LOAN AGREEMENT for a loan in the amount of among EMERITUS PROPERTIES-ARKANSAS, LLC, a Delaware limited liability company as Borrower and GENERAL ELECTRIC CAPITAL CORPORATION as Agent and a Lender and THE OTHER FINANCIAL INSTITUTIONS WHO ARE OR...
Loan
No. 07-0004235
for
a loan in the amount of
$15,930,000
among
EMERITUS
PROPERTIES-ARKANSAS, LLC,
a
Delaware limited liability company
as
Borrower
and
GENERAL
ELECTRIC CAPITAL CORPORATION
as
Agent and a Lender
and
THE
OTHER FINANCIAL INSTITUTIONS WHO ARE OR HEREAFTER
BECOME
PARTIES TO THIS AGREEMENT
as
Lenders
Emeritus
Acquisition
Arkansas
Portfolio
Dated
as of December 1, 2005
TABLE
OF CONTENTS
Page
ARTICLE
I INCORPORATION OF RECITALS, EXHIBITS AND SCHEDULES
|
1
|
|
Section
1.1
|
Incorporation
of Recitals.
|
1
|
Section
1.2
|
Incorporation
of Exhibits and Schedules.
|
2
|
Section
1.3
|
Definitions.
|
2
|
ARTICLE
II LOAN TERMS
|
2
|
|
Section
2.1
|
Disbursements.
|
2
|
Section
2.2
|
Interest
Rate; Late Charge.
|
2
|
Section
2.3
|
Payments.
|
2
|
Section
2.4
|
Maturity.
|
3
|
Section
2.5
|
Prepayment.
|
3
|
Section
2.6
|
Application
of Payments.
|
3
|
Section
2.7
|
Capital
Adequacy; Increased Costs; Illegality.
|
4
|
Section
2.8
|
Sources
and Uses.
|
4
|
Section
2.9
|
Defeasance.
|
5
|
Section
2.10
|
Security.
|
7
|
ARTICLE
III INSURANCE, CONDEMNATION, AND IMPOUNDS
|
7
|
|
Section
3.1
|
Insurance.
|
7
|
Section
3.2
|
Use
and Application of Insurance Proceeds.
|
10
|
Section
3.3
|
Condemnation
Awards.
|
11
|
Section
3.4
|
Reserved.
|
12
|
Section
3.5
|
Real
Estate Tax Impounds.
|
12
|
ARTICLE
IV LEASING MATTERS
|
13
|
|
Section
4.1
|
Representations
and Warranties on Leases.
|
13
|
Section
4.2
|
Approval
Rights.
|
13
|
Section
4.3
|
Covenants.
|
14
|
Section
4.4
|
Tenant
Estoppels.
|
14
|
Section
4.5
|
Security
Deposits
|
14
|
ARTICLE
V REPRESENTATIONS AND WARRANTIES
|
14
|
|
Section
5.1
|
Organization
and Power.
|
14
|
Section
5.2
|
Guarantor.
|
15
|
Section
5.3
|
Borrower's
Operating Agreement.
|
15
|
Section
5.4
|
Corporate
Documents.
|
15
|
Section
5.5
|
Validity
of Loan Documents.
|
15
|
Section
5.6
|
Liabilities;
Litigation.
|
16
|
Section
5.7
|
Taxes
and Assessments.
|
16
|
Section
5.8
|
Other
Agreements; Defaults.
|
16
|
Section
5.9
|
Compliance
with Law.
|
16
|
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
i
Section
5.10
|
Condemnation.
|
17
|
Section
5.11
|
Access.
|
17
|
Section
5.12
|
Flood
Hazard.
|
17
|
Section
5.13
|
Property.
|
17
|
Section
5.14
|
Location
of Borrower.
|
18
|
Section
5.15
|
Margin
Stock.
|
18
|
Section
5.16
|
Tax
Filings.
|
18
|
Section
5.17
|
Solvency.
|
18
|
Section
5.18
|
Full
and Accurate Disclosure.
|
19
|
Section
5.19
|
Single
Purpose Entity.
|
19
|
Section
5.20
|
No
Broker.
|
19
|
Section
5.21
|
Reserved.
|
19
|
Section
5.22
|
Labor
Disputes.
|
19
|
Section
5.23
|
Employees.
|
19
|
Section
5.24
|
ERISA
(Borrower).
|
19
|
Section
5.25
|
Intellectual
Property.
|
20
|
Section
5.26
|
Anti-Terrorism
and Anti-Money Laundering Compliance.
|
20
|
Section
5.27
|
Reserved.
|
21
|
Section
5.28
|
Master
Lease.
|
21
|
ARTICLE
VI FINANCIAL REPORTING; NOTICES
|
21
|
|
Section
6.1
|
Financial
Statements.
|
21
|
Section
6.2
|
Audits.
|
23
|
Section
6.3
|
Books
and Records/Audits.
|
23
|
Section
6.4
|
Notice
of Litigation or Default.
|
24
|
Section
6.5
|
Bank
Accounts.
|
24
|
ARTICLE
VII COVENANTS
|
25
|
|
Section
7.1
|
Inspection.
|
25
|
Section
7.2
|
Due
on Sale and Encumbrance; Transfers of Interests.
|
25
|
Section
7.3
|
Taxes;
Charges.
|
26
|
Section
7.4
|
Reserved.
|
26
|
Section
7.5
|
Operation;
Maintenance; Inspection.
|
26
|
Section
7.6
|
Taxes
on Security.
|
26
|
Section
7.7
|
Single
Purpose Entity; Legal Existence; Name, Etc.
|
27
|
Section
7.8
|
Affiliate
Transactions.
|
27
|
Section
7.9
|
Limitation
on Other Debt.
|
27
|
Section
7.10
|
Further
Assurances.
|
28
|
Section
7.11
|
Estoppel
Certificates.
|
28
|
Section
7.12
|
Notice
of Certain Events.
|
28
|
Section
7.13
|
Indemnification.
|
28
|
Section
7.14
|
Use
of Proceeds, Revenues.
|
29
|
Section
7.15
|
Payments
Under Master Lease.
|
29
|
Section
7.16
|
Reserved.
|
29
|
Section
7.17
|
Reserved.
|
29
|
Section
7.18
|
Compliance
with Laws and Contractual Obligations.
|
29
|
|
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
ii
Section
7.19
|
Notice
of Money Laundering.
|
30
|
Section
7.20
|
Anti-Terrorism
and Anti-Money Laundering Compliance.
|
30
|
Section
7.21
|
Employees.
|
32
|
Section
7.22
|
Reserved.
|
32
|
Section
7.23
|
Representations
and Warranties.
|
32
|
Section
7.24
|
Cooperation.
|
32
|
Section
7.25
|
Master
Lease.
|
33
|
Section
7.26
|
Financial
Covenants.
|
33
|
ARTICLE
VIII Health Care Matters
|
33
|
|
Section
8.1
|
Healthcare
Laws.
|
33
|
Section
8.2
|
Representations,
Warranties and Covenants Regarding Healthcare Matters.
|
34
|
Section
8.3
|
Cooperation.
|
37
|
ARTICLE
IX EVENTS OF DEFAULT
|
38
|
|
Section
9.1
|
Payments.
|
38
|
Section
9.2
|
Certain
Covenants.
|
39
|
Section
9.3
|
Covenants.
|
39
|
Section
9.4
|
Representations
and Warranties.
|
39
|
Section
9.5
|
Other
Encumbrances.
|
39
|
Section
9.6
|
Involuntary
Bankruptcy or Other Proceeding.
|
39
|
Section
9.7
|
Voluntary
Petitions, etc.
|
40
|
Section
9.8
|
Default
Under Master Lease.
|
40
|
Section
9.9
|
False
Reports.
|
40
|
Section
9.10
|
Control.
|
40
|
Section
9.11
|
Money
Laundering.
|
40
|
Section
9.12
|
Loan
Documents.
|
41
|
Section
9.13
|
Other
Defaults.
|
41
|
ARTICLE
X REMEDIES
|
41
|
|
Section
10.1
|
Remedies
- Insolvency Events.
|
41
|
Section
10.2
|
Remedies
- Other Events.
|
41
|
Section
10.3
|
Agent's
Right to Perform the Obligations.
|
41
|
ARTICLE
XI MISCELLANEOUS
|
42
|
|
Section
11.1
|
Notices.
|
42
|
Section
11.2
|
Amendments
and Waivers.
|
43
|
Section
11.3
|
Limitation
on Interest.
|
44
|
Section
11.4
|
Invalid
Provisions.
|
44
|
Section
11.5
|
Reimbursement
of Expenses; Portfolio Administration Fee.
|
45
|
Section
11.6
|
Approvals;
Third Parties; Conditions.
|
45
|
Section
11.7
|
Lender
Not in Control; No Partnership.
|
46
|
Section
11.8
|
Time
of the Essence.
|
46
|
Section
11.9
|
Successors
and Assigns.
|
47
|
Section
11.10
|
Renewal,
Extension or Rearrangement.
|
47
|
Section
11.11
|
Waivers;
Forbearance.
|
47
|
|
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
iii
Section
11.12
|
Cumulative
Rights.
|
47
|
Section
11.13
|
Singular
and Plural.
|
48
|
Section
11.14
|
Phrases.
|
48
|
Section
11.15
|
Exhibits
and Schedules.
|
48
|
Section
11.16
|
Titles
of Articles, Sections and Subsections.
|
48
|
Section
11.17
|
Promotional
Material.
|
48
|
Section
11.18
|
Survival.
|
48
|
Section
11.19
|
WAIVER
OF JURY TRIAL.
|
49
|
Section
11.20
|
Waiver
of Punitive or Consequential Damages.
|
49
|
Section
11.21
|
Governing
Law.
|
49
|
Section
11.22
|
Entire
Agreement.
|
49
|
Section
11.23
|
Counterparts.
|
50
|
Section
11.24
|
Venue.
|
50
|
Section
11.25
|
Sale
of Loan, Participation.
|
50
|
Section
11.26
|
Limitation
on Liability of Agent's and Lender's Officers, Employees,
etc.
|
51
|
Section
11.27
|
Effectiveness
of Facsimile Documents and Signatures.
|
51
|
Section
11.28
|
Agency.
|
51
|
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
iv
LIST
OF EXHIBITS AND SCHEDULES TO LOAN AGREEMENT
Exhibits:
Exhibit
A Real
Property
Exhibit
B Form
of
Interest Holder Agreement
Exhibit
C Intellectual
Property
Exhibit
D Ownership
of Borrower
Exhibit
E Provider
Payment/Reimbursement Programs
Exhibit
F Governmental
Approvals
Schedules:
Schedule
2.1 Advance
Conditions
Schedule
2.3 Amortization
Schedule
Schedule
2.8 Sources
and Uses
Schedule
3.1 Insurance
Exceptions
Schedule
3.2 Allocated
Loan Amount
Schedule
I Certain
Definitions
Schedule
II Calculation
of Net Operating Income
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
v
INDEX
OF DEFINED TERMS
Adjusted
Actual Rent - Sch. II
|
9
|
Lender
|
1
|
|
Agent
|
1
|
Licenses
|
34
|
|
Anti-Money
Laundering Laws
|
21
|
Lists
|
20
|
|
Anti-Money
Laundering Measures
|
21
|
Master
Lease
|
1
|
|
Anti-Terrorism
Laws
|
20
|
Monthly
Effective Rent - Sch. II
|
9
|
|
Assignment
Agreement
|
6
|
Monthly
Reports
|
22
|
|
Bankruptcy
Party
|
40
|
Net
Operating Income - Sch. II
|
9
|
|
Borrower
|
1
|
Note
|
1
|
|
Borrower
Anti-Terrorism Policies
|
31
|
Occupancy
|
33
|
|
Borrower's
Equity - Sch. 2.1
|
4
|
OFAC
|
20
|
|
BSA
|
21
|
OFAC
Laws and Regulations
|
20
|
|
Charges
|
26
|
Operating
Agreement
|
15
|
|
Collateral
|
7
|
Other
Lists
|
20
|
|
CON
|
34
|
Permitted
Debt
|
28
|
|
Defeasance
|
5
|
Prepayment
Premium
|
3
|
|
Defeasance
Deposit
|
7
|
Project
|
1
|
|
Designated
Person
|
20
|
Properties
|
1
|
|
Executive
Orders
|
20
|
Property
|
1
|
|
Expenses
- Sch. II
|
9
|
Release
Date
|
5
|
|
FIRREA
- Sch. 2.1
|
5
|
Rent
Proceeds
|
29
|
|
fiscal
month
|
22
|
Revenue
- Sch. II
|
9
|
|
Funding
Amount
|
2
|
Scheduled
Defeasance Payments
|
6
|
|
GECC
|
1
|
SDN
List
|
20
|
|
Guarantor
|
1
|
Secondary
Market Transactions
|
32
|
|
Healthcare
Laws
|
33
|
Security
Agreement
|
5
|
|
HIPAA
|
33
|
State
Regulator
|
30
|
|
HIPAA
Compliance Date
|
34
|
Successor
Borrower
|
6
|
|
HIPAA
Compliance Plan
|
34
|
Tax
Impound
|
12
|
|
HIPAA
Compliant
|
34
|
Taxes
|
12
|
|
Improvements
|
1
|
Terrorism
|
8
|
|
Incorporation
Documents
|
15
|
Third-Party
Payor Programs
|
36
|
|
Interest
Holder Agreement
|
30
|
Title
Policy - Sch. 2.1
|
2
|
|
Interest
Rate
|
2
|
U.S.
Obligations
|
7
|
|
Investor
Anti-Terrorism Policies
|
31
|
U.S.
Publicly-Traded Entity
|
21
|
|
Leases
- Sch. 2.1
|
3
|
Yield
Maintenance Amount
|
7
|
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
vi
This
Loan
Agreement is entered into as of December 1, 2005, among GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation (in its individual capacity, "GECC"
and in
its capacity as agent for the Lenders, together with its successors,
"Agent"),
the
financial institutions other than GECC who are or hereafter become parties
to
this Agreement (together with GECC collectively, or individually, as the context
may require, "Lender"),
and
EMERITUS PROPERTIES-ARKANSAS, LLC,
a
Delaware limited liability company ("Borrower").
RECITALS
A. Lender
and Agent have agreed to make the Loan to Borrower subject to the terms and
conditions contained herein. The Loan is evidenced by that certain Promissory
Note of even date herewith in the original principal amount of Fifteen Million
Nine Hundred Thirty Thousand and No/100 Dollars ($15,930,000.00) (the Promissory
Note and all amendments thereto and substitutions therefor are hereinafter
referred to collectively as the "Note").
The
terms and provisions of the Note are hereby incorporated herein by reference
in
this Agreement.
B. On
the
Closing Date, Borrower will be the owner of the real properties more
particularly described on Exhibit
A
attached
hereto (individually, a "Property"
and
collectively, the "Properties"),
and
the Improvements located thereon (collectively, the "Improvements"),
including, without limitation, three assisted/independent living facilities.
The Properties, together with the Improvements, are referred to herein as the
"Projects."
C. The
Projects are master leased to Emeritus Corporation, a Washington corporation
("Guarantor")
pursuant to a Master Lease of even date herewith between Borrower, as landlord
and Guarantor, as tenant
(the "Master Lease").
D. Borrower
will use the proceeds of the Loan for the purpose of acquiring the
Project.
E. Borrower's
obligations under the Loan will be evidenced and secured by, the Loan
Documents.
NOW,
THEREFORE, in consideration of the foregoing and the mutual conditions and
agreements contained herein, the parties agree as follows:
ARTICLE
I
INCORPORATION
OF RECITALS, EXHIBITS AND SCHEDULES
Section
1.1 Incorporation
of Recitals.
The
foregoing preambles and all other recitals set forth herein are made a part
hereof by this reference.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
1
Section
1.2 Incorporation
of Exhibits and Schedules.
The
Exhibits and Schedules to this Agreement are attached hereto and are
incorporated in this Agreement and expressly made a part hereof by this
reference.
Section
1.3 Definitions.
All
terms
defined in Schedule
I
or
otherwise in this Agreement shall, unless otherwise defined therein, have the
same meanings when used in any other Loan Document, or any certificate or other
document made or delivered pursuant hereto. The words "hereof", "herein", and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole.
ARTICLE
II
LOAN
TERMS
Section
2.1 Disbursements.
(a) Funding.
The Loan
shall be funded in one advance and repaid in accordance with this Agreement
and
the other Loan Documents. On the Closing Date, and subject to the terms,
provisions and conditions of this Agreement (including, without limitation
Borrower's satisfaction of the conditions to initial advance described in
Schedule 2.1
attached
hereto) and the other Loan Documents, Lender shall disburse to Borrower from
the
proceeds of the Loan the amount of Fifteen Million Nine Hundred Thirty Thousand
and No/100 Dollars ($15,930,000.00) (the "Funding
Amount").
Section
2.2 Interest
Rate; Late Charge.
The
outstanding principal balance of the Loan (including any amounts added to
principal under the Loan Documents) shall bear interest at a rate of interest
equal to six and ninety-five hundredths percent (6.95%) per annum (the
"Interest
Rate"). Interest
shall be computed on the basis of a fraction, the denominator of which is three
hundred sixty (360) and the numerator of which is the actual number of days
elapsed from the date of the initial advance or the date on which the
immediately preceding payment was due. If Borrower fails to pay any installment
of interest or principal within five (5) days after the date on which the same
is due, Borrower shall pay to Agent a late charge on such past-due amount,
as
liquidated damages and not as a penalty, equal to the greater of
(a) interest at the Default Rate on such amount from the date when due
until paid, and (b) five percent (5%) of such amount, but not in excess of
the maximum amount of interest allowed by applicable law. While any Event of
Default exists, the Loan shall bear interest at the Default Rate.
Section
2.3 Payments.
(a) Payments
at Interest Rate.
Commencing on January 1, 2006, Borrower shall pay interest in arrears on
the first day of each month until
all
amounts due under the Loan Documents are paid in full. If the first day of
a
month is not a Business Day, then the
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
2
applicable
payment due hereunder shall be made on the first Business Day immediately
following the first day of such month.
(b) Principal
Amortization Payments.
Commencing on January 1, 2006, and on the first (1st) day of each month
thereafter until the Maturity Date, Borrower shall make a monthly principal
amortization payment in accordance with Schedule 2.3
in
addition to the interest payments required under Section
2.3(a),
above.
If the first day of a month is not a Business Day, then the applicable payment
due hereunder shall be made on the first Business Day immediately following
the
first day of such month.
(c) Credit
for Payments under Master Lease.
Agent
acknowledges and agrees that Guarantor, in its capacity as the tenant under
the
Master Lease, has been directed to make its rent payments directly to Agent
to
be applied against the obligations of Borrower under the Loan Agreement and
the
other Loan Documents and that Borrower shall be deemed to have fulfilled its
obligations under this Section
2.3
as long
as Agent has actually received such payments from Guarantor, in its capacity
as
the tenant under the Master Lease, by the date on which any payment is due
from
Borrower under this Section
2.3 and
such
payments (after application to the Indebtedness as set forth in Section 2.6
herein)
is sufficient to pay in full any amounts then due and payable under this
Section 2.3.
Section
2.4 Maturity.
(a) Maturity
Date.
The
Loan shall mature and Borrower shall pay to Agent all outstanding principal,
accrued and unpaid interest, and any other amounts due under the Loan Documents
on November 30, 2012.
Section
2.5 Prepayment.
Borrower
may not prepay any of the outstanding principal balance of the Loan in full
or
in part at any time. If the Loan is accelerated for any reason other than
casualty or condemnation, Borrower shall pay, in addition to all other amounts
outstanding under the Loan Documents, a prepayment premium ("Prepayment
Premium")
equal
to one percent (1%) of the outstanding principal balance of the Loan. Defeasance
pursuant to Section 2.9
below
shall be available to Borrower at any time on and after December 1, 2008,
as provided herein.
Section
2.6 Application
of Payments.
All
payments received by Agent or Lender under the Loan Documents shall be applied:
first,
to any
fees, expenses and indemnification payments due to Agent or Lender under the
Loan Documents; second,
to any
Default Rate interest or late charges; third,
to
other accrued and unpaid interest; fourth,
to the
principal sum and other amounts due under the Loan Documents, and fifth
to
the Prepayment
Premium.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
3
Section
2.7 Capital
Adequacy; Increased Costs; Illegality.
(a) If
Agent
determines that any law, treaty, governmental (or quasi-governmental) rule,
regulation, guideline or order regarding capital adequacy, reserve requirements
or similar requirements or compliance by Lender with any request or directive
regarding capital adequacy, reserve requirements or similar requirements
(whether or not having the force of law), in each case, adopted after the
Closing Date, from any central bank or other governmental authority increases
or
would have the effect of increasing the amount of capital, reserves or other
funds required to be maintained by Lender and thereby reducing the rate of
return on Lender's capital as a consequence of its obligations hereunder, then
Borrower shall from time to time upon demand by Agent, pay to Lender, additional
amounts sufficient to compensate Lender for such reduction. A certificate as
to
the amount of that reduction and showing the basis of the computation thereof
submitted by Agent to Borrower shall, absent manifest error, be final,
conclusive and binding for all purposes. Lender agrees that, as promptly as
practicable after it becomes aware of any circumstances referred to above which
would result in any such increased cost, Lender shall, to the extent not
inconsistent with such Lender's internal policies of general application, use
reasonable commercial efforts to minimize costs and expenses incurred by it
and
payable to it by Borrower pursuant to this Section
2.7(a).
(b) If,
due
to either (i) the introduction of or any change in any law or regulation
(or any change in the interpretation thereof) or (ii) the compliance with
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law), in each case adopted after the Closing
Date, there shall be any increase in the cost to Lender of agreeing to make
or
making, funding or maintaining the Loan, then Borrower shall from time to time,
upon demand by Agent, pay to Lender, additional amounts sufficient to compensate
Lender for such increased cost. A certificate as to the amount of such increased
cost, submitted to Borrower by Agent, shall be conclusive and binding on
Borrower for all purposes, absent manifest error. Lender agrees that, as
promptly as practicable after it becomes aware of any circumstances referred
to
above which would result in any such increased cost, Lender shall, to the extent
not inconsistent with such Lender's internal policies of general application,
use reasonable commercial efforts to minimize costs and expenses incurred by
it
and payable to it by Borrower pursuant to this Section
2.7(b).
Section
2.8 Sources
and Uses.
The
sources and uses of funds for the contemplated transaction are as described
on
Schedule
2.8
attached
hereto. Borrower shall deliver such information and documentation as Agent
shall
request to verify that the sources and uses are as indicated on Schedule
2.8.
A
reduction in the amounts necessary for any of the uses may, at Agent's election,
shall result in an equal reduction in the amount of the Loan.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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Section
2.9 Defeasance.
At
any
time from and after December 1, 2008, so long as no monetary default,
material non-monetary default or Event of Default hereunder or under any of
the
other Loan Documents is then continuing, Borrower may obtain the release of
the
Projects from the lien of the Security Documents upon the satisfaction of the
following conditions precedent ("Defeasance"):
(a) not
less
than thirty (30) days prior written notice to Lender specifying the first day
of
a calendar month (or if not a Business Day, the first Business Day of such
calendar month) (the "Release
Date")
on
which the Defeasance Deposit (hereinafter defined) is to be made;
(b) the
payment to Agent on the Release Date of interest accrued and unpaid on the
principal balance of the Loan to and including the Release Date;
(c) the
payment to Agent on the Release Date of all other sums, not including scheduled
interest or principal payments, due under the Note, the Mortgages and the other
Loan Documents;
(d) the
payment to Agent on the Release Date of the Defeasance Deposit and a $2,500
non-refundable processing fee;
(e) the
delivery by Borrower to Agent at Borrower's sole cost and expense
of:
(i) a
security agreement in form and substance satisfactory to Lender, creating a
first priority lien in favor of Agent on the Defeasance Deposit and the U.S.
Obligations (hereinafter defined) purchased on behalf of Borrower with the
Defeasance Deposit in accordance with this Section 2.9
(the
"Security
Agreement");
(ii) releases
of the Projects from the lien of the Mortgages (for execution by Lender) in
a
form appropriate for the jurisdiction in which the Projects are located and
otherwise acceptable to Agent;
(iii) an
officer's certificate of Borrower certifying that the requirements set forth
in
this clause (e) have been satisfied;
(iv) an
opinion of counsel in form and substance, and rendered by counsel, satisfactory
to Agent, at Borrower's expense, stating, among other things, that Agent has
a
perfected first priority security interest in the Defeasance Deposit and the
U.S. Obligations purchased by or on behalf of Borrower and pledged to Agent
and
as to enforceability of the Assignment Agreement (as hereinafter defined),
the
Security Agreement and other documents delivered in connection therewith, and
if
required by the Agent, a
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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substantive
non-consolidation opinion with respect to the Successor Borrower (as hereinafter
defined); and
(v) such
other certificates, documents, opinions or instruments as Agent may reasonably
request; and
(f) Agent
shall have received, at Borrower's expense, a certificate from a nationally
or
regionally recognized independent certified public accountant acceptable to
Agent, in form and substance satisfactory to Lender, certifying the amount
of
U.S. Obligations required to be purchased with the Defeasance Deposit in order
to generate sufficient sums to satisfy the obligations of Borrower under this
Agreement, the Note and this Section 2.9
as and
when such obligations become due.
In
connection with the conditions set forth above, Borrower hereby appoints Agent
as its agent and attorney-in-fact for the purpose of using the Defeasance
Deposit to purchase or cause to be purchased U.S. Obligations which provide
payments on or prior to, but as close as possible to, all successive scheduled
Payment Dates after the Release Date upon which interest and principal payments
are required under this Agreement and the Note, including the amounts due on
the
Maturity
Date, and
in
amounts equal to the scheduled payments due on such dates under this Agreement
and the Note plus Agent's reasonable estimate of administrative expenses and
applicable federal income taxes associated with or to be incurred by the
Successor Borrower during the remaining term of, and applicable to, the Loan
(the "Scheduled
Defeasance Payments").
Borrower, pursuant to the Security Agreement or other appropriate document,
shall authorize and direct that the payments received from the U.S. Obligations
may be made directly to Agent and applied to satisfy the obligations of Borrower
under this Agreement, the Note and this Section 2.9.
Upon
compliance with the requirements of this Section 2.9,
the
Projects shall be released from the lien of the Security Documents and the
pledged U.S. Obligations shall be the sole source of collateral securing the
repayment of the Loan and the Note. Any portion of the Defeasance Deposit in
excess of the amount necessary to purchase the U.S. Obligations required by
the
preceding paragraph and to otherwise satisfy the Borrower's obligations under
this Section
2.9
shall be
remitted to Borrower with the release of the Projects from the lien of the
Security Documents. In connection with such release, a successor entity meeting
Agent's then applicable single purpose entity requirements and otherwise
acceptable to Agent, adjusted, as applicable, for the Defeasance contemplated
by
this Section 2.9 (the "Successor
Borrower"),
shall
be established by Borrower subject to Agent's approval (or at Agent's option,
by
Agent) and Borrower shall transfer and assign all obligations, rights and duties
under and to the Note together with the pledged U.S. Obligations to such
Successor Borrower pursuant to an assignment and assumption agreement in form
and substance satisfactory to Lender (the "Assignment
Agreement").
Such
Successor Borrower shall assume the obligations under the Note, the Security
Agreement and the other Loan Documents and Borrower shall be relieved of its
obligations thereunder, except (i) that Borrower shall be required to
perform its obligations pursuant to this Section 2.9,
including maintenance of the Successor Borrower, if applicable, and
(ii) for those obligations of Borrower which expressly survive repayment of
the Loan. Borrower
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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shall
pay
$1,000.00 to any such Successor Borrower as consideration for assuming the
obligations under the Note, the Security Agreement and the other Loan Documents
pursuant to the Assignment Agreement. Borrower shall pay all reasonable costs
and expenses incurred by Agent and Lender in connection with this Section 2.9,
including Agent's and Lender's reasonable attorneys' fees and expenses, and
any
administrative and tax expenses associated with or incurred by the Successor
Borrower, which amounts shall, as set forth above, be included when calculating
the amount of the Defeasance Deposit.
For
purposes of this Section 2.9,
the
following terms shall have the following meanings:
(x) The
term
"Defeasance
Deposit"
shall
mean an amount equal to the Yield Maintenance Amount, any costs and expenses
incurred or to be incurred in the purchase of U.S. Obligations necessary to
meet
the Scheduled Defeasance Payments (including Lender's reasonable estimate of
administrative expenses and applicable federal, state or local income taxes
associated with or to be incurred by the Successor Borrower during the remaining
term of, and applicable to, the Loan) and any revenue, documentary stamp or
intangible taxes or any other tax or charge due in connection with the transfer
of the Note or otherwise required to accomplish the agreements of this
Section 2.9,
all as
estimated by Agent.
(y) The
term
"Yield
Maintenance Amount"
shall
mean the amount estimated by Agent which will be sufficient to purchase U.S.
Obligations providing the required Scheduled Defeasance Payments;
and
(z) The
term
"U.S.
Obligations"
shall
mean "Government
Securities"
as
defined in the REMIC regulations, specifically, Treasury Regulation
§ 1.860G-2(a)(8)(i), as chosen by Lender.
Section
2.10 Security.
(a) Collateral.
The
Loan and all other indebtedness and obligations under the Loan Documents shall
be secured by the following (collectively, the "Collateral"):
(a)
the mortgaged property and other collateral as set forth in the Security
Documents, (b) a first priority security interest in all of the membership
interests in Borrower pledged by all members of Borrower, (c) a first
priority security interest in all of Guarantor's personal property related
to
the Projects pledged by Guarantor under the Subordination, Attornment and
Security Agreement, and (d) any other collateral or security described in
this Agreement or the other Loan Documents.
ARTICLE
III
INSURANCE,
CONDEMNATION, AND IMPOUNDS
Section
3.1 Insurance.
Borrower
shall maintain insurance as follows:
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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(a) Property.
Borrower shall (or shall cause Guarantor to) keep the Projects insured against
damage by fire and the other hazards covered by a standard extended coverage
and
"special perils" insurance policy (including a separate policy for broad form
boiler and machinery coverage (without exclusion for explosion)) for the full
insurable value thereof the term "full insurable value" to mean the actual
replacement cost of the improvements and the personal property (without taking
into account depreciation or co-insurance), and shall maintain such other
casualty insurance as reasonably required by Agent, including, without
limitation, ordinance or law coverage, in amounts and in form and with
carrier(s) approved by Agent as of the Closing Date which carrier(s), amounts
and form shall not be changed without the prior written consent of Agent.
Borrower shall keep the Projects insured against loss by flood if any Project
is
located in an area identified by the Federal Emergency Management Agency as
an
area having special flood hazards and in which flood insurance has been made
available under the National Flood Insurance Act of 1968, the Flood Disaster
Protection Act of 1973 and the National Flood Insurance Reform Act of 1994
(and
any successor acts thereto) in an amount at least equal to the amount approved
by Agent as of the Closing Date. The proceeds of insurance paid on account
of
any damage or destruction to any Project shall be paid to Agent to be applied
as
provided in Section 3.2.
Notwithstanding anything contained in this Agreement to the contrary and without
limitation of any of the provisions contained in this Article III, Borrower
shall at all times on and after January 1, 2006 maintain ordinance or law
coverage in amount equal to the full replacement cost of the Projects and
otherwise in form and substance and with carriers approved by Agent in Agent's
reasonable discretion.
(b) Liability.
Borrower shall maintain or shall cause Guarantor to maintain (a) commercial
general liability insurance with respect to the Projects; (b) worker's
compensation insurance and employer's liability insurance covering employees
at
the Projects employed by Guarantor (to the extent required, and in the amounts
required by applicable laws); (c) business interruption insurance,
including use and occupancy, rental income loss and extra expense, against
all
periods covered by Borrower's property insurance; (f) Umbrella liability,
(g) builder's risk insurance, as applicable, (h) professional
liability insurance, and (g) Terrorism insurance (subject to the
requirements of this Section 3.1(a)).
All of
the above shall be maintained at all times during the term of the Loan with
coverages, in the amounts and forms and with limits and carrier(s) approved
by
Agent as of the Closing Date which carrier(s), amounts, limits and form shall
not be changed or reduced without the prior written consent of Agent.
Without
limiting the foregoing and notwithstanding anything to the contrary contained
in
this Agreement, if on the Closing Date, terrorism, terrorist acts or similar
perils (collectively, "Terrorism")
is an
exclusion from coverage in any such insurance policy, or, if Terrorism is an
exclusion from coverage in any such insurance policy, then Borrower shall,
upon
Agent's request, obtain a separate policy insuring specifically against
Terrorism.
(c) Other
Insurance.
Borrower shall maintain or shall cause Guarantor to maintain such other
insurance with respect to the Projects as reasonably required by
Agent.
(d) Form
and Quality.
All
insurance policies shall be endorsed in form and substance acceptable to Agent
to name Agent as an additional insured, loss payee or
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
8
mortgagee
thereunder, as its interest may appear, with loss payable to Agent, without
contribution, under a standard New York (or local equivalent) mortgagee clause.
All such insurance policies and endorsements shall be fully paid for and contain
such provisions and expiration dates and be in such form and issued by such
insurance companies licensed to do business in the State where the Projects
are
located, with a rating of "A-IX" or better as established by Best's Rating
Guide
(or an equivalent rating approved in writing by Agent). Each policy shall
provide that such policy may not be cancelled or materially changed except
upon
thirty (30) days' prior written notice of intention of non-renewal, cancellation
or material change to Agent and that no act or thing done by Borrower shall
invalidate any policy as against Agent. Borrower shall assign the policies
or
proofs of insurance to Agent, in such manner and form that Agent and its
successors and assigns shall at all times have and hold the same as security
for
the payment of the Loan. Borrower shall deliver certificates of insurance to
Agent evidencing the coverages required hereunder. The proceeds of insurance
policies coming into the possession of Agent shall not be deemed trust funds,
and Agent shall be entitled to apply such proceeds as herein provided. Borrower
shall not maintain any separate or additional property insurance which is
contributing in the event of loss unless it is properly endorsed and otherwise
satisfactory to Agent in all respects.
(e) Adjustments.
Borrower shall give immediate written notice of any loss to the insurance
carrier and, if such loss is reasonably expected by Borrower to exceed the
deductible or if such loss is reasonably likely to result in a material adverse
change, to Agent. Borrower hereby irrevocably authorizes and empowers Agent,
as
attorney-in-fact for Borrower coupled with an interest, to make proof of loss,
to adjust and compromise any claim under insurance policies, to appear in and
prosecute any action arising from such insurance policies, to collect and
receive insurance proceeds, and to deduct therefrom Agent's expenses incurred
in
the collection of such proceeds. Nothing contained in this Section 3.1,
however, shall require Agent to incur any expense or take any action
hereunder.
(f) Agent's
Right to Purchase Insurance.
In the
event Borrower fails to provide Agent with evidence of the insurance coverage
required by this Agreement, Agent may purchase insurance at Borrower's expense
to protect Agent's interests in the Projects. This insurance may, but need
not,
protect Borrower's interests. The coverage purchased by Agent may not pay any
claim made by Borrower or any claim that is made against Borrower in connection
with the Projects. Borrower, or Agent at Borrower's request, may later cancel
any insurance purchased by Agent, but only after providing Agent with evidence
that Borrower has obtained insurance as required by this Agreement. If Agent
purchases insurance for the Projects, Borrower will be responsible for the
costs
of that insurance, including interest and other charges imposed by Agent in
connection with the placement of the insurance, until the effective date of
the
cancellation or expiration of the insurance. The costs of the insurance may
be
added to the outstanding principal balance of the Loan if not paid by Borrower
within ten (10) days after receipt of a written demand for payment from Lender
accompanied by an invoice or other reasonably supporting documentation. The
costs of the insurance may be more than the cost of insurance Borrower is able
to obtain on its own.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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(g) Borrower
has
advised Agent and Lender that, to
the
limited extent described on Schedule
3.1,
it is
not in compliance as of the Effective Date with certain requirements set forth
in Section 3.1.
Borrower nonetheless represents and warrants to Agent and Lender that the
policies of insurance (including the deductible or self-insured retention
provisions thereof) and risk management programs that Borrower and Guarantor
have in effect as of the date hereof are, and as may be in effect at any time
prior to the Maturity Date will be, consistent with custom, practice and prudent
management standards in the business and industry in which Borrower and
Guarantor are engaged. As and when insurance meeting the requirements set forth
in Section 3.1
(to the
extent Borrower is not in compliance with such requirements as provided in
Schedule 3.1)
becomes
generally available to operators of assisted living facilities owned by
institutional operators and similar to the Facility at commercially reasonable
rates, as determined by Agent in its reasonable judgment, Borrower shall
purchase and maintain or shall cause Guarantor to purchase and maintain such
insurance. Borrower's non-compliance with the requirements of Section 3.1,
as
set
forth in Schedule
3.1,
shall
not give rise to an Event of Default so long as (i) no other Event of
Default then exists, (ii) such non-compliance is limited to the matters
described on Schedule 3.1,
as it
may be amended from time to time prior to the Maturity Date with the consent
of
Agent and Lender in their sole discretion, (iii) the representations and
warranties set forth in this Section 3.1(g)
remain
true, correct and complete in all respects, and (iv) Borrower is in
compliance with the other covenants contained in this Section 3.1.
Notwithstanding anything to the contrary set forth herein, if any insurance
provided by Borrower or Guarantor in accordance with Schedule
3.1
provides
for coverage on a "claims-made" basis, every "claims
made" renewal or replacement policy shall continue to show the first date of
claims made coverage as of the date of execution of this Loan Agreement, or
a
date prior hereto, as its prior acts/retroactive or continuity date.
Furthermore, if any "claims made" policy is cancelled or non-renewed, and not
replaced by an "occurrence" policy with "full prior acts", Borrower will
purchase or will cause Guarantor to purchase an "Extended Reporting Provision
Option" (i.e., tail coverage), for a term
equal to the then remaining term of the Loan, and if any "claims made" policy
is
subsequently replaced by an "occurrence" policy, Borrower agrees that said
"occurrence" policy will contain a "full prior acts" provision.
Section
3.2 Use
and
Application of Insurance Proceeds.
Agent
shall apply insurance proceeds to costs of restoring the Projects or the Loan
as
follows:
(a) if
a loss
is less than or equal to twenty five percent (25%) of the Allocated Loan Amount
shown on Schedule 3.2,
Agent
shall apply the insurance proceeds to restoration provided that: (a) no
Potential Default exists, and (b) Borrower promptly commences and
diligently pursues restoration of the affected Project;
(b) if
the
loss exceeds twenty-five percent (25%) of the Allocated Loan Amount, but is
not
more than twenty-five percent (25%) of the replacement value of the affected
improvements (for projects containing multiple phases or stand alone structures,
such calculation to be based on the damaged phase or structure, not the affected
Project or
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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Projects
as a whole), Agent shall apply the insurance proceeds to restoration provided
that at all times during such restoration: (a) no monetary default or
non-monetary default or Event of Default exists hereunder or under any of the
other Loan Documents; (b) Agent determines that there are sufficient funds
available to restore and repair the affected Project to a condition approved
by
Agent; (c) Agent determines that the Net Operating Income of the Projects
during restoration plus
the
collectible proceeds of business interruption insurance plus any amounts
specifically reserved by Guarantor for the sole purpose of funding the
restoration will be sufficient to pay Debt Service as of the first measuring
period occurring after the anticipated date of completion of restoration the
Borrower will be able to satisfy the financial covenants set forth in
Sections 7.26(a)
and
(b);
(e) Agent determines that restoration and repair of the affected Project to
a condition approved by Agent will be completed within nine (9) months after
the
date of loss or casualty and in any event ninety (90) days prior to the Maturity
Date; and (f) Borrower promptly commences and is diligently pursuing
restoration of the affected Project; or
(c) if
the
conditions set forth above are not satisfied or the loss exceeds the maximum
amount specified in Subsections (b) above, in Agent's sole discretion,
Agent may apply any insurance proceeds it may receive to the payment of the
Loan
or allow all or a portion of such proceeds to be used for the restoration of
the
affected Project.
Insurance
proceeds applied to restoration will be disbursed on receipt of satisfactory
plans and specifications, contracts and subcontracts, schedules, budgets, lien
waivers and architects' certificates, and otherwise in accordance with prudent
commercial construction lending practices for construction loan advances,
including, as applicable, the advance conditions under Part C of Schedule
2.1
with
respect to disbursement of insurance proceeds.
Section
3.3 Condemnation
Awards.
Borrower
shall immediately notify Agent of the institution of any proceeding for the
condemnation or other taking of any Project or any portion thereof. Agent may
participate in any such proceeding and Borrower will deliver to Agent all
instruments necessary or required by Agent to permit such participation. Where
the amount of the compensation or award is anticipated to be in excess of
$25,000 (the "Award
Threshold")
Borrower shall not, without Agent's prior consent, (a) agree to any
compensation or award, and (b) take any action or fail to take any action
which would cause the compensation to be determined. All awards and compensation
for the taking or purchase in lieu of condemnation of the Projects or any part
thereof are hereby assigned to Agent as security for the obligations of Borrower
under this Agreement, all such awards and compensation below the Award Threshold
may be paid directly to Borrower so long as no Event of Default exists and
restoration or repair and the continued operation of the applicable Property
is
economically feasible (and the condemnation or other taking did not affect
in
any way the Improvements) and all such awards and compensation in excess of
the
Award Threshold shall be paid to Agent. Borrower authorizes Agent to collect
and
receive such awards and compensation in excess of the Award Threshold to give
proper receipts and acquittances therefor, and in Agent's sole discretion,
(a)
to apply the same (after deduction of Lender's reasonable costs and expenses,
if
any in collecting the same) toward the payment of the Loan in such order
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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and
manner as Agent may elect, notwithstanding that the Loan may not then be due
and
payable, or (b) to make the same available to Borrower for the restoration
or repair of the affected Project. If the net proceeds of the condemnation
award
are made available to Borrower for restoration or repair, such proceeds shall
be
disbursed upon satisfaction of and in accordance with the terms and conditions
set forth in Section
3.2.
Borrower, upon request by Agent, shall execute all instruments requested to
confirm the assignment of the awards and compensation to Agent, free and clear
of all liens, charges or encumbrances.
Section
3.4 Reserved.
Section
3.5 Real
Estate Tax Impounds.
At
the
time of and in addition to the monthly installment of interest, and if
applicable, principal due under the Note and this Loan Agreement, Borrower
shall
deposit with Agent or Agent's designee, monthly, a sum of money (the
"Tax
Impound")
equal
to one-twelfth (1/12th) of the annual charges for real estate taxes,
assessments, and impositions relating to the Projects (collectively, the
"Taxes").
At or
before the initial advance of the Loan, Borrower shall deposit with Agent or
Agent's designee a sum of money which together with the monthly installments
will be sufficient to make each of such payments thirty (30) days prior to
the
date any delinquency or penalty becomes due with respect to such payments and
maintain a reserve equal to approximately one-sixth (1/6th)
of the
annual taxes, assessments and charges in Agent's sole but reasonable estimation.
Deposits shall be made on the basis of Agent's estimate from time to time of
the
charges for the current year (after giving effect to any reassessment or, at
Agent's election, on the basis of the charges for the prior year, with
adjustments when the charges are fixed for the then current year). All funds
so
deposited shall be held by Agent or Agent's designee. These sums may be
commingled with Agent or Agent's designee's general funds and shall not be
deemed to be held in trust for the benefit of Borrower. So long as no Event
of
Default exists hereunder, Agent shall credit for Borrower's account interest
on
such funds held by Agent or Agent's designee from time to time at the Money
Market Rate. All interest paid on such funds shall be deemed to be a part of
the
Tax Impound and shall be applied in accordance with this Section
3.5.
Borrower hereby grants to Agent for the benefit of Lender and Agent a security
interest in all funds so deposited with Agent or Agent's designee for the
purpose of securing the Loan. While an Event of Default exists, the funds
deposited may be applied in payment of the Taxes or to the payment of the Loan
or any other charges affecting the security of Agent, as Agent may elect, but
no
such application shall be deemed to have been made by operation of law or
otherwise until actually made by Agent. Borrower shall furnish, or cause to
be
furnished, to Agent bills for the Taxes at least thirty (30) days prior to
the
date on which the Taxes first become payable. If at any time the amount on
deposit with Agent or Agent's designee, together with amounts to be deposited
by
Borrower before Taxes are payable, is insufficient to pay such Taxes and
maintain a reserve equal to approximately one-sixth (1/6th)
of the
Taxes, Borrower shall deposit any deficiency with Agent or Agent's designee
immediately upon demand. Agent shall pay such Taxes when the amount on deposit
with Agent or Agent's designee is sufficient to pay such charges and maintain
such reserve and Agent has received a xxxx for such charges. The obligation
of
Borrower to pay the Taxes, as set forth in the Security Documents, is not
affected or modified by the provisions of this paragraph but
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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shall
be
deemed satisfied if the same are paid by Agent or Agent's designee pursuant
to
the provisions of this paragraph.
ARTICLE
IV
LEASING
MATTERS
Section
4.1 Representations
and Warranties on Leases.
(a) Borrower
represents and warrants to Agent with respect to Leases of the Projects
that,
to
its
knowledge: (i) the occupancy certificate separately delivered to Agent at
or prior to Closing, if any, is true and correct as of the date hereof, and
the
Leases are valid and in and full force and effect; (ii) the Leases
(including amendments) are in writing, and there are no oral agreements with
respect thereto; (iii) the copies of the Leases delivered to Agent are true
and complete; (iv) neither the landlord nor any tenant is in default under
any of the non-residential Leases; (v) Borrower has no knowledge of any
notice of termination or default with respect to any non-residential Lease;
(vi) Borrower has not assigned or pledged any of the Leases, the rents or
any interests therein, except to Agent; (vii) no non-residential tenant or
other party has an option to purchase all or any portion of any Project;
(viii) no tenant has the right to terminate its Lease prior to expiration
of the stated term of such Lease (unless due to casualty or condemnation of
the
Project); and (ix) except for the prepayment of rent made by Xxxxxx Xxxxx
as shown on the rent roll, no tenant has prepaid more than one month's rent
in
advance (except for bona fide security deposits not in excess of an amount
equal
to two month's rent).
(b) The
Projects shall at all times be master leased to Guarantor pursuant to the Master
Lease. The Master Lease shall, at all times during the term of the Loan, be
subordinated to the lien of the Mortgages pursuant to the terms of the
Subordination, Attornment and Security Agreement.
Section
4.2 Approval
Rights.
(a) Borrower
shall not and shall not permit Guarantor to, without Agent's prior written
consent, enter into or amend (in any material respect) any Lease or other rental
or occupancy agreement or concession agreement with respect to the Projects
except as expressly permitted hereunder.
(b) Borrower
shall have the right to enter into or to permit Guarantor to amend and/or modify
non-residential Leases without Agent's consent provided (i) the economic terms
of the Lease conform to those of the market, (ii) the form of the
non-residential Lease is that of the standard lease form approved by Agent,
with
no material modifications, (iii) the initial term is not longer than one (1)
year or if longer such Lease shall be terminable by Guarantor as landlord upon
not greater than 30 days prior written notice to the applicable tenant, and
(iv) such Lease is not a Material Non-Residential Lease.
(c) Borrower
and Guarantor shall have the right to enter into or amend any residential Lease
which has a term of no more than one (1) month and all such residential
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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Leases
shall be at market rates on the form previously approved by Agent without any
material modifications.
Section
4.3 Covenants.
Borrower
shall or shall cause Guarantor to: (a) perform the obligations which
Borrower or Guarantor is required to perform under the Leases; (b) enforce
the material obligations to be performed by the tenants under the Leases;
(c) promptly furnish to Agent any notice of default or termination received
by Borrower or Guarantor from any non-residential tenant, and any notice of
default or termination given by Borrower or Guarantor to any non-residential
tenant; (d) not collect any rents for more than one month in advance of the
time when the same shall become due, except for bona fide security deposits
not
in excess of an amount equal to two months rent; (e) not enter into any
ground lease or master lease of any part of any Project other than the Master
Lease; (f) not further assign or encumber any Lease; (g) not, except
with Agent's prior written consent, cancel or accept surrender or termination
of
any Material Non-Residential Lease; and (h) not, except with Agent's prior
written consent, modify or amend any Material Non-Residential Lease, and any
action in violation of clauses (e), (f), (g), and (h) of this Section 4.3
shall be
void at the election of Agent. Borrower will not suffer or permit any breach
or
default to occur in any of Borrower's or Guarantor's obligations under any
of
the Leases nor suffer or permit the same to terminate by reason of any failure
of Borrower to meet any requirement of any Lease.
Section
4.4 Tenant
Estoppels.
At
Agent's request, Borrower shall obtain and furnish to Agent, written estoppels
in form and substance satisfactory to Agent, executed by non-residential tenants
under Leases in the Projects and confirming the term, rent, and other provisions
and matters relating to the non-residential Leases.
Section
4.5 Security
Deposits
Neither
Borrower nor Guarantor has collected or is in receipt of any security deposit
from any tenant of any Project, except as described on the occupancy summary
previously provided to Agent at or prior to closing. All resident trust funds
shall be held in separate personal allowance funds (not commingled) for the
sole
use of the applicable resident, and such funds shall be recorded on each
Facility's financial records as independent accounts.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES
Borrower
represents and warrants to Agent that:
Section
5.1 Organization
and Power.
Each
of
Borrower and Guarantor is duly organized, validly existing and in good standing
under the laws of the state of its formation or existence, and is in compliance
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
14
with
legal requirements applicable to doing business in the state of its formation.
Each of Borrower and Guarantor is in good standing under the laws of and is
in
compliance with legal requirements applicable to doing business in the state
where each Project is located. Borrower is not a "foreign person" within the
meaning of § 1445(f)(3) of the Internal Revenue Code.
Section
5.2 Guarantor.
(a) Guarantor's
principal place of business is at 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxxxx 00000. Guarantor is the sole member of Borrower and owns one hundred
percent (100%) of the membership interests in Borrower free and clear of all
liens, claims, and encumbrances. Guarantor has full right, power and authority
to execute the Loan Documents on its own behalf and on behalf of
Borrower.
(b) Authority/Xxxx.
Guarantor shall have authority to make all material business decisions
(including a sale or refinance) for Borrower during the term of the Loan. Xxxxxx
Xxxx is the chairman of the board of directors of Guarantor.
Section
5.3 Borrower's
Operating
Agreement.
A
true
and complete copy of the operating agreement creating Borrower and any and
all
amendments thereto (collectively, the "Operating
Agreement")
has
been furnished to Agent. The Operating Agreement constitutes the entire
agreement among the members of Borrower and is binding upon and enforceable
against each of the members in accordance with its terms. There are no other
agreements, oral or written, among any of the members relating to Borrower.
No
breach exists under the Operating Agreement and no condition exists which,
with
the giving of notice or the passage of time would constitute a breach under
the
Operating Agreement.
Section
5.4 Corporate
Documents.
A
true
and complete copy of the articles of incorporation and by-laws of Guarantor
(collectively, the "Incorporation
Documents")
have
been furnished to Agent. The Incorporation Documents were duly executed and
delivered, are in full force and effect, and binding upon and enforceable in
accordance with their terms.
Section
5.5 Validity
of Loan Documents.
The
execution, delivery and performance by Borrower and Guarantor of the Loan
Documents to which it or they are a party: (a) are duly authorized and do
not require the consent or approval of any other party or governmental authority
which has not been obtained; and (b) will not violate any law or result in
the imposition of any lien, charge or encumbrance upon the assets of any such
party, except as contemplated by the Loan Documents. The Loan Documents
constitute the legal, valid and binding obligations of Borrower and Guarantor,
enforceable in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, or similar laws generally affecting the enforcement
of
creditors' rights.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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Section
5.6 Liabilities;
Litigation.
(a) The
financial statements delivered by Borrower and Guarantor are true and correct
with no significant change since the date of preparation. Except as disclosed
in
such financial statements, there are no liabilities (fixed or contingent)
affecting the Projects, Borrower or Guarantor. Except as disclosed in such
financial statements, there is no litigation, administrative proceeding,
investigation or other legal action (including any proceeding under any state
or
federal bankruptcy or insolvency law) pending or, to the knowledge of Borrower,
threatened, against the Projects, Borrower or Guarantor which if adversely
determined would reasonably be expected to have a material adverse effect on
such party, the Projects or the Loan.
(b) Neither
Borrower nor Guarantor is contemplating either the filing of a petition by
it
under state or federal bankruptcy or insolvency laws or the liquidation of
all
or a major portion of its assets or property, and neither Borrower nor Guarantor
has knowledge of any Person contemplating the filing of any such petition
against it.
Section
5.7 Taxes
and Assessments.
There
are
no unpaid or outstanding real estate or other taxes or assessments on or against
the Projects or any part thereof, except general real estate taxes not due
or
payable. Copies of the current general real estate tax bills with respect to
the
Projects have been delivered to Agent. The Projects are comprised of one or
more
parcels, each of which constitutes a separate tax lot and none of which
constitutes a portion of any other tax lot. Except as disclosed in the Title
Policy, there are no pending or, to Borrower's best knowledge, proposed, special
or other assessments for public improvements or otherwise affecting the
Projects, nor are there any contemplated improvements to the Projects that
may
result in such special or other assessments.
Section
5.8 Other
Agreements; Defaults.
Except
with respect to the Xxxxxxxxx Judgment, which judgment is currently under
appeal, neither the Borrower nor Guarantor is a party to any agreement or
instrument or subject to any court order, injunction, permit, or restriction
which would reasonably be expected to adversely affect the Projects or the
business, operations, or condition (financial or otherwise) of Borrower or
Guarantor. Neither Borrower nor Guarantor is in violation of any agreement
which
violation would reasonably be expected to have a material adverse effect on
the
Projects, Borrower, or Guarantor or Borrower's or Guarantor's business,
properties, or assets, operations or condition, financial or
otherwise.
Section
5.9 Compliance
with Law.
Borrower
has all requisite licenses, permits, franchises, qualifications, certificates
of
occupancy or other governmental authorizations to own, and Guarantor has all
requisite licenses, permits, franchises, qualifications, certificates of
occupancy or other governmental authorizations to lease and operate, the
Projects and carry on its business, and
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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the
Projects are in compliance with all applicable legal requirements and, to the
best of Borrower's knowledge, are free of structural defects, and all building
systems contained therein are in good working order, subject to ordinary wear
and tear. Except for the Project located in Russellville, Arkansas which Project
constitutes a legal non-conforming use, no Project constitutes, in whole or
in
part, a legally non-conforming use under applicable legal
requirements.
Section
5.10 Condemnation.
No
condemnation has been commenced or, to Borrower's knowledge, is contemplated
with respect to all or any portion of any Project or for the relocation of
roadways providing access to any Project.
Section
5.11 Access.
The
Projects have adequate rights of access to public ways and are served by
adequate water, sewer, sanitary sewer and storm drain facilities. All public
utilities necessary or convenient to the full use and enjoyment of the Projects
are located in the public right-of-way abutting the Projects, and all such
utilities are connected so as to serve the Projects without passing over other
property, except to the extent such other property is subject to a perpetual
easement for such utility benefiting the applicable Project. All roads necessary
for the full utilization of the Projects for their current purpose have been
completed and dedicated to public use and accepted by all governmental
authorities.
Section
5.12 Flood
Hazard.
No
Project is situated in an area designated as having special flood hazards as
defined by the Flood Disaster Protection Act of 1973, as amended, or as a
wetlands by any governmental entity having jurisdiction over the
Projects.
Section
5.13 Property.
A
fee
interest in the Projects is, or contemporaneously with the initial funding
of
the Loan will be, owned by Borrower free and clear of all liens, claims,
encumbrances, covenants, conditions and restrictions, security interests and
claims of others, except only such exceptions to title as have been approved
by
Agent. To the best of Borrower's knowledge, the Projects are in compliance
with
all zoning requirements, building codes, subdivision improvement agreements,
declarations, ground leases, and all covenants, conditions and restrictions
of
record. Except as set forth in the exceptions to title approved by Agent, the
zoning and subdivision approval of the Projects and the right and ability to,
use or operate the Projects are not in any way dependent on or related to any
real estate other than the Properties where the same are to be made. Except
as
previously disclosed to Agent in writing, to the best of Borrower's knowledge,
as of the date hereof, (i) there are no, nor are there any alleged or asserted,
violations of law, regulations, ordinances, codes, permits, licenses,
declarations, ground leases, covenants, conditions, or restrictions of record,
or other agreements relating to the Projects, or any part thereof, (ii) the
Projects are in good condition
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
17
and
repair with no deferred maintenance and are free from damage caused by fire
or
other casualty, (iii) there is no latent or patent structural or other
significant defect or deficiency in the Projects, (iv) design and as-built
conditions of the Projects are such that no drainage or surface or other water
will drain across or rest upon either the Projects or land of others except
in
areas designated for such purpose and for which a benefiting or burdening
easement has been established, and (v) none of the Improvements on the Projects
create an encroachment over, across or upon any of the Projects' boundary lines,
rights of way or easements, and no buildings or other improvements on adjoining
land create such an encroachment.
Section
5.14 Location
of Borrower.
Borrower's
principal place of business and chief executive offices are located at the
address stated in Section 11.1.
Section
5.15 Margin
Stock.
No
part
of proceeds of the Loan will be used for purchasing or acquiring any "margin
stock" within the meaning of Regulations T, U or X of the Board of Governors
of
the Federal Reserve System.
Section
5.16 Tax
Filings.
Borrower
and Guarantor have filed (or have obtained effective extensions for filing)
all
federal, state and local tax returns required to be filed and have paid or
made
adequate provision for the payment of all federal, state and local taxes,
charges and assessments payable by Borrower and Guarantor,
respectively.
Section
5.17 Solvency.
After
giving effect to the Loan, the fair saleable value of Borrower's assets exceeds
and will, immediately following the making of the Loan, exceed Borrower's total
liabilities, including, without limitation, subordinated, unliquidated, disputed
and contingent liabilities. The fair saleable value of Borrower's assets is
and
will, immediately following the making of the Loan, be greater than Borrower's
probable liabilities, including the maximum amount of its contingent liabilities
on its Debts as such Debts become absolute and matured. Borrower's assets do
not
constitute and, immediately following the making of the Loan will not
constitute, unreasonably small capital to carry out its business as conducted
or
as proposed to be conducted. Borrower does not intend to, nor believes that
it
will, incur Debts and liabilities (including contingent liabilities and other
commitments) beyond its ability to pay such Debts as they mature (taking into
account the timing and amounts of cash to be received by Borrower and the
amounts to be payable on or in respect of obligations of such
Borrower).
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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Section
5.18 Full
and Accurate Disclosure.
No
statement of fact made by or on behalf of Borrower or Guarantor in this
Agreement or in any of the other Loan Documents contains any untrue statement
of
a material fact or omits to state any material fact necessary to make statements
contained herein or therein not misleading. There is no fact presently known
to
Borrower which has not been disclosed to Agent which adversely affects, nor
as
far as Borrower can reasonably foresee, would reasonably be expected to
adversely affect, the Projects or the business, operations or condition
(financial or otherwise) of Borrower or Guarantor.
Section
5.19 Single
Purpose Entity.
Borrower
is and has at all times since its formation been a Single Purpose
Entity.
Section
5.20 No
Broker.
No
brokerage commission or finder's fee is owing to any broker or finder arising
out of any actions or activity of Borrower in connection with the
Loan.
Section
5.21 Reserved.
Section
5.22 Labor
Disputes.
To
the
best of Borrower's knowledge, there are no strikes, boycotts, or labor disputes
pending which would reasonably be expected to have a material adverse effect
on
the operation of the Projects.
Section
5.23 Employees.
Borrower
has no employees.
Section
5.24 ERISA
(Borrower).
Borrower
is not an "employee benefit plan" as defined in Section 3(3) of ERISA, or a
"governmental plan" within the meaning of Section 3(32) of ERISA;
(b) Borrower is not subject to state statutes regulating investments and
fiduciary obligations with respect to governmental plans; (c) the assets of
Borrower do not constitute "plan assets" of one or more plans within the meaning
of 29 C.F.R. Section 2510.3-101; and (d) one or more of the following
circumstances is true: (i) Equity interests in Borrower are publicly offered
securities, within the meaning of 29 C.F.R. Section 2510.3-101(b)(2) or are
securities issued by an investment company registered under the Investment
Company Act of 1940; (ii) Less than twenty-five percent (25%) of the value
of
any class of equity interests in Borrower are held by "benefit plan investors"
within the meaning of 29 C.F.R. Section 2510.3-101(f)(2); or (iii) Borrower
qualifies as an "operating company", a "venture capital operating company",
or a
"real estate operating company" within the meaning of 29 C.F.R. Section
2510.3-101(c), (d) or (e). Borrower shall deliver to Agent such certifications
and/or other
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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evidence
periodically requested by Agent, in its reasonable discretion, to verify these
representations and warranties. Failure to deliver these certifications or
evidence, breach of these representations and warranties, or consummation of
any
transaction which would cause the Loan Documents or any exercise of Agent's
or
Lender's rights under the Loan Documents to (1) constitute a non-exempt
prohibited transaction under ERISA or (2) violate ERISA or any state statute
regulating governmental plans (collectively, a "Violation"),
which
failure continues for thirty (30) days after written notice, shall be an Event
of Default. Notwithstanding anything in the Loan Documents to the contrary,
no
sale, assignment, or transfer of any direct or indirect right, title, or
interest in Borrower or the Projects (including creation of a junior lien,
encumbrance or leasehold interest) shall be permitted which would negate
Borrower's representations in this section or cause a Violation. At least
fifteen (15) days before consummation of any of the foregoing, Borrower shall
obtain from the proposed transferee or lienholder (1) a certification to Agent
that the representations and warranties of this subparagraph will be true after
consummation and (2) an agreement to comply with this section.
Section
5.25 Intellectual
Property.
Except
as
set forth on Exhibit C,
Borrower has no interest in any trademarks, copyrights, patents or other
intellectual property with respect to the Projects.
Section
5.26 Anti-Terrorism
and Anti-Money Laundering Compliance.
(a) Compliance
with Anti-Terrorism Laws.
Borrower represents and warrants to Agent that it is not, and, after making
due
inquiry, that no Person who owns a controlling interest in or otherwise controls
Borrower is, (i) listed on the Specially Designated Nationals and Blocked
Persons List (the "SDN
List")
maintained by the Office of Foreign Assets Control ("OFAC"),
Department of the Treasury, and/or on any other similar list ("Other
Lists"
and,
collectively with the SDN List, the "Lists")
maintained by the OFAC pursuant to any authorizing statute, Executive Order
or
regulation (collectively, "OFAC
Laws and Regulations");
or
(ii) a Person (a "Designated
Person")
either
(A) included within the term "designated national" as defined in the Cuban
Assets Control Regulations, 31 C.F.R. Part 515, or (B) designated under
Sections 1(a), 1(b), 1(c) or 1(d) of Executive Order No. 13224, 66 Fed. Reg.
49079 (published September 25, 2001) or similarly designated under any related
enabling legislation or any other similar Executive Orders (collectively, the
"Executive
Orders"). The
OFAC
Laws and Regulations and the Executive Orders are collectively referred to
in
this Amendment as the "Anti-Terrorism
Laws".
Borrower represents and warrants that it requires, and has taken reasonable
measures to ensure compliance with the requirement, that no Person who owns
any
other direct interest in Borrower is or shall be listed on any of the Lists
or
is or shall be a Designated Person.
(b) Funds
Invested in Borrower.
Borrower represents and warrants that it has taken reasonable measures
appropriate to the circumstances (and in any event as required by law), with
respect to each holder of a direct or indirect interest in Borrower, to assure
that funds invested by such holders in Borrower are derived from legal sources
("Anti-Money
Laundering Measures"). The
Anti-Money Laundering Measures have been undertaken in
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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accordance
with the Bank Secrecy Act, 31 U.S.C. §§ 5311 et
seq.
("BSA"),
and
all applicable laws, regulations and government guidance on BSA compliance
and
on the prevention and detection of money laundering violations under 18 U.S.C.
§§ 1956 and 1957 (collectively with the BSA, "Anti-Money
Laundering Laws").
(c) No
Violation of Anti-Money Laundering Laws.
Borrower represents and warrants to Agent, to its actual knowledge after making
due inquiry, that neither Borrower nor Guarantor (i) is under investigation
by
any governmental authority for, or has been charged with, or convicted of,
money
laundering under 18 U.S.C. §§ 1956 and 1957, drug trafficking, terrorist-related
activities or other money laundering predicate crimes, or any violation of
the
BSA, (ii) has been assessed civil penalties under any Anti-Money Laundering
Laws, or (iii) has had any of its funds seized or forfeited in an action under
any Anti-Money Laundering Laws.
(d) Borrower
Compliance with Anti-Money Laundering Laws.
Borrower represents and warrants to Agent that it has taken reasonable measures
appropriate to the circumstances (in any event as required by law), to ensure
that Borrower is in compliance with all current and future Anti-Money Laundering
Laws and laws, regulations and government guidance for the prevention of
terrorism, terrorist financing and drug trafficking.
(e) U.S.
Publicly-Traded Entity.
This
Section
5.26
shall
not apply to any Person to the extent that such Person's interest in the
Borrower is through a U.S. Publicly-Traded Entity. As used in this Agreement,
"U.S.
Publicly-Traded Entity"
means a
Person (other than an individual) whose securities are listed on a national
securities exchange, or quoted on an automated quotation system, in the United
States, or a wholly-owned subsidiary of such a Person.
Section
5.27 Reserved.
Section
5.28 Master
Lease.
A
true,
correct and complete copy of the Master Lease, together with all amendments
thereto, has been delivered to Agent; and the Master Lease, and all amendments
thereto is in full force and effect as of the Closing Date.
ARTICLE
VI
FINANCIAL
REPORTING;
NOTICES
Section
6.1 Financial
Statements.
Borrower
shall furnish to Agent and shall cause Guarantor to furnish to Agent such
financial statements and other financial information as Agent may from time
to
time reasonably request. All such financial statements shall show all material
contingent liabilities and shall accurately and fairly present the results
of
operations and the financial condition of Borrower at the dates and for the
period indicated and shall be sufficient to permit Agent to calculate Debt
Service Coverage Ratio, Project Yield and Net Operating
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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Income.
Without limitation of the foregoing, Borrower shall furnish to Agent and shall
cause Guarantor to furnish to Agent the following statements:
(a) Monthly
Reports.
(i) Borrower
shall deliver or cause to be delivered to Agent on or prior to the last day
of
each fiscal month used by Guarantor in preparing financial reports (each, a
"fiscal
month")
the
following reports in respect of the Projects:
(A) For
the
preceding fiscal month, statements of the operations of the Projects (including
a current occupancy report, operating statement, delinquency report and a
schedule of delinquency of receipts and payments) as of the last day of each
fiscal month;
(B) For
the
preceding fiscal month and fiscal year-to-date (i) a cash summary detailing
all cash activity and reconciling beginning and end cash balances, and
(ii) aged accounts receivable and accounts payable;
(C) For
the
preceding fiscal month, statements of Net Operating Income.
(ii) Upon
request by Agent, Borrower shall deliver or cause to be delivered to Agent
the
following (together with the foregoing, such reports are hereinafter
collectively referred to as the "Monthly
Reports"):
(A) A
true,
correct and complete copy of the check register showing all paid invoices,
indicating date paid, amount paid and check number ;
(B) A
true,
correct and complete copy of the cash disbursements journal; and
(C) Evidence
of the timely payment of all taxes and insurance premiums.
(iii) The
Monthly Reports shall (a) be certified by the chief financial
representative or other authorized accounting officer of Borrower as true,
correct and complete, (b) be derived from the books and records maintained
by Borrower and/or Guarantor at the Projects, and (c) be accompanied with
copies of supporting documentation to the extent that Agent shall request.
Notwithstanding anything contained in clause (a)(i) above to the contrary,
any Monthly Reports for a fiscal month that coincides with the end of
Guarantor's fiscal quarter shall be delivered to Lender within forty-five (45)
days after the end of each such fiscal quarter.
(iv) Each
financial statement, report or other information required to be delivered or
caused to be delivered by Borrower and/or Guarantor to Agent under
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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this
Agreement and required hereunder to be certified by the chief financial
representative of Borrower shall also certify that: (a) all of the
covenants set forth in Article
VII
are
fully performed; provided, however, as to the financial covenants set forth
in
Section
7.26
such
certification shall only be required to be made upon delivery of the applicable
financial statements corresponding to such period of determination, and
(b) the representations and warranties set forth in this Loan Agreement,
the Security Documents and in the Subordination, Attornment and Security
Agreement are and remain true, correct and complete except as disclosed in
writing in the certificate. Each financial statement, report or other
information required to be delivered by Borrower to Agent under this Agreement
shall show all material contingent liabilities, shall be prepared in accordance
with sound accounting practices and shall accurately and fairly present the
results of operations and the financial condition of the person(s) referred
to
therein as of the dates and for the period indicated.
(b) Annual
Statements.
Within
ninety (90) days after the end of each fiscal year, Borrower shall deliver
or
cause to be delivered to Agent a balance sheet and financial statements of
Borrower and Guarantor, which, in the case of Guarantor, shall show, if Agent
requests, Guarantor's other real estate holdings, including income and expenses,
debt service requirements and occupancy thereof, certified as true and correct
in all respects, and prepared in accordance with sound accounting practices
and
fairly presenting the financial condition(s) of Borrower or Guarantor, as
applicable, as of the date(s) indicated.
Section
6.2 Audits.
If
Borrower fails to furnish or cause to be furnished promptly any report required
by Section
6.1,
or if
Agent reasonably deems such reports to be unacceptable or unreliable, Agent
may
elect (in addition to exercising any other right and remedy) to conduct an
audit
of all books and records of Borrower and Guarantor which in any way pertain
to
the Projects and to prepare such reports. Such audit shall be made and such
reports shall be prepared by an independent firm of certified public accountants
to be selected by Agent or another auditor of Agent's choice (which may be
an
affiliate of Agent). Borrower shall pay all reasonable expenses of the audit
and
other services, which expenses shall be immediately due and payable with
interest thereon at the Default Rate.
Section
6.3 Books
and Records/Audits.
Borrower
shall keep and maintain or cause to be kept and maintained at all times at
the
Projects or at Borrower's/Guarantor's principal place of business, or such
other
place as Agent may approve in writing, complete and accurate books of accounts
and records adequate to reflect the results of the operation of the Projects
(including computations of Net Operating Income) and to provide the financial
statements required to be provided to Agent pursuant to Section
6.1
above
and copies of all written contracts, correspondence, reports of Agent's
independent consultant, if any, and other documents affecting the Projects.
Agent and its designated agents shall have the right to inspect and copy any
of
the foregoing. Additionally, Agent may audit and determine, in Agent's sole
and
absolute discretion, the
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
23
accuracy
of Borrower's records and computations. The costs and expenses of the audit
shall be paid by Borrower if the audit discloses a monetary variance in any
financial information or computation (including the computation of Net Operating
Income) equal to or greater than the greater of: (i) five percent (5%); or
(ii) Five Thousand and No/100 Dollars ($5,000.00) more than any computation
submitted by Borrower.
Section
6.4 Notice
of Litigation or Default.
Borrower
shall promptly provide Agent with:
(a) written
notice of any litigation, arbitration, or other proceeding or governmental
investigation (including any survey results or inspection reports from any
Governmental Authority) pending or, to Borrower's or Guarantor's knowledge,
threatened against or relating to Borrower, Guarantor or the Projects (but
with
respect to matters affecting only Guarantor (and not affecting the Projects
in
any respect), only such matters which would reasonably be expected to have
a
material adverse effect on the financial condition of Guarantor ); provided,
that with respect to any such litigation, arbitration or other proceeding
relating solely to (i) a monetary claim of less than $100,000 (and less than
$500,000 in the aggregate) which is covered in its entirety by insurance (and
as
to which the insurance carrier has not refused coverage) and (ii) a monetary
claim of less than $50,000 (and less than $200,000 in the aggregate) with
respect to a breach of contract claim or an employee claim for unpaid wages,
Borrower shall not be required to provide notice (written or otherwise) of
such
claim in accordance with the terms of this Section
6.4.
(b) a
copy of
all notices of default and violations of laws, regulations, codes, ordinances
and the like (including, without limitation, notices of default or violation
under any license or permit necessary for the operation of the Projects) not
otherwise covered by Section
6.4(a)
which
are received by Borrower or Guarantor, relating to Borrower, Guarantor (but
with
respect to matters affecting only Guarantor (and not affecting the Projects
in
any respect) only such matters which would reasonably be expected to have a
material adverse effect on the financial condition of Guarantor or the Projects
or result in a material adverse change;
(c) a
copy of
all notices of default and other material correspondence sent to or received
from Guarantor under Master Lease;
(d) a
copy of
all notices sent or received by Borrower or Guarantor pursuant to that certain
Plat and Xxxx of Assurance dated August 1, 1975, recorded as Document
Number 13-C, Page 504; and
(e) a
copy of
all notices of default and other material correspondence sent to or received
from a tenant under a Lease.
Section
6.5 Bank
Accounts.
Borrower
shall cause Guarantor to, provide Agent with the following information with
respect to each of the accounts from which payments will be made to Agent
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
24
pursuant
to the Loan Documents: (i) bank name; (ii) bank's ABA number; (iii) bank
account number; and (iv) the name in which the bank account is
held.
ARTICLE
VII
COVENANTS
Borrower
covenants and agrees with Agent as follows:
Section
7.1 Inspection.
Subject
to the rights of tenants under the Leases and applicable federal and state
law
(including laws governing the confidentiality of resident records), Agent and
its authorized agents may enter upon and inspect the Projects at all reasonable
times upon notice given orally or in writing to Borrower. Agent, at Borrower's
expense, shall retain one or more independent consultants to periodically
inspect the Projects and all documents, drawings, plans, and consultants'
reports relating thereto.
Section
7.2 Due
on
Sale and Encumbrance; Transfers of Interests.
Without
the prior written consent of Agent, Borrower shall not nor shall
Guarantor:
(i) except
as
otherwise permitted herein or by the Assignment of Membership Interests create,
or permit the creation of, any new direct or indirect ownership interest in
Borrower, or
(ii) transfer,
or permit the transfer of (A) all or any part of any Project, or any
interest therein (other than Leases permitted hereunder), or (B) except as
otherwise permitted herein or by the Assignment of Membership Interests
any direct or indirect ownership
interest in Borrower (including any interest in the profits, losses or cash
distributions in any way relating to the Projects or Borrower), or
(iii) encumber,
alienate, xxxxx x Xxxx on, or grant any other interest in, any Project or any
part thereof (other than Leases permitted hereunder ) or take or fail to take
any other action which would result in a Lien against any Project or the
interest of Borrower in any Project or any ownership interest in Borrower,
whether voluntarily or involuntarily except Liens in favor of Agent for the
benefit of Lender and Agent or Liens for purchase money indebtedness expressly
permitted pursuant to Section 7.9 herein or Liens which are being duly contested
by Borrower in accordance with the terms hereof, or
(iv) enter
into any easement or other agreement granting rights in or restricting the
use
or development of any Project.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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Section
7.3 Taxes;
Charges.
To
the
extent not paid by Agent from the Tax Impound, Borrower shall pay before any
fine, penalty, interest or cost may be added thereto, and shall not enter into
any agreement to defer, any Taxes that may become a Lien upon the Projects
or
become payable during the term of the Loan, and will promptly furnish Agent
with
evidence of such payment. Borrower shall not suffer or permit the joint
assessment of any Project with any other real property constituting a separate
tax lot or with any other real or personal property. Borrower shall pay or
cause
to be paid when due all Taxes, claims and demands of mechanics, materialmen,
laborers and others which, if unpaid, might result in a Lien on the Projects
(collectively, the "Charges");
however, Borrower and Guarantor may contest, in good faith by appropriate
proceedings, the amount or validity of any such Charges or Liens so long as
(a) Borrower and Guarantor have given prior written notice to Agent of the
intent to so contest or object to any such Charges or Liens, (b) such contest
stays the enforcement or collection of the Charges or any Lien created,
(c) Borrower provides Agent with a bond or other security satisfactory to
Agent (which may include an endorsement to Agent's Title Policy insuring against
such claim, demand or lien) assuring the discharge of Borrower's and/or
Guarantor's obligations for such claims, demands or lien, including interest
and
penalties, and (d) Borrower and Guarantor are diligently contesting the
same by appropriate legal proceedings in good faith and at their own expense
and
concludes such contest prior to the tenth (10th) day preceding the earlier
to
occur of the Maturity Date or the date on which any Project is scheduled to
be
sold for non-payment.
Section
7.4 Reserved.
Section
7.5 Operation;
Maintenance; Inspection.
Borrower
shall observe and comply with (or cause observance and compliance with) all
legal requirements applicable to the ownership, use and operation of the
Projects. Borrower shall maintain (or cause to be maintained) the Projects
in
good condition, ordinary wear and tear excepted, and promptly after receipt
or
all necessary permits and approvals, including any approvals which Borrower
is
required to obtain from Agent or Lender under the terms of this Agreement or
any
of the other Loan Documents, repair any damage or casualty.
Section
7.6 Taxes
on Security.
Borrower
shall pay all taxes, charges, filing, registration and recording fees, excises
and levies payable with respect to the Note or the Liens created or secured
by
the Loan Documents, other than income, franchise and doing business taxes
imposed on Agent or Lender and other than taxes, charges and fees which are
being duly contested by Borrower in accordance with the terms of this Agreement
or any of the other Loan Documents. If there shall be enacted any law (1)
deducting the Loan from the value of the Projects for the purpose of taxation,
(2) affecting any Lien on the Projects, or (3) changing existing laws of
taxation of mortgages, deeds of trust, security deeds, or debts secured by
real
property, or changing the manner of collecting any such taxes, Borrower shall
promptly pay to Agent, on
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
26
demand,
all taxes, costs and charges for which Agent or Lender is or may be liable
as a
result thereof; however, if such payment would be prohibited by law or would
render the Loan usurious, then instead of collecting such payment, Lender may
declare all amounts owing under the Loan Documents to be immediately due and
payable.
Section
7.7 Single
Purpose Entity; Legal Existence; Name, Etc.
Borrower
shall preserve and keep in full force and effect its existence as a Single
Purpose Entity, entity status, franchises, rights and privileges under the
laws
of the state of its formation, and all qualifications, licenses and permits
applicable to the ownership of the Projects and Guarantor shall preserve and
keep in full force and effect its entity status, franchises, rights and
privileges under the laws of the state of its formation and all qualifications,
licenses and permits applicable to the use and operation of the Projects.
Borrower shall not, nor shall Guarantor cause or permit Borrower to, wind up,
liquidate, dissolve, reorganize, merge, or consolidate with or into, or convey,
sell, assign, transfer, lease, or otherwise dispose of all or substantially
all
of its assets, or acquire all or substantially all of the assets of the business
of any Person, or permit any subsidiary or Affiliate of Borrower to do so.
Guarantor shall not wind up, liquidate, dissolve, convey, sell, assign,
transfer, lease or otherwise dispose of all or substantially all of its assets.
Borrower will not amend or terminate or permit the amendment or termination
of
Borrower's membership agreement without the prior written consent of Agent
which
consent shall not, in the case of an amendment, be unreasonably withheld if
such
amendment is not reasonably anticipated to affect Borrower's ability to perform
its obligations hereunder or under the other Loan Documents. Borrower shall
conduct business only in its own name or in the names of the Projects. Neither
Borrower nor Guarantor shall change its name, identity, or organizational
structure, the location of its chief executive office or principal place of
business or its state of organization unless Borrower or Guarantor, as
applicable, (a) shall have given prior written notice to Agent of such change,
and (b) shall have taken all actions necessary or requested by Agent to file
or
amend any financing statement or continuation statement to assure perfection
and
continuation of perfection of security interests under the Loan Documents.
Borrower shall maintain its status as a Special Purpose Entity.
Section
7.8 Affiliate
Transactions.
Without
the prior written consent of Agent, Borrower shall not engage in any transaction
affecting the Projects with an Affiliate of Borrower other than agreements
which
are (i) terminable by Borrower upon thirty (30) days prior written notice
(ii) on an arms-length basis and (iii) on terms which are no less
favorable to Borrower than it could secure from an unrelated third
party.
Section
7.9 Limitation
on Other Debt.
Borrower
shall not, without the prior written consent of Agent, incur any
Debt, except
for trade payables in the ordinary course of business, the Contingent Payment
provided for in the Acquisition Document related to the Willow Brook Retirement
Community; provided, such Contingent Payment shall not exceed $200,000 and
shall
be
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
27
unsecured,
and up to $250,000 in the aggregate for purchase money debt to purchase and,
capital leases of, vehicles, equipment and other capital items to be used solely
in connection with the operation of such Project (purchase money debt not to
exceed in the aggregate $180,000 may be secured by automobiles and ordinary
office equipment used in connection with the Projects) and which are reasonably
related to the operation of assisted living facilities/independent living
facilities (the "Permitted
Debt").
Notwithstanding the foregoing, the amount of secured indebtedness incurred
by
Borrower pursuant to this Section 7.9
and
Guarantor (in its capacity as tenant under the Master Lease) pursuant to the
terms of the Subordination Agreement shall not at any time in the aggregate
exceed $180,000.
Section
7.10 Further
Assurances.
Borrower
shall promptly (a) cure any defects in the execution and delivery of the
Loan Documents, and (b) execute and deliver, or cause to be executed and
delivered, all such other documents, agreements and instruments as Agent may
reasonably request to further evidence and more fully describe the collateral
for the Loan, to correct any omissions in the Loan Documents, to perfect,
protect or preserve any liens created under any of the Loan Documents, or to
make any recordings, file any notices, or obtain any consents, as may be
necessary or appropriate in connection therewith.
Section
7.11 Estoppel
Certificates.
Borrower,
within ten (10) days after request, shall furnish to Agent a written statement,
duly acknowledged, setting forth the amount due on the Loan, the terms of
payment of the Loan, the date to which interest has been paid, whether any
offsets or defenses exist against the Loan and, if any are alleged to exist,
the
nature thereof in detail, and such other matters as Agent reasonably may
request.
Section
7.12 Notice
of Certain Events.
Borrower
shall promptly notify Agent of (a) any Potential Default or Event of
Default known to Borrower, together with a detailed statement of the steps
being
taken to cure such Potential Default or Event of Default; (b) any notice of
default received by Borrower under other obligations relating to Projects or
otherwise material to Borrower's business, including any notices of violations
of any laws, regulations, codes or ordinances; and in the case of clause (b)
promptly provide Agent with copies of such notices referred to
therein.
Section
7.13 Indemnification.
Borrower
shall indemnify, defend and hold Agent and Lenders harmless from and against
any
and all losses, liabilities, claims, damages, expenses, obligations, penalties,
actions, judgments, suits, costs or disbursements of any kind or nature
whatsoever, including the reasonable fees and expenses of Agent's and Lender's
counsel, in connection with (a) any inspection, review or testing of or
with respect to the Projects conducted by Agent or Lender
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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in
accordance with the terms of this Agreement, (b) any investigative,
administrative, mediation, arbitration, or judicial proceeding, in which Agent
or a Lender is designated a party thereto, commenced or threatened at any time
(including after the repayment of the Loan) in any way related to the execution,
delivery or performance of any Loan Document or to the Projects, (c) any
proceeding instituted by any Person claiming a Lien against any of the Projects,
and (d) any brokerage commissions or finder's fees claimed by any broker or
other party in connection with the Loan, the Projects, or any of the
transactions contemplated in the Loan Documents, including those arising from
the joint, concurrent, or comparative negligence of Agent or Lender, except
to
the extent any of the foregoing is caused by an indemnitee's gross negligence
or
willful misconduct.
Section
7.14 Use
of
Proceeds, Revenues.
Borrower
shall use the proceeds of the Loan for proper business purposes. No portion
of
the proceeds of the Loan shall be used by Borrower in any manner that might
cause the borrowing or the application of such proceeds to violate Regulation
U,
Regulation T or Regulation X or any other regulation of the Board of Governors
of the Federal Reserve System or to violate the Securities Act of 1933 or the
Securities Exchange Act of 1934. Except as otherwise specifically provided
in
the Loan Documents, proceeds from the Projects, if any, received by Borrower
shall be applied to the Indebtedness then due and payable, operating
expenses or
other
approved Project capital improvements, repairs or replacements before
distribution by Borrower to Guarantor.
Section
7.15 Payments
Under Master Lease.
Borrower
shall cause all rent payments by Guarantor under the Master Lease to be made
directly to Agent, pursuant to the terms of the Subordination, Non-Disturbance
and Security Agreement.
To
the
extent that any such funds are not sent directly to Agent as required under
this
Section 7.15
but are
received by Borrower, such amounts shall be held in trust for the benefit of
Agent and remitted to Agent within two (2) Business Days after receipt by
Borrower. All amounts from time to time held by Agent pursuant to this
Section 7.15
are
hereinafter referred to as "Rent
Proceeds."
Agent
may apply all such Rent Proceeds toward the Indebtedness then due and payable
in
such order as Agent shall determine.
Section
7.16 Reserved.
Section
7.17 Reserved.
Section
7.18 Compliance
with Laws and Contractual Obligations.
(a) Borrower
will comply with and will cause Guarantor to comply with (i) the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority (including, without limitation, laws, rules, regulations
and orders relating to all building, zoning, density, land use, covenants,
conditions and restrictions, subdivision requirements, taxes, employer and
employee contributions, securities, employee retirement
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
29
and
welfare benefits, environmental protection matters, employee health and safety,
quality and safety standards, accreditation standards and requirements of the
applicable state department of health or other applicable state regulatory
agency (each a "State
Regulator"),
quality and adequacy of medical care, distribution of pharmaceuticals, rate
setting, equipment, personnel, operating policies, additions to facilities
and
services and fee splitting) as are now in effect and which may be imposed upon
Borrower or Guarantor or the maintenance, use or operation of the Projects
or
the provision of services to the occupants of the Projects where the failure
to
so comply would reasonably be expected to result in a Material Regulatory
Violation or a material adverse change, and (ii) the obligations, covenants
and conditions contained in all other material contractual obligations of
Borrower and of Guarantor, but in the case of Guarantor only with respect to
the
operation of the Projects; and
(b) Borrower
will maintain or obtain and will cause Guarantor to maintain or obtain, all
licenses, qualifications and permits now held or hereafter required to be held
by Borrower or Guarantor for which the loss, suspension, revocation or failure
to obtain or renew, would reasonably be expected to have a material adverse
effect upon the financial condition of Borrower or the ability to operate the
Projects in compliance with the requirements of the Loan Documents and as they
have been operated prior to the date hereof or are then operated in accordance
with the terms hereof.
Section
7.19 Notice
of Money Laundering.
If
a
tenant under any Lease is charged with crimes involving money laundering or
predicate crimes to money laundering, and such charges are not dismissed without
further investigation within thirty (30) days, then Borrower shall give notice
of such charges to Agent's and upon Agent's request, Borrower shall exclude
from
the debt service rents from said tenant or resident.
Section
7.20 Anti-Terrorism
and Anti-Money Laundering Compliance.
(a) Compliance
with Anti-Terrorism Laws.
Borrower covenants to Agent and Lender that it shall not be, and, after making
due inquiry, that no Person who owns a controlling interest in or otherwise
controls Borrower shall be (i) listed on the Lists; or (ii) a Designated Person.
Borrower also shall require, and shall take reasonable measures to ensure
compliance with the requirement, that no Person who owns any other direct
interest in Borrower shall be listed on any of the Lists or is or shall be
a
Designated Person.
(b) Compliance
by Interest Holders.
Borrower shall require each Person that proposes to become a partner, member
or
shareholder in Borrower after the date hereof and that is not a U.S.
Publicly-Traded Entity to sign, and to deliver to Borrower (and Borrower shall
deliver to Agent), (i) an Interest Holder Certification and Agreement,
substantially in the form attached as Exhibit
B
("Interest
Holder Agreement")
and
(ii) if
requested by Agent, Borrower shall deliver to Agent a schedule of the name,
legal domicile address and (for entities) place of organization of each holder
of a direct or indirect legal or beneficial interest in Borrower.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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(c) Anti-Terrorism
Policies.
Borrower agrees to adopt and maintain adequate policies, procedures and controls
to ensure that it is in compliance with all applicable Anti-Terrorism Laws
and
related government guidance (such policies, procedures and controls are
collectively referred to in this Agreement as "Borrower
Anti-Terrorism Policies").
Borrower further agree to make the Borrower Anti-Terrorism Policies, and the
respective policies, procedures and controls for Persons who are or are to
become partners, members or shareholders in Borrower (such policies, procedures
and controls are collectively referred to as "Investor
Anti-Terrorism Policies"),
together with the information collected thereby concerning Borrower and such
partners, members or shareholders (but not information about indirect members
that do not have the power to direct the management or policies of Borrower,
whether through the ownership of voting stock, agreement or otherwise),
available to Agent for review and inspection by Agent from time to time during
normal business hours and upon reasonable prior notice, and Borrower agrees
to
deliver copies of the same to Agent from time to time upon request. Agent and
Lender will keep the Borrower Anti-Terrorism Policies and the Investor
Anti-Terrorism Policies, and the information collected thereby, confidential
subject to customary exceptions for legal process, auditors, regulators, or
as
otherwise reasonably required by Agent and Lender for enforcement of its rights
and/or in connection with reasonable business us in the management,
administration and disposition of its assets and investments. Borrower consents
to the disclosure to U.S. regulators and law enforcement authorities by Agent
or
Lender or any of their affiliates or agents of such information about Borrower
and the owners of direct and indirect interests in Borrower that Agent or Lender
reasonably deems necessary to comply with applicable Anti-Terrorism Laws and
Anti-Money Laundering Laws.
(d) Funds
Invested in Borrower.
Borrower covenants that it will take Anti-Money Laundering Measures in
accordance with Anti-Money Laundering Laws with respect to each holder of a
direct or indirect interest in any Borrower.
(e) Borrower
Compliance with Anti-Money Laundering Laws.
Borrower covenants to Agent and Lender that it shall take reasonable measures
appropriate to the circumstances (in any event as required by law), to ensure
that Borrower is in compliance with all current and future Anti-Money Laundering
Laws and laws, regulations and government guidance for the prevention of
terrorism, terrorist financing and drug trafficking.
(f) Notification
of Agent; Quarantine Steps.
Borrower shall immediately notify Agent if Borrower obtains actual knowledge
that any holder of a direct or indirect interest in Borrower, or any director,
manager or officer of any of such holder, (i) has been listed on any of the
Lists, (ii) has become a Designated Person, (iii) is under investigation by
any
governmental authority for, or has been charged with or convicted of, money
laundering drug trafficking, terrorist-related activities or other money
laundering predicate crimes, or any violation of the BSA, (iv) has been assessed
civil penalties under any Anti-Money Laundering Laws, or (v) has had funds
seized or forfeited in an action under any Anti-Money Laundering
Laws.
(g) Exception.
This
Section
7.20
shall
not apply to any Person to the extent that such Person's interest in the
Borrower is through a U.S. Publicly-Traded Entity.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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Section
7.21 Employees.
Borrower
shall not have any employees while any portion of the Loan is
outstanding.
Section
7.22 Reserved.
Section
7.23 Representations
and Warranties.
Borrower
will cause all representations and warranties set forth in this Agreement to
remain true and correct at all times during the term of this Agreement and
while
any portion of the Loan remains outstanding.
Section
7.24 Cooperation.
Borrower
acknowledges that Lender and its successors and assigns may (a) sell,
transfer or assign this Agreement, the Note and the other Loan Documents to
one
or more investors as a whole loan, in a rated or unrated public offering or
private placement, (b) participate the Loan to one or more investors in a
rated or unrated public offering or private placement, (c) deposit the Loan
Documents with a trust, which trust may sell certificates to investors
evidencing an ownership interest in the trust assets in a rated or unrated
public offering or private placement, or (d) otherwise sell the Loan or interest
therein to investors in a rated or unrated public offering or private placement
(the transactions referred to in clauses (a) through (d) are hereinafter
referred to as "Secondary
Market Transactions").
Borrower shall cooperate in good faith with Agent and Lender in effecting any
such Secondary Market Transaction and shall cooperate in good faith to implement
all requirements reasonably imposed by the participants involved in any
Secondary Market Transaction (including without limitation, an institutional
purchaser, participant or investor) including, without limitation, all
structural or other changes to the Loan, modifications to any documents
evidencing or securing the Loan, delivery of opinions of counsel reasonably
acceptable to such other purchasers, participants or investors may reasonably
require; provided,
however,
that
Borrower shall not be required to modify any documents evidencing or securing
the Loan which would (i) modify the interest rate payable under the Note, (ii)
modify the stated maturity of the Note, (iii) modify the amortization of
principal of the Note, (iv) modify or conflict with any other material terms
or
covenants of the Loan, (v) conflict with the Master Lease, (vi) increase
the Borrower's or Guarantor's liability or obligations under the Loan Documents
or (vii) reduce the Borrower's or Guarantor's rights under the Loan Documents,
including, but not limited to, Borrower's right to defease the Loan on the
terms
set forth in Section
2.9.
Borrower shall provide such information and documents relating to Borrower,
Guarantor and the Projects. Borrower acknowledges that certain information
regarding the Loan, Guarantor and the Projects may be included in a private
placement memorandum, prospectus or other disclosure documents.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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Section
7.25 Master
Lease.
Borrower
shall not, without Agent's prior written consent, amend or terminate the Master
Lease.
Section
7.26 Financial
Covenants.
(a) Commencing
on December 31, 2005, and as of the last day of each calendar quarter
thereafter, the average daily occupancy for the Projects taken as a whole for
the immediately preceding three (3) month period shall be greater than ninety
percent (90%) of the average daily occupancy at the Projects taken as a whole
for the three (3) month period immediately preceding the Closing. "Occupancy"
under
this Section 7.26
(a)
shall
mean beds occupied by a resident at any Project and paying at least applicable
Medicare, Medicaid or insurance reimbursable dates.
(b) Commencing
on December 31, 2005, and as of the last day of each calendar quarter
thereafter, through and including June 30, 2006, the Debt Service Coverage
Ratio (as determined by Agent) shall equal or exceed 1.15:1.00 and the Project
Yield (as determined by Agent) shall equal or exceed nine and one-half percent
(9.5%). Commencing on September 30, 2006, and as of the last day of each
calendar quarter thereafter through and including December 31, 2006, the
Debt Service Coverage Ratio (as determined by Agent) shall equal or exceed
1.20:1.0 and the Project Yield (as determined by Agent) shall equal or exceed
ten percent (10%). Commencing on March 31, 2007, and as of the last day of
each calendar quarter thereafter during the term of the Loan, Debt Service
Coverage Ratio (as determined by Agent) shall equal or exceed 1.25:1.00 and
Project Yield (as determined by Agent) shall equal or exceed ten and one-half
percent (10.5%).
ARTICLE
VIII
Health
Care Matters
Section
8.1 Healthcare
Laws.
(a) Without
limiting the generality of any other provision of this Agreement, Borrower
and
Guarantor and their respective employees and contractors (other than contracted
agencies) in the exercise of their duties on behalf of Borrower and Guarantor
(with respect to its operation of the Projects) shall be in compliance with
all
applicable Laws relating to patient healthcare and/or patient healthcare
information, including without limitation the Health Insurance Portability
and
Accountability Act of 1996, as amended, and the rules and regulations
promulgated thereunder ("HIPAA")
(collectively, "Healthcare
Laws")).
Borrower and Guarantor maintain in all material respects all records required
to
be maintained by any Governmental Authority or otherwise with respect to the
operations at the Projects under the Healthcare Laws and to Borrower's actual
knowledge there are no presently existing circumstances which would result
or
would reasonably be expected to result in material violations with respect
to
the operations at the Projects of the Healthcare Laws. Borrower and Guarantor
have and will maintain all Governmental Approvals
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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necessary
under applicable Laws to own and/or operate the Projects, as applicable
(including such Governmental Approvals as are required under such the Healthcare
Laws).
(b) If
(i) Borrower or Guarantor is a "covered entity" within the meaning of HIPAA
or (ii) Borrower and Guarantor (with respect to its operation of the
Project) is subject to the "Administrative Simplification" provisions of HIPAA,
then such Person(s) (x) have undertaken or will promptly undertake all necessary
surveys, audits, inventories, reviews, analyses and/or assessments (including
any necessary risk assessments) of all areas of its business and operations
required by HIPAA and/or that would reasonably be expected to be adversely
affected by the failure of such Person(s) to be HIPAA Compliant (as defined
below); (y) has developed or will promptly develop a detailed plan and time
line
for becoming HIPAA Compliant (a "HIPAA
Compliance Plan");
and
(z) has implemented or will implement those provisions of such HIPAA Compliance
Plan in all material respects necessary to ensure that such Person(s) are or
become HIPAA Compliant. For purposes hereof, "HIPAA
Compliant"
shall
mean that Borrower and Guarantor, as applicable (A) are or will be in compliance
with each of the applicable requirements of the so-called "Administrative
Simplification" provisions of HIPAA on and as of each date that any part
thereof, or any final rule or regulation thereunder, becomes effective in
accordance with its or their terms, as the case may be (each such date, a
"HIPAA
Compliance Date")
if and
to the extent Borrower or Guarantor are subjected to such provisions, rules
or
regulations, and (B) are not and would not reasonably be expected to
become, as of any date following any such HIPAA Compliance Date, the subject
of
any civil or criminal penalty, process, claim, action or proceeding, or any
administrative or other regulatory review, survey, process or proceeding (other
than routine surveys or reviews conducted by any government health plan or
other
accreditation entity) that would reasonably be expected to result in any of
the
foregoing or that would reasonably be expected to adversely affect Borrower's
or
Guarantor's business, operations, assets, properties or condition (financial
or
otherwise), in connection with any actual or potential violation by Borrower
or
Guarantor of the then effective provisions of HIPAA.
(c) If
required under applicable Law, Borrower and/or Guarantor has and shall maintain
in full force and effect a valid certificate of need ("CON")
or
similar certificate, license, or approval issued by the State Regulator for
the
requisite number of beds and units in the Projects (as shown on Exhibit
A
attached
hereto), and a provider agreement or other required documentation of approved
provider status for each provider payment or reimbursement program listed in
Exhibit E
hereto,
if applicable. All required Government Approvals necessary for operation of
the
Projects are listed on Exhibit F
hereto
(collectively with the CON, if applicable, the "Licenses").
Borrower and/or Guarantor shall operate the Projects in a manner such that
the
Licenses shall remain in full force and effect. True and complete copies of
the
Licenses have been delivered to Agent.
Section
8.2 Representations,
Warranties and Covenants Regarding Healthcare Matters.
Borrower
represents, warrants, covenants and agrees with Agent and Lenders
that:
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Loan Agreemnt Arizona Properties & GE Cap
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(a) Borrower,
together with Guarantor, is using and operating the Projects as an assisted
living and/or independent senior housing having the number of beds/units as
set
forth in Exhibit
A
attached
hereto (as modified from time to time with Agent's consent).
(b) All
Licenses necessary or desirable for using and operating the Projects for the
uses described in Section
8.2(a)
above
are held by Guarantor in the name of Guarantor, as required under applicable
law, and are in full force and effect, including, if applicable, the
CON.
(c) The
Licenses:
(i) Are
not
now and will not be pledged by Borrower or Guarantor as collateral security
for
any loan or indebtedness, other than the Loan;
(ii) Are
held
free and will remain free from restrictions (which for purposes hereof shall
include if any such licenses are provisional or probationary in any way) or
known conflicts which would materially impair the use or operation of the
Projects for the uses described in Section
8.2(a)
above;
and
(iii) Guarantor
shall at all times during the term of the Loan operate the Projects in
compliance with applicable Laws in order to maintain the Licenses free from
restrictions (which for purposes hereof shall include if any such licenses
are
provisional or probationary in any way) which would materially impair the use
or
operation of the Projects for the uses described in Section
8.2(a).
(d) Borrower
or Guarantor shall not do (or suffer to be done) any of the
following:
(i) Rescind,
withdraw, revoke, amend, modify, supplement, or otherwise alter the nature,
tenor or scope of the Licenses for the Projects without Agent's
consent;
(ii) Amend
or
otherwise change the Projects' authorized units/beds capacity and/or the number
of units/beds approved by the State Regulator; provided that Borrower may (if
permitted by applicable law) combine units at a Project so long as the number
of
total units at each Project is at least 90% of the total number of units at
such
Project as of the Closing;
(iii) Replace
or transfer all or any part of the Projects' units or beds to another site
or
location; or
(iv) Voluntarily
transfer or encourage the transfer of any resident of any Project to any other
facility, unless such transfer is at the request of the resident or is for
reasons relating to the health, required level of medical care or safety of
the
resident to be transferred, other residents in the applicable Project or the
employees of the applicable Project or is for reasons of non
payment.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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(e) If
and
when Borrower or Guarantor participates in Medicare, Medicaid, Blue Cross and/or
Blue Shield, and any other private commercial insurance managed care and
employee assistance program (such programs, the "Third-Party
Payor Programs"),
Borrower shall give Agent prompt written notice thereof and such information
with respect thereto as Agent may reasonably request, and the Projects will
remain in material compliance with all applicable requirements for participation
in any such Third Party Payor Programs, including the Medicare and Medicaid
Patient Protection Act of 1987, as it may be amended. The Projects are and
will
remain in conformance in all material respects with all insurance, reimbursement
and cost reporting requirements and, if applicable, have a current provider
agreement that is in full force and effect under Medicare and Medicaid;
provided, however, to the extent a Project is not certified to participate
in
any Third Party Payor Program as of the Closing and thereafter Borrower or
Guarantor elects to participate therein, nothing herein shall thereafter
preclude Borrower or Guarantor from voluntarily withdrawing from participation
in such Third Party Payor Programs.
(f) If
and to
the extent Borrower or Guarantor at any time during the term of the Loan elects
to participate in any Third Party Payor Programs with respect to any Project,
neither Borrower nor Guarantor shall, other than in the normal course of
business, change the term of any such Third-Party Payor Programs, or their
normal billing payment or reimbursement policies and procedures with respect
thereto (including the amount and timing of finance charges, fees and
write-offs). All Medicaid, Medicare and private insurance cost reports and
financial reports submitted by Borrower or Guarantor will be materially accurate
and complete and have not been and will not be misleading in any material
respects. If and to the extent Borrower or Guarantor at any time during the
terms of the Loan elects to participate in any Third Party Payor Programs with
respect to any Project, neither Borrower nor Guarantor shall permit any
revocation, suspension, termination, probation, restriction, limitation or
non-renewal with respect thereto, except as expressly permitted by the terms
of
Section 8.2(e) above.
(g) To
Borrower's actual knowledge, none of Borrower, the Projects or Guarantor is
subject of any proceeding by any Governmental Authority, and no notice of any
violation has been issued by a Governmental Authority that would, directly
or
indirectly, or with the passage of time:
(i) Have
a
material adverse impact on Borrower's or Guarantor's ability to accept and/or
retain patients or residents at, or operate, the Projects for their current
use
or result in the imposition of a fine, a sanction, or a lower reimbursement
rate
for services rendered to eligible patients or residents;
(ii) Modify,
limit or annul or result in the transfer, suspension, revocation or imposition
of probationary use of any of the Licenses; or
(iii) If
applicable, affect Borrower's or Guarantor's continued participation at the
Projects in the Medicaid or Medicare programs or any other of the Third-Party
Payor Programs, or any successor programs thereto, at then current rate
certifications.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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(h) To
Borrower's actual knowledge, the Projects have not received a "Level 1" (or
equivalent) violation, and no statement of charges or deficiencies has been
made
or penalty enforcement action has been undertaken against any Project by any
Governmental Authority during the last five calendar years.
(i) The
Projects do not currently participate in Medicare, Medicaid or any other Third
Party Payor Programs. Borrower or Guarantor is not a participant in any federal
program whereby any Governmental Authority may have the right to recover funds
by reason of the advance of federal funds, including those authorized under
the
Xxxx-Xxxxxx Act (42 U.S.C. 291, et
seq.),
as it
may be amended.
(j) Neither
Borrower nor Guarantor will enter into any patient or resident care agreements
with patients or residents of the Projects which deviate in any material adverse
respect from the form agreements which have been delivered to and approved
by
Agent pursuant to Section 4.2
of this
Loan Agreement.
(k) In
the
event the Master Lease is terminated or in the event of foreclosure or other
acquisition of any Project by Agent or its designee or any purchaser at a
foreclosure sale or by acceptance of a deed in lieu of foreclosure, Borrower,
Agent, any subsequent tenant or any subsequent purchaser need not under the
Healthcare Laws in effect as of the Closing obtain a CON prior to applying
for
and receiving Medicare or Medicaid payments provided that neither the services
offered at the Projects nor the number of beds operated would be changed, it
being understood and agreed that no representation or warranty is being made
as
to the requirements for a CON under the Healthcare Laws in effect at the time
such termination, foreclosure or acquisition occurs.
(l) All
patient or resident records at the Projects, including patient or resident
trust
fund accounts, are to Borrower's actual knowledge, true and correct in all
material respects, and all such records of the Projects maintained or developed
by Borrower or Guarantor will be true and correct in all material
respects.
Section
8.3 Cooperation.
(a) Upon
the
request of Agent during the continuance of an Event of Default hereunder or
under the other Loan Documents provided that Agent has elected as a result
of
such Event of Default to exercise its remedies on default, including its remedy
to take possession of the Projects or to seek to have a receiver appointed
to
assume operational responsibility for the Projects, Borrower shall, and shall
cause Guarantor to, complete, execute and deliver to Agent any applications,
notices, documentation, and other information reasonably necessary or desirable,
in Agent's reasonable judgment, to permit Agent or its designee (including
a
receiver) to obtain, maintain or renew any one or more of the Licenses for
the
Projects (or, to the extent permitted by applicable Laws, to become the owner
of
the existing Licenses for the Project) and to the extent permitted by applicable
Laws to obtain any other provider agreements or Governmental Approvals then
necessary or desirable for the operation of the Projects by Agent or its
designee for their then current use (including, without limitation, any
applications for change of ownership of the existing Licenses).
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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(b) In
furtherance and not in limitation of the foregoing, to the extent permitted
by
applicable Laws, (i) Agent is hereby authorized (without the consent of
Borrower or Guarantor) to submit any such applications, notices, documentation
or other information which Borrower caused to be delivered to Agent in
accordance with the above provisions to the applicable Governmental Authorities,
or to take such other steps as Agent may deem advisable to obtain, maintain
or
renew any License or other Governmental Approvals in connection with the
operation of the Projects by Agent or its designee (including a receiver) for
their then current use, and Borrower agrees to cooperate and to cause Guarantor
to cooperate with Agent in connection with the same and (ii) Borrower, upon
demand by Agent, shall take, and shall cause Guarantor to take, any action
which
is reasonably necessary or desirable, in Agent's reasonable judgment, to permit
Agent or its designee (including a receiver) to use, operate and maintain the
Projects for their current use.
(c) If
Borrower fails to comply with the provisions of this Section
8.3
for any
reason whatsoever, Borrower hereby irrevocably appoints Agent and its designee
as Borrower's attorney-in-fact, with full power of substitution, to take any
action and execute any documents and instruments which are reasonably necessary
or desirable, in Agent's reasonable judgment, to permit Agent or its designee
(including a receiver) to undertake Borrower's obligations under this
Section
8.3,
including obtaining any Licenses or Governmental Approvals then required for
the
operation of the Projects by Agent or its designee (including a receiver) for
their current use. The foregoing power of attorney is coupled with an interest
and is irrevocable and Agent may exercise its rights thereunder in addition
to
any other remedies which Agent may have against Borrower or Guarantor as a
result of Borrower's breach of the obligations contained in this Section
8.3.
(d) In
the
event of the exercise by Agent of the rights granted to it under this Section
8.3, Borrower shall not be deemed to be in default of its obligations or
representations under this Agreement with respect to the maintenance of the
Licenses, provider agreements or other Governmental Approvals in its name or
in
Guarantor's name nor shall Borrower or Guarantor have any liability or
responsibility to any third party for any matters arising from or related to
the
operation of the Projects by Agent or its designee (including a receiver) once
the Licenses, provider agreements or other Governmental Approvals have been
issued in the name of Agent or its designee (including a receiver).
ARTICLE
IX
EVENTS
OF DEFAULT
Each
of
the following shall constitute an Event of Default:
Section
9.1 Payments.
Failure
of Borrower to pay within five (5) days after the date when due any of the
payment obligations of Borrower due under the Loan Documents, or Borrower's
failure to pay the Loan at the Maturity Date, whether by acceleration or
otherwise.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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Section
9.2 Certain
Covenants.
Borrower's
failure to (a) maintain insurance as required under Section 3.1
of this
Agreement; (b) permit inspections as required by Section 7.1;
(c) strictly comply with the provisions of Section
7.2;
(d) maintain its status as a Single Purpose Entity as required by
Section 7.7;
(e) strictly comply with the provisions of Section 7.15
(payments under Master Lease), Section
7.21
(employees), Section
7.25
(Master
Lease), Section 7.26
(financial covenants), Section
8.1(c)
(licenses and other matters), and Sections 8.2(b)
and
(c) (licenses).
Section
9.3 Covenants.
Borrower's
failure to perform or observe any of the agreements and covenants contained
in
this Agreement or in any of the other Loan Documents, and the continuance of
such failure for thirty (30) days after notice by Agent to Borrower; however,
subject to any shorter period for curing any failure by Borrower as specified
in
any of the other Loan Documents, Borrower shall have an additional thirty (30)
days to cure such failure if (a) such failure does not involve the failure
to make payments on a monetary obligation; (b) such failure cannot
reasonably be cured within such thirty (30) day cure period; (c) Borrower
commenced to cure such failure promptly after written notice thereof and is
diligently undertaking to cure such default, and (d) Borrower has provided
Agent with security reasonably satisfactory to Agent against any interruption
of
payment or impairment of collateral as a result of such continuing failure;
provided that the notice and cure provisions of this Section 9.3
do not
apply to the Events of Default described in any other section of this
Article
IX.
Section
9.4 Representations
and Warranties.
Any
representation or warranty made in any Loan Document proves to be untrue in
any
material respect when made or deemed made.
Section
9.5 Other
Encumbrances.
Any
default under any document or instrument, other than the Loan Documents,
evidencing or creating in the aggregate any Debt of the Borrower in excess
of
$5,000 or evidencing or creating a Lien on the Projects or any part thereof,
unless such lien is being duly contested in accordance with the express
provisions of the Loan Documents.
Section
9.6 Involuntary
Bankruptcy or Other Proceeding.
Commencement
of an involuntary case or other proceeding against Borrower or
Guarantor (each,
a
"Bankruptcy
Party")
which
seeks liquidation, reorganization or other relief with respect to it or its
debts or other liabilities under any bankruptcy, insolvency or other similar
law
now or hereafter in effect or seeks the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any of its property,
and such involuntary case or other proceeding shall remain undismissed or
unstayed for a period of sixty (60) days; or an order for relief against a
Bankruptcy Party shall be entered in any such case under the Federal Bankruptcy
Code.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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Section
9.7 Voluntary
Petitions, etc.
Commencement
by a Bankruptcy Party of a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its Debts
or other liabilities under any bankruptcy, insolvency or other similar law
or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official for it or any of its property, or consent by a Bankruptcy
Party
to any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
the
making by a Bankruptcy Party of a general assignment for the benefit of
creditors, or the failure by a Bankruptcy Party, or the admission by a
Bankruptcy Party in writing of its inability to pay its debts generally as
they
become due, or any action by a Bankruptcy Party to authorize or effect any
of
the foregoing.
Section
9.8 Default
Under Master Lease.
The
termination of the Master Lease without Lender's prior written consent or the
occurrence of a default and the expiration of any cure period applicable thereto
under the Master Lease.
Section
9.9 False
Reports.
Any
statement, report or certificate made or delivered to Agent by Borrower or
Guarantor is not materially true and complete when made or
delivered.
Section
9.10 Control.
Guarantor
ceases at any time to, directly or indirectly, control the day-to-day management
of Borrower.
Section
9.11 Money
Laundering.
(a) Borrower
or Guarantor is listed on the Lists or (i) is convicted or (ii) pleads
nolo
contendere
to
charges involving money laundering or predicate crimes to money laundering.
(b) Borrower
or Guarantor is charged with crimes involving money laundering or predicate
crimes to money laundering, and Borrower or such other party does not, within
thirty (30) days, obtaining the dismissal of such charges without further
investigation.
(c) If
a
tenant under any Lease, Borrower or Guarantor is listed on the Lists or
(i) is convicted, or (ii) pleads nolo
contendere
to
charges involving money laundering or predicate crimes to money laundering,
and
proceeds from the rents of such tenant are used to pay debt service and Borrower
fails to give Agent such representations and verifications as Agent shall
reasonably request that such rents are not being used to pay debt
service.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
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Section
9.12 Loan
Documents.
The
occurrence of a default under any of the other Loan Documents, which continues
uncured beyond any applicable notice and grace periods provided under such
Loan
Document, or the occurrence of an "Event of Default" as defined in any other
Loan Document.
Section
9.13 Other
Defaults.
The
occurrence of a default under any other material contract or agreement to which
Borrower is a party which continues uncured beyond any applicable notice and
grace period provided under said contract or agreement and such default is
declared and is not cured within the greater of thirty (30) days thereafter
or
the time, if any, specified therefor in any agreement governing the
same.
ARTICLE
X
REMEDIES
Section
10.1 Remedies
- Insolvency Events.
Upon
the
occurrence of any Event of Default described in Section 9.7
or
9.8,
the
obligations of Lender to advance amounts hereunder shall immediately terminate,
and all amounts due under the Loan Documents immediately shall become due and
payable, all without written notice and without presentment, demand, protest,
notice of protest or dishonor, notice of intent to accelerate the maturity
thereof, notice of acceleration of the maturity thereof, or any other notice
of
default of any kind, all of which are hereby expressly waived by Borrower;
however, if the Bankruptcy Party under Section 9.7
or
9.8
is other
than Borrower, then all amounts due under the Loan Documents shall become
immediately due and payable at Lender's election, in Agent's sole
discretion.
Section
10.2 Remedies
- Other Events.
Except
as
set forth in Section 10.1
above,
while any Event of Default exists, Agent may (a) by written notice to Borrower,
declare the entire Loan to be immediately due and payable without presentment,
demand, protest, notice of protest or dishonor, notice of intent to accelerate
the maturity thereof, notice of acceleration of the maturity thereof, or other
notice of default of any kind, all of which are hereby expressly waived by
Borrower, (b) terminate the obligation, if any, of Lender to advance amounts
hereunder, and (c) exercise all rights and remedies therefore under the Loan
Documents and at law or in equity.
Section
10.3 Agent's
Right to Perform the Obligations.
If
Borrower shall fail, refuse or neglect to make any payment or perform any act
required by the Loan Documents, then while any Event of Default exists, and
without notice to or demand upon Borrower and without waiving or releasing
any
other right, remedy or recourse Agent or Lender may have because of such Event
of Default, Agent may (but shall not be obligated to) make such payment or
perform such act for the account of and at
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
41
the
expense of Borrower, and shall have the right to enter upon the Projects for
such purpose and to take all such action thereon and with respect to the
Projects as it may deem necessary or appropriate. If Agent shall elect to pay
any sum due with reference to the Projects, Agent may do so in reliance on
any
xxxx, statement or assessment procured from the appropriate governmental
authority or other issuer thereof without inquiring into the accuracy or
validity thereof. Similarly, in making any payments to protect the security
intended to be created by the Loan Documents, Agent shall not be bound to
inquire into the validity of any apparent or threatened adverse title, lien,
encumbrance, claim or charge before making an advance for the purpose of
preventing or removing the same. Additionally, if any Hazardous Materials (as
defined in the Environmental Indemnity) affect or threaten to affect the
Projects, Agent may (but shall not be obligated to) give such notices and take
such actions as it deems necessary or advisable in order to xxxxx the discharge
of any Hazardous Materials or remove the Hazardous Materials. In exercising
any
rights under the Loan Documents or taking any actions provided for therein,
Agent may act through its employees, agents or independent contractors as
authorized by Agent. Borrower shall indemnify Agent and Lender for all losses,
expenses, damages, claims and causes of action, including reasonable attorneys'
fees, incurred or accruing by reason of any acts performed by Agent or Lender
pursuant to the provisions of this Section 10.3,
including those arising from the joint, concurrent, or comparative negligence
of
Agent or Lender, except as a result of Agent or Lender's gross negligence or
willful misconduct. All reasonable sums paid by Agent or Lender pursuant to
this
Section 10.3,
and all
other reasonable sums expended by Agent or Lender to which they shall be
entitled to be indemnified, together with interest thereon at the Default Rate
from the date of such payment or expenditure until paid, shall constitute
additions to the Loan, shall be secured by the Loan Documents and shall be
paid
by Borrower to Agent upon demand.
ARTICLE
XI
MISCELLANEOUS
Section
11.1 Notices.
Any
notice required or permitted to be given under this Agreement shall be in
writing and either shall be mailed by certified mail, postage prepaid, return
receipt requested, or sent by overnight air courier service, or personally
delivered to a representative of the receiving party, or sent by telecopy
(provided an identical notice is also sent simultaneously by mail, overnight
courier, or personal delivery as otherwise provided in this Section 11.1).
All
such communications shall be mailed, sent or delivered, addressed to the party
for whom it is intended at its address set forth below.
If
to
Borrower: Emeritus
Properties-Arkansas, LLC
c/o
Emeritus Corporation
0000
Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxxxxx 00000
Attention: Xxxxxxx
X. Xxxxxxxxxx, CFO
Facsimile: (000)
000-0000
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
42
With
a
copy to: The
Xxxxxxxxx Group PLLC
0000
Xxxxxx Xxxxxx, Xxxxx
Xxxxx
Xxxxxxx,
Xxxxxxxxxx
00000
Attention: Xxxxx
X.
Xxxxxxxxx, Esq.
Facsimile: (000)
000-0000
If
to
Agent: General
Electric Capital Corporation
Loan
No. 07-0004235
0
Xxxxxxxx Xxxxx Xxxxxx, Xxxxx
000
Xxxxxxxx,
Xxxxxxxx
00000
Attention: Manager,
Portfolio Management Group
Facsimile: (000)
000-0000
With
a
copy to: General
Electric Capital Corporation
Loan
No. 07-0004235
000
Xxxx Xxxxxx
Xxxxxx
Xxxxxxx,
Xxxxxxxx
00000
Attention: Xxxx
Xxxx
Facsimile: (000)
000-0000
And
a
copy to: GE
Commercial Finance, Healthcare Financial Services
Loan
No. 07-0004235
0000
Xxxxxxxxx
Xxxxxx
Xxxxxx,
Xxxxx 00000
Attention: Xxxxx
Xxxxxxxxxx, Senior Vice President,
Chief
Counsel, Real
Estate
Facsimile: (000)
000-0000
Notices
shall be deemed given (1) when actually delivered, (2) on the first Business
Day
after deposit with an overnight air courier service for delivery on the next
Business Day, or (3) on the third Business Day after deposit in the United
States mail, postage prepaid, in each case to the address of the intended
addressee and any communication so delivered in person shall be deemed to be
given when receipted for, or actually received by, Agent or Borrower, as the
case may be. If given by telecopy, a notice shall be deemed given and received
when the telecopy is transmitted to the party's telecopy number specified above,
if confirmation of complete receipt is received by the transmitting party during
normal business hours or on the next Business Day if not confirmed during normal
business hours, and an identical notice is also sent simultaneously by overnight
courier or personal delivery as otherwise provided in this Section 11.1.
Either
party may designate a change of address by written notice to the other by giving
at least ten (10) days prior written notice of such change of
address.
Section
11.2 Amendments
and Waivers.
No
amendment or waiver of any provision of the Loan Documents shall be effective
unless in writing and signed by the party against whom enforcement is
sought.
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Loan Agreemnt Arizona Properties & GE Cap
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Section
11.3 Limitation
on Interest.
It
is the
intention of the parties hereto to conform strictly to applicable usury laws.
Accordingly, all agreements between Borrower, Agent and Lender with respect
to
the Loan are hereby expressly limited so that in no event, whether by reason
of
acceleration of maturity or otherwise, shall the amount paid or agreed to be
paid to Lender or charged by Lender for the use, forbearance or detention of
the
money to be lent hereunder or otherwise, exceed the maximum amount allowed
by
law. If the Loan would be usurious under applicable law, then, notwithstanding
anything to the contrary in the Loan Documents: (a) the aggregate of all
consideration which constitutes interest under applicable law that is contracted
for, taken, reserved, charged or received under the Loan Documents shall under
no circumstances exceed the maximum amount of interest allowed by applicable
law, and any excess shall be credited on the Note the holder thereof (or, if
the
Note has been paid in full, refunded to Borrower); and (b) if maturity is
accelerated by reason of an election by Agent or Lender, or in the event of
any
prepayment, then any consideration which constitutes interest may never include
more than the maximum amount allowed by applicable law. In such case, excess
interest, if any, provided for in the Loan Documents or otherwise, to the extent
permitted by applicable law, shall be amortized, prorated, allocated and spread
from the date of advance until payment in full so that the actual rate of
interest is uniform through the term hereof. If such amortization, proration,
allocation and spreading is not permitted under applicable law, then such excess
interest shall be cancelled automatically as of the date of such acceleration
or
prepayment and, if theretofore paid, shall be credited on the Note (or, if
the
Note has been paid in full, refunded to Borrower). The terms and provisions
of
this Section 11.3
shall
control and supersede every other provision of the Loan Documents. The Loan
Documents are contracts made under and shall be construed in accordance with
and
governed by the laws of the State of Illinois, except that (1) if at any
time the laws of the United States of America permit Lender to contract for,
take, reserve, charge or receive a higher rate of interest than is allowed
by
the laws of the State of Illinois (whether such federal laws directly so provide
or refer to the law of any state), then such federal laws shall to such extent
govern as to the rate of interest which Lender may contract for, take, reserve,
charge or receive under the Loan Documents and (2) to the extent otherwise
specified in any of the Loan Documents.
Section
11.4 Invalid
Provisions.
If
any
provision of any Loan Document is held to be illegal, invalid or unenforceable,
such provision shall be fully severable; the Loan Documents shall be construed
and enforced as if such illegal, invalid or unenforceable provision had never
comprised a part thereof; the remaining provisions thereof shall remain in
full
effect and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance therefrom; and in lieu of such illegal, invalid
or
unenforceable provision there shall be added automatically as a part of such
Loan Document a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible to be legal, valid and
enforceable.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
44
Section
11.5 Reimbursement
of Expenses; Portfolio Administration Fee.
(a) Borrower
shall pay all expenses incurred by Agent and Lenders in connection with the
Loan, including, without limitation, (i) reasonable out-of-pocket costs and
expenses of Agent and Lender in connection with (a) the negotiation,
preparation, execution and delivery of the Loan Documents and the documents
and
instruments referred to therein; (b) due diligence with respect to the
Collateral and the creation, perfection or protection of Agent's liens on the
Collateral (including, without limitation, fees and expenses for title and
lien
searches, premiums for title insurance and endorsements thereto, amended or
replacement Security Documents, Uniform Commercial Code financing statements
or
other collateral security instruments, title insurance premiums and filing
and
recording fees, third party due diligence expenses for the Projects plus travel
expenses, accounting firm fees, costs of the appraisals and Site Assessments
(and the environmental consultant), the engineering reports, audit costs and
costs and fees incurred in connection with arranging, setting up, servicing
any
pledged accounts or similar collateral); (c) the negotiation, preparation,
execution and delivery of any amendment, waiver, restructuring, workout or
consent relating to any of the Loan Documents, (d) the settlement of any dispute
regarding condemnation and casualty awards and (e) the preservation of rights
under and enforcement of the Loan Documents and the documents and instruments
referred to therein, including any communications or discussions relating to
any
action that Borrower shall from time to time request Agent to take, as well
as
any restructuring or rescheduling of the Loan, (ii) the reasonable fees,
expenses and other charges of counsel to Agent and the Lender in connection
with
all of the foregoing, (iii) all reasonable fees and expenses of any servicer
appointed by Agent to service and administer the Loan and its counsel, and
(iv)
Agent's or Lender's reasonable travel and other out-of-pocket expenses in
connection with site visits to the Projects. Borrower shall, upon request,
promptly reimburse Agent and Lender for all reasonable amounts expended,
advanced or incurred by Agent and Lender to collect the Note, or to enforce
the
rights of Agent and Lender under this Agreement or any other Loan Document,
or
to defend or assert the rights and claims of Agent and Lender under the Loan
Documents or with respect to the Projects (by litigation or other proceedings),
which amounts will include all reasonable court costs, attorneys' fees and
expenses, fees of auditors and accountants, and investigation expenses as may
be
incurred by Agent and Lender in connection with any such matters (whether or
not
litigation is instituted), together with interest at the Default Rate on each
such amount from the date of disbursement until the date of reimbursement to
Agent, all of which shall constitute part of the Loan and shall be secured
by
the Loan Documents.
(b) Borrower
shall also pay to Agent on the first (1st) day of each month during the term
of
the Loan, in addition to all other amounts due under the Loan Documents, the
sum
of Three Hundred and No/100 Dollars ($300.00), which Agent shall apply against
the cost of the administration of the Loan.
Section
11.6 Approvals;
Third Parties; Conditions.
All
approval rights retained or exercised by Agent with respect to leases,
contracts, plans, studies and other matters are solely to facilitate Lender's
credit underwriting,
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
45
and
shall
not be deemed or construed as a determination that Agent or Lender has passed
on
the adequacy thereof for any other purpose and may not be relied upon by
Borrower or any other Person. This Agreement is for the sole and exclusive
use
of Agent, Lender and Borrower and may not be enforced, nor relied upon, by
any
Person other than Agent, Lender and Borrower. All conditions of the obligations
of Agent or Lender hereunder, including the obligation to make advances, are
imposed solely and exclusively for the benefit of Agent and Lender, and their
respective successors and assigns, and no other Person shall have standing
to
require satisfaction of such conditions or be entitled to assume that Lender
will refuse to make advances in the absence of strict compliance with any or
all
of such conditions, and no other Person shall, under any circumstances, be
deemed to be a beneficiary of such conditions, any and all of which may be
freely waived in whole or in part by Agent or Lender, as applicable, at any
time
in Agent's or Lender's sole discretion.
Section
11.7 Lender
Not in Control; No Partnership.
None
of
the covenants or other provisions contained in this Agreement shall, or shall
be
deemed to, give Agent or Lender the right or power to exercise control over
the
affairs or management of Borrower, the power of Agent and Lender being limited
to the right to exercise the remedies referred to in the Loan Documents. The
relationship between Borrower, on the one hand, and Agent and Lender, on the
other hand, is, and at all times shall remain, solely that of debtor and
creditor. No covenant or provision of the Loan Documents is intended, nor shall
it be deemed or construed, to create a partnership, joint venture, agency or
common interest in profits or income between Agent and Lender, on the one hand,
and Borrower, on the other hand, or to create an equity in the Projects in
Lender or Agent. Neither Agent nor Lender either undertakes or assumes any
responsibility or duty to Borrower or to any other person with respect to the
Projects or the Loan, except as expressly provided in the Loan Documents; and
notwithstanding any other provision of the Loan Documents (a) Neither Agent
nor Lender is nor shall be construed as, a partner, joint venturer, alter ego,
manager, controlling person or other business associate or participant of any
kind of Borrower or its stockholders, members, or partners and neither Agent
nor
Lender intends to ever assume such status; (b) Neither Agent nor Lender
shall in any event be liable for any Debts, expenses or losses incurred or
sustained by Borrower; and (c) Neither Agent nor Lender shall be deemed
responsible for or a participant in any acts, omissions or decisions of Borrower
or its stockholders, members, or partners. Agent, and Lender, on the one hand,
and Borrower, on the other hand, disclaim any intention to create any
partnership, joint venture, agency or common interest in profits or income
between Agent and Lender, on the one hand, and Borrower, on the other hand,
or
to create an equity in the Projects in Agent or Lender, or any sharing of
liabilities, losses, costs or expenses.
Section
11.8 Time
of the Essence.
Time
is
of the essence with respect to this Agreement.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
46
Section
11.9 Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of Agent, Lender and
Borrower and the respective successors and assigns of Agent, Lender and
Borrower, provided that, except as expressly provided herein, neither Borrower
nor Guarantor shall, without the prior written consent of Agent, assign any
rights, duties or obligations hereunder.
Section
11.10 Renewal,
Extension or Rearrangement.
All
provisions of the Loan Documents shall apply with equal effect to each and
all
promissory notes and amendments thereof hereinafter executed which in whole
or
in part represent a renewal, extension, increase or rearrangement of the Loan.
For portfolio management purposes, Agent and Lender may elect to divide the
Loan
into two or more separate loans evidenced by separate promissory notes so long
as the payment and other obligations of Borrower are not effectively increased
or otherwise modified. Borrower agrees to cooperate with Agent and to execute
such documents as Agent reasonably may request to effect such division of the
Loan.
Section
11.11 Waivers;
Forbearance.
No
advance of Loan proceeds hereunder shall constitute a waiver of any of the
conditions to Lender's obligation to make advances nor, in the event Borrower
is
unable to satisfy any such condition, shall any such advance have the effect
of
precluding Lender or Agent from thereafter requiring such condition to be
satisfied prior to any future advance to which such condition otherwise applies.
No course of dealing on the part of Agent or Lender, or their respective
officers, employees, consultants or agents, nor any failure or delay by Agent
or
Lender with respect to exercising any right, power or privilege of Agent or
Lender under any of the Loan Documents, shall operate as a waiver thereof.
Any
forbearance by Agent or Lender in exercising any right or remedy under any
of
the Loan Documents, or otherwise afforded by applicable law, shall not be a
waiver of or preclude the exercise of any right or remedy. Agent's acceptance
of
payment of any sum secured by any of the Loan Documents after the due date
of
such payment shall not be a waiver of Agent's or Lender's right to either
require prompt payment when due of all other sums so secured or to declare
a
Potential Default for failure to make prompt payment. The procurement of
insurance or the payment of taxes or other liens or charges by Agent or Lender
shall not be a waiver of Agent's or Lender's right to accelerate the maturity
of
the Loan, nor shall Agent's or Lender's receipt of any awards, proceeds, or
damages under this Agreement or the Security Documents operate to cure or waive
Borrower's or Guarantor's Potential
Default in payment of sums secured by any of the Loan Documents.
Section
11.12 Cumulative
Rights.
Rights
and remedies of Agent and Lender under the Loan Documents shall be cumulative,
and the exercise or partial exercise of any such right or remedy shall not
preclude the exercise of any other right or remedy.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
47
Section
11.13 Singular
and Plural.
Words
used in this Agreement and the other Loan Documents in the singular, where
the
context so permits, shall be deemed to include the plural and vice versa. The
definitions of words in the singular in this Agreement and the other Loan
Documents shall apply to such words when used in the plural where the context
so
permits and vice versa.
Section
11.14 Phrases.
When
used
in this Agreement and the other Loan Documents, the phrase "including" shall
mean "including, but not limited to," the phrase "satisfactory to Agent" or
"satisfactory to Lender" shall mean "in form and substance satisfactory to
Agent
in all respects" or "in form and substance satisfactory to Lender in all
respects" (as applicable), the phrase "with Agent's consent", "with Agent's
approval", "with Lender's consent" or "with Lender's approval" shall mean such
consent or approval at Agent's or Lender's discretion (as applicable), and,
unless otherwise specifically provided to the contrary herein, the phrase
"acceptable to Agent" or "acceptable to Lender" shall mean "acceptable to Agent
at Agent's sole discretion" or "acceptable to Lender at Lender's sole
discretion" (as applicable).
Section
11.15 Exhibits
and Schedules.
The
exhibits and schedules attached to this Agreement are incorporated herein and
shall be considered a part of this Agreement for the purposes stated
herein.
Section
11.16 Titles
of Articles, Sections and Subsections.
All
titles or headings to articles, sections, subsections or other divisions of
this
Agreement and the other Loan Documents or the exhibits hereto and thereto are
only for the convenience of the parties and shall not be construed to have
any
effect or meaning with respect to the other content of such articles, sections,
subsections or other divisions, such other content being controlling as to
the
agreement between the parties hereto.
Section
11.17 Promotional
Material.
Borrower
authorizes Agent and Lender to issue press releases, advertisements and other
promotional materials in connection with Lender's own promotional and marketing
activities, and describing the Loan in general terms and Lender's and Agents
participation in the Loan; provided, however, Agent and Lender shall be required
to secure Borrower's approval of such materials prior to the issuance or
distribution thereof, which approval shall not be unreasonably withheld. All
references to Lender or Agent contained in any press release, advertisement
or
promotional material issued by Borrower or Affiliate of Borrower shall be
approved in writing by Agent in advance of issuance.
Section
11.18 Survival.
All
of
the representations, warranties, covenants, and indemnities hereunder, and
under
the indemnification provisions of the other Loan Documents shall survive the
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
48
repayment
in full of the Loan and the release of the liens evidencing or securing the
Loan, and shall survive the transfer (by sale, foreclosure, conveyance in lieu
of foreclosure or otherwise) of any or all right, title and interest in and
to
the Projects to any party, whether or not an Affiliate of Borrower.
Section
11.19 WAIVER
OF JURY TRIAL.
TO
THE
MAXIMUM EXTENT PERMITTED BY LAW, BORROWER, AGENT AND LENDER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT
OF
ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF ANY PARTY OR ANY
EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS OR
IN
ANY WAY RELATING TO THE LOAN OR THE PROJECTS (INCLUDING, WITHOUT LIMITATION,
ANY
ACTION TO RESCIND OR CANCEL THIS AGREEMENT, AND ANY CLAIM OR DEFENSE ASSERTING
THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE).
THIS WAIVER IS A MATERIAL INDUCEMENT FOR LENDER AND BORROWER TO ENTER THIS
AGREEMENT.
Section
11.20 Waiver
of Punitive or Consequential Damages.
Neither
Agent, Lender nor Borrower shall be responsible or liable to the other or to
any
other Person for any punitive, exemplary or consequential damages which may
be
alleged as a result of the Loan or the transaction contemplated hereby,
including any breach or other Potential Default by any party
hereto.
Section
11.21 Governing
Law.
The
laws
of the State of Illinois and of the United States of America shall govern the
rights and duties of the parties hereto and the validity, construction,
enforcement and interpretation of the Loan Documents, except to the extent
otherwise specified in any of the Loan Documents.
Section
11.22 Entire
Agreement.
This
Agreement and the other Loan Documents embody the entire agreement and
understanding between Agent, Lender and Borrower and supersede all prior
agreements and understandings between such parties relating to the subject
matter hereof and thereof. Accordingly, the Loan Documents may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties. There are no unwritten oral agreements among the
parties. If any conflict or inconsistency exists between the Commitment and
this
Agreement or any of the other Loan Documents, the terms of this Agreement and
the other Loan Documents shall control.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
49
Section
11.23 Counterparts.
This
Agreement may be executed in multiple counterparts, each of which shall
constitute an original, but all of which shall constitute one
document.
Section
11.24 Venue.
BORROWER
HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN
THE COUNTY OF XXXX, STATE OF ILLINOIS AND IRREVOCABLY AGREES THAT, SUBJECT
TO
AGENT OR LENDER'S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN
SUCH COURTS. BORROWER EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF
THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. BORROWER HEREBY
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE
OF PROCESS MAY BE MADE UPON BORROWER BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO BORROWER, AT THE ADDRESS SET FORTH IN THIS
AGREEMENT.
Section
11.25 Sale
of Loan, Participation.
Lender
or
Agent, at any time and without the consent of Borrower or Guarantor, may grant
participations in or sell, transfer, assign and convey all or any portion of
its
right, title and interest in and to the Loan, this Agreement and the other
Loan
Documents, any guaranties given in connection with the Loan and any collateral
given to secure the Loan. Subject to the limitations of applicable Laws,
including, but not limited to, Laws governing the rights of the residents of
the
Projects and the confidentiality of the records of those residents, Agent and
Lender shall have the right (but shall be under no obligation) to make available
to any party for the purpose of granting participations in or selling,
transferring, assigning or conveying all or any part of the Loan (including
any
governmental agency or authority and any prospective bidder at any foreclosure
sale of any Project) any and all information which Agent or Lender may have
with
respect to the Projects and Borrower, whether provided by Borrower, Guarantor
or
any third party or obtained as a result of any environmental assessments.
Borrower and Guarantor agree that, absent gross negligence or willful
misconduct, Agent and Lender shall have no liability whatsoever as a result
of
delivering any such information to any third party, and Borrower and Guarantor,
on behalf of themselves and their successors and assigns, hereby release and
discharge Agent and Lender from any and all liability, claims, damages, or
causes of action, arising out of, connected with or incidental to the delivery
of any such information to any third party absent gross negligence or willful
misconduct.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
50
Section
11.26 Limitation
on Liability of Agent's and Lender's Officers, Employees, etc.
Any
obligation or liability whatsoever of Agent or Lender which may arise at any
time under this Agreement or any other Loan Document shall be satisfied, if
at
all, out of the Agent's or Lender's assets only. No such obligation or liability
shall be personally binding upon, nor shall resort for the enforcement thereof
be had to, the property of any of Agent's or Lender's shareholders, directors,
officers, employees or agents, regardless of whether such obligation or
liability is in the nature of contract, tort or otherwise.
Section
11.27 Effectiveness
of Facsimile Documents and Signatures.
The
Loan
Documents may be transmitted and/or signed by facsimile. The effectiveness
of
any such documents and signatures shall, subject to applicable law, have the
same force and effect as manually signed originals and shall be binding on
all
parties to the Loan Documents. Agent may also require that any such documents
and signatures be confirmed by a manually signed original thereof; provided,
however, that the failure to request or deliver the same shall not limit the
effectiveness of any facsimile document or signature.
Section
11.28 Agency.
Both
GECC
and the other Lenders agree that GECC shall act as agent for each Lender in
all
dealings with Borrower and Guarantor under or in connection with this Loan
Agreement and each of the other Loan Documents, including without limitation,
granting any consents or waivers, taking any enforcements actions, sending
or
receiving notices, dealing with collateral, granting releases, accepting
payments or otherwise. Borrower and Guarantor may rely without question upon
any
document signed by GECC as agent for each Lender hereunder or under any other
Loan Documents. References to "Lender" in this Agreement and in the other Loan
Documents shall refer to each of GECC and the other financial institutions
who
are or hereafter become parties to this Agreement as Lenders, individually,
or
to all of GECC and the other financial institutions who are or hereafter become
parties to this Agreement, collectively, as the context may require; provided
any and all grants of security interests to a Lender under this Agreement or
any
other Loan Document shall be deemed to be a grant to GECC as agent for each
Lender.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
51
EXECUTED
as of the date first written above.
LENDER:
GENERAL
ELECTRIC CAPITAL CORPORATION,
a
Delaware corporation
By:
/s/ Xxx XxXxxxx
Name:
Xxx XxXxxxx
Its:
Vice President
|
BORROWER:
EMERITUS
PROPERTIES-ARKANSAS, LLC,
a
Delaware limited liability company
|
||
By:
|
EMERITUS
CORPORATION, a Washington corporation, its sole member
|
|
By:
/s/ Xxxxxxx X. Xxxxxxxxxx
Name:
Xxxxxxx X. Xxxxxxxxxx
Its:
Vice President of Finance
|
AGENT:
GENERAL
ELECTRIC CAPITAL CORPORATION,
a
Delaware corporation
By:
/s/ Xxx XxXxxxx
Name:
Xxx XxXxxxx
Its:
Vice President
|
Signature
Page to Loan Agreement
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
EXHIBIT
A-1
The
Project
Name
of Facility:
|
Trillium
Park
|
Address
of Land:
|
0000
Xxxxx Xxxx, Xxxxxx, Xxxxxxxx
|
Master
Tenant:
|
Emeritus
Corporation
|
Number
of Independent/Assisted Living Beds/Units:
|
80
units (independent living and assisted living)
|
Number
of Parking Spaces:
|
56
regular, 2 handicapped
|
Legal
Description of Land:
|
See
Attached
|
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
TRILLIUM
PARK
LEGAL
DESCRIPTION
Xxx
0,
Xxxxxxxx Xxxxx Xxxxx 0, to the City of Conway, Arkansas as shown on plat of
record in plat book I, page 98, records of Xxxxxxxx County,
Arkansas.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
EXHIBIT
A-2
The
Project
Name
of Facility:
|
Willow
Brook Retirement Community
|
Address
of Land:
|
0000
Xxxxxx Xxxx, Xxxx Xxxxx, Xxxxxxxx
|
Master
Tenant:
|
Emeritus
Corporation
|
Number
of Independent/Assisted Living Beds/Units:
|
93
units (retirement and residential care)
|
Number
of Parking Spaces:
|
48
regular, 4 handicapped
|
Legal
Description of Land:
|
See
Attached
|
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
WILLOWBROOK
LEGAL
DESCRIPTION
Lot
1,
Camlu Addition to the City of Fort Xxxxx, Arkansas, according to plat
filed
May
14, 1990.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
EXHIBIT
A-3
The
Project
Name
of Facility:
|
Wildflower
|
Address
of Land:
|
000
X. Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxx
|
Master
Tenant:
|
Emeritus
Corporation
|
Number
of Independent/Assisted Living Beds/Units:
|
80
units (retirement and residential care)
|
Number
of Parking Spaces:
|
58
regular, 2 handicapped
|
Legal
Description of Land:
|
See
Attached
|
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
WILDFLOWER
LEGAL
DESCRIPTION
A
part of
the NE 1/4
of the
SW 1/4
of
Section 6, Township 7 North, Range 20 West, Russellville, Xxxx County, Arkansas,
more particularly described as follows: Commencing at the Southeast Corner
of
said NE 1/4
of the
SW 1/4;
thence S 89° 59' 41" West, 38.80 feet to a point on the West right of way of
South Inglewood Avenue; thence N 0° 13' 30" East, along said right of way, 91.14
feet to the Point of Beginning; thence S 89° 59' 41" West, 599.99 feet to the XX
Xxxxxx xx Xxx 00, Xxxxxxxxx Xxxxxx Xxxxxx Xxxx to the City of Russellville,
Arkansas; thence N 13° 15' 00" East, along the East line of Lots 16 and 15 of
said Xxxxxxxxx Xxxxxx Xxxxxx Xxxx, 000.00 feet; thence N 47° 14' 34" East, along
the Southerly line of Lots 15, 14, and 13 of said Xxxxxxxxx Xxxxxx Xxxxxx Xxxx,
000.00 feet; thence South 90° 00' 00" East, 183.87 feet to a point on the
Southerly line of Xxx 0 xx xxxx Xxxxxxxxx Xxxxxx Xxxxxx Xxxx; thence S 66° 30'
04" East, along said Southerly line, 183.89 feet to the SE Corner of said Lot
4
and a point on the West Right-of-Way of South Inglewood Avenue; thence S 00° 24'
04" West, along said Right-of-Way 395.00 feet to the Point of
Beginning.
And,
A
part of
Xxx 0, Xxxxxxxxx Xxxxxx Xxxxxx Xxxx to the City of Russellville, Arkansas,
more
particularly described as: Commencing at the Southeast Corner of said NE ¼ of
the SW ¼ ; thence South 89°59' 41" West, 38.80 feet to a point on the West
Right-of-Way line of South Inglewood Avenue; thence North 00° 13' 30" East,
along said Right of Way line, 91.14 feet to a point; thence along said
Right-of-Way line North 00° 24' 04" East 395.00 feet to the Point of Beginning;
thence North 66° 30' 04" West 183.89 feet; thence South 89° 46' 26" East 169.15
feet to a point located on said West Right-of-Way line of South Inglewood
Avenue; thence along said West Right-of-Way line South 00° 24' 04" West 72.81
feet to the Point of Beginning.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
EXHIBIT
B
Interest
Holder Certificate and Agreement
To: General
Electric Capital Corporation, as Agent
000
Xxxx
Xxxxxx Xxxxxx
Xxxxx
0000
Xxxxxxx,
Xxxxxxxx 00000
Date:
_________________
Re:
|
Loan
Agreement dated as of ___________ ____, 20__ among
_______________________ ("Borrower"),
and General Electric Capital Corporation, a Delaware corporation,
as Agent
and, in its individual capacity as a Lender, "GECC",
and the other financial institutions who are or become parties to
said
Loan Agreement as lenders (collectively with GECC, the "Lender"),
(as it may be amended from time to time, the "Loan
Agreement")
|
To
induce
Agent and Lender to enter into the Loan Agreement with Borrower, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned represents, warrants, covenants and agrees for
the
benefit of Agent and Lender as follows:
1. The
undersigned [members] [partners]
(collectively, "Owners"
and in
their individual capacity, "Owner")
represent and warrant to Agent and Lender that the Owners own, in the aggregate,
100% of the direct ownership interests in Borrower, and that neither Borrower
nor any Owner is or shall be and, after due inquiry, that no Person who owns
a
controlling interest in or otherwise controls Borrower or any Owner, is or
shall
be, (a) listed on the Specially Designated Nationals and Blocked Persons List
(the "SDN
List")
maintained by the Office of Foreign Assets Control ("OFAC"),
Department of the Treasury, and/or on any other similar publicly-available
United States government list ("Other
Lists"
and,
collectively with the SDN List, the "Lists")
maintained by the OFAC pursuant to any authorizing statute, Executive Order
or
regulation (collectively, "OFAC
Laws and Regulations");
or
(b) a Person (a "Designated
Person")
either
(i) included within the term "designated national" as defined in the Cuban
Assets Control Regulations, 31 C.F.R. Part 515, or (ii) designated under
Sections 1(a), 1(b), 1(c) or 1(d) of Executive Order No. 13224, 66 Fed. Reg.
49,079 (published September 25, 2001),
or
similarly designated under any related enabling legislation or any other similar
Executive Orders (collectively, the "Executive
Orders").
The
OFAC Laws and Regulations and the Executive Orders are collectively referred
to
in this Agreement as the "Anti
Terrorism Laws".
Each
Owner and Borrower shall be required, and shall take reasonable measures to
ensure compliance with such requirement, that no Person who owns any other
direct interest in any Owner or Borrower is or shall be listed on any of the
Lists or is or shall be a Designated Person. This
Exhibit
B-
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
Section
1
shall not apply to any Person to the extent that such Person's interest in
Borrower is through a U.S. Publicly-Traded Entity. As used in this Agreement
"U.S.
Publicly-Traded Entity"
means a
Person (other than an individual) whose securities are listed on a national
securities exchange, or quoted on an automated quotation system, in the United
States, or a wholly-owned subsidiary of such a Person. From time to time upon
the written request of Agent, each Owner shall deliver to Borrower a schedule
of
the name, legal domicile address and (for entities) place of organization of
each holder of a controlling ownership interest in such Owner.
2. Each
Owner represents and warrants that all evidence of identity provided by it
to
Borrower is genuine and that all related information is accurate and that it
has
acquired, or is acquiring, and shall hold, its interest in Borrower for its
own
account, risk and beneficial interest and without the obligation or intention
to
sell, distribute, assign or transfer all or a portion of such interest to any
other Person.
3. Each
Owner represents and warrants that it has taken, and agrees that it shall
continue to take, reasonable measures appropriate to the circumstances (and
in
any event as required by law), with respect to each holder of a controlling
ownership interest in such Owner and Borrower, to assure that funds invested
by
such holders in Borrower are derived from legal sources (the "Anti
Money Laundering Measures").
The
Anti Money Laundering Measures have been and shall be undertaken in accordance
with the Bank Secrecy Act, 31 U.S.C. §§ 5311 et
seq. ("BSA"),
to the extent applicable and all applicable laws, regulations and government
guidance on BSA compliance and on the prevention and detection of money
laundering violations under 18 U.S.C. §§ 1956 and 1957 (collectively,
"Anti
Money Laundering Laws").
4. Each
Owner represents and warrants, to its knowledge after making due inquiry, that
neither it nor any holder of a controlling ownership interest in any Owner
or in
Borrower (a) is under investigation by any governmental authority for, or has
been charged with, or convicted of, money laundering under 18 U.S.C.
§§ 1956 and 1957, drug trafficking, terrorist related activities, other
money laundering predicate crimes or any violation of the BSA, (b) has been
assessed civil penalties under Anti Money Laundering Laws, or (c) has had its
funds seized or forfeited in an action under any Anti Money Laundering
Laws.
5. Each
Owner shall immediately notify Agent if such Owner obtains actual knowledge
that
Borrower, any Owner, or any holder of a direct or indirect interest in Borrower
or any Owner, or any director, manager or officer of any of them, (a) has been
listed on any of the Lists, (b) has become a Designated Person, (c) is under
investigation by any governmental authority for, or has been charged with or
convicted of, money laundering, drug trafficking, terrorist related activities,
other money laundering predicate crimes, or any violation of the BSA, (d) has
been assessed civil penalties under any Anti Money Laundering Laws, or (e)
has
had funds seized or forfeited in an action under any Anti Money Laundering
Laws.
6. Each
Owner acknowledges and agrees that if any of the representations or warranties
of the undersigned set forth herein are false, misleading or incorrect in any
Exhibit
B-2
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
material
respect as of the date made, Agent, in addition to all of its other rights
and
remedies, may declare that an Event of Default exists under the Loan Agreement.
Each Owner agrees to notify Borrower and Agent promptly of any change in facts
or circumstances that causes any of the representations or warranties contained
herein to the untrue.
7. Each
Owner represents and warrants that it has taken, and agrees that it shall
continue to take, reasonable measures, appropriate to the circumstances (and
in
any event as required by law), to ensure that it and Borrower are and shall
be
in compliance with all current and future applicable Anti-Money Laundering
Laws,
and other applicable laws, regulations and government guidance for the
prevention of terrorism, terrorist financing and drug trafficking.
8. In
addition to the representations, warranties and covenants regarding full
compliance with Anti-Terrorism Laws and Anti-Money Laundering Laws, each Owner
represents and warranties that it is, and agrees that it shall remain, in
compliance in all material respects with all other laws and requirements
applicable to it, its business and its assets, the violation of which would
have
a material adverse effect on its ability to perform its obligations under the
Borrower's operating agreement or on the Borrower's ability to perform its
obligations under the Loan Agreement.
9. Each
Owner shall cause to be made, all payments owed by Borrower to Agent by check
or
wire transfer drawn on an account owned by Borrower, or by an Owner or another
Person approved in writing in advance by Agent, and maintained at a banking
institution organized under the laws of the United States or one of its
constituent States, or at a federally regulated U.S. branch or agency of a
foreign bank, or at a federally regulated securities broker dealer.
10. If
the
applicable Anti-Money Laundering Measures do not provide, in Agent's reasonable
determination, adequate means to assure that Persons that are listed on any
of
the Lists, or that are Designated Persons, or whose funds are not derived from
legal sources, are excluded from becoming or being direct or indirect investors
in any Owner or Borrower, Agent shall notify Borrower of its determination
in
accordance with the notice provisions in the Loan Agreement. If such inadequate
Anti-Money Laundering Measures are not modified in a commercially reasonable
manner to Agent's reasonable satisfaction within thirty (30) days following
notice to Borrower of Agent's determination, each of the undersigned
acknowledges that Agent, in addition to all of its other rights and remedies,
may declare that an Event of Default exists.
11. No
transfer of any direct interest in Borrower or of any controlling ownership
interest in Owner shall be effective unless and until the transferor has
provided a written certification to Borrower that, after making due inquiry,
(a) the transferee or any Person who owns a controlling interest in, or
otherwise controls, the transferee is not listed on any of the Lists and is
not
a Designated Person, and the transferee has taken reasonable measures to assure
that no holder of any other controlling ownership interest in the transferee
is
so listed or is so designated; provided, however, that none of the foregoing
shall apply to any Person
Exhibit
B-3
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
which
is,
or to the extent that such interest is through, a U.S. Publicly-Traded Entity,
and (b) the funds for investment in Owner or Borrower are derived from
legal sources.
12. Each
Owner acknowledges and agrees that if at any time Borrower or Agent reasonably
believes that such Owner has breached its representations and warranties or
its
agreements set forth herein, Borrower has the right or may be obligated to
block
such Owner's investment in Borrower, to prohibit additional investments, to
segregate the assets constituting such Owner's the investment in accordance
with
applicable Anti-Terrorism Laws, to decline any redemption request or to redeem
the Investor's investment. Each Owner further acknowledges that it will have
no
claim against Borrower, Lender or Agent or any of their respective affiliates
or
agents for any form of damages as a result of any of the foregoing
actions.
13. Each
Owner shall require each Person that proposes to become a holder of any direct
interest in Borrower or of any controlling ownership interest in Owner to sign
an agreement substantially in the form of this Agreement and to deliver the
same
to Borrower.
14. Capitalized
terms used in this Agreement and not defined in this Agreement shall have the
meanings assigned to them in the Loan Agreement. Any notice sent to Agent under
this Agreement shall be sent in accordance with the notice provisions set forth
in the Loan Agreement.
15. The
undersigned acknowledges that (a) Lender is relying on this Agreement and
its rights hereunder in entering into the Loan Agreement and in advancing
proceeds of the Loan, and (b) any terms hereof applying to more than one of
the undersigned are made on a joint and several basis hereunder. This Agreement
may be executed in counterparts.
Exhibit
B-4
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
IN
WITNESS WHEREOF, each of the undersigned have executed and delivered this
Agreement as of the date set forth above.
OWNER:
Exhibit
B-5
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
EXHIBIT
C
INTELLECTUAL
PROPERTY
None
but
Guarantor holds or has applied for registration of the following service marks,
some of all of which may be used by Guarantor and/or Borrower in connection
with
the ownership and operation of the Projects:
XXXX
|
STATUS
|
REG.
NO.
|
REG.
DATE
|
APP.
NO.
|
EMERITUS
|
Registered
|
2333116
|
March
21, 2000
|
75725728
|
EMERITUS
ASSISTED LIVING COMMUNITIES SUPPORT ALZHEIMER'S EDUCATION & AWARENESS
& Design
|
Pending
|
78530077
|
||
EMERITUS
SIGNATURE SERVICES
|
Registered
|
2840150
|
May
11, 2004
|
78191071
|
FLEXASSIST
|
Registered
|
2041109
|
February
25, 1997
|
74614956
|
JOIN
THEIR JOURNEY
|
Registered
|
2979178
|
July
26, 2005
|
78292378
|
XXXXXXXX
PLACE
|
Registered
|
2283749
|
October
5, 1999
|
75304451
|
LOYALTON
|
Registered
|
2443087
|
April
10, 2001
|
75534864
|
THE
START OF SOMETHING WONDERFUL
|
Registered
|
2249729
|
June
1, 1999
|
75503469
|
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
EXHIBIT
D
OWNERSHIP
OF BORROWER
Guarantor
is the sole member of Borrower and accordingly owns 100% of the membership
interests in Borrower.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
EXHIBIT
E
PROVIDER
PAYMENT/REIMBURSEMENT PROGRAMS
NONE
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
EXHIBIT
F
GOVERNMENTAL
APPROVALS
Willow
Brook, Fort Xxxxx
· |
Elevator
Certificate of Operation issued by the Arkansas Department of
Labor
|
· |
Elevator
Certificate of Operation issued by the Arkansas Department of
Labor
|
· |
Mechanical
Room Certificate issued by the Arkansas Department of
Labor
|
· |
Mechanical
Room Certificate issued by the Arkansas Department of
Labor
|
· |
Mechanical
Room Certificate issued by the Arkansas Department of
Labor
|
· |
Mechanical
Room Certificate issued by the Arkansas Department of
Labor
|
· |
Mechanical
Room Certificate issued by the Arkansas Department of
Labor
|
· |
Business
Permit issued by the City of Fort Xxxxx,
Arkansas
|
· |
Food
Permit issued by the Arkansas Department of
Health
|
· |
Residential
Care Facility License issued by the Arkansas Department of Human
Services
|
Wildflower,
Russellville
· |
Boiler
Room Certificate issued by the Arkansas Department of
Labor
|
· |
Boiler
Room Certificate issued by the Arkansas Department of
Labor
|
· |
Boiler
Room Certificate issued by the Arkansas Department of
Labor
|
· |
Boiler
Room Certificate issued by the Arkansas Department of
Labor
|
· |
Boiler
Room Certificate issued by the Arkansas Department of
Labor
|
· |
Elevator
Certificate of Operation issued by the Arkansas Department of
Labor
|
· |
Elevator
Certificate of Operation issued by the Arkansas Department of
Labor
|
· |
Business
Permit issued by the City of Russellville,
Arkansas
|
· |
Residential
Care Facility License issued by the Arkansas Department of Human
Services
|
Trillium
Park, Conway
· |
Mechanical
Room Certificate issued by the Arkansas Department of
Labor
|
· |
Mechanical
Room Certificate issued by the Arkansas Department of
Labor
|
· |
Mechanical
Room Certificate issued by the Arkansas Department of
Labor
|
· |
Assisted
Living I Facility License issued by the Arkansas Department of Human
Services
|
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
SCHEDULE
2.1
ADVANCE
CONDITIONS
Part
A -
Conditions to Initial Advance
Part
B -
Application of Insurance Proceeds
PART
A
CONDITIONS
TO INITIAL ADVANCE
The
initial advance of the Loan shall be subject to the terms of the Term Sheet,
and
Agent's receipt, review, approval and/or confirmation of the following items
set
forth in Part A of this Schedule
2.1,
at
Borrower's cost and expense, each in form and content satisfactory to Agent
in
its sole discretion:
1. Loan
Documents.
The
following Loan Documents:
(a) |
the
Loan Agreement executed by Borrower
|
(b) |
Promissory
Note
|
(c) |
the
Security Documents executed by
Borrower
|
(d) |
such
Uniform Commercial Code financing statements as Agent may
require
|
(e) |
an
Environmental Indemnity Agreement executed by Borrower and
Guarantor
|
(f) |
the
Business Associate Agreement executed by Borrower and
Guarantor.
|
(g) |
a
Payment and Performance Guaranty executed by
Guarantor
|
(h) |
the
Assignment of Membership Interests
|
(i) |
the
Subordination, Attornment and Security Agreement ("Subordination
Agreement")
|
2. |
Loan
Origination Fee.
The loan origination fee of $159,300, which fee shall be non-refundable
and shall be deemed fully earned upon receipt.
|
3. |
Title
Insurance Policies.
An ALTA (or equivalent) mortgagee policy or policies of title insurance
in
the maximum amount of the Loan, with reinsurance and endorsements
as Agent
may require, containing no exceptions to title (printed or otherwise)
which are unacceptable to Agent, and insuring that the applicable
Security
Documents are a first-priority Lien on the Projects and related collateral
(the "Title
Policy").
|
Schedule
2.1-1
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
4. |
Organizational
and Authority Documents.
Certified copies of all documents evidencing the formation, organization,
valid existence, good standing, and due authorization of and for
Borrower
and Guarantor for the execution, delivery, and performance of the
Loan
Documents by Borrower and Guarantor, as
applicable.
|
5. |
Legal
Opinions.
Legal opinions issued by counsel for Borrower and Guarantor, opining
as to
the due organization, valid existence and good standing of Borrower
and
Guarantor, and the due authorization, execution, delivery, enforceability
and validity of the Loan Documents with respect to Borrower and Guarantor;
that the Loan, as reflected in the Loan Documents is not usurious;
and as
to such other matters as Agent and Agent's counsel reasonably may
specify.
|
6. |
Searches.
Current Uniform Commercial Code, tax, judgment lien and litigation
searches for Borrower, Guarantor and the immediately preceding owners
of
the Projects.
|
7. |
Insurance.
Evidence of insurance as required by this Agreement, and conforming
in all
respects to the requirements of
Agent.
|
8. |
Survey.
Three (3) originals of a current "as-built" survey of the Projects,
dated
or updated to a date not earlier than forty-five (45) days prior
to the
Closing Date, prepared by a registered land surveyor in accordance
with
the American Land Title Association/ American Congress on Surveying
and
Mapping Standards and containing Agent's approved form of certification
in
favor of Agent and the title insurer. The surveyor shall certify
that no
portion of any Project is in a flood hazard area as identified by
the
Secretary of Housing and Urban Development (or, if any portion of
any
Project is in such a flood hazard area, then the survey shall certify
to
the hazard designation of the affected portion of the property,)
and shall
conform to Agent's current survey requirements. The survey shall
be
sufficient for the title insurer to remove the general survey
exception.
|
9. |
Property
Condition Report.
A
current engineering report or architect's certificate with respect
to the
Projects, covering, among other matters, inspection of heating and
cooling
systems, roof and structural details and showing no failure of compliance
with building plans and specifications, applicable legal requirements
(including requirements of the Americans with Disabilities Act) and
fire,
safety and health standards. As requested by Agent, such report shall
also
include an assessment of each Project's tolerance for earthquake
and
seismic activity.
|
10. |
Environmental
Reports.
A
current Site Assessment for each
Project.
|
Schedule
2.1-2
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
11. |
Occupancy
Summary.
A
current occupancy summary of the Projects, certified by Borrower
or the
current owner of the Projects. Such occupancy summary shall include
the
following information: (a) tenant names and, if applicable, guarantor
names but only to the extent such names can be disclosed by Borrower
without violating applicable Laws governing the confidentiality of
resident records/information including, but not limited to, HIPAA;
(b) unit/suite numbers; (c) for non-residential tenants, area of
each demised premises and total area of the Projects (stated in net
rentable square feet); (d) rental rate (including escalations)
(stated in gross amount and in amount per net rentable square foot
per
year); (e) for non-residential tenants, lease term (commencement,
expiration and renewal options); (f) for non-residential tenants,
expense pass-throughs; (g) for non-residential tenants,
cancellation/termination provisions; (h) security deposit; and
(i) for non-residential tenants, material operating covenants and
co-tenancy clauses. All leases of, subleases of and occupancy agreements
affecting the Projects or any part thereof now existing or hereafter
executed (including all patient and resident care agreements and
service
agreements which include an occupancy agreement) and all amendments,
modifications or supplements thereto ("Leases")
shall be in form and substance, with tenants and for uses acceptable
to
Agent; provided, however, this requirement shall be met with respect
to
residential tenants provided Borrower uses the form of residential
Lease
submitted to, and approved by, Agent prior to the Closing Date without
material modification, other than modifications made in accordance
with
statutory, regulatory or other legal requirements; and, provided,
further,
with respect to non-residential tenants (excluding the tenant under
the
Master Lease) to whom Borrower or the tenant under the Master Lease
has
leased less than 500 square feet, no such approval shall be required.
On
the Closing Date: (a) all Leases shall be in full force and effect;
and
(b) Borrower shall have submitted a revised and recertified occupancy
summary.
|
12. |
Master
Lease.
A
copy of the Master Lease, certified by Borrower as being true, correct
and
complete.
|
13. |
Tax
Impounds.
Borrower's deposit with Agent of the amount required by Agent to
impound
for Taxes and to fund any other required escrows or reserves.
|
14. |
Compliance
With Laws.
Evidence that the Projects and the operation thereof comply with
all legal
requirements, including that all requisite certificates of occupancy,
building permits, and other licenses, certificates, approvals or
consents
required of any governmental authority have been issued without variance
or condition and that there is no litigation, action, citation, injunctive
proceedings, or like matter pending or threatened with respect to
the
validity of such matters. If
|
Schedule
2.1 -3
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
title
insurance with respect to the Projects described in item 3 above does not
include a Zoning 3.1 (with parking) endorsement because such an endorsement
is
not available in the State where the applicable Project is located, then
Borrower shall furnish to Agent a zoning letter from the applicable municipal
agency with respect to the Projects. Borrower shall, upon request of Agent,
furnish Agent with utility letters from applicable service
providers.
15. |
No
Casualty or Condemnation.
No condemnation or adverse zoning or usage change proceeding shall
have
occurred or shall have been threatened against any Project; the Projects
shall not have suffered any significant damage by fire or other casualty
which has not been repaired; no law, regulation, ordinance, moratorium,
injunctive proceeding, restriction, litigation, action, citation
or
similar proceeding or matter shall have been enacted, adopted, or
threatened by any governmental authority, which would, in Agent's
reasonable judgment, result in a Material Adverse
Change.
|
16. |
Audit
Requirement.
The annualized Net Operating Income of the Projects equals or exceeds
$1,580,000 for the six month period ending August 31,
2005.
|
17. |
Borrower's
Equity.
Borrower's cash investment in the Projects is at least $2,170,000
("Borrower's
Equity").
|
18. |
Broker's
Fees.
All fees and commissions payable to real estate brokers, mortgage
brokers,
or any other brokers or agents in connection with the Loan or the
acquisition of the Projects have been paid, such evidence to be
accompanied by any waivers or indemnifications deemed necessary by
Agent.
|
19. |
Costs
and Expenses.
Payment of Agent's costs and expenses in underwriting, documenting,
and
closing the transaction, including fees and expenses of Agent's inspecting
engineers, consultants and counsel.
|
20. |
Representations
and Warranties.
The representations and warranties contained in this Loan Agreement
and in
all other Loan Documents are true and correct in all material
respects.
|
21. |
No
Defaults.
No Potential Default or Event of Default or default under any of
the Loan
Documents shall have occurred or
exist.
|
22. |
Appraisal.
Agent shall obtain an appraisal report for the Projects, in form
and
content acceptable to Agent, prepared by an independent MAI appraiser
in
accordance with the Financial Institutions Reform, Recovery and
Enforcement Act ("FIRREA")
and the regulations promulgated pursuant to such
act.
|
Schedule
2.1-4
EX-10.86.4 Loan Agreemnt Arizona Properties & GE Cap
23. |
Acquisition
Documents.
Agent shall have reviewed and approved the purchase contracts for
the
Projects and the closing statements with respect thereto (the
"Acquisition
Documents").
|
24. |
Agent
shall have received such other items as Agent may reasonably
require.
|
PART
B
APPLICATION
OF INSURANCE PROCEEDS
Insurance
proceeds applied to restoration will be advanced in accordance with Section
3.2
and on
the following terms and conditions:
1. Each
request for such an advance shall specify the amount requested, shall be on
forms satisfactory to Agent, and shall be accompanied by appropriate invoices,
bills paid affidavits, lien waivers, title updates, endorsements to the title
insurance, and other documents as may be required by Agent. Such advances may
be
made, at Agent's election, either: (a) in reimbursement for expenses paid
by Borrower, or (b) for payment of expenses incurred and invoiced but not
yet paid by Borrower, or (c) with respect to non-residential tenant
restorations, by funding allowances for tenant improvements undertaken to be
constructed by non-residential tenants and completed in accordance with Leases.
Agent, at its option and without further direction from Borrower, may disburse
any restorations advance to the Person to whom payment is due or through an
escrow satisfactory to Agent. Borrower hereby irrevocably directs and authorizes
Agent to so advance the insurance proceeds. Agent may, at Borrower's expense,
conduct an audit, inspection, or review of the Projects to confirm the amount
of
the requested restoration advance.
2. Borrower
shall have submitted and Agent shall have approved, which approval shall not
be
unreasonably withheld, (a) the restorations to be completed, (b) the
plans and specifications for such restorations, which plans and specifications
may not be changed in any material respect without Agent's prior written
consent, which consent shall not be unreasonably withheld and (c) if
requested by Agent, each contract or subcontract for an amount in excess of
Fifty Thousand Dollars ($50,000) for the performance of labor or the furnishing
of materials for such restorations.
3. Borrower
shall have submitted and Agent shall have approved the time schedule for
completing the restorations, which approval shall not be unreasonably withheld.
After Agent's approval of a detailed budget, such budget may not be changed
in
any material respect without Agent's prior written consent, which consent shall
not be unreasonably withheld. If the estimated cost of such restorations exceeds
the unadvanced portion of the amount allocated for such restorations in the
approved budget, then Borrower shall comply with the requirements of Section
9
hereof.
4. All
restorations constructed by Borrower prior to the date a restorations advance
is
requested shall be completed to the satisfaction of Agent and Agent's engineer
Schedule
2.1 - 5
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
and
in
accordance with the plans and budget for such restorations, as approved by
Agent
in accordance with the terms hereof, and all legal
requirements.
5. Borrower
shall not use any portion of any restorations advance for payment of any other
cost except as specifically set forth in a request for advance approved by
Agent
in writing.
6. Each
restorations advance, except for a final restorations advance, shall be in
the
amount of actual costs incurred less
ten
percent (10%) of such costs as retainage to be advanced as part of a final
restorations advance.
7. Agent
shall not under any circumstances be obligated to make any restorations advance
after nine (9) months after the casualty or ninety (90) days prior to the
Maturity Date.
8. No
funds
will be advanced for materials stored at the Projects unless Borrower furnishes
Agent satisfactory evidence that such materials are properly stored and secured
at the Projects.
9. Borrower
shall have delivered evidence satisfactory to Agent, in its sole discretion,
that the amount remaining to be disbursed for such restorations is sufficient
to
complete the restorations or, if insufficient, Borrower shall have deposited
with Agent funds necessary to complete the restorations (Borrower's deposit
to
be disbursed before any balance of the additional advance).
Schedule
2.1 - 6
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
SCHEDULE
2.3
AMORTIZATION
SCHEDULE
Emeritus
|
First
Payment Date
|
1/1/2006
|
Payment
|
($112,082.33)
|
||||
Original
Balance
|
$15,930,000
|
Coupon
|
300
|
|||||
Maturity
Date
|
Int
Conv
|
Actual/360
|
Period
|
Date
|
Days
|
Ending
Balance
|
Payment
|
Interest
|
Principal
|
Prepayment
|
Balloon
Amount
|
0
|
12/1/2005
|
15,930,000.00
|
||||||
1
|
1/1/2006
|
31
|
15,913,254.30
|
112,082.33
|
95,336.63
|
16,745.71
|
0.00
|
0.00
|
2
|
2/1/2006
|
31
|
15,896,408.37
|
112,082.33
|
95,236.41
|
16,845.92
|
0.00
|
0.00
|
3
|
3/1/2006
|
28
|
15,870,254.96
|
112,082.33
|
85,928.92
|
26,153.41
|
0.00
|
0.00
|
4
|
4/1/2006
|
31
|
15,853,151.70
|
112,082.33
|
94,979.07
|
17,103.26
|
0.00
|
0.00
|
5
|
5/1/2006
|
30
|
15,832,885.54
|
112,082.33
|
91,816.17
|
20,266.16
|
0.00
|
0.00
|
6
|
6/1/2006
|
31
|
15,815,558.63
|
112,082.33
|
94,755.42
|
17,326.91
|
0.00
|
0.00
|
7
|
7/1/2006
|
30
|
15,795,074.74
|
112,082.33
|
91,598.44
|
20,483.89
|
0.00
|
0.00
|
8
|
8/1/2006
|
31
|
15,777,521.55
|
112,082.33
|
94,529.13
|
17,553.20
|
0.00
|
0.00
|
9
|
9/1/2006
|
31
|
15,759,863.30
|
112,082.33
|
94,424.08
|
17,658.25
|
0.00
|
0.00
|
10
|
10/1/2006
|
30
|
15,739,056.85
|
112,082.33
|
91,275.87
|
20,806.46
|
0.00
|
0.00
|
11
|
11/1/2006
|
31
|
15,721,168.40
|
112,082.33
|
94,193.88
|
17,888.45
|
0.00
|
0.00
|
12
|
12/1/2006
|
30
|
15,700,137.84
|
112,082.33
|
91,051.77
|
21,030.56
|
0.00
|
0.00
|
13
|
1/1/2007
|
31
|
15,682,016.47
|
112,082.33
|
93,960.96
|
18,121.37
|
0.00
|
0.00
|
14
|
2/1/2007
|
31
|
15,663,786.65
|
112,082.33
|
93,852.51
|
18,229.82
|
0.00
|
0.00
|
15
|
3/1/2007
|
28
|
15,636,375.79
|
112,082.33
|
84,671.47
|
27,410.86
|
0.00
|
0.00
|
16
|
4/1/2007
|
31
|
15,617,872.83
|
112,082.33
|
93,579.37
|
18,502.96
|
0.00
|
0.00
|
17
|
5/1/2007
|
30
|
15,596,244.01
|
112,082.33
|
90,453.51
|
21,628.82
|
0.00
|
0.00
|
18
|
6/1/2007
|
31
|
15,577,500.87
|
112,082.33
|
93,339.19
|
18,743.14
|
0.00
|
0.00
|
19
|
7/1/2007
|
30
|
15,555,638.23
|
112,082.33
|
90,219.69
|
21,862.64
|
0.00
|
0.00
|
20
|
8/1/2007
|
31
|
15,536,652.08
|
112,082.33
|
93,096.17
|
18,986.16
|
0.00
|
0.00
|
21
|
9/1/2007
|
31
|
15,517,552.29
|
112,082.33
|
92,982.55
|
19,099.78
|
0.00
|
0.00
|
22
|
10/1/2007
|
30
|
15,495,342.45
|
112,082.33
|
89,872.49
|
22,209.84
|
0.00
|
0.00
|
23
|
11/1/2007
|
31
|
15,475,995.44
|
112,082.33
|
92,735.32
|
19,347.01
|
0.00
|
0.00
|
24
|
12/1/2007
|
30
|
15,453,544.92
|
112,082.33
|
89,631.81
|
22,450.52
|
0.00
|
0.00
|
25
|
1/1/2008
|
31
|
15,433,947.76
|
112,082.33
|
92,485.17
|
19,597.16
|
0.00
|
0.00
|
Schedule
2.3 - 1
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
Period
|
Date
|
Days
|
Ending
Balance
|
Payment
|
Interest
|
Principal
|
Prepayment
|
Balloon
Amount
|
26
|
2/1/2008
|
31
|
15,414,233.32
|
112,082.33
|
92,367.89
|
19,714.44
|
0.00
|
0.00
|
27
|
3/1/2008
|
29
|
15,388,449.29
|
112,082.33
|
86,298.30
|
25,784.03
|
0.00
|
0.00
|
28
|
4/1/2008
|
31
|
15,368,462.56
|
112,082.33
|
92,095.59
|
19,986.74
|
0.00
|
0.00
|
29
|
5/1/2008
|
30
|
15,345,389.24
|
112,082.33
|
89,009.01
|
23,073.32
|
0.00
|
0.00
|
30
|
6/1/2008
|
31
|
15,325,144.80
|
112,082.33
|
91,837.89
|
20,244.44
|
0.00
|
0.00
|
31
|
7/1/2008
|
30
|
15,301,820.60
|
112,082.33
|
88,758.13
|
23,324.20
|
0.00
|
0.00
|
32
|
8/1/2008
|
31
|
15,281,315.42
|
112,082.33
|
91,577.15
|
20,505.18
|
0.00
|
0.00
|
33
|
9/1/2008
|
31
|
15,260,687.52
|
112,082.33
|
91,454.43
|
20,627.90
|
0.00
|
0.00
|
34
|
10/1/2008
|
30
|
15,236,990.00
|
112,082.33
|
88,384.82
|
23,697.51
|
0.00
|
0.00
|
35
|
11/1/2008
|
31
|
15,216,096.82
|
112,082.33
|
91,189.15
|
20,893.18
|
0.00
|
0.00
|
36
|
12/1/2008
|
30
|
15,192,141.05
|
112,082.33
|
88,126.56
|
23,955.77
|
0.00
|
0.00
|
37
|
1/1/2009
|
31
|
15,170,979.47
|
112,082.33
|
90,920.74
|
21,161.59
|
0.00
|
0.00
|
38
|
2/1/2009
|
31
|
15,149,691.24
|
112,082.33
|
90,794.10
|
21,288.23
|
0.00
|
0.00
|
39
|
3/1/2009
|
28
|
15,119,501.40
|
112,082.33
|
81,892.50
|
30,189.83
|
0.00
|
0.00
|
40
|
4/1/2009
|
31
|
15,097,905.09
|
112,082.33
|
90,486.02
|
21,596.31
|
0.00
|
0.00
|
41
|
5/1/2009
|
30
|
15,073,264.79
|
112,082.33
|
87,442.03
|
24,640.30
|
0.00
|
0.00
|
42
|
6/1/2009
|
31
|
15,051,391.77
|
112,082.33
|
90,209.30
|
21,873.03
|
0.00
|
0.00
|
43
|
7/1/2009
|
30
|
15,026,482.08
|
112,082.33
|
87,172.64
|
24,909.69
|
0.00
|
0.00
|
44
|
8/1/2009
|
31
|
15,004,329.07
|
112,082.33
|
89,929.32
|
22,153.01
|
0.00
|
0.00
|
45
|
9/1/2009
|
31
|
14,982,043.48
|
112,082.33
|
89,796.74
|
22,285.59
|
0.00
|
0.00
|
46
|
10/1/2009
|
30
|
14,956,732.16
|
112,082.33
|
86,771.00
|
25,311.33
|
0.00
|
0.00
|
47
|
11/1/2009
|
31
|
14,934,161.71
|
112,082.33
|
89,511.89
|
22,570.44
|
0.00
|
0.00
|
48
|
12/1/2009
|
30
|
14,908,573.07
|
112,082.33
|
86,493.69
|
25,588.64
|
0.00
|
0.00
|
49
|
1/1/2010
|
31
|
14,885,714.41
|
112,082.33
|
89,223.67
|
22,858.66
|
0.00
|
0.00
|
50
|
2/1/2010
|
31
|
14,862,718.94
|
112,082.33
|
89,086.87
|
22,995.46
|
0.00
|
0.00
|
51
|
3/1/2010
|
28
|
14,830,977.87
|
112,082.33
|
80,341.25
|
31,741.08
|
0.00
|
0.00
|
52
|
4/1/2010
|
31
|
14,807,654.82
|
112,082.33
|
88,759.28
|
23,323.05
|
0.00
|
0.00
|
53
|
5/1/2010
|
30
|
14,781,333.49
|
112,082.33
|
85,761.00
|
26,321.33
|
0.00
|
0.00
|
54
|
6/1/2010
|
31
|
14,757,713.33
|
112,082.33
|
88,462.18
|
23,620.15
|
0.00
|
0.00
|
55
|
7/1/2010
|
30
|
14,731,102.76
|
112,082.33
|
85,471.76
|
26,610.57
|
0.00
|
0.00
|
56
|
8/1/2010
|
31
|
14,707,181.99
|
112,082.33
|
88,161.56
|
23,920.77
|
0.00
|
0.00
|
57
|
9/1/2010
|
31
|
14,683,118.06
|
112,082.33
|
88,018.40
|
24,063.93
|
0.00
|
0.00
|
58
|
10/1/2010
|
30
|
14,656,075.45
|
112,082.33
|
85,039.73
|
27,042.60
|
0.00
|
0.00
|
59
|
11/1/2010
|
31
|
14,631,705.66
|
112,082.33
|
87,712.54
|
24,369.79
|
0.00
|
0.00
|
60
|
12/1/2010
|
30
|
14,604,365.30
|
112,082.33
|
84,741.96
|
27,340.37
|
0.00
|
0.00
|
61
|
1/1/2011
|
31
|
14,579,686.04
|
112,082.33
|
87,403.07
|
24,679.26
|
0.00
|
0.00
|
Schedule
2.3 - 2
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
Period
|
Date
|
Days
|
Ending
Balance
|
Payment
|
Interest
|
Principal
|
Prepayment
|
Balloon
Amount
|
62
|
2/1/2011
|
31
|
14,554,859.08
|
112,082.33
|
87,255.37
|
24,826.96
|
0.00
|
0.00
|
63
|
3/1/2011
|
28
|
14,521,453.85
|
112,082.33
|
78,677.10
|
33,405.23
|
0.00
|
0.00
|
64
|
4/1/2011
|
31
|
14,496,278.38
|
112,082.33
|
86,906.87
|
25,175.46
|
0.00
|
0.00
|
65
|
5/1/2011
|
30
|
14,468,153.67
|
112,082.33
|
83,957.61
|
28,124.72
|
0.00
|
0.00
|
66
|
6/1/2011
|
31
|
14,442,659.22
|
112,082.33
|
86,587.88
|
25,494.45
|
0.00
|
0.00
|
67
|
7/1/2011
|
30
|
14,414,223.95
|
112,082.33
|
83,647.07
|
28,435.26
|
0.00
|
0.00
|
68
|
8/1/2011
|
31
|
14,388,406.75
|
112,082.33
|
86,265.13
|
25,817.20
|
0.00
|
0.00
|
69
|
9/1/2011
|
31
|
14,362,435.04
|
112,082.33
|
86,110.62
|
25,971.71
|
0.00
|
0.00
|
70
|
10/1/2011
|
30
|
14,333,535.14
|
112,082.33
|
83,182.44
|
28,899.89
|
0.00
|
0.00
|
71
|
11/1/2011
|
31
|
14,307,235.04
|
112,082.33
|
85,782.23
|
26,300.10
|
0.00
|
0.00
|
72
|
12/1/2011
|
30
|
14,278,015.45
|
112,082.33
|
82,862.74
|
29,219.59
|
0.00
|
0.00
|
73
|
1/1/2012
|
31
|
14,251,383.07
|
112,082.33
|
85,449.96
|
26,632.37
|
0.00
|
0.00
|
74
|
2/1/2012
|
31
|
14,224,591.31
|
112,082.33
|
85,290.57
|
26,791.76
|
0.00
|
0.00
|
75
|
3/1/2012
|
29
|
14,192,146.94
|
112,082.33
|
79,637.95
|
32,444.38
|
0.00
|
0.00
|
76
|
4/1/2012
|
31
|
14,165,000.66
|
112,082.33
|
84,936.06
|
27,146.27
|
0.00
|
0.00
|
77
|
5/1/2012
|
30
|
14,134,957.30
|
112,082.33
|
82,038.96
|
30,043.37
|
0.00
|
0.00
|
78
|
6/1/2012
|
31
|
14,107,468.76
|
112,082.33
|
84,593.79
|
27,488.54
|
0.00
|
0.00
|
79
|
7/1/2012
|
30
|
14,077,092.19
|
112,082.33
|
81,705.76
|
30,376.57
|
0.00
|
0.00
|
80
|
8/1/2012
|
31
|
14,049,257.34
|
112,082.33
|
84,247.49
|
27,834.84
|
0.00
|
0.00
|
81
|
9/1/2012
|
31
|
14,021,255.92
|
112,082.33
|
84,080.90
|
28,001.43
|
0.00
|
0.00
|
82
|
10/1/2012
|
30
|
13,990,380.03
|
112,082.33
|
81,206.44
|
30,875.89
|
0.00
|
0.00
|
83
|
11/1/2012
|
31
|
13,962,026.23
|
112,082.33
|
83,728.54
|
28,353.79
|
0.00
|
0.00
|
84
|
########
|
29
|
0.00
|
112,082.33
|
78,167.96
|
33,914.37
|
13,928,111.86
|
13,962,026.23
|
Schedule
2.3 - 3
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
SCHEDULE
2.8
SOURCES
AND USES
SOURCES
|
USES
|
Borrower's
Equity: $2,170,000
|
Purchase
Price: $17,700,000
|
Loan: $15,930,000
|
Closing
Costs: $
240,700
|
Application
Fee: $
159,300
|
|
Total: $18,100,000
|
Total: $18,100,000
|
Schedule
2.8 - 1
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
SCHEDULE
3.1
INSURANCE
EXCEPTIONS
1. |
Borrower
does not maintain a separate boiler and machinery policy. Rather
such
coverage is included within Borrower's property insurance
policy.
|
2. |
Borrower
only maintains terrorism insurance with respect to property damage
and not
with respect to the type of claims covered under its general liability
insurance policy. Further, Borrower anticipates that if and when
the
federal legislation which requires insurers to provide terrorism
insurance
expires and such insurance is no longer required and/or subsidized
by the
federal government that the same will either not be available or
not be
available on commercially reasonable terms and thus, subject to the
immediately following sentence, will not be maintained by the Borrower.
Notwithstanding anything contained in this Schedule 3.1
or
anywhere in this Loan Agreement, terrorism coverage in amounts and
with a
carrier acceptable to Lender in its sole discretion if such terrorism
coverage (i) is customarily obtained by owners of property similar to
the Projects in use, character and geographic location, and (ii) is
readily available at a cost, which in Agent's opinion, is commercially
reasonable.
|
3. |
The
Professional Liability Insurance is carried by an unrated captive
insurance carrier in such amounts and against such risks as is customarily
maintained by similar businesses and by operators of similar assisted
living facilities in the same geographic area; provided,
however,
that Borrower contribute (or cause Master Tenant to contribute) to
its
established insurance captive on an annual basis an amount equal
to the
greatest of: (a) the amount required by any applicable insurance
rules, regulations or laws existing now or hereafter under the
jurisdiction in which the captive has been organized, and (b) the
amounts
required pursuant to the Master
Lease.
|
Schedule
3.1 - 1
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
SCHEDULE
3.2
ALLOCATED
LOAN AMOUNT
Property
|
Allocation
Loan Amount
|
|
Trillium
|
$5,220,000
|
|
Wildflower
|
$5,940,000
|
|
Willow
Brook
|
$4,770,000
|
Schedule
5.29 - 1
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
SCHEDULE
I
CERTAIN
DEFINITIONS
As
used
herein, the following terms have the meanings indicated:
"Acquisition
Documents"
has the
meaning assigned to such term in Schedule 2.1.
"Affiliate"
means
(a) any entity, including, but not limited to, any corporation, general or
limited partnership, joint venture, limited liability company or limited
liability partnership, which Borrower or Guarantor, directly or indirectly,
controls, (b) any trust as to which Borrower is the trustee or beneficiary,
(c) any Person which controls, directly or indirectly, Guarantor,
including, but not limited to, any director or executive officer of Guarantor,
(d) any Person related by birth, adoption or marriage to any director or
executive officer of Guarantor, or (e) Guarantor; provided, however, an
Affiliate shall not include any entity, other than Borrower or Guarantor, which
is an Affiliate solely as a result of the fact that such entity and Guarantor
are both controlled by Xxx Xxxx or by an Affiliate of Xxx Xxxx.
"Agent"
has the
meaning assigned to such term in the introductory paragraph of this
Agreement.
"Agreement"
means
this Loan Agreement, as amended from time to time.
"Anti-Money
Laundering Laws"
has the
meaning assigned to such term in Sections
5.26(b).
"Anti-Money
Laundering Measures"
has the
meaning assigned to such term in Section
5.26(b).
"Anti-Terrorism
Laws"
has the
meaning assigned to such term in Section
5.26(a).
"Assignment
Agreement"
has the
meaning assigned to such term in Section 2.9.
"Assignment
of Membership Interests"
shall
mean that certain Assignment of Membership Interests executed by Guarantor
with
respect to the membership interests in Borrower.
"Bankruptcy
Party"
shall
have the meaning assigned to such term in Section
9.7.
"Borrower"
has the
meaning assigned to such terms in the introductory paragraph of this
Agreement.
Schedule
I - 1
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
"Borrower
Anti-Terrorism Policies"
has the
meaning assigned to such term in Section
7.20(c).
"Borrower's
Equity"
has the
meaning assigned to such term in Part A of Schedule 2.1.
"Business
Associate Agreement"
has the
meaning assigned to such term in Part A of Schedule
2.1.
"Business
Day"
means a
day other than a Saturday, a Sunday, or a legal holiday on which national banks
located in the City of Chicago are not open for general banking
business.
"BSA"
has the
meaning assigned to such term in Section
5.26(b).
"Closing Date"
shall
be the date on which the Loan is closed and the Initial Funding Amount is
funded.
"Collateral"
has the
meaning assigned to such term in Section
2.10.
"Collateral
Assignments"
has the
meaning assigned to such term in Part A of Schedule
2.1.
"CON"
has the
meaning assigned to such term in Section 8.1(c).
"Control"
or
"controls":
When
used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities or other beneficial interests, by contract
or
otherwise; and the terms "Controlling" and "Controlled" have the meaning
correlative to the foregoing.
"Debt"
means,
for any Person, without duplication, the aggregate of: (a) all indebtedness
of such Person for borrowed money, for amounts drawn under a letter of credit,
or for the deferred purchase price of property for which such Person or its
assets is liable, (b) all unfunded amounts under a loan agreement, letter
of credit, or other credit facility for which such Person would be liable,
if
such amounts were advanced under the credit facility, (c) all amounts
required to be paid by such Person as a guaranteed payment to partners or a
preferred or special dividend, including any mandatory redemption of shares
or
interests, (d) all indebtedness guaranteed by such Person, directly or
indirectly, (e) all obligations under leases that constitute capital leases
for which such Person is liable, and (f) all obligations of such Person
under interest rate swaps, caps, floors, collars and other interest hedge
agreements, in each case whether such Person is liable contingently or
otherwise, as obligor, guarantor or otherwise, or in respect of which
obligations such Person otherwise assures a creditor against loss.
Schedule
I - 2
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
"Debt
Service"
means
the aggregate interest, principal, and other payments due under the Loan, and
on
any other outstanding permitted Debt relating to the Projects (if any) for
the
period of time for which calculated.
"Debt
Service Coverage Ratio"
means
the ratio of (i) Net Operating Income (calculated in accordance with
Schedule
II attached
hereto) from the Projects,
taken
as
a whole, for a particular period, to (ii) payments of interest due on the Loan
for the same period plus principal amortization due during the same
period.
"Default
Rate"
means
the lesser of (a) the maximum rate of interest allowed by applicable law,
and (b) five percent (5%) per annum in excess of the Interest
Rate.
"Defeasance"
has the
meaning assigned to such term in Section 2.9.
"Defeasance
Deposit"
has the
meaning assigned to such term in Section 2.9.
"Designated
Person"
has the
meaning assigned to such term in Section
5.26(a).
"Event
of Default"
has the
meaning assigned to such term in Article IX.
"Executive
Orders"
has the
meaning assigned to such term in Section
5.26(a).
"Expenses""
has
the meaning assigned to such term in Schedule
II.
"Federal
Bankruptcy Code"
shall
mean Chapter 11 of Title II of the United States Code (11 U.S.C. § 101,
et
seq.),
as
amended.
"FIRREA"
has the
meaning assigned to such term in Part A of Schedule 2.1.
"Funding
Amount"
has the
meaning assigned to such term in Section
2.1(a).
"GECC"
has the
meaning assigned to such term in the introductory paragraph of this
Agreement.
"Governmental
Approvals"
means,
collectively, all consents, licenses and permits and all other authorizations
or
approvals required from any Governmental Authority to operate the
Projects.
"Governmental
Authority"
means
any federal, state, county or municipal government or political subdivision
thereof, any governmental or quasi-governmental agency, authority, board,
bureau, commission, department, instrumentality or public body (including,
without limitation, the State Regulator), or any court, administrative tribunal,
or public body, including but not limited to all such authorities relating
to
the quality and adequacy of medical care, distribution of pharmaceuticals,
rate
setting, equipment, personnel, operating policies, additions to facilities
and
services and fee splitting.
"Guarantor" has
the
meaning assigned to such term in Recital C.
Schedule
I - 3
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
"Guaranty"
means
that certain Guaranty of Payment and Performance of even date herewith executed
by Guarantor in favor of Agent.
"Hazardous
Materials"
has the
definition given to such term in the Environmental Indemnity.
"HIPAA"
has the
meaning assigned to such term in Section 8.1(a).
"HIPAA
Compliance Plan"
has the
meaning assigned to such term in Section 8.1(b).
"HIPAA
Compliance Date"
has the
meaning assigned to such term in Section 8.1(b).
"HIPAA
Compliant"
has the
meaning assigned to such term in Section 8.1(b).
"Healthcare
Laws"
has the
meaning assigned to such term in Section
8.1(a).
"Improvements"
has the
meaning assigned to such term in Recital
B.
"Indebtedness"
means
all payment obligations of Borrower or Guarantor to Agent and/or Lender under
the Loan or any of the Loan Documents.
"Insurance
Impound"
has the
meaning assigned to such term in Section
3.4.
"Interest
Rate"
has the
meaning assigned to such term in Section
2.2.
"Interest
Holder Agreement"
has the
meaning assigned to such term in Section
7.20(b).
"Investor
Anti-Terrorism Policies"
has the
meaning assigned to such term in Section 7.20(c).
"Laws"
means,
collectively, all federal, state and local laws, statutes, codes, ordinances,
orders, rules and regulations and guidances and judicial opinions or
presidential authority in the applicable jurisdiction, including but not limited
to quality and safety standards, accreditation standards and requirements of
the
State Regulator, each as it may be amended from time to time.
"Leases"
has the
meaning assigned to such term in Part A of Schedule 2.1.
"Licenses"
has the
meaning assigned to such term in Section
8.1(c).
"Lien"
means
any interest, or claim thereof, in the Projects securing an obligation owed
to,
or a claim by, any Person other than the owner of the Projects, whether such
interest is based on common law, statute or contract, including the lien or
security interest arising from a deed of trust, mortgage, assignment,
encumbrance, pledge, security agreement, conditional sale or trust receipt
or a
lease, consignment or bailment for security
Schedule
I - 4
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
purposes.
The term "Lien"
shall
include reservations, exceptions, encroachments, easements, rights of way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting the Projects.
"Lists"
has the
meaning assigned to such term in Section
5.26(a).
"Loan"
means
the loan to be made by Lender to Borrower under this Agreement and all other
amounts payable under the Loan Documents, including the Prepayment
Premium.
"Loan
Documents"
means:
(a) this Agreement, (b) the Note, (c) the Guaranty, (d) any
letter of credit provided to Agent in connection with the Loan, (e) the
Security Documents, (f) the Environmental Indemnity Agreement,
(g) Uniform Commercial Code financing statements, (h) such assignments
of management agreements, contracts and other rights as may be required under
the Commitment or otherwise requested by Agent, (i) all other
documents evidencing, securing, governing or otherwise pertaining to the Loan,
and (j) all amendments, modifications, renewals, substitutions and
replacements of any of the foregoing.
"Material
Adverse Change"
or
"material
adverse change"
means,
in Agent's reasonable discretion, the business prospects, operations or
financial condition of Borrower or Guarantor, as applicable, or the Projects,
taken as a whole, has changed in a manner which would reasonably be expected
to
impair the value of Agent's and Lender's security for the Loan, prevent timely
repayment of the Loan or otherwise prevent Guarantor or Borrower, as applicable,
from timely performing any of its material obligations under the Loan
Documents.
"Material
Non-Residential Lease"
means
any non-residential Lease of space at a Project with respect to which base
rent
is equal to or greater than $2,500/month or $30,000/per annum.
"Material
Regulatory Violation"
means
any of the following: (i) revocation of any license, permit, approval or
other Governmental Approval (including, without limitation, any CON) required
for the lawful operation of the Projects, or (ii) other circumstances under
which (a) a Borrower or Guarantor is, or in Lender's judgment is reasonably
likely to be required by a determination of any Governmental Authority to cease
or suspend operation of any Project or (b) any then existing certification
of Guarantor or the Borrower under any Third Party Payor Program in which
Guarantor or Borrower or any Project then participates, is, or in Agent's
judgment is reasonably likely to be terminated, in whole or in part, prior
to
the expiration of the term thereof, (iii) any Project receives a
Level 4/immediate jeopardy finding that is not removed, as determined by
the applicable surveying agency, within ten (10) days from the date the
immediate jeopardy designation went into effect, (iv) any Project is at any
time assessed material fines or penalties (whether monetary (e.g. fines or
penalties in an aggregate amount in excess of $2,500) or non-monetary) by any
Governmental Authority having jurisdiction over Guarantor, Borrower or such
Project, (v) any Project continues to have a substandard quality of care
designation for a
Schedule
I -5
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
consecutive
period of ten days (10) days after receipt by Guarantor or Borrower of notice
from the Governmental Authority or any other Person of the original substandard
quality of care determination; or (vi) the commencement of any
State
or Federal remedy imposing a ban on new admissions or denying payment for
new
admissions that is not removed within thirty (30) days of that remedy going
into
effect.
"Maturity
Date"
means
the (a) November 30, 2012, or (b) any earlier date on which the entire
Loan is required to be paid in full, whether at maturity, by acceleration or
otherwise, under this Agreement or any of the other Loan Documents, or any
later
date to which the same may be extended in accordance with the terms of the
Loan
Agreement.
"Master
Lease"
has the
meaning assigned to such term in Recital C.
"Money
Market Rate"
has the
meaning assigned to such term in Section
3.4.
"Monthly
Reports"
has the
meaning assigned to such term in Section
6.1(a).
"Net
Operating Income"
has the
meaning assigned to such term in Schedule II.
"Note"
has the
meaning assigned to such term in Recital
A.
"OFAC"
has the
meaning assigned to such term in Section 5.26(a).
"OFAC
Laws and Regulations"
has the
meaning assigned to such term in Section
5.26(a).
"Xxxxxxxxx
Judgment"
means
the judgment entered in respect of that certain matter captioned Xxx
Xxxxxxxxx and Xxxxx Xxxxxxxxxxx on behalf of Xxxxxxxx Xxxxxxxxx, Deceased vs.
Emeritus Corporation, Emeritus IV, LP and HB-ESC V, LP d/b/a Xxxxxxxx
Place at Oakwell Farms,
filed
in district court of the 4th judicial district in and for Bexar County, Texas
as
Cause No. 2003-C1-13504.
"Operating
Agreement"
has the
meaning assigned to such term in Section 5.3.
"Other
Lists"
has the
meaning assigned to such term in Section
5.26(a).
"Permitted
Debt"
has the
meaning assigned to such term in Section
7.9.
"Person"
means
any individual, corporation, partnership, joint venture, association, joint
stock company, trust, trustee, estate, limited liability company, limited
partnership, limited liability, partnership, limited partnership, unincorporated
organization, real estate investment trust, government or any agency or
political subdivision thereof, or any other form of entity.
Schedule
I - 6
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
"Potential
Default"
means
the occurrence of any event or condition which, with the giving of notice,
the
passage of time, or both, would constitute an Event of Default.
Prepayment
Premium"
has the
meaning assigned to such term in Section 2.5.
"Projects"
has the
meanings assigned to such terms in Recital
B.
"Project
Yield"
means
the ratio, expressed as a percentage, of (a) annualized Net Operating
Income from the Projects, taken as a whole, as determined by Agent for a
particular period, to (b) the outstanding principal balance of the
Loan.
"Property"
has the
meaning assigned to such term in Recital
B.
"Regulatory
Action"
has the
meaning assigned to such term in Section
9.3.
"Release
Date"
has the
meaning assigned to such term in Section 2.9(a).
"Repayment
Date"
means
the date upon which the entire principal balance of the Loan and all interest
thereon and other sums due pursuant to the Loan
Documents,
including, without limitation, the Prepayment Premium, in any, have been paid
in
full.
"Revenue"
has the
meaning assigned to such term in Schedule
II.
"Scheduled
Defeasance Payments"
has the
meaning assigned to such term in Section 2.9.
"Security
Agreement"
has the
meaning assigned to such term in Section 2.9(e).
"Security
Deposits"
means
any security deposit from any tenant or occupant of the Projects collected
or
held by Borrower or Guarantor.
"Security
Documents"
means
those certain first priority Mortgages, Assignment of Rents and Security
Agreements (or documents of similar title) executed by Borrower for the benefit
of Agent, encumbering the Projects.
"Single
Purpose Entity"
means a
Person (other than an individual, a government, or any agency or political
subdivision thereof), which exists solely for the purpose of owning and
operating the Projects, conducts business only in its own name or in the name
of
the Projects, does not engage in any business or have any assets unrelated
to
the Projects, does not have any Debt other than as permitted by this Agreement,
has its own separate books, records, and accounts (with no commingling of
assets) holds itself out as being a Person separate and apart from any other
Person, and observes corporate, partnership or limited liability company, as
the
case may be, formalities independent of any other Person, and which otherwise
constitutes a single purpose entity as determined by Agent. Without limiting
the
foregoing, a Single Purpose Entity (i) does not hold, directly or
indirectly, any ownership interest (legal or equitable) in any real or personal
property other than the interest
Schedule
I - 7
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
which
it
owns in its respective Project and (ii) is not a shareholder or partner or
member of any other entity.
"Site
Assessment"
means
collectively, those certain Property Condition Reports for the Projects each
dated September 2, 2005, Project Numbers D5418, D5417 and
D5419.
"SND
List"
has the
meaning assigned to such term in Section
5.26(a).
"State
Regulator"
has the
meaning assigned to such term in Section
7.18(a).
"Successor
Borrower"
has the
meaning assigned to such term in Section 2.9.
"Taxes"
has the
meaning assigned to such term in Section
3.5.
"Tax
Impound"
has the
meaning assigned to such term in Section
3.5.
"Tenant"
means
any tenant or occupant of the Projects under a Lease.
"Term
Sheet"
means
that certain term Sheet dated September 12, 2005, addressed to Xxxxxxx
Xxxxxxx and signed by Xxxxx Xxxxxx.
"Terrorism"
has the
meaning assigned to such term in Section
3.1(b).
"Third
Party Payor Programs"
has the
meaning assigned to such term in Section
8.2(f).
"Title
Company"
means
Chicago Title Insurance Company or such other national title insurance company
approved by Agent and Lender in their sole and absolute discretion.
"Title
Policy"
has the
meaning assigned to such term in Schedule
2.1
Part
A.
"U.S.
Obligations"
has the
meaning assigned to such term in Section 2.9.
"U.S.
Publicly-Traded Entity"
has the
meaning assigned to such term in Section
5.26(a).
"Violation"
has the
meaning assigned to such term in Section
5.24.
"Yield
Maintenance Amount"
has the
meaning assigned to such term in Section 2.9.
Schedule
I - 8
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap
SCHEDULE
II
CALCULATION
OF NET OPERATING INCOME
"Net
Operating Income"
means
annualized Revenue less
Expenses, all as reasonably determined by Agent's audit (or otherwise reasonably
estimated by Agent) and at Borrower's expense.
"Revenue"
for a
period means the lesser of (i) annualized Adjusted Actual Rent for such period
or (ii) annualized Monthly Effective Rent, excluding in each case, rent payable
under the Master Lease. In determining Revenue, the occupancy factor utilized
shall be the lesser of (a) actual occupancy of the Projects, ignoring for this
purpose the Master Lease, or (b) an assumed ninety-five percent (95%) occupancy
rate.
"Adjusted
Actual Rent"
means
(a) all amounts collected by or on behalf of Guarantor, in its capacity as
the
operator of the Projects under the terms of the Master Lease from tenants of
the
Projects, taken as a whole (excluding amounts due to Borrower under the Master
Lease for the period in question (and if none specified, then for the most
current twelve
(12) months, excluding nonrecurring
income and non-property related income (as determined by Agent in its reasonable
discretion) and income from tenants (i) that are thirty (30) or more days
delinquent, (ii) that are in bankruptcy (even if current), (iii) non-residential
tenants whose leases terminate within six (6) months (as adjusted for space
re-leased upon terms acceptable to Agent in its reasonable discretion) and
(iv) that have been delinquent two (2) or more times during the past twelve
(12) months, and (b) other revenue for such period not to exceed ten
percent (10%) of the amounts included in clause (a) above for laundry, vending,
parking and other occupancy payments (but excluding late fees and interest
income) based upon collections for such period.
"Monthly
Effective Rent"
means
an amount equal to (x) total rent due over the term of the Leases with respect
to the Projects, taken as a whole (excluding rent due under the Master Lease)
less
any
payments or concessions which Agent, in its reasonable discretion, deems to
be a
rent concession, divided
by
(y) the
total number of months in the Leases with respect to the Projects taken as
a
whole.
"Expenses"
means
actual and customary operating expenses, whether incurred by Borrower or by
Guarantor in its capacity as the operator of the Projects, related to the
Projects, taken as a whole, on a stabilized accrual basis for the previous
twelve (12) month period (as reasonably adjusted by Agent), including: (i)
recurring expenses (e.g., tenant improvements, leasing commissions, carpeting
replacement, appliance and drapery replacement and such others as determined
by
Agent in its reasonable discretion), (ii) real estate taxes, (iii) management
fees (whether paid or not) in an amount not less than five percent (5%) of
effective gross income, and (iv) a replacement reserve (whether reserved or
not)
of not less than Three Hundred Fifty and No/100 Dollars ($350.00) per
unit.
EX-10.86.4
Loan Agreemnt Arizona Properties & GE Cap