1
EXHIBIT 10.3
FINANCING AND SECURITY AGREEMENT
(MASTER ACCOMMODATOR AGREEMENT)
EAST MEADOW A.L., LLC AND WHITE OAK ASSISTED LIVING L.L.C.
AS BORROWERS
BANK OF AMERICA, N.A.
AS ADMINISTRATIVE AGENT
FLEET NATIONAL BANK, AS SYNDICATION AGENT
AND
LASALLE BANK NATIONAL ASSOCIATION
AND ALLFIRST BANK AS
CO-AGENTS
BANC OF AMERICA SECURITIES LLC
AS SOLE LEAD ARRANGER AND BOOK MANAGER
$20,000,000 ACCOMMODATOR TRANCHE
JUNE 13, 2001
2
TABLE OF CONTENTS
ARTICLE I DEFINITIONS............................................................ 1
Section 1.1 Certain Defined Terms............................................. 1
Section 1.2 Accounting Terms and Other Definitional Provisions................ 21
ARTICLE II BORROWING............................................................. 21
Section 2.1 The Loan.......................................................... 21
Section 2.2 Procedure for Advances............................................ 23
Section 2.3 Fees.............................................................. 24
Section 2.4 Interest Rate Matters and Payments................................ 24
Section 2.5 Computation of Interest and Fees.................................. 29
Section 2.6 Permitted Costs................................................... 29
Section 2.7 Requisitions Demonstrating Expenses............................... 29
Section 2.8 Co-Borrower Obligations........................................... 30
Section 2.9 Agreement Among Borrowers......................................... 31
Section 2.10 Benefits to Borrowers............................................. 31
Section 2.11 Guaranty.......................................................... 31
Section 2.12 Application of Payments........................................... 35
ARTICLE III COLLATERAL........................................................... 35
Section 3.1 Collateral........................................................ 35
Section 3.2 Eligible Projects................................................. 36
Section 3.3 Assignment of Ownership Interests................................. 36
Section 3.4 Guaranties........................................................ 36
Section 3.5 Collateral for Obligations........................................ 36
Section 3.6 Costs............................................................. 37
ARTICLE IV GENERAL FINANCING PROVISIONS.......................................... 37
Section 4.1 Conditions Precedent to Credit Facility Closing and Addition of
Deeds of Trust.................................................. 37
Section 4.2 Conditions Precedent to Determining Availability Under Borrowing
Base or Making an Advance Under the Loan........................ 42
Section 4.3 Conditions Under Which an Eligible Project is a Completed Facility 43
Section 4.4 Liens; Setoff..................................................... 44
Section 4.5 Payment and Performance of Obligations............................ 44
Section 4.6 Payments to Others for the Account of the Borrowers............... 45
Section 4.7 Prepayment........................................................ 45
Section 4.8 Assignments....................................................... 45
Section 4.9 Liability of the Lenders.......................................... 46
Section 4.10 Stored Materials.................................................. 46
Section 4.11 Limitations on Advances........................................... 46
Section 4.12 Feasibility Studies............................................... 46
i
3
ARTICLE V REPRESENTATIONS AND WARRANTIES......................................... 47
Section 5.1 Existence/Good Standing........................................... 47
Section 5.2 Power and Authority............................................... 47
Section 5.3 Binding Agreements................................................ 47
Section 5.4 Litigation........................................................ 48
Section 5.5 No Conflicting Agreements......................................... 48
Section 5.6 Financial Information............................................. 48
Section 5.7 No Default........................................................ 49
Section 5.8 Taxes............................................................. 49
Section 5.9 Place(s) of Business and Location of Collateral................... 49
Section 5.10 Title to Properties............................................... 49
Section 5.11 Margin Stock...................................................... 49
Section 5.12 ERISA............................................................. 50
Section 5.13 Governmental Consent.............................................. 50
Section 5.14 Full Disclosure................................................... 50
Section 5.15 Business Names and Addresses...................................... 50
Section 5.16 Licenses and Certifications....................................... 51
Section 5.17 Operating Agreements and Management Contracts..................... 51
Section 5.18 Participation Agreements and Resident Agreements.................. 51
Section 5.19 Compliance with Laws.............................................. 52
Section 5.20 Presence of Hazardous Materials or Hazardous Materials
Contamination................................................... 52
Section 5.21 Nature of Credit Facility; Usury; Disclosures..................... 52
Section 5.22 Compliance with Zoning............................................ 53
Section 5.23 Plans and Specifications.......................................... 53
Section 5.24 Building Permits; Other Permits................................... 53
Section 5.25 Utilities......................................................... 53
Section 5.26 Access; Roads..................................................... 53
Section 5.27 Other Liens....................................................... 54
Section 5.28 Defaults.......................................................... 54
Section 5.29 Survival; Updates of Representations and Warranties............... 54
Section 5.30 Accounts.......................................................... 54
Section 5.31 Development of Eligible Projects.................................. 55
ARTICLE VI CONDITIONS OF LENDING................................................. 55
Section 6.1 No Default........................................................ 55
Section 6.2 Opinion of Counsel for the Borrowers.............................. 55
Section 6.3 Approval of Counsel for the Lenders............................... 55
Section 6.4 Supporting Documents.............................................. 55
Section 6.5 Financing Documents............................................... 56
Section 6.6 Insurance......................................................... 56
Section 6.7 Security Documents................................................ 56
ARTICLE VII AFFIRMATIVE COVENANTS OF BORROWER.................................... 57
Section 7.1 Financial Statements.............................................. 57
Section 7.2 Taxes and Claims.................................................. 57
Section 7.3 Legal Existence................................................... 58
Section 7.4 Conduct of Business and Compliance with Laws...................... 58
Section 7.5 Use of Proceeds................................................... 59
ii
4
Section 7.6 Insurance......................................................... 59
Section 7.7 Flood Insurance................................................... 61
Section 7.8 Maintenance of Properties......................................... 61
Section 7.9 Maintenance of the Collateral..................................... 61
Section 7.10 Other Liens, Security Interests, etc.............................. 61
Section 7.11 Defense of Title and Further Assurances........................... 61
Section 7.12 Subsequent Opinion of Counsel as to Recording Requirements........ 62
Section 7.13 Books and Records................................................. 62
Section 7.14 Collections....................................................... 62
Section 7.15 Notice to Account Debtors and Escrow Account...................... 63
Section 7.16 Business Names.................................................... 63
Section 7.17 ERISA............................................................. 63
Section 7.18 Change in Management.............................................. 63
Section 7.19 Management........................................................ 63
Section 7.20 Surveys........................................................... 64
Section 7.21 Inspections; Cooperation; Payment of Inspecting Engineer.......... 64
Section 7.22 Vouchers and Receipts............................................. 65
Section 7.23 Payments for Labor and Materials.................................. 65
Section 7.24 Correction of Construction Defects................................ 65
Section 7.25 Fees and Expenses; Indemnity...................................... 65
Section 7.26 Governmental Surveys or Inspections............................... 65
Section 7.27 Cost Reports...................................................... 66
Section 7.28 Updated Appraisals................................................ 66
Section 7.29 Notification of Certain Events, Events of Default and Adverse
Developments.................................................... 66
Section 7.30 Compliance with Environmental Laws................................ 67
Section 7.31 Hazardous Materials; Contamination................................ 68
Section 7.32 Participation in Reimbursement Programs........................... 68
Section 7.33 Pool Status....................................................... 68
Section 7.34 Subordination of Distributions and Management Fees................ 69
Section 7.35 Copies of Notices................................................. 69
Section 7.36 Commencement of Occupancy......................................... 69
ARTICLE VIII NEGATIVE COVENANTS OF BORROWER...................................... 69
Section 8.1 Borrowings........................................................ 69
Section 8.2 Deeds of Trust and Pledges........................................ 69
Section 8.3 Sale or Transfer of Assets........................................ 70
Section 8.4 Other Liens; Transfers; "Due-on-Sale"; etc........................ 70
Section 8.5 Advances and Loan................................................. 70
Section 8.6 Contingent Liabilities............................................ 70
Section 8.7 Licenses.......................................................... 70
Section 8.8 ERISA Compliance.................................................. 71
Section 8.9 Transfer of Collateral............................................ 71
Section 8.10 Sale of Accounts or Receivables................................... 71
Section 8.11 Amendments; Terminations.......................................... 71
Section 8.12 Prohibition on Hazardous Materials................................ 72
Section 8.13 Subsidiaries...................................................... 72
iii
5
Section 8.14 Distributions to Partners or Members.............................. 72
Section 8.15 Mergers or Acquisitions........................................... 72
Section 8.16 Partnership or Member Interests................................... 72
Section 8.17 Impairment of Security............................................ 73
Section 8.18 Conditional Sales................................................. 73
Section 8.19 Changes to Plans and Specifications............................... 73
Section 8.20 Construction Contract; Construction Management.................... 73
Section 8.21 Qualified Intermediary Limitations................................ 73
ARTICLE IX EVENTS OF DEFAULT..................................................... 74
Section 9.1 Failure to Pay and/or Perform the Obligations..................... 74
Section 9.2 Breach of Representations and Warranties.......................... 74
Section 9.3 Failure to Comply with Covenants.................................. 74
Section 9.4 Failure to Comply with Books and Records.......................... 74
Section 9.5 Other Defaults.................................................... 74
Section 9.6 Default Under Other Financing Documents........................... 75
Section 9.7 Receiver; Bankruptcy.............................................. 75
Section 9.8 Judgment.......................................................... 75
Section 9.9 Execution; Attachment............................................. 75
Section 9.10 Default Under Other Borrowings.................................... 75
Section 9.11 Default Under Master Credit Facility.............................. 75
Section 9.12 Material Adverse Change........................................... 75
Section 9.13 Impairment of Position............................................ 76
Section 9.14 Change in Status or Ownership..................................... 76
Section 9.15 Zoning............................................................ 76
Section 9.16 Change in Management.............................................. 76
Section 9.17 Licenses.......................................................... 76
Section 9.18 Damage to Improvements............................................ 76
Section 9.19 Disclosure of Contractors......................................... 77
Section 9.20 Mechanic's Lien................................................... 77
Section 9.21 Survey Matters.................................................... 77
Section 9.22 General Contractor Default........................................ 77
Section 9.23 Compliance with Law............................................... 77
Section 9.24 Construction Abandonment.......................................... 77
Section 9.25 Failure to Commence Occupancy..................................... 77
Section 9.26 Default Under Exchange Documents.................................. 78
Section 9.27 Pool A Status..................................................... 78
Section 9.28 Non-Compliance with the Code...................................... 78
ARTICLE X RIGHTS AND REMEDIES UPON DEFAULT....................................... 78
Section 10.1 DEMAND; ACCELERATION.............................................. 78
Section 10.2 Further Advances; Immediate Acceleration.......................... 78
Section 10.3 Specific Rights With Regard to Collateral......................... 79
Section 10.4 Performance by Lenders............................................ 80
Section 10.5 Remedies on Default............................................... 81
Section 10.6 Uniform Commercial Code and Other Remedies........................ 82
Section 10.7 Receiver or Other Court Order..................................... 82
iv
6
Section 10.8 No Conditions Precedent to Exercise of Remedies................... 83
Section 10.9 Remedies Cumulative and Concurrent................................ 83
Section 10.10 Strict Performance................................................ 83
Section 10.11 Limited Cross-Collateralization................................... 83
ARTICLE XI MISCELLANEOUS......................................................... 84
Section 11.1 Notices........................................................... 84
Section 11.2 Consents and Approvals............................................ 85
Section 11.3 Remedies, etc. Cumulative......................................... 85
Section 11.4 No Waiver of Rights by the Lenders................................ 85
Section 11.5 Entire Agreement.................................................. 85
Section 11.6 Survival of Agreement; Successors and Assigns..................... 85
Section 11.7 Expenses.......................................................... 86
Section 11.8 Counterparts...................................................... 86
Section 11.9 Governing Law..................................................... 86
Section 11.10 Modifications..................................................... 87
Section 11.11 Illegality........................................................ 87
Section 11.12 Gender, etc....................................................... 87
Section 11.13 Headings.......................................................... 87
Section 11.14 Waiver of Trial by Jury........................................... 87
Section 11.15 No Warranty by Lenders............................................ 88
Section 11.16 Liability of the Lenders.......................................... 88
Section 11.17 License of Tradename.............................................. 88
Section 11.18 No Partnership.................................................... 89
Section 11.19 Third Parties; Benefit............................................ 89
Section 11.20 Conditions; Verification.......................................... 89
Section 11.21 Signs; Publicity.................................................. 89
Section 11.22 Time of Essence................................................... 89
Section 11.23 Replacement Note.................................................. 90
v
7
EXHIBIT 10.3
FINANCING AND SECURITY AGREEMENT
(ACCOMMODATOR FACILITY AGREEMENT)
THIS FINANCING AND SECURITY AGREEMENT (the "Agreement") is made this
13th of June, 2001, by and among EAST MEADOW A.L., LLC, a Delaware limited
liability company, and WHITE OAK ASSISTED LIVING L.L.C., a Delaware limited
liability company (collectively, the "Borrowers") and any Additional Borrowers
(as hereinafter defined; the Borrowers and the Additional Borrowers are
hereinafter referred to collectively as the "Borrowers"), and BANK OF AMERICA,
N.A., as administrative agent (the "Administrative Agent") for itself and for
certain additional lenders who are or shall be from time to time participating
as lenders hereunder pursuant to the Accommodator Agency Agreement, as
hereinafter defined (collectively with the Administrative Agent, the "Lenders").
RECITALS
A. The Borrowers have obtained from the Lenders a line of credit
in the original maximum principal sum of $20,000,000 (the "Credit Facility").
The Credit Facility is evidenced by the Notes (as hereinafter defined).
B. The Lenders have agreed to make available the Credit Facility
upon the condition that this Agreement be executed and delivered to the
Administrative Agent.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises, the mutual agreements
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrowers and the
Administrative Agent, on behalf of the Lenders, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms.
As used herein, the terms defined in the Preamble and Recitals hereto
shall have the respective meanings specified therein, and the following terms
shall have the following meanings:
"Account", individually, and "Accounts", collectively, mean with
respect to any and all Facilities, all presently existing or hereafter acquired
or created accounts, accounts receivable, health care insurance receivables,
contract rights, notes, drafts, instruments, acceptances, chattel paper, leases
and writings evidencing a monetary obligation or a security interest in or a
lease of
1
8
goods, all rights to payment of a monetary obligation or other consideration
under present or future contracts arising out of or relating to any and all
Facilities (including, without limitation, all rights to receive the payment of
money or other consideration from, or on behalf of, any private pay patient), or
by virtue of property that has been sold, leased, licensed, assigned or
otherwise disposed of, services rendered or to be rendered, loan and advances
made or other considerations given, by or set forth in, or arising out of, any
present or future chattel paper, note, draft, lease, acceptance, writing, bond,
insurance policy, instrument, document or general intangible, and all extensions
and renewals of any thereof, all rights under or arising out of present or
future contracts, agreements which gave rise to any or all of the foregoing,
including all commercial tort claims, other claims or causes of action now
existing or hereafter arising in connection with or under any agreement or
document or by operation of law or otherwise, all collateral security of any
kind (including real property mortgages) Supporting Obligations,
letter-of-credit rights and letters of credit given by any person with respect
to any of the foregoing, including, without limitation, all rights to receive
payment of money or other consideration from, or on behalf of, any private pay
patient, all rights to receive payments under all Resident Agreements, and all
third-party payor contracts (including Medicare and Medicaid to the extent
permitted by Law), including, but not limited to, the Veterans Administration,
Participation Agreements, and any and all depository accounts (other than
resident trust accounts) into which the proceeds of all or any portion of such
accounts may be now or hereafter deposited, and all proceeds (cash and non-cash)
of the foregoing.
"Account Debtor" means any Person who is obligated on a Receivable and
"Account Debtors" mean all Persons who are obligated on the Receivables.
"Act of Bankruptcy" means the filing of a petition in bankruptcy under
the Bankruptcy Code or the other commencement of a proceeding under any other
applicable law concerning insolvency, reorganization or bankruptcy, now or
hereafter in effect.
"Additional Borrower" shall mean any Eligible Borrower who executes and
delivers a Facility Owner Note and all such other Financing Documents as shall
be required by the Administrative Agent and who otherwise complies with all
terms and conditions hereunder for a Facility Closing.
"Accommodator Agency Agreement" means that certain Agency Agreement of
even date herewith by and among the Administrative Agent and the other
Accommodator Lenders, as the same may be amended, restated or substituted from
time to time.
"Administrative Agent" means Bank of America, N.A., its successors and
assigns.
"Affiliate" means an entity in which SALI or another entity which SALI
controls, holds an ownership interest equal to or greater than twenty-five
percent (25%).
"Agency Agreements" means collectively, the Agency Agreement and the
Master Revolver Agency Agreement.
"Agreement" means this Financing and Security Agreement and all
amendments, extensions, restatements, substitutions and supplements hereto which
may from time to time become effective in accordance with the provisions of
Section 11.10 (Modifications).
2
9
"Applicable Interest Rate: means (a) the Eurodollar Rate or (b) the
Base Rate.
"Applicable Margin" means the applicable rate per annum added, as set
forth in Section 2.4(c)(iii) (Applicable Interest Rates), to the Eurodollar Base
Rate.
"Appraised Value" means the appraised value of a Facility as
stabilized, as reviewed by the Administrative Agent.
"Architect" means the architect named in the Architect's Contract, if
any, and his or its successors and permitted assigns.
"Architect's Contract" means the architect's agreement by and between
SDI or any Affiliate as agent for any Borrower, and the architect for the
particular Facility, or any contract for architectural services relating to the
development of the Land and/or the construction of the Improvements for all of
the Facilities made by any of such parties and an architect and approved in
writing by the Administrative Agent, as the same may be amended from time to
time with the prior written approval of the Administrative Agent.
"Banking Day" means any day that is not a Saturday, Sunday or banking
holiday in the Commonwealth of Virginia and a day on which banks are open for
the transaction of business in U.S. Dollar deposits in London, England.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C.
101 et seq.
"Base Rate" means the greater of (a) the Prime Rate plus twelve and
one-half (12.5) basis points per annum or (b) the Federal Funds Rate, plus
sixty-two and one-half (62.5) basis points per annum.
"Base Rate Loan" means any Loan for which interest is to be computed
with reference to the Base Rate.
"Borrowing Base" means at any time an amount equal to the lesser of (a)
the aggregate dollar amounts of the Deed of Trust Lien Amounts for each of the
Eligible Projects or, in cases where an appraisal is obtained pursuant to
Section 7.28 (Updated Appraisals), the lesser of the Deed of Trust Lien Amount
or 75% of the Appraised Value of such Eligible Project; or (b) the aggregate
dollar amount equal to 80% of the Costs Incurred to Date for each Pool A
Project. No availability will be given for an Eligible Project which does not
qualify as a Pool A Project.
"Borrowing Base Deficiency" shall have the meaning set forth in Section
2.1 (The Loan).
"Borrowing Base Report" shall have the meaning set forth in Section 2.1
(The Loan).
"Chattel Paper" means a writing or writings which evidence both a
monetary obligation and a security interest in or lease of specific goods; any
returned, rejected or repossessed goods covered by any such writing or writings
and all proceeds (in any form including, without limitation, accounts, contract
rights, documents, chattel paper, instruments and general intangibles) of such
returned, rejected or repossessed goods; and all proceeds (cash and non-cash) of
the foregoing.
3
10
"Collateral" means all of the Borrowers' Accounts, Equipment, General
Intangibles, documents, Chattel Paper, Instruments and Inventory, all right,
title and interest of the Borrowers in and to the Operating Agreements and
Management Contracts (including, without limitation, the Management Agreement),
Resident Agreements, physician contracts, Participation Agreements, the Licenses
(whether or not designated with initial capital letters), and all other
management contracts, operating agreements, service agreements and any other
agreements pertaining to the Eligible Projects as that term is defined herein
and in the Uniform Commercial Code as presently adopted and in effect in the
Commonwealth of Virginia, and shall also cover, without limitation, (i) any and
all property specifically included in those respective terms in this Agreement
or in the Financing Documents, (ii) all right, title and interest of the
Borrowers in and to Leases or subleases, rents, royalties, issues, profits,
revenues, earnings, income or other benefits of the Property, or arising from
the use or enjoyment of the Property, or from any lease or other use and
occupancy agreement pertaining to the Property, (iii) all right, title and
interest of the Borrowers under all construction, architectural and design
contracts and plans and specifications, (iv) any and all property and/or
collateral described in any of the Security Documents, including, without
limitation, this Agreement, the Collateral Assignments, the Deeds of Trust, the
Pledge of Account, [and the Pledge, Assignment and Security Agreement], (v) any
and all bank accounts or other deposit accounts of the Borrowers wherever
located, and (vi) all proceeds (cash and non-cash, including, without
limitation, insurance proceeds), of the foregoing.
"Code" means the Internal Revenue Code of 1986 and all amendments
thereto and all regulations and Revenue Procedures issued by the Internal
Revenue Service pursuant thereto, including but not limited to Section 1031 of
the Code and Revenue Procedure 2000-37 issued pursuant thereto.
"Collateral Assignments" means collectively the Collateral Assignment
of Licenses, Participation Agreements and Resident Agreements dated entered into
between the Borrowers and the Administrative Agent from time to time in
connection with each Facility Closing and the Collateral Assignment of Operating
Agreements and Management Contracts dated entered into among the Borrowers, the
Management Company and the Administrative Agent from time to time in connection
with each Facility Closing.
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with any of the Borrowers within the
meaning of Section 414(b) or (c) of the Internal Revenue Code of 1986, as
amended and the regulations promulgated or issued thereunder.
"Completed Facility" means an Eligible Project which has met the
conditions set forth in Section 4.3 (Conditions Under Which an Eligible Project
is a Completed Facility).
"Completion Date" shall mean the date which is eighteen (18) months
from the recordation of the Deed of Trust on such Facility or upon the earlier
issuance of an occupancy permit.
"Construction Contract" or "Construction Contracts" shall mean
individually or collectively the general contractor's agreements by and between
SDI as agent for any Borrower
4
11
and a general contractor for the development of any of the Land and/or the
construction of any of the Improvements and approved in writing by the
Administrative Agent, as the same may be amended from time to time pursuant to
Section 8.19 (Changes to Plans and Specifications), or otherwise with the prior
written approval of the Administrative Agent.
"Convertible Debt" means the $150,000,000 convertible subordinated
notes of SALI due June 15, 2002.
"Core Property" means a Facility which is any one of several design
prototypes developed by SALI and its Wholly Owned Subsidiaries (other than
Karrington Operating Company, Inc.) during the years of operation under the
"Sunrise" tradename, which Facilities are located in a Metropolitan Area in
which SALI or its Affiliates own or manage at least two (2) such Facilities and
which has also not been designated as a Non-Core Property.
"Costs Incurred to Date" means as to an Eligible Project actual costs
expended by or on behalf of any of the Borrowers under a Total Development
Budget and reported to the Administrative Agent through the requisition process
as verified by the Administrative Agent pursuant to the provisions of this
Agreement; provided, however, no cost overruns not otherwise covered by a
contingency category in the Total Development Budget will be included in the
definition of Costs Incurred to Date without the Administrative Agent's prior
written consent.
"Credit Facility" means the line of credit in a maximum principal sum
at any one time outstanding equal to the Credit Facility Committed Amount.
"Credit Facility Closing" shall mean the date on which the documents
evidencing and securing the Credit Facility as modified in connection herewith,
are executed and delivered to the Administrative Agent.
"Credit Facility Committed Amount" means $20,000,000 or such larger
amount which the Lenders may from time to time severally commit to lend to the
Borrowers pursuant to the terms of Agency Agreement.
"Credit Facility Expiration Date" means June 13, 2004.
"Credit Facility Termination Date" means the earlier of (a) the Credit
Facility Expiration Date, or (b) the date on which the Credit Facility is
terminated pursuant to Section 10.5 (Remedies on Default).
"Debt Service" means for any period of determination an amount equal to
the lesser of (a) the Deed of Trust Lien amount or (b) 80% of an Eligible
Project's Costs Incurred to Date in either case multiplied by a mortgage
constant of 10%.
"Deed of Trust" or "Deeds of Trust" means, individually or
collectively, a Deed of Trust, Assignment and Security Agreement, a Mortgage,
Assignment and Security Agreement, an Indemnity Deed of Trust, Assignment and
Security Agreement or an Indemnity Mortgage, Assignment and Security Agreement
or comparable security documents covering Property and securing the Obligations
as the same may be from time to time amended, modified, restated or substituted.
5
12
"Deed of Trust Lien Amount" means the dollar amount of the first
priority Lien created by a Deed of Trust on any Borrower's fee simple interest
in an Eligible Project or on any Borrower's leasehold interest in a Qualified
Ground Lease, the lien amount being the lesser of (i) 75% of such Eligible
Project's Appraised Value, or (ii) 80% of such Eligible Project's Total
Development Budget.
"Default" means, with respect to each Financing Document, a default
which, with the giving of notice or the passage of time, or both, would
constitute an Event of Default.
"Development Fee" shall have the meaning set forth in Section 2.1 (The
Loan).
"EBITDA" means earnings before interest, federal and state income
taxes, depreciation, amortization, and any other non-cash and one-time,
non-recurring charges consented to by the Administrative Agent in its sole
discretion [(provided that the consent of Lenders holding at least 66.67% of the
pro rata shares of the Loan shall be required for adding back charges in excess
of $5,000,000 in the aggregate in any one rolling four (4) quarter period], but
after an imputed Replacement Reserve and a Management Fee equal to the greater
of 5% of gross revenues or the actual Management Fee paid to the Management
Company. Earnings shall include the gain from any sale of an open operating
Facility owned by SALI or an Affiliate of SALI up to but not exceeding an
aggregate of twenty-five (25) of such sales in any twelve (12) month period of
which not more than twenty (20) may be Core Properties; provided, however that
other one-time non-recurring gains will not be included in EBITDA. Gains from
sales of Non Core Properties shall not be included in EBITDA. Gains from sales
of Core Properties shall be included in EBITDA only if they are recognized
ratably over the longer of (i) four (4) fiscal quarters or (ii) such longer
period as shall be required by GAAP; provided, however, if GAAP requires that
such gain be recognized in fewer than four (4) quarters, for purposes of this
definition of EBITDA, the gain must be calculated ratably over four (4)
quarters. In the event that any advances are made to or any investments are made
in any entity or entities whose financial statements are not consolidated with
those of the Master Guarantor where said advance or investment is in excess of
the entity's original project capital funding agreement among the entity's
owners, relates to the Master Guarantor's or its Wholly Owned Subsidiary's
obligation to fund all or a portion of the entity's debt service payments,
and/or
(i) where said obligation to advance or invest
is made to cause the entity to remain in compliance with its financial
covenants;
(ii) where said obligation to invest or advance
is made in order to cure an event of non-compliance or an event of
default on the part of the entity (including the Master Guarantor's or
its Wholly Owned Subsidiary's obligations relating thereto); or
(iii) where said obligation to advance is to fund
an operating loss of a Facility in excess of the pro forma budget for
such Facility.
then any such amounts, net of such advances or investments which have
been returned, in excess of $15,000,000 for the immediately preceding four (4)
quarters shall be subtracted from EBITDA.
6
13
"EBITDAR" means EBITDA plus Rent Expense.
"Eligible Borrower" means a Qualified Intermediary which has no
subsidiaries or a wholly owned subsidiary of a Qualified Intermediary which, in
either case, must be a single purpose entity.
"Eligible Project" means any location in the United States where (a) an
Eligible Borrower proposes to construct a Facility; (b) the Administrative Agent
has received and reviewed an as-built, and as-stabilized appraisal of the
Facility and a Phase I Environmental Assessment of the Property found them
acceptable; (c) using the services of a consulting engineer selected by the
Administrative Agent, the Administrative Agent has received, reviewed and found
to be acceptable the Plans and Specifications and the Total Development Budget
for the proposed Facility; (d) the Administrative Agent has received a pro forma
operating budget acceptable to the Administrative Agent; (e) a first lien Deed
of Trust has been recorded on the Property; (f) other documentation necessary to
perfect a lien on the Collateral in favor of the Lenders has been executed and
delivered to the Administrative Agent and recorded, if required; (g) a
commitment for a mortgagee title insurance policy has been issued for the
benefit of the Lenders and (h) construction has commenced or will commence
within sixty (60) days after the recordation of the applicable Deed of Trust.
Each acceptable pro forma operating budget provided pursuant to (d) and all
other due diligence materials for an Eligible Project to be constructed or under
construction must demonstrate that the Facility can satisfy the criteria for a
Pool A Project and all applicable criteria for an Eligible Project under the
Master Credit Facility.
"Enforcement Costs" means all expenses, charges, costs and fees
whatsoever (including, without limitation, attorney's fees and expenses) of any
nature whatsoever paid or incurred by or on behalf of the Lenders in connection
with (a) the collection or enforcement of any or all of the Obligations, (b) the
preparation of or changes to this Agreement, the Note, the Security Documents
and/or any of the other Financing Documents, (c) the creation, perfection,
collection, maintenance, preservation, defense, protection, realization upon,
disposition, sale or enforcement of all or any part of the Collateral,
including, without limitation, those sums paid or advanced, and costs and
expenses, more specifically described in Section 7.11 (Defense of Title and
Further Assurance), Section 7.25 (Fees and Expenses; Indemnity), Section 10.4
(Performance by Lenders) and Xxxxxxx 00.0 (Xxxxxxxx) , (x) the monitoring,
administration, processing, servicing of any or all of the Obligations and/or
the Collateral (e) post-judgment enforcement or collection actions, and (f)
bankruptcy proceedings of any Borrower or the Guarantors.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Equipment" shall mean all equipment, machinery, furniture and fixtures
and supplies of every nature, presently existing or hereafter acquired or
created and wherever located, together with all accessions, additions, fittings,
accessories, special tools, and improvements thereto and substitutions therefor
and all parts and equipment which may be attached to or which are necessary for
the operation and use of such personal property, whether or not the same shall
be deemed to be affixed to real property, and all rights under or arising out of
present or future contracts relating to the foregoing and all proceeds (cash and
non-cash) of the foregoing.
7
14
"Eurodollar Base Rate" means for any Interest Period with respect to
any Eurodollar Loan, the per annum interest rate rounded upward, if necessary,
to the nearest 1/100 of 1%, appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in Dollars at or about
11:00 a.m. (London time) on the date that is two (2) Eurodollar Business Days
prior to the first day of such Interest Period for a term comparable to such
Interest Period. If for any reason such rate is not available, the term
"Eurodollar Base Rate" shall mean, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two (2) Eurodollar Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates (rounded upwards,
if necessary, to the nearest 1/100 of 1%).
"Eurodollar Business Day" means any Business Day on which dealings in
United States Dollar deposits are carried out on the London interbank market and
on which commercial banks are open for domestic and international business
(including dealings in Dollar deposits) in London, England.
"Eurodollar Loan" means any advance under the Loan for which interest
is to be computed with reference to the Eurodollar Rate.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Loan, (a) the Applicable Margin, plus (b) the per annum rate of
interest calculated pursuant to the following formula:
Eurodollar Base Rate
1.00 - Reserve Percentage
"Event(s) of Default" shall mean the occurrence of any one or more of
the events specified in ARTICLE IX (EVENTS OF DEFAULT) or in the Deeds of Trust
and the continuance of such event beyond the applicable grace and/or cure
periods therefor, if any, set forth in ARTICLE IX (EVENTS OF DEFAULT).
"Exchange Documents" shall have the meaning set forth in Section 4.1
(Conditions Precedent to Credit Facility Closing).
"Expense Payments" shall have the meaning set forth in Section 10.4
(Performance by Lenders).
"Facility" and "Facilities" mean, individually or collectively, an
assisted living facility or independent living facility owned by one of the
Borrowers.
"Facility Closing" shall have the meaning set forth in Section 4.1
(Conditions Precedent to Credit Facility Closing).
"Facility Owner Note" shall have the meaning set forth in Section 2.1
(The Loan).
8
15
"Facility Owner Obligations" means the aggregate of Deed of Trust Lien
Amounts and the Obligations allocable to each Borrower that acquires its
Property with proceeds from the sale of the same Relinquished Property.
"Facility Owners" means that group of Borrowers that acquires its
Property with proceeds from the sale of the same Relinquished Property.
"Federal Funds Rate: means for any day of determination, the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day) by the Federal Reserve Bank for the
next preceding Business Day) by the Federal Reserve Bank of Richmond or, if such
rate is not so published for any day that is a Business Day, the average of
quotations for such day on such transactions received by the Administrative
Agent from three (3) federal funds brokers of recognized standing selected by
the Administrative Agent.
"Financing Documents" means at any time collectively and includes this
Agreement, the Notes, the Deeds of Trust, the Guaranty Agreement, the
Performance Guaranty, the Management Fee Subordination Agreements, the Security
Documents, the Interest Rate Protection Documents and any other instrument,
agreement or document previously, simultaneously or hereafter executed and
delivered by any of the Borrowers and/or any other Person, singly or jointly
with another Person or Persons, evidencing, securing, guarantying or in
connection with any of the Obligations and/or in connection with this Agreement,
the Notes and/or any of the Security Documents, as the same may from time to
time be amended, restated, supplemented or otherwise modified.
"Fixed Charge Coverage Ratio" means starting after the first resident
takes occupancy in any given Facility (regardless of whether a Borrower then
owned the Facility or when the Facility was added to the Borrowing Base), such
Facility shall maintain a ratio of EBITDA for the Facility to Debt Service for a
Facility with 77 units or fewer, equal to not less than 0.6 to 1.0 as of the end
of the third (3rd) full fiscal quarter, a ratio of not less than 1.0 to 1.0 as
of the end of the fourth (4th) full fiscal quarter and a ratio of not less than
1.25 to 1.0 as of the end of each of the fifth (5th) full fiscal quarter and
thereafter and for a Facility with 78 units or more, a ratio equal to not less
than 0.6 to 1.0 as of the end of the third (3rd) full fiscal quarter, a ratio
equal to not less than 1.0 to 1.0 as of the end of the fourth (4th) full fiscal
quarter, a ratio of note less than 1.15 to 1.0 as of the end of the fifth (5th)
full fiscal quarter and a ratio of not less than 1.25 to 1.0 as of the end of
the sixth (6th) full fiscal quarter and thereafter, measured thereafter as of
the end of each full fiscal quarter on a rolling four-quarter basis.
"Force Majeure" shall mean events occasioned by strikes, lock-outs,
labor unrest war or civil disturbance, materials shortages, unavailability of
materials, fire, natural disaster or acts of God which cause a delay in any
Borrower's performance of an obligation; provided, however, that such Borrower
must give Notice to the Administrative Agent within ten (10) days after such
Borrower knew of or should have known of the occurrence of an event which it
believes to constitute an event of Force Majeure.
9
16
"Funded Debt" of the Master Guarantor, at any time means the sum at
such time of (a) indebtedness for borrowed money (including specifically but
without limiting the generality of the foregoing, the Convertible Debt), (b) any
obligations in respect of letters of credit, banker's or other acceptances or
similar obligations issued or created for the account of the Master Guarantor,
(c) lease obligations which have been or should be, in accordance with GAAP,
capitalized on the books of the Master Guarantor, (d) all liabilities secured by
any property owned by the Master Guarantor to the extent attached to the Master
Guarantor's interest in such property, even though the Master Guarantor has not
assumed or become liable for the payment thereof, and in the case of the Master
Guarantor (e) (i) amounts payable by the Master Guarantor under any terminated
or defaulted interest rate protection products or which remain outstanding or
(ii) take-out commitments (excluding a refinancing or a commitment of a third
party) or purchase contracts including the deferred purchase price of property
or services in each instance if the Master Guarantor does not control the
incurring obligation, (f) (i) the amount of any guaranty of indebtedness for
borrowed money or (ii) other debt owed by Persons other than the Master
Guarantor which is in default and for which the creditor is pursuing payment by
the Master Guarantor, (g) any obligation of the Master Guarantor or a Commonly
Controlled Entity to a Multiemployer Plan (h) any synthetic lease obligations,
(i) any other lease expenses for rented real property will be accounted for as
debt based on eight (8) times annualized lease payments (provided, however, that
so long as the Master Guarantor or any Affiliate shall continue to own a 50%
interest in the Facility located in Severna Park, Maryland known as "Sunrise of
Severna Park", lease expenses for Sunrise of Severna Park will be accounted for
as debt based on four times the annualized lease payments rather than eight
times the annualized lease payments and (j) other amounts considered to be debt
by all of the following: the Administrative Agent, the Syndication Agent and the
Documentation Agent in a dollar amount to be mutually agreed upon by the
Administrative Agent and the Master Guarantor; but excluding trade and other
accounts payable in the ordinary course of business in accordance with customary
trade terms and which are not overdue (as determined in accordance with
customary trade practices) or which are being disputed in good faith by the
Master Guarantor and for which adequate reserves are being provided on the books
of the Master Guarantor in accordance with GAAP, all of the above whether
recourse or non-recourse, secured or unsecured. For purposes of the definition
of Material Adverse Change in this Agreement, the term "Master Guarantor" as
used in this definition of Funded Debt shall be deemed to read "Person".
"GAAP" shall mean generally accepted accounting principles in effect in
the United States of America from time to time.
"General Contractor" or "General Contractors" shall mean individually
or collectively the general contractors named in the Construction Contracts and
its or their respective successors and permitted assigns.
"General Intangibles" shall mean any and all general intangibles of
every nature, whether presently existing or hereafter acquired or created
arising out of or relating to any or all of the Facilities, including without
limitation all books, correspondence, credit files, records, computer programs,
computer tapes, cards and other papers and documents in the possession or
control of the Borrowers claims (including without limitation all claims for
income tax and other refunds), choses in action, judgments, patents, patent
licenses, trademarks (excluding the "Sunrise", "Dignity Home Care" or "Respect
Home Care" trademark or tradename), trademark licenses
10
17
(excluding any license to any of the Borrowers for the "Sunrise,"
"Reminiscence", "Dignity Home Care" or "Respect Home Care" trademarks or
tradenames), licensing agreements, rights in intellectual property, goodwill, as
that term is defined in accordance with GAAP (including all goodwill of the
Borrowers' business symbolized by, and associated with, any and all trademarks,
trademark licenses, copyrights and/or service marks), royalty payments,
contractual rights, rights as lessee under any lease of real or personal
property, literary rights, copyrights, service names, service marks, logos,
trade secrets, all amounts received as an award in or settlement of a suit in
damages, deposit accounts, interests in joint ventures or general or limited
partnerships, all Licenses, construction permits, Operating Agreements and
Management Contracts, Participation Agreements and Resident Agreements, and all
proceeds (cash and non-cash) of the foregoing.
"Governmental Authority or Authorities" shall mean any nation or
government, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantor" or "Guarantors" means the Master Guarantor and each
Qualified Intermediary.
"Guaranty" or "Guaranties" means any or all of the Guaranty of Payment
Agreements executed by a Qualified Intermediary in connection with each Facility
Closing.
"Hazardous Materials" means any flammable explosives, radioactive
materials, hazardous waste, toxic substances or related materials, including,
without limitation, asbestos, polychlorinated biphenyls, urea-formaldehyde,
radon, and any substance defined as or included in the definition of (a) any
"hazardous waste" as defined by the Resource Conservation Recovery Act of 1976,
as amended from time to time, and regulations promulgated thereunder; (b) any
"hazardous substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time, and
regulations promulgated thereunder; (c) any "toxic substance" as defined by the
Toxic Substances Control Act, as amended from time to time, and regulations
promulgated thereunder; (d) any hazardous or infectious medical waste including,
but not limited to, cultures and stocks of infectious agents and associated
biologicals, pathological wastes, human and animal blood specimens and blood
products, anatomical materials, blood, blood-soiled articles, contaminated
materials, microbiological laboratory wastes, sharps, chemical wastes,
infectious wastes, chemotherapeutic wastes, and radioactive wastes; (e) any
substance, the presence of which on any property now or hereafter owned,
operated or acquired by any of the Borrowers is prohibited or regulated under
any applicable Federal or state laws or regulations; and (f) any other
substance, pollutant, contaminant, chemical, or industrial toxic hazardous
substance or waste, including without limitation hazardous materials, which by
law is prohibited or is otherwise regulated as a hazardous material.
"Hazardous Materials Contamination" shall mean the contamination by,
release or spill of (whether presently existing or occurring after the date of
this Agreement), Hazardous Materials of or on any property owned, operated or
controlled by any of the Borrowers, or for which any of the Borrowers, has
responsibility, including, without limitation, improvements, facilities, soil,
ground water, air or other elements on, or of, any property now or hereafter
11
18
owned, operated or acquired by any of the Borrowers, and any other contamination
by Hazardous Materials for which any of the Borrowers is, or is claimed to be,
responsible.
"Home Healthcare Provider" means any Affiliate of SALI or of the
Sunrise Foundation which is licensed as a home health care provider in any state
in which assistance with tasks of daily living provided to a person must be
provided by a home healthcare provider licensed in such state.
"Hydric Soils" shall mean any soil category upon which building would
be prohibited or restricted under applicable governmental requirements
(including, without limitation, those imposed by the U.S. Army Corps of
Engineers based upon its guidelines as to, among other things, soil, vegetation
and effect on the ecosystem).
"Improvements" shall have the meaning given to that term in each Deed
of Trust.
"Inspecting Engineer" shall mean such person or firm as the
Administrative Agent may from time to time appoint or designate for purposes
related to the inspection of the progress of the development of any of the Land
and the construction of any of the Improvements, conformity of construction with
the applicable Plans and Specifications, and for such other purposes as the
Administrative Agent may from time to time deem appropriate or as may be
required by the terms of this Agreement.
"Instruments" means any and all notes, notes receivable, drafts,
acceptances, and similar instruments or documents, both now owned or hereafter
created or acquired arising out of or relating to the Facility (or any part
thereof).
"Interest Expense" shall have the meaning set forth in the Guaranty.
"Interest Period" means as to any Eurodollar Loan, the period
commencing on and including the date such Eurodollar Loan is made (or on the
effective date of the Borrowers' election to convert any Base Rate Loan to a
Eurodollar Loan in accordance with the provisions of this Agreement) and ending
on and including the day which is seven (7) days, one (1) month, two (2) months
or three (3) months thereafter, as selected by the Borrowers in accordance with
the provisions of this Agreement, and thereafter, each period commencing on the
last day of the then preceding Interest Period for such Eurodollar Loan and
ending on and including the day which is seven (7) days, one (1) month, two (2)
months or three (3) months thereafter, as selected by the Borrowers in
accordance with the provisions of this Agreement; provided, however that:
(a) the first day of any Interest Period shall be a
Eurodollar Business Day;
(b) if any Interest Period would end on a day that shall
not be a Eurodollar Business Day, such Interest Period shall be extended to the
next succeeding Eurodollar Business Day unless such next succeeding Eurodollar
Business Day would fall in the next calendar month, in which case, such Interest
Period shall end on the next preceding Eurodollar Business Day; and
(c) no Interest Period shall extend beyond the Credit
Facility Expiration Date.
12
19
"Interest Rate Election Notice" has the meaning described in Section
2.4(d)(v) (Selection of Interest Rates).
"Interest Rate Protection" means any or all of the interest rate
protection agreements that have been or may from time to time be entered into
between the Borrowers and the Administrative Agent or another Lender in
connection with the Credit Facility.
"Interest Rate Protection Documents" means the documents evidencing and
governing the Interest Rate Protection at any time and from time to time.
"Interest Reserve" shall have the meaning set forth in Section 2.1 (i)
(The Loan).
"Inventory" means any and all inventory of the Borrowers and all right,
title and interest of the Borrowers in, and to, all of its now owned and
hereafter acquired goods, merchandise and other personal property furnished
under any contract of service or intended for sale or lease arising out of or
relating to any and all Facilities, including, without limitation, all supplies
of any kind, nature or description which are used or consumed in the Borrowers'
business and all documents of title or documents representing the same and all
proceeds (cash and non-cash) and products of the foregoing.
"Joinder Agreement" means a Joinder Agreement in the form attached
hereto as EXHIBIT E executed by an Additional Borrower to acknowledge its
joinder as a party to this Agreement and the Note as a co-borrower jointly and
severally liable for the Obligations pursuant to and in connection with its
delivery of a Deed of Trust and other Security Documents in connection with a
new Eligible Project.
"Klaassens" means Xxxx X. Xxxxxxxx and Xxxxxx X. Xxxxxxxx.
"Land" shall mean the land described in the applicable Deed of Trust.
"Laws" means all ordinances, statutes, rules, regulations, orders,
injunctions, writs or decrees of any Governmental Authority or any court or
similar entity established by any thereof.
"Lease" has the meaning set forth in a Deed of Trust.
"Lender Tax" means any present or future tax, levy, cost or charge of
any nature imposed by any Governmental Authority, excluding taxes on or measured
by the net income of any Lender imposed by any jurisdiction in which the
principal or relevant lending office of such Lender is located.
"Licenses" means any and all licenses, certificates of need, operating
permits, franchises, and other licenses, authorizations, certifications,
permits, or approvals, other than construction permits, issued by, or on behalf
of, any Governmental Authority now existing or at any time hereafter issued,
with respect to the acquisition, construction, renovation, expansion, leasing,
management, ownership and/or operation of any and all Facilities, accreditation
of any Facility, and/or the participation or eligibility for participation in
any third party payment or reimbursement programs to the extent any of the
Borrowers are participating in such programs (but specifically excluding any and
all Participation Agreements to the extent required by law),
13
20
any and all operating licenses issued by any state Governmental Authority, any
and all pharmaceutical licenses and other licenses related to the purchase,
dispensing, storage, prescription or use of drugs, medications, and other
"controlled substances," any and all licenses relating to the operation of food
or beverage facilities or amenities, if any, and any and all certifications and
eligibility for participation in Medicare, Medicaid, Blue Cross and/or Blue
Shield, or any of the Managed Care Plans, private insurer, employee assistance
programs or other third party payment or reimbursement programs as the same may
from time to time be amended, renewed, restated, reissued, restricted,
supplemented or otherwise modified.
"Lien" means any mortgage, deed of trust, deed to secure debt, grant,
pledge, security interest, assignment, encumbrance, judgment, lien or charge of
any kind, whether perfected or unperfected, avoidable or unavoidable, consensual
or non-consensual, including, without limitation, any conditional sale or other
title retention agreement, filed or unfiled tax liens, any lease in the nature
thereof, and the filing of or agreement to give any financing statement under
the Uniform Commercial Code of any jurisdiction.
"Liquid Assets" means cash, cash equivalents and readily marketable
securities for purposes of any covenant under the Financing Documents.
"Liquidation Costs" shall have the meaning set forth in Section 10.6
(Uniform Commercial Code and Other Remedies).
"Loan" shall have the meaning set forth in Section 2.1 (The Loan).
"Major Subcontractor" means a subcontractor under a subcontract in an
amount of $100,000 or more pertaining to any Facility.
"Managed Care Plans" means any health maintenance organization,
preferred provider organization, individual practice association, competitive
medical plan, or similar arrangement, entity, organization, or Person.
"Management Agreement" means any and all Management Agreements entered
into or to be entered into by and between any of the Borrowers and the
Management Company relating to the management of the Facilities, as the same may
from time to time be amended, restated, supplemented or otherwise modified.
"Management Company" means XXXXX, its successors and assigns and any
other Person which may become the manager of the Facilities.
"Management Fees" shall have the meaning set forth in Section 7.19
(Management).
"Management Fee Subordination Agreement" shall have the meaning set
forth in Section 7.19 (Management).
"Master Credit Facility" means the existing revolving credit facility
to Wholly Owned Subsidiaries of SALI as borrowers in the current maximum
principal amount of $265,000,000 (or such larger amount as may be agreed to by
the lenders under the Master Revolver Agency Agreement), advanced pursuant to
the terms of the Master Credit Facility Financing Agreement.
14
21
"Master Credit Facility Financing Agreement" means the Fourth Amended
and Restated Financing and Security Agreement dated June 13, 2001 (as amended,
restated or substituted from time to time).
"Master Credit Facility Financing Documents" means the documents
evidencing or securing the Master Credit Facility.
"Master Guarantor" means Sunrise Assisted Living, Inc., a Delaware
corporation.
"Master Guaranty" means the Master Guaranty of Payment Agreement by
SALI of even date herewith.
"Master Revolver Agency Agreement" means that certain Second Amended
and Restated Agency Agreement of even date herewith by and among the
Administrative Agent and the other Master Revolver Lenders, as the same may be
further amended, restated or substituted from time to time.
"Material Adverse Change" means a significant adverse change in a
Person's financial position or capacity including but not limited to significant
adverse changes in (a) liquidity, (b) gross revenues, (c) total expenses, (d)
such Person's net worth, or (e) ability to meet payment obligations under such
Person's Funded Debt, the Obligations and/or contingent liabilities.
"Material Lease" has the meaning set forth in a Deed of Trust.
"Metropolitan Area" means a city and/or the counties or parishes
surrounding such city which are generally accepted as being suburbs of such city
as determined in the reasonable judgment of the Administrative Agent.
"Minimum Occupancy Requirement" means for a Facility with 77 units or
fewer, a minimum Resident Occupancy of 50% by the ninth (9th) Operating Month,
70% by the twelfth (12th) Operating Month and 85% by the fifteenth (15th)
Operating Month and thereafter and means for a Facility with 78 units or more, a
minimum Resident Occupancy of 45% by the ninth (9th) Operating Month, 65% by the
twelfth (12th) Operating Month, 80% by the fifteenth (15th) Operating Month and
85% by the eighteenth (18th) Operating Month and thereafter.
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Operating Income" means total operating revenue less total
operating expenses (excluding interest, federal and state income taxes,
depreciation and amortization) but including a management fee to the Management
Company of the higher of five percent (5%) of gross revenues or the actual
management fee for the period in question as shown in financial information
provided by the Borrowers.
"Non-Core Property" means a Facility which is not a Core Property and
which is listed as a Non-Core Property by the Borrowers on a written list
submitted to and approved by the Administrative Agent. Any Facility must appear
on such list in advance of its sale to be considered on Non-Core Property for
purposes of this Agreement.
15
22
"Notes" shall have the meaning set forth in Section 2.1 (The Loan).
"Note Maturity Date" shall have the meaning set forth in Section 2.1
(The Loan).
"Notice" shall mean a written communication delivered as specified in
Section 11.1 (Notices).
"Obligations" means all present and future debts, obligations, and
liabilities, whether now existing or contemplated or hereafter arising, of the
Borrowers to the Administrative Agent or any Lender under, arising pursuant to,
in connection with and/or on account of the provisions of this Agreement, the
Note, each Joinder Agreement, the Deeds of Trust, each Security Document, and
any of the other Financing Documents, including, without limitation, the
principal of, and interest on, the Note, late charges, Enforcement Costs, and
other prepayment penalties (if any), any indebtedness to the Administrative
Agent or other Lender or Lenders who make available the Interest Rate Protection
arising out of such Interest Rate Protection pursuant to the Interest Rate
Protection Documents, and also means all other present and future indebtedness,
liabilities and obligations, whether now existing or contemplated or hereafter
arising, of the Borrowers to the Lenders in connection with the Credit Facility
of any nature whatsoever regardless of whether such debts, obligations and
liabilities be direct, indirect, primary, secondary, joint, several, joint and
several, fixed or contingent, and any and all renewals, extensions and
rearrangements of any such debts, obligations and liabilities.
"Operating Agreements and Management Contracts" means any and all
contracts and agreements previously, now or at any time hereafter at any time
entered into by any of the Borrowers with respect to the acquisition,
construction or renovation of a significant nature, expansion, ownership,
operation, maintenance, use or management of any or all of the Facilities or
otherwise concerning the operations and business of any or all of the
Facilities, including, without limitation, any and all service and maintenance
contracts, any employment contracts, any and all management agreements, any and
all consulting agreements, laboratory servicing agreements, pharmaceutical
contracts, physician, other clinician or other professional services provider
contracts, resident agreements, food and beverage service contracts, and other
contracts for the operation and maintenance of, or provision of services to, a
Facility, as the same may from time to time be amended, restated, supplemented,
renewed, or modified.
"Operating Month" means a full calendar month after the first resident
takes occupancy in a Facility (regardless of whether the Facility was owned by a
Borrower or included in the Borrowing Base at the time of such occurrence).
"Operating Reserve" shall mean a reserve in an amount approved by the
Administrative Agent included in each Total Development Budget to cover the
costs of leasing up a Facility and initial operating deficits.
"Participation Agreements" means any and all third party payor
participation or reimbursement agreements now or at any time hereafter existing
for the benefit of any of the Borrowers relating to rights to payment or
reimbursement from, and claims against, private insurers, Managed Care Plans,
material employee assistance programs, Blue Cross and/or Blue Shield, federal,
state and local Governmental Authorities, including without limitation, Medicare
16
23
and Medicaid, and other third party payors, as the same may from time to time be
amended, restated, extended, supplemented or modified.
"Performance Guaranty" means, individually or collectively, and any
Guaranty of Performance of even date herewith or which may in the future be
executed and delivered by the Guarantors in connection with any Facility
Closing.
"Permitted Liens" means: (a) Liens for Taxes which are not delinquent
or which the Administrative Agent has determined in the exercise of its sole and
absolute discretion (i) are being diligently contested in good faith and by
appropriate proceedings, (ii) the applicable Borrower has the financial ability
to pay, with all penalties and interest, at all times without materially and
adversely affecting such Borrower, and (iii) are not, and will not be with
appropriate filing, the giving of notice and/or the passage of time, entitled to
priority over any Lien of the Lenders; (b) deposits or pledges to secure
obligations under workers' compensation, social security or similar laws, or
under unemployment insurance in the ordinary course of business; (c) Liens in
favor of the Lenders pursuant to the Credit Facility; (d) judgment Liens to the
extent the entry of such judgment does not constitute an Event of Default under
the terms of this Agreement or result in the sale of, or levy of execution on,
any of the Collateral; and (e) such other Liens, if any, as are identified as
Permitted Encumbrances as defined in the Deed of Trust.
"Person" shall mean and include an individual, a corporation, a
partnership, a limited liability company, a joint venture, a trust, an
unincorporated association, any Governmental Authority or any other entity.
"Plans and Specifications" shall mean any and all plans and
specifications prepared in connection with the development of the Land and/or
the construction of the Improvements for any Eligible Project and which are
approved in writing by the Administrative Agent, including but not limited to,
the plans and specifications prepared by the Architect, a copy of which have
been initialed by the applicable Borrower, or SDI as agent for such Borrower,
and the Administrative Agent for identification and delivered to the
Administrative Agent.
"Pledge, Assignment and Security Agreement" means the various Pledge
Assignment and Security Agreements executed in connection with a Facility
Closing by the partners or members of each of the Borrowers in favor of the
Administrative Agent, pursuant to which such owners of the Borrower have pledged
and assigned all of their respective interests in such Borrower to the Lenders
as additional security for the Credit Facility.
"Pledge of Account" shall the meaning set forth in Section 4.1
(Conditions Precedent to Credit Facility Closing and Addition of Deeds of
Trust).
"Pool A Project" means any Eligible Project for which, when the
Borrowing Base is computed at the end of a reporting period, (a) either (i)
construction has been on-going for not more than eighteen (18) months or (ii) it
is a Completed Facility not later than eighteen (18) months after the date on
which the applicable Deed of Trust was executed; or (b) after it is a Completed
Facility, meets the Minimum Occupancy Requirement and Fixed Charge Coverage
Ratio Requirement.
17
24
"Post Default Rate" means the interest rate on the Note in the absence
of an Event of Default plus three percent (3%) per annum.
"Prime Rate" means the floating and fluctuating per annum prime
commercial lending rate of interest of the Administrative Agent, as established
and declared by the Administrative Agent at any time or from time to time. The
Prime Rate shall be adjusted automatically, without notice, as of the effective
date of any change in such prime commercial lending rate. The Prime Rate does
not necessarily represent the lowest rate of interest charged by the
Administrative Agent the other Lenders to borrowers.
"Property" means collectively the "Property" as that term is defined in
each of the Deeds of Trust.
"Purchase Price" means the gross purchase cost to a Borrower of an
Acquisition Project.
"Qualified Ground Lease" means (i) any lease (a) which is a direct
ground lease granted by the fee owner of real property (which fee owner in the
case of a Sunrise Qualified Ground Lease shall be a Sunrise Wholly Owned
Subsidiary), (b) which may be transferred and/or assigned without the consent of
the Lessor (or as to which the lease expressly provides that (i) such lease may
be transferred and/or assigned with the consent of the lessor and (ii) such
consent shall not be unreasonably withheld or delayed), (c) which (unless it is
a Sunrise Qualified Ground Lease) has a remaining term (including any renewal
terms exercisable at the sole option of the lessee) of at least 50 years, (d)
under which no material default has occurred and is continuing, (d) with respect
to which a security interest may be granted without the consent of the lessor,
and (e) which contains lender protection provisions reasonably acceptable to the
Administrative Agent including, without limitation, provisions to the effect
that (A) the lessor shall notify the Administrative Agent of the occurrence of
any default by the lessee under such lease and shall afford the Administrative
Agent the right to cure such default, and (B) in the event that such lease is
terminated, the Administrative Agent shall have the option to enter into a new
lease having terms substantially identical to those contained in the terminated
lease. Upon the submission to the Administrative Agent of a written request for
approval of the subordination provisions and other lender protection provisions
and other terms of a proposed Qualified Ground Lease, the Administrative Agent
may waive any non-compliances with the foregoing which it considers in its
reasonable judgment not to be material and adverse with respect to the
eligibility of the Facility subject to the Qualified Ground Lease, and shall use
its best efforts to accept or reject such proposal within five (5) Banking Days,
and shall accept or reject such proposal within ten (10) Banking Days, in each
case following receipt of such request.
"Qualified Intermediary" is any entity formed by Xxxxx and Xxxxxxx
Xxxxxx, to enter into an agreement with a Sunrise Wholly Owned Subsidiary to
purchase one or more Replacement Properties using the proceeds from the sale of
any Facility owned by SALI or such Sunrise Wholly Owned Subsidiary and possibly
funds advanced by SALI or a Sunrise Wholly Owned Subsidiary.
"Receivables" means all of the Borrowers' now or hereafter owned,
acquired or created Accounts, Chattel Paper, Contract Rights, General
Intangibles and Instruments, and all cash and noncash proceeds and products
thereof.
18
25
"Relinquished Property" means a Facility sold by SALI or a Sunrise
Wholly Owned Subsidiary from which sale the proceeds are deposited with a
Qualified Intermediary for investment in the acquisition and/or construction of
Replacement Properties.
"Rent Expense" means the actual rent expense incurred by the Borrower,
the Guarantors or any Affiliate as a tenant under leases with respect to any
Facility.
"Replacement Property" shall have the meaning given to that term in
Section 1031 of the Code and Revenue Procedure 2000-37.
"Replacement Reserves" means $250 per year per bed in each Facility
(whether or not such Facility is stabilized).
"Reportable Event" shall mean any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder.
"Requisition" or "Requisitions" shall have the meaning set forth in
Section 2.7 (Requisitions Demonstrating Expenses).
"Reserve Percentage" means, at any time, the then current maximum rate
for which reserves (including any basic, special, supplemental, marginal and
emergency reserves) are required to be maintained by member banks of the Federal
Reserve System under Regulation D of the Board of Governors of the Federal
Reserve System against "Eurocurrency liabilities", as that term is defined in
Regulation D. Without limiting the effect of the foregoing, the Reserve
Percentage shall reflect any other reserves required to be maintained by such
member banks with respect to (i) any category of liabilities which includes
deposits by reference to which the Eurodollar Rate is to be determined, or (ii)
any category of extensions of credit or other assets which include Eurodollar
Loans. The Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Percentage.
"Resident Agreements" means any and all contracts, authorizations,
agreements and/or consents executed by, or on behalf of any resident or other
person seeking services from any Borrower pursuant to which such Borrower
provides or furnishes health or assisted living care and related services at any
and all of the Facilities, including the consent to treatment, assignment of
payment of benefits by third party, as the same may from time to time be
amended, restated, supplemented or modified.
"Resident Occupancy" means the number of residents who are in occupancy
at a Facility and paying fees pursuant to a resident agreement divided by the
pro forma resident occupancy for such Facility as contained in the pro forma
operating budget of an Eligible Facility.
"SALI" means Sunrise Assisted Living, Inc., a Delaware corporation.
"SALII" means Sunrise Assisted Living Investments, Inc., a Virginia
corporation.
"XXXXX" means Sunrise Assisted Living Management, Inc., a Virginia
corporation, formerly known as Sunrise Terrace, Inc.
19
26
"SDI" means Sunrise Development, Inc., a Virginia corporation.
"Security Documents" means, collectively, any assignment, including,
without limitation, any Pledge, Assignment and Security Agreement, any Pledge of
Account, the Collateral Assignments and any assignment, pledge agreement,
security agreement, mortgage, deed of trust (including the Deeds of Trust),
leasehold mortgage, leasehold deed of trust, deed to secure debt, financing
statement, initial transaction statement and any similar instrument, document or
agreement under or pursuant to which a Lien is now or hereafter granted to, or
for the benefit of, the Lenders on any collateral to secure the Obligations, as
the same may from time to time be amended, restated, supplemented or otherwise
modified.
"Settlement Payment" means any settlement payment due to the
Administrative Agent or other Lender or Lenders who provided Interest Rate
protection to the Borrowers.
"Stabilized Facility" means an Eligible Project with a Resident
Occupancy of at least 85% and a ratio of Net Operating Income to Debt Service of
not less than 1.25 to 1.00 measured for two consecutive fiscal quarters.
"Stored Materials" shall have the meaning set forth in Section 4.10
(Stored Materials).
"Sunrise Qualified Ground Lease" means a Qualified Ground Lease with a
term of 180 days which is fully subordinate by its terms to the lien of a Deed
of Trust.
"Supporting Obligation" means a letter of credit right, secondary
obligation or obligation of a secondary obligor or that supports the payment or
performance of an account, chattel paper, a document, a general intangible, an
instrument or investment property.
"Sunrise Wholly Owned Subsidiary" or "Sunrise Wholly Owned
Subsidiaries" means one or more subsidiaries 100% owned by SALI or by any wholly
owned subsidiary of SALI.
"Survey" means a plat of the Land for any Facility which complies with
the survey requirements set forth on Exhibit F attached hereto.
"Tangible Net Worth" shall have the meaning set forth in Section 3.2 of
the Guaranty.
"Taxes" means all taxes and assessments whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, of every character
(including all penalties or interest thereon), which at any time may be
assessed, levied, confirmed or imposed by any Governmental Authority on any of
the Borrowers or any of their properties or assets or any part thereof or in
respect of any of their franchises, businesses, income or profits.
"Total Development Budget" means the development, construction and
opening operating expense budget for an Eligible Project as reviewed and
approved by the Administrative Agent.
"Unused Commitment Amount" shall have the meaning set forth in Section
2.3 (Fees).
"Unused Line Fee" shall have the meaning set forth in Section 2.3
(Fees).
20
27
"Wholly Owned Subsidiary" or "Wholly Owned Subsidiaries" means a
subsidiary 100% owned by a Qualified Intermediary.
Section 1.2 Accounting Terms and Other Definitional Provisions.
Unless otherwise defined in this Agreement, as used in this Agreement
and in any certificate, report or other document made or delivered pursuant
hereto, accounting terms not otherwise defined in this Agreement, and accounting
terms only partly defined in this Agreement, to the extent not defined, shall
have the respective meanings given to them under GAAP. Unless otherwise defined
in this Agreement, all terms used in this Agreement which are defined by the
Virginia Uniform Commercial Code shall have the same meanings as assigned to
them by the Virginia Uniform Commercial Code unless and to the extent varied by
this Agreement. The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, Section,
subsection, schedule and exhibit references are references to sections or
subsections of, or schedules or exhibits to, as the case may be, this Agreement
unless otherwise specified. As used in this Agreement, the singular number shall
include the plural, the plural the singular and the use of the masculine,
feminine or neuter gender shall include all genders, as the context may require.
Reference to any one or more of the Financing Documents and any of the Financing
Documents shall mean the same as the foregoing may from time to time be amended,
restated, substituted, extended, renewed, supplemented or otherwise modified.
ARTICLE II
BORROWING
Section 2.1 The Loan.
(a) The Lenders agree to lend to the Borrowers pursuant
to the terms and conditions of this Agreement, and the Borrowers agree to borrow
from the Lenders from time to time the principal amount (the "Loan") not to
exceed at any time outstanding the lesser of (i) the Credit Facility Committed
Amount, or (ii) the Borrowing Base.
(b) The obligation of the Borrowers to repay the Loan
shall be evidenced by multiple Facility Owner Notes (each a "Facility Owner
Note") each executed by a Borrower in connection with a Facility Closing (as
amended, restated, substituted, extended, renewed and otherwise modified from
time to time, collectively, the "Notes") payable to the Administrative Agent in
the form attached hereto as EXHIBIT A. Each Facility Owner Note shall be in the
principal sum equal to the applicable Deed of Trust Lien Amount. The foregoing
notwithstanding, advances under the Notes may not exceed in the aggregate the
Credit Facility Committed Amount. The Notes shall bear interest and shall be
repaid by the Borrowers in the manner and at the times set forth in Section 2.4
(Interest Rate Matters) of this Agreement. Each Note shall have a maturity date
of the earlier of 180 days from the date of its execution or such earlier date
on which the proceeds from the applicable Relinquished Property must be expended
by the Qualified Intermediary to qualify for tax deferral treatment (each a
"Note Maturity Date"). In no event may a Note Maturity Date be later than the
Credit Facility Expiration Date. The
21
28
Borrowers shall advise the Administrative Agent of the date on which such tax
deferral treatment pursuant to Section 1031 of the Code will expire for each
Qualified Intermediary.
(c) The conditions precedent for making an advance under
the Loan shall be as set forth in this Agreement. Sums borrowed and repaid may
not be readvanced under a Facility Owner Note; however, Facility Owner Notes may
be paid off and new Facility Owner Notes issued from time to time subject to the
limitations set forth in this Agreement. Advances shall be made by the Lenders
on a pro rata basis based on their pro rata shares of the Credit Facility
Committed Amount.
(d) The Borrowers will prepare a Borrowing Base Report
(each a "Borrowing Base Report") in the form attached hereto as EXHIBIT B which
must also be certified by the Borrowers listing for each of the Eligible
Projects (i) the applicable Deed of Trust Lien Amount, (ii) the Costs Incurred
to Date, and (iii) its status as of the most recent reporting date as a Pool A
Project within thirty (30) days after the end of each month. The Borrowing Base
Report will be based on the outcome of the requisition procedures hereinafter
described, appraisals obtained by the Administrative Agent and other information
on the Eligible Projects provided by the Borrowers or obtained by the
Administrative Agent. The Borrowing Base shall be computed based on the
Borrowing Base Report most recently prepared by the Borrowers and reviewed and
accepted by the Administrative Agent. In the event the Borrowers shall fail to
furnish other current reports or information as reasonably required by the
Administrative Agent pursuant to the Financing Documents, or in the event the
Administrative Agent believes that a Borrowing Base Report is no longer
accurate, the Administrative Agent may, in its reasonable discretion exercised
from time to time and without limiting its other rights and remedies under the
Financing Documents, upon notice to the Borrowers and the expiration of a cure
period of five (5) Banking Days, designate any Eligible Project as having no
availability under the Borrowing Base or suspend the making of or limit advances
under the Loan. The Borrowing Base shall be subject to reduction as a result of
the following events: (i) the release of an Eligible Project from the lien of
the applicable Deed of Trust, (ii) by the change of any Eligible Project's
status as a Pool A Project, as determined by the Administrative Agent quarterly,
or (iii) the change in appraised value of an Eligible Project pursuant to
Section 7.28 (Updated Appraisals). The Borrowing Base shall be subject to
increase as a result of the following events: (i) addition of Eligible Projects
or (ii) increase in the Costs Incurred to Date as determined by the
Administrative Agent at least quarterly.
(e) The Borrowers shall furnish to the Administrative
Agent such schedules, certificates, lists, records, reports, information and
documents as required by the Administrative Agent from time to time so that the
Administrative Agent may, in its reasonable discretion, determine the Borrowing
Base.
(f) If at any time the aggregate principal amount of the
Loan outstanding exceeds the Borrowing Base, a borrowing base deficiency
("Borrowing Base Deficiency") shall exist. Each time a Borrowing Base Deficiency
exists, the Borrowers shall within three (3) Banking Days of notice thereof from
the Administrative Agent either pay the amount and/or add Eligible Projects to
increase the Borrowing Base to an amount which is at least equal to the
aggregate principal amount outstanding under the Loan.
22
29
(g) The current Borrowing Base Report is attached hereto
as EXHIBIT C.
(h) This Agreement shall govern the procedures for
verification by the Administrative Agent of Costs Incurred to Date on each
Eligible Project. This Agreement shall also govern the terms, conditions and
procedures under which Eligible Projects may be added to the Borrowing Base.
(i) The Borrowers will give notice to the Administrative
Agent in writing in advance of its intention to add a particular Facility as an
Eligible Project under the Credit Facility. Each Total Development Budget for an
Eligible Project shall include an interest reserve (the "Interest Reserve"), an
Operating Reserve, a hard cost contingency reserve of not less than five percent
(5%) of the total budgeted construction costs and a development fee payable to
SDI (the "Development Fee") each in amounts acceptable to the Administrative
Agent and shall demonstrate to the Administrative Agent's satisfaction in its
sole discretion that the Eligible Project will be designated as a Pool A
Project.
Section 2.2 Procedure for Advances.
(a) The Administrative Agent will make advances from time
to time upon receipt of written request from the Borrowers in the form
designated by the Administrative Agent, provided that after giving effect to the
Borrowers' request, the outstanding principal balance of the Loan would not
exceed the lesser of the Credit Facility Committed Amount or the Borrowing Base.
Each advance under the Loan shall be in an amount of not less than $500,000, and
in increments of $100,000 in excess thereof. Advances or the renewal of a
Interest Period shall be requested by the Borrowers orally or in writing by
10:00 A.M. (Eastern Time) three (3) Banking Days prior to the Banking Day on
which the funds will be advanced. The Borrowers shall advise the Administrative
Agent at the time of such notice which Interest Period they are selecting or
whether they are selecting the Base Rate. The Administrative Agent shall have no
obligation to make any advance if at the time such advance is requested and/or
is proposed to be funded, there exists an Event of Default or an event which
upon notice or lapse of time or both would constitute an Event of Default under
the Financing Documents.
(b) In addition, if the Administrative Agent has reason
to believe a Default or an Event of Default has occurred, the Borrowers hereby
irrevocably authorize the Lenders to make advances of the Loan at any time and
from time to time, without further request from or notice to the Borrowers,
which the Lenders, in their sole and absolute discretion, deem necessary or
appropriate to protect the Lenders' interests under this Agreement or otherwise,
including, without limitation, advances of the Loan made to cover interest on
the Loan, fees, and/or Enforcement Costs, prior to, on, or after the termination
of this Agreement, regardless of whether the aggregate amount of the advances of
the Loan which the Lenders may make hereunder exceeds the Credit Facility
Committed Amount. The Lenders shall have no obligation whatsoever to make any
advance under this subsection and the making of one or more advances under this
subsection shall not obligate the Lenders to make other similar advances. Any
such advances will be evidenced by the Note secured by the Collateral and the
Deeds of Trust.
23
30
Section 2.3 Fees.
The Borrowers shall pay to the Administrative Agent the following fees:
(a) Unused Line Fee. The Borrowers shall pay to the
Administrative Agent for the benefit of the Lenders beginning on the date set
forth below a quarterly facility fee (the "Unused Line Fee") in an amount equal
to twenty-five (25) basis points per annum of the average daily unused and
undisbursed portion of the Loan. The accrued and unpaid portion of the Unused
Line Fee shall be paid by the Borrower to the Administrative Agent as of the
Credit Facility Closing Date and on the first day of each fiscal quarter and on
the Revolving Credit Termination Date.
(b) Appraisal Fees. Upon the receipt of an appraiser's
invoice from the Administrative Agent, the Borrowers shall pay the fee of the
appraiser for an Eligible Project or for any Facility appraised at the request
of the Borrowers whether or not a Facility Closing is completed for such
Facility.
Section 2.4 Interest Rate Matters and Payments.
(a) Lender Tax Adjustment. Each payment made by the
Borrowers under the Note shall either (i) be exempt from, and be made without
reduction by reason of, any Lender Tax or (ii) to the extent that any such
payment shall be subject to any Lender Tax, be accompanied by an additional
payment by the Borrowers of such amount as may be necessary so that the net
amount received by each Lender (after deducting all applicable Taxes) is the
same as such Lender would have received had such payment not been subject to
such Lender Tax. Upon any payment of Lender Tax by the Borrowers, the Borrowers
shall promptly (and in any event within 30 days) furnish to the Administrative
Agent and applicable Lender such tax receipts, certificates an other evidence of
such payment as the Borrowers may have or the Administrative Agent or the
applicable Lender may reasonably request.
(b) Inability to Determine Eurodollar Base Rate. In the
event that the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that, by reason of circumstances affecting the
London interbank market, quotation of Eurodollar Base Rates for any portion of
any of the Notes are not being provided in the relevant amounts or for the
relevant maturities for the purpose of determining a Eurodollar Rate for any
portion of the principal sum, the Administrative Agent will give notice of such
determination to the Borrowers and each Lender at least one day prior to the
date of an advance or any subsequent Interest Period for the Loan. If any such
notice is given, no Lender shall have any obligation to make any advance or
maintain any principal sum outstanding at a Eurodollar Rate. Until the earlier
of the date any such notice has been withdrawn by the Administrative Agent or
the date when the Lenders and the Borrowers have mutually agreed upon an
alternate method of determining the rates of interest payable on the Loan, as
the case may be, the Borrowers shall not have the right to have additional
advances or maintain any portion of the Credit Facility at a Eurodollar Rate,
whereupon the Lenders and the Borrowers shall mutually agree upon an alternate
method of determining the rates of interest payable on the Loan or such Lender's
portion of the principal outstanding under the Note shall be immediately due and
payable.
24
31
(c) Applicable Interest Rates.
(i) Each advance under Loan shall bear interest
at either the Base Rate or the Eurodollar Rate, as selected and
specified by the Borrowers in an Interest Rate Election Notice
furnished to the Administrative Agent in accordance with the provisions
of Section 2.4(d) (Selection of Interest Rates), or as otherwise
determined in accordance with the provisions of this Section 2.4
(Interest Rate Matters), and as may be adjusted from time to time in
accordance with the provisions of Section 2.4(b) (Inability to
Determine Eurodollar Base Rate).
(ii) Notwithstanding the foregoing, following the
occurrence and during the continuance of an Event of Default, at the
option of the Administrative Agent, all Loans and all other Obligations
shall bear interest at the Post-Default Rate.
(iii) The Applicable Margin for Eurodollar Loans
shall be two hundred twelve and one-half (212.5) basis points per
annum.
(d) Selection of Interest Rates.
(i) The Borrowers may select the initial
Applicable Interest Rate or Applicable Interest Rates to be charged on
portions of the Loan.
(ii) From time to time after the date of this
Agreement as provided in this Section, by a proper and timely Interest
Rate Election Notice furnished to the Administrative Agent in
accordance with the provisions of Section 2.4(d)(v) (Selection of
Interest Rates) , the Borrowers may select an initial Applicable
Interest Rate or Applicable Interest Rates for any portion of the Loan
or may convert the Applicable Interest Rate and, when applicable, the
Interest Period, for any existing Loan to any other Applicable Interest
Rate or, when applicable, any other Interest Period.
(iii) The Borrowers' selection of an Applicable
Interest Rate and/or an Interest Period, the Borrowers' election to
convert an Applicable Interest Rate and/or an Interest Period to
another Applicable Interest Rate or Interest Period, and any other
adjustments in an interest rate are subject to the following
limitations:
(A) the Borrowers shall not at any time
select or change to an Interest Period that extends beyond the
Credit Facility Expiration Date;
(B) except as otherwise provided in
Section 2.4(e) (Indemnity), no change from the Eurodollar Rate
to the Base Rate shall become effective on a day other than a
Business Day and on a day which is the last day of the then
current Interest Period, no change of an Interest Period shall
become effective on a day other than the last day of the then
current Interest Period, and no change
25
32
from the Base Rate to the Eurodollar Rate shall become
effective on a day other than a day which is a Eurodollar
Business Day;
(C) any Applicable Interest Rate change
for any Loan to be effective on a date on which any principal
payment on account of such Loan is scheduled to be paid shall
be made only after such payment shall have been made;
(D) no more than six (6) different
Eurodollar Rates may be outstanding at any time and from time
to time, provided that not more than one (1) may be a seven
(7) day Interest Period;
(E) the first day of each Interest
Period shall be a Eurodollar Business Day;
(F) as of the effective date of a
selection, there shall not exist an Event of Default; and
(G) the minimum principal amount of a
Eurodollar Loan shall be Five Hundred Thousand Dollars
($500,000).
(iv) If a request for an advance under the Loans
is not accompanied by an Interest Rate Election Notice or does not
otherwise include a selection of an Applicable Interest Rate and, if
applicable, an Interest Period, or if, after having made a selection of
an Applicable Interest Rate and, if applicable, an Interest Period, the
Borrowers fail or are not otherwise entitled under the provisions of
this Agreement to continue such Applicable Interest Rate or Interest
Period, the Borrowers shall be deemed to have selected the Base Rate as
the Applicable Interest Rate until such time as the Borrowers have
selected a different Applicable Interest Rate and specified an Interest
Period in accordance with, and subject to, the provisions of this
Section.
(v) The Administrative Agent will not be
obligated to make Loans, to convert the Applicable Interest Rate on
Loans to another Applicable Interest Rate, or to change Interest
Periods, unless the Administrative Agent shall have received an
irrevocable written or telephonic notice (an "Interest Rate Election
Notice") from the Borrowers specifying the following information:
(A) the amount to be borrowed or
converted;
(B) a section of the Base Rate or the
Eurodollar Rate;
(C) the length of the Interest Period
if the Applicable Interest Rate selected is the Eurodollar
Rate; and
(D) the requested date on which such
election is to be effective.
26
33
Any telephonic notice must be confirmed in writing within three (3)
Business Days. Each Interest Rate Election Notice must be received by the
Administrative Agent not later than 12:00 noon (Eastern Standard Time) on the
Business Day of any requested borrowing or conversion in the case of a selection
of the Base Rate and not later than 12:00 noon (Eastern Standard Time) on the
third Business Day before the effective date of any requested borrowing or
conversion in the case of a selection of the Eurodollar Rate.
(e) Indemnity. The Borrowers jointly and severally agree
to indemnify and reimburse the Administrative Agent and to hold the
Administrative Agent harmless from any loss, cost (including administrative
costs) or expense which the Administrative Agent may sustain or incur as a
consequence of (a) a default by the Borrowers in payment when due of the
principal amount of or interest on any Eurodollar Loan, (b) the failure of the
Borrowers to make, or convert the Applicable Interest Rate of any portion of the
Loan after the Borrowers have given a request for an advance or an Interest Rate
Election Notice, (c) the failure of the Borrowers to make any prepayment of a
Eurodollar Loan after the Borrowers have given notice of such intention to make
such a prepayment, and/or (d) the making by the Borrowers of a prepayment of a
Eurodollar Loan on a day which is not the last day of the Interest Period for
such Eurodollar Loan, breakage costs calculated by the Administrative Agent,
including, without limitation, any such loss or expense arising from the
reemployment of funds obtained by the Administrative Agents to maintain any
Eurodollar Loan or from fees payable to terminate the deposits from which such
funds were obtained. This agreement and covenant of the Borrowers shall survive
termination or expiration of this Agreement and payment of the other
Obligations.
(f) Payment of Interest.
(i) Unpaid and accrued interest on any portion
of the Loans which consists of a Base Rate Loan shall be paid monthly,
in arrears, on the first day of each calendar month, commencing on the
first such date after the date of this Agreement, and on the first day
of each calendar month thereafter, and at maturity (whether by
acceleration, declaration, extension or otherwise).
(ii) Notwithstanding the foregoing, any and all
unpaid and accrued interest on any Base Rate Loan converted to a
Eurodollar Loan or prepaid shall be paid immediately upon such
conversion and/or prepayment, as appropriate.
(g) Unpaid and accrued interest on any Eurodollar Loan
shall be paid monthly and on the last Business Day of each Interest Period for
such Eurodollar Loan and at maturity (whether by acceleration, declaration,
extension or otherwise); provided, however that any and all unpaid and accrued
interest on any Eurodollar Loan prepaid prior to expiration of the then current
Interest Period for such Eurodollar Loan shall be paid immediately upon
prepayment.
(h) Illegality. Notwithstanding any other provision of
the Financing Documents to the contrary, in the event that it shall become
unlawful for any Lender to obtain funds in the London interbank market or for
such Lender to maintain the Loan at the Eurodollar Rate, then, by written notice
to the Borrowers and to the Administrative Agent, such Lender may declare that
advances will not thereafter be made or the Loan maintained by such Lender
27
34
hereunder at the Eurodollar Rate, whereupon the Lenders and the Borrowers shall
mutually agree upon an alternate method of determining the rates of interest
payable on the Loan or such Lender's portion of the principal outstanding under
the Note shall be immediately due and payable.
(i) Increased Costs and Reduced Return.
(i) If any event shall occur (whether in the
form of a reserve requirement (not included in the definition of the
Eurodollar Rate), exchange control regulations, governmental charges,
compliance with any guideline or request from any central bank or other
Governmental Authority, changes in the London interbank market or the
position of any Lender in such market or otherwise) and the result of
any such event is, in such Lender's reasonable judgment, to increase
the costs which such Lender determines are attributable to its making
or maintaining the Loan at the Eurodollar Rate in excess of those costs
already in effect as of June 1, 2001, or its obligation to make
available the Loan at the Eurodollar Rate or to reduce the amount of
any sum received or receivable by such Lender under the Note, then,
within ten (10) days after demand by such Lender, Borrowers hereby
agree to pay to such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduction.
(ii) In addition to any amounts payable pursuant
to Section (i), if any Lender shall have determined that the
applicability of any law, rule, regulation or guideline adopted
pursuant to or arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital
Standards," or the adoption after the date hereof of any other law,
rule, regulation or guideline regarding capital adequacy, or any change
in any of the foregoing or in the enforcement or interpretation or
administration of any of the foregoing by any court or any central bank
or other Governmental Authority, charged with the enforcement or
interpretation or administration thereof, or compliance by such Lender
(or any lending office of such Lender) or such Lender's holding company
with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital or on the capital of such Lender's
holding company, if any, as a consequence of its making or maintaining
the Loan or its incurring any obligations under this Agreement to a
level below that which such Lender or such Lender's holding company
could have achieved but for such applicability, adoption, change or
compliance (taking into consideration such Lender's policies and the
policies of such Lender's holding company with respect to capital
adequacy) by an amount deemed by such Lender to be material, then, upon
demand by such Lender, the Borrowers hereby agree to pay to such Lender
from time to time such additional amount or amounts as will compensate
such Lender or such Lender's holding company for any such reduction
suffered.
28
35
(j) Notice of Amounts Payable to Lenders. If any Lender
shall seek payment of any amounts from Borrowers pursuant to this Section or
under Section 2.4 (Interest Rate Matters), it shall notify the Borrowers and the
Administrative Agent of the amount payable by the Borrowers to such Lender
hereunder. A certificate of such Lender seeking payment setting forth in
reasonable detail the factual basis for and the computation of the amount
specified, shall be conclusive and binding on all parties for all purposes,
absent manifest error, as to the amounts owned. The Borrowers' obligations under
this Section shall survive the termination of this Agreement and the repayment
of the Obligations.
Section 2.5 Computation of Interest and Fees
All applicable fees and interest shall be calculated on the basis of a
year of 365 days for the actual number of days elapsed pursuant to the terms of
the Note and interest shall be payable monthly in arrears.
Section 2.6 Permitted Costs.
Advances under the Borrowing Base shall be made available by the
Lenders pursuant to a Borrowing Base Report issued quarterly by the
Administrative Agent or more frequently in the Administrative Agent's discretion
and certified by the Borrowers in accordance with the terms of this Agreement.
That portion of the Borrowing Base composed of Costs Incurred to Date shall be
related to expenditures for each Eligible Facility described in the applicable
Total Development Budget. Each Total Development Budget may include the cost of
(i) the acquisition by the Borrowers of the Land which is the site of such
Facility, (ii) the construction on the Premises of a Facility containing
residential units and common facilities (iii) marketing, staffing and similar
pre-opening expenses and (iv) an Operating Reserve. Unless otherwise agreed to
by the Administrative Agent and to the extent specifically permitted by the
Administrative Agent, the process of verification of Requisitions shall confirm
the payment by any of the Borrowers of the following costs and expenses related
to the development of the Premises and the construction of the Improvements and
no others may be included in a Total Development Budget: (i) the payment of
interest when due without further authorization or consent of the Borrowers;
(ii) the actual cost of the Land and all labor, services, materials,
supervision, construction fees and the like reasonably incurred by any of the
Borrowers in connection with the construction upon the Land of the Improvements
in accordance with the Plans and Specifications; (iii) for the actual cost of
pre-opening expenses, marketing expenses and operations of the Facility to the
extent of operating deficits; (iv) for the actual cost of commitment fees,
extension fees, appraisal fees, closing or settlement costs, fees of attorneys,
engineers, architects and accountants, insurance and bond premiums, ad valorem
real estate taxes and other costs directly related to the development of the
Land and the construction, marketing, initial start-up operating of the
Improvements and (v) for the Development Fee and other pre-opening fees.
Section 2.7 Requisitions Demonstrating Expenses.
Verification of the Borrowers' Costs Incurred to Date will be
administered by the Administrative Agent's Real Estate Loan Administration
Group. Requisitions for each Eligible Project shall be submitted by the
Borrowers at least once each month setting forth costs incurred
29
36
by or on behalf of the Borrowers shall be in the form approved by the
Administrative Agent (each a "Requisition" collectively, the "Requisitions")
signed by Xxxxx X. Xxxx, Xxxxx Xxxxx, Xxxxxxxxx X. X. Xxxxxx or Xxx Xxxxxxxx on
behalf of the Borrowers and approved by the Architect, showing the percentage of
completion and setting forth in trade breakdown form and in such detail as may
be required by the Administrative Agent the amounts expended and/or costs
incurred for work done and necessary materials incorporated in the Improvements.
The Requisition shall also show the percentage of completion of each line item
on the applicable Borrower's cost breakdown approved by the Administrative
Agent. The Borrowers shall submit with each Requisition a statement that the
work completed to the date of such Requisition is of quality consistent with the
applicable Plans and Specifications. In addition, at the time of delivery of
each Requisition by the Borrowers, the Borrowers shall furnish to the
Administrative Agent such additional information (such as paid receipts,
invoices, statements of accounts, etc.) as the Administrative Agent may
reasonably require to assure that amounts shown in the Requisition have been
paid by or on behalf of the Borrowers. Requisitions verified by the Real Estate
Loan Administration Group during the course of a fiscal quarter will be included
in the calculation of the next Borrowing Base Report.
Section 2.8 Co-Borrower Obligations.
Each Person included in the term "Borrowers", including each Additional
Borrower, hereby covenants and agrees with the Administrative Agent on behalf of
the Lenders as follows:
(a) The Facility Owner Obligations include all present
and future indebtedness, duties, obligations, and liabilities, whether now
existing or contemplated or hereafter arising, of any one or more of the
Additional Borrowers or the Original Borrowers owned by the same Qualified
Intermediary in connection with the Loan.
(b) Reference in this Agreement and the other Financing
Documents to the "Borrowers" or otherwise with respect to any one or more of the
Persons now or hereafter included in the definition of "Borrowers" shall mean
each and every such Person and any one or more of such Persons unless the
context requires otherwise.
(c) Each Person included in the term "Borrowers" hereby
irrevocably authorizes the Administrative Agent to make advances to any one or
more or to all of such Persons, pursuant to the provisions of this Agreement
upon the written, oral or telephonic request any one or more of the Persons who
is from time to time a Responsible Officer of a Borrower under the provisions of
the most recent certificate of corporate resolutions and/or incumbency of the
Person included in the term "Borrowers" on file with the Administrative Agent
and also upon the written, oral or telephone request of any one of the
Responsible Officers.
(d) The Administrative Agent assumes no responsibility or
liability for any errors, mistakes, and/or discrepancies in the oral,
telephonic, written or other transmissions of any instructions, orders, requests
and confirmations between the Administrative Agent and any one or more of the
Persons included in the term "Borrowers", any advance under the Loan or any
other transaction in connection with the provisions of this Agreement except
those resulting from the Administrative Agent's gross negligence or willful
misconduct.
30
37
Section 2.9 Agreement Among Borrowers.
Without implying any limitation on the joint and several nature of the
Obligations, the Administrative Agent agrees that, notwithstanding any other
provision of this Agreement, the Persons included in the term "Borrowers" may
create reasonable inter-company indebtedness between or among the Persons
included in the term "Borrowers" with respect to the allocation of the benefits
and proceeds of the advances under this Agreement. The Persons included in the
term "Borrowers" agree among themselves, and the Administrative Agent consents
to that agreement, that each such Person shall have rights of contribution from
all of the such Persons to the extent such Person incurs Obligations in excess
of the proceeds of the Loan received by, or allocated to purposes for the direct
benefit of, such Person. All such indebtedness and rights shall be, and are
hereby agreed by the Persons included in the term "Borrowers" to be, subordinate
in priority and payment to the indefeasible repayment in full in cash of the
Obligations, and, unless the Administrative Agent agrees in writing otherwise,
shall not be exercised or repaid in whole or in part until all of the
Obligations have been indefeasibly paid in full in cash. Each Person included in
the term "Borrowers" agrees that all of such inter-company indebtedness and
rights of contribution are part of the Collateral and secure the Obligations.
Each Person included in the term "Borrowers" hereby waives all rights of
counterclaim, recoupment and offset between or among themselves arising on
account of that indebtedness and otherwise. Unless otherwise consented to in
writing by the Administrative Agent, no Person included in the term "Borrowers"
shall evidence the inter-company indebtedness or rights of contribution by note
or other instrument, and shall not secure such indebtedness or rights of
contribution with any Lien or security.
Section 2.10 Benefits to Borrowers.
Each Person included in the term "Borrowers" hereby represents and
warrants to the Administrative Agent that each of them will derive benefits,
directly and indirectly, from each advance under the Loan, both in their
separate capacity and as a member of the integrated group to which each such
Person belongs and because the successful operation of the integrated group is
dependent upon the continued successful performance of the functions of the
integrated group as a whole, because (i) the terms of the consolidated financing
provided under this Agreement are more favorable than would otherwise be
obtainable by such Persons individually, and (ii) the additional administrative
and other costs and reduced flexibility associated with individual financing
arrangements which would otherwise be required if obtainable would substantially
reduce the value to such Persons of the financing.
Section 2.11 Guaranty.
(a) Each Person included in the term "Borrowers" hereby
unconditionally and irrevocably, guarantees to the Administrative Agent:
(i) the due and punctual payment in full (and
not merely the collectibility) by the other Persons included in the
term "Borrowers" of their applicable Facility Owner Obligations,
including unpaid and accrued interest thereon, in each case when due
and payable, all according to the terms of this Agreement, the Note and
the other Financing Documents;
31
38
(ii) the due and punctual payment in full (and
not merely the collectibility) by the other Persons included in the
term "Borrowers" which are owned by the same Qualified Intermediary of
all other sums and charges which may at any time be due and payable in
accordance with this Agreement, the Note or any of the other Financing
Documents;
(iii) the due and punctual performance by the
other Persons included in the term "Borrowers" which are owned by the
same Qualified Intermediary of all of the other terms, covenants and
conditions contained in the Financing Documents; and
(iv) all the other Facility Owner Obligations of
the other Persons included in the term "Borrowers" which are owned by
the same Qualified Intermediary.
(b) The obligations and liabilities of each Person
included in the term "Borrowers" as a guarantor under this Section shall be
absolute and unconditional and joint and several as to the Facility Owner
Obligations, irrespective of the genuineness, validity, priority, regularity or
enforceability of this Agreement, the Note or any of the Financing Documents or
any other circumstance which might otherwise constitute a legal or equitable
discharge of a surety or guarantor. Each Person included in the term "Borrowers"
in its capacity as a guarantor expressly agrees that the Administrative Agent
may, in its sole and absolute discretion, without notice to or further assent of
such Borrower and without in any way releasing, affecting or in any way
impairing the joint and several obligations and liabilities of such Person as a
guarantor hereunder (limited as described herein):
(i) waive compliance with, or any defaults
under, or grant any other indulgences under or with respect to any of
the Financing Documents;
(ii) modify, amend, change or terminate any
provisions of any of the Financing Documents;
(iii) grant extensions or renewals of or with
respect to this Agreement, the Note or any of the other Financing
Documents;
(iv) effect any release, subordination,
compromise or settlement in connection with this Agreement, the Note or
any of the other Financing Documents;
(v) agree to the substitution, exchange, release
or other disposition of the Collateral or any part thereof, or any
other collateral for the Loan or to the subordination of any lien or
security interest therein;
(vi) make advances for the purpose of performing
any term, provision or covenant contained in this Agreement, the Note
or any of the other Financing Documents with respect to which the
Borrower shall then be in default;
32
39
(vii) make future advances pursuant to this
Agreement or any of the other Financing Documents;
(viii) assign, pledge, hypothecate or otherwise
transfer, the Obligations, the Note, any of the other Financing
Documents or any interest therein, all as and to the extent permitted
by the provisions of this Agreement;
(ix) deal in all respects with the other Persons
included in the term "Borrowers" as if this Section were not in effect;
(x) effect any release, compromise or settlement
with any of the other Persons included in the term "Borrowers", whether
in their capacity as a Borrower or as a guarantor under this Section or
any other guarantor; and
(xi) provide debtor-in-possession financing or
allow use of cash collateral in proceedings under the Bankruptcy Code,
it being expressly agreed by all Persons included in the term
"Borrowers" that any such financing and/or use would be part of the
Obligations.
(c) The obligations and liabilities of each Person
included in the term "Borrowers", as guarantor of the Facility Owner Obligations
under this Section shall be primary, direct and immediate, shall not be subject
to any counterclaim, recoupment, set off, reduction or defense based upon any
claim that such Person may have against any one or more of the other Persons
included in the term "Borrowers", the Administrative Agent and/or any other
guarantor and shall not be conditional or contingent upon pursuit or enforcement
by the Administrative Agent of any remedies it may have against Persons included
in the term "Borrowers" with respect to this Agreement, the Note or any of the
other Financing Documents, whether pursuant to the terms thereof or by operation
of law. Without limiting the generality of the foregoing, the Administrative
Agent shall not be required to make any demand upon any of the Persons included
in the term "Borrowers", or to sell the Collateral or otherwise pursue, enforce
or exhaust its or their remedies against the Persons included in the term
"Borrowers" or the Collateral either before, concurrently with or after pursuing
or enforcing its rights and remedies hereunder. Any one or more successive or
concurrent actions or proceedings may be brought against each Person included in
the term "Borrowers" under this Section, either in the same action, if any,
brought against any one or more of the Persons included in the term "Borrowers"
or in separate actions or proceedings, as often as the Administrative Agent may
deem expedient or advisable. Without limiting the foregoing, it is specifically
understood that any modification, limitation or discharge of any of the
liabilities or obligations of any one or more of the Persons included in the
term "Borrowers", any other guarantor or any obligor under any of the Financing
Documents, arising out of, or by virtue of, any bankruptcy, arrangement,
reorganization or similar proceeding for relief of debtors under federal or
state law initiated by or against any one or more of the Persons included in the
term "Borrowers", in their respective capacities as borrowers and guarantors
under this Section, or under any of the Financing Documents shall not modify,
limit, lessen, reduce, impair, discharge, or otherwise affect the liability of
each Borrower under this Section in any manner whatsoever, and this Section
shall remain and continue in full force and effect. It is the intent and purpose
of this Section that each Person included in the term "Borrowers" shall and does
hereby waive all rights and benefits which might accrue to any other
33
40
guarantor by reason of any such proceeding, and the Persons included in the term
"Borrowers" agree that they shall be liable for the full amount of the
obligations and liabilities under this Section regardless of, and irrespective
to, any modification, limitation or discharge of the liability of any one or
more of the Persons included in the term "Borrowers", any other guarantor or any
obligor under any of the Financing Documents, that may result from any such
proceedings.
(d) Each Person included in the term "Borrowers", as
guarantor under this Section, hereby unconditionally, jointly and severally,
irrevocably and expressly waives:
(i) presentment and demand for payment of the
Obligations and protest of non-payment;
(ii) notice of acceptance of this Section and of
presentment, demand and protest thereof;
(iii) notice of any default hereunder or under the
Note or any of the other Financing Documents and notice of all
indulgences;
(iv) notice of any increase in the amount of any
portion of or all of the indebtedness guaranteed by this Section;
(v) demand for observance, performance or
enforcement of any of the terms or provisions of this Agreement, the
Note or any of the other Financing Documents;
(vi) all errors and omissions in connection with
the Administrative Agent's administration of all indebtedness
guaranteed by this Section;
(vii) any right or claim of right to cause a
marshalling of the assets of any one or more of the other Persons
included in the term "Borrowers";
(viii) any act or omission of the Administrative
Agent which changes the scope of the risk as guarantor hereunder; and
(ix) All other notices and demands otherwise
required by law which such Person may lawfully waive.
(e) Within ten (10) days following any request of the
Administrative Agent to do so, each Person included in the term "Borrowers" will
furnish the Administrative Agent and such other persons as the Administrative
Agent may direct with a written certificate, duly acknowledged stating in detail
whether or not any credits, offsets or defenses exist with respect to this
Section.
34
41
Section 2.12 Application of Payments
All payments made on account of any of the Notes, including
prepayments, shall be applied in the following order:
(a) First, to all Enforcement Costs and other expenses of
the Administrative Agent and/or the Lenders;
(b) Second, to all amounts due to the Administrative
Agent (in its capacity as Administrative Agent) from the Borrowers or the
Lenders;
(c) Third, to the Lenders, in accordance with their
respective Pro Rata Share, for the past due interest on the Notes;
(d) Fourth, to the payment of any prepayment penalty or
breakage charges due under Section 4.8 (Assignments) of this Agreement;
(e) Fifth, to the Lenders, in accordance with their
respective Pro Rata Shares, for principal of the Notes;
(f) Sixth, to the Lenders, in accordance with their
respective Pro Rata Shares, for past due fees required under the Financing
Documents;
(g) Seventh, to the Administrative Agent, in payment or
reimbursement of any over-drafts in any account of the Borrowers; and
(h) Eighth, to the Lenders, in accordance with their
respective Pro Rata Shares, for all other amounts owed the Lenders pursuant to
the provisions of this Agreement or the other Financing Documents.
ARTICLE III
COLLATERAL
Section 3.1 Collateral.
As security for the payment of any and all of the Obligations and for
the Borrowers' performance of, and compliance with, all of the terms, covenants,
conditions, stipulations and agreements contained in the Financing Documents,
the Borrowers hereby assign, grant and convey to the Lenders, and agree that the
Lenders shall have, to the extent permitted by law a perfected, continuing
security interest in, all of the Collateral. The Borrowers further agree that
the Lenders shall have in respect of the Collateral all of the rights and
remedies of a secured party under the Virginia Uniform Commercial Code and the
Uniform Commercial Code of those other states in which the Facilities are
located, whichever is applicable, and under other applicable Laws as well as
those provided in this Agreement. The Borrowers covenant and agree to execute
and deliver such financing statements and other instruments and filings as are
necessary in the opinion of the Administrative Agent to perfect such security
interest. Notwithstanding the fact that the proceeds of the Collateral
constitute a part of the Collateral, the Borrowers may not dispose of the
Collateral, or any part thereof, other than in the ordinary
35
42
course of their business or as otherwise may be permitted by this Agreement or
other Security Agreements. The foregoing notwithstanding only that Collateral
provided by a Borrower shall only serve as Collateral for the portion of the
Obligations evidenced by such Borrower's Facility Owner Note and the Facility
Owner Notes issued by another Borrower which is owned by the same Qualified
Intermediary as such Borrower.
Section 3.2 Eligible Projects.
The Borrowers shall from time to time designate Facilities owned by any
of the Borrowers as Eligible Projects included in the Borrowing Base pursuant to
the terms hereof. The Facilities which are currently Eligible Projects are
listed on EXHIBIT C attached hereto and incorporated herein by reference or any
future Borrowing Base Report. The Credit Facility shall be secured by (a) the
first lien Deeds of Trust on the fee simple interests of the Borrowers in the
Eligible Projects or on the leasehold interests of Borrowers under Qualified
Ground Leases, (b) a first lien security interest in all fixtures, building
materials and all other machinery, equipment and other personalty used or
installed by the Borrowers or each of the premises of an Eligible Project or in
the Improvements constructed thereon, and (c) all of the other Collateral
relating to the Eligible Projects. The Administrative Agent may in its sole
discretion agree to include a Facility occupied pursuant to a Qualified Ground
Lease; provided, however, that at no time shall the aggregate Deed of Trust Lien
Amounts of Eligible Projects under the Master Credit Facility subject to
Qualified Ground Leases, plus the Aggregate Deed of Trust Lien Amounts of
Eligible Projects under this Credit Facility subject to Qualified Ground Leases
which are not Sunrise Qualified Ground Leases comprise more than twenty percent
(20%) of the Credit Facility Committed Amount under the Master Credit Facility
at any one time.
Section 3.3 Assignment of Ownership Interests.
The Obligations are further secured by one or more Pledge, Assignment
and Security Agreements, pursuant to which the owners of each of the Borrowers
have assigned to the Administrative Agent for the benefit of the Lenders one
hundred percent (100%) of all partnership or member interests in each of the
Borrowers.
Section 3.4 Guaranties.
The Obligations are the subject of the Master Guaranty, the Guaranties
and the Performance Guaranties executed and delivered by the applicable
Guarantors in favor of the Lenders.
Section 3.5 Collateral for Obligations.
The Borrowers acknowledge that it is the intention of the Borrowers
that the Collateral and all the Deeds of Trust be security for all of the
Obligations, both those now existing and those hereafter created or incurred by
future loan, advances, extensions of credit or otherwise and whether or not
currently contemplated by the Borrowers and/or the Lenders on or about the date
hereof.
36
43
Section 3.6 Costs.
The Borrowers agree to pay on demand, to the fullest extent permitted
by applicable laws, all reasonable fees, commissions, costs, charges, travel
expenses and other expenses incurred by the Lenders, or any of them, in
connection with the taking, perfection, preservation, protection and/or release
of any security interest or lien on any of the Collateral or Deeds of Trust. The
foregoing notwithstanding, the Borrowers shall not be obligated to pay the
travel expenses of the Lenders with the exception of travel expenses incurred in
connection with any enforcement actions following the occurrence of an Event of
Default. If the Borrowers elect not to finance a Facility under this Credit
Facility but the Administrative Agent or any of the other Lenders have incurred
costs in connection with reviewing such Facility for inclusion in the Borrowing
Base, including but not limited to appraisal fees, environmental review fees or
legal fees, all of such fees and expenses will be paid by the Borrowers upon
demand by the Administrative Agent.
ARTICLE IV
GENERAL FINANCING PROVISIONS
Section 4.1 Conditions Precedent to Credit Facility Closing and
Addition of Deeds of Trust.
(a) Conditions Precedent to Credit Facility Closing. The
following shall be conditions precedent to the Credit Facility Closing or to the
addition of an Additional Borrower and/or the addition of an Eligible Project to
the Borrowing Base (each a "Facility Closing"):
(i) The Master Guaranty, this Agreement and all
applicable Notes shall have been properly executed and delivered to the
Administrative Agent.
(ii) The Administrative Agent shall have received
and approved a copy of each Borrower's fully executed Partnership
Agreement (if a limited partnership), Operating Agreement and Articles
of Organization (if a limited liability company) and a certified copy
of the recorded Certificate of Limited Partnership (if a limited
partnership) or Articles of Organization (if a limited liability
company). In connection with the addition of an Additional Borrower,
the Administrative Agent shall have received and approved copies of all
organizational documents, including certified copies of all documents
on record with the State in which such entity is organized.
(iii) The Administrative Agent shall have received
and approved a certificate executed by all of the general and limited
partners or members of the Borrowers authorizing the execution and
delivery of this Agreement or any other the Financing Documents being
delivered in connection herewith and consenting to the Loan and similar
authority certificates or resolutions of any Additional Borrower.
37
44
(iv) The Administrative Agent shall have received
and approved a current certificate of good standing or certificate of
fact from the State in which any Borrower is formed.
(v) The Administrative Agent shall have received
and approved an opinion of counsel for the Borrowers as to the
Borrowers' good standing, form, powers and authority and as to the
validity, binding effect and enforceability of the Financing Documents
and such an opinion shall be issued in connection with the execution
and delivery of each Joinder Agreement.
(vi) The Borrowers under the Master Credit
Facility shall have paid all fees then due pursuant to any fee letter
between the Administrative Agent and the Borrowers and/or the Master
Guarantor.
(vii) The Master Credit Facility restructure shall
have closed.
(b) Conditions Precedent to Accepting an Eligible
Project:
(i) The Credit Facility Closing shall have been
completed.
(ii) The Administrative Agent shall have received
a certificate of authority to do business for the applicable Borrower
in each jurisdiction where a Facility is located (if different from the
state in which such Borrower was formed).
(iii) The Total Development Budget for such
Eligible Project shall have been reviewed and approved in writing by
the Administrative Agent consistent with the provision of Section 2.1
(The Loan) and a draw schedule setting forth the portion of the Total
Development Budget scheduled to be advanced under any Facility Owner
Note prior to the applicable Facility Owner Note Maturity Date which
shall be satisfactory in all respects and shall confirm that the draw
schedules for all Facility Owner Notes to be outstanding simultaneously
will not exceed the Credit Facility Committed Amount.
(iv) The Administrative Agent shall have received
a paid policy of title insurance (American Land Title Association
Standard Form "B" Loan Policy - Current Edition) covering the Facility
or a valid and enforceable commitment to issue the same, together with
such reinsurance agreements and direct access agreements as may be
required by the Administrative Agent in the amount agreed upon by the
Administrative Agent (but in no event less than the Deed of Trust Lien
Amount) from a company satisfactory to the Administrative Agent and
which may be endorsed or assigned to the successors and assigns of the
Lenders and to additional Lenders without additional cost, insuring the
liens of the Deeds of Trust to be valid first liens on the Property,
free and clear of all defects, exception and encumbrances except such
as the Administrative Agent and its counsel shall have approved but
without a creditor's rights exception and (unless otherwise agreed by
the Administrative Agent) containing affirmative insurance against
mechanics liens.
38
45
(v) The Administrative Agent shall have received
advice, in form and substance and from a source satisfactory to the
Administrative Agent, to the effect that a search of the applicable
public records discloses no conditional sales contracts, chattel
mortgages, leases of personalty, financing statements or title
retention agreements filed or recorded against the Property except such
as the Administrative Agent shall have approved.
(vi) The Administrative Agent shall have received
all policies of insurance required by the terms hereof and by the other
Financing Documents to be in effect from a company or companies and in
form and amount satisfactory to the Administrative Agent, including
without limitation, flood insurance (in the amount or evidence that
flood insurance is not available or otherwise required with respect to
the Property), together with written evidence, in form and substance
satisfactory to the Administrative Agent, that all fees and premiums
due on account thereof have been paid in full.
(vii) The Administrative Agent shall have received
and accepted an appraisal of the Facility.
(viii) The Administrative Agent shall have received
from the Borrowers a complete set of the Plans and Specifications
signed and sealed by the Architect, together with written evidence, in
form and substance satisfactory to the Administrative Agent, to the
effect that the Plans and Specifications are satisfactory to the
applicable Borrowers, SDI, the General Contractor, the Inspecting
Engineer and, to the extent required by applicable law or any effective
restrictive covenant, have been approved by all Governmental
Authorities having or claiming jurisdiction and by the beneficiary of
any such restrictive covenant, respectively.
(ix) The Administrative Agent shall have received
and approved a fully executed copy of the applicable Construction
Contract, the Architect's Contract and a list of Major Subcontractors
as well as any information regarding the General Contractor, the
Architect and the Major Subcontractors which the Administrative Agent
has requested.
(x) The Administrative Agent shall have received
and approved a copy of a current Survey of the Land certified to the
Administrative Agent and to the title insurance company and any
recorded subdivision plat of the Land and otherwise complying with the
survey requirements set forth on EXHIBIT F attached hereto.
(xi) The Administrative Agent shall have received
and approved a site plan for the Improvements approved by all
appropriate Governmental Authorities.
(xii) The Administrative Agent shall have received
from the Borrowers written evidence, in form and substance satisfactory
to the
39
46
Administrative Agent, from all Governmental Authorities having or
claiming jurisdiction to the effect that all building, construction and
other permits required in connection with the development of the Land
and the construction of the Improvements have been validly issued, that
all fees and bonds required in connection therewith have been paid in
full or posted, as the circumstances may require, and that the
Improvements meet zoning requirements and all sewer and storm drain
requirements.
(xiii) The Administrative Agent shall have received
and approved a report setting forth a construction progress schedule in
form and substance satisfactory to the Administrative Agent, calling
for the completion of the Improvements by a date no later than the
Completion Date.
(xiv) If construction work of any kind has
commenced upon the Land or materials have been placed or stored upon
the Land prior to the recordation of the Deed of Trust among the Land
Records where the Land is located, any mechanic's or materialman's
Liens or the same shall be fully insured against by the title insurance
company.
(xv) The Administrative Agent shall have received
and approved evidence that the applicable General Contractor carries
public liability and property damage insurance and workers'
compensation insurance in form and amounts and issued by companies
acceptable to the Administrative Agent.
(xvi) The Administrative Agent shall have received
and accepted a Phase I environmental audit of the applicable Facility
prepared by a person or firm acceptable to the Administrative Agent.
(xvii) The Administrative Agent shall have received
evidence acceptable in all respects through certification by the
Architect or other source acceptable to the Administrative Agent that
the applicable Improvements, when constructed, will comply with all
legal requirements regarding access and facilities for handicapped or
disabled persons, including, without limitation and to the extent
applicable to assisted living facilities (or, if applicable,
independent living facilities), The Federal Architectural Barriers Act
(42 U.S.C. Section 4151 et seq.), The Fair Housing Amendments Act of
1988 (42 U.S.C. Section 3601 et seq.), The Americans With Disabilities
Act of 1990 (42 U.S.C. Section 12101 et seq.), The Rehabilitation Act
of 1973 (29 U.S.C. Section 794) and any applicable state statutes
relating to access and facilities for handicapped or disabled persons.
(xviii) The Administrative Agent shall have received
and approved soil reports which shall (aa) demonstrate that the soil
conditions of the Land for the applicable Facility are suitable for the
construction of the Improvements and (bb) evidence to the
Administrative Agent's satisfaction that there are no Hydric Soils on
the Land.
40
47
(xix) The Administrative Agent shall have received
and approved copies of any executed Material Leases of the applicable
Property or of any portion thereof.
(xx) The Administrative Agent shall have received
and approved an opinion of local counsel for the Borrowers in the
jurisdiction where the applicable Facility is located that the
Financing Documents applicable to that Facility are in proper form and
enforceable in the context of a facility of the type represented by
this Credit Facility and that the Loan is not usurious, which opinion
must also inform the Lenders (aa) of the cost and timing of
foreclosure; (bb) of any limitations on the Lenders' right to obtain,
or the amount of, a deficiency judgment; and (cc) the existence of and
details surrounding any redemption period enjoyed by the Borrower's
following a sale at foreclosure.
(xxi) At the Administrative Agent's sole option
the Administrative Agent shall have obtained the advice of its own
local counsel in the jurisdiction where the Facility is located on the
form and enforceability of any or all of the Financing Documents at the
Borrowers' expense.
(xxii) The Administrative Agent shall have received
and approved an opinion of counsel for the Borrowers or the Management
Company that all Licenses needed for the operation of the Facility have
been issued and describing such Licenses and the assignability thereof
under local laws or regulations. If the Eligible Project is not a
Completed Project and no License can be issued until the Eligible
Project is at or near completion, the licensing opinion shall include a
detailed explanation of the procedure for applying for and obtaining
the License and shall identify the entity that will apply for and hold
the License.
(xxiii) With regard to any Facility Closing for a
Facility located in any state having such requirement, the
Administrative Agent shall have received evidence satisfactory to the
Administrative Agent that a Certificate of Need has been issued for
such Facility.
(xxiv) No Eligible Project may be added to the
Borrowing Base if the Deed of Trust Lien Amount of such Eligible
Facility, plus the aggregate Deed of Trust Lien Amounts of all other
Eligible Projects in this Credit Facility and the Master Credit
Facility exceed the Master Credit Facility's Credit Facility Committed
Amount unless the Administrative Agent determines, in its sole
discretion, that SALI and its applicable Wholly Owned Subsidiaries have
sufficient liquidity from other bona fide sources to finance any excess
portion of such Eligible Project's Total Development Budget.
(xxv) The Administrative Agent shall have received
a pro forma Borrowing Base Certificate adding the new Eligible Project.
41
48
(xxvi) The Administrative Agent shall have received
a properly and fully executed Facility Owner Note and Joinder Agreement
for any Additional Borrower.
(xxvii) A Deed of Trust and all other Security
Documents and other Financing Documents required by the Administrative
Agent in connection with such Facility Closing shall have been executed
by the applicable Borrowers, the applicable Qualified Intermediary and
all other required parties, delivered to the Administrative Agent and,
if and as required, recorded.
(xxviii) All funds received by a Qualified
Intermediary from the sale of a Relinquished Property and not yet
invested in an Eligible Project or otherwise or in another Replacement
Property will be pledged to the Administrative Agent on behalf of the
Lenders pursuant to a pledge of any deposit account in which such funds
are held (each a "Pledge of Account") and an acknowledgment of such
pledge by the depository bank in form and substance satisfactory to the
Administrative Agent; provided, however, the Qualified Intermediary may
withdraw from such funds its fee of $10,000 per Replacement Property
for arranging the 1031 exchange of a particular Relinquished Property
(each an "Accommodator Fee") after notice to the Administrative Agent.
(xxix) All agreements governing the relationship
between a Borrower and/or a Qualified Intermediary and SALI or its
Sunrise Wholly Owned Subsidiaries regarding the design, development,
construction or occupancy by a Sunrise Wholly Owned Subsidiary of any
Eligible Project and such Sunrise Wholly Owned Subsidiary's right to
purchase the Eligible Project (collectively, the "Exchange Documents")
shall be delivered to the Administrative Agent and shall be in all
respects satisfactory to the Administrative Agent.
Section 4.2 Conditions Precedent to Determining Availability Under
Borrowing Base or Making an Advance Under the Loan.
The Lenders shall not be obligated to include any Requisition for an
individual Eligible Project in the calculation of the Borrowing Base or make any
advance under the Loan unless the conditions described in Section 4.1
(Conditions Precedent to Credit Facility Closing and Addition of Deeds of Trust)
and the following additional conditions shall have been satisfied with regard to
such Eligible Project to the Administrative Agent's satisfaction:
(a) The Administrative Agent shall have received a
monthly title report on each Eligible Project which is under construction from
the applicable title insurance company, indicating that since the last preceding
report, there has been no change in the status of title and no other exceptions
not theretofore approved by the Administrative Agent, if required by the terms
of the existing title insurance policy, the Administrative Agent shall have
received an endorsement which shall have the effect of advancing the effective
date of the policy to the date of the advance then being made and increasing the
coverage of the policy by an amount equal to the Requisition being verified if
the policy does not by its terms provide for such an increase.
42
49
(b) No Default or Event of Default shall have occurred
and be continuing under any Note or any of the other Financing Documents.
(c) None of the Improvements shall have been materially
damaged by fire or other casualty unless the Administrative Agent shall have
received or reasonably anticipates receiving proceeds of insurance sufficient in
the judgment of the Administrative Agent to effect a satisfactory restoration of
such Improvements in accordance with the terms of the applicable Deed of Trust.
(d) The Administrative Agent shall have received written
evidence, in form and substance satisfactory to the Administrative Agent, to the
effect that all work requiring inspection by Governmental Authorities having or
claiming jurisdiction has been duly inspected and approved by such authorities
and by any rating or inspection organization, bureau, association or office
having or claiming jurisdiction.
(e) The representations and warranties made in ARTICLE
III (COLLATERAL) shall be true and correct in all material respects on and as of
the date of the advance with the same effect as if made on such date.
(f) All terms and conditions of the Financing Documents
required to be met as of the date of the applicable advance shall have been met
to the complete satisfaction of the Administrative Agent.
(g) In the reasonable judgment of the Administrative
Agent, all work completed on the applicable Property at the time of the
application for an advance has been performed in a good and workmanlike manner
and all materials and fixtures usually furnished and installed at that stage of
construction have been furnished and installed and that all costs covered by the
Requisition have been paid by the Borrowers.
(h) The Administrative Agent shall be satisfied that each
Eligible Project is a Pool A Project.
(i) Before verifying any Requisition, the Administrative
Agent shall require the Borrowers to obtain from the applicable General
Contractor and if required by the applicable title insurance company from all
subcontractors and material suppliers acknowledgments of payment and releases of
liens and rights to claim liens for work performed or materials delivered
covered by such Requisition. All such acknowledgments and releases shall be in
form AIA Forms G706 and G706A.
(j) The Administrative Agent's Inspecting Engineer will
inspect work performed which is covered by each Requisition being verified.
Section 4.3 Conditions Under Which an Eligible Project is a Completed
Facility.
The Administrative Agent shall verify that an Eligible Project is a
Completed Facility based on the satisfaction of the following additional
conditions:
43
50
(a) The Administrative Agent shall have received the
final "as built" Survey for the applicable Property.
(b) The Administrative Agent shall have received written
evidence from a qualified third party, in form and substance satisfactory to the
Administrative Agent, to the effect that the applicable Improvements have been
substantially completed in accordance with their Plans and Specifications.
(c) The Administrative Agent shall have received written
evidence, in form and substance satisfactory to the Administrative Agent, to the
effect that requisite certificates for permanent occupancy or completion of the
Improvements have been validly issued.
(d) Final waivers of liens of the General Contractor, and
if required by the applicable title insurance company, subcontractors, laborers
and material suppliers have been furnished to the Administrative Agent or, as to
any disputed lien or claim of lien, a bond in form and substance acceptable to
the Administrative Agent has been provided or other arrangements satisfactory to
the Administrative Agent have been made.
The Administrative Agent shall have received a copy of an operating
License for the Facility or other evidence satisfactory to the Administrative
Agent that the Facility may be lawfully operated as contemplated by the
Financing Documents.
Section 4.4 Liens; Setoff.
The Borrowers hereby grant to the Lenders a continuing lien and
security interest for all the applicable Facility Owner Obligations upon any and
all monies, securities, and other property of the Borrowers and the proceeds
thereof, now or hereafter held or received by or in transit to, the Lenders, or
any affiliate of any of the Lenders, from or for any of the Borrowers, and also
upon any and all deposits (general or special) and credits of any of the
Borrowers with any of the Lenders, if any, at any time existing. During the
continuance of any Event of Default under this Agreement, each Lender is hereby
authorized by any of the Borrowers at any time and from time to time, without
notice to the Borrowers, to set off, appropriate and apply any or all items
hereinabove referred to against all then outstanding Obligations. The Lenders
agree that the Notes shall be cross-collateralized only among those Borrowers
owned by the same Qualified Intermediary and not among Borrowers owned by
different Qualified Intermediaries.
Section 4.5 Payment and Performance of Obligations.
The payment and performance by the Borrowers of the Obligations arising
with respect to Borrowers owned by the same Qualified Intermediary shall be
absolute and unconditional, irrespective of any defense or any rights of
set-off, recoupment or counterclaim it might otherwise have against the Lenders,
or any of them, and the Borrowers shall pay absolutely net all of the
Obligations arising with respect to Borrowers owned by the same Qualified
Intermediary, free of any deductions and without abatement, diminution or
set-off; and until payment in full of all of the Obligations, the Borrowers: (a)
will not suspend or discontinue any payments provided for in the Note and (b)
will perform and observe all of its other agreements contained in this
Agreement, including (without limitation) all payments required to be made to
44
51
the Administrative Agent, and (c) will not terminate or attempt to terminate
this Agreement or any of the other Financing Documents to which any of the
Borrowers is a party for any cause.
Section 4.6 Payments to Others for the Account of the Borrowers.
At the option of the Lenders and without any request from the
Borrowers, and without waiving any of its rights hereunder, the Lenders may
elect to cure or avoid any default by the Borrowers under the Financing
Documents by applying amounts due hereunder or advancing the Lenders' own funds
to the satisfaction of the conditions of the Financing Documents and any amounts
so applied shall be part of the Loan and shall be secured by the Deeds of Trust
and the other Collateral of the applicable group of Borrowers owned by the same
Qualified Intermediary. The Administrative Agent agrees to endeavor to give the
Borrowers notice of any such payment or performing such act and the amount of
any payment whether prior to or contemporaneously with its making such payment
or performance of such act; provided, however, that failure to give such notice
shall not constitute a waiver by the Lenders of, or constitute a defense to, any
of the rights of the Lenders under this Agreement or the other Financing
Documents, including (without limitation) the right of the Lenders to repayment
of the amount of such payment.
Section 4.7 Prepayment.
The Borrowers shall have the right to prepay the Loan in full or in
part, at any time and from time to time, upon five (5) days' prior written
notice to the Administrative Agent without premium or penalty. The foregoing
notwithstanding, in connection with any prepayment of a principal sum on any day
other than the last day of the Interest Period applicable thereto, the Borrowers
shall pay to the Administrative Agent upon request by the Administrative Agent,
such amount as shall be sufficient to compensate any of the Lenders for any and
all losses or expenses which such Lender may sustain or incur (including without
limitation, any such loss or expense arising from the redeployment of funds
obtained by such Lender). Unless an Event of Default has occurred, any partial
prepayment shall be applied first to such breakage costs, second to accrued and
unpaid interest and third to the outstanding principal balance of the Loan due
and owing at maturity. Sums borrowed and repaid may not be readvanced. The
Borrowers' obligations under this Section shall survive the termination of this
Agreement and the repayment of the Obligations.
Section 4.8 Assignments.
The Borrowers agree not to transfer, assign, pledge or hypothecate any
right or interest in any payment or advance due pursuant to this Agreement, or
any of the other benefits of this Agreement, without the prior written consent
of the Administrative Agent. Any assignment made or attempted by the Borrowers,
or any of them, without the prior written consent of the Administrative Agent
shall be void and of no effect. No consent by the Administrative Agent to an
assignment by the Borrowers shall release the Borrowers as the parties primarily
obligated and liable under the terms of this Agreement unless the Borrowers
shall be released specifically by the Administrative Agent in writing. No
consent by the Administrative Agent to an assignment shall be deemed to be a
waiver of the requirement of prior written consent by the Administrative Agent
with respect to each and every further assignment and as a condition precedent
to the effectiveness of such assignment.
45
52
Section 4.9 Liability of the Lenders.
The Lenders shall in no event be responsible or liable to any person
other than the Borrowers for the disbursement of or failure to disburse the Loan
proceeds or any part thereof and neither the General Contractor nor any
subcontractor, laborer or material supplier shall have any right or claim
against the Lenders under this Agreement or the administration thereof. No
Lender shall be liable to the Borrowers for the failure of any other Lender to
fund its ratable portion of any advance pursuant to the Agency Agreement.
Section 4.10 Stored Materials.
The Administrative Agent will permit inclusion of construction
materials (the "Stored Materials") to be included in Requisitions prior to their
incorporation into the Improvements if they have been fully paid for by or on
behalf of the applicable Borrower. The Borrowers shall securely store or cause
to be securely stored any Stored Materials. If required by the Administrative
Agent, for any Stored Materials not stored on the Property, the Borrowers will
execute additional documents to confirm that the Lenders have a perfected Lien
on such Stored Materials.
Section 4.11 Limitations on Advances.
The following additional limitations on certain advances of the Loan
shall also apply:
(a) Interest Reserve. Except as provided in Section 2.6
(Permitted Costs), after the earlier of the issuance of certificate of occupancy
for a Facility or the expiration of the Construction Phase, no further advances
shall be made from the Interest Reserve in such Total Development Budget.
(b) Development Fee. The Development Fee will be advanced
only upon the exercise of a Sunrise Wholly Owned Subsidiary's option to purchase
the ownership interests in the Borrower. Such advance shall be based upon such
portion of the Development Fee which has accrued in equal monthly portions over
the first twelve (12) months of construction. Each Development Fee shall not
exceed five percent (5%) of the Total Development Budget.
(c) Operating Reserve. No advances from the Operating
Reserve shall be made until both a certificate of occupancy has been issued by
the applicable governmental authorities and, if applicable to the Facility, an
operating License has been issued for the Facility by the appropriate
Governmental Authority or Authorities. Advances from the Operating Reserve shall
be for the sole purpose of paying Debt Service or net operating losses as shown
on a monthly financial report for such Facility prepared in accordance with the
requirements set forth in this Agreement, and certified by the Chief Financial
Officer, Executive Vice President or President of the Master Guarantor.
Section 4.12 Feasibility Studies.
The Borrowers and the Administrative Agent agree that a Borrower may
request that the Administrative Agent order a market feasibility study from an
appraiser or other third-party consultant for any proposed Facility under
consideration to become an Eligible Project. The
46
53
Borrowers agree that such study is for informational purposes only and that the
Administrative Agent is not warranting the accuracy, completeness or reliability
of any such study and indemnifies and holds harmless the Administrative Agent
and the other Lenders from any claims arising out of or relating to any
feasibility study. The Administrative Agent acknowledges that the Lenders shall
not require that a feasibility study be obtained on any Facility. Administrative
Agent acknowledges that the Borrowers may use a feasibility study to decide
whether to proceed to have an Appraisal performed for a proposed Facility.
However, the Administrative Agent shall receive a copy of any such feasibility
study and the Borrowers shall pay the cost of each such study on demand by the
Administrative Agent, whether or not such Facility becomes an Eligible Project.
The Borrowers acknowledge that any Appraisal of the same Facility may or may not
be performed by the same party who performed any market feasibility study, in
the Administrative Agent's sole discretion.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to make available the Credit Facility, the
Borrowers represent and warrant to the Lenders that:
Section 5.1 Existence/Good Standing.
Each Borrower is a limited partnership or a limited liability company
duly organized and existing and in good standing under the laws of the
jurisdiction of its formation, has the power to own its property and to carry on
its business as now being conducted, and is duly qualified to do business and is
in good standing in each jurisdiction in which each Facility owned by such
Borrower is located and in which the character of the properties owned by it
therein or in which the transaction of its business makes such qualification
necessary. Each Borrower is a Wholly Owned Subsidiary.
Section 5.2 Power and Authority.
Each Borrower has full power and authority to execute and deliver this
Agreement and each of the other Financing Documents executed and delivered by
it, to make the borrowing hereunder, and to incur the Obligations, all of which
have been duly authorized by all proper and necessary partnership action. No
consent or approval of partners or members of, or lenders to, the Borrowers, and
no consent or approval of any Governmental Authority or any third party payor on
the part of the Borrowers, is required as a condition to the validity or
enforceability of this Agreement or any of the other Financing Documents
executed and delivered by any of the Borrowers or to the payment or performance
by the Borrowers of the Obligations.
Section 5.3 Binding Agreements.
This Agreement and each of the other Financing Documents executed and
delivered by the Borrowers have been properly executed by the Borrowers,
constitute valid and legally binding obligations of the Borrowers, and are fully
enforceable against the Borrowers in accordance with their respective terms.
47
54
Section 5.4 Litigation.
There are no proceedings pending before any court or arbitrator or
before or by any Governmental Authority which, in any one case or in the
aggregate, will cause a Material Adverse Change in any of the Borrowers or
affect the authority of any of the Borrowers to enter into this Agreement or any
of the other Financing Documents executed and delivered by any of the Borrowers.
There is no pending revocation, suspension, termination, probation, restriction,
limitation or non-renewal of any License, Participation Agreement or any similar
accreditation or approval organization or Governmental Authority for healthcare
providers, including, without limitation, the issuance of any provisional
License or other License with a term of less than twelve (12) months, as a
consequence of any sanctions imposed by any Governmental Authority, nor is there
any pending assessment of any civil or criminal penalties by any Governmental
Authority, the outcome of which, if determined adversely to any of the
Borrowers, could result in a Material Adverse Change in any of the Borrowers.
The Borrowers do not have any appeals regarding rates or reimbursements
currently pending or contemplated before any Governmental Authority or any
administrator of any third party payor or preferred provider program or referral
source, the outcome of which, if determined adversely to any of the Borrowers,
could result in a Material Adverse Change in any of the Borrowers. There are no
Medicare or Medicaid recoupments or recoupments of any other third party payor
being sought, requested or claimed, against any of the Borrowers, the outcome of
which, if determined adversely to any of the Borrowers could materially impair
any of the Borrowers' ability to pay the Obligations, except as otherwise
disclosed in writing to, and approved by, the Administrative Agent.
Section 5.5 No Conflicting Agreements.
There is (a) no provision of any Borrower's partnership agreement,
articles of incorporation or operating agreement and no provision of any
existing mortgage, indenture, contract or agreement binding on any of the
Borrower or affecting its property, and (b) to the knowledge of the Borrowers no
provision of law or order of court binding upon any of the Borrowers, which
would conflict with or in any way prevent the execution, delivery, or
performance of the terms of this Agreement or of any of the other Financing
Documents executed and delivered by any of the Borrowers, or which would be
violated as a result of such execution, delivery or performance, or, if so, all
necessary consents have been obtained.
Section 5.6 Financial Information.
All financial statements or information hereto furnished to the Lenders
with respect to the Borrowers, each Facility and the Guarantors is complete and
correct in all material respects and fairly presents the financial condition of
the Borrowers and the financial condition of the Facilities. There are no
liabilities, direct or indirect, fixed or contingent, of any of the Borrowers or
the Guarantors which are not reflected in the their respective financial
statements or in the notes thereto. There has been no Material Adverse Change in
the financial condition or operations of any of the Borrowers or the Guarantors
since the Guarantors' financial statements dated December 31, 2000 (and to the
Borrowers' and Guarantors' knowledge, no such Material Adverse Change is
pending), and neither any of the Borrowers nor the Guarantors has guaranteed the
obligations of, or made any investments in or advances to, any company,
individual or other entity, except as disclosed in such information.
48
55
Section 5.7 No Default.
None of the Borrowers is in default under or with respect to any
obligation under any agreement to which such Borrower is a party in any respect
which could result in a Material Adverse Change. There is no Event of Default
hereunder.
Section 5.8 Taxes.
The Borrowers have filed or have caused to have been filed all federal,
state and local tax or informational returns which are required by law to be
filed, and has paid or caused to have been paid all Taxes as shown on such
returns or on any assessment received by them, to the extent that such Taxes
have become due, or which are required by law to be paid, unless and to the
extent only that such Taxes, assessments and governmental charges are currently
contested in good faith and by appropriate proceedings by the Borrowers and
adequate reserves therefor have been established as required under GAAP.
Section 5.9 Place(s) of Business and Location of Collateral.
The Borrowers warrant that the address of the Borrowers' chief
executive office is as specified in EXHIBIT D attached hereto and made a part
hereof and that the address of each other place of business of any of the
Borrowers, are as disclosed in EXHIBIT D. The Collateral and all books and
records pertaining to the Collateral are and/or will be located at the addresses
indicated on EXHIBIT D. The Borrowers will immediately advise the Administrative
Agent in writing of the opening of any new place of business or the closing of
any existing place of business of any of the Borrowers, and of any change in the
location of the places where the Collateral, or any part thereof, or the books
and records concerning the Collateral, or any part thereof, are kept. EXHIBIT D
may be modified from time to time to add the locations of additional Facilities.
Section 5.10 Title to Properties.
The Borrowers have good and marketable title to all of their
properties, including, without limitation, the Property and the Collateral. The
Property and the Collateral are free and clear of mortgages, pledges, liens,
charges and other encumbrances other than the Permitted Liens.
Section 5.11 Margin Stock.
None of the proceeds of the Loan will be used, directly or indirectly,
by any of the Borrowers for the purpose of purchasing or carrying, or for the
purpose of reducing or retiring any indebtedness which was originally incurred
to purchase or carry, any "margin security" or "margin stock" within the meaning
of Regulation U (12 CFR ARTICLE 221), of the Board of Governors of the Federal
Reserve System (herein called "margin security" and "margin stock") or for any
other purpose which might make the transactions contemplated herein a "purpose
credit" within the meaning of said Regulation G or Regulation U, or cause this
Agreement to violate any other regulation of the Board of Governors of the
Federal Reserve System or the Securities Exchange Act of 1934 or the Small
Business Investment Act of 1958, as amended, or any rules or regulations
promulgated under any of such statutes.
49
56
Section 5.12 ERISA.
With respect to any "pension plan", as defined in Section 3(2) of
ERISA, which plan is now or previously has been maintained or contributed to by
any of the Borrowers and/or by any Commonly Controlled Entity: (a) no
"accumulated funding deficiency" as defined in Code Section 412 or ERISA Section
302 has occurred, whether or not that accumulated funding deficiency has been
waived; (b) no "reportable event" as defined in ERISA Section 4043 has occurred;
(c) no termination of any plan subject to Title IV of ERISA has occurred; (d)
neither any of the Borrowers nor any Commonly Controlled Entity has incurred a
"complete withdrawal" within the meaning of ERISA Section 4203 from any
multiemployer plan; (e) neither any of the Borrowers nor any Commonly Controlled
Entity has incurred a "partial withdrawal" within the meaning of ERISA Section
4205 with respect to any multiemployer plan; (f) no multiemployer plan to which
any of the Borrowers or any Commonly Controlled Entity has an obligation to
contribute is in "reorganization" within the meaning of ERISA Section 4241 nor
has notice been received by any of the Borrowers or any Commonly Controlled
Entity that such a multiemployer plan will be placed in "reorganization".
Section 5.13 Governmental Consent.
Neither the nature of any of the Borrowers or of its business or
properties, nor any relationship between any of the Borrowers and any other
Person, nor any circumstance in connection with the making of the Loan, or the
offer, issue, sale or delivery of the Note is such as to require a consent,
approval or authorization of, or filing, registration or qualification with, any
Governmental Authority, on the part of any of the Borrowers, as a condition to
the execution and delivery of this Agreement or any of the other Financing
Documents, the borrowing of the principal amounts of the Loan or the offer,
issue, sale or delivery of the Note.
Section 5.14 Full Disclosure.
The financial statements referred to in this ARTICLE V (REPRESENTATIONS
AND WARRANTIES) do not, nor does this Agreement, nor do any written statements
furnished by the Borrowers to the Administrative Agent in connection with the
making available of the Credit Facility, contain any untrue statement of fact or
knowingly omit a material fact necessary to make the statements contained
therein or herein not materially misleading. The Borrowers have not failed to
disclose any fact to the Administrative Agent in writing which materially
adversely affects or, will or could prove to materially adversely affect the
properties, business, prospects, profits or condition (financial or otherwise)
of any of the Borrowers or the ability of any of the Borrowers to perform this
Agreement or any of the other Financing Documents.
Section 5.15 Business Names and Addresses.
The Borrowers have not conducted business under any name other than
their current names or tradenames and have not conducted their business in any
jurisdiction other than those listed on EXHIBIT D. The Borrowers intend to
operate the Facilities under the names set forth on EXHIBIT D. The Borrowers
shall promptly notify the Administrative Agent of any change in the name of any
Facility.
50
57
Section 5.16 Licenses and Certifications.
The Borrowers further represent and warrant to the Lenders that, with
respect to any License they possess or have applied for, (a) no Default or Event
of Default has occurred or is continuing under the terms of any of the Licenses,
or any condition to the issuance, maintenance, renewal and/or continuance of any
License, (b) the Borrowers have paid all fees, charges and other expenses to the
extent due and payable with respect to, and has provided all information and
otherwise complied with all material conditions precedent to, the issuance,
maintenance, renewal, and continuance of all Licenses, (c) the Borrowers have
not received any notice from any Governmental Authority relating to any actual
or pending suspension, revocation, restriction, or imposition of any
probationary use, of any License, nor has any License been materially amended,
supplemented, rescinded, terminated, or otherwise modified except as otherwise
disclosed in writing to, and approved by, the Administrative Agent, (d) the
Borrowers have not made any previous assignment of any of the Licenses to any
Person, and (e) no financing statement covering any of the Licenses is on file
in any public office except financing statements in favor of the Lenders.
Without implying any limitation to the other representations and warranties
contained in this Agreement, the Borrowers are not required by any applicable
Law of any state, county or city in which any of the Facilities is located to
obtain a certificate of need to operate any Facility as an assisted living
facility or, an independent living facility or has applied for and obtained such
Certificate(s) of Need. Licenses to operate are required in all states where the
Facilities are located and Certificates of Need are also required in the State
of New Jersey. In New York and Illinois, licenses must be held by a Home
Healthcare Provider.
Section 5.17 Operating Agreements and Management Contracts.
The Borrowers have furnished to the Administrative Agent photocopies of
all material Operating Agreements and Management Contracts entered into with
respect to the Facilities, and all amendments, supplements and modifications
thereto including, without limitation, the Management Agreement. The Borrowers
further represent and warrant to the Lenders that (a) all of the material
Operating Agreements and Management Contracts are or will be at the time of
execution and delivery thereof valid and binding on the parties thereto and in
full force and effect, (b) no Default or Event of Default has occurred or is
continuing under the terms of any of the material Operating Agreements and
Management Contracts, and no party thereto has attempted or threatened to
terminate any such Management Contract or Operating Agreement, (c) the Borrowers
have not made any previous assignment of any Operating Agreements and Management
Contracts to any Person, and (d) no financing statement covering any of the
Operating Agreements and Management Contracts is on file in any public office,
except financing statements in favor of the Lenders in connection with the
Credit Facility.
Section 5.18 Participation Agreements and Resident Agreements.
The Borrowers have furnished to the Administrative Agent, on or before
the Facility Closing, the Borrowers' form of Resident Agreement used with
respect to all Facilities and, if requested by the Administrative Agent after
the occurrence and during the continuance of a Default, copies of all current,
executed Resident Agreements for any or all of the Eligible Projects.
51
58
(a) The Borrowers further covenant to the Lenders that, with
respect to the Participation Agreements, if any, (i) to the best of their
knowledge, all Participation Agreements will be at the time of execution and
delivery thereof valid and binding on the parties thereto and in full force and
effect, and (ii) all Participation Agreements will provide for payment to the
applicable Borrower for services rendered to residents. The Borrowers represent
and warrant that as of the date hereof it has not entered into any Participation
Agreement for any Facility.
(b) To the extent the Borrowers participates or will
participate in Medicare or Medicaid payment and reimbursement programs, the
Borrowers have complied and will comply with all notice and other requirements
under Title XVIII and Title XIX of the Social Security Act to enable the
Borrowers to participate in the Medicare and Medicaid payment and reimbursement
programs.
Section 5.19 Compliance with Laws.
None of the Borrowers is in violation of any applicable laws of any
Governmental Authority pertaining to employment practices, health standards or
controls, environmental and occupational standards or controls or order of any
court or arbitrator, the violation of which, considered in the aggregate, would
result in a Material Adverse Change in any of the Borrowers. Each of the
Borrowers are in compliance with all accreditation standards and requirements to
which it is subject. Each of the Borrowers have obtained or will obtain all
Licenses necessary to the ownership of its property or to the conduct of its
activities which, if not obtained, could materially adversely affect the ability
of any of the Borrowers to conduct its activities of operating each Facility as
an assisted living facility, including, without limitation if and as required by
any Governmental Authorities for the dispensing, storage, prescription,
disposal, and use of drugs, medications and other "controlled substances" and
for the maintenance of cafeteria and other food and beverage facilities or
services or the condition (financial or otherwise) of any of the Borrowers.
Section 5.20 Presence of Hazardous Materials or Hazardous Materials
Contamination.
None of the Borrowers has placed Hazardous Materials on any real
property owned, controlled or operated by any of the Borrowers or for which any
of the Borrowers are responsible except as described in the following sentence.
To the best of the Borrowers' knowledge, no Hazardous Materials are located on
any real property owned, controlled or operated by any of the Borrowers or for
which any of the Borrowers are responsible, except as disclosed in any
Environmental Warranty Agreement executed by a Borrower and the Guarantors in
connection with a Facility Closing and except for reasonable quantities of
necessary supplies for use by the Borrowers in the ordinary course of its
current line of business and stored, used and disposed of in accordance with
applicable Laws, and no property owned, controlled or operated by any of the
Borrowers has ever been used as a manufacturing, storage, or dump site for
Hazardous Materials nor is such property affected by Hazardous Materials
Contamination.
Section 5.21 Nature of Credit Facility; Usury; Disclosures.
Each of the Borrowers is a business or commercial organization, and the
Credit Facility is being made solely for the purpose of carrying on or acquiring
a business or commercial
52
59
enterprise. The rate or rates of interest charged on the Note do not, and will
not, violate any usury Law or interest rate limitation. The Credit Facility is
not subject to the federal Consumer Credit Protection Act (15 U.S.C. Section
1601 et. seq.) nor any other federal or state disclosure or consumer protection
laws. The Credit Facility is being transacted solely for business or commercial
purposes and not for personal, family or household purposes.
Section 5.22 Compliance with Zoning.
The Borrowers represent and warrant that the anticipated use of each
Eligible Project complies with applicable zoning ordinances, regulations and
restrictive covenants affecting such Land, all use requirements of any
Governmental Authority having jurisdiction have been satisfied, and no violation
of any law or regulation exists with respect thereto.
Section 5.23 Plans and Specifications.
The Borrowers represent and warrant that, to the extent required by
applicable law or any effective restrictive covenant, the Plans and
Specifications for each Eligible Project have been approved by all Governmental
Authorities having or claiming jurisdiction and by any beneficiary of any such
restrictive covenant.
Section 5.24 Building Permits; Other Permits.
The Borrowers represent and warrant that all building, construction and
other permits necessary or required in connection with the development of the
applicable Land and the construction of the Improvements have been or, prior to
any advance under the Loan for any applicable Eligible Project, will be, unless
otherwise agreed to by the Administrative Agent, validly issued and all fees and
bonds required in connection therewith have been paid or posted, as the
circumstances may require.
Section 5.25 Utilities.
The Borrowers represent and warrant that all utility services necessary
for the development of all the Land and the construction of the Improvements for
each Eligible Project and the operation thereof for their intended purpose are
or will be available at the boundaries of all the Land, including, without
limitation, telephone service, water supply, storm and sanitary sewer
facilities, natural gas (if available) and electric facilities.
Section 5.26 Access; Roads.
The Borrowers represent and warrant that all roads and other accesses
necessary for the development of all the Land and the construction of all the
Improvements for all Eligible Projects and full utilization thereof for their
intended purposes have either been completed or the necessary rights of way
therefor have either been or will be acquired by the appropriate Governmental
Authorities or have been or will be dedicated to public use and accepted by such
Governmental Authorities and all necessary steps have been taken by the
Borrowers or such Governmental Authorities to assure the complete construction
and installation thereof by a date sufficient to ensure the timely completion of
the Improvements and in no event later than the
53
60
Completion Date or such Eligible Projects have access to a public road via a
private road pursuant to recorded easements satisfactory to the Administrative
Agent.
Section 5.27 Other Liens.
The Borrowers represent and warrant that except as otherwise provided
in the Financing Documents, the Borrowers have made no contract or arrangement
of any kind the performance of which by the other party thereto would give rise
to a Lien on any Eligible Project.
Section 5.28 Defaults.
The Borrowers represent and warrant that there is no default on the
part of any of the Borrowers under the Financing Documents and no event has
occurred and is continuing which, with notice or the passage of time, or both,
would constitute a default under the Note or any of the other Financing
Documents.
Section 5.29 Survival; Updates of Representations and Warranties.
All representations and warranties contained in or made under or in
connection with this Agreement and the other Financing Documents shall survive
the date of this Agreement and the Loan made hereunder. The Lenders acknowledge
and agree that any and all representations and warranties contained in, or made
under, or in connection with, this Agreement may be amended, changed or
otherwise modified by the Borrowers at any time and from time to time after the
date of this Agreement so as to accurately reflect the matters represented and
warranted therein; provided, that such amendments, changes and/or modifications
are disclosed in writing to the Administrative Agent. The Lenders shall have no
obligation to waive any Event of Default due to any present or future inaccuracy
of such representation or warranty or to agree to any amendment, change or
modification of any such representation or warranty.
Section 5.30 Accounts.
With respect to all of the Borrowers' Accounts and to the best of the
Borrowers' knowledge (a) they are genuine, and in all respects what they purport
to be, and are not evidenced by a judgment, an instrument, or chattel paper
(unless such judgment has been assigned and such instrument or chattel paper has
been endorsed and delivered to the Administrative Agent); (b) they represent
undisputed, bona fide transactions completed in accordance with the terms and
provisions contained in the invoices relating thereto; (c) the services rendered
which resulted in the creation of the Accounts have been delivered or rendered
to and accepted by the Account Debtor; (d) the amounts shown on the Borrowers'
books and records, with respect thereto are actually and absolutely owing to the
Borrowers and are not contingent for any reason; (e) there are no set-offs,
counterclaims or disputes known by the Borrowers or asserted with respect
thereto, and the Borrowers have made no agreement with any Account Debtor
thereof for any deduction or discount of the sum payable thereunder except
regular discounts allowed by the Borrowers in the ordinary course of their
business for prompt payment; (f) there are no facts, events or occurrences known
to any of the Borrowers which in any way impair the validity or enforcement
thereof or tend to reduce the amount payable thereunder; (g) all Account Debtors
thereof, to the best of the Borrower's knowledge, have the capacity to contract;
(h) the services furnished giving rise thereto are not subject to any Liens
54
61
other than Permitted Liens; (i) the Borrowers have no knowledge of any fact or
circumstance which would impair the validity or collectibility thereof; and (j)
there are no proceedings or actions known to any of the Borrowers which are
pending against any Account Debtor which might result in any material adverse
change in its financial condition.
Section 5.31 Development of Eligible Projects.
To the extent SDI is acting as development agent for any of the
Eligible Projects, the applicable Borrowers have entered into a written
agreement therefor with SDI and all contracts entered into by SDI with respect
thereto, including, without limitation, the Architect's Contract and the
Construction Contracts, were executed by SDI with the knowledge and approval of
and as agent for the applicable Borrowers. In connection with such services as
agent for any of the Borrowers, SDI receives the Development Fee as and when
payable pursuant to the terms hereof.
ARTICLE VI
CONDITIONS OF LENDING
The making of any advance under the Loan is subject to the conditions
set forth in this Agreement and the following conditions precedent:
Section 6.1 No Default.
No Event of Default and no event which, with the giving of notice or
the passage of time or both, would become an Event of Default has occurred and
is existing or would result from the making of the Loan or any advance
thereunder and all representations and warranties set forth herein or in the
other Financing Documents are true and correct, both before and after the making
of the Loan or any advance thereunder.
Section 6.2 Opinion of Counsel for the Borrowers.
At the Credit Facility Closing and any Facility Closing the Lenders
shall receive a written opinion of counsel for the Borrowers and the Guarantors
satisfactory in all respects to the Administrative Agent.
Section 6.3 Approval of Counsel for the Lenders.
All legal matters incident to the Loan and all documents necessary in
the opinion of the Administrative Agent to make the Loan or the addition of
either an Eligible Project to the Borrowing Base or to add such Deeds of Trust
and related Collateral shall be satisfactory in all material respects to counsel
for the Lenders.
Section 6.4 Supporting Documents.
The Administrative Agent shall receive at the Facility Closing and in
connection with the subsequent granting of a Lien on an Eligible Project: (a) a
certificate of the general partner or managing member of each of the Borrowers,
in a form acceptable to the Administrative Agent in all respects, dated as of
the date hereof and certifying (i) that attached thereto is a true, complete and
correct copy of resolutions duly adopted by the partners or members of each of
the
55
62
Borrowers authorizing the execution and delivery of this Agreement, the Note and
the other Financing Documents, the borrowing thereunder, and the performance of
the Obligations, and (ii) as to the incumbency and specimen signature of the
authorized officer of the general partner or managing member of the Borrowers
executing this Agreement, the Note and the other Financing Documents; (b) such
other documents as the Administrative Agent may reasonably require the Borrowers
and/or the partners or members of the Borrowers to execute, in form and
substance acceptable to the Administrative Agent; and (c) such additional
information, instruments, opinions, documents, certificates and reports as the
Administrative Agent may reasonably deem necessary.
Section 6.5 Financing Documents.
All of the Financing Documents required by the Administrative Agent
whether at the Credit Facility Closing or any subsequent Facility Closing shall
be executed, delivered and, if deemed necessary by the Administrative Agent,
recorded, all at the sole expense of the Borrowers.
Section 6.6 Insurance.
The Borrowers shall have satisfied the Administrative Agent that any
and all insurance required by this Agreement is in effect as of the date of this
Agreement or as of the date of the addition of a Deed of Trust and related
Collateral, and that, to the extent required by the Financing Documents, the
Lenders have been named as an insured lienholder.
Section 6.7 Security Documents.
In order to perfect the lien and security interest created by this
Agreement, the Borrowers shall have executed and delivered to the Administrative
Agent all Security Documents (in form and substance acceptable to the
Administrative Agent in its sole discretion) deemed necessary by the
Administrative Agent, in a sufficient number of counterparts for recordation,
and, at the Borrowers' sole expense, shall record all such financing statements
and Security Documents, or cause them to be recorded, in all public offices
deemed necessary by the Administrative Agent.
Section 6.8 Joinder Agreement
In order to perfect the lien and security interest of the Lenders in
the Collateral related to the construction and operation of any Facility
encumbered by a Deed of Trust provided by an Additional Borrower, such
Additional Borrower shall execute and deliver to the Administrative Agent, a
Joinder Agreement joining in this Agreement as co-borrower in such assignments
of Collateral and such other Security Documents as the Administrative Agent may
require or shall execute Security Documents as the Administrative Agent may
require each in sufficient number of counterparts for recordation, if required
by the Administrative Agent, at the Borrowers' sole expense. The Borrowers or
the Administrative Agent shall record all financing statements and other
Security Documents, or cause them to be recorded, in all public offices deemed
necessary to the Administrative Agent.
56
63
ARTICLE VII
AFFIRMATIVE COVENANTS OF BORROWER
---------------------------------
Until payment in full and the performance of all of the Obligations
hereunder, the Borrowers shall:
Section 7.1 Financial Statements.
Furnish to the Administrative Agent:
(a) Monthly Operating Reports. Beginning with the first Operating
Month, not later than thirty (30) days after the last day of each such calendar
month, operating statements for each Eligible Project for such month, including
an income and expense statement for such period and census and billing reports
with respect to each Eligible Project then operating for such period;
(b) Other Quarterly Reports. Borrowing Base Reports (as and when
described in Section 2.1 (d) (The Loan) and copies of all Borrowing Base Reports
submitted to the Administrative Agent in connection with the Master Credit
Facility.
(c) Guarantor Statements. Cause the Master Guarantor to furnish such
financial statements as are required pursuant to the terms of the Master
Guaranty.
(d) Other Information. With reasonable promptness such additional
information, reports or statements as the Administrative Agent may from time to
time reasonably request.
(e) Certification. All required financial statements, required pursuant
to the Master Guaranty shall include the following certification:
"The undersigned as _____________ of ____________ certifies
that the financial information contained in the financial
statement dated _________, is true and complete as of this
date. This statement is provided to Bank of America, N.A. (the
"Bank") as administrative agent for certain Lenders for the
purpose of obtaining credit or in fulfillment of the terms and
conditions of credit already provided. Accordingly, it is
intended that the Bank may rely on this information".
Section 7.2 Taxes and Claims.
Pay and discharge all taxes, assessments and governmental charges or
levies imposed upon it or any of its income or properties prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid, might
become a lien or charge upon any of its properties; provided, however, the
Borrowers shall not be required to pay any such tax, assessment, charge, levy or
claim, the payment of which is being contested in good faith and by proper
proceedings.
57
64
Section 7.3 Legal Existence.
Maintain their existence as limited partnerships or limited liability
companies in good standing in the states of their formation and in each
jurisdiction where they are required to register or qualify to do business.
Section 7.4 Conduct of Business and Compliance with Laws.
Do or cause to be done all things necessary to obtain, enter into,
preserve and to keep in full force and effect its material rights and its trade
names, patents, trademarks and Licenses, Participation Agreements, and Operating
Agreements and Management Contracts which are necessary for the operation of
each Facility as an adult assisted living facility (or independent living
facility, as applicable) as contemplated by the Borrowers, engage in and
continue to engage substantially only in the business of owning and operating an
adult assisted living facility (or independent living facility, as applicable)
and related services in compliance with all applicable laws of the state in
which the applicable Facility is located or any other Governmental Authority
having jurisdiction over such Facility, and comply with all applicable Laws,
including, without limitation, regulations issued under the Omnibus Budget
Reconciliation Act of 1987 (OBRA'87) (Xxx.X.Xx. 100-203), as amended, and
observe the valid requirements of Governmental Authorities, and perform the
terms of all Participation Agreements to which it is a party, the noncompliance
with or the nonobservance of which might materially interfere with the
performance of its Obligations or the proper or prudent conduct of its business
or the applicable Property. In addition, the Borrowers covenant and agree that
they will:
(a) obtain and maintain in full force and effect all Licenses
necessary to the acquisition and/or ownership and/or operation of each Facility
including, without limitation, Licenses and other approvals related to the
storage, dispensation, use, prescription and disposal of drugs, medications and
other "controlled substances" and, to the extent offered by the Borrowers, the
maintenance of cafeteria and other food and beverage facilities or services;
(b) administer, maintain and operate (or will cause to be
administered, maintained and operated) each Facility as a revenue-producing
assisted living facility (or independent living facility, as applicable);
(c) to the extent the Borrowers participate in any such
programs, maintain and operate each Facility to meet the standards and
requirements and to provide healthcare of such quality and in such manner as
would enable the Borrowers to participate in, and provide services in connection
with, recognized medical and healthcare insurance programs;
(d) obtain, maintain and comply with all conditions for the
continuance of, all Licenses, including without limitation, Licenses which may
at any time be required by the state in which the applicable Facility is located
or other appropriate governmental entity, necessary or desirable for the
operation of each Facility as an adult assisted living facility (or independent
living facility, as applicable); and
(e) to the extent the Borrowers presently participate or in
the future will participate in such programs, obtain, maintain and comply with
all conditions for the continuance
58
65
of certification from each applicable Governmental Authority that the Borrowers
meet all conditions for participation in the Medicare and Medicaid programs.
Section 7.5 Use of Proceeds.
Use the proceeds of the Loan for the purpose of purchasing Replacement
Properties, constructing Improvements, paying Taxes and interest on the Loan as
set forth in Section 8.1 (Borrowings) and Section 8.14 (Distributions to
Partners or Members) and, without the prior written consent of the
Administrative Agent for no other purpose or purposes.
Section 7.6 Insurance.
Provide or cause to be provided to the Administrative Agent and
maintain in full force and effect at all times during the term of the Loan, such
policies of insurance as may be required by the terms of the Financing Documents
from a company or companies, and in form and amounts satisfactory to the
Administrative Agent including, by way of example and not by way of limitation,
at least the following:
(a) During any period of construction in or on an Eligible
Project, "builder's risk" insurance, including but not limited to vandalism and
malicious mischief and collapse endorsements in amounts not less than the
replacement cost of the Improvements being constructed or of the Property and
naming the Administrative Agent on behalf of the Lenders as a loss payee in the
mortgagee clause thereof;
(b) Casualty or physical damage insurance coverage for each
Eligible Project affording protection against loss or damage by fire or other
hazards covered by the standard all-risk fire and hazard insurance policy with
"extended coverage" endorsement and such other risks as shall be customarily
covered with respect to projects similar in construction, location and use as
the Property, or as the Administrative Agent may from time to time otherwise
require in amounts necessary to prevent the application of any co-insurance
provisions of any applicable policies up to an amount not less than the greater
of the full insurable value of the Improvements (as defined in the Deed of
Trust) or the aggregate principal amount of the Obligations; no policy of
insurance shall be written such that the proceeds thereof will produce less than
the minimum coverage required by this Section by reason of co-insurance
provisions or otherwise; the term "full insurable value" means the actual
replacement cost of the Property (as defined in the Deed of Trust) (excluding
foundation and excavation costs and costs of underground flues, pipes, drains
and other uninsurable items); and as to Eligible Projects naming the
Administrative Agent on behalf of the Lenders as loss payee in the mortgagee
clause thereof;
(c) General public liability insurance in amounts usually
carried by similar operations against claims for bodily injury or death and
property damage insurance for claims for damage to property (including loss of
use) occurring upon, in or about the Property naming the Administrative Agent on
behalf of the Lenders as loss payee thereunder, with such insurance to afford
protection to the limit of not less than $5,000,000 for the aggregate of all
occurrences during any given annual policy period for each Eligible Project;
59
66
(d) Workers' compensation insurance in accordance with the
requirements of applicable law or regulation naming the Administrative Agent on
behalf of the Lenders as loss payee thereunder;
(e) Business interruption insurance naming the Lenders as
additional insureds with respect to each Facility once a certificate of
occupancy has been issued for such Facility in an amount equal to at least
twelve (12) months' debt service on the applicable Loan; and
(f) To the extent that healthcare professionals are employed
by any of the Borrowers or the Management Company, medical liability,
malpractice and other healthcare professional liability insurance protecting the
Borrowers and its employees against claims arising from the professional
services performed by the Borrowers or the Management Company and their
employees with limits of (i) not less than One Million Dollars ($1,000,000.00)
with respect to injury or death for each person or occurrence, and (ii) not less
than Three Million Dollars ($3,000,000.00) in the aggregate for claims made for
injury or death in any one year, and an umbrella policy insuring against such
liability in an aggregate amount of Five Million Dollars ($5,000,000.00). In
addition, the Borrowers shall ensure that all healthcare providers with whom any
of the Borrowers contracts to provide services at any Facility are insured
against claims arising from such services with limits as set forth in clauses
(i) and (ii) above.
The Borrowers shall file with the Administrative Agent, upon its
request, a detailed list of the insurance then in effect and stating the names
of the insurance companies, the amounts and rates of the insurance, dates of the
expiration thereof and the properties and risks covered thereby. Each policy of
insurance shall (A) be issued by one or more recognized, financially sound and
responsible insurance companies approved by the Administrative Agent and which
are qualified or authorized by the laws of the state in which the applicable
Facility is located to assume the risk covered by such policy, (B) with respect
to the insurance described under the preceding subsections (a), (b) and (f) have
attached thereto standard noncontributing, non-reporting mortgagee clauses in
favor of and entitling the Lenders without contribution to collect any and all
proceeds payable under such insurance, (C) provide that such policy shall not be
canceled or modified without at least thirty (30) days prior written notice to
the Administrative Agent, and (D) provide that any loss otherwise payable
thereunder shall be payable notwithstanding any act of negligence of any of the
Borrowers which might, absent such agreement, result in a forfeiture of all or a
part of such insurance payment. Unless an escrow account has been established
for insurance premiums pursuant to the provisions of a Deed of Trust, the
Borrowers shall promptly pay all premiums when due on such insurance and, not
less than ten (10) days prior to the expiration date of each such policy, the
Borrowers will deliver to the Administrative Agent a renewal policy or policies
marked "premium paid" or other evidence of payment satisfactory to the
Administrative Agent. The Borrowers will immediately give the Administrative
Agent notice of any cancellation of, or change in, any insurance policy. The
Lenders shall not, because of accepting, rejecting, approving or obtaining
insurance, incur any liability for (i) the existence, nonexistence, form or
legal sufficiency thereof, (ii) the solvency of any insurer, or (iii) the
payment of losses.
60
67
Section 7.7 Flood Insurance.
If required by applicable law or regulation, provide or cause to be
provided to the Administrative Agent a separate policy of flood insurance in the
aggregate amount of the applicable Loan or the maximum limit of coverage
available with respect to the Property, whichever is the lesser, from a company
or companies satisfactory to the Administrative Agent and written in strict
conformity with the Flood Disaster Protection Act of 1973, as amended, and all
applicable regulations adopted pursuant thereto. In the event that flood
insurance is not required by applicable law or regulation to be provided in
connection with the applicable Loan or is not otherwise available with respect
to the Property, the Borrowers shall supply the Administrative Agent with
written evidence, in form and substance satisfactory to the Administrative
Agent, to that effect. Any such policy shall provide that the policy may not be
surrendered, canceled or substantially modified (including, without limitation,
cancellation for nonpayment of premiums) without at least thirty (30) days'
prior written notice to any and all insureds named therein, including the
Lenders.
Section 7.8 Maintenance of Properties.
Keep its properties, whether owned in fee or otherwise, or leased,
including, without limitation, all of the Property, in good operating condition;
make all proper repairs, renewals, replacements, additions and improvements
thereto needed to maintain such properties in good operating condition; comply
with the provisions of all leases to which it is a party or under which it
occupies property so as to prevent any loss or forfeiture thereof or thereunder;
and comply with all laws, rules, regulations and orders applicable to its
properties or business or any part thereof.
Section 7.9 Maintenance of the Collateral.
Not permit anything to be done to the Collateral which may impair the
value thereof. Any of the Lenders or an agent designated by such Lender, shall
be permitted to enter the premises of any of the Borrowers and examine, audit
and inspect the Collateral at any reasonable time and from time to time without
notice. The Lenders shall not have any duty to, and the Borrowers hereby release
the Lenders from, all claims of loss or damage caused by the delay or failure to
collect or enforce any of the Accounts or Receivables or to preserve any rights
against any other party with an interest in the Collateral.
Section 7.10 Other Liens, Security Interests, etc.
Keep the Collateral and the Property free from all liens, security
interests and claims of every kind and nature, other than Permitted Liens;
provided, the Borrowers may lease office Equipment and other Equipment in the
used in normal course of its business for the operation of a Facility provided
the total implied cost of such leased Equipment at any Eligible Project shall
not exceed $75,000 at any one time.
Section 7.11 Defense of Title and Further Assurances.
At its expense defend the title to the Collateral (or any part
thereof), and promptly upon request execute, acknowledge and deliver any
financing statement, renewal, affidavit, deed, assignment, continuation
statement, security agreement, certificate or other document the
61
68
Administrative Agent may reasonably require in order to perfect, preserve,
maintain, protect, continue and/or extend any lien or security interest granted
to the Lenders under this Agreement or any of the Security Documents and its
priority. The Borrowers shall pay to the Administrative Agent, on demand all
taxes, costs and expenses incurred by any of the Lenders, in connection with the
preparation, execution, recording and filing of any such document or instrument.
Section 7.12 Subsequent Opinion of Counsel as to Recording
Requirements.
Provide to the Administrative Agent a subsequent opinion of counsel as
to the filing, recording and other requirements with which any of the Borrowers
have complied to maintain the liens and security interests in favor of the
Lenders in the Collateral in the event that the Borrowers shall transfer its
principal place of business or the office where it keeps its records pertaining
to the Accounts and Receivables.
Section 7.13 Books and Records.
Keep and maintain accurate books and records, make entries on such
books and records in form reasonably satisfactory to the Administrative Agent
disclosing the Lenders' assignment of, and security interest in and lien on, the
Collateral and all collections received by the Borrowers on its Accounts,
furnish to the Administrative Agent promptly upon request such information,
reports, contracts, invoices, lists of purchases of Inventory (showing names,
addresses and amount owing) and other data concerning Account Debtors and the
Borrowers' Accounts and Inventory and all contracts and collection(s) relating
thereto as the Administrative Agent may from time to time specify, unless the
Administrative Agent shall otherwise consent in writing, keep and maintain all
such books and records mentioned in (a) above only at the addresses listed in
EXHIBIT D, and permit any person designated by any of the Lenders to enter the
premises of the Borrowers and examine, audit and inspect the books and records
at any reasonable time and from time to time.
Section 7.14 Collections.
Until such time as the Administrative Agent shall notify the Borrowers
of the revocation of such privilege following an Event of Default, at its own
expense have the privilege for the account of and in trust for the Lenders of
collecting its Accounts and receiving in respect thereto all items of payment
and shall otherwise completely service all of the Accounts including (i) the
billing, posting and maintaining of complete records applicable thereto, and
(ii) the taking of such action with respect to such Accounts as the
Administrative Agent may reasonably request or in the absence of such request,
as the Borrowers may deem advisable; and in its discretion, grant, in the
ordinary course of business, to any Account Debtor, any rebate, refund or
adjustment to which the Account Debtor may be lawfully entitled, and may accept,
in connection therewith, the return of goods, the sale or lease of which shall
have given rise to an Account. The Administrative Agent may, at its option but
solely in accordance with applicable law, at any time or from time to time after
the occurrence of an Event of Default hereunder, revoke the collection privilege
given to the Borrowers herein by either giving notice of its assignment of, and
lien on the Collateral, subject to the provisions of Section 3.1 (Collateral),
to the Account Debtors or giving notice of such revocation to the Borrowers.
62
69
Section 7.15 Notice to Account Debtors and Escrow Account.
In the event that (a) a Default or an Event of Default exists, or (b)
demand has been made for any or all of the Obligations, promptly upon the
request of the Administrative Agent in such form and at such times as reasonably
specified by the Administrative Agent, give notice of the Lenders' lien on the
Accounts to the Account Debtors requiring those Account Debtors which are
permitted by applicable law to make payments thereon directly to the
Administrative Agent.
Section 7.16 Business Names.
Immediately notify the Administrative Agent of any change in the name
or names under which they conduct their business.
Section 7.17 ERISA.
With respect to any pension plan which any of the Borrowers and/or any
Commonly Controlled Entity maintains or contributes to, either now or in the
future, that: (a) such bonding as is required under ERISA Section 412 will be
maintained; (b) as soon as practicable and in any event within 15 days after any
of the Borrowers or any Commonly Controlled Entity knows or has reason to know
that a "reportable event" has occurred or is likely to occur, the Borrowers will
deliver to the Administrative Agent a certificate signed by its chief financial
officer setting forth the details of such "reportable event"; (c) neither the
Borrowers nor any Commonly Controlled Entity will: (i) engage in or permit any
"prohibited transaction" (as defined in ERISA Section 406 or Code Section 4975)
to occur; (ii) cause any "accumulated funding deficiency" as defined in ERISA
Section 302 and/or Code Section 412; (iii) terminate any pension plan in a
manner which could result in the imposition of a lien on the property of the
Borrowers pursuant to ERISA Section 4068; (iv) terminate or consent to the
termination of any multiemployer plan; (v) incur a complete or partial
withdrawal with respect to any multiemployer plan within the meaning of ERISA
Sections 4203 and 4205; and (d) within 15 days after notice is received by any
of the Borrowers or any Commonly Controlled Entity that any multiemployer plan
has been or will be placed in "reorganization" within the meaning of ERISA
Section 4241, the Borrowers will notify the Administrative Agent to that effect.
Upon the Administrative Agent's request, the Borrowers will deliver to the
Administrative Agent a copy of the most recent actuarial report, financial
statements and annual report completed with respect to any "defined benefit
plan", as defined in ERISA Section 3(35).
Section 7.18 Change in Management.
There shall be no change of the Management Company for any Facility to
any manager other than XXXXX or another Sunrise Wholly Owned Subsidiary without
the prior written consent of the Essential Lenders.
Section 7.19 Management.
(a) Subject to the terms of any Management Fee Subordination Agreement
by and among a Borrower, XXXXX and the Administrative Agent, signed in
connection with a Facility Closing (individually or collectively, the
"Management Fee Subordination Agreement"), the Borrowers shall cause XXXXX to
agree to subordinate payment of any and all management fees under, or in
connection with, the Management Agreement (the "Management Fees") to payment of
the
63
70
Obligations, in accordance with the terms and conditions of one or more
subordination agreements in form and content acceptable to the Administrative
Agent in its reasonable discretion, and not amend, restate, supplement,
terminate, cancel or otherwise modify any of the terms or conditions of such
Management Agreement, in any material respect, without the prior written consent
of the Administrative Agent, and (b) terminate the Management Agreement upon
receipt of notice from the Administrative Agent directing the Borrowers to
terminate the Management Agreement after the occurrence of an Event of Default,
and, if requested to do so by the Administrative Agent, enter into a management
agreement for the management of any Facility with an independent manager. The
Management Agreement shall be approved in writing by the Administrative Agent
prior to execution. A fully executed copy of the Management Agreement shall be
delivered to the Administrative Agent by the Borrowers promptly after it is
signed.
Section 7.20 Surveys.
Upon the Administrative Agent's request from time to time as
construction of a Facility progresses and upon the completion of the
construction of the Improvements, the Borrowers shall furnish the Administrative
Agent with a Survey with a current certification to the Administrative Agent by
a registered land surveyor of the jurisdiction in which the Land is located. At
any time the Borrowers are required to furnish a Survey to the Administrative
Agent pursuant to the terms of this Agreement, the Borrower shall also furnish
an original print thereof to the title insurance company and such Survey shall
not be sufficient for the purposes of this Agreement unless and until the title
insurance company shall advise the Administrative Agent, by endorsement to the
title insurance policy or otherwise, that the Survey discloses no violations,
encroachments or other variances from applicable set-backs or other restrictions
except such as the Administrative Agent and its counsel shall approve.
Section 7.21 Inspections; Cooperation; Payment of Inspecting Engineer.
The Borrowers shall permit the Lenders and their duly authorized
representatives (including, without limitation, the Inspecting Engineer) to
enter upon any of the Land, to inspect the Improvements and any and all
materials to be used in connection with the development of any of the Land
and/or the construction of the Improvements, to examine all detailed plans and
shop drawings and similar materials as well as all records and books of account
maintained by or on behalf of the Borrowers relating thereto and to discuss the
affairs, finances and accounts pertaining to any Facility and any of the
Improvements with representatives of the Borrowers. The Borrowers shall at all
times cooperate and cause the General Contractor and each and every one of its
subcontractors and materialmen to cooperate with the Lenders and their duly
authorized representatives (including, without limitation, the Inspecting
Engineer) in connection with or in aid of the performance of the Administrative
Agent's or Lenders' functions under this Agreement. The reasonable fees of any
Inspecting Engineer engaged or employed by the Administrative Agent in
connection with or in aid of the performance of the Administrative Agent's or
the Lenders' functions under this Agreement shall be paid by the Borrowers.
64
71
Section 7.22 Vouchers and Receipts.
The Borrowers shall furnish to the Administrative Agent, promptly on
demand, any contracts, bills of sale, statements, receipted vouchers or
agreements pursuant to which any of the Borrowers has any claim of title to any
materials, fixtures or other articles delivered or to be delivered to the Land
or incorporated or to be incorporated into any of the Improvements. The
Borrowers shall furnish to the Administrative Agent, promptly on demand, a
verified written statement, in such form and detail as the Administrative Agent
may require, showing all amounts paid for labor and materials and all items of
labor and materials furnished or to be furnished for which payment has not been
made and the amounts to be paid therefor.
Section 7.23 Payments for Labor and Materials.
The Borrowers shall pay when due all bills for services or labor
performed and materials supplied in connection with the development of the Land
and the construction of the Improvements. In the event any mechanics' lien or
other lien or encumbrance shall be filed or attached against the Property
without the prior written consent of the Administrative Agent in each instance,
the Borrowers covenant and agree that, within thirty (30) days after receipt of
notice from any source of the filing of such lien, the Borrowers will promptly
discharge the same by payment or filing bond or otherwise as permitted by law;
and if the Borrowers fail to do so, the Administrative Agent may, at its option,
in addition to, and not in limitation of, all other rights and remedies of the
Administrative Agent in the Event of Default by the Borrowers, and without
regard to the priority of said mechanics' lien or other lien or encumbrance, pay
the same, and all amounts expended by the Administrative Agent for such purpose
shall constitute loan to the Borrowers and shall be secured by the Deed of Trust
and the other Financing Documents, and be due and payable forthwith by the
Borrowers to the Administrative Agent with interest thereon at the Reimbursement
Rate provided for in the Deed of Trust.
Section 7.24 Correction of Construction Defects.
Promptly following any demand by the Administrative Agent, the
Borrowers shall correct or cause the correction of any structural defects in the
Improvements and any material departures or deviations from the Plans and
Specifications, as determined by the Administrative Agent in its sole but
reasonable discretion, not approved in writing by the Administrative Agent.
Section 7.25 Fees and Expenses; Indemnity.
Pay all reasonable fees, charges, costs and expenses required to
satisfy the conditions of the Financing Documents. The Borrowers shall hold the
Lenders harmless and indemnify the Lenders against all claims of brokers and
"finders" arising by reason of the execution and delivery of the Financing
Documents or the consummation of the transaction contemplated hereby.
Section 7.26 Governmental Surveys or Inspections.
Furnish to the Administrative Agent upon its request, within thirty
(30) days of receipt thereof, copies of any and all annual surveys or
inspections performed by any Governmental Authority or accreditation or
certification organization with respect to any Facility.
65
72
Section 7.27 Cost Reports.
Prepare and file all applicable cost reports to all third-party payors,
if any, to the extent required by any such third-party payor and, within thirty
(30) days thereafter, notify the Administrative Agent of any settlement of any
cost report disclosed to the Administrative Agent as being open or unsettled as
of the Closing Date to the extent any such cost report would have a materially
adverse effect on the Borrowers.
Section 7.28 Updated Appraisals.
In addition, the Administrative Agent shall have the right but not the
obligation to require annual updated appraisals of any or all the Property and
the Facilities, which appraisals shall be prepared by an appraiser or appraisers
designated by the Administrative Agent and shall be in all respects reasonably
acceptable to the Administrative Agent which appraisals shall include, if deemed
necessary by the Administrative Agent, in its reasonable discretion, updated
discounted cash flow analysis, inspections of and commentary on the physical
status of the applicable Facility and an engineering review. The basis of the
appraisal calculations shown on such appraisal reports and all other aspects of
the appraisal reports must be satisfactory to the Administrative Agent in all
material respects. The release of such appraisal reports by the Administrative
Agent to the Borrowers shall be at the Administrative Agent's sole option if the
Borrowers have not paid the cost of such appraisal. If the Borrowers have paid
the cost of the appraisal, a copy of the appraisal will be provided to the
Borrowers upon their signing of the Administrative Agent's standard appraisal
release letter provided an Event of Default has not occurred and is not
continuing. The Borrowers shall reimburse the Administrative Agent upon demand
for all costs and expenses incurred by any of the Lenders with respect to the
preparation and review of all future appraisals required pursuant to the terms
hereof, if either (i) such appraisal is required by law or banking regulation,
(ii) an event of default has occurred under the Financing Documents, or (iii)
the Administrative Agent has reason to believe a change in value has occurred in
the Facility being appraised due to an adverse change in the Facility's
occupancy status or operating performance.
Section7.29 Notification of Certain Events, Events of Default and
Adverse Developments.
Promptly give written notice to the Administrative Agent who will
forward a copy of the notice to the Lenders upon obtaining knowledge of the
occurrence of any of the following:
(a) any Event of Default under the Financing Documents;
(b) any event, development or circumstance whereby the
financial statements furnished under the Financing Documents fail in any
material respect to present fairly, in accordance with GAAP, the financial
condition and operational results of the Borrowers;
(c) any judicial, administrative or arbitral proceeding
pending against any of the Borrowers or any judicial or administrative
proceeding known by the Borrowers to have been threatened against any of them in
a written communication which threatened proceeding, if adversely decided, could
cause a Material Adverse Change in any of the Borrowers;
66
73
(d) the revocation, suspension, probation, restriction,
limitation or refusal to renew, or any administrative procedure then in process
for the revocation, suspension, probation, restriction, limitation, or refusal
to renew, of any License, or the decertification, revocation, suspension,
probation, restriction, limitation, or refusal to renew, or the pending,
decertification, revocation, suspension, probation, restriction, limitation, or
refusal to renew or any administrative procedure then in process for any
participation or eligibility in any third party payor program in which any of
the Borrowers elects to participate, including, without limitation, Medicare,
Medicaid or other private insurer programs or any accreditation of any of the
Borrowers, or the issuance or pending issuance of any License for a period of
less than twelve (12) months, as a consequence of sanctions imposed by any
Governmental Authority, or the assessment or pending assessment, of any civil or
criminal penalties by any Government Authority, any third party payor or any
accreditation organization or Person, which could materially adversely affect
the financial condition or operations of any of the Borrowers or an Affiliate
(present or prospective) as determined by the Administrative Agent, in its sole
but reasonable discretion;
(e) any action, including, but not limited to, the filing of
any certificate of need application if required by law, the amendment of any
facility license or certification, or the issuance of any new license or
certification for any Facility, under which any of the Borrowers proposes (i) to
develop a new facility or service and/or (ii) eliminate, materially expand or
materially reduce any service;
(f) any actual contingent liability or a potential contingent
liability threatened or noticed in a written communication to any of the
Borrowers of $50,000 or more per Facility;
(g) any other development in the business or affairs of the
Borrower results in a Material Adverse Change; and
(h) in each case listed in clauses (a) through (g), inclusive,
of this Section describing in detail satisfactory to the Administrative Agent
the nature thereof and, in the case, if any, of notification under clause (a),
the action the Borrowers propose to take with respect thereto or a statement
that the Borrowers intend to take no action and an explanation of the reasons
for such inaction. In addition, the Borrowers will furnish to the Administrative
Agent immediately after receipt thereof copies of all administrative notices
material to Borrowers' business and operation of any Facility and all responses
by or on behalf of the Borrowers with respect to such administrative notices.
Section 7.30 Compliance with Environmental Laws.
If any Hazardous Materials are used, present or generated on any real
property owned or controlled by any of the Borrowers or for which any of the
Borrowers are responsible, such Borrower shall use, process, distribute, handle,
maintain, treat, store, dispose of and transport such substance in compliance
with all applicable laws, including, but not limited to, those regulating PCB's,
underground storage tanks, radon and medical waste tracking, as well as any laws
that are enacted after the date of this Agreement.
67
74
Section 7.31 Hazardous Materials; Contamination.
(a) Give notice to the Administrative Agent within five (5) Banking
Days of any of the Borrowers' acquiring knowledge of the presence of any
Hazardous Materials on any property owned or controlled by any of the Borrowers
or for which any of the Borrowers is responsible or of any Hazardous Materials
Contamination with a full description thereof, except for reasonable quantities
of necessary supplies for use by the Borrowers in the ordinary course of their
current line of business and stored, used and disposed of in accordance with
applicable Laws; (b) promptly comply with any laws requiring special handling,
maintenance, servicing, removal, treatment or disposal of Hazardous Materials or
Hazardous Materials Contamination and provide the Administrative Agent upon
request with satisfactory evidence of such compliance; (c) provide the
Administrative Agent, within thirty (30) days after a demand by the
Administrative Agent, with a bond, letter of credit or similar financial
assurance evidencing to the Administrative Agent's satisfaction that funds are
available to pay the cost of removing, treating, and disposing of such Hazardous
Materials or Hazardous Materials Contamination and discharging any lien which
may be established as a result thereof on any property owned, operated or
controlled by any of the Borrowers or for which any of the Borrowers are
responsible; and (d) defend, indemnify and hold harmless the Lenders and each of
their agents, employees, trustees, successors and assigns from any and all
claims which may now or in the future (whether before or after the termination
of this Agreement) be asserted as a result of the presence of any Hazardous
Materials on any property owned, operated, controlled or managed by any of the
Borrowers for which any of the Borrowers are responsible for any Hazardous
Materials Contamination.
Section 7.32 Participation in Reimbursement Programs.
In the event any of the Borrowers elects to participate in any or all
plans and/or programs for third party payment and/or reimbursement, and the
revenues derived from a single plan or program exceed ten percent (10%) of the
gross revenues of the applicable Facility, such Borrower will continue its
participation in any and all such plans and/or programs for third party payment
and/or reimbursement from, and claims against, private insurers or programs for
payment and/or reimbursement from federal, state and local governmental agencies
and/or private or quasi-public insurers, including, without limitation, Managed
Care Plans, Medicaid and Medicare and the Veterans Administration (as determined
by the Borrowers in the good faith exercise of their prudent and commercially
reasonable business judgment). While participating in such plans, the Borrowers
shall comply with any and all rules, regulations, standards, procedures and
decrees necessary to maintain the Borrowers' participation in any such third
party payment or reimbursement program or plan.
Section 7.33 Pool Status.
Any Eligible Project must qualify as a Pool A Project when it is added
to and while it remains in the Borrowing Base.
68
75
Section 7.34 Subordination of Distributions and Management Fees.
Subordinate, and cause the partners or members of each of the Borrowers
to subordinate, all distributions of the Borrowers to principal and interest
payments on the Loan; provided, however, that the Borrowers may pay
distributions to partners or members of the Borrowers in accordance with Section
8.14 (Distributions to Partners or Members) prior to the occurrence of an Event
of Default and so long as the payment of any such distributions will not result
in the occurrence of an Event of Default. Subordinate the payment of management
fees with respect to each Facility pursuant to the terms of all Management Fee
Subordination Agreement (as the same may be modified from time to time) by and
among any of the Borrowers, the Administrative Agent and the Management Company.
Section 7.35 Copies of Notices.
Promptly following the giving or receipt by any of the Borrowers of any
notice given to or received from the General Contractor or any subcontractor or
materialman with respect to the Property, if such notice concerns any default or
failure to perform by any party, or relates to any matter requiring the
Administrative Agent's or the Lenders' approval under this Agreement, the
Borrowers shall forward to the Administrative Agent copies of any such notice.
Section 7.36 Commencement of Occupancy.
The first resident of a Completed Facility shall take occupancy within
sixty (60) days of the issuance of the occupancy permit for such Facility.
ARTICLE VIII
NEGATIVE COVENANTS OF BORROWER
Until payment in full and the performance of all of the Obligations,
without the prior written consent of the Administrative Agent as permitted
pursuant to the Agency Agreement, the Borrowers will not directly or indirectly:
Section 8.1 Borrowings.
Create, incur, assume or suffer to exist any liability for borrowed
money other than the Credit Facility, Equipment leases permitted by the terms of
this Agreement or unsecured loan from Affiliates which are fully subordinated
(either by their terms or by separate written agreement) to the Credit Facility
and bearing interest at a rate no higher than that then applicable to the Credit
Facility.
Section 8.2 Deeds of Trust and Pledges.
Create, incur, assume or suffer to exist any deed of trust, mortgage,
pledge, Lien or other encumbrance of any kind upon, or any security interest in,
any of its property or assets, including the Collateral, whether now owned or
hereafter acquired.
69
76
Section 8.3 Sale or Transfer of Assets.
Directly or indirectly enter into any arrangement whereby any of the
Borrowers shall sell, lease, transfer, assign or otherwise dispose of more than
$50,000 of assets in connection with any Eligible Project in any one year other
than (a) sales or other disposition of assets in the ordinary course of business
for value, provided the proceeds thereof are used to pay down the Loan or the
asset sold or disposed of is replaced by one of equal or greater value or (b)
the transfer of an Eligible Project or the sale of an Eligible Project, in
either case, in which case the Borrowing Base will be reduced by the
availability attributed to such Facility. The foregoing notwithstanding,
ownership interests in a Borrower may be purchased by a Sunrise Wholly Owned
Subsidiary in connection with the payment in full of such Borrower's Facility
Owner Note.
Section 8.4 Other Liens; Transfers; "Due-on-Sale"; etc.
The Borrowers shall not, without the prior written consent of the
Administrative Agent, create or permit to be created or remain with respect to
any of the Property or any part thereof or income therefrom, any mortgage,
pledge, lien, encumbrance or charge, or security interest, or conditional sale
or other title retention agreement, whether prior or subordinate to the lien of
the Financing Documents, other than in connection with the Financing Documents
or as otherwise provided or permitted therein. Except for any grant, conveyance,
sale, assignment or transfer in the ordinary course of the Borrowers' business
and which is specifically conditioned upon the release of record of the lien of
the Deed of Trust and the other Financing Documents as to that portion of the
Property granted, conveyed, sold, assigned or transferred, the Borrowers shall
not, without the prior written consent of the Administrative Agent, make,
create, permit or consent to any conveyance, sale, assignment or transfer of any
of the Property or any part thereof, other than in connection with the Financing
Documents or as otherwise provided or permitted therein.
Section 8.5 Advances and Loans.
Make loans or advances to any Person, including, without limitation,
Affiliates, partners and employees of the Borrowers.
Section 8.6 Contingent Liabilities.
Assume, guarantee, endorse, contingently agree to purchase or otherwise
become liable upon the obligation of any Person, except by the endorsement of
negotiable instruments for deposit and collection or similar transactions in the
ordinary course of business.
Section 8.7 Licenses.
Allow any Licenses, permit, right, franchise or privilege necessary for
the ownership or operation of any Facility for the purposes for which any
Facility is intended to be used to lapse, be suspended or be forfeited unless
solely due to administrative delay by the licensing authority.
70
77
Section 8.8 ERISA Compliance.
(a) Restate or amend any Plan established and maintained by the
Borrowers or any Commonly Controlled Entity and subject to the requirements of
ERISA, in a manner designed to disqualify such Plan and its related trusts under
the applicable requirements of the Code; (b) permit any partners of the
Borrowers or any Commonly Controlled Entity to materially adversely affect the
qualified tax-exempt status of any Plan or related trusts of the Borrowers or
any Commonly Controlled Entity under the Code; (c) engage in or permit any
Commonly Controlled Entity to engage in any Prohibited Transaction; (d) incur or
permit any Commonly Controlled Entity to incur any Accumulated Funding
Deficiency, whether or not waived, in connection with any Plan; (e) take or
permit any Commonly Controlled Entity to take any action or fail to take any
action which causes a termination of any Plan in a manner which could result in
the imposition of a lien on the property of the Borrowers or any Commonly
Controlled Entity pursuant to Section 4068 of ERISA; (f) fail to notify the
Administrative Agent that notice has been received of a "termination" (as
defined in ERISA) of any Multiemployer Plan to which any of the Borrowers or any
Commonly Controlled Entity has an obligation to contribute; (g) incur or permit
any Commonly Controlled Entity to incur a "complete withdrawal" or "partial
withdrawal" (as defined in ERISA) from any Multiemployer Plan to which any of
the Borrowers or any Commonly Controlled Entity has an obligation to contribute;
or (h) fail to notify the Administrative Agent that notice has been received
from the administrator of any Multiemployer Plan to which any of the Borrowers
or any Commonly Controlled Entity has an obligation to contribute that any such
Plan will be placed in "reorganization" (as defined in ERISA).
Section 8.9 Transfer of Collateral.
Transfer, or permit the transfer, to another location of any of the
Collateral or the books and records related to any of the Collateral; provided,
however, that the Borrowers may transfer the Collateral or the books and records
related thereto to another location if the Borrowers shall have provided to the
Administrative Agent prior to such transfer an opinion of counsel addressed to
the Administrative Agent to the effect that the Lenders' perfected security
interest shall not be affected by such move or if it shall be affected, setting
forth the steps necessary to continue the Lenders' perfected security interest
together with the commencement of such steps by the Borrowers at their expense.
Section 8.10 Sale of Accounts or Receivables.
Sell, discount, transfer, assign or otherwise dispose of any of its
Accounts or Receivables of any Facility, such as accounts receivable, notes
receivable, installment or conditional sales agreements or any other rights to
receive income, revenues or moneys, however evidenced.
Section 8.11 Amendments; Terminations.
Amend or terminate or agree to amend or terminate any of the Exchange
Agreements, any License, the Management Agreement, or any participation
agreement which exceeds 10% of the gross revenue of the applicable Facility, or
except in the ordinary course of business any other Management Contracts and
Operating Agreements which may have been entered into by
71
78
the Borrowers with respect to any Facility and which exceeds 10% of its gross
revenue, or consent to or waive any material provisions thereof.
Section 8.12 Prohibition on Hazardous Materials.
Place, manufacture or store or permit to be placed, manufactured or
stored, any Hazardous Materials on any property owned, controlled or operated by
the Borrowers or the Management Company or SDI or for which the Borrowers or the
Management Company or SDI is responsible, except for reasonable quantities of
necessary supplies for use by the Borrowers, the Management Company or SDI in
the ordinary course of its current line of business and stored, used and
disposed of in accordance with applicable Laws.
Section 8.13 Subsidiaries.
Create or otherwise acquire any subsidiaries.
Section 8.14 Distributions to Partners or Members.
(a) Make any distributions of net operating income to partners
or members of any of the Borrowers.
(b) Make a distribution to partners or members of any of the
Borrowers from proceeds of the Loan as a repayment of equity in an Eligible
Project unless the Borrowers give advance written notice to the Administrative
Agent of the amount of such proposed distribution and the Administrative Agent
acknowledges in writing the availability of equity to make such a distribution,
except that a Borrower may make distributions to the Qualified Intermediary
which owns it (not in excess of the amount contributed to such Borrower by such
Qualified Intermediary) and the Qualified Intermediary may contribute cash from
the sale of a Relinquished Property (i) to a Wholly Owned Subsidiary to purchase
property and construct a Facility thereon if the Qualified Intermediary has
pledged to the Lenders its ownership interests in such Wholly Owned Subsidiary
or (ii) provided no Default has occurred, to Sunrise Wholly Owned Subsidiary in
order to purchase a Replacement Property, in which case SALI shall provide to
the Administrative Agent by five (5) days prior to the date of such purchase
such information as the Administrative Agent may request with respect to such
Replacement Property.
Section 8.15 Mergers or Acquisitions.
Enter into any merger or consolidation or amalgamation, wind up or
dissolve itself (or suffer any liquidation or dissolution), or acquire all or
substantially all of the assets of any person, firm, joint venture or
corporation except to transfer its ownership interests to a Sunrise Wholly Owned
Subsidiary in connection with the payment in full of the applicable Borrower's
respective Facility Owner Note.
Section 8.16 Partnership or Member Interests.
Repurchase, redeem or retire any partnership or membership interest any
of in the Borrowers.
72
79
Section 8.17 Impairment of Security.
The Borrowers shall take no action which shall impair in any manner the
value of any of the Property or the validity, priority or security of any Deed
of Trust.
Section 8.18 Conditional Sales.
The Borrowers shall not incorporate in the Improvements any property
acquired under a conditional sales contract, or lease, or as to which the vendor
retains title or a security interest, without the prior written consent of the
Administrative Agent.
Section 8.19 Changes to Plans and Specifications.
After review and approval of a Total Development Budget by the
Administrative Agent, the Borrowers shall not permit any change order increasing
the price of the Improvements for an Eligible Project by more than $50,000 for
any one change order or by more than 10% of the total hard cost portion of the
Total Development Budget in the aggregate or materially altering the scope of
the Improvements, without the prior written consent of the Administrative Agent
which consent will not be unreasonably withheld and provided such changes will
not cause the Facility not to qualify as a Pool A Project.
Section 8.20 Construction Contract; Construction Management.
The Borrowers shall not execute any contract or agreement or become a
party to any arrangement for the construction of any Improvements or for
construction management services with respect to any Property except for
contracts included in the Exchange Documents without the prior written consent
of the Administrative Agent.
Section 8.21 Qualified Intermediary Limitations.
No Qualified Intermediary shall create a subsidiary which is not a
Borrower (except as permitted by the following sentence) or enter into a
financing transaction other than this Credit Facility. A Qualified Intermediary
may contribute cash from the sale of a Relinquished Property to acquire (i) a
Replacement Property to be owned by a Sunrise Wholly Owned Subsidiary so long as
no Default has occurred and SALI provides to the Administrative Agent at least
five (5) days prior to such purchase whatever information the Administrative
Agent may request with respect to such Replacement Property, or (ii) a Facility
or land for the construction of a Facility which is not an Eligible Project
provided it is owned at the time of such contribution by a Wholly Owned
Subsidiary formed by such Qualified Intermediary and provided the Qualified
Intermediary has pledged its ownership interests in the Wholly Owned Subsidiary
as security for such Qualified Intermediary's appplicable Facility Owner
Obligations. Such pledge may be released upon the sale of the Qualified
Intermediary's ownership interest to a Sunrise Wholly Owned Subsidiary. No
Wholly Owned Subsidiary shall incur any indebtedness other than its respective
Facility Owner Obligations without the prior written consent of the
Administrative Agent.
73
80
ARTICLE IX
EVENTS OF DEFAULT
The occurrence of one or more of the following events shall be "Events
of Default" under this Agreement, and the terms "Event of Default" shall mean,
whenever they are used in this Agreement, any one or more of the following
events
Section 9.1 Failure to Pay and/or Perform the Obligations.
The Borrowers shall fail to (a) make any payment of interest on the
Note, or (b) pay any of the other Obligations including but not limited to the
Expense Payments and Liquidation Costs and such failure continues for more than
five (5) calendar days after notice thereof by the Administrative Agent, except
with regard to payment of (a) any Borrowing Base Deficiency which shall be due
as provided in Section 2.1 (The Loan), and (b) amounts due at maturity for which
no notice or cure period shall be required to be given.
Section 9.2 Breach of Representations and Warranties.
Any material representation or warranty made in this Agreement or in
any report, certificate, opinion (including any opinion of counsel for the
Borrowers), financial statement or other instrument furnished in connection with
the Obligations or with the execution and delivery of any of the Financing
Documents, shall prove to have been false or misleading when made (or, if
applicable, when reaffirmed) in any material respect.
Section 9.3 Failure to Comply with Covenants.
Default shall be made by the Borrowers in the due observance and
performance of any covenant, condition or agreement contained in ARTICLE VII
(AFFIRMATIVE COVENANTS OF BORROWER) (except for Section 7.8 (Maintenance of
Properties), Section 7.9 (Maintenance of the Collateral), Section 7.10 (Other
Liens, Security Interests, etc.), Section 7.17 (ERISA)) or in ARTICLE VIII
(NEGATIVE COVENANTS OF BORROWER).
Section 9.4 Failure to Comply with Books and Records.
Default shall be made by the Borrowers in the due observance or
performance of Section 7.13 (Books and Records), which default shall remain
unremedied, and the Borrowers shall cure such default promptly, but in no event
more than ten (10) days after written notice thereof to the Borrowers by the
Administrative Agent.
Section 9.5 Other Defaults.
Default shall be made by the Borrowers in the due observance or
performance of any other term, covenant or agreement other than as set forth in
this ARTICLE IX (EVENTS OF DEFAULT), which default shall remain unremedied for
more than thirty (30) days after written notice thereof to the Borrowers by the
Administrative Agent, unless the nature of the failure is such that (a) it
cannot be cured within the thirty (30) day period, and (b) the Borrowers
institute corrective action within the thirty (30) day period and (c) the
Borrowers diligently pursue such action and complete the cure within ninety (90)
days.
74
81
Section 9.6 Default Under Other Financing Documents.
A Default shall occur under any of the other Financing Documents, and
such Default is not cured within any applicable grace period provided therein.
Section 9.7 Receiver; Bankruptcy.
An Act of Bankruptcy occurs with respect to any of the Borrowers or any
Qualified Intermediary becomes generally unable to pay its debts as they become
due; provided, however, if a proceeding with respect to an Act of Bankruptcy is
filed or commenced against any of the Borrowers or any Qualified Intermediary,
the same shall not constitute an Event of Default if such proceeding is
dismissed within sixty (60) days from the date of such Act of Bankruptcy.
Section 9.8 Judgment.
Any judgment against any of the Borrowers of $250,000 or more or any
judgment against any Qualified Intermediary and any attachment or other levy
against any property of any of the Borrowers or any Qualified Intermediary
remain unpaid, unstayed on appeal, undischarged, unbonded or undismissed for a
period of thirty (30) days after the same shall have been issued.
Section 9.9 Execution; Attachment.
Any execution or attachment shall be levied against the Collateral, or
any part thereof, and such execution or attachment shall not be set aside,
discharged or stayed within thirty (30) days after the same shall have been
levied.
Section 9.10 Default Under Other Borrowings.
(a) Default which continues beyond any applicable grace period
shall be made under any obligation of or guaranteed by any of the Borrowers
equal to or greater than $250,000 or any obligation of or guaranteed by any
Qualified Intermediary, if the effect of such default is to accelerate the
maturity of such obligation or to permit the holder or obligee thereof to cause
such obligation to become due prior to its stated maturity.
(b) Default shall be made under any obligation equal to or
greater than $1,000,000 of a consolidated Affiliate, which is otherwise
non-recourse to the Borrowers if the holder or obligee of such obligation has
commenced action on any of the remedies available to it under the obligation.
Section 9.11 Default Under Master Credit Facility.
Any default shall occur under the Master Credit Facility Financing
Documents.
Section 9.12 Material Adverse Change.
If the Administrative Agent in its reasonable discretion determines
that a Material Adverse Change has occurred in the financial condition of any of
the Borrowers or any Qualified Intermediary.
75
82
Section 9.13 Impairment of Position.
If the Administrative Agent in its reasonable discretion determines
that an event has occurred which impairs the prospect of payment of the
Obligations and/or the value of the Facilities or the Collateral.
Section 9.14 Change in Status or Ownership.
Any of the Borrowers or any Qualified Intermediary is dissolved,
merged, consolidated or reorganized, or any change occurs in the ownership of
any of the Borrowers or any Qualified Intermediary (other than a transfer to
SALII or another Sunrise Wholly Owned Subsidiary at which time the applicable
Eligible Project must be refinanced under the Master Credit Facility or
released) or any Subsidiary without the prior written consent of the
Administrative Agent.
Section 9.15 Zoning.
Any change in any zoning ordinance or any other public restriction is
enacted, limiting or defining the uses which may be made of any of the Property
or a part thereof, such that the use of any of the Property, as specified
herein, would be in material violation of such restriction or zoning change.
Section 9.16 Change in Management.
Any Management Agreement is terminated or amended without the prior
written consent of the Administrative Agent.
Section 9.17 Licenses.
The involuntary, imposed or required revocation, suspension, probation,
restriction, limitation or refusal to renew, or the pending revocation,
suspension, probation, restriction, limitation, of, or refusal to renew, of any
License; other than in the ordinary course of business or to the extent that the
Borrowers deem such action to be, in the exercise of prudent business judgment,
in the best interest of Borrowers, the decertification, revocation, suspension,
probation, restriction, limitation, or refusal to renew, or the pending
decertification, revocation, suspension, probation, restriction, limitation, or
refusal to renew any participation or eligibility in any third party payor
program in which the Borrowers elect to participate, including, without
limitation, the Medicaid or Medicare programs; or the issuance or pending
issuance of any License for a period of less than twelve (12) months as a
consequence of any sanctions imposed by any Governmental Authority; or the
assessment or pending assessment, of any civil or criminal penalties by any
Governmental Authority, any third party payor or any accreditation organization
or person. Without limiting the generality of the foregoing, the failure of the
Borrowers to obtain an operating license for any Facility within sixty (60) days
of the issuance of the certificate of occupancy for such Facility.
Section 9.18 Damage to Improvements.
At any time prior to the issuance of a certificate of occupancy or
completion therefor, any of the Improvements are substantially damaged or
destroyed by fire or other casualty and the
76
83
Administrative Agent determines in good faith that such Improvements cannot be
restored and completed in accordance with the terms and provisions of the Deed
of Trust.
Section 9.19 Disclosure of Contractors.
The Borrowers shall fail to disclose to the Administrative Agent, upon
demand, the names of all persons with whom any of the Borrowers, SDI or XXXXX
has contracted or intends to contract for the construction of the Improvements
or for the furnishing of labor or materials therefor.
Section 9.20 Mechanic's Lien.
A lien for the performance of work or the supply of materials which is
perfected against any of the Land remains unsatisfied or unbonded or for which
no other arrangements satisfactory to the Administrative Agent have been made
for a period of thirty (30) days after notice to the Borrowers, SDI or XXXXX
from any source of the filing of such Lien.
Section 9.21 Survey Matters.
Any Survey required by the Lenders during the period of construction
shows any matters not approved by the Administrative Agent and such matters not
approved are not removed within thirty (30) days after Notice thereof by the
Administrative Agent to the Borrowers.
Section 9.22 General Contractor Default.
The General Contractor shall have defaulted under any Construction
Contract, which default the Administrative Agent, in its sole discretion, shall
deem substantial, and the Borrowers, after thirty (30) days Notice from the
Administrative Agent, shall fail to commence exercising any resulting right or
remedy to which it may be entitled thereunder and diligently pursue such right
or remedy.
Section 9.23 Compliance with Law.
The Borrowers fail to comply with any requirement of any Governmental
Authority having jurisdiction within the time required by such Governmental
Authority; or any proceeding is commenced or action taken to enforce any remedy
for a violation of any requirement of a Governmental Authority or any
restrictive covenant affecting the Property or any part thereof.
Section 9.24 Construction Abandonment.
The failure to continue construction of an Eligible Project, once
commenced for a period of ten (10) days except for delays caused by Force
Majeure unless the Borrowers exclude the affected Eligible Project from the
Borrowing Base.
Section 9.25 Failure to Commence Occupancy.
Any failure to comply with Section 7.36 (Commencement of Occupancy).
77
84
Section 9.26 Default Under Exchange Documents.
Any default shall occur under any of the Exchange Documents.
Section 9.27 Pool A Status
Any Eligible Project ceases to be a Pool A Project provided, however,
the Borrower may cure such default by paying in full the applicable Facility
Owner Note and removing such Eligible Project from the Borrowing Base within
three (3) Banking Days of notice by the Administrative Agent.
Section 9.28 Non-Compliance with the Code.
If a Borrower or Qualified Intermediary is ever notified that an
Eligible Project or any transaction pertaining to an Eligible Project does not
comply with the Code for purposes of Section 1031 tax deferred exchange
purposes, it shall constitute a default hereunder and such Eligible Project must
be released from the Borrowing Base and its related Facility Owner Note paid in
full or refinanced under the Master Credit Facility if permitted under the terms
of the Master Credit Facility within thirty (30) days thereof. Failure to do so
shall constitute an Event of Default hereunder. If the entire Credit Facility
fails to qualify for tax deferred treatment under the Code or such Code
provisions are repealed, further advances under the Credit Facility shall
immediately cease and the Obligations under the Credit Facility shall be paid in
full within thirty (30) days of the date thereof whether by refinancing the
Eligible Projects under the Master Credit Facility, if permitted under the terms
of the Master Credit Facility, or otherwise. Failure to do so shall constitute
an Event of Default hereunder.
ARTICLE X
RIGHTS AND REMEDIES UPON DEFAULT
Section 10.1 DEMAND; ACCELERATION.
THE OCCURRENCE OR NONOCCURRENCE OF AN EVENT OF DEFAULT UNDER THIS
AGREEMENT SHALL IN NO WAY AFFECT OR CONDITION THE RIGHT OF THE LENDERS TO DEMAND
PAYMENT AT ANY TIME OF ANY OF THE OBLIGATIONS WHICH ARE PAYABLE ON DEMAND
REGARDLESS OF WHETHER OR NOT AN EVENT OF DEFAULT HAS OCCURRED. Upon the
occurrence of an Event of Default, and in every such event and at any time
thereafter, the Administrative Agent may declare the Obligations due and
payable, without presentment, demand, protest, or any notice of any kind, all of
which are hereby expressly waived, anything contained herein or in any of the
other Financing Documents to the contrary notwithstanding.
Section 10.2 Further Advances; Immediate Acceleration.
Following an Event of Default the Administrative Agent may from time to
time without notice to the Borrowers suspend, terminate or limit any further
advances under the Loan or other extensions of credit under this Agreement and
under any of the other Financing Documents. Further, upon the occurrence of an
Event of Default or Default specified in Section 9.7
78
85
(Receiver; Bankruptcy) above, the unpaid principal amount of the Note (with
accrued interest thereon) and all other Obligations then outstanding, shall
immediately become due and payable without further action of any kind and
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived by the Borrowers.
Section 10.3 Specific Rights With Regard to Collateral.
Following an Event of Default, in addition to all other rights and
remedies provided hereunder or as shall exist at law or in equity from time to
time, the Administrative Agent may, without notice to the Borrowers and subject
to the terms of the Agency Agreement:
(a) assign any and all Operating Agreements and Management
Contracts to any Person designated by the Administrative Agent, and/or exercise
all rights and privileges of the Borrowers under such contracts and agreements
for the purpose of realizing on the Collateral and to the extent and for the
time required to realize the value of the Collateral;
(b) to the extent permitted by applicable law, assume such
management, operation and control of the Property to the extent and for the time
necessary to realize the value of the Collateral;
(c) cause the Borrowers to engage, contract with, and/or hire
qualified service, billing, collection and other such agents, organizations and
companies acceptable to the Administrative Agent to collect and/or realize upon
any or all of the Collateral and to remit the proceeds to the Administrative
Agent;
(d) subject to applicable state and federal laws pertaining to
resident confidentiality, request any Account Debtor obligated on any of the
Accounts to make payments thereon directly to the Administrative Agent to the
extent permitted by applicable law, with the Administrative Agent taking control
of the cash and non-cash proceeds thereof and/or direct the Borrowers to (and
the Borrowers shall) turn over to the Administrative Agent immediately following
receipt all payments with respect to the Collateral in the form received (with
the addition of all necessary endorsements) and not to deposit, negotiate or
otherwise deal with those payments;
(e) compromise, extend or renew any of the Collateral or deal
with the same as it may deem advisable;
(f) make exchanges, substitutions or surrenders of all or any
part of the Collateral;
(g) copy or transcribe books, records, ledger sheets,
correspondence, invoices and documents, relating to or evidencing any of the
Collateral or without cost or expense to the Lenders, make such use of the
Borrowers' SDI's or XXXXX'x place of business as may be reasonably necessary to
copy such books and records or to administer, control and collect the Collateral
without unreasonable disturbing any business operations which are unrelated to
the Collateral;
79
86
(h) demand, collect, receipt for and give renewals,
extensions, discharges and releases of any of the Collateral;
(i) institute and prosecute legal and equitable proceedings to
enforce collection of, or realize upon, any of the Collateral;
(j) settle, renew, extend, compromise, compound, exchange or
adjust claims in respect of any of the Collateral or any legal proceedings
brought in respect thereof;
(k) endorse the name of any of the Borrowers upon any items of
payment relating to the Collateral or on any Proof of Claim in Bankruptcy
against an Account Debtor; and
(l) notify the Post Office authorities to change the address
for the delivery of mail to the Borrowers to such address or Post Office Box as
the Administrative Agent may designate and receive and open all mail addressed
to the Borrowers.
In addition, the Borrowers shall, following an Event of Default
promptly, upon request, execute and deliver to the Administrative Agent written
assignments, to the extent permitted by applicable law, in form and content
acceptable to the Administrative Agent, of specific Accounts or groups of
Accounts; provided, however, that the lien and/or security interest granted to
the Lenders under this Agreement shall not be limited in any way to or by the
inclusion or exclusion of Accounts within such assignments. Such Accounts shall
secure payment of the Obligations and are not sold to the Lenders whether or not
any assignment thereof, which is separate from this Agreement, is in form
absolute.
Following an Event of Default, the Lenders may also direct the
Borrowers to appoint a manager for any or all of the Facilities and enter into a
management agreement with one or more management companies approved by the
Lenders, the terms of which agreement shall be approved by the Lenders.
Section 10.4 Performance by Lenders.
Following an Event of Default, the Administrative Agent without the
necessity of prior notice to or demand upon the Borrowers and without waiving or
releasing any of the Obligations or any Event of Default, may (but shall be
under no obligation to) at any time thereafter make such payment or perform such
act for the account and at the expense of the Borrowers, and may enter upon the
premises of the Borrower for that purpose and take all such action thereon as
the Administrative Agent may consider necessary or appropriate for such purpose.
The Administrative Agent will give the Borrowers notice, at least subsequently,
of any such performance by the Administrative Agent. All sums so paid or
advanced by the Administrative Agent and all costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses) incurred in
connection therewith (the "Expense Payments") together with interest thereon
from the date of payment, advance or incurring until paid in full at the
Post-Default Rate shall be paid by the Borrowers to the Administrative Agent on
demand and shall constitute and become a part of the Obligations.
80
87
Section 10.5 Remedies on Default.
The Administrative Agent shall have the right, upon the happening of
any Event of Default, to terminate this Agreement by Notice from the
Administrative Agent to the Borrowers and, in addition to any rights or remedies
available to them under the Deed of Trust or any of the other Financing
Documents, to enter into possession of any of the Property and perform any and
all work and labor necessary to complete the development of such Land and the
construction of the Improvements thereon (whether or not in accordance with the
Plans and Specifications therefor) and to employ watchmen to protect the
Property and the Improvements. All sums expended by the Lenders for such
purposes shall be deemed to have been advanced to the Borrowers under the Note
and shall be secured by the Deeds of Trust and the Collateral. For this purpose,
the Borrowers hereby constitute and appoint the Lenders, or the Administrative
Agent on behalf of the Lenders, its true and lawful attorney-in-fact with full
power of substitution to complete work on any Eligible Project in the name of
the Borrowers, and hereby empowers said attorney or attorneys as follows:
(a) To use any funds of any of the Borrowers including any
balance which may be held in escrow and any funds which may remain unadvanced
under any of the Facility Owner Notes for the purpose of completing the
development of any of the Land and the construction of any of the Improvements,
except that a Borrower's funds may only be used for development and construction
of a Facility owned by itself or another Borrower owned by the same Qualified
Intermediary whether or not in the manner called for in the Plans and
Specifications;
(b) To make such additions and changes and corrections to any
of the Plans and Specifications which shall be necessary or desirable in the
judgment of the Administrative Agent to complete the development of any of the
Land and the construction of any of the Improvements;
(c) To employ such contractors, subcontractors, agents,
architects and inspectors as shall be necessary or desirable for said purpose;
(d) To pay, settle or compromise all existing bills and claims
which are or may be liens against any of the Property, or may be necessary or
desirable for the completion of the work or the clearance of title to any of the
Property;
(e) To execute all applications and certificates which may be
required in the name of any of the Borrowers; and
(f) To do any and every act with respect to the development of
the Land and the construction of the Improvements which any of the Borrowers may
do in its own behalf.
It is understood and agreed that this power of attorney shall be deemed
to be a power coupled with an interest which cannot be revoked. Said
attorney-in-fact shall also have the power to prosecute and defend all actions
or proceedings in connection with the development of the Land and the
construction of the Improvements and to take such actions and to require such
performance as the Lenders may deem necessary.
81
88
Section 10.6 Uniform Commercial Code and Other Remedies.
Upon the occurrence of an Event of Default (and in addition to all of
its rights, powers and remedies under this Agreement), the Lenders shall have
all of the rights and remedies of a secured party under the applicable Uniform
Commercial Code and other applicable laws, and the Lenders are authorized to
offset and apply to all or any part of the Obligations all moneys, credits and
other property of any nature whatsoever of the Borrowers now or at any time
hereafter in the possession of, in transit to or from, under the control or
custody of, or on deposit with, any of the Lenders; and upon demand by the
Administrative Agent, the Borrowers shall assemble the Collateral and make it
available to the Lenders, at a place designated by the Administrative Agent; and
the Lenders or their agents may enter upon the Borrowers' premises to take
possession of the Collateral, to remove it, to render it unusable, or to sell or
otherwise dispose of it.
Any written notice of the sale, disposition or other intended action by
the Lenders with respect to the Collateral which is sent by regular mail,
postage prepaid, to the Borrowers at the address set forth in ARTICLE IX (EVENTS
OF DEFAULT), or such other address of the Borrowers which may from time to time
be shown on the Lenders' records, at least ten (10) days prior to such sale,
disposition or other action, shall constitute reasonable notice to the
Borrowers. The Borrowers shall pay on demand all costs and expenses, including,
without limitation, attorney's fees and expenses, incurred by or on behalf of
the Lenders, or any of them, in preparing for sale or other disposition,
selling, managing, collecting or otherwise disposing of, the Collateral. All of
such costs and expenses (the "Liquidation Costs") together with interest thereon
from the date incurred until paid in full at the Post-Default Rate, shall be
paid by the Borrowers to the Administrative Agent on demand and shall constitute
and become a part of the Obligations. Any proceeds of sale or other disposition
of the Collateral will be applied by the Lenders to the payment of the
Liquidation Costs and Expense Payments, and any balance of such proceeds will be
applied by the Lenders to the payment of the balance of the Obligations in such
order and manner of application as the Lenders may from time to time in its sole
discretion determine. After such application of the proceeds, any balance shall
be paid to the applicable Borrowers or to any other party entitled thereto.
Section 10.7 Receiver or Other Court Order.
Following an Event of Default, as a matter of right, following ten (10)
days notice and without regard to the adequacy of the security, and upon
application to a court of competent jurisdiction, the Lenders shall be entitled
to the immediate appointment of a receiver for all or any part of the
Collateral, and of the payments and proceeds thereof and therefrom, whether such
receivership be incidental to a proposed sale of the Collateral or otherwise,
and the Borrowers hereby consent to the appointment of such a receiver and to an
order of court directing that payments, including Medicare and Medicaid
payments, be made directly to the receiver. The Borrowers will pay to the
Beneficiary, upon demand, all expenses, including receiver's fees, attorney's
fees, costs and agents compensation, advanced by the Borrowers and incurred
pursuant to the provisions contained in this Section.
82
89
Section 10.8 No Conditions Precedent to Exercise of Remedies.
The Borrowers shall not be relieved of any obligation by reason of the
failure of the Lenders to comply with any request of the Borrowers or of any
other person to take action to foreclose on the Property under the Deed of Trust
or otherwise to enforce any provision of the Financing Documents, or by reason
of the release, regardless of consideration, of all or any part of the Property,
or by reason of any agreement or stipulation between any subsequent owner of the
Property and the Lenders extending the time of payment or modifying the terms of
the Financing Documents without first having obtained the consent of the
Borrowers; and in the latter event, the Borrowers shall continue to be liable to
make payments according to the terms of any such extension or modification
agreement, unless expressly released and discharged in writing by the Lenders.
Section 10.9 Remedies Cumulative and Concurrent.
No remedy herein conferred upon or reserved to the Lenders or the
Administrative Agent is intended to be exclusive of any other remedies provided
for in the Financing Documents, and each and every such remedy shall be
cumulative, and shall be in addition to every other remedy given hereunder, or
under the Financing Documents, or now or hereafter existing at law or in equity
or by statute. Every right, power and remedy given by the Financing Documents to
the Lenders or the Administrative Agent shall be concurrent and may be pursued
separately, successively or together against any or all of the Borrowers or the
Property or any part thereof, and every right, power and remedy given by the
Financing Documents may be exercised from time to time as often as may be deemed
expedient by the Lenders or the Administrative Agent.
Section 10.10 Strict Performance.
No delay or omission of the Lenders or the Administrative Agent to
exercise any right, power or remedy accruing upon the happening of an Event of
Default shall impair any such right, power or remedy or shall be construed to be
a waiver of any such Event of Default or any acquiescence therein. No delay or
omission on the part of the Lenders or the Administrative Agent to exercise any
option for acceleration of the maturity of the Obligations, or any of them, or
for foreclosure of the Deeds of Trust, or any of them, following any Event of
Default as aforesaid, or any other option granted to the Lenders hereunder in
any one or more instances, or the acceptance by the Lenders of any partial
payment on account of the Obligations shall constitute a waiver of any such
Event of Default and each such option shall remain continuously in full force
and effect.
Section 10.11 Limited Cross-Collateralization.
Notwithstanding anything to the contrary in this Agreement, Lenders
agree that Collateral from one Qualified Intermediary and its Subsidiaries may
only be applied within that group, and may not be applied to Obligations of a
separate Qualified Intermediary and such separate Qualified Intermediary's
Subsidiaries.
83
90
ARTICLE XI
MISCELLANEOUS
Section 11.1 Notices.
All notices, certificates or other communications hereunder shall be
deemed given when delivered by hand or courier, or three (3) Banking Days after
being mailed by certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Administrative Agent BANK OF AMERICA, N.A.
or the Lenders: 0000 Xxxxxxxxx Xxxxx
Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Senior Vice President
and
BANK OF AMERICA, N.A.
000 Xxxxx XxXxxxx Xxxxxx
Mail Code IL1-231-08-30
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxx
Vice President
with a courtesy copy to: Xxxxxxxx Xxxxxxx Xxxx & Valentine LLP
0000 Xxxxxxxxxxxxx Xxxxx
Xxxxx 000
XxXxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx Xxx Xxxxx, Esq.
if to the Borrowers: c/o Apex Property Exchange, Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
with a courtesy copy to: Xxxxx X. Xxxxxxx, Esquire
Watt, Tieder, Hoffar & Xxxxxxxxxx
0000 Xxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
and
Sunrise Assisted Living Investments, Inc.
0000 Xxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Christian X. X. Xxxxxx
Xxxxx X. Xxxx
84
91
Section 11.2 Consents and Approvals.
If any consent, approval, or authorization of any Governmental
Authority or of any Person having any interest therein, should be necessary to
effectuate any sale or other disposition of the Collateral, the Borrowers agree
to execute all such applications and other instruments, and to take all other
action, as may be required in connection with securing any such consent,
approval or authorization.
Section 11.3 Remedies, etc. Cumulative.
Each right, power and remedy of the Lenders as provided for in this
Agreement or in any of the other Financing Documents or now or hereafter
existing at law or in equity or by statute or otherwise shall be cumulative and
concurrent and shall be in addition to every other right, power or remedy
provided for in this Agreement or in any of the other Financing Documents or now
or hereafter existing at law or in equity, by statute or otherwise, and the
exercise or beginning of the exercise by the Lenders of any one or more of such
rights, powers or remedies shall not preclude the simultaneous or later exercise
by the Lenders of any or all such other rights, powers or remedies. In order to
entitle the Lenders to exercise any remedy reserved to it herein, it shall not
be necessary to give any notice, other than such notice as may be expressly
required in this Agreement.
Section 11.4 No Waiver of Rights by the Lenders.
No failure or delay by the Administrative Agent or the Lenders to
insist upon the strict performance of any term, condition, covenant or agreement
of this Agreement or of any of the other Financing Documents, or to exercise any
right, power or remedy consequent upon a breach thereof, shall constitute a
waiver of any such term, condition, covenant or agreement or of any such breach
or preclude the Administrative Agent or the Lenders from exercising any such
right, power or remedy at any later time or times. By accepting payment after
the due date of any amount payable under this Agreement or under any of the
other Financing Documents, neither the Administrative Agent nor the Lenders
shall be deemed to waive the right either to require prompt payment when due of
all other amounts payable under this Agreement or under any of the other
Financing Documents, or to declare a default for failure to effect such prompt
payment of any such other amount.
Section 11.5 Entire Agreement.
The Financing Documents shall completely and fully supersede all other
agreements, both written and oral, between the Lenders and any of the Borrowers
relating to the Obligations. Neither the Lenders nor the Borrowers shall
hereafter have any rights under such prior agreements but shall look solely to
the Financing Documents for definition and determination of all of their
respective rights, liabilities and responsibilities relating to the Obligations.
Section 11.6 Survival of Agreement; Successors and Assigns.
All covenants, agreements, representations and warranties made by the
Borrowers herein and in any certificate, in the Financing Documents and in any
other instruments or documents delivered pursuant hereto shall survive the
making by the Lenders of the Loan and the execution
85
92
and delivery of the Note, and shall continue in full force and effect so long as
any of the Obligations are outstanding and unpaid. Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the Borrowers which are contained in this
Agreement shall inure to the benefit of the respective successors and assigns of
each of the Lenders, and all covenants, promises and agreements by or on behalf
of the Lenders which are contained in this Agreement shall inure to the benefit
of the permitted successors and permitted assigns of the Borrowers, but this
Agreement may not be assigned by the Borrowers without the prior written consent
of the Lenders.
Section 11.7 Expenses.
The Borrowers agree to pay all reasonable out-of-pocket expenses of the
Lenders and Banc of America Securities LLC (including the reasonable fees and
expenses of the legal counsel of the Administrative Agent or any other Lender)
in connection with the preparation of this Agreement, the issuance of the Loan
hereunder, the recordation of all financing statements and such other
instruments as may be required by the Administrative Agent at the time of, or
subsequent to, the execution of this Agreement to secure the Obligations
(including any and all recordation tax and other costs and taxes incident to
recording), the administration of the Credit Facility (not otherwise
contemplated by any fee paid by the Borrowers), any future modification of the
Financing Documents, the addition of Eligible Projects to the Borrowing Base or
the enforcement of any provision of this Agreement and the collection of the
Obligations. The Borrowers agree to indemnify and save harmless the Lenders from
any liability resulting from the failure to pay any required recordation tax,
transfer taxes, recording costs or any other expenses incurred by the Lenders in
connection with the Obligations. The provisions of this Section shall survive
the execution and delivery of this Agreement and the repayment of the
Obligations. The Borrowers further agree to reimburse the Lenders upon demand
for all reasonable out-of-pocket expenses (including reasonable attorneys' fees
and legal expenses and travel expenses) incurred by the Lenders, or any of them,
in enforcing any of the Obligations or any security therefor or incurred in
connection with any bankruptcy proceeding or in any post-judgment enforcement or
collection action, together with interest at the Post-Default Rate which
agreement shall survive the termination of this Agreement and the repayment of
the Obligations.
Section 11.8 Counterparts.
This Agreement may be executed in any number of counterparts all of
which together shall constitute a single instrument.
Section 11.9 Governing Law.
This Agreement and all of the other Financing Documents shall be
governed by and construed in accordance with the laws of the Commonwealth of
Virginia; provided, however, any Deed of Trust and any financing statements
covering fixtures securing such Loan shall be governed by, and construed in
accordance with, the laws of the state in which the applicable Facility is
located.
86
93
Section 11.10 Modifications.
No modification or waiver of any provision of this Agreement or of any
of the other Financing Documents, nor consent to any departure by the Borrowers
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Administrative Agent, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on the Borrowers in any case shall entitle the Borrowers to
any other or further notice or demand in the same, similar or other
circumstance.
Section 11.11 Illegality.
If fulfillment of any provision hereof or any transaction related
hereto or to any of the other Financing Documents, at the time performance of
such provision shall be due, shall involve 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 any clause or provisions herein
contained other than the provisions hereof pertaining to repayment of the
Obligations operates or would prospectively operate to invalidate this Agreement
in whole or in part, then such clause or provision only shall be void, as though
not herein contained, and the remainder of this Agreement shall remain operative
and in full force and effect; and if such provision pertains to repayment of the
Obligations, then, at the options of the Lenders, all of the Obligations of the
Borrowers to the Lenders shall become immediately due and payable.
Section 11.12 Gender, etc.
Whenever used herein, the singular number shall include the plural, the
plural the singular and the use of the masculine, feminine or neuter gender
shall include all genders.
Section 11.13 Headings.
The headings in this Agreement are for convenience only and shall not
limit or otherwise affect any of the terms hereof.
Section 11.14 Waiver of Trial by Jury.
THE BORROWER AND THE LENDERS HEREBY JOINTLY AND SEVERALLY WAIVE TRIAL
BY JURY IN ANY ACTION OR PROCEEDING TO WHICH ANY OF THEM MAY BE PARTIES, NOT
GOVERNED BY THE ARBITRATION PROVISIONS OF THE NOTE OR THE GUARANTIES ARISING OUT
OF OR IN ANY WAY PERTAINING TO (A) THIS AGREEMENT, (B) ANY OF THE FINANCING
DOCUMENTS, OR (C) THE COLLATERAL. THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY
JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING
CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT.
This waiver is knowingly, willingly and voluntarily made by the
Borrowers and the Lenders, and the Borrowers and the Lenders hereby represent
that no representations of fact or opinion have been made by any individual to
induce this waiver of trial by jury or to in any way modify or nullify its
effect. The Borrowers and the Lenders further represent that they have been
represented in the signing of this Agreement and in the making of this waiver by
independent
87
94
legal counsel, selected of their own free will, and that they have had the
opportunity to discuss this waiver with counsel.
Section 11.15 No Warranty by Lenders.
By accepting or approving anything required to be observed, performed
or fulfilled by the Borrowers or to be given to the Administrative Agent or the
Lenders pursuant to this Agreement, including, without limitation, any
certificate, balance sheet, statement of profit and loss or other financial
statement, Survey, receipt, appraisal or insurance policy, the Lenders shall not
be deemed to have warranted or represented the sufficiency, legality,
effectiveness or legal effect of the same, or of any term, provision or
condition thereof and any such acceptance or approval thereof shall not be or
constitute any warranty or representation with respect thereto by the Lenders.
Section 11.16 Liability of the Lenders.
No Lender shall be liable for another Lender's failure to fund its
ratable share of any advance under the Loan. The Lenders shall not be liable for
any other act or omission by the Lenders, or any of them, pursuant to the
provisions of this Agreement in the absence of fraud or gross negligence. The
Lenders shall incur no liability to the Borrowers or any other party in
connection with the acts or omissions of any of the Lenders in reliance upon any
certificate or other paper believed by the Lenders to be genuine or with respect
to any other thing which the Lenders may do or refrain from doing, unless such
act or omission amounts to fraud or gross negligence. The Borrowers hereby agree
that the Lenders shall not be chargeable for any negligence, mistake, act or
omission of any accountant, examiner, agency or attorney employed by the
Lenders, or any of them, (except for the gross negligence or willful misconduct
of any person, corporation, partnership or other entity employed by any of the
Lenders) in making examinations, investigations or collections, or otherwise in
perfecting, maintaining, protecting or realizing upon any lien or security
interest or any other interest in the Collateral or other security for the
Obligations. The Borrowers, jointly and severally as to the applicable Facility
Owner Obligations, shall indemnify, defend and hold the Lenders and their
successors and assigns harmless from and against any and all claims, demands,
suits, losses, damages, assessments, fines, penalties, costs or other expenses
(including reasonable attorney's fees and court costs) arising from or in
connection with this Agreement. Any indemnity provision for the benefit of the
Lenders set forth herein or in any of the Financing Documents shall extend to
any other lender who becomes a Lender under the Credit Facility. The provisions
of this Section shall survive the termination of the Credit Facility.
Section 11.17 License of Tradename.
The Borrowers do hereby grant to each of the Lenders and their
affiliates and any trustee under a Deed of Trust and their management company a
license to use the name of any Borrower and the name "Sunrise", "Dignity Home
Care", "Respect Home Care" and any marks associated therewith in the operation
or a Facility upon such Lender's or trustee's taking of possession or taking
over management of a Facility or acquiring title thereto at a foreclosure sale
which license shall be in effect for a period of thirty (30) months from the
date thereof. The Borrowers further
88
95
agree that a third-party purchaser of a Facility may continue to operate the
Facility under the name of any Borrower unless such Borrower objects in writing
thereto.
Section 11.18 No Partnership.
Nothing contained in this Agreement shall be construed in a manner to
create any relationship between the Borrowers and the Lenders other than the
relationship of borrower and lender and the Borrowers and the Lenders shall not
be considered partners or co-venturers for any purpose on account of this
Agreement.
Section 11.19 Third Parties; Benefit.
All conditions to the obligation of the Lenders to make advances
hereunder are imposed solely and exclusively for the benefit of the Lenders and
their assigns and no other persons shall have standing to require satisfaction
of such conditions in accordance with their terms or be entitled to assume that
the Lenders will refuse to make advances in the absence of strict compliance
with any or all thereof and no other person shall, under any circumstances, be
deemed to be the beneficiary of such conditions, any or all of which may be
freely waived in whole or in part by the Administrative Agent at any time in the
sole and absolute exercise of its discretion pursuant to its agreements with the
Lenders. The terms and provisions of this Agreement are for the benefit of the
parties hereto and, except as herein specifically provided, no other person
shall have any right or cause of action on account thereof.
Section 11.20 Conditions; Verification.
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 to the existence or non-existence, as the case may be, of such
fact or facts that the Lenders shall, at all times, be free independently to
establish to their satisfaction and in their absolute discretion such existence
or non-existence.
Section 11.21 Signs; Publicity.
At the Administrative Agent's request, but at the expense of the
Administrative Agent, the Borrowers shall place a sign acceptable to the
Borrowers at a location on each of the Eligible Projects under construction
satisfactory to the Administrative Agent, which sign shall recite, among other
things, that the Lenders are financing the development of the Land and the
construction of the Improvements. The Borrowers expressly authorize the
Administrative Agent to prepare and to furnish to the news media for publication
from time to time news releases with respect to the Credit Facility and each
Eligible Project, specifically to include but not limited to, releases detailing
the Administrative Agent's and the Lenders' involvement with the Credit Facility
and the financing of any Eligible Project, all subject to prior review by the
Borrowers.
Section 11.22 Time of Essence.
Time shall be of the essence for each and every provision of this
Agreement of which time is an element.
89
96
Section 11.23 Replacement Note.
In the event any of the Notes is ever lost or destroyed, the Borrowers
covenant and agree that they will execute and deliver to the Administrative
Agent upon demand a replacement original thereof.
[SIGNATURES ON THE FOLLOWING PAGE]
90
97
IN WITNESS WHEREOF, the parties hereto have signed and sealed this
Agreement on the day and year first above written.
WITNESS/ATTEST: EAST MEADOW A.L., LLC
By: Rockville APEX LLC, its Sole Member
By: APEX Property Exchange, Inc., its
Sole Member
------------------------- By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------
Title: President
-----------------------
WITNESS/ATTEST: WHITE OAK ASSISTED LIVING L.L.C.
By: Rockville APEX LLC, its Sole Member
By: APEX Property Exchange, Inc., its
Sole Member
------------------------- By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------
Title: President
-----------------------
91
98
WITNESS: BANK OF AMERICA, N.A., as Administrative
Agent for the Lenders
By: /s/ Xxxxxxx X. Xxxxxxx (SEAL)
------------------------ ----------------------------------------
Xxxxxxx X. Xxxxxxx
Senior Vice President
92
99
LIST OF EXHIBITS
----------------
A Form of Note
B Form of Borrowing Base Report
C Initial Borrowing Base Report
D Places of Business
E Form of Joinder Agreement
F Survey Requirements
G Form of Compliance Certificate
93
100
EXHIBIT A
FORM OF NOTE
PROMISSORY NOTE
((Deed Of Trust Lien Amount:$9,999.00)) ((TODAY))
FOR VALUE RECEIVED, ((Borrower:LIKE THIS)), a ((BAM Type of Entity))
organized under the laws of the ((BAM Jurisdiction of Formation)) (the
"Borrower"), promises to pay to the order of BANK OF AMERICA, N.A., its
successors and assigns (the "Administrative Agent") as administrative agent for
itself and the other lenders who are or shall be from time to time participating
as lenders (collectively with the Administrative Agent, the "Lenders") pursuant
to an Agency Agreement dated June 13, 2001, (as amended, restated or substituted
from time to time, the "Agency Agreement"), the principal sum of ((Deed Of Trust
Lien Amount:$9,999.00)) (Words:_________________ AND NO/100 DOLLARS) ((Deed Of
Trust Lien Amount:$9,999.00))) (the "Principal Sum"), or so much thereof as may
be advanced to or for the account of the Borrower pursuant to the terms and
conditions of the Financing Agreement (as hereinafter defined), together with
interest thereon at the rate or rates hereinafter provided. All defined terms
not otherwise defined herein shall have the meaning set forth in the Financing
Agreement.
1. Interest.
Interest on portions of the outstanding Principal Sum shall accrue as set
forth in Section 2.4 of the Financing Agreement. Interest shall be computed for
the actual number of days that have elapsed from the date of each advance of a
portion of the Principal Sum calculated on the basis of a 365-day year.
2. Payments and Maturity.
(a) Interest only on the outstanding principal balance of this Note
shall be payable as set forth in Section 2.4 of the Financing Agreement; and
(b) The outstanding principal balance and all accrued and unpaid
interest thereon shall be due and owing ((Maturity Date:June ___, 1990)).
3. Default Interest.
Upon the occurrence of an Event of Default (as hereinafter defined), the
unpaid Principal Sum shall bear interest thereafter until such Event of Default
is cured at a rate which is at all times equal to three percent (3%) per annum
in excess of the rate or rates of interest otherwise payable hereunder.
94
101
4. Late Charges.
In the event that any payment due hereunder is not received by the
Administrative Agent within fifteen (15) days of the date such payment is due
(inclusive of the date when due), the Borrower shall pay to the Administrative
Agent on demand a late charge equal to four percent (4%) of such payment.
5. Application and Place of Payments.
All payments made on account of this Note, including prepayments, shall be
applied in accordance with the terms of the Financing Agreement. All payments on
account of this Note shall be paid in lawful money of the United States of
America in immediately available funds during regular business hours of the
Administrative Agent at its principal office in Baltimore, Maryland or at such
other times and places as the Administrative Agent may at any time and from time
to time designate in writing to the Borrower. Any payment received after 2:30
p.m. (Eastern Time) shall be deemed to have been received on the next Banking
Day.
6. Prepayment.
The Borrower shall have the right to prepay the Principal Sum in full or
in part, at any time and from time to time in accordance with Section 4.7 of the
Financing Agreement. Sums repaid may not be reborrowed.
7. Financing Agreement and Other Financing Documents.
This Note is a Facility Owner Note described in the Financing and Security
Agreement dated June 13, 2001 by and among the Borrowers (as defined therein)
and the Administrative Agent (as amended or otherwise modified from time to
time, the "Financing Agreement"). The term "Financing Documents" as used in this
Note shall mean collectively this Note, the Financing Agreement, the Deed of
Trust (as hereinafter defined), all of the other Financing Documents and any
other instrument, agreement, or document previously, simultaneously, or
hereafter executed and delivered by the Borrower and/or any other person,
singularly or jointly with any other person, evidencing, securing, guaranteeing,
or in connection with the Principal Sum.
8. Security.
This Note is secured by, among other things, a ((Mortgage DOT Full Name)),
Assignment, Security Agreement and Fixture Filing (as amended, restated or
substituted from time to time, the "Deed of Trust"), covering that real estate
owned by the Borrower and the improvements thereon located in ((Facility County
Location)), ((Facility State Location)), described in Exhibit A attached hereto
and made a part hereof and all other property, real and personal, more
particularly described in the Deed of Trust (the "Property") and the Financing
Agreement.
95
102
9. Events of Default.
The occurrence of any one or more of the following events shall constitute
an event of default (individually, an "Event of Default" and collectively, the
"Events of Default") under the terms of this Note:
(a) The failure of the Borrower to pay to the Administrative Agent,
for the ratable benefit of the Lenders, when due any and all amounts payable by
the Borrower under the terms hereof and such failure continues for five (5)
calendar days after notice thereof by the Administrative Agent, except with
regard to payment of amounts due at maturity for which no notice or cure period
shall be required to be given and except for a Borrowing Base Deficiency (as
defined in the Financing Agreement) which shall be payable as provided in the
Financing Agreement; or
(b) The occurrence of a Default or an Event of Default (as those
terms are defined in the Financing Agreement) under the terms and conditions of
any of the other Financing Documents, which Default or Event of Default remains
uncured beyond any applicable grace and/or cure period provided therefor.
10. Remedies.
Upon the occurrence of an Event of Default, at the option of the
Administrative Agent, all amounts payable by the Borrower to the Administrative
Agent for the ratable benefit of the Lenders under the terms hereof shall
immediately become due and payable by the Borrower to the Administrative Agent
without notice to the Borrower or any other person, and the Administrative Agent
shall have all of the rights, powers, and remedies available under the terms of
this Note, any of the other Financing Documents and all applicable laws. The
Borrower and all endorsers, guarantors, and other parties who may now or in the
future be primarily or secondarily liable for the payment of the indebtedness
evidenced by this Note hereby severally waive presentment, protest and demand,
notice of protest, notice of demand and of dishonor and non-payment of this Note
and expressly agree that this Note or any payment hereunder may be extended from
time to time without in any way affecting the liability of the Borrower,
guarantors and endorsers. The Borrower and all endorsers, guarantors, and other
parties who may now or in the future be liable for payment of the Obligations
hereby acknowledge that all advances to the Borrower pursuant to the Financing
Agreement will be made under and will be evidenced by this Note.
11. Mandatory Arbitration.
Any controversy or claim between or among the parties hereto including but
not limited to those arising out of or relating to this Note or any related
agreements or instruments, including any claim based on or arising from an
alleged tort, shall be determined by binding arbitration in accordance with the
Federal Arbitration Act (or if not applicable, the applicable state law), as
promulgated from time to time by the Rules of Practice and Procedure for the
Arbitration of Commercial Disputes of Judicial Arbitration and Mediation
Services, Inc., predecessor in interest to Endispute, Inc., doing business as
"J.A.M.S./Endispute" and the "Special Rules" set forth below. In the event of
any inconsistency, the Special Rules shall control. Judgment upon any
96
103
arbitration award may be entered in any court having jurisdiction. Any party to
this Note may bring an action, including a summary or expedited proceeding, to
compel arbitration of any controversy or claim to which this agreement applies
in any court having jurisdiction over such action. The foregoing
notwithstanding, in a claim pertaining to a Deed of Trust or Collateral located
in a state with "one-action" rule which might limit lenders' remedies, the
Administrative Agent shall have the right in its sole discretion to restrict the
application of this arbitration provision to the extent that it would otherwise
result in a limitation on the Administrative Agent's remedies in such state.
(a) Special Rules. The arbitration shall be conducted in Fairfax
County, Virginia and administered by J.A.M.S./Endispute who will appoint an
arbitrator pursuant to its rules of practice and procedure; if
J.A.M.S./Endispute is unable or legally precluded from administering the
arbitration, then the American Arbitration Association will serve. All
arbitration hearings will be commenced within ninety (90) calendar days of the
demand for arbitration; further, the arbitrator shall only, upon a showing of
cause, be permitted to extend the commencement of such hearing for up to an
additional sixty (60) calendar days.
(b) Reservations of Rights. Nothing in this Note shall be deemed to
(i) limit the applicability of any otherwise applicable statutes of limitation
or repose and any waivers contained in this Note; or (ii) be a waiver by
Administrative Agent of the protection afforded to it by 12 U.S.C. Sec. 91 or
any substantially equivalent state law; or (iii) limit the right of the
Administrative Agent or the Lenders (A) to exercise self help remedies such as
(but not limited to) setoff, or (B) to foreclose against any real or personal
property collateral, or (C) to obtain from a court provisional or ancillary
remedies such as (but not limited to) injunctive relief or the appointment of a
receiver. The Administrative Agent or the Lenders may exercise such self help
rights, foreclose upon such property, or obtain such provisional or ancillary
remedies before, during or after the pendency of any arbitration proceeding
brought pursuant to this Note. At the Administrative Agent's or the Lenders'
option, foreclosure under a deed of trust or mortgage may be accomplished by any
of the following: the exercise of a power of sale under the deed of trust or
mortgage, or by judicial sale under the deed of trust or mortgage, or by
judicial foreclosure. Neither the exercise of self help remedies nor the
institution or maintenance of an action for foreclosure or provisional or
ancillary remedies shall constitute a waiver of the right of any party,
including the claimant in any such action, to arbitrate the merits of the
controversy or claim occasioning resort to such remedies. Notwithstanding the
foregoing, in the event that the Administrative Agent or the Lenders exercise
such self help remedies or other actions, the Borrower has not waived any of its
rights to seek legal or equitable relief to defend against the Administrative
Agent's or the Lenders' exercise of such self help remedies or other actions. No
provision in the Financing Documents regarding submission to jurisdiction and/or
venue in any court is intended or shall be construed to be in derogation of the
provisions in any Financing Document for arbitration of any controversy or
claim.
(c) Confidentiality. Any arbitration proceeding, award, findings of
fact, conclusions of law, or other information concerning such arbitration
matters shall be held in confidence by the parties and shall not be disclosed
except to each party's employees or agents as shall be reasonably necessary for
such party to conduct its business; provided, however, that either party may
disclose such information for auditing purposes by independent certified public
97
104
accountants, for complying with applicable governmental laws, regulations or
court orders, or that is or becomes part of the public domain through no breach
of this Note.
12. Consent to Jurisdiction.
The Borrower irrevocably submits to the jurisdiction of any state or
federal court sitting in the Commonwealth of Virginia over any suit, action, or
proceeding arising out of or relating to this Note. The Borrower irrevocably
waives, to the fullest extent permitted by law, any objection that the Borrower
may now or hereafter have to the laying the venue of any such suit, action, or
proceeding brought in any such court and any claim that any such suit, action,
or proceeding brought in any such court has been brought in an inconvenient
forum. Final judgment in any such suit, action, or proceeding brought in any
such court shall be conclusive and binding upon the Borrower and may be enforced
in any court in which the Borrower is subject to jurisdiction by a suit upon
such judgment provided that service of process is effected upon the Borrower as
provided in this Note or as otherwise permitted by applicable law.
13. Service of Process.
(c) The Borrower hereby irrevocably designates and appoints Xxxxx X.
Xxxxxxx, Esquire of Watt, Tieder, Hoffar & Xxxxxxxxxx, 0000 Xxxxxxxx Xxxxx,
XxXxxx, Xxxxxxxx 00000, as the Borrower's authorized agent to accept and
acknowledge on the Borrower's behalf service of any and all process that may be
served in any suit, action, or proceeding instituted in connection with this
Note in any state or federal court sitting in the Commonwealth of Virginia. If
such agent shall cease so to act, the Borrower shall irrevocably designate and
appoint without delay another such agent in the Commonwealth of Virginia
satisfactory to the Administrative Agent and shall promptly deliver to the
Administrative Agent evidence in writing of such agent's acceptance of such
appointment and its agreement that such appointment shall be irrevocable.
(d) The Borrower hereby consents to process being served in any
suit, action, or proceeding instituted in connection with this Note by (i) the
mailing of a copy thereof by certified mail, postage prepaid, return receipt
requested, to the Borrower and (ii) serving a copy thereof upon the agent
hereinabove designated and appointed by the Borrower as the Borrower's agent for
service of process. The Borrower irrevocably agrees that such service shall be
deemed to be service of process upon the Borrower in any such suit, action, or
proceeding. Nothing in this Note shall affect the right of the Administrative
Agent to serve process in any manner otherwise permitted by law and nothing in
this Note will limit the right of the Administrative Agent otherwise to bring
proceedings against the Borrower in the courts of any jurisdiction or
jurisdictions.
14. WAIVER OF TRIAL BY JURY.
THE BORROWER AND THE ADMINISTRATIVE AGENT HEREBY WAIVE TRIAL BY JURY IN
ANY ACTION OR PROCEEDING NOT REQUIRED TO BE ARBITRATED PURSUANT TO THE TERMS
HEREOF TO WHICH THE BORROWER AND THE ADMINISTRATIVE AGENT, OR EITHER OF THEM,
MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS NOTE, (B)
THE OTHER FINANCING DOCUMENTS OR (C) ANY OF THE PROPERTY. IT IS AGREED AND
UNDERSTOOD
98
105
THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL
PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE
NOT PARTIES TO THIS NOTE. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY
MADE BY THE BORROWER, AND THE BORROWER HEREBY REPRESENTS THAT NO REPRESENTATIONS
OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF
TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THE BORROWER
FURTHER REPRESENTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND
IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN
FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL.
15. Expenses.
The Borrower promises to pay to the Administrative Agent on demand by the
Administrative Agent all costs and expenses incurred by the Administrative Agent
in connection with the collection and enforcement of this Note, including,
without limitation, all reasonable attorneys' fees and expenses and all court
costs.
16. Notices.
Any notice, request, or demand to or upon the Borrower or the
Administrative Agent shall be deemed to have been properly given or made when
delivered in accordance with Section 11.1 of the Financing Agreement.
17. Miscellaneous.
Each right, power, and remedy of the Administrative Agent as provided for
in this Note or any of the other Financing Documents, or now or hereafter
existing under any applicable law or otherwise shall be cumulative and
concurrent and shall be in addition to every other right, power, or remedy
provided for in this Note or any of the other Financing Documents or now or
hereafter existing under any applicable law, and the exercise or beginning of
the exercise by the Administrative Agent of any one or more of such rights,
powers, or remedies shall not preclude the simultaneous or later exercise by the
Administrative Agent of any or all such other rights, powers, or remedies. No
failure or delay by the Administrative Agent to insist upon the strict
performance of any term, condition, covenant, or agreement of this Note or any
of the other Financing Documents, or to exercise any right, power, or remedy
consequent upon a breach thereof, shall constitute a waiver of any such term,
condition, covenant, or agreement or of any such breach, or preclude the
Administrative Agent from exercising any such right, power, or remedy at a later
time or times. By accepting payment after the due date of any amount payable
hereunder, the Administrative Agent shall not be deemed to waive the right
either to require prompt payment when due of all other amounts payable under the
terms hereof or to declare an Event of Default for the failure to effect such
prompt payment of any such other amount. No course of dealing or conduct shall
be effective to amend, modify, waive, release, or change any provisions of this
Note.
99
106
18. Partial Invalidity.
In the event any provision of this Note (or any part of any provision) is
held by a court of competent jurisdiction to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision (or remaining part of the affected
provision) of this Note; but this Note shall be construed as if such invalid,
illegal, or unenforceable provision (or part thereof) had not been contained in
this Note, but only to the extent it is invalid, illegal, or unenforceable.
19. Captions.
The captions herein set forth are for convenience only and shall not be
deemed to define, limit, or describe the scope or intent of this Note.
20. Governing Law.
The provisions of this Note shall be construed, interpreted and enforced
in accordance with the laws of the Commonwealth of Virginia as the same may be
in effect from time to time.
IN WITNESS WHEREOF, the Borrower has caused this Promissory Note to be
executed, under seal, by its duly authorized representatives, as of the date
first written above.
WITNESS OR ATTEST: ((Borrower:LIKE THIS))
By: ((Borrower Acting Member))
By: ((Guarantor Name))
By: (SEAL)
------------------------- --------------------
((Guarantor Signer))
((Guarantor Signer Title))
COMMONWEALTH OF MASSACHUSETTS, COUNTY OF PLYMOUTH, TO WIT:
I, , a Notary Public in and for the jurisdiction
---------------------
aforesaid, do hereby certify that ((Guarantor Signer)) as ((Guarantor Signer
Title)) of ((Guarantor Name)), the sole member of ((Borrower Acting Member)),
who executed the foregoing instrument, personally appeared before me and
acknowledged said Instrument to be his act and deed that he executed said
Instrument for the purposes therein contained.
WITNESS my hand and Notarial Seal.
------------------------------
Section 11.24 Notary Public
My Commission Expires:
100
107
EXHIBIT B
FORM OF BORROWING BASE REPORT
101
108
EXHIBIT C
INITIAL BORROWING BASE REPORT
102
109
EXHIBIT D
PLACES OF BUSINESS
AS OF JUNE 13, 2001
The Borrowers' Chief Executive
Office and Principal Place of Business is:
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Locations of Collateral:
Sunrise White Oak (Silver Spring)
00000 Xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxxx
Silver Spring, Maryland
Sunrise East Meadow
Xxxxxxx Avenue, East Meadow
Town of Hempstead
Nassau County, New York
103
110
EXHIBIT E
FORM OF JOINDER AGREEMENT
(((Project Name)))
THIS JOINDER AGREEMENT (this "Agreement") is made this ((Date of
Execution:_____ day of June, 1990)) by ((Borrower:LIKE THIS)), a ((Type of
Entity)) organized under the laws of the ((Jurisdiction of Formation)), d/b/a
"Sunrise of ((DBA Name))" (the "Additional Borrower") in favor of BANK OF
AMERICA, N. A., as administrative agent (the "Administrative Agent") for itself
and for certain additional lenders (collectively with the Administrative Agent,
the "Lenders") who are or shall be from time to time participating in a bank
group pursuant to an Agency Agreement dated June 13, 2001 (amended, restated or
substituted from time to time, the "Agency Agreement").
NOW, THEREFORE, for value received the undersigned agrees as follows
1. Pursuant to the terms of a Financing and Security Agreement dated June
13, 2001 by and among East Meadow A.L., LLC, a Delaware limited liability
company, White Oak Assisted Living L.L.C., a Delaware limited liability company
and the Administrative Agent (as amended, restated or substituted from time to
time, the "Financing Agreement"), the Lenders have extended to the Borrowers (as
defined in the Financing Agreement) a revolving line of credit in the Credit
Facility Committed Amount or such greater amount as the Lenders may from time to
time commit to lend pursuant to the Agency Agreement (the "Credit Facility").
The Credit Facility is advanced as provided in and subject to the terms and
conditions of the Financing Agreement. Capitalized terms used, but not defined
in this Agreement shall have the meaning set forth in the Financing Agreement.
2. As of the date hereof, the Lenders have agreed to make advances
pursuant to the Financing Agreement to ((Borrower)) (the "Additional Borrower")
in the maximum principal amount of the lesser of (i) the maximum amount
permitted to be advanced under the Financing Agreement or (ii)
((Amount:$9,999.00)) (the "Deed of Trust Lien Amount"), which advances shall be
evidenced by the Promissory Note dated of even date herewith from the Additional
Borrower to the Administrative Agent in the face amount of ((Amount:$9,999.00))
(as amended, restated, consolidated or substituted from time to time, the
"Note") and secured in part by a lien on the Additional Borrower's interest in
an assisted living facility located in ((Facility County Location)), ((Facility
State Location)).
3. As a condition precedent to extending the Deed of Trust Lien Amount to
the Additional Borrower, the Lenders require that the Additional Borrower
execute this Agreement to evidence its agreement to the terms of the Financing
Documents as applicable.
4. The Additional Borrower hereby acknowledges, confirms and agrees that
on and as of the date of this Agreement, the Additional Borrower has or will
receive the benefit of certain advances made under the Credit Facility and has
granted a ((Mortgage or DOT)), Assignment, Security Agreement and Fixture Filing
of even date herewith (the "Deed of Trust") covering its Facility located in
((Facility County Location)), ((Facility State Location)) and known
104
111
as "Sunrise of ((DBA Name))" (the "Property") to secure the Facility Owner
Obligations, and as such shall be liable, as provided in the Financing
Documents, for all Facility Owner Obligations (whether incurred or arising prior
to, on, or subsequent to the date hereof) and otherwise bound by all of the
terms, provisions and conditions of the Financing Documents. Without in any way
implying any limitation on any of the provisions of this Agreement, the
Additional Borrower (a) represents and warrants that all of the representations
and warranties contained in the Financing Documents are true and correct on and
as the date hereof as if made on and as of the date hereof, both before and
after giving effect to this Agreement, and that no Event of Default or Default
has occurred and is continuing or exists, or would occur or exist after giving
effect to this Agreement, (b) promises to pay, jointly and severally with the
Facility Owners, all sums due or to become due under the Facility Owner Notes
and the other Financing Documents; (c) acknowledges, confirms and agrees that
from and after the date hereof Additional Borrower shall be liable for all
Facility Owner Obligations under the Financing Documents; and (d) acknowledges,
confirms and agrees that from and after the date hereof the term Borrowers as
such term (or any similar or related term) is used in the Financing Agreement,
this Agreement or any other Financing Document shall include the Additional
Borrower.
5. Without in any way implying any limitation on any of the provisions of
this Agreement, the Financing Agreement, or any of the other Financing
Documents, the Additional Borrower hereby assigns, pledges and grants to the
Administrative Agent, for the ratable benefit of the Lenders as security for the
Facility Owner Obligations, and agrees that the Administrative Agent, for the
ratable benefit of the Lenders, shall have a perfected and continuing security
interest in, and Lien on, (a) all of the Additional Borrower's Accounts,
Equipment, General Intangibles, documents, Chattel Paper, Instruments and
Inventory, all right, title and interest of the Borrowers in and to the
Operating Agreements and Management Contracts (including, without limitation,
the Management Agreement), Resident Agreements, physician contracts,
Participation Agreements, the Licenses (whether or not designated with initial
capital letters), and all other management contracts, operating agreements,
service agreements and any other agreements pertaining to the Eligible Projects
as that term is defined herein and in the Uniform Commercial Code as presently
adopted and in effect in the Commonwealth of Virginia, and shall also cover,
without limitation, (i) any and all property specifically included in those
respective terms in this Agreement or in the Financing Documents, (ii) all
right, title and interest of the Additional Borrower in and to Leases or
subleases, rents, royalties, issues, profits, revenues, earnings, income or
other benefits of the Property, or arising from the use or enjoyment of the
Property, or from any lease or other use and occupancy agreement pertaining to
the Property, (iii) all right, title and interest of the Additional Borrower
under all construction, architectural and design contracts and plans and
specifications, (iv) any and all property and/or collateral described in any of
the Security Documents, including, without limitation, this Agreement, the
Collateral Assignments, the Deeds of Trust, the Pledge of Account, and the
Pledge, Assignment and Security Agreement, (v) any and all bank accounts or
other deposit accounts of the Additional Borrower wherever located, and (vi) all
proceeds (cash and non-cash, including, without limitation, insurance proceeds),
of the foregoing. The Additional Borrower further agrees that the Administrative
Agent, shall have in respect thereof all of the rights and remedies of a secured
party under the Uniform Commercial Code as well as those provided in this
Agreement, under each of the other Financing Documents and under applicable
Laws.
105
112
6. Without in any way implying any limitation on any of the provisions of
this Agreement, the Additional Borrower agrees to execute such financing
statements, instruments, and other documents as the Administrative Agent may
require.
7. Additional Borrower hereby covenants and agrees with the Administrative
Agent and the Lenders that the Obligations include all present and future
indebtedness, duties, obligations, and liabilities, whether now existing or
contemplated or hereafter arising, of the Borrower.
8. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Virginia, without regard to
principles of choice of law.
9. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original for all purposes, and all of which shall
constitute, collectively, one agreement.
WITNESS the due execution hereof as of the day and year first written
above.
WITNESS OR ATTEST: ((Borrower:LIKE THIS))
By: ((Borrower Acting Member)),
its sole member
By: ((Guarantor Acting Member)),
its sole member
By: (SEAL)
------------------------- --------------------
((Guarantor Acting Member
Signer))
((Guarantor Acting Member
Title))
106
113
WITNESS: BANK OF AMERICA, N. A.,
By: (SEAL)
---------------------------- ----------------------
((Bank Officer))
((Bank Officer Title))
107
114
1
EXHIBIT F
SURVEY REQUIREMENTS
1. Field Note Description. The Survey shall contain a certified metes
and bounds description complying with the following: (a) the beginning point
shall be established by a monument located at the beginning point, or by
reference to a nearby monument; (b) the sides of the Land shall be described by
giving the distances and bearings of each; (c) the distances, bearings, and
angles shall be taken from an instrument survey by a registered professional
engineer or registered professional land surveyor; (d) curved sides shall be
described by data including: length of arc, central angle, radius of circle for
the arc and chord distance, and bearing; (e) the description shall be a single
perimeter description of the entire Land, if and as instructed, there shall also
be a separate metes and bounds description of one or more constituent tracts out
of the Land; (f) the description shall include a reference to all streets,
alleys, and other rights-of-way that abut the Land, and the width of all
rights-of-way mentioned shall be given the first time these rights-of-way are
referred to; (g) for each boundary line abutting a street, road, alley or other
means of access, the description must, in calling the boundary line, state that
the boundary line and the right-of-way line are the same; (h) if the Land has
been recorded on a map or plat as part of an abstract or subdivision, reference
to such recording data shall be made; and (i) the total acreage and square
footage of the Land shall be certified.
2. Lot and Block Description. If the Land consists of one or more
complete lots or blocks included within a properly established recorded
subdivision or addition, then a lot and block description will be an acceptable
substitute for a metes and bounds description, provided that the lot and block
description must completely and properly identify the name or designation of the
recorded subdivision or addition and give the recording information therefor.
3. Map or Plat. The Survey shall also contain a certified map or plat
clearly showing the following: (a) the Land; (b) the relation of the point of
beginning of the Land to the monument from which it is fixed; (c) all easements,
streets, roads, alleys and rights-of-way on or abutting the Land, showing
recording information therefor by volume and page; (d) if the Land has been
recorded on a map or plat as part of an abstract or subdivision, all survey
lines must be shown, and all lot and block lines (with distances and bearings)
and numbers, must be shown; (e) the established building setback lines, if any,
including those by restrictive covenant, recorded plat and zoning ordinance
(identifying the source in each case, by volume and page reference if
applicable); (f) all easements appurtenant to said Land, with recording
information by volume and page; (g) the boundary lines of the street or streets
abutting the Land and the width of said streets and the width of the
rights-of-way therefor; (h) the distance from the nearest intersecting street or
road to the Land; (i) all structures and improvements on the Land (with
designation and dimensions of each party wall, if any) with horizontal lengths
of all sides and the relation thereof by distances to (1) all boundary lines of
the Land, (2) easements, (3) established building lines, and (4) street lines;
(j) the types of materials comprising the exterior walls and roofs of all
buildings; (k) all street addresses of improvements on the Land; (l) all curb
cuts, driveways, fences, sidewalks, xxxxxx and landscaping; (m) the number of
stories of all multistory structures; (n) the location, type and size of all
utility lines as they service the Land and Improvements (sewer, water, gas,
electric and telephone); (o) all encroachments and protrusions, if any, from or
108
115
upon the Land or any improvements thereon or upon any easement, building setback
line or other restricted area, with exact measurements; (p) all parking and
paved areas, including the number of vehicles that may be parked; (q) all
distances, angles and other calls contained in the legal description; (r) the
location, type and size of all monuments, and as to each monument, indication
whether it was found or placed by the surveyor; (s) the boundaries of any flood
hazard area or flood plain area in which any part of the Land lies, with the map
number, date and source (governmental authority) of each flood map shown; (t)
all surface water bodies or courses; (u) the date of any revisions subsequent to
the initial survey prepared pursuant to these requirements; (v) a legend
explaining the meaning of all symbols used on the plat; and (w) the scale of all
distances and dimensions on the plat.
4. Certification. The certification for the property description and
the map or plat shall be addressed to Lender, Borrower and the Title Insurer,
signed by the surveyor (a registered professional land surveyor or registered
professional engineer), bearing current date, registration number, and seal, and
shall be in the following form or its substantial equivalent:
This is to certify to _______ _________Assisted Living, ________
("Borrower"), First American Title Insurance Company ("Title Insurer") and Bank
of America, N.A., as Administrative Agent (the "Administrative Agent"), that
this map or plat and the survey on which it is based were made in accordance
with "Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys"
jointly established and adopted by ALTA, ACSM and NSPS in 1999, and pursuant to
the Accuracy Standards as adopted by ALTA, NSPS and ACSM and in effect on the
date of this certification. The undersigned hereby certifies that the Positional
Uncertainties resulting from the survey measurements made on the survey do not
exceed the allowable Positional Tolerance. The undersigned further certifies to
Administrative Agent, Borrower and the Title Insurer that (a) this survey is
true and correct and was made on the ground under my supervision as per the
field notes shown hereon and correctly shows the boundary lines and dimensions
and area of the land indicated hereon and each individual parcel thereof
indicated hereon; (b) all monuments shown hereon actually exist, and the
location, size and type of such monuments are correctly shown; (c) the subject
property described in this survey is the same land as described in the title
commitment described below; (d) this survey and the information, courses and
distance shown on the survey are correct; (e) this survey correctly shows the
size, location and type of all buildings, structures, other improvements and
visible items on the subject property and that all buildings and improvements
are within the boundary lines and applicable set back lines of the subject
property; (f) this survey correctly shows the location and dimensions of all
alleys, streets, roads, rights-of-way, easements, building setback lines and
other matters of record of which the undersigned has been advised affecting the
subject property according to the legal description in such easements and other
matters (with instrument, book and page number indicated); (g) there are no
violations of zoning ordinances, restrictions or other rules and regulations
with reference to the location of the buildings and improvements; (h) except as
shown, there are no visible (1) improvements, easements, rights-of-way, party
walls, drainage ditches, streams, uses, discrepancies or conflicts, (2) party
walls or encroachments onto adjoining premises, streets, or alleys by any of
said buildings, structures or other improvements, (3) encroachments onto the
subject property by buildings, structures or other improvements on adjoining
premises, or (4) encroachments on any easement, building setback lines or other
restricted area by any buildings, structures or other improvements on the
subject property; (i) the distance from the nearest intersecting street or road
is as shown hereon; (j) the subject property
109
116
abuts a dedicated public street or road as shown hereon; (k) all utility
services required for the operation of the subject property either enter the
subject property through adjoining public streets, or this survey shows the
point of entry and location of any utilities that pass through or are located on
the adjoining premises; (l) any discharge into streams, rivers or other
conveyance system is shown on this survey; (m) if the subject property consists
of two or more parcels having common boundaries, those parcels are contiguous
along the common boundaries; (n) except as shown, no part of the property is
located in a 100-year Flood Plain or in an identified "flood prone area" as
defined pursuant to the Flood Disaster Protection Act of 1973, as amended, as
reflected by Flood Insurance Rate Map No. _________, Panel #______________,
dated __________, which such map panel covers the area in which the property is
situated; (o) no portion of the subject property lies within a delineated
wetlands area under federal, state or local law or policy; (p) except as shown
on this survey, the subject property does not serve any adjoining premises for
drainage, utilities, or ingress or egress; (q) the record description of the
subject property forms a mathematically closed figure; and (r) the subject
property has a tax map designation separate and distinct from that of any other
premises and the subject property is a separate, legally subdivided parcel. The
undersigned has received and examined a copy of the Title Insurance Commitment
No. __________ issued by the Title Insurer for the property as well as a copy of
each instrument listed therein, and the location of any matter shown thereon, to
the extent it can be located, has been shown on this survey.
110
117
EXHIBIT G
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate is delivered pursuant to (i) Section 7.1 of
the Financing and Security Agreement dated as of June 13, 2001 (together with
all amendments and modifications, if any, from time to time made thereto, the
"Financing Agreement") among East Meadow A.L., L.L.C. and White Oak Assisted
Living L.L.C. and certain affiliated borrowing entities (collectively, the
"Borrowers") and Bank of America, N.A. as Administrative Agent, and (ii) Section
3.1 of the Master Guaranty of Payment Agreement dated as of June 13, 2001
(together with all amendments and modifications, if any, from time to time made
thereto, the "Guaranty") by Sunrise Assisted Living, Inc. ("Master Guarantor")
and Bank of America, N.A. as Administrative Agent. Unless otherwise defined,
terms used herein (including the attachments hereto) have the meanings provided
in the Financing Agreement.
BORROWER CERTIFICATE
The undersigned, one of the Borrowers as of the date hereof, hereby
certifies and warrants that:
5. It is authorized to execute this certificate on behalf of all
Borrowers.
6. As of the (fiscal quarter) (fiscal year) ending as of
________________, 200_:
(a) No Borrower was in default under any of the provisions of the Financing
Agreement during the period to which this Compliance Certificate
relates;
The attached Borrowing Base Report
accurately represents the status of
each Eligible Project with regard
to any and all applicable covenants
set forth in the Financing
Agreement (including the ratio of
Net Operating Income to Debt
Service for such reporting period
and the Minimum Occupancy
Requirement and actual occupancy as
of the end of such reporting
period).
--------------------------
----------------,
By:
-----------------------
111
118
---------------------------
By:
-----------------------
By:
-----------------------
Name:
Title:
---------------------------
By:
-----------------------
By:
-----------------------
Name:
Title:
112
119
GUARANTOR CERTIFICATE
The undersigned, being the duly elected, qualified and acting Chief
Financial Officer or Executive Vice President of the Master Guarantor, on behalf
of the Master Guarantor, hereby certifies and warrants that:
7. He is the Executive Vice President or Chief Financial Officer of the
Master Guarantor and that, as such, he is authorized to execute this certificate
on behalf of the Master Guarantor.
8. As of the (fiscal quarter) (fiscal year) ending as of
________________, 200_:
(a) The Master Guarantor is not in default under any of the
provisions of the Guaranty;
(b) The Master Guarantor's Tangible Net Worth was $_______________
as computed on Attachment 1 hereto;
(c) The Master Guarantor's ratio (on a consolidated basis with all
subsidiaries) of Funded Debt (as defined in the Guaranty) to
EBITDAR was ______ as computed on Attachment 2 hereto;
(d) The Master Guarantor's ratio (on a consolidated basis with all
subsidiaries) of EBITDAR to the sum of Interest Expense (as
defined in the Guaranty) and Rent Expense (as defined in the
Guaranty) was __________ as computed on Attachment 3 hereto;
(e) The value of the Master Guarantor's Minimum Liquid Assets was
$_____ as computed on Attachment 4 hereto.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate, this ______ day of ______________, 200__.
SUNRISE ASSISTED LIVING, INC.
By: ___________________________(SEAL)
Christian X.X. Xxxxxx
Executive Vice President
113
120
ATTACHMENT 1
Period Ending: ____________, 200_
Tangible Net Worth
9. net worth (defined by GAAP), plus the leasehold value associated with
the properties which are the subject of synthetic lease transactions
which are otherwise characterized as intangible assets $___________
less
10. (a) all intangible assets (except for deferred taxes recorded as
goodwill and except for the good will purchased in connection with the
acquisition of Karrington Health, Inc. in the amount of $32,000,000);
$______________
(b) write-up in book value of assets subsequent to most recent financial
statement; $_____________
(c) loan and advances to, or investments in, any person or entity (except:
(i) cash equivalents or deposit accounts at financial institutions;
(ii) mortgage revenue bonds issued by Bucks County, PA Industrial
Development Authority; and (iii) individual investments less than
$2,500,000, but not exceeding $10,000,000 in the aggregate);
$_______________
(d) advances or loan to, or receivables from, unconsolidated affiliates
(except subordinated debt or loan of unconsolidated subsidiaries and
affiliates of Master Guarantor which are parties to development and
management contracts with Sunrise Development, Inc. and Sunrise
Assisted Living Management, Inc.); $______________
Actual Tangible Net Worth = $_______________
Required Tangible Net Worth equal to the sum of :
(i) Master Guarantor's net worth as of March 31, 2001 $284,000,000
(ii) Master Guarantor's net income (if positive) for each quarter
subsequent to March 31, 2001 x 75% = $____________
(iii) Net proceeds received by Master Guarantor of any equity
capital transaction during each quarter subsequent to March
31, 2001 x 85% = $____________
TOTAL $____________
114
121
ATTACHMENT 2
Period Ending: ____________, 200_
Ratio of Funded Debt to EBITDAR
11. Funded Debt $_____________*
12. EBITDAR (as calculated on Attachment 3) $_____________
Actual Ratio: ____
Required Ratio:
Period Ending Maximum Ratio
------------- -------------
June 30, 2001 6.50 to 1.00
September 30, 2001 6.50 to 1.00
December 31, 2001 6.50 to 1.00
March 31, 2002 6.00 to 1.00
June 30, 2002 6.00 to 1.00
September 30, 2002 6.00 to 1.00
December 31, 2002 6.00 to 1.00
March 31, 2003 5.50 to 1.00
and thereafter
* "Funded Debt" means the sum of the following but shall exclude trade and other
accounts payable in the ordinary course of business in accordance with customary
trade terms and which are not overdue (as determined in accordance with
customary trade practices) or which are being disputed in good faith by the
Master Guarantor and for which adequate reserves are being provided on the books
of the Master Guarantor in accordance with GAAP:
(f) indebtedness for borrowed money (including the 5-1/2%
convertible subordinated notes issued by the Master Guarantor)
$______________
(g) obligations in respect of letters of credit, banker's or other
acceptances or similar obligations issued or created for the
account of the Master Guarantor $____________
(h) (i) lease obligations which have been or should be, in
accordance with GAAP, capitalized on the books of the Master
Guarantor, plus (ii) the product of Rent Expense (as defined
in the Guaranty), with
115
122
respect to operating leases, multiplied by eight (8) (except
for Sunrise of Severna Park which is multiplied by four (4)
$____________
(i) liabilities secured by any property owned by the Master
Guarantor, to the extent attached to the Master Guarantor's
interest in such property, even though Master Guarantor is not
liable for the payment thereof $____________
(j) (i) amounts payable by Master Guarantor under any terminated,
defaulted or outstanding interest rate protection products, or
(ii) take-out commitments (excluding a refinancing or a
commitment of a third party) or purchase contracts including
the deferred purchase price of property or services in each
instance if the Master Guarantor does not control the
incurring obligation $____________
(k) (i) the amount of any guaranty of indebtedness for borrowed,
or (ii) other debt owned by Persons other than the Master
Guarantor which is in default and for which the creditor is
pursuing payment by the Master Guarantor $____________
(l) any obligation of the Master Guarantor or a Commonly
Controlled Entity to a Multiemployer Plan $____________
(m) any synthetic lease obligations $____________,
(n) any other lease expenses for rented real property will be
accounted for as debt based on eight times annualized lease
payments (provided, however, that so long as the Master
Guarantor or any Affiliate shall continue to own a 50%
interest in the Facility located in Severna Park, Maryland
known as "Sunrise of Severna Park", lease expenses for Sunrise
of Severna Park will be accounted for as debt based on four
times the annualized lease payments rather than eight times
the annualized lease payments) $____________
(o) other amounts considered to be debt by the Administrative
Agent, the Syndication Agent and the Documentation Agent in a
dollar amount to be mutually agreed upon by the Administrative
Agent and the Master Guarantor (excluding trade and other
accounts payable in the ordinary course of business in
accordance with customary trade terms which are not overdue or
which are being disputed in good faith by the Master Guarantor
and for which adequate reserves are being provided on the
books of Master Guarantor in accordance with GAAP)
$____________
116
123
ATTACHMENT 3
Period Ending: ____________, 200_
Ratio of EBITDAR to Interest Expense plus Rent Expense
13. EBITDAR $_____________ (calculated as follows)
Net Income* $_____________
Plus Interest $_____________
Plus Taxes $_____________
Plus Depreciation $_____________
Plus Amortization $_____________
Plus other non-cash
Items** $_____________
Plus Rent Expense $_____________ (actual rent expense
incurred by Borrower,
Master Guarantor or any
Affiliate as a tenant
under leases for any
senior living facility)
Plus Actual
Management Fees $_____________ (equal to actual Management
Fees)
Plus Gains from the
sale of open
operating
Facilities
(not to exceed
25 per 12 month
period of which not
more than 20 may be
Core Properties). $_____________
Minus Replacement
Reserve $_____________ ($250/year/bed for each
Facility)
Minus Management
Fees $_____________ (equal to the greater of 5%
of gross revenues or actual
Management Fees)
Minus gains from
sales of Non-Core
Properties $_____________
Minus other
extraordinary gains $_____________
14. Interest Expense $_____________ (actual interest expense
incurred by Master Guarantor
and its subsidiaries on all
debt owed to unaffiliated
third
117
124
parties, including 5-1/2%
convertible subordinated
notes)
15. Rent Expense $_____________
Interest Expense $_____________
Sum of Rent Expense
and Interest Expense $_____________
Actual Ratio: _____
Required Ratio: Not less than 2.25 to 1.00
*Net Income shall include gain from the sale of any Core Property provided such
gain is recognized ratably over the longer of (i) four (4) fiscal quarters or
(ii) such longer period as may be required by GAAP; provided, however, if GAAP
requires that such gain be recognized in fewer than four (4) quarters, for
purposes of this definition, the gain must be calculated ratably over four (4)
quarters. The Master Guarantor's financial statements shall disclose over what
period such gain is being recognized. Gain from the sale of any Non-Core
Property shall not be included in Net Income.
**Other non-cash and one-time non-recurring items which may be added back to
EBITDAR require the consent of the Administrative Agent and if they exceed
$5,000,000 in any year require consent of 66.67% of the Lenders by pro rata
shares of the Loan.
118
125
ATTACHMENT 4
Period Ending: ____________, 200_
Minimum Liquid Assets
Value of unrestricted cash, cash equivalents and marketable securities
$
--------------
Required Value: not less than the greater of (a) 90 days of Debt Service, or
(b) $25,000,000.
119
126
SUNRISE ASSISTED LIVING, INC.
ESCROWS
AS OF JULY 2001
R.E. OPERATING CAPITAL REPLACEMENT LAND CONTRACT
TAXES INSURANCE RESERVE BUDGETS RESERVE REPAIRS CLOSING LOCALITY
# HOME 10300 10310 10320 10325 10330 10335 10340 10350
--------------------------------------------------------------------------------------------------
00001 XXXX - - - - - - - -
00000 XXXXX - - - - - - - -
00000 XXX - - - - - - - -
00000 SALLP 385,129.94 - - - - - - -
00107 Fairfax - - - - - - - -
00113 Xxxxxx - - - - - - - -
00000 VillageHos - - - - - - - -
00116 Towson - - - - - - - -
00120 Xxxxxxx - - - - - - - -
00000 Xxxxxxxxxx - - - - - - - -
---------------------------------------------------------------------------------------------------------------------------
00000 Xxxxxxx - - - - - - - -
00000 Walnut
00151 Glen_Cove
00153 Cohasset
00157 Xxxxxxxxx
00000 Xxxxxxx
00000 Xxxxx
00000 Bellevue
00222 Xxxxxxx
00224 Cot Bismar 10,891.79 - - - - - - -
00225 Cot Xxxxxx 00,000.00 - - - - - - -
00000 Com Bismar 20,888.36 - - - - - - -
00227 Cot Buffal 121,374.77 - - - - - - -
00228 Com Buffal 36,554.64 - - - - - - -
00229 Roch 1 77,045.22 - - - - - - -
00238 Cott Xxxxx 0,000.00 - - - - - - -
00000 Albur
00242 Kenwood
00243 Englewood
00244 Colorado
00246 Park Ridge 56,030.35 - - - - - - -
00250 Finneytown
00000 Xxxxxxxx (2,542.23) 11,531.86
00706 Mt. Laurel 63,482,48 6,306.06 - - - - - -
00720 Xxxxxx M
00721 Reston
00722 Prim Annap
00733 Xxxxxxx
CONSTR/ DEBT SER DEBT SERV. TOTAL
PROJ FUND RES #1 RES #4 PER BANK PER GL DIFFERENCE
# HOME 10370 10380 10383
------------------------------------------------------
00001 SALI - - - - 255,00.00 (255,000.00)
00002 XXXXX - - - - (8,777.40) 8,777.40
00003 SDI - - - - 232,685.20 (232,685.20)
00012 SALLP - - - 385,129.94 1,170,407.97 (785,278.03)
00000 Xxxxxxx - - - - 38,495.38 (39,496.38)
00113 Atrium - - - - 129,167.63 (129,167.63)
00114 VillageHos - - - 519,107.47 512,251.65 8,855.82
00116 Towson - - - - 298,214.97 (298,214.97)
00120 Chanate - - - - 315,535.37 (315,535.37)
00140 Alexandria 58,862.53 - - 58,862.53 58,862.53 -
------------------------------------------------------------------------------------------------------------------
00147 Decatur - - - - 60,168.35 (60,168.35)
00149 Walnut - 49,592.52 (49,592.52)
00151 Glen_Cove - 206,397.39 (206,397.39)
00000 Xxxxxxxx - 63,122.51 (53,122.51)
00000 Xxxxxxxxx - 11,554.80 (11,554.80)
00000 Xxxxxxx - 85,752.20 (85,752.20)
00000 Xxxxx - 19,186.20 (19,186.20)
00000 Xxxxxxxx - 37,713.85 (37,713.85)
00222 Xxxxxxx - 21,728.19 (21,728.19)
00224 Cot Bismar - - - 10,891.79 12,516.57 (1,624.78)
00225 Cot Waterl - - - 10,891.78 21,033.67 (10,141.89)
00226 Com Bismar - - - 20,888.36 20,797.27 91.09
00227 Cot Buffal - - - 121,374.77 139,105.15 (17,730.38)
00228 Com Buffal - - - 36,554.64 71,018.36 (34,481.72)
00229 Roch 1 - - - 77,048.22 90,048.01 (12,999.79)
00000 Xxxx Xxxxx - - - 9,847.37 11,073.33 (1,225.96)
00000 Xxxxx - 1,687.00 (1,687.00)
00000 Xxxxxxx - 1,668.00 (1,688.00)
00243 Englewood - 1,633.00 (1,633.00)
00244 Colorado - 1,668.00 (1,668.00)
00246 Park Ridge - - - 58,030.35 58,030.35 -
00000 Xxxxxxxxxx - 10,759.70 (10,759.70)
00704 Woodbury - - - 8,989.65 121,971.59 (112,981.94)
00706 Mt. Laurel - - - 71,788.54 141,837.49 (70,048.95)
00720 Xxxxxx M - 3,053.00 (3,053.00)
00721 Reston - (29,897.34) (29,897.00)
00722 Prim Annap - 7,385,761.07 (7,385,761.07)
00733 Xxxxxxx - 14,200.00 (14,200.00)
127
Sunrise Assisted Living, Inc.
Escrows
As of July 2001
R.E. Insurance Operating Capital Replacement Repairs Land Contract Constr/ Debt Ser
Taxes Reserve Budgets Reserve Closing Locality Proj Fund Res #1
# Home 10300 10310 10320 10325 10330 10335 10340 10350 10370 10380
00744 MSH COHAS 31,332.58 - - - 18,198.35 - - - - -
00745 MSH GlenCo 149,312.16 - - - - - - - - -
00746 MSH Paramu 104,837.20 - - - - - - - - -
00747 MSH Layafe 61,306.97 - - - - - - - - -
00748 MSH Paoli 85,767.32 1,565.60 - - 4,881.27 - - - - -
00749 MSH Decatu 24,988.69 - - - - - - - - -
00750 MSH Bellev 35,555.97 - - - - - - - - -
00751 MSH Walnut 33,844.29 - - - - - - - - -
00766 SpringLLC 99,253.89 - - - - - - - - -
00767 MorrisPILLC 43,543.89 - - - - - - - - -
00768 XxxXxxXXX 00,000.00 - - - - - - - - -
00000 XxxxXxxXXX 00,000.00 - - - - - - - - -
00000 XxxxxxXXX 000,000.00 - - - - - - - - -
00000 WayneLLC 67,450.07 - - - 158.46 - - - - -
00772 XxxxxxxXXX 00,000.00 - - - - - - - - -
00000 HavarfdLLC 61,773.50 - - - - - - - - -
00781 XXXXxXxxxx 00,000.00 - - - - - - - - -
00000 ALINapervi 50,306.08 - - - - - - - - -
00783 ALIEBrunsw 74,294.99 - - - - - - - - -
00784 XXXXxxxxxx 00,000.00 - - - - - - - - -
00000 ALINLynbro 176,083.68 - - - - - - - - -
00786 ALIStamfor 19,394.04 - - - - - - - - -
00787 ALIWCliff 76,743.66 - - - - - - - - -
00801 SFI Xxxxxx - - - - - - - - - -
Debt Serv. Total
Res #4 per Bank per GL difference
# Home 10383
00744 MSH COHAS - 49,530.93 49,541.18 (10.25)
00745 MSH GlenCo - 149,312.16 119,710.09 29,602.07
00746 MSH Paramu - 104,937.20 104,937.20 -
00747 MSH Layafe - 81,306.97 81,306.97 -
00000 XXX Xxxxx - 87,352.92 87,355.21 (2.29)
00749 MSH Decatu - 29,869.96 29,869.96
00750 MSH Bellev - 35,555.97 67,698.46 (32,142.49)
00751 MSH Walnut - 33,844.29 33,844.29 -
00766 SpringLLC - 99,253.89 100,260.86 (1,006.97)
00767 MorrisPILLC - 43,543.69 73,718.56 (30,174.87)
00768 OldTapLLC - 56,856.20 56,856.21 (0.01)
00769 GranRunLLC - 76,688.75 76,688.75 -
00770 AbingtLLC - 253,561.64 253,511.64 50.00
00771 WayneLLC - 67,606.53 159,799.95 (92,191.42)
00772 WestfldLLC - 65,295.89 154,050.78 (88,754.89)
00773 HavarfdLLC - 81,773.50 81,773.50 -
00000 XXXXxXxxxx - 48,516.42 48,473.00 43.42
00782 ALINapervi - 50,308.08 50,262.00 46.08
00783 ALIEBrunsw - 74,294.99 74,221.00 73.99
00000 XXXXxxxxxx - 11,183.29 11,176.00 7.29
00785 ALINLynbro - 176,083.68 175,905.00 178.68
00786 ALIStamfor - 19,394.04 19,385.00 9.04
00787 ALIWCliff - 76,743.66 76,667.00 76.66
00801 SFI Xxxxxx - - (39,496.37) 39.496.37
