relief Laws.
3.4 Title to the Property. Borrower holds good and marketable title to the
Property subject only to title exceptions set forth in the Title Policy.
3.5 No Default. Borrower is not in default in the payment of the principal
of, or interest on, any indebtedness for borrowed money, nor is Borrower in
default under any instrument or agreement under or subject to which any material
indebtedness for borrowed money has been issued, and no event has occurred under
the provisions of any such instrument which, with or without the lapse of time
or the giving of notice or both, constitutes or would reasonably be expected to
constitute an event of default of Borrower thereunder.
3.6 Approval and Consent. No approval, authorization, or consent of any
Tribunal or Governmental Authority that has not yet been received, is required
for the proper execution, delivery, and performance of this Agreement or the
other Loan Documents.
3.7 Cost Certification. To Borrower's Knowledge, the Approved Budget
contains, in all material respects, true and accurate cost estimates for each
line item contained therein, based upon the most complete and up-to-date
information available to Borrower on the date of this Agreement, all as more
particularly described on Exhibit B attached hereto.
3.8 Taxes. All federal, state, foreign, and other tax returns of Borrower
required to be filed have been filed, and no deficiency, claim, controversy or
dispute exists with respect to any federal, state, foreign, and other taxes
imposed upon Borrower, except for any such taxes as are being contested in good
faith by Borrower through appropriate proceedings.
3.9 Purpose of Loan. To Borrower's Knowledge, none of the proceeds of the
Advances will be used for any purpose that is contrary to, or that would result
in a material violation of, any Laws.
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3.10 Properties; Liens. Subject to the exceptions set forth in the Title
Policy. Borrower has good and marketable title to any properties listed as
assets on Borrower's Financial Statements, and except for such exceptions and
those Liens subsequently approved by Lender in writing, there is no Lien on any
asset of Borrower.
3.11 Damage; Condemnation. No material casualty or damage has occurred to
the Property, any portion thereof, any improvements thereon or any appurtenances
thereto. Borrower has not received notice with respect to (and Borrower has no
Knowledge of) any actual or threatened taking of the Property or any portion
thereof, for any public or quasi-public purpose by the exercise of the right of
condemnation or eminent domain.
3.12 General. No representation, warranty or covenant by Borrower in this
Agreement (including the Exhibits and Schedules attached hereto), any Loan
Document, or other document or certificate furnished by Borrower in connection
with the transactions contemplated by this Agreement (including the Financial
Statements) contains any untrue statement of a material fact or omits to state
any material fact required to be stated herein or therein in order to make the
statements herein or therein, in light of the circumstances in which made, not
misleading.
3.13 Material Agreements. Except for the Material Agreements delivered to
Lender, prior to the date of this Agreement, Borrower is not directly,
indirectly, or contingently obligated with respect to any Material Agreements
relating to the Property. This warranty is only made as of the date hereof, but
shall be actionable by Lender if it is subsequently determined that such
representation and warranty was false when made.
3.14 Property Compliance. The Property complies, in all material respects,
with all applicable subdivision, platting, building, land use, safety and zoning
Laws and requirements and all requirements contained within any of the title
exceptions included in the Title Policy.
3.15 Roads. The Property has access to and from public streets and roads
adequate for its intended use, subject to temporary closing for construction
purposes; all such streets and roads have been completed, dedicated to the
public use and accepted for all purposes (including, but not limited to,
maintenance) by the appropriate Governmental Authority.
3.16 Utility Services. All utility services, in sufficient size and
capacity, necessary for the construction of the Improvements and the operation
thereof for the intended use of the Property are or will be upon completion of
construction available at the boundaries of the Property, consisting of water
supply, storm and sanitary sewer facilities, electric, gas, and telephone
facilities.
3.17 Permits. Borrower has secured all necessary building and other
permits and consents (such permits and consents to be unconditional) for the
construction of the Project and operation thereof, except for the Certificate of
Occupancy and any other permits or consents not available until completion of
the Improvements.
3.18 Hazardous Materials. Except as reflected on any Phase I or other
environmental report or survey respecting the Property delivered to Lender, to
Borrower's Knowledge, no portion of the Property has been used to generate,
store or dispose of, on, under or about the
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Property, or transport to or from the Property, any hazardous wastes, toxic
substances or related materials ("Hazardous Materials"). For purposes of this
Section 3.18, Hazardous Materials shall include, but not be limited to,
substances defined as "Hazardous Substances" or "Toxic Substances" in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. Section 9061, et seq.; and in the regulations adopted and
publications promulgated pursuant to such statute now or in the future.
ARTICLE IV.
COVENANTS AND AGREEMENTS OF BORROWER
4.1 Compliance with Governmental Requirements. Borrower shall timely
comply, in all material respects, with all Governmental Requirements. Borrower
assumes full responsibility for the compliance of the Plans and the Property
with all Governmental Requirements and requirements of the Leases and with sound
building and engineering practices and, notwithstanding any approvals by Lender,
Lender shall have no obligation or responsibility whatsoever for the Plans or
any other matter incident to the Property or the construction of the
Improvements.
4.2 The Construction Contract. Borrower shall become a party to no
Material Agreement or Major Contract (other than Approved Contracts) for the
performance of any work on the Property or for the supplying of any labor,
materials, or services for the construction of the Improvements except upon such
terms and with such parties as shall be approved in writing by Lender, such
approval not to be unreasonably withheld, conditioned or delayed. Borrower shall
neither request nor approve any change orders under the Construction Contract
without the prior written approval of Lender, such approval not be unreasonably
withheld, conditioned, or delayed, except for non-structural changes which do
not change the cost of construction by more than One Hundred Fifty Thousand and
No/100 Dollars ($150,000.00) as to any one change or Five Hundred Thousand and
No/100 Dollars ($500,000.00) in the aggregate. No approval of Lender of any
Construction Contract or change order shall make Lender responsible for the
adequacy, form, or content of such Construction Contracts or change orders.
4.3 Construction of the Improvements. The construction of the Improvements
shall be prosecuted with diligence and continuity, in a good and workmanlike
manner, and in accordance with sound building and engineering practices, all
applicable Governmental Requirements, the Plans, the Development Agreement, and
the Construction Contract. Any cessation of work shall be permitted by Borrower
only in accordance with the terms and conditions set forth in the Development
Agreement and the Construction Contract, as applicable.
4.4 Correction of Defects. Borrower shall correct or cause to be corrected
within thirty (30) days after receipt of written notice from Lender (a) any
material defect in the Improvements, (b) any material departure in the
construction of the Improvements from the Plans or Governmental Requirements, or
(c) any material encroachment by any part of the Improvements or any other
structure located on the Property, on any building line, easement, property
line, or restricted area.
4.5 Storage of Materials. Borrower shall cause all materials supplied for,
or intended to be utilized in, the construction of the Improvements, but not
affixed to or incorporated into the
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Improvements or the Property, to be stored in accordance with the terms and
conditions of the Development Agreement.
4.6 Inspection of the Property. Borrower shall permit Lender and any
Governmental Authority, and their agents and representatives, to enter upon the
Property and any location where materials intended to be utilized in the
construction of the Improvements are stored for the purpose of inspection of the
Property and such materials at all reasonable times during normal business
hours, following reasonable notice to Borrower and so long as such inspections
do not materially interfere with the construction of the Improvements.
4.7 Notices by Governmental Authority, Fire and Casualty Losses, Etc.
Borrower shall timely comply with and promptly furnish to Lender following
receipt thereof, true and complete copies of any official notice or claim by any
Governmental Authority pertaining to the Property. Borrower shall immediately
notify Lender of any fire or other material casualty or any notice of taking or
eminent domain action or proceeding affecting the Property.
4.8 Special Account. Borrower shall maintain a special account at a bank
or other financial institution selected by Borrower, reasonably satisfactory to
Lender, into which all Advances and any other amounts or payments arising in
connection with the ownership of the Property, excluding direct disbursements
made by Lender pursuant to Section 2.8 hereof, shall be deposited by Borrower,
and against which checks shall be drawn only for the payment of (a) costs of
labor, materials, and services supplied for the construction of the Improvements
specified in the Approved Budget, and (b) other costs and expenses incident to
the Loan, the Property, and the construction of the Improvements specified in
the Approved Budget. Borrower shall furnish Lender with monthly bank statements,
as they are received by Borrower, showing all deposits to and withdrawals from
said special account for Lender's verification of compliance with this Loan
Agreement.
4.9 Costs and Expenses. Borrower shall promptly pay Lender upon demand all
reasonable costs and expenses incurred by Lender in connection with: (a) the
preparation of this Agreement and all other Loan Documents and the closing of
the Loan and any amendment, supplement, or modification of, or any waiver or
consent under or with respect to, any of the Loan Documents; and (b) the
enforcement or satisfaction by Lender of any of Borrower's obligations under
this Agreement or the other Loan Documents. For all purposes of this Agreement,
Lender's costs and expenses shall include, without limitation, all reasonable
appraisal fees, cost engineering and inspection fees, legal fees, environmental
consultant fees and the cost to Lender of any title insurance premiums and title
surveys (including, without limitation, the costs and expenses of the inspection
of the Property and/or Project by the Inspecting Architects/Engineers). Borrower
recognizes and agrees that formal written appraisals of the Property and
Improvements by a licensed independent appraiser may be required upon completion
of the Improvements and pursuant to federal regulatory reporting requirements
and that Lender may require reasonable inspections of the Property and
Improvements by an independent supervising architect and/or cost engineering
specialist following reasonable advance written notice to Borrower. If any of
the services described above are provided by an employee of Lender, Lender's
reasonable cost and expenses for such services shall be calculated in accordance
with Lender's standard charge for such services.
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4.10 Additional Documents. Borrower shall execute and deliver to Lender,
from time to time as reasonably requested by Lender, such other documents as
shall be reasonably necessary to provide the rights and remedies to Lender
granted or provided for by the Loan Documents.
4.11 Inspection of Books and Records. Borrower shall permit Lender, at all
reasonable times during normal business hours and following reasonable notice to
Borrower, to examine and copy the books and records of Borrower pertaining to
the Loan and the Property, and all contracts, statements, invoices, bills, and
claims for labor, materials, and services supplied for the construction of the
Improvements.
4.12 No Liability of Lender. Lender shall have no liability, obligation,
or responsibility whatsoever with respect to the construction of the
Improvements. Lender shall not be obligated to inspect the Property or the
construction of the Improvements, nor be liable for the performance or default
of Borrower, Architect, or any other party, or for any failure to construct,
complete, protect, or insure the Improvements, or for the payment of costs of
labor, materials, or services supplied for the construction of the Improvements,
or for the performance of any obligation of Borrower whatsoever. Nothing,
including without limitation any Advance or acceptance of any document or
instrument, shall be construed as a representation or warranty, express or
implied, to any party by Lender.
4.13 Insurance. Borrower shall (a) maintain in full force, until full
payment of the Loan, such insurance coverages on the Property as are described
on the attached Schedule 4.13, (b) maintain such coverages through the
applicable insurance carriers for the respective coverages listed on Schedule
4.13, and (c) name the Lender as an additional insured and provide at least
thirty (30) days prior written notice to Lender of cancellation, non-renewal or
material change of the insurance policies maintained by the Borrower pursuant
hereto.
4.14 No Conditional Sale Contracts, Etc. Except as set forth in the
attached Schedule 4.14, no materials, equipment, or fixtures shall be supplied,
purchased, or installed for the construction of the Improvements pursuant to
security agreements, conditional sale contracts, lease agreements, or other
arrangements or understandings whereby a security interest or title is retained
by any party or the right is reserved or accrues to any party to remove or
repossess any materials, equipment, or fixtures intended to be utilized in the
construction or operation of the Improvements.
4.15 [Intentionally Omitted]
4.16 Bills of Sale. Borrower shall deliver to Lender, promptly following
Lender's written demand therefor, any contracts, bills of sale, statements, or
agreements under which Borrower claims title to any materials, fixtures or
articles incorporated in the Improvements or subject to the Lien or security
title of the Loan Documents.
4.17 Leases. Borrower shall not, without the prior written consent of
Lender (which consent shall not be unreasonably withheld, conditioned, or
delayed), enter into any new Leases after the effective date of this Agreement.
Borrower shall not, without the prior written consent of Lender (which consent
shall not be unreasonably withheld, conditioned, or delayed), enter into
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any modification, amendment or termination of the Community Hospital Lease.
Borrower shall not accept any rental from the Community Hospital Tenant more
than one (1) month in advance of its due date. Borrower shall materially perform
and comply with all of the landlord's obligations under the Community Hospital
Lease. Borrower shall not release the Community Hospital Tenant from any
material obligations or liabilities under the Community Hospital Lease without
the prior written consent of Lender. Borrower shall promptly notify Lender of
the occurrence of any events of default under the Community Hospital Lease
(subject to all notice, grace and cure periods) of which Borrower has Knowledge,
and shall promptly after receipt thereof provide to Lender any notices in
writing from the Community Hospital Tenant alleging that Borrower is in default
under the Community Hospital Lease.
4.18 Additional Security. As additional security for the payment of the
Loan, Borrower hereby irrevocably assigns to Lender and grants to Lender a
security interest in all Advances disbursed to Borrower and Borrower's interest
in all Loan funds held by Lender, whether or not disbursed.
4.19 Prohibition on Transfers. Except for the interest, rights and options
granted pursuant to the MOB Lease and except as permitted in Section 8.15 of the
Mortgage, Borrower shall not, without the prior written consent of Lender,
transfer, convey, assign, encumber or otherwise dispose of the Property or the
Improvements or any part thereof or any interest of Borrower therein to any
individual, partnership, joint venture, trust, association, corporation or other
legal entity, however organized, so long as any part of the indebtedness secured
by the Mortgage is outstanding. Additionally, without the prior written consent
of Lender, except as permitted in Section 3.9 of the Mortgage, no person having
a controlling interest in any of the General Partners shall transfer, convey,
assign, encumber or otherwise dispose of his/her interest in such General
Partner so long as any part of the indebtedness secured by the Mortgage is
outstanding.
4.20 No Assignment by Borrower. This Agreement may not be assigned by
Borrower without the written consent of Lender, which consent may not be
unreasonably withheld, conditioned, or delayed. If Lender approves an assignment
hereof by Borrower, Lender shall be entitled to make Advances to such assignee
and such Advances shall be secured by the Loan Documents. Borrower shall remain
liable for payment of all sums advanced hereunder before and after such
assignment unless otherwise approved in writing by Lender.
4.21 Further Assurance of Title. If at any time Lender's legal counsel is
of the reasonable opinion that any Advance is not secured or will not be secured
by the Loan Documents as a first Lien or first priority security interest on the
Property, subject only to the matters in Title Policy, then Borrower shall,
within ten (10) days after written notice of such opinion from Lender, do all
things and matters reasonably necessary to assure to the reasonable satisfaction
of Lender's counsel that any advance previously made hereunder or to be made
hereunder is secured or will be secured by the Loan Documents as a first Lien or
first priority security interest on the Property, subject to the matters in such
title insurance policy, and Lender, at its option, may decline to make further
Advances hereunder until Lender has received such assurance, but nothing in this
Section shall limit Lender's right to require endorsements extending the
effective date of such policy prior to an Advance under each Application for
Advance.
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4.22 Payment of Claims. Borrower shall promptly pay or cause to be paid
when due all costs and expenses incurred in connection with the Property and the
construction of the Improvements, and Borrower shall keep the Property free and
clear of any Liens, charges, or claims other than Liens reflected in the Title
Policy, and such other Liens approved in writing by Lender. Notwithstanding
anything to the contrary contained in this Agreement or the Loan Documents,
Borrower (a) may contest the validity or amount of any claim of any contractor,
consultant, architect, or other person providing labor, materials, or services
with respect to the Property, (b) may contest any tax or special assessments
levied by any Governmental Authority, and (c) may contest the enforcement of or
compliance with any Governmental Requirements, and such contest on the part of
Borrower shall not be deemed a violation of any representation or covenant
hereunder or the occurrence of an Event of Default hereunder and shall not
release Lender from its obligations to make Advances hereunder; provided,
however, that during the pendency of any such contest, Borrower shall furnish to
Lender and Title Company either (x) reasonably satisfactory evidence that
Borrower has adequate reserves to pay the amount being contested, or (y) an
indemnity bond with corporate surety satisfactory to Lender and Title Company or
other security acceptable to them in an amount equal to one hundred percent
(100%) of the amount being contested, and provided further that Borrower shall
pay any amount adjudged by a court of competent jurisdiction to be due, with all
costs, interest, and penalties thereon, before such judgment becomes a Lien on
the Property.
4.23 Restrictions and Annexation. Except as reflected in the Title Policy
and except as may be required by the MOB Lease, Borrower shall not impose any
restrictive covenants, easements, sharing agreements or encumbrances upon the
Property, execute or file any subdivision plat affecting the Property, or
consent to any assessments burdening the Property without the prior written
consent of Lender (which consent shall not be unreasonably withheld,
conditioned, or delayed).
4.24 Advertising by Lender. Borrower agrees that during the term of the
Loan, Lender shall have the right to issue press releases, advertisements and
other promotional materials approved, in writing, by Borrower and describing in
general terms or in detail Lender's participation in such transaction including
the placement of a sign approved by Borrower for display upon the Property
identifying Lender. Any such sign shall be provided at the expense of Lender;
provided, however, that if Lender provides a sign to Borrower, then Borrower
agrees to erect such sign in a prominent and suitable location for display for
the duration of the construction of the Improvements.
4.25 Financial Statements: Tax Returns. Within forty-five (45) days after
the end of each fiscal quarter of Borrower's operation of the Property, Borrower
shall furnish to Lender current (as of such fiscal quarter) operating statements
and rent rolls for the Property in scope and detail satisfactory to Lender and
certified by Borrower to be complete and accurate in all material respects.
Within ninety (90) days after the end of each fiscal year of Borrower's
operation of the Property, Borrower shall furnish to Lender current (as of such
fiscal year) Financial Statements, operating statements and rent roll for the
Property in scope, detail and form reasonably satisfactory to Lender and
certified by Borrower to be complete and accurate in all material respects and,
the Financial Statements, if required by Lender, shall be certified by an
independent certified public accountant selected by Borrower which is
satisfactory to Lender.
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All Financial Statements of Borrower shall be delivered in duplicate and shall
be accompanied by the certificate of the General Partner of Borrower, dated
within five (5) days of the delivery of such statements to Lender, stating that
the General Partner has no Knowledge of an Event of Default, nor of any event
which, after notice or lapse of time, or both, would reasonably be expected to
constitute an Event of Default, which has occurred and is continuing, and if an
Event of Default has occurred, or such an event which would reasonably be
expected to constitute an Event of Default has occurred, specifying the nature
and period of existence thereof and what action Borrower has taken or proposes
to take with respect thereto, and, except as otherwise specified, stating that
Borrower has fulfilled, in all material respects, all of Borrower's obligations
under this Agreement which are required to be fulfilled on or prior to the date
of such certificate. Borrower shall deliver to Lender, as soon as available, but
in no event later than fifteen (15) days after the timely filing thereof with
the Internal Revenue Service including any permitted and valid extensions of any
filing deadlines, a copy of Borrower's annual tax return for the preceding
calendar year.
4.26 Notification of Adverse Changes. Upon Borrower's Knowledge, Borrower
shall promptly notify Lender of the occurrence of any event or condition which,
if not remedied, would reasonably be expected to result in a material, adverse
change to the financial condition of Borrower or would reasonably be expected to
materially and adversely affect the value of the Property.
4.27 Indemnification. Borrower agrees to indemnify, defend and hold Lender
harmless from and against any and all claims, charges, actions, suits,
proceedings, lawsuits, obligations, liabilities, fines, penalties, costs and
expenses, including, but not limited to, reasonable attorneys' fees incurred by
Lender, alleged by or in favor of Borrower or any principal, partner,
stockholder, officer, director, employee or agent thereof, or by or in favor of
any broker, realtor, agent or other party claiming brokerage commissions or
finder's fees in connection with entering into this Agreement or the
transactions contemplated hereby (other than for claims for commissions or fees
claimed by persons or parties employed or engaged by Lender), or in connection
with making or collecting the Loan or enforcing the Loan Documents, but
excluding claims relating to or arising out of the Lender's gross negligence,
willful misconduct, or breach of its obligations in the Loan Documents. Borrower
shall further indemnify Lender and hold Lender harmless against any and all
liabilities (including any and all taxes and special assessments levied against
the Property or any improvements, fixtures, or personal property located
thereon), obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses, and disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against Lender, in any way
relating to, or arising out of, the Loan Documents or any of the transactions
contemplated therein, or the construction and/or operation of the Property
(except claims relating to or arising out of the Lender's gross negligence,
willful misconduct, or breach of its obligations in the Loan Documents), to the
extent that any such indemnified liabilities result, directly or indirectly,
from any claims made or actions, suits, or proceedings commenced by or on behalf
of any person or entity other than Lender. The obligations and provisions of
this paragraph shall continue and remain in full force and effect after the Loan
and other obligations of Borrower under this Agreement and under the other Loan
Documents have been paid or discharged in full and shall survive the termination
of this Agreement and the repayment of the Loan.
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4.28 Termination. Lender, at its option, may terminate this Agreement and
its obligation to make any Advance upon the occurrence and continuation of any
Event of Default.
4.29 Third-Party Agreements; Management Fee. Except for the MOB Lease and
as contemplated therein. Borrower shall not execute or enter into any agreement
with any third party providing for management or operation of the Property
and/or the Improvements without the prior written consent of Lender (which
consent shall not be unreasonably withheld, conditioned, or delayed). Lender
acknowledges that the Community Hospital Tenant has entered into subleases
relating to the Property and the Improvements, and that copies of such subleases
have been delivered to the Lender prior to the date hereof.
4.30 Development Agreement. Borrower will not amend or modify the
Development Agreement without the prior written consent of Lender.
4.31 Debt Service Requirement. From and after June 17, 2006, and until the
Loan is paid in full by Borrower, Borrower shall not allow the Net Operating
Income of the Project any calendar quarter to be less than 1.25 times the
principal and interest payments then due and payable by Borrower under the Note
for the respective designated period in question. In the event that the Net
Operating Income falls below such minimum debt service requirement, Borrower
shall promptly within ten (10) days of its Knowledge of such non-compliance
prepay a portion of the principal balance of the Note so that the debt service
requirement is satisfied and maintained.
4.32 Maintenance of Bonds. At all times prior to the Completion Date,
Borrower shall cause the Bonds to be maintained and in full force and effect.
ARTICLE V.
EVENTS OF DEFAULT
5.1 Default. Any one or more of the following events shall constitute an
"Event of Default" hereunder and under the Loan Documents:
(a) The failure or refusal of Borrower to pay all or any part of the
monthly installments of accrued interest or monthly installments of
principal and accrued interest of the Note as and when the same become due
and payable in accordance with the terms of the Note, and the continuation
of such failure or refusal for a period of ten (10) days after the due
date thereof or the failure or refusal to pay the unpaid principal balance
and accrued but unpaid interest on the Maturity Date (as defined in the
Note);
(b) The failure or refusal of Borrower to pay any amounts due and
owing to Lender under the Loan Documents (other than the payment of
principal or installments of accrued interest under the Note) as the same
become due in accordance with the terms of the Loan Documents and the
continuation of such failure or refusal for a period of thirty (30) days
following written notice thereof from Lender to Borrower;
(c) The failure or refusal of Borrower punctually and properly to
perform, observe and comply, in all material respects, with any covenant,
agreement or condition
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(other than covenants or agreements to pay the indebtedness described in
subparagraphs (a) and (b) above) contained in any of the Loan Documents,
and the continuation of such failure or refusal for a period of thirty
(30) days following written notice thereof from Lender to Borrower or for
such additional reasonable period, not to exceed ninety (90) days, as
shall be necessary to cure such failure or refusal if not capable of cure
within such thirty (30) day period and if Borrower diligently pursues such
cure during such thirty (30) day period and thereafter;
(d) The occurrence of an "Event of Default" under and as defined in
the Mortgage, and the continuation thereof beyond the expiration of all
applicable notice, grace, or cure periods;
(e) A failure by Borrower to deposit the Borrower's Deposit with
Lender within thirty (30) days of written request from Lender to do so;
(f) Any representation or warranty made by Borrower to Lender in any
of the Loan Documents or any Application for Advance or in any other
certificate or document furnished to Lender in connection with the Loan or
in furtherance of the requirements of this Agreement or of any other Loan
Documents shall be incorrect or misleading in any material respect at the
time when made or at the time when reaffirmed or deemed reaffirmed by the
terms of this Agreement relating to conditions precedent to Lender's
obligation to make Advances;
(g) The Improvements are not in substantial Completion by March
31,2006;
(h) If a Lien (other than an inchoate Lien for taxes) for the
performance of work or the supply of materials or any other Lien, whether
for federal, state or local taxes or otherwise is filed against the
Property or any part thereof and remains unsatisfied or unbonded and
evidence of adequate reserves for payment thereof by Borrower is not
provided to Lender as set forth in Section 4.22 hereof and for a period of
thirty (30) days after Borrower knows of the filing of such Lien;
(i) If a receiver, liquidator or trustee of Borrower. Guarantor, the
Community Hospital Tenant or of the Property or of any substantial portion
of Borrower's or Guarantor' properties, shall be appointed; if a petition
in bankruptcy or for reorganization or for protection under any Debtor
Relief Laws shall have been filed against Borrower or Guarantor and the
same is not withdrawn, dismissed, cancelled or terminated within ninety
(90) days; if Borrower or Guarantor make a general assignment for the
benefit of creditors or files or consent to the filing of a petition in
bankruptcy or for protection under any Debtor Relief Laws or commence or
consent to the commencement of any proceeding under the Federal Bankruptcy
Code or any other federal or state law, now or hereafter in effect,
relating to the reorganization of Borrower or Guarantor or the arrangement
or rearrangement or readjustment of the debts of Borrower or Guarantor or
having the effect of enjoining or staying the exercise of rights or
remedies by creditors, it being understood that the filing against
Borrower or Guarantor of such a petition by a partner, officer or
stockholder of Borrower shall be deemed to be a filing with the consent of
Borrower; if there is an attachment or sequestration of or relating to the
Property or to
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any other substantial portion of any other assets of Borrower or Guarantor
and the same is not promptly discharged;
(j) If Borrower shall cause, institute or fail to contest any
proceeding for the dissolution or termination of Borrower;
(k) If Borrower ceases to do business or terminates its business as
presently conducted for any reason whatsoever;
(l) If any condemnation, eminent domain or other taking proceedings
shall have commenced against the Property (or any material portion
thereof) which Lender, in its reasonable judgment, believes will
materially and adversely affect the value of the Property;
(m) If any event of default shall occur under any of the Loan
Documents (as such term may be defined therein), and such event of default
shall continue beyond all applicable notice, grace, and cure periods; or
(n) Any representation or warranty made by Guarantor under the
Guaranty is incorrect in any material respect or Guarantor is in default
of any of Guarantor's non-monetary obligations to Lender under the
Guaranty, and Guarantor shall fail to cure such non-monetary default
within thirty (30) days following written notice thereof from Lender to
Guarantor.
ARTICLE VI.
RIGHTS AND REMEDIES OF LENDER
6.1 Rights of Lender. Upon the occurrence of any one or more Events of
Default, Lender shall have the right, in addition to any other right or remedy
of Lender under the Loan Documents or at equity or under applicable law, but not
the obligation, in its own name or through an agent or in the name of Borrower,
to enter into possession of the Property; to perform all work necessary to
complete the construction and equipping of the Improvements substantially in
accordance with the Plans, Governmental Requirements, and the requirements of
any tenant lease approved by Lender; and to do anything necessary or desirable
in Lender's sole judgment to fulfill the obligations of Borrower hereunder and
under the other Loan Documents, including the right to avail itself of, and
procure performance of the Construction Contract and subcontract or to let new
or additional contracts with a new general contractor or the same subcontractors
or to others; and to employ watchmen and other safeguards to protect the
Property. Without restricting the generality of the foregoing, and for the
purposes aforesaid, Borrower hereby appoints Lender as the attorney-in-fact of
Borrower, with full power of substitution, and in the name of Borrower, if
Lender elects to do so, upon the occurrence and continuation beyond any
applicable notice, grace, or cure period of an Event of Default, to (a) use such
sums as are necessary, including any proceeds of the Loan and the Borrower's
Deposit, to make such changes or corrections in the Plans, and employ such
architects, engineers, inspectors, rental agents, managers and contractors as
may be reasonably required for the purpose of completing the construction of the
Improvements substantially in the manner contemplated by the Plans, and
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Governmental Requirements, (b) execute all applications and certificates in the
name of Borrower which may be required for completion of construction of the
Improvements, (c) endorse the name of Borrower on any checks or drafts
representing proceeds of the insurance policies, or other checks or installments
payable to Borrower with respect to the Property, (d) do every act with respect
to the construction of the Improvements which Borrower may do, (e) prosecute or
defend any action or proceeding incident to the Property, (f) to do all things
reasonably necessary in Lender's reasonable judgment, to complete construction,
finishing and equipping of the Improvements and to rent, operate and manage the
Improvements, and to pay operating costs and expenses, including management
fees, of every kind and nature in connection therewith so that the same shall be
operational and usable for its intended purpose, all in the name of Borrower,
Lender or both; (g) pay interest when due on all amounts disbursed hereunder
(either by adding such interest to the principal balance of the Loan or paying
the same in cash); (h) pay, settle or compromise all existing bills and claims
which may be or become Liens or security interests, or to avoid such bills and
claims becoming Liens against the Property or against fixtures or equipment, or
as may be necessary or desirable for the completion of construction or for the
equipping and operation of the Improvements; (i) prosecute and defend all
actions or proceedings in connection with the Property or any equipment or
fixtures; (j) the right, to be exercised in Lenders sole discretion, to
terminate any remaining obligations under this Agreement; and (k) apply for and
obtain, by appropriate judicial action, appointment of a receiver or receivers
for all or any part of the Property as a matter of right, without regard to the
sufficiency of the security, without any showing of insolvency, fraud or
mismanagement on the part of Borrower and without the necessity of filing
judicial proceedings (other than for the appointment of the receiver(s)) to
protect or enforce the rights of Lender (and Borrower hereby consents to such
appointment). The power-of-attorney granted hereby is a power coupled with an
interest and is irrevocable. Lender shall have no obligation to undertake any of
the foregoing actions, and if Lender should do so, it shall have no liability to
Borrower for the sufficiency or adequacy of any such actions taken by Lender.
All reasonable cost and expenses, including all reasonable attorneys' fees in
connection with the matters contemplated in this Section 6.1 shall be payable by
Borrower on demand, and if not promptly paid, shall be added to the principal of
the Loan and shall be secured by all of the Loan Documents. The
power-of-attorney granted hereby is a power coupled with an interest and
irrevocable by action of Borrower without the joinder of Lender. Lender shall
have no obligation to undertake any of the foregoing actions, and if Lender
should do so, it shall have no liability to Borrower for the sufficiency or
adequacy of any such actions taken by Lender.
6.2 Acceleration. Upon the occurrence of an Event of Default, Lender may,
at its option, declare the Loan immediately due and payable upon written notice
to Borrower, and Borrower hereby expressly waives, but not by way of limitation,
any other notice of default, notice of intent to accelerate and notice of
acceleration.
6.3 Cessation of Advances. Upon the occurrence of an Event of Default, the
obligation of Lender to make any Advance and to make disbursements from the
Borrower's Deposit and all other obligations of Lender hereunder and under the
Loan Documents shall at Lender's option, immediately terminate; provided,
however, that nothing in this paragraph shall be deemed to limit the other
provisions of this Agreement setting forth the conditions precedent to Lender's
obligation to make any Advance or the conditions under which Lender may refuse
to
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make further disbursements or to limit Lender's option to make further Advances
at Lender's sole option notwithstanding the occurrence of one or more Events of
Default.
6.4 Funds of Lender. Any funds of Lender used for any purpose referred to
in this Article VI shall constitute Advances secured by the Loan Documents and
shall bear interest at the Default Rate specified in the Note.
6.5 No Waiver or Exhaustion. No waiver by Lender of any of its rights or
remedies hereunder, in the other Loan Documents, or otherwise, shall be
considered a waiver of any other or subsequent right or remedy of Lender; no
delay or omission in the exercise or enforcement by Lender of any rights or
remedies shall ever be construed as a waiver of any right or remedy of Lender;
and, no exercise or enforcement of any such rights or remedies shall ever be
held to exhaust any right or remedy of Lender.
6.6 Performance by Lender. Should any covenant, duty, or agreement of
Borrower fail to be performed during the continuation of an Event of Default in
accordance with the terms of the Loan Documents, Lender may, at its option,
perform, or attempt to perform, such covenant, duty, or agreement on behalf of
Borrower. In such event, Borrower shall, at the request of Lender and promptly
pay to Lender any amount reasonably expended by Lender in such performance or
attempted performance, together with interest thereon at the Default Rate from
the date of such expenditure by Lender until paid. Notwithstanding the
foregoing, it is expressly understood that Lender does not assume and shall
never have, except by express written consent of Lender, any liability or
responsibility for the performance of any duties of Borrower hereunder or in
connection with all or any part of the Property.
6.7 Use or Operation by Lender. Should all or any part of the Property
come into the possession of Lender, Lender may use or operate the same for the
purpose of preserving it or its value, or pursuant to the order of a court of
appropriate jurisdiction, or in accordance with any other rights held by Lender
in respect thereof. The risk of accidental loss or damage to the Property is on
Borrower, and Lender shall have no liability whatsoever for failure to obtain or
maintain insurance, or to determine whether any insurance ever in force is
adequate as to amounts or as to the risks insured, or for decline in the value
of the Property.
6.8 Cumulative Rights. All rights available to Lender under the Loan
Documents shall be cumulative of and in addition to all other rights granted to
Lender at law or in equity, whether or not any sums be due and payable to Lender
and whether or not Lender shall have instituted any suit for collection,
foreclosure, or other action in connection with the Loan Documents.
6.9 Acceptance of Assignments and Items Delivered. By acceptance of
delivery of copies of, or by taking an assignment of or security interest in,
any of the items delivered to or received by Lender pursuant to this Agreement,
including, but not limited to, the Plans, Approved Budget, and the Material
Agreements, Lender shall not be deemed to have approved same or to have assumed
any liability, obligation, or responsibility whatsoever in connection therewith
except as expressly stated in the Loan Documents.
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6.10 Delegation of Duties and Rights. Lender may exercise any of its
duties and/or exercise any of its rights under the Loan Documents by or through
its officers, directors, employees, attorneys, agents, or other representatives.
6.11 Lender Not in Control. None of the covenants or other provisions
contained in this Agreement shall, or shall be deemed to, give Lender the right
or power to exercise control over the affairs of Borrower, the power of Lender
being limited to the right to exercise the remedies provided in this Article VI
and elsewhere in the Loan Documents.
ARTICLE VII.
GENERAL TERMS AND CONDITIONS
7.1 Modifications. No provision of this Agreement or the other Loan
Documents may be modified, waived, or terminated except by instrument in writing
executed by the party against whom a modification, waiver or termination is
sought to be enforced.
7.2 Severability. In case any of the provisions of this Agreement shall
for any reason be held to be invalid, illegal, or unenforceable, such
invalidity, illegality, or unenforceability shall not affect any other provision
hereof, and this Agreement shall be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein; provided, however, if
the disregard of such provision would frustrate the intent and purposes of this
Agreement, Lender may petition any court having jurisdiction in equity to render
a judgment modifying the disregarded provision(s) of this Agreement so as to
carry out such intent and purposes.
7.3 Election of Remedies. Lender shall have all of the rights and remedies
granted in the Loan Documents in addition to such rights and remedies that may
be available to Lender at law or in equity, and these same rights and remedies
shall be cumulative and may be pursued separately, successively, or concurrently
against Borrower or any property covered under the Loan Documents at the sole
discretion of Lender. The exercise or failure to exercise any of the same shall
not constitute a waiver or release thereof or of any other right or remedy, and
such exercise or failure to exercise shall be nonexclusive.
7.4 Form and Substance. All documents, certificates, insurance policies,
and other items required under this Agreement to be executed and/or delivered to
Lender shall be in form and substance satisfactory to Lender and its legal
counsel.
7.5 Savings Clause. It is the intention to the parties hereto to comply
with all applicable federal and state laws relating to usury; that is, laws
limiting changes for the use, detention or forbearance of money and governing
contracts relating thereto; accordingly, all agreements between Borrower and
Lender, whether now existing or hereafter arising and whether written or oral,
are expressly limited so that in no contingency or event whatsoever, whether by
reason of acceleration of the maturity hereof, or otherwise, shall the amount
paid or agreed to be paid to Lender for the use, forbearance or detention of the
money to be loaned hereunder or otherwise, or for the performance or payment of
any covenant or obligation contained herein or in any other document evidencing
securing or pertaining to the Loan, exceed the Maximum Rate. If from any
circumstance whatsoever fulfillment of any provision hereof or of any such other
document, at the time performance of such provision shall be due, shall involve
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transcending the limit of validity prescribed by law, then, ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such validity, and
if from any such circumstance Lender shall ever receive anything of value deemed
interest by applicable law which would exceed the Maximum Rate, an amount equal
to any excessive interest shall be applied to the reduction of the principal
amount owing under the Note or on account of any other principal indebtedness of
Borrower to Lender, and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of such principal and such other
indebtedness, such excess shall be refunded to Borrower. All sums paid or agreed
to be paid to Lender for the use, forbearance or detention of the indebtedness
of Borrower to Lender shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of such
indebtedness until payment in full in such manner as permitted by law so as to
avoid any portion of the interest on the Loan becoming usurious. The terms and
provisions of this Section 7.5 shall control and supersede every other provision
of all agreements between Borrower and Lender in the event of a conflict in such
provisions.
7.6 Rights of Third Parties. All conditions of the obligations of Lender
hereunder, including the obligation to make Advances, are imposed solely and
exclusively for the benefit of Lender and its successors and assigns and no
other person or entity shall have standing to require satisfaction of such
conditions in accordance with their terms or be entitled to assume that Lender
will refuse to make Advances in the absence of strict compliance with any or all
thereof, and no other person or entity shall, under any circumstances, be deemed
to be a beneficiary of this Agreement, any and all of the terms and conditions
of which may be freely waived in whole or in part by Lender at any time if in
its sole discretion it deems it desirable to do so, and Lender reserves the
right to enter into modifications or amendments of this Agreement with Borrower
without notification to or the consent of any other party. In particular, Lender
makes no representations and assumes no obligations as to third parties
concerning the quality of the construction of the Improvements by Borrower or
the absence therefrom of defects. In this connection Borrower agrees to and
shall indemnify, defend and hold harmless Lender from and against any
liabilities, claims or losses resulting from the disbursement of the proceeds of
the Loan or from the condition of the Property whether related to the quality of
construction or otherwise and whether arising during or after the term of the
Loan. This provision shall survive the repayment of the Loan and shall continue
in full force and effect so long as the possibility of such liability, claims or
losses exists.
7.7 Evidence of Satisfaction of Conditions. Any condition of this
Agreement which requires the submission of evidence of the existence or
non-existence of a specified fact or facts implies as a condition the existence
or non-existence, as the case may be, of such fact or facts and Lender shall, at
all times, be free independently to establish to its reasonable satisfaction
such existence or non-existence.
7.8 [Intentionally omitted]
7.9 No Agency. Lender is not the agent or representative of Borrower, and
Borrower is not the agent or representative of Lender, and nothing in this
Agreement shall be construed to make Lender liable to anyone for goods delivered
or services performed upon the Property or for debts or claims accruing against
Borrower.
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7.10 No Partnership or Joint Venture. Nothing herein nor the acts of the
parties hereto shall be construed to create a partnership or joint venture
between Borrower and Lender.
7.11 Number and Gender. Whenever used herein, the singular number shall
include the plural and the singular, and the use of any gender shall be
applicable to all genders. The duties, covenants, obligations, and warranties of
Borrower in this Agreement shall be joint and several obligations of Borrower,
and of each Borrower if more than one.
7.12 Conflicts. In the event of any conflict between the provisions of
this Agreement and those of the Mortgage, the provisions of this Agreement shall
govern.
7.13 Time of Essence. Time is of the essence in performance of this
Agreement by Borrower.
7.14 Participation. Lender shall have the right, at its sole discretion,
to invite participants to participate in or to purchase all or portions of the
Loan.
7.15 Further Assurances. Borrower shall do, execute, acknowledge and
deliver, at the sole cost and expense of Borrower, all and every such further
acts, deeds, conveyances, mortgages, assignments, estoppel certificates, notices
of assignment, transfers and assurances as Lender may reasonably require from
time to time in order to better assure, convey, assign, transfer and confirm
unto the Lender, the rights now or hereafter intended to be granted to the
Lender under the Loan Documents for carrying out the intention of facilitating
the performance of the terms of this Agreement.
7.16 Captions. The captions, headings, and arrangements used in this
Agreement are for convenience only and do not in any way affect, limit, amplify,
or modify the terms and provisions hereof.
7.17 APPLICABLE LAW. THIS AGREEMENT AND THE LOAN DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND
THE LAWS OF THE UNITED STATES APPLICABLE TO TRANSACTIONS WITHIN SUCH STATE.
7.18 Notices. All notices pursuant to any provisions of this Agreement or
of the other Loan Documents which require the giving of notice as a condition to
creating or effectuating an obligation of Borrower to Lender or a right on the
part of Lender to exercise rights or remedies against Borrower or any
collateral, and any notice by Borrower to Lender to the effect that Lender has
not fulfilled one or more of any obligation to Borrower under this Agreement or
under any other Loan Documents, must be in writing. Such notice shall be given
by messenger, telegram or mail (registered or certified, return receipt
requested) effective when received by the party to whom addressed or when
delivered to such address, and shall be addressed to the parties at the
addresses given below. Rejection or other refusal to accept or the inability to
deliver because of changed address of which no notice was given shall be deemed
to be receipt of the notice, demand or request sent. By giving at least ten (10)
days written notice thereof in the manner specified in this Section 7.18,
Borrower or Lender shall have the right from time to time and at any time during
the term of this Agreement to change their respective addresses and each
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shall have the right to specify as its address any other address within the
United States of America.
If to Lender: Colonial Bank, N.A.
00000 Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx
Facsimile No.: 469/791-4507
with a copy to: Xxxxxxx & XxXxxxxx, P.C.
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. XxXxxxxx, Esq.
Facsimile No.: 214/265-0615
If to Borrower: MPT West Houston Hospital, L.P.
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: 205/969-3756
with a copy to: Baker, Donelson, Bearnan, Xxxxxxxx & Xxxxxxxxx, PC
000 00xx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile No.: 205/488-3721
7.19 Counterparts. This Agreement may be executed in counterparts, all of
which taken together shall constitute one agreement.
7.20 Certain Rules of Construction. No implications or inferences shall be
drawn from the deletion from the terms and provisions of this Agreement of any
terms or provisions contained in unexecuted drafts of this Agreement. In
addition, all parties hereto acknowledge that counsel for same have participated
in the preparation of this Agreement and that, therefore, in the event of any
ambiguity in, or controversy with respect to the meaning of, any term or
provision contained in this Agreement, no presumption shall exist against any
party's interpretation of this Agreement solely by reason of such party's or its
counsel's participation in the preparation of this Agreement.
7.21 WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE
RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER
VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY OR ANY EXERCISE BY ANY PARTY OF
THEIR RESPECTIVE RIGHTS HEREUNDER OR IN ANY WAY RELATING TO THE
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LOAN OR THE MORTGAGED PROPERTY (INCLUDING ANY ACTION TO RESCIND OR CANCEL THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND ANY CLAIM OR DEFENSE ASSERTING
THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE).
THIS WAIVER IS A MATERIAL INDUCEMENT FOR LENDER TO MAKE THE LOAN.
7.22 Exhibits. The following Exhibits and Schedules are attached hereto
and made a part hereof for all purposes:
Schedule 1.54 - Permitted Encumbrances
Schedule 2.11 (b) - Application for Advance
Schedule 4.13 - Insurance Coverage
Schedule 4.14 - Conditional Sale Contracts
Exhibit A - Property Description
Exhibit B - Approved Budget
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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EXECUTED AND DELIVERED on the date first above recited.
LENDER:
COLONIAL BANK, N.A.
By: /s/ Xxxxxx Xxxxxxx
----------------------------------------
Xxxxxx Xxxxxxx,
Senior Vice President
BORROWER:
MPT WEST HOUSTON HOSPITAL, L.P.,
a Delaware limited partnership
By: MPT West Houston Hospital, LLC,
a Delaware limited liability company,
its General Partner
By: MPT Operating Partnership, L.P.,
a Delaware limited partnership,
its Sole Member
By: /s/ R. Xxxxxx Xxxxxx
---------------------------------
Name: R. Xxxxxx Xxxxxx
Title: EVP. CFO
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