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Exhibit 10.59
DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (this "Agreement") is made and entered into as
of June 30, 1997, between ALCO II, L.L.C., a North Carolina limited liability
company ("Owner") and BCC Development and Management Company, a Delaware
corporation ("Developer"), and Balanced Care Corporation, a Delaware
corporation ("Guarantor").
RECITALS
WHEREAS, Owner is purchasing certain real estate located in (1) Roanoke
County, (2) City of Danville, (3) City of Harrisonburg, Virginia (the
"Property"), on which it plans to construct an assisted living facility; and
WHEREAS, Developer has experience and knowledge in the areas of
development, construction and operation of assisted living facilities; and
WHEREAS, Owner wishes to develop, with Developer's assistance, a (1)
59-unit (Roanoke), (2) 60-unit (Danville), (3) 51-unit (Harrisonburg) assisted
living facility and all of the personal property necessary or appropriate for
the use and operation of such an assisted living facility (the "Project"); and
WHEREAS, Construction Lender [as defined in the Construction Disbursement
Agreement set forth in Exhibit 2.1(i)] has been appointed by Owner as agent for
Owner to function as construction lending manager and to administer fund
disbursement on behalf of Owner to Developer up to 100% of the approved,
budgeted development costs set forth in the Construction Disbursement Agreement;
and
WHEREAS, Owner wishes to employ Developer to provide Owner with assistance
in the development of the Project and to cause Developer's affiliate, BCC at
Harrisonburg, Inc. ("Lessee") to lease the Project under a triple-net, pass
through lease as more particularly set forth below.
WITNESSETH
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Owner and the Developer do hereby
agree as follows:
1. DEFINITIONS. The definitions of certain terms used herein are
set forth on Exhibit 1 attached hereto.
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2. THE PROJECT.
2.1 Development of Project. Developer agrees (i) to develop and construct
the Project for an amount not to exceed the sum of ($_____________________),
including Developer's fees, Developer's incentive fee, contingency, fees and
accrued interest on advances made by Construction Lender on behalf of Owner
(which interest shall accrue on all sums advanced or deemed to be advanced and
shall be posted on the first of each month), all as set forth on the line-item
budget attached hereto as Exhibit 2.1 (i) under the heading of "Maximum Project
Amount", subject to such increases, reallocations or other modifications as
shall be made only upon Construction Lender's prior written consent on behalf of
Owner, which consent shall be in Construction Lender's sole discretion (the
"Approved Budget"); (ii) to cause the construction of the Project pursuant to
the plans and specifications set forth as Exhibit 2.1 (ii); (iii) to obtain or
execute a construction contract for the Project with a fixed price or guaranteed
maximum amount, such contract to be in the form set forth in Exhibit 2.1(iii);
(iv) to satisfy any requirements in the Lease or sought to be imposed by Lessee
relating to acceptance of occupancy or commencement of rent; and (v) to cause
completion of construction and equipping of the Project in accordance with plans
and specifications which are submitted to and approved by Construction Lender on
behalf of Owner and in accordance with all Laws and any licensure requirements
and so as to permit the "Primary Intended Use" described in the Lease.
Developer agrees to comply with and timely satisfy the terms and
conditions (including, but not limited to, the conditions for obtaining advances
from Construction Lender) pursuant to the Construction Disbursement Agreement,
which agreement is incorporated herein by this reference in full and deemed a
part of this Agreement.
2.2 Developer's Services. Until Completion of the Project or termination
as provided in Sections 4.2 or 8.2 below, Developer, acting within the
parameters of the Approved Budget and the plans and specifications approved by
Construction Lender on behalf of Owner, shall have the authority in its own name
(not as Owner's Agent) to supervise, direct and coordinate all development and
project management matters pertaining to the Project, including, without
limitation:
(a) Development Services:
(1) completing a market analysis to confirm bed need;
(2) finding a suitable site and obtaining rights thereto;
(3) obtaining architectural plans for the Project;
(4) retaining and supervising engineers, architects, land
planners, surveyors, consultants, independent contractors, subcontractors,
attorneys, service agents, suppliers and other providers of materials or
services;
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(5) pursuing with the appropriate governmental agencies
obtaining any necessary permits and approvals to permit the Property's use and
development in a manner reflected in the plans and specifications approved in
advance by Construction Lender on behalf of Owner;
(6) entering into contracts for labor, materials and services;
(7) creating and filing, after Owner's express approval of,
and, where required, execution of any easements, plats, maps, plans,
declarations of covenants and restrictions, right-of-way deeds and other similar
instruments necessary to the development of the Project;
(8) purchasing all necessary supplies and equipment required
for the development, construction, management and operation of the Project and
all improvements forming a part thereof;
(b) Project Management Services:
(1) coordinating with all applicable federal, state, county
and city governmental authorities and securing all necessary permits,
authorizations and approvals to permit Lessee's Primary Intended Use of the
Project;
(2) negotiating for the provision of utilities to serve the
Property and the Project;
(3) supervising all construction on the Property and
supervising contractor compliance with construction, architectural or
development criteria applicable to the Project;
(4) paying the reasonable fees, charges, expenses and
commissions of all independent contractors, architects, engineers,
subcontractors, suppliers and service agents utilized in the development and
construction of the Project; and
(5) __________ all other construction administration with
respect to the Project.
2.3 Financing of Project. Fund disbursement will be administered by Owner
as construction lending manager pursuant to the Construction Disbursement
Agreement set forth on Exhibit 2.3 hereto.
2.4 Lease of Project. Simultaneously with the execution of this
Development Agreement, Developer will cause Lessee to execute a lease of the
Project from Owner in the form attached hereto as Exhibit 2.4 ("Lease").
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2.5 Opinion of Counsel. Simultaneously with the execution hereof,
Developer shall deliver or cause to be delivered to Owner an opinion of counsel,
in form and substance reasonably satisfactory to Owner, regarding the due
authorization, execution and enforceability of the Lease and related documents.
2.6 Guaranty. All obligations of the Developer under this Agreement are
unconditionally guaranteed by Guarantor which joins in this Agreement for such
purpose. The obligation of Guarantor is primary and not secondary.
2.7 Owner Cooperation. Owner shall take all reasonable and necessary steps
to cooperate with Developer as necessary to enable Developer to discharge its
obligations hereunder; provided, however, that Construction Lender shall not be
required to expend funds on behalf of Owner not provided for in the Approved
Budget unless consented to by Construction Lender on behalf of Owner under
Section 2.1 above.
3. REPRESENTATIONS AND WARRANTIES.
3.1 Representations and Warranties of Developer and Guarantor. Developer
and Guarantor represent and warrant to Owner that:
(a) Formation and Qualification. Developer and Guarantor are
corporations duly incorporated, validly existing and in good standing under the
Laws of the State of Delaware and are duly qualified and in good standing in the
Commonwealth of Virginia, and have both all requisite power and authority to
enter into this Agreement, the Construction Disbursement Agreement and any
guarantees and other documents to which Developer or Guarantor is a party and
contemplated herein or therein (collectively, the "Transaction Documents") and
to conduct their respective businesses and own and lease their respective
properties.
(b) Transaction Documents. The execution, delivery and performance
of the Transaction Documents to which the Developer and Guarantor are parties
are within the Developer's and Guarantor's power and authority, have been duly
authorized by all necessary action and do not and will not (a) require any
Authorization which has not been obtained, (b) contravene the Charter Documents
of Developer or Guarantor, any applicable Laws or any agreement or restriction
binding on or affecting Developer or Guarantor or their properties, or (c)
except to the extent created under the Transaction Documents, result in or
require the creation or imposition of any Lien upon or with respect to any
property now owned by Developer or Guarantor. No Authorization of Developer or
Guarantor (except which has already been obtained) is required for the
enforcement by Owner of its remedies under the Transaction Documents. Each
Transaction Document, when executed and delivered, will constitute the legal,
valid and binding obligation of Developer and Guarantor, enforceable against
Developer and Guarantor, as applicable, in accordance with its terms, except as
enforcement may be limited by principles of equity, bankruptcy, insolvency or
other similar Laws affecting the rights of creditors generally.
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(c) Financial Information. The Financial Statements of Developer and
Guarantor which have been furnished to Owner fairly present Developer's and
Guarantor's financial condition as at the dates of such Financial Statements and
results of operations, properties or prospects of Developer and Guarantor.
Developer and Guarantor have filed all tax returns required to be filed by them,
and have paid all Taxes due pursuant to such returns or in respect of any of
their properties, and to the current, actual knowledge of Developer and
Guarantor without special inquiry or investigation, no basis exists for
additional assessments which have not been adequately reserved against in the
Financial Statements referred to above or otherwise disclosed in writing to
Owner.
(d) Litigation and Other Matters. Except as otherwise disclosed in
writing to Owner: (a) no actions or other proceedings affecting or relating to
Developer or Guarantor or any of the Project are pending or, to the best
knowledge of Developer and Guarantor, threatened, and (b) no actions or other
proceedings are pending or, to the best knowledge of Developer and Guarantor,
threatened against or affecting Developer or Guarantor or any of their property
which (as regards both clauses (a) and (b) immediately preceding), if determined
adversely to Developer or Guarantor, could materially impair the financial
condition, operations, properties or prospects of Developer or Guarantor or the
ability of Developer or Guarantor to perform their respective obligations under
the Transaction Documents.
(e) Documents and Other Information. All Documents and other
information delivered to Owner pursuant to any of the Transaction Documents to
which Developer or Guarantor are parties are and will be complete and correct in
all material respects at the time of delivery to Owner.
3.2 Representations and Warranties of Owner.
(a) Formation and Qualification. Owner is a limited liability
company duly incorporated, validly existing and in good standing under the Laws
of the State of North Carolina and is duly qualified and in good standing in the
Commonwealth of Virginia, and has all requisite power and authority to enter
into this Agreement, the Construction Disbursement Agreement, the Loan Agreement
with Construction Lender, and any other documents to which it is a party and
contemplated herein or therein and to conduct its business and own and lease its
properties.
4. EVENTS OF DEFAULT AND REMEDIES OF OWNER.
4.1 Events of Default. The occurrence of any one or more of the following
events shall constitute an Event of Default.
(a) Developer shall fail to perform or observe any material term,
covenant or condition of this Agreement or any documents executed in connection
herewith and such failure is not cured by Developer within a period of thirty
(30) days after receipt by Developer of notice thereof from Owner, unless such
failure cannot with reasonable due diligence be cured within a period of thirty
(30) days, in which case such failure shall not be deemed to continue if
Developer
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proceeds promptly and with reasonable due diligence to cure the failure and
diligently completes the curing thereof (as soon as reasonably possible);
(b) any representation or warranty of Developer or Guarantor
contained in this Agreement or any Transaction Document or made in connection
with the Project, this Agreement or any Transaction Document proves to have been
incorrect in any material respect when made;
(c) Developer is enjoined by any court or other Governmental Agency
from constructing the Project or entering into the Transaction Documents and
such injunction continues unreleased and unstayed for forty-five (45) days;
(d) Without Construction Lender's consent of behalf of Owner, which
shall not be unreasonably withheld, Developer is dissolved or liquidated or
merged with or into any other Person; or for any period of more than thirty (30)
days, after Developer has received notice, Developer ceases to exist in its
present form and (where applicable) be in good standing and duly qualified under
the Laws of the States of Delaware and Virginia; or all or substantially all of
the assets of Developer are sold or otherwise transferred.
(e) The Guarantor ceases to own 100% of the Voting Stock of
Developer (unless consented to by Construction Lender on Owner's behalf in
Construction Lender's reasonable discretion).
(f) Developer or Guarantor is subject to an order for relief by the
bankruptcy court, or is unable or admits in writing its inability to pay its
debts as they mature or makes an assignment for the benefit of creditors; or
Developer or Guarantor applies for or consents to the appointment of any
receiver, trustee or similar official for it or for all or any part of its
property (or any such appointment is made without its consent and the
appointment continues undischarged and unstayed for sixty (60) days); or
Developer or Guarantor institutes or consents to any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, dissolution, custodianship,
conservatorship, liquidation, rehabilitation or similar proceeding relating to
it or to all or any part of its property under the Laws of any jurisdiction (or
any such proceeding is instituted without its consent and continues undismissed
and unstayed for sixty (60) days); or any judgment, writ, warrant of attachment
or execution or similar process is issued or levied against any property of
Developer or any Guarantor and is not released, vacated or fully bonded within
sixty (60) days after its issue or levy; or
4.2 Remedies of Owner. Upon the occurrence of any Event of Default
hereunder by Developer, Owner may, without further notice to or demand, if any,
upon Developer, which are expressly waived by Developer (except for notices or
demands otherwise required by applicable Laws to the extent not effectively
waived by Developer and any notices or demands specified in the Transaction
Documents), exercise any one or more of the following Remedies as Owner may
determine:
(a) Construction Lender, on behalf of Owner, may recover all
previously paid
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Developer fees and accrued and unpaid interest on advances at the Advance Rate,
terminate further advances to Developer;
(b) Owner may terminate Developer's rights with respect to the
Project and perform any of Developer's obligations in such manner as Owner may
reasonably determine; or
(c) Owner may proceed to protect, exercise and enforce any and all
other Remedies provided under the Transaction Documents or by applicable Laws.
All actual and reasonable costs, expenses, charges and advances of Owner
in exercising any such Remedies shall be payable by Developer to Owner as
Transaction Expenses in accordance herewith.
4.3 Remedies Cumulative. Each of the Remedies of Owner provided in the
Transaction Documents is cumulative and not exclusive of, and shall not
prejudice, any other Remedy provided in the Transaction Documents or by
applicable Laws. Each Remedy may be exercised from time to time as often as
deemed necessary by Owner, and in such order and manner as Owner may determine.
No failure or delay on the part of Owner in exercising any Remedy shall operate
as a waiver of such Remedy; nor shall any single or partial exercise of any
Remedy preclude any other or further exercise of such Remedy or of any other
Remedy. No application of payments, or any advances or other action by or on
behalf of Owner, will cure or waive any Event of Default or prevent
acceleration, or continued acceleration, of amounts payable under the
Transaction Documents or prevent the exercise, or continued exercise, of any
Remedies of Owner.
5. IMPOSITIONS. Prior to the commencement of the term of the Lease,
Developer will pay, or cause to be paid, all Impositions before any fine,
penalty, interest or cost may be added for non-payment, such payments to be made
directly to the taxing authorities where feasible, and Developer will promptly,
upon request, furnish to Construction Lender on behalf of Owner copies of
official receipts or other satisfactory proof evidencing such payments.
Developer's obligation to pay such Impositions become payable without a penalty.
6. PERMITTED CONTESTS. Notwithstanding any provision of this Agreement to
the contrary, Developer may contest by appropriate action any Imposition, and
Owner shall have no right to pay such Imposition on Developer's behalf during
the pendency of such contest, provided that (a) no "Event of Default" has
occurred and is continuing under this Agreement or under any of the other
Transaction Documents; (b) Developer has given Owner written notice that
Developer is contesting the application, interpretation or validity of the law,
regulation, order or agreement pertaining to the Imposition by appropriate legal
or administrative proceedings conducted in good faith and with due diligence and
dispatch; (c) such contest shall not subject Owner or any of its affiliates to
any assignment of all or any portion of the Owner's interest in any of the
Project to civil or criminal liability and does not jeopardize any such party's
interest in the Project; and (d) Developer shall give such security or
assurances as may be reasonably required by Construction Lender to ensure
ultimate compliance with all legal or contractual requirements
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pertaining to the Imposition (and payment of all costs, expenses, interest and
penalties in connection therewith) and to prevent any sale, forfeiture or loss
by reason of nonpayment or noncompliance.
7. DOCUMENTS TO BE PROVIDED BY DEVELOPER.
7.1 Certificate of Occupancy. The Developer shall furnish Owner a copy of
the final certificate of occupancy for the Project, as well as any related
operating licenses or other certificates of authority within twelve (12) months
(unless extended by Owner in Owner's reasonable discretion) of the date of this
Agreement (but no later than the date required by any regulatory agency) and
satisfy within such period any other conditions, if any, necessary to trigger
the obligations of Lessee under the Lease to commence the payment of rent. The
commencement and first payment by Lessee of said rent payments under the Lease
shall be a condition of Construction Lender's payment obligation on behalf of
Owner with respect to the final installment of the Developer's fee.
7.2 Plans and Specifications: Project Compliance. The Developer will
provide two (2) complete sets of the final Plans and Specifications for
Construction Lender and its construction inspector. The Project, as completed,
must conform substantially to such approved Plans and Specifications and comply
with covenants and restrictions of record and all applicable laws, ordinances
and regulations, including, without limitation, the Americans with Disabilities
Act and regulations thereunder, the Fair Housing Act and regulations thereunder,
and laws, ordinances and regulations relating to zoning, building codes, set
back requirements and environmental matters. Developer, by its execution and
delivery of this Agreement, represents and warrants to Owner and Construction
Lender that the Project will, if constructed in accordance with plans and
specifications provided by Developer, comply with covenants and restrictions of
record and all applicable Laws.
7.3 Soils Report; Architect's Certificate of Soil Conditions and
Other Matters.
Developer must furnish Construction Lender with a copy of the soils report
addressed to Construction Lender and a letter from Developer's architect in form
and content satisfactory to Construction Lender stating that the structural
foundations have been adequately designed considering soil conditions at the
site, permitting assignment of the plans and specifications to Construction
Lender for its use on behalf of Owner in the event of default without
responsibility on the part of the Owner or Construction Lender for the
architect's fees, and certifying as to compliance of the plans and
specifications with applicable laws, ordinances and regulations and such other
matters as Owner and/or Construction Lender may reasonably request.
7.4 Financial and Other Information. The Construction Lender must receive,
prior to closing hereunder, current financial statements of Developer, Lessee
and Guarantor and any applicable regulatory approvals required for the Project.
The contents of these financial statements and approvals are subject to the
Owner's review and approval.
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7.5 Construction Contract and Completion. Developer will provide
Construction Lender with a guaranteed maximum price construction contract in an
amount not greater than the proceeds allocable thereto, together with payment
and performance bonds with a dual obligee rider naming the Owner and
Construction Lender. The general contractor, the form and content of the
contract and the form and content of the bonds must be acceptable to
Construction Lender. Owner reserves the right for Construction Lender to approve
changes in the general contractor.
Developer shall cause the general contractor to provide a lien waiver and
affidavit of payment of all subcontractors, laborers and materialmen as a
condition to the payment of the remainder of Developer's fee. Developer shall be
responsible for assuring that the Project is completed, licensed and certified
for occupancy within the earlier of twelve (12) months (unless extended by Owner
in Owner's reasonable discretion) from commencement of construction or the date
required by any regulatory approval, and the construction contract will obligate
the general contractor to timely complete the Project within such period.
8. TERM.
8.1 Term. The term of this Agreement shall commence on the date hereof and
shall, unless sooner terminated as provided in Section 4.2 above or Section 8.2
below, or unless extended by agreement between Developer and Owner, terminate
upon Completion of the Project.
8.2 Termination by Developer. Developer may terminate this Agreement
following forty-five (45) days written notice to Owner if the Developer has
fully complied with all of its obligations hereunder and under the Transaction
Documents, has satisfied all conditions for an advance of funds under this
Agreement and the Construction Disbursement Agreement and no Event of Default
exists, and Construction Lender nevertheless shall fail to advance funds
required under this Agreement and the Construction Disbursement Agreement and
such failure is not cured within such forty-five (45) day period. Upon such a
termination, Developer shall also be entitled to exercise an option to purchase
the Project in its then current condition (which option must be exercised, and
the Purchase closed, if at all, within ninety (90) days following the end of
such aforesaid forty-five (45) day period). The purchase price shall equal all
Approved Budget funds previously advanced or deemed advanced excluding fees and
interest to Construction Lender.
9. MISCELLANEOUS.
9.1 Waiver of Trial by Jury. THE PARTIES TO THIS AGREEMENT DESIRE TO AVOID
THE ADDITIONAL TIME AND EXPENSE RELATED TO A JURY TRIAL OF ANY DISPUTES ARISING
HEREUNDER. THEREFORE, IT IS MUTUALLY AGREED BY AND BETWEEN THE PARTIES HERETO,
AND FOR THEIR SUCCESSORS AND ASSIGNS, THAT THEY SHALL AND HEREBY DO WAIVE TRIAL
BY JURY OF ANY CLAIM, COUNTERCLAIM, OR THIRD-PARTY CLAIM, INCLUDING ANY AND ALL
CLAIMS OF INJURY OR DAMAGES, BROUGHT BY EITHER PARTY AGAINST THE OTHER ARISING
OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT AND THE
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RELATIONSHIP WHICH ARISES HEREFROM. THE PARTIES ACKNOWLEDGE AND AGREE THAT
THIS WAIVER IS KNOWINGLY, FREELY AND VOLUNTARILY GIVEN, IS DESIRED BY ALL
PARTIES, AND IS IN THE BEST INTEREST OF ALL PARTIES.
9.2 Notice. Any notices, demands, approvals and other communications
provided for herein shall be in writing and shall be delivered by telephonic
facsimile and by overnight air courier, personal delivery or registered or
certified U.S. Mail with return receipt requested, postage paid, to the
appropriate party at its address as follows:
If to Owner:
ALCO II, L.L.C.
c/o Xxxxxxx X. Xxxxxxxx
00 Xxxxx Xxxxxx X.X.
Xxxxxxx, Xxxxx Xxxxxxxx 00000
With a copy to:
CAPSTONE CAPITAL CORPORATION
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx X. XxXxxxx, Assistant Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Developer:
BCC Development and Management Co.
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Esq.
With copies to:
Xxxxxxxxxxx and Xxxxxxxx, L.L.P.
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn: Xxxx X. Xxxxxx, Esq.
Addresses for notice may be changed from time to time by written notice to
all other parties. Any communication given by mail will be effective (i) upon
the earlier of (a) three business days following deposit in a post office or
other official depository under the care and custody of the United States Postal
Service or (b) actual receipt, as indicated by the return receipt; (ii) if given
by telephone facsimile, when sent; and (iii) if given by personal delivery or by
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overnight air courier, when delivered to the appropriate address set forth.
9.3 Governing Law. This Agreement shall be interpreted according to the
laws of the State of Alabama. All disputes hereunder shall be adjudicated in the
federal courts sitting in the State of Alabama, or should such courts refuse to
recognize jurisdiction over such matters, the courts of the State of Alabama.
9.4 Assignment. Neither party shall assign its rights and obligations
under this Agreement without the prior written approval of the other party
except that Developer may assign it rights and obligations to a wholly-owned
subsidiary or an affiliate of Developer. Developer shall provide notice to Owner
of such assignment.
9.5 Entire Agreement. This Agreement constitutes the entire Agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements, oral or written, and all other communications
between the parties relating to such subject matter.
9.6 Amendments. This Agreement shall not be modified or amended except by
mutual written agreement.
9.7 Waiver of Breach. The waiver by either party of a breach or violation
of any provisions of this Agreement shall not operate as, or be construed to be,
a waiver of any subsequent breach of the same or other provision.
9.8 Severability. In the event any provision of this Agreement is held to
be unenforceable or invalid for any reason, this Agreement shall remain in full
force and effect and enforceable in accordance with its terms disregarding such
enforceable or invalid provision; provided, however, that in the event that a
provision of this Agreement is rendered invalid or unenforceable and its removal
has the effect of materially altering the obligations or benefits to either
party, the party so affected shall have the right to terminate this Agreement
upon thirty (30) days' prior written notice to the other party.
9.9 Captions and Headings. The captions or headings in this Agreement are
made for convenience and general reference only and should not be construed to
describe, define or limit the scope and intent of the provisions of this
Agreement.
9.10 Counterparts. This Agreement may be executed in one or more
counterparts, all of which together shall constitute only one Agreement.
9.11 Binding Effect. This Agreement shall be binding and shall inure to
the benefit of the parties hereto, and their respective heirs, legatees,
executors, administrators, legal representatives, successors and assigns.
9.12 No Rule of Construction. The parties acknowledge that this
Agreement was
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initially prepared by Owner solely as a convenience and that all parties hereto,
and their counsel, have read and fully negotiated all of the language used in
this Agreement. The parties acknowledge that, because all parties and their
counsel participated in negotiating and drafting this Agreement, no rule of
construction shall apply to this Agreement which construes ambiguous and unclear
language in favor of or against any party because such party drafted this
Agreement.
9.13 No Third Party Beneficiary. This Agreement is solely for the benefit
of the parties hereto and shall not inure to the benefit of any individual or
entity not a party to this Agreement, except for Construction Lender.
9.14 Time is of the Essence. With respect to all provisions of this
Agreement, time is of the essence.
9.15 Other Terms. The term "document" is used in its broadest sense and
encompasses agreements, certificates, opinions, consents, instruments and other
written material of every kind. The terms "including" and "include" mean
"including without limitation" and "including, but not limited to". The term
"any" as a modifier to any noun, shall be construed to mean "any and/or all"
preceding the same noun in the plural. The terms "herein" "hereunder" and other
similar compounds of the word "here" refer to the entire document in which the
term appears and not to any particular provision or section of the document in
which the term appears and not to any particular provision or section of the
document.
9.16 Unavoidable Delay. An Unavoidable Delay shall toll the time for
performance by Developer hereunder for the duration of the Unavoidable Delay,
except that in no event shall Developer have more than eighteen (18) months from
the execution hereof to discharge all of its obligations hereunder.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
SIGNATURES APPEAR ON THE FOLLOWING PAGE.
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OWNER:
ALCO II, L.L.C.,
a North Carolina limited liability company
By /s/ Xxxxxxx Xxxxxxxx
------------------------------------------
Name
----------------------------------------
Title
---------------------------------------
DEVELOPER:
BCC DEVELOPMENT AND
MANAGEMENT COMPANY,
a Delaware corporation
By /s/ Xxxxx X. Xxxxx
-----------------------------------------
Xxxxx X. Xxxxx
Vice President
GUARANTOR:
BALANCED CARE CORPORATION
By /s/ Xxxxx X. Xxxxx
-----------------------------------------
Xxxxx X. Xxxxx
Vice President
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EXHIBIT 1
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings as
indicated:
"Advance Rate" means the prime rate of interest as reported by the Wall
Street Journal on the date of each advance plus two percent (2%).
"Agreement" means this agreement and all exhibits and schedules
attached hereto.
"Approved Budget" has the meaning set forth in Section 2.1.
"Authorization" means any authorization, consent, approval, order,
license, permit, exemption or other action by or from, or any filing,
registration or qualification with, any Governmental Agency or other Person.
"Charter Documents" means (a) in the case of a corporation, its articles
of incorporation and bylaws, (b) in the case of a partnership, its partnership
agreement and any certificate or statement of partnership, and (c) in the case
of a trust or any other entity, its formation documents, in each case as amended
from time to time.
"Completion of the Project" means the date which is the earlier of
_______________ or the date the Project obtains all certificates and licenses
necessary to operate the Facility as a (1) 59-unit (Roanoke), (2) 60-unit
(Danville), (3) 51-unit (Harrisonburg) assisted living/personal care facility.
"Developer" has the meaning set forth in the introductory paragraph to
this Agreement.
"Events of Default" means the events set forth in Section 4.1.
"Financial Statements" means for any Fiscal Year or other accounting
period for Developer, audited statements of earnings and retained earnings and
of changes in financial position for such period and for the period from the
beginning of the respective fiscal year of Developer to the end of such period
and the related balance sheet as at the end of such period, together with the
notes thereto, all in reasonable detail and setting forth in comparative form
the corresponding figures for the corresponding period in the preceding Fiscal
Year of Developer, and prepared in accordance with generally accepted accounting
principles consistently applied, except as noted.
"Fiscal Year" means Developer's fiscal year, ending on June 30 of each
calendar year.
"Governmental Agency" means, as relates to the Project, (a) any
government or municipally or political subdivision of any government or
municipality, (b) any assessment,
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improvement, community facilities or other special taxing district, (c) any
governmental or quasi-governmental agency, authority, board, bureau, commission,
corporation, department, instrumentality or public body, (d) any court,
administrative tribunal, arbitrator, public utility or regulatory body, or (e)
any central bank or comparable authority.
"Impositions" means, collectively, all taxes relating to the Property and
the Project, including all ad valorem, sales and use, gross receipts, action,
privilege, rent or similar taxes, assessments (including all assessments for
public improvements or benefits, whether or not commenced or completed prior to
the date hereof and whether or not to be completed prior to the termination
hereof) water, sewer or other rents and charges, excises, tax levies, fees
(including license, permit, inspection, authorization and similar fees), and all
other governmental charges, in each case whether general or special, ordinary or
extraordinary, or foreseen or unforeseen, of every character in respect of the
Property and the Project (including all interest and penalties thereon due to
any failure in payment by Developer); provided that nothing contained in this
Agreement shall be construed to require Developer to pay any tax based on net
income (whether denominated as a franchise or capital stock or other tax)
imposed on Owner.
"Laws" means all federal, state and local laws, rules, regulations,
ordinances and codes.
"Lease" has the meaning set forth in Section 2.4.
"Lien" means any lien, mortgage, deed of trust, pledge, security interest,
equitable or other charge or encumbrance, or the option or right to acquire any
such item, except for ad valorem real estate taxes that are timely paid.
"Net Operating Income" means, with respect to the Project, earnings before
interest, taxes (other than ad valorem taxes), rent, depreciation and
amortization, less all expenses.
"Owner" has the meaning set forth in the introductory paragraph to this
Agreement.
"Person" means any person or entity, whether an individual, trustee,
corporation, partnership, joint stock company, trust, unincorporated
organization, bank, business association or firm, joint venture, Governmental
Agency or otherwise.
"Project" has the meaning set forth in recitals of this Agreement.
"Property" has the meaning set forth in the recitals of this Agreement.
"Remedy" means any right, power or remedy.
"Taxes" means all taxes, assessments, charges, fees and levies (including
interest and penalties) imposed, assessed or collected by any Governmental
Agency.
"Transaction Documents" has the meaning set forth in Section 3.1.
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"Unavoidable Delay" means an act of God, civil unrest, natural disaster or
failure by Owner to cure a failure to provide funding called for by this
Agreement after performance by Developer of all conditions precedent thereto.
"Voting Shares" of any corporation means shares of any class or classes
(however designated) having ordinary voting power for the election of at least a
majority of the members of the board of directors (or other governing bodies) of
such corporation, other than shares having such power only by reason of the
happening of a contingency.
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OMITTED EXHIBITS
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EXHIBIT 2.1 (i) APPROVED BUDGET
EXHIBIT 2.1 (ii) PLANS AND SPECIFICATIONS
EXHIBIT 2.1 (iii) CONSTRUCTION CONTRACT
EXHIBIT 2.3 CONSTRUCTION CONTRACT
EXHIBIT 2.4 LEASE