<PAGE> 1
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 0-22178
ARBOR HEALTH CARE COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 34-1469604
(State of incorporation) (IRS Employer
Identification No.)
1100 SHAWNEE ROAD, P. O. BOX 840, LIMA, OHIO 45802-0840
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (419) 227-3000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------ ------
Shares of Registrant's Common Stock, $.03 par value, outstanding as of the
close of business on May 10, 1996 -- 6,894,723.
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TABLE OF CONTENTS
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Page
Number
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PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Interim Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
2
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PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ARBOR HEALTH CARE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands except for share data)
<TABLE>
<CAPTION>
December 31 March 31
1995 1996
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ASSETS (Note 1)
<S> <C> <C>
Current assets
Cash and cash equivalents .................................. $6,394 $1,722
Accounts receivable, less allowances of $1,285 and
$1,460, respectively ................................. 36,207 37,936
Other current assets ....................................... 5,765 6,452
Deferred income taxes ...................................... 1,320 1,523
------------- -----------
Total current assets ........................................... 49,686 47,633
Property and equipment
Land and improvements ..................................... 19,966 21,183
Buildings and improvements ................................. 73,845 78,095
Equipment and furnishings .................................. 30,411 35,340
Leasehold improvements ..................................... 7,247 7,272
Construction in process ................................... 12,985 11,347
------------- -----------
144,454 153,237
Less allowances for depreciation and amortization........... 27,470 29,236
------------- -----------
Total property and equipment.................................... 116,984 124,001
Other assets
Goodwill, less amortization of $281 and $416, respectively 10,483 10,348
Other deferred costs, less amortization of $3,242 and
$3,039, respectively ................................... 1,438 2,130
Sundry...................................................... 192 170
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Total other assets.............................................. 12,113 12,648
------------- -----------
$178,783 $184,282
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable .............................................. $4,496 $4,074
Accounts payable ........................................... 15,889 12,520
Accrued payroll and related items........................... 11,043 11,052
Other liabilities........................................... 8,094 11,110
Current maturities of long-term obligations................. 5,957 5,823
------------- -----------
Total current liabilities....................................... 45,479 44,579
Long-term obligations, .........................................
less current maturities...................................... 74,741 78,651
Deferred income taxes........................................... 2,935 3,376
Stockholders' equity
Preferred stock, $.01 par value
Authorized - 2,000,000 shares
None issued or outstanding -- --
Common stock, $.03 par value
Authorized -- 20,000,000 shares
Issued and outstanding -- 6,891,992 and 6,894,723 shares 207 207
Additional paid-in capital ................................. 30,135 30,160
Retained earnings........................................... 25,286 27,309
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Total stockholders' equity ..................................... 55,628 57,676
------------- -----------
$178,783 $184,282
============ ===========
</TABLE>
See accompanying notes
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ARBOR HEALTH CARE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share data)
<TABLE>
<CAPTION>
Three Months
Ended March 31
----------------------
1995 1996
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Net revenues
Subacute care ................................... $23,409 $27,391
Basic care....................................... 17,257 20,396
Pharmacy and other............................... 2,902 4,689
-------- --------
Total net revenues................................. 43,568 52,476
Expenses
Operating........................................ 34,903 41,681
General corporate................................ 2,255 2,543
Operating lease rental........................... 1,011 1,126
Net Interest..................................... 1,221 1,620
Depreciation and amortization.................... 1,578 2,115
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Total expenses..................................... 40,968 49,085
Other expense (income).............................
Loss on disposal of property and equipment....... 19 55
Interest and sundry.............................. (77) (32)
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Total other expense (income)....................... (58) 23
-------- --------
Income before income taxes......................... 2,658 3,368
Income taxes....................................... 1,033 1,345
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Net income......................................... $1,625 $2,023
======== ========
Net income per share .............................. $0.24 $0.29
======== ========
Weighted average shares outstanding................ 6,849 6,970
======== ========
</TABLE>
See accompanying notes
4
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ARBOR HEALTH CARE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
<TABLE>
<CAPTION>
Three Months
Ended March 31
--------------------
1995 1996
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Operating activities
Net income....................................................... $1,625 $2,023
Adjustments to reconcile net income to net cash provided
by operating activities
Provision for depreciation................................... 1,415 1,785
Amortization................................................. 238 389
Provision for deferred income taxes.......................... (125) 238
Provision for losses on accounts receivable.................. 177 357
Loss on disposal of property and equipment................... 19 55
Changes in operating assets and liabilities
Accounts receivable ....................................... (1,432) (2,086)
Other current assets ...................................... (210) (687)
Deferred preopening costs.................................. (133) (234)
Accounts payable........................................... 1,509 (3,369)
Accrued payroll and related items.......................... 803 9
Other liabilities (income tax payments of $889 and $73,
respectively)........................................... 652 3,016
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Net cash provided by operating activities........................... 4,538 1,496
Investing activities
Expenditures for property and equipment ......................... (4,402) (8,863)
Sundry and other................................................. (7) 29
-------- --------
Net cash used in investing activities .............................. (4,409) (8,834)
Financing activities
Net borrowings (repayments) under line of credit agreements
to finance development projects and acquisitions ............. 2,502 (22,559)
Net repayments of working capital
under line of credit agreements................................ (1,107) (423)
Borrowings on long-term obligations ............................. 107 27,000
Repayments of long-term obligations.............................. (752) (662)
Deferred financing costs......................................... (60) (715)
Issuance of stock................................................ 48 25
-------- --------
Net cash provided by financing activities........................... 738 2,666
-------- --------
Net increase (decrease) in cash and cash equivalents................ 867 (4,672)
Cash and cash equivalents at beginning of period.................... 5,555 6,394
-------- --------
Cash and cash equivalents at end of period.......................... $6,422 $1,722
======== ========
</TABLE>
See accompanying notes
5
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ARBOR HEALTH CARE COMPANY AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(UNAUDITED)
1. ORGANIZATION AND BASIS OF PRESENTATION
The consolidated balance sheet of Arbor Health Care Company and subsidiaries
(the "Company") at December 31, 1995 has been derived from the audited
consolidated financial statements at that date. The consolidated balance sheet
of the Company as of March 31, 1996, and the consolidated statements of income
and cash flows for the periods ended March 31, 1996 and 1995, have been
prepared by the Company, without audit, in accordance with the rules and
regulations of the Securities and Exchange Commission. In the opinion of
management, all adjustments, consisting only of normal recurring adjustments,
necessary to fairly present the financial position, results of operations and
cash flows at March 31, 1996 and for all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These condensed consolidated financial
statements should be read in conjunction with the audited consolidated
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1995. The results of operations
and cash flows for the periods ended March 31, 1996 and 1995 are not
necessarily indicative of the operating results or cash flows for the full
year.
2. ACQUISITIONS
On May 31, 1995, the Company acquired substantially all of the assets of the
Arbors at Fairlawn, a 150-bed nursing and assisted living facility, for cash
of approximately $6.7 million and assumed certain liabilities of $3.8 million
for a total purchase price of approximately $10.5 million. On June 30, 1995,
the Company acquired all of the outstanding stock of The Druggist, Inc., an
institutional pharmacy, for approximately $10.5 million, and exchanged 49,937
shares of its Common Stock for all of the outstanding shares of Alternacare
Plus Enterprises, Inc., a provider of medical and enteral feeding supplies and
Medicare billing services. Results of operations of companies purchased and
the immaterial pooling are included from the dates of acquisition.
3. LONG-TERM OBLIGATIONS
On February 15, 1996, the Company closed on a $27.0 million financing package
($13.5 million at a fixed rate of 7.75% and $13.5 million of variable rate
taxable option notes) for six Centers, which was used to repay $24.2 million of
debt. The notes are collateralized by real estate, equipment and accounts
receivable and are payable in semi-annual installments and lump sums to
February, 2003.
6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company was formed in 1985 and had an initial public offering of
its Common Stock in August 1993. As more fully described in the Annual Report
on Form 10-K for the year ended December 31, 1995, the Company provides
subacute and basic health care services to patients in centers ("Centers")
located in five states and operates three institutional pharmacies, one in Ohio
and two in Florida. The Company's growth strategy includes the development of
new facilities and strategic acquisitions in its primary markets. The Company
developed and opened two 120-bed Centers, one in April, 1995, and one in
October, 1995, acquired a 150-bed Center on May 31, 1995 and acquired an
institutional pharmacy and a company that provides medical and enteral feeding
supplies and Medicare billing services on June 30, 1995. At March 31, 1996,
the Company operated 3,263 beds in its 27 Centers. The Company's three
institutional pharmacies service 124 non-affiliated facilities along with its
Centers in Florida, Ohio and Indiana. Refer to Note 2 to the Interim
Consolidated Financial Statements.
THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THREE MONTHS ENDED MARCH 31,
1995
Total net revenues for the three months ended March 31, 1996 of $52.5
million increased $8.9 million, or 20.4%, from the three months ended March
31, 1995. Approximately 58.8% of the revenue increase was from internal growth
and the balance from acquisitions made during 1995. Internal revenue growth
from Mature Operations (Centers and pharmacies in operation for 24 months or
more in the period being reported upon), was approximately 11.6%, and from
Start-Up Centers was approximately 47.2%. Subacute care revenues (which
accounted for 52.2% of total revenues) increased $4.0 million due to the
addition of new beds during the year. Basic care revenues increased $3.1
million ($1.2 million from higher rates and $1.9 million from new beds added
during the year); and pharmacy and other revenues increased $1.8 million due
substantially to the June 30, 1995 institutional pharmacy acquisition. Mature
Operations provided $0.7 million of the subacute care revenue increase (due
to more beds) and $1.0 million of the basic care revenue increase (due to
higher rates). The remaining revenue growth came from three Start-Up Centers
and the acquisition of one Center in May, 1995.
Operating expenses for the three months ended March 31, 1996 of $41.7
million increased $6.8 million, or 19.4%, over the comparable period in 1995.
The increased costs primarily were due to increased census and utilization of
therapies, pharmaceuticals and medical supplies ("Ancillary Services") in
mature Centers, the increased occupancy of three Start-Up Centers, the
acquisition of one Center in May, 1995, and the June 30, 1995 institutional
pharmacy acquisition. Center personnel compensation expenses of $19.7 million
(which are included in operating expenses) increased by $2.5 million, or 14.5%,
over the comparable period in 1995. The increased occupancy of three Start-Up
Centers and the acquisition of one Center in May, 1995 accounted for $2.3
million of the increase in Center personnel compensation expenses, while
routine wage increases partially offset by cost control efforts accounted for
the remaining $0.2 million increase. The cost of providing additional
Ancillary Services increased operating expenses by $3.4 million, while the net
effect of other cost increases and decreases reflected an overall net increase
of $0.9 million primarily resulting from three Start-Up Centers and the
acquisition of one Center in May, 1995. As a percent of revenue, operating
costs decreased to 79.4% from 80.1% for the comparable period in 1995, due
primarily to the effect of the pharmacy acquisition made during 1995 and lower
routine operating costs at the Mature Centers.
General corporate expenses for the three months ended March 31, 1996
of $2.5 million increased $0.3 million, or 12.8%, over the comparable period
in 1995. This change was primarily caused by expenses for additional
administrative personnel and other related expenses needed to support the
growing business. However as a percentage of revenue general corporate
expenses declined to 4.9% from 5.2% in the comparable period of the prior year.
Center ownership costs for the three months ended March 31, 1996 of
$4.9 million increased $1.1 million, or 27.6%, over the three months ended
March 31, 1995. The increase in ownership costs is due primarily to three
Start-Up Centers and the acquisition of one Center and an institutional
pharmacy in 1995.
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Net income increased by $0.4 million, or 24.5%, from the comparable
period in 1995, primarily as a result of the foregoing factors, notwithstanding
an increase in the effective income tax rate from 38.9% to 39.9%. The increase
in the tax rate was due to the discontinuance of the targeted jobs tax credit
in 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company's growth during the last two years has been financed with
cash from operating and financing activities. The Company's cash from
operating activities was $1.5 million for the three months ended March 31, 1996
compared to $4.5 million for the comparable period last year. Cash provided by
financing activities was $2.7 million for the three months ended March 31,
1996. Expenditures for investing activities totalled $8.8 million, including
development of Centers, renovations to existing Centers and the purchase of a
company airplane.
At March 31, 1996, the Company had working capital of $3.1 million
compared to $4.2 million at December 31, 1995. This decrease was primarily
attributable to expenditures for property and equipment. Accounts receivable
net of allowances were $37.9 million at March 31, 1996 compared to $36.2
million at December 31, 1995. The number of days of net revenues for the
quarter in net receivables increased to 66 at March 31, 1996 compared to 64 at
December 31, 1995.
The Company has revolving credit facilities ("Credit Facilities") with
four banks that are renewable on an annual basis. These Credit Facilities
provide amounts for working capital, letters of credit, and acquisition and
development financing of $7.6 million, $4.4 million, and $45.5 million,
respectively. As of March 31, 1996, $4.1 million of working capital had been
borrowed, $2.6 million of letters of credit were outstanding, and $13.2
million had been committed for acquisition and development purposes. The
annual rates charged by the banks vary. Interest rates on the working capital
lines range from London Interbank Offered Rates ("LIBOR") plus 1.5% to prime
and on the acquisition/development facilities from LIBOR plus 1.75% to prime
plus 0.25%. Annual fees of from 1.0% to 1.5% are charged to the Company by
the banks issuing letters of credit under these credit facilities. On
February 15, 1996, the Company closed a $27.0 million refinancing package
($13.5 million at a fixed rate of 7.75% and $13.5 million of variable rate
taxable option notes) for six Centers which was used to repay $24.2 million of
debt.
Long-term obligations, including current maturities which provide
funds for long-term financing of Centers and acquisitions, totaled
approximately $84.5 million at March 31, 1996. These obligations are for
varying amounts and for terms that expire at varying times over the next 17
years. Interest rates on outstanding obligations ranged from 3.44% to 10.50% at
March 31, 1996. The Company has been successful in finding permanent financing
and refinancing existing debt but uses its Credit Facilities as interim sources
of financing when appropriate.
The Company has various ongoing needs for capital, including (i)
working capital for operations; (ii) capital expenditures for its Centers or
corporate office; and (iii) capital expenditures for the development of new
Centers and possible acquisitions. During the remainder of 1996, the Company
expects to utilize approximately $12.4 million for completion of Centers in
Jacksonville and Pensacola, Florida and commencement of the development of two
to three additional Centers; $1.8 million for upgrading six subacute units; and
$7.1 million for other capital expenditures. The Company expects to complete
the development of three Centers during 1996 and two to three in 1997 at a
cost of $6.0 to $7.5 million per 120-bed Center. Management believes when all
sources of capital are considered, including cash to be generated by operating
activities, credit facilities likely to be available, and other financing
activities to be undertaken, that sufficient capital resources will be
available to carry out anticipated undertakings during the next 12 to 24
months.
Recent federal budget discussions have targeted the Medicare program
for savings in spending of approximately $10 billion. Approximately 37% of the
Company's revenue is derived from Medicare. While any legislation of the
magnitude of the current proposals could have a significant effect on the
Company, the Company will attempt to offset any cuts by making certain cost
reductions, changing patient mix and acuity, or increasing revenue from other
payor sources such as managed care. Until the ultimate form of any new
legislation is known, the Company will not be able to determine its financial
impact. Additionally, the House and Senate both have proposed changes to the
welfare program which includes Medicaid, in the form of block grants with the
objective of limiting growth to a predetermined amount. Approximately 30% of
the Company's revenue is derived from Medicaid. The exact nature of the
proposals and their effect are not readily apparent. The individual state
welfare programs will dictate the nature of the changes and, as such, the
effects will vary from state to state. The Company can give no assurance that
payments under such programs in the future
8
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will remain at a level comparable to the present level or be sufficient to
cover the costs allocable to such patients.
PART II -- OTHER INFORMATION
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Item 1. Legal Proceedings.
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None
Item 2. Changes in Securities.
----------------------
None
Item 3. Defaults Upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
Item 5. Other Information
-----------------
None
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibits
EXHIBIT
NUMBER DESCRIPTION
- - - ------- -----------
3.1 Restated Certificate of Incorporation of the Company (incorporated by reference to
Exhibit 3.1 of the Company's Registration Statement on Form S-3
(File No. 33-93470) filed June 14, 1995 under the Securities Act of 1933).
3.2 Restated bylaws of the Company (incorporated by reference to
Exhibit 3.2 of the Company's Registration Statement on Form S-3
(File No. 33-93470) filed June 14, 1995 under the Securities Act of 1933).
4.1 Promissory Note dated February 15, 1996 between the Company and Capital One Funding Corporation.
4.2 Reimbursement Agreement dated February 12, 1996 between the Company and Bank One, Kentucky, N.A.
4.3 Open-End Mortgage and Security Agreement dated February 12, 1996 between the Company and
Bank One, Kentucky, N.A.
4.4 Mortgage and Security Agreements (5) dated February 12, 1996 between the Company and
Bank One, Kentucky, NA.
4.5 Assignments of Leases and Rents (6) dated February 12, 1996 between the
Company and Bank One, Kentucky, NA.
4.6 Guaranty Agreement dated February 12, 1996 between the Company and Bank One, Kentucky, NA.
4.7 Contingent Guaranty Agreement dated February 12, 1996 between the Company and Bank One, Kentucky, NA.
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - - ------- -----------
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4.8 Working Capital Line of Credit extension letter dated March 31, 1996 between
the Company and Society National Bank.
4.9 Letter of Credit extension letter dated March 31, 1996 between the
Company and Society National Bank.
4.10 Acquisition and Development Revolving Credit Facility extension letter
dated March 31, 1996 between the Company and Society National Bank.
4.11 Second Amendment to Amended and Restated Revolving Credit and Term Loan
Agreement dated February 9, 1996 between the Company and Society National Bank.
4.12 Amendment to Amended and Restated Loan Agreement dated February 1, 1996 between
the Company and Bank One, Lima, NA.
4.13 Acquisition and Development Revolving Credit Facility extension letter dated
December 21, 1995 between the Company and Society National Bank
(incorporated by reference to Exhibit 4.1 of the Company's 10-K for
the year ended December 31, 1995).
4.14 Working Capital Line of Credit extension letter dated December 21, 1995 between
the Company and Society National Bank (incorporated by reference to Exhibit 4.2
of the Company's 10-K for the year ended December 31, 1995).
4.15 Letter of Credit extension letter dated December 21, 1995 between the Company and
Society National Bank (incorporated by reference to Exhibit 4.3 of the Company's 10-K
for the year ended December 31, 1995).
4.16 Second Amended and Restated Demand Promissory Note dated December 28, 1995 between
the Company and Society National Bank (incorporated by reference to Exhibit 4.4
of the Company's 10-K for the year ended December 31, 1995).
4.17 Amended and Restated Revolving Credit and Term Loan Agreement dated June 1, 1995
between the Company and Society National Bank (incorporated by reference to Exhibit 4.5
of the Company's 10-K for the year ended December 31, 1995).
4.18 Amendment to Loan Agreement dated September 14, 1995 between the Company and The Provident Bank
(incorporated by reference to Exhibit 4.1 of the Company's 10-Q for the quarter ended
September 30, 1995).
4.19 Acquisition and Development Revolving Credit Facility extension letter dated August 31, 1995
between the Company and Society National Bank (incorporated by reference to
Exhibit 4.2 of the Company's 10-Q for the quarter ended September 30, 1995).
4.20 Working Capital Line of Credit extension letter dated August 31, 1995 between the
Company and Society National Bank (incorporated by reference to Exhibit 4.3 of the Company's
10-Q for the quarter ended September 30, 1995).
4.21 Letter of Credit extension letter dated August 31, 1995 between the Company and
Society National Bank (incorporated by reference to Exhibit 4.4 of the Company's 10-Q for the
quarter ended September 30, 1995).
4.22 Loan Agreement dated August 1, 1995 between the Company and The Provident Bank
(incorporated by reference to Exhibit 4.5 of the Company's 10-Q for the quarter
ended September 30, 1995).
4.23 Amended and Restated Loan Agreement dated August 1, 1995 between the Company and
Bank One, Lima, NA (incorporated by reference to Exhibit 4.6 of the Company's 10-Q for the
quarter ended September 30, 1995).
4.24 Amendment to Amended and Restated Revolving Credit and Term Loan Agreement dated June 30, 1995
between the Company and Society National Bank (incorporated by reference to
Exhibit 4.1 of the Company's 10-Q for the quarter ended June 30, 1995).
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - - ------- -----------
<S> <C>
4.25 Amendment to Loan Agreement dated June 30, 1995 between the Company and The Provident Bank
(incorporated by reference to Exhibit 4.2 of the Company's 10-Q for the quarter ended
June 30, 1995).
4.26 Amendment to Loan Agreement dated June 29, 1995 between the Company and Bank One (incorporated by reference to
Exhibit 4.3 of the Company's 10-Q for the quarter ended June 30, 1995).
4.27 Amendment to Loan Agreement dated June 30, 1995 between the Company and The Fifth Third Bank
(incorporated by reference to Exhibit 4.4 of the Company's 10-Q for the quarter ended June 30, 1995).
4.28 Acquisition and Development Revolving Credit Facility extension letter dated June 1, 1995 between the Company and
Society National Bank (incorporated by reference to Exhibit 4.5 of the Company's 10-Q for the quarter ended
June 30, 1995).
4.29 Working Capital Line of Credit extension letter dated June 1, 1995 between the Company and Society National
Bank (incorporated by reference to Exhibit 4.6 of the Company's 10-Q for the quarter ended June 30, 1995).
4.30 Letter of Credit extension letter dated June 1, 1995 between the Company and Society National Bank (incorporated
by reference to Exhibit 4.7 of the Company's 10-Q for the quarter ended June 30, 1995).
4.31 Loan Agreement amendment dated May 31, 1995 between the Company and Bank One (incorporated by reference to
Exhibit 4.8 of the Company's 10-Q for the quarter ended June 30, 1995).
4.32 Loan Agreement extension letter dated May 29, 1995 between the Company and The Provident Bank (incorporated
by reference to Exhibit 4.9 of the Company's 10-Q for the quarter ended June 30, 1995).
4.33 Loan Agreement extension letter dated March 22, 1995 between the Company and The Provident Bank (incorporated
by reference to Exhibit 4.1 of the Company's 10-Q for the quarter ended March 31, 1995).
4.34 Line of Credit for Letters of Credit Agreement dated November 10, 1994 between the Company and Society National
Bank (incorporated by reference to Exhibit 4.1 of the Company's 10-K for the year ended December 31, 1994).
4.35 Loan Agreement extension letter dated September 16, 1994 between the Company and The Provident Bank
(incorporated by reference to Exhibit 4.1 of the Company's 10-Q for the quarter ended September 30, 1994).
4.36 Acquisition and Development Revolving Credit Facility extension letter dated August 31, 1994 between the Company
and Society National Bank (incorporated by reference to Exhibit 4.2 of the Company's 10-Q for the quarter ended
September 30, 1994).
4.37 Working Capital Line of Credit extension letter dated August 31, 1994 between the Company and Society National Bank
(incorporated by reference to Exhibit 4.3 of the Company's 10-Q for the quarter ended September 30, 1994).
4.38 Letter of Credit extension letter dated August 31, 1994 between the Company and Society National Bank
(incorporated by reference to Exhibit 4.4 of the Company's 10-Q for the quarter ended September 30, 1994).
4.39 Loan Agreement amendment dated September 15, 1994 between the Company and Bank One (incorporated by reference to
Exhibit 4.5 of the Company's 10-Q for the quarter ended September 30, 1994).
4.40 Revolving Credit and Term Loan Agreement dated April 11, 1994 between the Company and The Fifth Third Bank
(incorporated by reference to Exhibit 4.1 of the Company's 10-Q for the quarter ended June 30, 1994).
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - - ------- -----------
<S> <C>
4.41 Loan Agreement extension letter dated May 25, 1994 between the Company and The Provident Bank (incorporated by
reference to Exhibit 4.2 of the Company's 10-Q for the quarter ended June 30, 1994).
4.42 Acquisition and Development Revolving Credit Facility extension letter dated May 18, 1994 between the Company
and Society National Bank (incorporated by reference to Exhibit 4.3 of the Company's 10-Q for the quarter ended
June 30, 1994).
4.43 Acquisition and Development Revolving Credit Facility extension letter dated July 31, 1994 between the Company
and Society National Bank (incorporated by reference to Exhibit 4.4 of the Company's 10-Q for the quarter ended
June 30, 1994).
4.44 Working Capital Line of Credit extension letter dated May 16, 1994 between the Company and Society National Bank
(incorporated by reference to Exhibit 4.5 of the Company's 10-Q for the quarter ended June 30, 1994).
4.45 Working Capital Line of Credit extension letter dated July 31, 1994 between the Company and Society National Bank
(incorporated by reference to Exhibit 4.6 of the Company's 10-Q for the quarter ended June 30, 1994).
4.46 Letter of Credit extension dated May 18, 1994 between the Company and Society National Bank (incorporated by
reference to Exhibit 4.7 of the Company's 10-Q for the quarter ended June 30, 1994).
4.47 Letter of Credit extension letter dated July 31, 1994 between the Company and Society National Bank
(incorporated by reference to Exhibit 4.8 of the Company's 10-Q for the quarter ended June 30, 1994).
4.48 Loan Agreement dated December 21, 1993 between the Company and Bank One, Lima, NA (incorporated by reference to
Exhibit 4.1 of the Company's 10-K for the year ended December 31, 1993).
4.49 Revolving Credit and Term Loan Agreement dated August 11, 1993 between the Company and The Provident Bank
(incorporated by reference to Exhibit 4.1 of the Company's 10-Q for the quarter ended September 30, 1993).
4.50 Revolving Credit and Term Loan Agreement dated September 30, 1993 between the Company and Society Bank & Trust
(incorporated by reference to Exhibit 4.2 of the Company's 10-Q for the quarter ended September 30, 1993).
4.51 Stockholders Agreement dated April 9, 1985 among Arbor Holdings, Inc. and Stockholders and the First Amendment
thereto (incorporated by reference to Exhibit 4.1 of the Company's Registration Statement on Form S-1
(File No. 33-65080) filed June 25, 1993 under the Securities Act of 1933).
4.52 Series B Preferred Stock Purchase Agreement dated November 3, 1986 (incorporated by reference to Exhibit 4.2 of
the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25, 1993 under the Securities
Act of 1933).
4.53 Revolving Credit and Term Loan Agreement dated June 30, 1992 between the Company and Society Bank & Trust
(incorporated by reference to Exhibit 4.3 of the Company's Registration Statement on Form S-1 (File No. 33-65080)
filed June 25, 1993 under the Securities Act of 1933).
4.54 Line of Credit Agreement dated June 22, 1993 between the Company and Society Bank and Trust (incorporated by
reference to Exhibit 4.4 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25,
1993 under the Securities Act of 1933).
4.55 Loan Agreement between the Company and The Provident Bank dated September 9, 1992 (incorporated by reference to
Exhibit 4.5 of the Com-pany's Registration Statement on Form S-1 (File No. 33-65080) filed June 25, 1993 under
the Securities Act of 1933).
</TABLE>
12
<PAGE> 13
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - - ------ -----------
<S> <C>
4.56 Loan Agreement between the Company and Bank One, Lima, NA dated December 7, 1992 (incorporated by reference to
Exhibit 4.6 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25, 1933 under
the Securities Act of 1933).
4.57 Commitment Letter dated May 28, 1993 from Bank One, Lima, NA, accepted by the Company June 7, 1993 (incorporated
by reference to Exhibit 4.7 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June
25, 1993 under the Securities Act of 1933).
4.58 Mortgage and Security Agreement between the Company and Southtrust Bank of Alabama, National Association, dated
September 29, 1992 (incorporated by reference to Exhibit 4.8 of the Company's Registration Statement on Form S-1
(File No. 33-65080) filed June 25, 1993 under the Securities Act of 1933).
4.59 Commitment Letter dated as of May 30, 1993, from Society Bank & Trust for revolving credit facility, accepted by
the Company June 22, 1993 (incorporated by reference to Exhibit 4.9 of the Company's Registration Statement on
Form S-1 (File No. 33-65080) filed July 9, 1993 under the Securities Act of 1933).
4.60 Commitment Letter dated as of July 1, 1993, from The Provident Bank, informing the Company of reaffirmation of
line of credit (incorporated by reference to Exhibit 4.10 of the Company's Registration Statement on Form S-1
(File No. 33-65080) filed July 9, 1993 under the Securities Act of 1933).
(The Company is not filing any instrument with respect to long-term debt that does not exceed 10 percent of the
total assets of the Company, and the Company agrees to furnish a copy of any such instrument to the Commission
upon request).
10.1 Second Amendment to Lease Agreement dated March 18, 1996 between the Company and V & V Properties.
10.2+ Arbor Health Care Company 1996 Stock Option Plan for Non-Employee Directors (incorporated by reference to the
Company's Proxy Statement dated April 8, 1996).
10.3+ Description of 1995 Bonus Plans for Named Executive Officers (incorporated by reference to Exhibit 10.1 of the
Company's 10-k for the year ended December 31, 1995).
10.4 Asset Purchase Agreement dated April 28, 1995 between the Company and Fairlawn Associates Limited Partnership
(incorporated by reference to Exhibit 10.1 of the Company's 10-Q for the quarter ended June 30, 1995).
10.5 Amendment to Asset Purchase Agreement dated June 1, 1995 between the Company and Fairlawn Associates Limited
Partnership (incorporated by reference to Exhibit 10.2 of the Company's 10-Q for the quarter ended June 30, 1995).
10.6 Agreement of Merger dated June 30, 1995 between the Company, Green Tree Pharmacy, Inc., Allan K. Vrable and
The Druggist, Inc. (incorporated by reference to Exhibit 10.3 of the Company's 10-Q for the quarter ended
June 30, 1995).
10.7 Addendum to Agreement of Merger dated June 30, 1995 between the Company, Green Tree Pharmacy, Inc.,
Allan K. Vrable and The Druggist, Inc. (incorporated by reference to Exhibit 10.4 of the Company's 10-Q for the
quarter ended June 30, 1995).
10.8 Share Purchase Agreement dated June 30, 1995 between the Company and Allan K. Vrable, sole shareholder of
Alternacare Plus Enterprises, Inc. (incorporated by reference to Exhibit 10.5 of the Company's 10-Q for the
quarter ended June 30, 1995).
10.9 Employment Agreement dated June 30, 1995 between the Company and Allan K. Vrable (incorporated by reference to
Exhibit 10.6 of the Company's 10-Q for the quarter ended June 30, 1995).
</TABLE>
13
<PAGE> 14
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - - ------ -----------
<S> <C>
10.10+ Arbor Health Care Company 1995 Stock Option Plan (incorporated by reference to the Company's Proxy Statement
dated April 24, 1995).
10.11 Share Purchase Agreement dated June 30, 1994 between the Company and the Stockholders of Bay Geriatric Pharmacy,
Inc. and Home Care Pharmacy, Inc. of Florida (incorporated by reference to Exhibit 10.1 of the Company's 10-K
for the year ended December 31, 1994).
10.12 Lease Agreement between Highland Oaks Associates, LTD., and Bay Geriatric Pharmacy, dated May 23, 1991
(incorporated by reference to Exhibit 10.2 of the Company's 10-K for the year ended December 31, 1994).
10.13 Lease Agreement between FGHP Properties, Limited Partnership and Home Care Pharmacy, Inc. of Florida, dated
March 24, 1993 (incorporated by reference to Exhibit 10.3 of the Company's 10-K for the year ended December 31,
1994).
10.14 First Amendment to lease between the Company and Semi Cane Investments, Inc., as Successor in Interest to Great
Western Bank dated June 17, 1994 (incorporated by reference to Exhibit 10.4 of the Company's 10-K for the year
ended December 31, 1994).
10.15 First Amendment to Lease Agreement dated March 11, 1994 between the Company and V & V Properties (incorporated by
reference to Exhibit 10.5 of the Company's 10-K for the year ended December 31, 1994).
10.16 Management Agreement between the Company and Fairlawn Nursing Home and Assisted Living, Inc. dated June 9, 1986,
and amendments thereto dated June 13, 1986, October 1, 1990, and January 1, 1993 (incorporated by reference to
Exhibit 10.1 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25, 1993 under
the Securities Act of 1933).
10.17 Lease Agreement between the Company and V & V Properties, dated June 2, 1988 (incorporated by reference to
Exhibit 10.2 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25, 1993 under
the Securities Act of 1933).
10.18 Operating Lease between the Company and Health Care Property Investors, Inc., dated January 31, 1986, as amended
September 11, 1991 (incorporated by reference to Exhibit 10.3 of the Company's Registration Statement on
Form S-1 (File No. 33-65080) filed June 25, 1993 under the Securities Act of 1933).
10.19 Business Property Lease between the Company and Office World, Inc. dated July 1, 1992 (incorporated by reference
to Exhibit 10.4 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25, 1993 under
the Securities Act of 1933).
10.20 Lease Agreement between the Company and Great Western Bank, dated July 1, 1992 (incorporated by reference to
Exhibit 10.5 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25, 1993 under
the Securities Act of 1933).
10.21 Operating Lease between the Company and Health Care Property Investors, Inc., dated January 31, 1986, as amended
September 11, 1991 (incorporated by reference to Exhibit 10.6 of the Company's Registration Statement on
Form S-1 (File No. 33-65080) filed June 25, 1993 under the Securities Act of 1933).
10.22 Office Lease between the Company and NFI MetroCenter II Associates dated November 15, 1992 (incorporated by
reference to Exhibit 10.7 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25,
1993 under the Securities Act of 1933).
10.23 Lease Agreement between the Company and Marie Antoinette Partners, dated April 2, 1986 (incorporated by
reference to Exhibit 10.8 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25,
1993 under the Securities Act of 1933).
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - - ------ -----------
<S> <C>
10.24 Facility Lease by and between the Company and Cumberland Healthcare, L.P., I-C, dated February 1, 1989, as
amended November 15, 1991 (incorporated by reference to Exhibit 10.9 of the Company's Registration Statement on
Form S-1 (File No. 33-65080) filed June 25, 1993 under the Securities Act of 1933).
10.25 Lease and Security Agreement between BIP SUB I, INC. and Arbors East, Inc. dated April 1, 1991 (incorporated by
reference to Exhibit 10.10 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25,
1993 under the Securities Act of 1933).
10.26 Operating Lease between the Company and Health Care Properties Investors, Inc. dated December 30, 1986 and
Addendum dated March 23, 1987 (incorporated by reference to Exhibit 10.11 of the Company's Registration Statement
on Form S-1 (File No. 33-65080) filed June 25, 1993 under the Securities Act of 1933).
10.27+ First Amended and Restated Incentive Stock Option Plan dated November 26, 1991 (incorporated by reference to
Exhibit 10.12 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25, 1993 under
the Securities Act of 1933).
10.28 Management Agreement dated September 28, 1989 between the Company and The Druggist, Inc., as amended June 30, 1991
(incorporated by reference to Exhibit 10.14 of the Company's Registration Statement on Form S-1
(File No. 33-65080) filed June 25, 1993 under the Securities Act of 1933).
10.29 Share Purchase Agreement dated June 23, 1993 between the Company and the Stockholders of Marshall Properties, Inc.
(incorporated by reference to Exhibit 10.15 of the Company's Registration Statement on Form S-1
(File No. 33-65080) filed June 25, 1993 under the Securities Act of 1933).
10.30 Assignment and Assumption of Management Agreement dated January 4, 1989 among the Company, Fairlawn Nursing Home
and Assisted Living, Inc., and Fairlawn Associates Limited Partnership, relating to Management Agreement
previously filed as Exhibit 10.1 of the Company's Registration Statement on Form S-1 filed on June 25, 1993
(File No. 33-65080) and incorporated by reference
herein (incorporated by reference to Exhibit 10.16 of the Company's Registration Statement on Form S-1
(File No. 33-65080) filed July 9, 1993 under the Securities Act of 1933).
10.31+ Certificate of Amendment dated July 7, 1993, to First Amended and Restated Incentive Stock Option Plan
previously filed as Exhibit 10.12 of the Company's Registration Statement on Form S-1 (File No. 33-65080) and
incorporated by reference herein (incorporated by reference to Exhibit 10.17 of the Company's Registration
Statement on Form S-1 (File No. 33-65080) filed July 9, 1993 under the Securities Act of 1933).
10.32 Land Lease Agreement between the Company and the Chesapeake and Potomac Telephone Company of West Virginia dated
June 24, 1993 (incorporated by reference to Exhibit 10.18 of the Company's Registration Statement on Form S-1
(File No. 33-65080) filed July 29, 1993 under the Securities Act of 1933).
10.33+ Form of Indemnification Agreement between the Company and its Directors and Executive Officers (incorporated by
reference to Exhibit 10.19 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed
July 29, 1993 under the Securities Act of 1933).
11.1 Statement Re Computation of Net Income Per Share.
27.1 Financial Data Schedule.
<FN>
+Executive management contract or compensatory plan or arrangement.
</TABLE>
15
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ARBOR HEALTH CARE COMPANY
(Registrant)
Date 5/13/96 By: /s/ DENNIS R. SMITH
----------------- --------------------------------------
Dennis R. Smith, Vice President,
Controller and Chief Accounting
Officer
16
<PAGE> 17
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - - ------- -----------
<S> <C>
3.1* Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 of the Company's
Registration Statement on Form S-3 (File No. 33-93470) filed June 14, 1995 under the Securities Act of 1933).
3.2* Restated bylaws of the Company (incorporated by reference to Exhibit 3.2 of the Company's Registration Statement
on Form S-3 (File No. 33-93470) filed June 14, 1995 under the Securities Act of 1933).
4.1 Promissory Note dated February 15, 1996 between the Company and Capital One Funding Corporation.
4.2 Reimbursement Agreement dated February 12, 1996 between the Company and Bank One, Kentucky, N.A.
4.3 Open-End Mortgage and Security Agreement dated February 12, 1996 between the Company and Bank One, Kentucky, N.A.
4.4 Mortgage and Security Agreements (5) dated February 12, 1996 between the Company and Bank One, Kentucky, NA.
4.5 Assignments of Leases and Rents (6) dated February 12, 1996 between the Company and Bank One, Kentucky, NA.
4.6 Guaranty Agreement dated February 12, 1996 between the Company and Bank One, Kentucky, NA.
4.7 Contingent Guaranty Agreement dated February 12, 1996 between the Company and Bank One, Kentucky, NA.
4.8 Working Capital Line of Credit extension letter dated March 31, 1996 between the Company and Society National Bank.
4.9 Letter of Credit extension letter dated March 31, 1996 between the Company and Society National Bank.
4.10 Acquisition and Development Revolving Credit Facility extension letter dated March 31, 1996 between the Company
and Society National Bank.
4.11 Second Amendment to Amended and Restated Revolving Credit and Term Loan Agreement dated February 9, 1996 between
the Company and Society National Bank.
4.12 Amendment to Amended and Restated Loan Agreement dated February 1, 1996 between the Company and Bank One, Lima, NA.
4.13* Acquisition and Development Revolving Credit Facility extension letter dated December 21, 1995 between the
Company and Society National Bank (incorporated by reference to Exhibit 4.1 of the Company's 10-K for the year
ended December 31, 1995).
4.14* Working Capital Line of Credit extension letter dated December 21, 1995 between the Company and Society National
Bank (incorporated by reference to Exhibit 4.2 of the Company's 10-K for the year ended December 31, 1995).
4.15* Letter of Credit extension letter dated December 21, 1995 between the Company and Society National Bank
(incorporated by reference to Exhibit 4.3 of the Company's 10-K for the year ended December 31, 1995).
</TABLE>
17
<PAGE> 18
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - - ------- -----------
<S> <C>
4.16* Second Amended and Restated Demand Promissory Note dated December 28, 1995 between the Company and Society
National Bank (incorporated by reference to Exhibit 4.4 of the Company's 10-K for the year ended
December 31, 1995).
4.17* Amended and Restated Revolving Credit and Term Loan Agreement dated June 1, 1995 between the Company and Society
National Bank (incorporated by reference to Exhibit 4.5 of the Company's 10-K for the year ended
December 31, 1995).
4.18* Amendment to Loan Agreement dated September 14, 1995 between the Company and The Provident Bank (incorporated by
reference to Exhibit 4.1 of the Company's 10-Q for the quarter ended September 30, 1995).
4.19* Acquisition and Development Revolving Credit Facility extension letter dated August 31, 1995 between the Company
and Society National Bank (incorporated by reference to Exhibit 4.2 of the Company's 10-Q for the quarter ended
September 30, 1995).
4.20* Working Capital Line of Credit extension letter dated August 31, 1995 between the Company and Society National Bank
(incorporated by reference to Exhibit 4.3 of the Company's 10-Q for the quarter ended September 30, 1995).
4.21* Letter of Credit extension letter dated August 31, 1995 between the Company and Society National Bank
(incorporated by reference to Exhibit 4.4 of the Company's 10-Q for the quarter ended September 30, 1995).
4.22* Loan Agreement dated August 1, 1995 between the Company and The Provident Bank (incorporated by reference to
Exhibit 4.5 of the Company's 10-Q for the quarter ended September 30, 1995).
4.23* Amended and Restated Loan Agreement dated August 1, 1995 between the Company and Bank One, Lima, NA
(incorporated by reference to Exhibit 4.6 of the Company's 10-Q for the quarter ended September 30, 1995).
4.24* Amendment to Amended and Restated Revolving Credit and Term Loan Agreement dated June 30, 1995 between the
Company and Society National Bank (incorporated by reference to Exhibit 4.1 of the Company's 10-Q for the quarter
ended June 30, 1995).
4.25* Amendment to Loan Agreement dated June 30, 1995 between the Company and The Provident Bank (incorporated by
reference to Exhibit 4.2 of the Company's 10-Q for the quarter ended June 30, 1995).
4.26* Amendment to Loan Agreement dated June 29, 1995 between the Company and Bank One (incorporated by reference to
Exhibit 4.3 of the Company's 10-Q for the quarter ended June 30, 1995).
4.27* Amendment to Loan Agreement dated June 30, 1995 between the Company and The Fifth Third Bank (incorporated by
reference to Exhibit 4.4 of the Company's 10-Q for the quarter ended June 30, 1995).
4.28* Acquisition and Development Revolving Credit Facility extension letter dated June 1, 1995 between the Company
and Society National Bank (incorporated by reference to Exhibit 4.5 of the Company's 10-Q for the quarter ended
June 30, 1995).
</TABLE>
18
<PAGE> 19
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - - ------- -----------
<S> <C>
4.29* Working Capital Line of Credit extension letter dated June 1, 1995 between the Company and Society National Bank
(incorporated by reference to Exhibit 4.6 of the Company's 10-Q for the quarter ended June 30, 1995).
4.30* Letter of Credit extension letter dated June 1, 1995 between the Company and Society National Bank (incorporated
by reference to Exhibit 4.7 of the Company's 10-Q for the quarter ended June 30, 1995).
4.31* Loan Agreement amendment dated May 31, 1995 between the Company and Bank One (incorporated by reference to
Exhibit 4.8 of the Company's 10-Q for the quarter ended June 30, 1995).
4.32* Loan Agreement extension letter dated May 29, 1995 between the Company and The Provident Bank (incorporated by
reference to Exhibit 4.9 of the Company's 10-Q for the quarter ended June 30, 1995).
4.33* Loan Agreement extension letter dated March 22, 1995 between the Company and The Provident Bank (incorporated by
reference to Exhibit 4.1 of the Company's 10-Q for the quarter ended March 31, 1995).
4.34* Line of Credit for Letters of Credit Agreement dated November 10, 1994 between the Company and Society National
Bank (incorporated by reference to Exhibit 4.1 of the Company's 10-K for the year ended December 31, 1994).
4.35* Loan Agreement extension letter dated September 16, 1994 between the Company and The Provident Bank (incorporated
by reference to Exhibit 4.1 of the Company's 10-Q for the quarter ended September 30, 1994).
4.36* Acquisition and Development Revolving Credit Facility extension letter dated August 31, 1994 between the Company
and Society National Bank (incorporated by reference to Exhibit 4.2 of the Company's 10-Q for the quarter
ended September 30, 1994).
4.37* Working Capital Line of Credit extension letter dated August 31, 1994 between the Company and Society National Bank
(incorporated by reference to Exhibit 4.3 of the Company's 10-Q for the quarter ended September 30, 1994).
4.38* Letter of Credit extension letter dated August 31, 1994 between the Company and Society National Bank
(incorporated by reference to Exhibit 4.4 of the Company's 10-Q for the quarter ended September 30, 1994).
4.39* Loan Agreement amendment dated September 15, 1994 between the Company and Bank One (incorporated by reference to
Exhibit 4.5 of the Company's 10-Q for the quarter ended September 30, 1994).
4.40* Revolving Credit and Term Loan Agreement dated April 11, 1994 between the Company and The Fifth Third Bank
(incorporated by reference to Exhibit 4.1 of the Company's 10-Q for the quarter ended June 30, 1994).
4.41* Loan Agreement extension letter dated May 25, 1994 between the Company and The Provident Bank (incorporated by
reference to Exhibit 4.2 of the Company's 10-Q for the quarter ended June 30, 1994).
4.42* Acquisition and Development Revolving Credit Facility extension letter dated May 18, 1994 between the Company and
Society National Bank (incorporated by reference to Exhibit 4.3 of the Company's 10-Q for the quarter ended
June 30, 1994).
</TABLE>
19
<PAGE> 20
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - - ------- -----------
<S> <C>
4.43* Acquisition and Development Revolving Credit Facility extension letter dated July 31, 1994 between the Company
and Society National Bank (incorporated by reference to Exhibit 4.4 of the Company's 10-Q for the quarter ended
June 30, 1994).
4.44* Working Capital Line of Credit extension letter dated May 16, 1994 between the Company and Society National Bank
(incorporated by reference to Exhibit 4.5 of the Company's 10-Q for the quarter ended June 30, 1994).
4.45* Working Capital Line of Credit extension letter dated July 31, 1994 between the Company and Society National Bank
(incorporated by reference to Exhibit 4.6 of the Company's 10-Q for the quarter ended June 30, 1994).
4.46* Letter of Credit extension dated May 18, 1994 between the Company and Society National Bank (incorporated by
reference to Exhibit 4.7 of the Company's 10-Q for the quarter ended June 30, 1994).
4.47* Letter of Credit extension letter dated July 31, 1994 between the Company and Society National Bank
(incorporated by reference to Exhibit 4.8 of the Company's 10-Q for the quarter ended June 30, 1994).
4.48* Loan Agreement dated December 21, 1993 between the Company and Bank One, Lima, NA (incorporated by reference to
Exhibit 4.1 of the Company's 10-K for the year ended December 31, 1993).
4.49* Revolving Credit and Term Loan Agreement dated August 11, 1993 between the Company and The Provident Bank
(incorporated by reference to Exhibit 4.1 of the Company's 10-Q for the quarter ended September 30, 1993).
4.50* Revolving Credit and Term Loan Agreement dated September 30, 1993 between the Company and Society Bank & Trust
(incorporated by reference to Exhibit 4.2 of the Company's 10-Q for the quarter ended September 30, 1993).
4.51* Stockholders Agreement dated April 9, 1985 among Arbor Holdings, Inc. and Stockholders and the First Amendment
thereto (incorporated by reference to Exhibit 4.1 of the Company's Registration Statement on Form S-1
(File No. 33-65080) filed June 25, 1993 under the Securities Act of 1933).
4.52* Series B Preferred Stock Purchase Agreement dated November 3, 1986 (incorporated by reference to Exhibit 4.2 of
the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25, 1993 under the Securities
Act of 1933).
4.53* Revolving Credit and Term Loan Agreement dated June 30, 1992 between the Company and Society Bank & Trust
(incorporated by reference to Exhibit 4.3 of the Company's Registration Statement on Form S-1 (File No. 33-65080)
filed June 25, 1993 under the Securities Act of 1933).
4.54* Line of Credit Agreement dated June 22, 1993 between the Company and Society Bank & Trust (incorporated by
reference to Exhibit 4.4 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed
June 25, 1993 under the Securities Act of 1933).
4.55* Loan Agreement between the Company and The Provident Bank dated September 9, 1992 (incorporated by reference to
Exhibit 4.5 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25, 1993 under
the Securities Act of 1933).
</TABLE>
20
<PAGE> 21
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - - ------- -----------
<S> <C>
4.56* Loan Agreement between the Company and Bank One, Lima, NA dated December 7, 1992 (incorporated by reference to
Exhibit 4.6 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25, 1933 under
the Securities Act of 1933).
4.57* Commitment Letter dated May 28, 1993 from Bank One, Lima, NA, accepted by the Company June 7, 1993 (incorporated
by reference to Exhibit 4.7 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed
June 25, 1993 under the Securities Act of 1933).
4.58* Mortgage and Security Agreement between the Company and Southtrust Bank of Alabama, National Association, dated
September 29, 1992 (incorporated by reference to Exhibit 4.8 of the Company's Registration Statement on Form S-1
(File No. 33-65080) filed June 25, 1993 under the Securities Act of 1933).
4.59* Commitment Letter dated as of May 30, 1993, from Society Bank & Trust for revolving credit facility, accepted by
the Company June 22, 1993 (incorporated by reference to Exhibit 4.9 of the Company's Registration Statement on
Form S-1 (File No. 33-65080) filed July 9, 1993 under the Securities Act of 1933).
4.60* Commitment Letter dated as of July 1, 1993, from The Provident Bank, informing the Company of reaffirmation of
line of credit (incorporated by reference to Exhibit 4.10 of the Company's Registration Statement on Form S-1
(File No. 33-65080) filed July 9, 1993 under the Securities Act of 1933).
(The Company is not filing any instrument with respect to long-term debt that does not exceed 10 percent of the
total assets of the Company, and the Company agrees to furnish a copy of any such instrument to the Commission
upon request).
10.1 Second Amendment to Lease Agreement dated March 18, 1996 between the Company and V & V Properties.
10.2*+ Arbor Health Care Company 1996 Stock Option Plan for Non-Employee Directors (incorporated by reference to the
Company's Proxy Statement dated April 8, 1996).
10.3*+ Description of 1995 Bonus Plans for Named Executive Officers (incorporated by reference to Exhibit 10.1 of the
Company's 10-k for the year ended December 31, 1995).
10.4* Asset Purchase Agreement dated April 28, 1995 between the Company and Fairlawn Associates Limited Partnership
(incorporated by reference to Exhibit 10.1 of the Company's 10-Q for the quarter ended June 30, 1995).
10.5* Amendment to Asset Purchase Agreement dated June 1, 1995 between the Company and Fairlawn Associates Limited
Partnership (incorporated by reference to Exhibit 10.2 of the Company's 10-Q for the quarter ended June 30, 1995).
10.6* Agreement of Merger dated June 30, 1995 between the Company, Green Tree Pharmacy, Inc., Allan K. Vrable and The
Druggist, Inc. (incorporated by reference to Exhibit 10.3 of the Company's 10-Q for the quarter ended June 30,
1995).
</TABLE>
21
<PAGE> 22
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - - ------- -----------
<S> <C>
10.7* Addendum to Agreement of Merger dated June 30, 1995 between the Company, Green Tree Pharmacy, Inc.,
Allan K. Vrable and The Druggist, Inc. (incorporated by reference to Exhibit 10.4 of the Company's 10-Q for the
quarter ended June 30, 1995).
10.8* Share Purchase Agreement dated June 30, 1995 between the Company and Allan K. Vrable, sole shareholder of
Alternacare Plus
Enterprises, Inc. (incorporated by reference to Exhibit 10.5 of the Company's 10-Q for the quarter ended
June 30, 1995).
10.9* Employment Agreement dated June 30, 1995 between the Company and Allan K. Vrable (incorporated by reference to
Exhibit 10.6 of the Company's 10-Q for the quarter ended June 30, 1995).
10.10*+ Arbor Health Care Company 1995 Stock Option Plan (incorporated by reference to the Company's Proxy Statement
dated April 24, 1995).
10.11* Share Purchase Agreement dated June 30, 1994 between the Company and the Stockholders of Bay Geriatric Pharmacy,
Inc. and Home Care Pharmacy, Inc. of Florida (incorporated by reference to Exhibit 10.1 of the Company's 10-K for
the year ended December 31, 1994).
10.12* Lease Agreement between Highland Oaks Associates, LTD., and Bay Geriatric Pharmacy, dated May 23, 1991
(incorporated by reference to Exhibit 10.2 of the Company's 10-K for the year ended December 31, 1994).
10.13* Lease Agreement between FGHP Properties, Limited Partnership and Home Care Pharmacy, Inc. of Florida, dated
March 24, 1993 (incorporated by reference to Exhibit 10.3 of the Company's 10-K for the year ended
December 31, 1994).
10.14* First Amendment to lease between the Company and Semi Cane Investments, Inc., as Successor in Interest to Great
Western Bank dated June 17, 1994 (incorporated by reference to Exhibit 10.4 of the Company's 10-K for the year
ended December 31, 1994).
10.15* First Amendment to Lease Agreement dated March 11, 1994 between the Company and V & V Properties (incorporated
by reference to Exhibit 10.5 of the Company's 10-K for the year ended December 31, 1994).
10.16* Management Agreement between the Company and Fairlawn Nursing Home and Assisted Living, Inc. dated June 9, 1986,
and amendments thereto dated June 13, 1986, October 1, 1990, and January 1, 1993 (incorporated by reference to
Exhibit 10.1 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25, 1993 under
the Securities Act of 1933).
10.17* Lease Agreement between the Company and V & V Properties, dated June 2, 1988 (incorporated by reference to
Exhibit 10.2 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25, 1993 under
the Securities Act of 1933).
10.18* Operating Lease between the Company and Health Care Property Investors, Inc., dated January 31, 1986, as amended
September 11, 1991 (incorporated by reference to Exhibit 10.3 of the Company's Registration Statement on
Form S-1 (File No. 33-65080) filed June 25, 1993 under the Securities Act of 1933).
10.19* Business Property Lease between the Company and Office World, Inc. dated July 1, 1992 (incorporated by reference
to Exhibit 10.4 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25, 1993
under the Securities Act of 1933).
</TABLE>
22
<PAGE> 23
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - - ------- -----------
<S> <C>
10.20* Lease Agreement between the Company and Great Western Bank, dated July 1, 1992 (incorporated by reference to
Exhibit 10.5 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25, 1993 under
the Securities Act of 1933).
10.21* Operating Lease between the Company and Health Care Property Investors, Inc., dated January 31, 1986, as amended
September 11, 1991 (incorporated by reference to Exhibit 10.6 of the Company's Registration Statement on
Form S-1 (File No. 33-65080) filed June 25, 1993 under the Securities Act of 1933).
10.22* Office Lease between the Company and NFI MetroCenter II Associates dated November 15, 1992 (incorporated by
reference to Exhibit 10.7 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25,
1993 under the Securities Act of 1933).
10.23* Lease Agreement between the Company and Marie Antoinette Partners, dated April 2, 1986 (incorporated by
reference to Exhibit 10.8 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25,
1993 under the Securities Act of 1933).
10.24* Facility Lease by and between the Company and Cumberland Healthcare, L.P., I-C, dated February 1, 1989, as
amended November 15, 1991 (incorporated by reference to Exhibit 10.9 of the Company's Registration Statement on
Form S-1 (File No. 33-65080) filed June 25, 1993 under the Securities Act of 1933).
10.25* Lease and Security Agreement between BIP SUB I, INC. and Arbors East, Inc. dated April 1, 1991 (incorporated by
reference to Exhibit 10.10 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed
June 25, 1993 under the Securities Act of 1933).
10.26* Operating Lease between the Company and Health Care Properties Investors, Inc. dated December 30, 1986 and
Addendum dated March 23, 1987 (incorporated by reference to Exhibit 10.11 of the Company's Registration
Statement on Form S-1 (File No. 33-65080) filed June 25, 1993 under the Securities Act of 1933).
10.27*+ First Amended and Restated Incentive Stock Option Plan dated November 26, 1991 (incorporated by reference to
Exhibit 10.12 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed June 25, 1993 under
the Securities Act of 1933).
10.28* Management Agreement dated September 28, 1989 between the Company and The Druggist, Inc., as amended June 30, 1991
(incorporated by reference to Exhibit 10.14 of the Company's Registration Statement on Form S-1
(File No. 33-65080) filed June 25, 1993 under the Securities Act of 1933).
10.29* Share Purchase Agreement dated June 23, 1993 between the Company and the Stockholders of Marshall Properties, Inc.
(incorporated by reference to Exhibit 10.15 of the Company's Registration Statement on Form S-1
(File No. 33-65080) filed June 25, 1993 under the Securities Act of 1933).
</TABLE>
23
<PAGE> 24
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - - ------- -----------
<S> <C>
10.30* Assignment and Assumption of Management Agreement dated January 4, 1989 among the Company, Fairlawn Nursing Home
and Assisted Living, Inc., and Fairlawn Associates Limited Partnership, relating to Management Agreement
previously filed as Exhibit 10.1 of the Company's Registration Statement on Form S-1 filed on June 25, 1993
(File No. 33-65080) and incorporated by reference herein (incorporated by reference to Exhibit 10.16 of the
Company's Registration Statement on Form S-1 (File No. 33-65080) filed July 9, 1993 under the Securities Act
of 1933).
10.31*+ Certificate of Amendment dated July 7, 1993, to First Amended and Restated Incentive Stock Option Plan
previously filed as Exhibit 10.12 of the Company's Registration Statement on Form S-1 (File No. 33-65080) and
incorporated by reference herein (incorporated by reference to Exhibit 10.17 of the Company's Registration
Statement on Form S-1 (File No. 33-65080) filed July 9, 1993 under the Securities Act of 1933).
10.32* Land Lease Agreement between the Company and the Chesapeake and Potomac Telephone Company of West Virginia dated
June 24, 1993 (incorporated by reference to Exhibit 10.18 of the Company's Registration Statement on Form S-1
(File No. 33-65080) filed July 29, 1993 under the Securities Act of 1933).
10.33*+ Form of Indemnification Agreement between the Company and its Directors and Executive Officers (incorporated by
reference to Exhibit 10.19 of the Company's Registration Statement on Form S-1 (File No. 33-65080) filed
July 29, 1993 under the Securities Act of 1933).
11.1 Statement Re Computation of Net Income Per Share.
27.1 Financial Data Schedules.
<FN>
*Previously filed.
+Executive management contract or compensatory plan or arrangement.
</TABLE>
24
<PAGE> 1
Exhibit 4.1
PROMISSORY NOTE
(Series 1996A-1)
$13,500,000 February 15, 1996
FOR VALUE RECEIVED, the undersigned, Arbor Health Care Company,
a Delaware corporation, having an address of 1100 Shawnee Road, Box 840, Lima,
Ohio 45802-0840 ("Arbor") and Marshall Properties, Inc., an Ohio corporation
having an address at P.O. Box 840, Lima Ohio 45802 ("Marshall" and together
with Arbor, the "Borrowers"), hereby promise to pay to the order of CAPITAL ONE
FUNDING CORPORATION, a Delaware corporation (the "Corporation"), (i) the
principal sum of Thirteen Million Five Hundred Thousand Dollars ($13,500,000),
(ii) interest, determined and calculated as provided in paragraph 2 of this
Note, on the outstanding principal amount of this Note from the date hereof
until the principal of this Note is paid in full and (iii) certain other
payments as provided in paragraph 3 of this Note. The principal sum of this
Note shall be payable in semi-annual installments in the amounts and on the
dates set forth in Schedule I attached hereto, subject to acceleration as
provided in paragraph 7 of this Note. Interest on the outstanding principal
balance of this Note shall be payable monthly, in arrears, on the first
Business Day of each month, commencing on the 1st day of April, 1996.
1. BACKGROUND. The Borrowers have executed and delivered
this Note to the Corporation in order to evidence a $13,500,000 loan, made on
February 15, 1996 from the Corporation to the Borrowers. The Corporation made
the loan evidenced by this Note from proceeds received from the sale of the
Corporation's Floating Rate Option Notes, Series 1996A (the "Floating Rate
Option Notes"). The Floating Rate Option Notes are secured by a letter of
credit issued by Bank One, Kentucky, NA (the "Bank"). The Borrowers and the
Bank have entered into a Reimbursement Agreement of even date herewith (the
"Reimbursement Agreement") which describes in further detail the transactions
underlying this Note. All capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Reimbursement
Agreement.
2. INTEREST RATE PROVISIONS.
a. GENERAL. This Note shall bear interest from time to
time according to the interest rate selection (i.e., the Weekly Rate, the One
Year Rate, the Three Year Rate, the Five Year Rate or the Seven Year Rate) made
by the Borrowers pursuant to Section 2.07 of the Reimbursement Agreement. All
provisions of Section 2.07 of the Reimbursement Agreement applicable to the
determination and computation of interest are incorporated herein by reference.
b. INITIAL AND SUBSEQUENT INTEREST RATES. This Note shall
initially bear interest at the Weekly Rate. Thereafter, this Note shall
continue to bear interest at the Weekly Rate until the Borrowers make a Rate
Election as provided in paragraph 2(c) of this Note and Section 2.07 of the
Reimbursement Agreement.
<PAGE> 2
c. RATE ELECTION. Pursuant to the provisions and upon
compliance with the procedures set forth in Section 2.07 of the Reimbursement
Agreement, the Borrowers shall have the right to make a Rate Election (i.e., an
election to continue or change the then current interest rate determination
method) for this Note and for an equal principal amount of Floating Rate Option
Notes, with each such Rate Election to take place and become effective in
accordance with the provisions and procedures set forth in Section 2.07 of the
Reimbursement Agreement. The Borrowers understand that (i) no Rate Election to
a One Year Rate, a Three Year Rate, a Five Year Rate or a Seven Year Rate will
be permitted unless the term of the letter of credit furnished by the Bank will
exceed the term of the Rate Period selected, (ii) when this Note bears interest
at the One Year Rate, the Three Year Rate, the Five Year Rate or the Seven Year
Rate, no Rate Election may be made until the end of the applicable Rate Period
and the Borrowers' failure to make a timely Rate Election at the conclusion of
the then current Rate Period will be deemed to be a Rate Election to the Weekly
Rate, and (iii) no action, consent or notice is required on the part of the
Borrowers to continue the Weekly Rate from Rate Period to Rate Period. Also, in
connection with the Borrowers' Rate Election, the Borrowers may select more
than one interest rate determination method and designate the principal amount
of the Floating Rate Option Notes to be affected by each such selection;
provided, however, that the Borrowers must designate at least $1,000,000 in
principal amount of Floating Rate Option Notes for each interest rate
determination method selected. In the event that a Rate Election by the
Borrowers result in only a portion of the Floating Rate Option Notes bearing
interest at the interest rate determination method selected by the Borrowers
because the Remarketing Agent is unable to remarket all of such Floating Rate
Option Notes, then, for such time as this condition continues, all references
in paragraphs 2, 3 and 4 of this Note to "Floating Rate Option Notes" shall be
deemed to mean that principal portion of Floating Rate Option Notes which Bank
One Trust Company, NA the ("Trustee") designates as being owed under this Note.
3. PROGRAM, REMARKETING AND OTHER FEES. The Borrowers
shall pay to the Corporation a program fee (the "Program Fee"), rating agency
fee, a remarketing fee (the "Remarketing Fee"), and certain remarketing
expenses as follows:
a. PROGRAM FEE. The Borrowers shall pay to the Corporation
an annual Program Fee in an amount equal to 0.04% of the outstanding
principal amount of this Note. The Program Fee shall be payable in quarterly
installments in arrears on each March 1, June 1, September 1 and December 1
commencing March 1, 1996. The Program Fee shall be computed on the basis of (i)
a year of 360 days (comprised of twelve 30-day months) for the actual number of
days in such quarterly period and (ii) the outstanding principal amount of this
Note on the first day of each quarterly installment payment period.
b. RATING AGENCY FEE. The Borrowers shall pay quarterly on
the same dates that Program Fees are payable $1,000 (one-quarter of the annual
rating agency fee), divided by (b) the number of borrowers with loans
outstanding which correspond to the Floating Rate Option Notes.
c. WEEKLY RATE AND ONE YEAR RATE REMARKETING FEE. Whenever
this Note bears interest at the Weekly Rate or the One Year Rate, the Borrowers
shall pay to the Corporation an annual Remarketing Fee in an amount equal to
ten hundredths of one percent (0.10%)
-2-
<PAGE> 3
of the outstanding principal amount of this Note. The Weekly Rate and the One
Year Rate Remarketing Fee shall be payable in quarterly installments in arrears
on each March 1, June 1, September 1, and December 1 commencing March 1, 1996.
The Weekly Rate and the One Year Rate Remarketing Fee shall be computed on the
basis of (i) a year of 360 days (comprised of twelve 30-day months) for the
actual number of days elapsed in such quarterly period and (ii) the outstanding
principal amount of this Note on the first day of each quarterly installment
payment period.
d. RATE ELECTION REMARKETING FEE. Whenever the Borrowers make a
Rate Election to the Three Year Rate, the Five Year Rate or the Seven Year Rate
and the related Floating Rate Option Notes are remarketed to different holders,
the Borrowers shall pay to the Corporation a Remarketing Fee to cover nominal
printing and miscellaneous fees and expenses in an amount not to exceed
thirty-seven and a half hundredths of one percent (0.375%) of the outstanding
principal amount of this Note which relates to Floating Rate Option Notes
actually remarketed. The Rate Election Remarketing Fee shall be payable on the
applicable Rate Adjustment Date.
e. REMARKETING EXPENSES. The Borrowers also agree to pay to the
Corporation the extraordinary expenses incurred in connection with the
remarketing of the Floating Rate Option Notes related to this Note, including
without limitation the preparation, amendment, supplementation or replacement
of an initial offering or remarketing disclosure document and related
materials. Any such fee shall be assessed to the Borrowers as the Trustee shall
reasonably determine.
4. OPTIONAL AND MANDATORY PAYMENT. The Borrowers shall have the
Option to prepay all or any part (equal to an integral multiple of $1,000) of
this Note by (i) at least 45 days prior to an Optional Redemption Date, giving
written notice of the Borrowers' election to prepay this Note (which notice
shall specify the proposed redemption date and the principal amount of this
Note to be prepaid) to the Trustee, the Bank and the Remarketing Agent and (ii)
at least 15 days prior to the proposed Optional Redemption Date, making a loan
prepayment in an amount equal to the optional redemption price. As used herein
the term "Optional Redemption Date" means any date upon which Borrowers are
permitted to make a Rate Election. BORROWERS SHALL NOT BE PERMITTED TO PREPAY
THIS NOTE ON OTHER THAN AN OPTIONAL REDEMPTION DATE. ALL PREPAYMENTS SHALL BE
APPLIED TO REMAINING PRINCIPAL AMOUNTS DUE ON THE LATEST SCHEDULED LOAN PAYMENT
DATE SET FORTH IN SCHEDULE 1 TO THIS PROMISSORY NOTE.
The principal of this Note is subject to certain supplemental mandatory
repayments according to specified variations from the "Reappraisal Maximum LTV
Requirement" as set forth in Section 14 of Exhibit C to the Reimbursement
Agreement.
5. PROCEDURE FOR PAYMENTS. All loan and other payments to be made
by the Borrowers hereunder in respect of payments of principal of and premium,
if any, and interest on this Note shall be made to the Corporation do Bank One,
Kentucky, NA, 416 West Jefferson Street, Louisville, Kentucky 40202, Attention:
Commerical Loan Operations (or at such other address as the Corporation or Bank
may have specified for such purpose in a written notice to the Borrowers). All
payments to be made by the Borrowers hereunder
-3-
<PAGE> 4
in respect of the Program Fee and the Remarketing Fee shall be made to the
Corporation at Bank One Trust Company, N.A., Trustee, 100 East Broad Street,
Columbus, Ohio 43271-0181, Attention: Victoria Pavlick (or at such other
address as the Corporation may have specified for such purpose in a written
notice to the Borrowers). All payments made by the Borrowers hereunder shall be
in immediately available funds and in lawful currency of the United States. All
such payments shall be made to the Bank or the Corporation as applicable, by
not later than 3:00 p.m., Louisville, Kentucky time, on the date due and any
payments received after that time shall be deemed received on the next Business
Day. Whenever any payment to be made under this Note shall be due on a day
which is not a Business Day, such payment shall be due on the next succeeding
Business Day, with interest continuing to accrue thereon until such payment is
made.
6. INTEREST ON OVERDUE AMOUNTS. The Borrowers agree to
pay, on demand, interest on any principal or interest payment, program fee
payment, remarketing fee payment or other obligation payable by the Borrowers
under this Note or the Reimbursement Agreement which is not paid when due, for
the period from and including the date on which payment is due to but not
including the date on which payment is made, at the Default Rate of Interest as
specified in the Reimbursement Agreement.
7. ACCELERATION.
a. If an Event of Default under the Reimbursement
Agreement shall have occurred and the Bank shall have instructed the Trustee to
accelerate the Floating Rate Option Notes, the maturity of this Note shall be
accelerated and the unpaid principal amount of and accrued interest on this
Note shall be immediately due and payable.
b. If the Bank fails to reinstate the Letter of Credit in
accordance with its terms following a draw under the Letter of Credit and the
Trustee accelerates the maturity date for the Floating Rate Option Notes, the
maturity of this Note shall be accelerated and the unpaid principal amount of
and accrued interest on this Note shall be due and payable on the date which is
the accelerated maturity date for the Floating Rate Option Notes as specified
in a notice of acceleration from the Corporation or the Bank acting on behalf
of the Corporation; provided, however, that the annulment of the declaration of
acceleration with respect to the Floating Rate Option Notes shall also
constitute an annulment of a corresponding declaration with respect to this
Note.
c. In the event that following any optional or mandatory
tender of Floating Rate Option Notes the Remarketing Agent is unable for any
reason to remarket all of such Floating Rate Option Notes, this Note shall be
deemed to have been repaid in an amount equal to that portion of the Floating
Rate Option Notes not remarketed which the Trustee designates as being related
to this Note. Upon the subsequent remarketing of Floating Rate Option Notes,
this Note shall be deemed to have been reinstated in an amount equal to that
portion of the Floating Rate Option Notes that have been remarketed which the
Trustee designates as being related to this Note. The Trustee shall make its
designation by multiplying the outstanding principal amount of this Note by the
ratio of (i) the principal amount of Floating Rate Option Notes which have not
been remarketed and which bear interest at the Interest Rate Option applicable
to this Note, to (ii) the total principal amount
-4-
<PAGE> 5
of Floating Rate Option Notes that bear interest at the Interest Rate Option
applicable to this Note.
8. MISCELLANEOUS. The obligation of the Borrowers to make
the loan and other payments required hereunder shall be joint and several and
absolute, unconditional and irrevocable and the Borrowers shall make such
payments without abatement, diminution or deduction regardless of any cause or
circumstances whatsoever, including without limitation any defense, set-off,
recoupment or counterclaim which the Borrowers may have or assert against the
Corporation, the Bank, the Remarketing Agent or any other Person.
The Note may not be amended, supplemented, restated or
discharged except by an instrument in writing signed by the Borrowers and the
Corporation, and approved in writing by the Bank. No requirement of this Note
may be waived at any time except by a writing signed by the Corporation and the
Bank, nor shall any waiver be deemed a waiver of any subsequent breach or
default by the Borrowers. The Borrowers waive presentment, demand, protest and
all other demands in connection with the delivery, acceptance, performance,
default or enforcement of this Note.
9. WAIVER OF JURY TRIAL. The Corporation and the
Borrowers each hereby voluntarily, irrevocably and unconditionally waive any
right to have a jury participate in resolving any dispute, whether sounding in
contract, tort, or otherwise, between the Corporation and the Borrowers arising
out of, in connection with, related to or incidental to the relationship
established between the Borrowers and the Corporation in connection with this
Note or any other agreement or document executed or delivered in connection
herewith or the transactions related hereto. This provision is a material
inducement to the Corporation to make the loan evidenced by this Note. It shall
not in any way affect, waive, limit, amend or modify the Corporation's ability
to pursue its remedies including, but not limited to, any confession of
judgment or cognovit provision contained in the loan documents or any other
document related hereto.
-5-
<PAGE> 6
THIS NOTE HAS BEEN DELIVERED IN LOUISVILLE, KENTUCKY AND SHALL BE DEEMED TO BE
A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
KENTUCKY.
IN WITNESS WHEREOF, the Borrowers have caused this Note to be
duly executed and delivered by its respective authorized officers, all as of
the date hereinbefore written.
BORROWERS:
ARBOR HEALTH CARE COMPANY
By: /s/ W. Wondolowski
------------------------------
Title: VP & Treasurer
---------------------------
MARSHALL PROPERTIES, INC.
By: /s/ W. Wondolowski
------------------------------
Title: VP and Treasurer
---------------------------
-6-
<PAGE> 7
ASSIGNMENT TO BANK ONE, KENTUCKY, NA
FOR VALUE RECEIVED, Capital One Funding Corporation (the "Corporation")
hereby assigns to Bank One, Kentucky, NA (the "Bank") all of its right, title
and interest in the Promissory Note delivered by Arbor Health Care Company, a
Delaware corporation, and Marshall Properties, Inc., an Ohio corporation, dated
February 15, 1996 in the principal amount of $13,500,000 (the "Series 1996A-1
Note"); provided, however, that the rights of the Corporation to receive the
fees and expenses provided for in paragraph 3 of the Note are not assigned; and
provided, further, that should the Bank fail to honor any properly submitted
drawing request under the Bank's irrevocable, transferable, direct-pay letter
of credit delivered to Bank One Trust Company, N.A., as Trustee to secure
payment of the Corporation's Floating Rate Option Notes, Series 1996A, then
this Assignment shall, without the necessity for any action or notice on the
part of the Corporation or any notice or consent on the part of the Bank,
immediately be null, void, rescinded and of no further force and effect.
IN WITNESS WHEREOF, the Corporation and the Bank have caused this
Assignment to be duly executed and delivered all as of the 15th day of
February, 1996.
CAPITAL ONE FUNDING CORPORATION
AS ASSIGNOR
By: /s/ Tiffany Percival
-------------------------------------
Title: Tiffany Percival, Vice President
----------------------------------
BANK ONE, KENTUCKY, NA
AS ASSIGNEE
By: /s/ Dennis P. Heishman
-------------------------------------
Title: Senior Vice President
----------------------------------
-7-
<PAGE> 8
SCHEDULE I
TO
PROMISSORY NOTE
SCHEDULE Of PRINCIPAL PAYMENTS
<TABLE>
<CAPTION>
Loan Payment Date Amount
----------------- ------
<S> <C>
08/01/96 $149,000.00
02/01/97 154,000.00
08/01/97 160,000.00
02/01/98 166,000.00
08/01/98 173,000.00
02/01/99 179,000.00
08/01/99 186,000.00
02/01/2000 193,000.00
08/01/2000 200,000.00
02/01/2001 208,000.00
08/01/2001 216,000.00
02/01/2002 224,000.00
08/01/2002 233,000.00
02/01/2003* 242,000.00
08/01/2003 250,000.00
02/01/2004 261,000.00
08/01/2004 270,000.00
02/01/2005 280,000.00
08/01/2005 292,000.00
02/01/2006 302,000.00
08/01/2006 314,000.00
02/01/2007 326,000.00
08/01/2007 338,000.00
02/01/2008 351,000.00
08/01/2008 364,000.00
02/01/2009 379,000.00
08/01/2009 392,000.00
02/01/2010 408,000.00
08/01/2010 423,000.00
02/01/2011 440,000.00
08/01/2011 456,000.00
02/01/2012 473,000.00
08/01/2012 492,000.00
02/01/2013 510,000.00
08/01/2013 529,000.00
02/01/2014 550,000.00
08/01/2014 571,000.00
02/01/2015 592,000.00
08/01/2015 616,000.00
02/01/2016 638,000.00
-------------
TOTAL 13,500,000.00
<FN>
______________________
* If the Letter of Credit is not extended as provided in the Reimbursement
Agreement, the entire unpaid principal amount will be due and payable on
February 1, 2003.
</TABLE>
-8-
<PAGE> 9
PROMISSORY NOTE
(Series 1996A-2)
$13,500,000 February 15, 1996
FOR VALUE RECEIVED, the undersigned, Arbor Health Care Company,
a Delaware corporation and Marshall Properties, Inc., an Ohio corporation, both
having an address of 1100 Shawnee Road, Box 840, Lima, Ohio 45802-0840
(collectively, the "Borrowers"), hereby jointly and severally promise to pay to
the order of CAPITAL ONE FUNDING CORPORATION, a Delaware corporation (the
"Corporation"), (i) the principal sum of Thirteen Million Five Hundred Thousand
Dollars ($13,500,000), (ii) interest, determined and calculated as provided in
paragraph 2 of this Note, on the outstanding principal amount of this Note from
the date hereof until the principal of this Note is paid in full and (iii)
certain other payments as provided in paragraph 3 of this Note. The principal
sum of this Note shall be payable in semi-annual installments in the amounts
and on the dates set forth in Schedule I attached hereto, subject to
acceleration as provided in paragraph 7 of this Note. Interest on the
outstanding principal balance of this Note shall be payable monthly, in
arrears, on the first Business Day of each month, commencing on the 1st day of
April, 1996.
1. BACKGROUND. The Borrowers have executed and delivered
this Note to the Corporation in order to evidence a $13,500,000 loan, made on
February 15, 1996 from the Corporation to the Borrowers. The Corporation made
the loan evidenced by this Note from proceeds received from the sale of the
Corporation's Floating Rate Option Notes, Series 1996A (the "Floating Rate
Option Notes"). The Floating Rate Option Notes are secured by a letter of
credit issued by Bank One, Kentucky, NA (the "Bank"). The Borrowers and the
Bank have entered into a Reimbursement Agreement of even date herewith (the
"Reimbursement Agreement") which describes in further detail the transactions
underlying this Note. All capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Reimbursement
Agreement.
2. INTEREST RATE PROVISIONS.
a. GENERAL. This Note shall bear interest from time to
time according to the interest rate selection (i.e., the Weekly Rate, the One
Year Rate, the Three Year Rate, the Five Year Rate or the Seven Year Rate) made
by the Borrowers pursuant to Section 2.07 of the Reimbursement Agreement. All
provisions of Section 2.07 of the Reimbursement Agreement applicable to the
determination and computation of interest are incorporated herein by reference.
b. INITIAL AND SUBSEQUENT INTEREST RATES. This Note shall
initially bear interest at the Seven Year Rate. Thereafter, this Note shall
continue to bear interest at the Seven Year Rate until the Borrowers make a
Rate Election as provided in paragraph 2(c) of this Note and Section 2.07 of
the Reimbursement Agreement.
<PAGE> 10
c. RATE ELECTION. Pursuant to the provisions and upon
compliance with the procedures set forth in Section 2.07 of the Reimbursement
Agreement, the Borrowers shall have the right to make a Rate Election (i.e., an
election to continue or change the then current interest rate determination
method) for this Note and for an equal principal amount of Floating Rate Option
Notes, with each such Rate Election to take place and become effective in
accordance with the provisions and procedures set forth in Section 2.07 of the
Reimbursement Agreement. The Borrowers understand that (i) no Rate Election to
a One Year Rate, a Three Year Rate, a Five Year Rate or a Seven Year Rate will
be permitted unless the term of the letter of credit furnished by the Bank will
exceed the term of the Rate Period selected, (ii) when this Note bears interest
at the One Year Rate, the Three Year Rate, the Five Year Rate or the Seven Year
Rate, no Rate Election may be made until the end of the applicable Rate Period
and the Borrowers' failure to make a timely Rate Election at the conclusion of
the then current Rate Period will be deemed to be a Rate Election to the Weekly
Rate, and (iii) no action, consent or notice is required on the part of the
Borrowers to continue the Weekly Rate from Rate Period to Rate Period. Also, in
connection with the Borrowers' Rate Election, the Borrowers may select more
than one interest rate determination method and designate the principal amount
of the Floating Rate Option Notes to be affected by each such selection;
provided, however, that the Borrowers must designate at least $1,000,000 in
principal amount of Floating Rate Option Notes for each interest rate
determination method selected. In the event that a Rate Election by the
Borrowers results in only a portion of the Floating Rate Option Notes bearing
interest at the interest rate determination method selected by the Borrowers
because the Remarketing Agent is unable to remarket all of such Floating Rate
Option Notes, then, for such time as this condition continues, all references
in paragraphs 2, 3 and 4 of this Note to "Floating Rate Option Notes" shall be
deemed to mean that principal portion of Floating Rate Option Notes which Bank
One Trust Company, NA the ("Trustee") designates as being owed under this Note.
3. PROGRAM, REMARKETING AND OTHER FEES. The Borrowers
shall pay to the Corporation a program fee (the "Program Fee"), rating agency
fee, a remarketing fee (the "Remarketing Fee"), and certain remarketing
expenses as follows:
a. PROGRAM FEE. The Borrowers shall pay to the Corporation
an annual Program Fee in an amount equal to 0.04% of the outstanding principal
amount of this Note. The Program Fee shall be payable in quarterly installments
in arrears on each March 1, June 1, September 1 and December 1 commencing March
1, 1996. The Program Fee shall be computed on the basis of (i) a year of 360
days (comprised of twelve 30-day months) for the actual number of days in such
quarterly period and (ii) the outstanding principal amount of this Note on the
first day of each quarterly installment payment period.
b. RATING AGENCY FEE. The Borrowers shall pay quarterly on
the same dates that Program Fees are payable $1,000 (one-quarter of the annual
rating agency fee), divided by (b) the number of borrowers with loans
outstanding which correspond to the Floating Rate Option Notes.
c. WEEKLY RATE AND ONE YEAR RATE REMARKETING FEE. Whenever
any portion of this Note bears interest at the Weekly Rate or the One Year
Rate, the Borrowers shall pay to the Corporation an annual Remarketing Fee in
an amount equal to ten hundredths of one
-2-
<PAGE> 11
percent (0.10%) of the outstanding principal amount of this Note bearing
interest at either the Weekly or One Year Rate. The Weekly Rate and the One
Year Rate Remarketing Fee shall be payable in quarterly installments in arrears
on each March 1, June 1, September 1, and December 1 commencing March 1, 1996.
The Weekly Rate and the One Year Rate Remarketing Fee shall be computed on the
basis of (i) a year of 360 days (comprised of twelve 30-day months) for the
actual number of days elapsed in such quarterly period and (ii) the outstanding
principal amount of this Note on the first day of each quarterly installment
payment period bearing interest at either the Weekly or One Year Rate.
d. RATE ELECTION REMARKETING FEE. Whenever the Borrowers make a
Rate Election to the Three Year Rate, the Five Year Rate or the Seven Year Rate
and the related Floating Rate Option Notes are remarketed to different holders,
the Borrowers shall pay to the Corporation a Remarketing Fee to cover printing
and miscellaneous fees and expenses in an amount not to exceed thirty-seven and
a half hundredths of one percent (0.375%) of the outstanding principal amount
of this Note which relates to Floating Rate Option Notes actually remarketed.
The Rate Election Remarketing Fee shall be payable on the applicable Rate
Adjustment Date.
e. REMARKETING EXPENSES. The Borrowers also agree to pay to the
Corporation the extraordinary expenses incurred in connection with the
remarketing of the Floating Rate Option Notes related to this Note, including
without limitation the preparation, amendment, supplementation or replacement
of an initial offering or remarketing disclosure document and related
materials. Any such fee shall be assessed to the Borrowers as the Trustee shall
reasonably determine.
4. OPTIONAL AND MANDATORY PREPAYMENT. The Borrowers shall have the
option to prepay all or any part (equal to an integral multiple of $1,000) of
this Note by (i) at least 45 days prior to an Optional Redemption Date, giving
written notice of the Borrowers' election to prepay this Note (which notice
shall specify the proposed redemption date and the principal amount of this
Note to be prepaid) to the Trustee, the Bank and the Remarketing Agent and (ii)
at least 15 days prior to the proposed Optional Redemption Date, making a loan
prepayment in an amount equal to the optional redemption price; provided,
however, the Borrower shall have the option to prepay this Note, with the
consent of the Bank, in whole on any Business Day or in part on any Interest
Payment Date at the redemption prices (expressed as percentages of the
principal amount thereof being prepaid) and at the times set forth in the
following table, plus accrued interest to the date fixed for prepayment:
<TABLE>
<CAPTION>
Redemption Dates Inclusive Redemption Price
-------------------------- ----------------
<S> <C>
February 1, 2001 through January 31, 2002 101%
February 1, 2002 and thereafter 100%
</TABLE>
Except as hereinafter provided, this Note is not subject to prepayment prior to
February 1, 2001. As used herein the term "Optional Redemption Date" means any
date upon which Borrowers are permitted to make a Rate Election. EXCEPT AS
OTHERWISE PROVIDED IN
-3-
<PAGE> 12
THIS PARAGRAPH 4, BORROWERS SHALL NOT BE PERMITTED TO PREPAY THIS NOTE ON OTHER
THAN AN OPTIONAL REDEMPTION DATE. ALL PREPAYMENTS SHALL BE APPLIED TO REMAINING
PRINCIPAL AMOUNTS DUE ON THE LATEST SCHEDULED LOAN PAYMENT DATE SET FORTH IN
SCHEDULE I TO THIS PROMISSORY NOTE.
The principal of this Note is subject to certain supplemental mandatory
repayments according to specified variations from the "Reappraisal Maximum LTV
Requirement" as set forth in Section 14 of Exhibit C to the Reimbursement
Agreement.
5. PROCEDURE FOR PAYMENTS. All loan and other payments to be made
by the Borrowers hereunder in respect of payments of principal of and premium,
if any, and interest on this Note shall be made to the Corporation c/o Bank One,
Kentucky, NA, 416 West Jefferson Street, Louisville, Kentucky 40202,
Attention: Commercial Loan Operations (or at such other address as the
Corporation or Bank may have specified for such purpose in a written notice to
the Borrowers). All payments to be made by the Borrowers hereunder in respect
of the Program Fee and the Remarketing Fee shall be made to the Corporation at
Bank One Trust Company, N.A., Trustee,100 East Broad Street, Columbus, Ohio
43271-0181, Attention: Victoria Pavlick (or at such other address as the
Corporation may have specified for such purpose in a written notice to the
Borrowers). All payments made by the Borrowers hereunder shall be in
immediately available funds and in lawful currency of the United States. All
such payments shall be made to the Bank or the Corporation as applicable, by
not later than 3:00 p.m., Louisville, Kentucky time, on the date due and any
payments received after that time shall be deemed received on the next Business
Day. Whenever any payment to be made under this Note shall be due on a day
which is not a Business Day, such payment shall be due on the next succeeding
Business Day, with interest continuing to accrue thereon until such payment is
made.
6. INTEREST ON OVERDUE AMOUNTS. The Borrowers agree to pay, on
demand, interest on any principal or interest payment, program fee payment,
remarketing fee payment or other obligation payable by the Borrowers under this
Note or the Reimbursement Agreement which is not paid when due, for the period
from and including the date on which payment is due to but not including the
date on which payment is made, at the Default Rate of Interest as specified in
the Reimbursement Agreement.
7. ACCELERATION.
a. If an Event of Default under the Reimbursement Agreement shall
have occurred and the Bank shall have instructed the Trustee to accelerate the
Floating Rate Option Notes, the maturity of this Note shall be accelerated and
the unpaid principal amount of and accrued interest on this Note shall be
immediately due and payable.
b. If the Bank fails to reinstate the Letter of Credit in
accordance with its terms following a draw under the Letter of Credit and the
Trustee accelerates the maturity date for the Floating Rate Option Notes, the
maturity of this Note shall be accelerated and the unpaid principal amount of
and accrued interest on this Note shall be due and payable on the date which is
the accelerated maturity date for the Floating Rate Option Notes as specified
in a notice of acceleration from the Corporation or the Bank acting on behalf
of
-4-
<PAGE> 13
the Corporation; provided, however, that any annulment of the declaration of
acceleration with respect to the Floating Rate Option Notes shall also
constitute an annulment of a corresponding declaration with respect to this
Note.
c. In the event that following any optional or mandatory
tender of Floating Rate Option Notes the Remarketing Agent is unable for any
reason to remarket all of such Floating Rate Option Notes, this Note shall be
deemed to have been repaid in an amount equal to that portion of the Floating
Rate Option Notes not remarketed which the Trustee designates as being related
to this Note. Upon the subsequent remarketing of Floating Rate Option Notes,
this Note shall be deemed to have been reinstated in an amount equal to that
portion of the Floating Rate Option Notes that have been remarketed which the
Trustee designates as being related to this Note. The Trustee shall make its
designation by multiplying the outstanding principal amount of this Note by the
ratio of (i) the principal amount of Floating Rate Option Notes which have not
been remarketed and which bear interest at the Interest Rate Option applicable
to this Note, to (ii) the total principal amount of Floating Rate Option Notes
that bear interest at the Interest Rate Option applicable to this Note.
8. MISCELLANEOUS. The obligation of the Borrowers to make
the loan payments and other payments required hereunder shall be joint and
several and absolute, unconditional and irrevocable and the Borrowers shall
make such payments without abatement, diminution or deduction regardless of any
cause or circumstances whatsoever, including without limitation any defense,
set-off, recoupment or counterclaim which the Borrowers may have or assert
against the Corporation, the Bank, the Remarketing Agent or any other Person.
This Note may not be amended, supplemented, restated or
discharged except by an instrument in writing signed by the Borrowers and the
Corporation, and approved in writing by the Bank. No requirement of this Note
may be waived at any time except by a writing signed by the Corporation and the
Bank, nor shall any waiver be deemed a waiver of any subsequent breach or
default by the Borrowers. The Borrowers waive presentment, demand, protest and
all other demands in connection with the delivery, acceptance, performance,
default or enforcement of this Note.
9. WAIVER OF JURY TRIAL. THE CORPORATION AND THE BORROWERS
EACH HEREBY VOLUNTARILY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT, OR OTHERWISE, BETWEEN THE CORPORATION AND THE BORROWERS ARISING OUT OF,
IN CONNECTION WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THE BORROWERS AND THE CORPORATION IN CONNECTION WITH THIS NOTE OR ANY
OTHER AGREEMENT OR DOCUMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS RELATED HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE
CORPORATION TO MAKE THE LOAN EVIDENCED BY THIS NOTE. IT SHALL NOT IN ANY WAY
AFFECT, WAIVE, LIMIT, AMEND OR MODIFY THE CORPORATION'S ABILITY TO PURSUE ITS
REMEDIES INCLUDING, BUT NOT LIMITED TO, ANY
-5-
<PAGE> 14
CONFESSION OF JUDGMENT OR COGNOVIT PROVISION CONTAINED IN THE LOAN DOCUMENTS
OR ANY OTHER DOCUMENT RELATED HERETO. THIS NOTE HAS BEEN DELIVERED IN
LOUISVILLE, KENTUCKY AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF KENTUCKY.
IN WITNESS WHEREOF, the Borrowers have caused this Note to be
duly executed and delivered by its respective authorized officers, all as of
the date hereinbefore written.
BORROWERS:
ARBOR HEALTH CARE COMPANY
/s/
By:_____________________________
Title: VP & Treasurer
__________________________
MARSHALL PROPERTIES, INC.
/s/
By:_____________________________
Treasurer
Title:__________________________
-6-
<PAGE> 15
ASSIGNMENT TO BANK ONE, KENTUCKY, NA
FOR VALUE RECEIVED, and in consideration of the issuance by Bank One,
Kentucky, NA of an irrevocable letter of credit to secure payment of the
Floating Rate Option Notes, Series 1996A, hereinafter described, Capital One
Funding Corporation (the "Corporation") hereby assigns to Bank One, Kentucky, NA
(the "Bank") all of its right, title and interest in the Promissory Note
delivered by Arbor Health Care Company, a Delaware corporation, and Marshall
Properties, Inc., an Ohio corporation, dated February 15, 1996 in the principal
amount of $13,500,000 (the "Series 1996A-2 Note"); provided, however, that the
rights of the Corporation to receive the fees and expenses provided for in
paragraph 3 of the Note are not assigned; and provided, further, that should the
Bank fail to honor any properly submitted drawing request under the Bank's
irrevocable, transferable, direct-pay letter of credit delivered to Bank One
Trust Company, N.A., as Trustee to secure payment of the Corporation's Floating
Rate Option Notes, Series 1996A, then this Assignment shall, without the
necessity for any action or notice on the part of the Corporation or any notice
or consent on the part of the Bank, immediately be null, void, rescinded and of
no further force and effect.
IN WITNESS WHEREOF, the Corporation and the Bank have caused this
Assignment to be duly executed and delivered all as of the 15th day of
February, 1996.
CAPITAL ONE FUNDING CORPORATION
AS ASSIGNOR
By: /s/ Tiffany Percival
-------------------------------------
Title: Tiffany Percival, Vice President
----------------------------------
BANK ONE, KENTUCKY, NA
AS ASSIGNEE
By: /s/ Dennis P. Heishman
-------------------------------------
Title: Senior Vice President
----------------------------------
-7-
<PAGE> 16
SCHEDULE I
TO
PROMISSORY NOTE
SCHEDULE Of PRINCIPAL PAYMENTS
<TABLE>
<CAPTION>
LOAN PAYMENT DATE AMOUNT
----------------- ------
<S> <C>
08/01/96 $149,000.00
02/01/97 154,000.00
08/01/97 160,000.00
02/01/98 166,000.00
08/01/98 173,000.00
02/01/99 179,000.00
08/01/99 186,000.00
02/01/2000 193,000.00
08/01/2000 200,000.00
02/01/2001 208,000.00
08/01/2001 216,000.00
02/01/2002 224,000.00
08/01/2002 233,000.00
02/01/2003* 242,000.00
08/01/2003 250,000.00
02/01/2004 261,000.00
08/01/2004 270,000.00
02/01/2005 280,000.00
08/01/2005 292,000.00
02/01/2006 302,000.00
08/01/2006 314,000.00
02/01/2007 326,000.00
08/01/2007 338,000.00
02/01/2008 351,000.00
08/01/2008 364,000.00
02/01/2009 379,000.00
08/01/2009 392,000.00
02/01/2010 408,000.00
08/01/2010 423,000.00
02/01/2011 440,000.00
08/01/2011 456,000.00
02/01/2012 473,000.00
08/01/2012 492,000.00
02/01/2013 510,000.00
08/01/2013 529,000.00
02/01/2014 550,000.00
08/01/2014 571,000.00
02/01/2015 592,000.00
08/01/2015 616,000.00
02/01/2016 638,000.00
----------
TOTAL 13,500,000.00
<FN>
_______________________
* If the Letter of Credit is not extended as provided in the
Reimbursement Agreement, the entire unpaid principal amount
will be due and payable on February 1, 2003.
</TABLE>
-8-
<PAGE> 1
Exhibit 4.2
REIMBURSEMENT AGREEMENT
This REIMBURSEMENT AGREEMENT (the "Agreement") is made and entered
into as of February 12, 1996 by and among [i] BANK ONE, KENTUCKY, NA, a
national banking association (the "Bank"), [ii] Arbor Health Care Company, a
Delaware corporation ("Arbor"), [iii] Marshall Properties, Inc., an Ohio
corporation ("Marshall") (Arbor and Marshall shall hereinafter collectively be
called the "Borrowers" and individually a "Borrower"), and [iv-x] each of the
"Guarantors" more particularly hereinafter defined.
A. The Borrowers have requested that CAPITAL ONE FUNDING
CORPORATION, a Delaware corporation (the "Lender"), make a loan to the
Borrowers in the original principal amount of $27,000,000 (the "Loan").
B. The Lender has agreed to make the Loan provided that it is
able to obtain the funds necessary by placing with investors floating rate
option notes (the "Notes") of the Lender, which Notes shall be secured by an
unconditional, irrevocable, direct pay letter of credit issued by the Bank.
Bank One, Columbus, NA, shall act as placement agent for the Notes.
NOW, THEREFORE, in consideration of the premises the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. The following terms, as used herein, have
the meanings set forth below:
"Accounts" shall have the meaning given it by the Uniform Commercial
Code as in effect in the state of Kentucky.
"Affiliated Person" means any Person directly or indirectly
controlling, under common control with, or controlled by, a Person and shall
include any officer, director, or record or beneficial owner of 5% or more of
any class of outstanding capital stock of a Person. For purposes of the
definition of Affiliated Person, "control" when used with respect to any
specific Person, means the power to direct the management and policies of such
person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings relative to the foregoing.
"Agreement" means this Reimbursement Agreement, as the same may from
time to time be amended, supplemented, or extended, including all exhibits
hereto and any other documents executed and delivered as a part hereof.
"Annual Fee" means the Annual Fee payable pursuant to and as defined
in Section 2.02 hereof.
<PAGE> 2
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or
state law for the relief of debtors.
"Borrower Notes" means the Promissory Note (Series 1996A-1) and the
Promissory Note (Series 1996A-2), both executed and delivered by the Borrowers
to the Lender, in the aggregate original principal amount of the Loan.
"Business Day" means a day of the year, other than (i) a Saturday,
Sunday or legal holiday on which the Bank is authorized or required by law to
close or (ii) a day on which The New York Stock Exchange is closed.
"Capital Expenditure" means any expenditure that is classified as a
capital expenditure under GAAP.
"Cash Flow" means the sum of net income, interest expense, income tax
expense, depreciation expense and amortization expense less the sum of
dividends, distributions and $300 per bed assumed capital expenditures for all
beds owned or leased by the Borrowers or any of their Subsidiaries.
"Closing Date" means February 15, 1996.
"Code" means the Internal Revenue Code of 1986, as amended, and
references to the Code and Sections of the Code shall include relevant
regulations and proposed regulations thereunder and any successor provisions to
such Sections, regulations or proposed regulations.
"Commitment Letter" means the Commitment Letter issued by the Bank and
accepted by the Borrowers and the Guarantors, dated January 16, 1996.
"Consolidated" means the consolidation of the accounts of Arbor and
its Subsidiaries in accordance with GAAP.
"Contingent Guarantors" means Alternacare Plus Enterprises, Inc., an
Ohio corporation ("Alternacare"), and The Druggist, Inc., an Ohio corporation
("Druggist").
"Current Assets" means all assets which may properly be classified as
current assets in accordance with GAAP.
"Current Liabilities" means all Liabilities maturing on demand or
within 12 months from the date as of which Current Liabilities is to be
determined (including, without limitation, amounts due within such 12 months
with respect to the principal of or premium, if any, on any indebtedness), and
such other obligations and liabilities (including taxes accrued as estimated)
as may properly be classified as current liabilities in accordance with GAAP.
2
<PAGE> 3
"Date of Issuance" means the date of the issuance of the Letter of
Credit.
"Default Rate of Interest" means a rate per annum equal to the sum of
the Index Rate plus 3% (computed on the basis of a year of 360 days and the
actual number of days elapsed).
"Depository" means any security depository that is a clearing agency
under federal law operating and maintaining, with participants or otherwise, a
book entry system to record ownership of book entry interests in the Notes, and
to effect transfers of book entry interests in the Notes in book entry form,
and includes and means The Depository Trust Company, New York, New York.
"Dollars" and the sign "$" mean freely transferable money of the
United States of America.
"Drawing" means any Principal Drawing, Premium Drawing, Remarketing
Drawing or Interest Drawing.
"Effective Date" means the date upon which interest starts to accrue
under the Borrower Notes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Environmental Laws" means any and all statutes, laws, regulations,
ordinances, rules, judgments, court orders, consent decrees, permits, licenses,
binding agreements or other governmental restrictions relating to the
protection of health, safety or the environment or the release of any hazardous
or medical substances into the environment.
"Event of Default" means any of the events specified in Article VI of
this Agreement, provided that any requirement, if applicable pursuant to the
express terms of this Agreement, for the giving of notice or for the lapse of
time has been satisfied in connection with such event.
"Expiration Date" means the date on which the Trustee's right to draw
under the Letter of Credit expires, determined as provided therein, and which
on the Closing Date of this Agreement shall be February 15, 2003.
"Fee Increase Event" means the occurrence of either or both of the
following: (i) a ratio of Arbor's Consolidated Cash Flow to Consolidated Fixed
Charges of less than 1.25 TO 1.0 at any time, or (ii) a ratio of Arbor's
Consolidated Liabilities to Consolidated Net Worth of greater than 3.5 TO 1.0
at any time.
3
<PAGE> 4
"Fee Increase Event Cure Date" means the next day of June 1, September
1, December 1 and March 1 to occur, following a Fee Increase Event, on which
(i) a ratio of Arbor's Consolidated Cash Flow to Consolidated Fixed Charges is
greater than 1.25 TO 1.0, and (ii) a ratio of Arbor's Consolidated Liabilities
to Consolidated Net Worth is less than 3.5 TO 1.0, and (iii) no Event of
Default has occurred and is existing.
"Financing Statements" means Uniform Commercial Code 1 financing
statements executed by the Borrower and the Bank on the date hereof which are
necessary to perfect upon filing a security interest in the tangible and
intangible property of the Borrowers provided as security to the Bank for the
Letter of Credit.
"Five Year Rate" means the fixed rate of interest per annum determined
by the Remarketing Agent and in effect for the period commencing on the
Effective Date or a Rate Adjustment Date, as applicable, and ending on (but not
including) the first Business Day of the month which is sixty months after such
Effective Date or Rate Adjustment Date.
"Fixed Charges" means the sum of current maturities of long term debt
(excluding balloon payments due), current portion of capitalized lease
obligations, interest expense, and income tax expense.
"GAAP" means generally accepted accounting principles consistently
applied. All accounting terms shall be determined in accordance with GAAP,
unless otherwise defined herein.
"Guarantors" means the Contingent Guarantors and Arbors East, Inc., an
Ohio corporation ("Arbors East"), Arbors at Fort Wayne, Inc., an Indiana
corporation ("Arbors at Fort Wayne"), Arbors at Toledo, Inc., an Ohio
corporation ("Arbors at Toledo"), Home Care Pharmacy, Inc. of Florida, a
Florida corporation ("Home Care") and Bay Geriatric Pharmacy, Inc., a Florida
corporation ("Bay Geriatric").
"Guaranty Agreements" means agreements establishing the irrevocable
absolute, joint and several guaranty of payment by each of the Guarantors of
all of the obligations of each of the Borrowers to Bank resulting from, arising
out of, or in connection with, the issuance by Bank of the Letter of Credit,
except that the obligations of the Contingent Guarantors under the Guarantor
Agreement entered into by them shall not become effective until the occurrence
of an Event of Default.
"Hazardous Substances" means any hazardous or toxic substance or
material or other waste as defined in or regulated under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. Section 9601 et seq.) ("CERCLA"), the Resource Conservation and Recovery
Act (42 U.S.C. Section 6901, et seq.), The Oil Pollution Act of 1990 (33 U.S.C.
Section 2701 et seq.) or any other Environmental Law.
4
<PAGE> 5
"Holder" or "Holders" means the holder or holders of the Notes.
"Index Rate" means the annual rate of interest set by the Bank from
time to time to establish the annual interest rate applicable to extensions of
credit by the Bank which bear interest related to the Bank's Index Rate. The
Index Rate is not necessarily the Bank's best or lowest rate of interest. If
the Index Rate is not available, the Prime Rate as listed under the Money Rates
section in the Wall Street Journal shall be substituted for the Index Rate.
"Interest Drawing" shall have the definition set forth in the Letter
of Credit.
"Interest Rate" means a rate per annum equal to the sum of the Index
Rate plus 1% (computed on the basis of a year of 360 days and the actual number
of days elapsed).
"Interest Rate Option" means the Weekly Rate, the One Year Rate, the
Three Year Rate, the Five Year Rate or the Seven Year Rate. The foregoing
Rates are sometimes collectively referred to as the "Interest Rate Options."
"Lender" means Capital One Funding Corporation, a Delaware
corporation.
"Letter of Credit" means a direct pay irrevocable letter of credit,
issued by the Bank at the request of and for the joint and several account of
Borrowers, in favor of the Trustee for the benefit of the Holders, as the same
may from time to time be reinstated, reconfirmed, reissued or extended, in the
form attached hereto as EXHIBIT D.
"Liabilities" as applied to any Person means: (i) all obligations of
that Person to repay or pay money borrowed from another Person or the deferred
portion of the purchase price of services or property (other than inventory
purchased in the ordinary course of business unless evidenced by a note
payable); (ii) all obligations of that Person under bankers acceptances; (iii)
all obligations of that Person under letters of credit; (iv) obligations of
others which that Person has directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business),
discounted or sold with recourse or agreed (contingently or otherwise) to
purchase or repurchase or otherwise acquire, or in respect of which that Person
has agreed to supply or advance funds (whether by way of loan, stock purchase,
capital contribution or otherwise) or otherwise to become directly or
indirectly liable; (v) all obligations evidenced or secured by any mortgage,
pledge, lien or conditional sale or other title retention agreement to which
any property or asset owned or held by that Person is subject, whether or not
the obligation evidenced or secured thereby shall have been assumed; (vi)
mandatorily redeemable preferred stock; (vii) guaranties of indebtedness and
(viii) all other items which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance sheet
of that Person as of the date Liabilities is to be determined, including,
without limitation, obligations of that Person properly treated as capital
lease obligations or its equivalent under GAAP.
5
<PAGE> 6
"Loan" is defined in paragraph A of the preamble.
"Maximum Rate" means the maximum interest rate per annum at which the
Notes may bear interest, which is 15% per annum.
"Mortgage Agreements" means the Open-end Mortgage and Security
Agreements, the Mortgage and Security Agreements and the associated Assignments
of Rents and Leases, dated on or about the date hereof, granting from the
applicable Borrower to the Bank a first priority mortgage and security interest
in all property, whether real, personal or mixed, constituted by or arising out
of the applicable Project Property.
"Net Worth" of a Person shall, as of any date, mean the total assets
of that Person less the total liabilities of that Person as determined in
accordance with GAAP for purposes of balance sheet presentation; provided,
however, Net Worth shall include no appraisal surplus of any type or
depreciation.
"Notes" means Lender's floating rate option notes.
"One Year Rate" means the fixed rate of interest per annum determined
by the Remarketing Agent and in effect for the period commencing on the
Effective Date or a Rate Adjustment Date, as applicable, and ending on (but not
including) the first Business Day of the month which is twelve months after
such Effective Date or Rate Adjustment Date.
"PBGC" is the Pension Benefit Guaranty Corporation.
"Permitted Liens" means:
A. With respect to any property of each Borrower and
each Guarantor that is not part of any of the
Project Properties:
(i) Liens securing taxes, assessments, fees or
other governmental charges or levies, or the
claims of materialmen, mechanics, carriers,
warehousemen, landlords, and other similar
Person;
(ii) Liens incurred or deposits made in the
ordinary course of business (a) in connection
with workman's compensation, unemployment
insurance, social security and other similar
laws, or (b) to secure the performance of
bids, tenders, sales, contracts, public or
statutory obligations, customs, appeal and
performance bonds, or (c) other similar
obligations not incurred in connection with
the borrowing
6
<PAGE> 7
of money, the obtaining of advances, or the
payment of the deferred purchase price of
property or (d) liens upon real or personal
property which is financed by any lender,
including but not limited to Bank;
(iii) Reservations, exceptions, encroachments,
easements, rights of way, covenants,
conditions, restrictions, leases and other
similar title exceptions or encumbrances
affecting real property, provided they do not
in the aggregate materially detract from the
value of such properties or materially
interfere with their use in the ordinary
conduct of Borrowers' business; and
(iv) Liens in favor of Bank, and
B. With respect to the Project Properties, the liens
created by the Security Documents in favor of Bank
and any liens that are expressly permitted by the
express provisions of the Security Documents.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or trustee thereof or any other
entity, fiduciary or organization, including a government or political
subdivision thereof.
"Plan" means any pension or other benefit plan subject to the
provisions of ERISA.
"Pledged Notes" means the Pledged Notes as defined in Section 2.06
hereof.
"Principal Drawing" shall have the definition set forth in the Letter
of Credit.
"Premium Drawing" shall have the definition set forth in the Letter of
Credit.
"Project Property(ies)" means (i) Arbors at Brandon located at 701
Victoria Street, Brandon, Hillsborough County, Florida 33510, (ii) Arbors at
Milford located at 5900 Meadowcreek Drive, Milford, Clermont County, Ohio
45150, (iii) Arbors at Orlando Subacute and Rehabilitation Center located at
1099 West Town Parkway, Altamonte Springs, Seminole County, Florida 32714, (iv)
Arbors at St. Petersburg located at 9393 Park Boulevard, Seminole, Pinellas
County, Florida 34647, (v) Arbors at Melbourne located at 3033 Sarno Road,
Melbourne, Brevard County, Florida 32934, and (vi) Arbors at Tampa located at
2811 Campus Hill Drive, Tampa, Hillsborough County, Florida 33612, all of which
are subject to the Mortgage Agreements.
"Rate Adjustment Date" means the date on which an interest rate,
determined on the related Rate Determination Date, applicable to the Borrower
Notes becomes effective. In the case
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of the Weekly Rate, a Rate Adjustment Date shall occur on each Thursday or on
such other day as may be necessary as provided in the last sentence of the
first paragraph of Section 2.07(d) of this Agreement. Each Rate Election Date
shall also be a Rate Adjustment Date.
"Rate Determination Date" means the day on which the Remarketing Agent
determines the Weekly Rate, the One Year Rate, the Three Year Rate, the Five
Year Rate and the Seven Year Rate, as applicable, for any Rate Period. In the
case of the Weekly Rate, the Rate Determination Date for a Rate Period shall be
the first or second Business Day next preceding the Rate Adjustment Date or
such other day as may be necessary as provided in the last sentence of the
first paragraph of Section 2.07(d) of this Agreement. In the case of the One
Year Rate, the Three Year Rate, the Five Year Rate and the Seven Year Rate, the
Rate Determination Date for a Rate Period shall be a Business Day selected by
the Remarketing Agent and occurring not earlier than 15 days and not later than
two days prior to the Rate Adjustment Date.
"Rate Election" means (i) the option to select the interest rate
determination method applicable to the Borrower Notes and (ii) in the absence
of the exercise of the option referred to in clause (i) of this definition, the
automatic conversion of the interest rate determination method applicable to
the Borrower Notes to the Weekly Rate.
"Rate Election Date" means the date on which a Rate Election becomes
effective. In the case of a Rate Election from the Weekly Rate, the Rate
Election Date shall be the first Business Day of any month. In the case of a
Rate Election from the One Year Rate, the Three Year Rate, the Five Year Rate
or the Seven Year Rate, the Rate Election Date must be the date upon which the
final interest payment is due and payable for that Rate Period.
"Rate Period" means the period during which a particular Weekly Rate,
One Year Rate, Three Year Rate, Five Year Rate or Seven Year Rate, as
applicable, determined on a particular Rate Determination Date is effective.
In the case of the Weekly Rate, with the exception (i) if applicable, of the
initial Rate Period, (ii) of a Rate Period whose last day is a Rate Election
Date or (iii) of a Rate Period whose last day is occasioned by the
circumstances described in the last sentence of the first paragraph of Section
2.07(d) of this Agreement, each Rate Period shall commence on a Thursday and
end on the following Wednesday or the maturity date of the Borrower Notes,
whichever shall first occur. In the case of the One Year Rate, the Three Year
Rate, the Five Year Rate and the Seven Year Rate, with the exception, if
applicable, of the initial Rate Period, each Rate Period shall commence on the
Rate Election Date establishing any such rate, shall continue for the number of
months (i.e. 12, 36, 60 and 84) specified in the definition of each such rate
and shall end on (but such Rate Period will not include) the next Rate Election
Date or the maturity date of the Borrower Notes, whichever shall first occur.
"Remarketing Agent" means, initially, Bank One, Columbus, NA and its
successors and assigns, and any other person appointed and acting as
remarketing agent under the Remarketing Agreement.
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"Remarketing Agreement" means the Master Remarketing Agreement dated
June 1, 1994 between the Lender and the Remarketing Agent, relating to the
remarketing of the Notes, as such agreement may be amended as permitted
therein.
"Remarketing Drawing" shall have the definition set forth in the
Letter of Credit.
"Security Documents" means all documents which on or about the date
hereof or at any time hereafter have been delivered by the Borrowers or the
Guarantors and/or other Persons that are party thereto to the Bank as security
for or to guarantee payment of the Borrowers' obligations hereunder including
but not limited to: Borrower Notes, Mortgage Agreements, Guaranty Agreements
and Financing Statements, including any amendments, supplements and
replacements related thereto.
"Seven Year Rate" means the fixed rate of interest per annum
determined by the Remarketing Agent and in effect for the period commencing on
the Effective Date or a Rate Adjustment Date, as applicable, and ending on (but
not including) the first Business Day of the month which is eighty-four months
after such Effective Date or Rate Adjustment Date.
"Stated Amount" means the total amount of the Letter of Credit that is
issued by the Bank at the request of and for the account of Borrowers, as
reduced by any Principal Drawing or Premium Drawing for which Bank has been
fully reimbursed in accordance with the provisions of this Agreement. At the
time of issuance of the Letter of Credit, the Stated Amount shall be
$27,506,250.
"Subsidiary" means, with respect to the Borrowers, any corporation of
which more than 50% of the outstanding stock having ordinary voting power to
elect a majority of the board of directors of such corporation is at the time
directly or indirectly owned by either of the Borrowers, or by one or more of
their Subsidiaries, or by either of the Borrowers and one or more of their
Subsidiaries taken together.
"Three Year Rate" means the fixed rate of interest per annum
determined by the Remarketing Agent and in effect for the period commencing on
the Effective Date or a Rate Adjustment Date, as applicable, and ending on (but
not including) the first Business Day of the month which is thirty-six months
after such Effective Date or Rate Adjustment Date.
"Transaction Documents" means this Agreement, the Security Documents,
and any other document or instrument now or hereafter (1) executed, delivered,
or otherwise entered into by or on behalf of either of the Borrowers or any of
the Guarantors in connection with, or, (2) evidencing, securing, or pertaining
to, the Loan, the Notes, or the Letter of Credit, including any amendments,
modifications, replacements, or supplements of whatsoever nature to any of
them.
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"Trust Agreement" means the Master Trust Indenture II dated June 1,
1994 between the Lender and the Trustee pursuant to which the Trust will be
created and the Notes will be issued, as amended as permitted therein.
"Trustee" means, initially, Bank One Trust Company, N.A. and its
successors and assigns, and any other Person appointed and acting as trustee
under the Trust Agreement.
"Weekly Rate" means the rate of interest per annum determined by the
Remarketing Agent and generally in effect for a period of one week, subject to
adjustment as provided in Section 2.07 of this Agreement.
ARTICLE II
AMOUNT AND TERMS OF LETTER OF CREDIT
Section 2.01. THE LETTER OF CREDIT.
(a) The Bank has agreed, upon the terms and conditions set forth
herein, to issue the Letter of Credit in favor of the Trustee for the benefit
of the Holders under the Trust Agreement and under the Remarketing Agreement.
(b) The rights of the beneficiary under the Letter of Credit may
be transferred only to a successor or substitute Trustee in accordance with the
provisions set forth in the Letter of Credit.
(c) The Stated Amount shall be reduced and reinstated in
accordance with the provisions of the Letter of Credit.
(d) The Letter of Credit shall expire on the Expiration Date,
unless sooner terminated in accordance with the terms and conditions contained
in the Letter of Credit. The Bank shall not be required to enter into any
extension or to otherwise amend, modify or supplement the Letter of Credit;
provided, however, the Bank may, in its sole and absolute discretion, extend
the Expiration Date upon the written request of the Borrowers made to the Bank
on or before ninety (90) days prior to the Expiration Date. Without limitation
of the absolute discretion of the Bank to determine whether to extend the
Expiration Date, any such extension shall be conditioned upon no Event of
Default existing at the time thereof and may be subject to such amendments or
modifications to this Agreement and/or any of the Security Documents as are
required by the Bank in its sole discretion. In addition, any extension, if
granted, shall be subject to payment by Borrowers of an extension fee together
with all out-of-pocket expenses, including reasonable attorneys' fees, of the
Bank.
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Section 2.02. FEES. (a) The Borrowers shall pay to the Bank on the
date of execution of this Agreement and on the date of issuance of any
additional Letter of Credit by the Bank, an Issuance Fee of $150. The
Borrowers shall also pay a fee of $35 to the Bank for each draw upon the Letter
of Credit. In addition, if a successor or substitute Trustee is appointed at
any time and the rights of the beneficiaries under the Letter of Credit are
transferred to such substitute Trustee, the Borrowers shall pay to the Bank the
customary Letter of Credit transfer fee of the Bank.
(b) The Borrowers shall pay to the Bank on the Date of Issuance a
prorated Annual Fee for the period from the Date of Issuance through May 31,
1996. Thereafter, the Borrowers agree to pay the Bank on June 1, 1996 and on
each June 1 (for the period of June 1 to and including August 31), September 1
(for the period of September 1 to and including November 30), December 1 (for
the period of December 1 to and including the last day of February) and March 1
(for the period of March 1 to and including May 31) and thereafter, until the
Expiration Date, an Annual Fee amount to be calculated at the annual rate of
one and one-tenth percent (1.10%) TIMES the Stated Amount of the Letter of
Credit, as of each May 15, August 15, November 15 and February 15 for the June
1, September 1, December 1 and March 1 Annual Fee payment dates, respectively,
TIMES the number of days in the quarterly period divided by 360; provided,
however, the Annual Fee will be increased to one and one-half percent (1.50%)
of the Stated Amount effective upon the occurrence of a Fee Increase Event
beginning with the next date of June 1, September 1, December 1 or March 1 to
occur following the Fee Increase Event and continuing thereafter until the
first to occur of either (i) a Fee Increase Event Cure Date, or (ii) all
obligations of Bank under or with respect to or in connection with the Letter
of Credit have been terminated and all of the obligations of Borrowers to Bank
under this Agreement have been paid and discharged in full. During the period
from the Date of Issuance until May 31, 1996 and, if applicable, if the final
quarter in which the Letter of Credit is left outstanding is not a full
calendar quarter, the Annual Fee shall be prorated in each case on the basis of
a 360-day year.
The Borrowers hereby acknowledge and agree that if any change in any
law or regulation or in the interpretation thereof by any court or
administrative or governmental authority charged with the administration
thereof, or in GAAP, shall either (i) impose, modify or deem applicable any
reserve, special deposit or similar requirement against letters of credit
issued by, or assets held by, or deposits in or for the account of, the Bank,
or (ii) impose on the Bank any other condition relating, directly or
indirectly, to the Letter of Credit, and the result of any event referred to in
the preceding clause (i) or (ii) shall be to increase the cost to the Bank of
issuing or maintaining the Letter of Credit (which increase in cost shall be
determined by the Bank's reasonable allocation of the aggregate of such cost
increase resulting from such event), then the Bank shall be entitled to present
to the Borrowers a certificate stating the amount of its increased costs
reasonably allocable to the Letter of Credit, and the Borrowers shall
immediately pay to the Bank, from time to time as specified by the Bank in such
certificate, such additional amounts as shall be sufficient to compensate for
such increased cost. The certificate referred
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to hereinabove shall be conclusive as to the amount stated therein, except for
demonstrable mathematical errors.
(c) In addition to the foregoing, the Borrowers shall pay to the
Lender the fees set forth in paragraph 3 of the Borrower Notes.
(d) All payments of fees under this Agreement or the Security
Documents to be made by the Borrowers to the Bank shall be made in immediately
available funds. With respect to the payment of the Annual Fee, the Bank shall
notify the Borrowers of the amount of such payment not less than ten (10) days
prior to the date upon which such payment is due, but failure to provide such
notice shall not affect the Borrowers' obligation to make the payment when due.
Section 2.03. REIMBURSEMENT AND OTHER PAYMENTS.
(a) PRINCIPAL, INTEREST OR PREMIUM DRAWING. In the event of any
Principal Drawing, Interest Drawing or Premium Drawing, the Borrowers shall be
jointly and severally liable to the Bank for the reimbursement to the Bank of
all amounts paid by the Bank to duly honor such Drawing and shall immediately
on the date of the Principal, Interest or Premium Drawing pay to the Bank or
cause the Trustee to pay to the Bank the amount of such Drawing, and failure to
so immediately reimburse the Bank shall constitute an Event of Default under
this Agreement. Without limitation of the preceding sentence, if such amount
is not immediately paid to the Bank, such amount shall constitute a loan to and
indebtedness of the Borrowers to the Bank. From the date any amounts become
payable under this Section 2.03(a) as a result of a Principal Drawing as
honored, an Interest Drawing as honored or a Premium Drawing as honored until
payment in full of such amount, the Borrowers shall be obligated to pay
interest to the Bank, payable on demand, or, if demand is not made, monthly in
arrears on the last day of each month following such Principal Drawing,
Interest Drawing or Premium Drawing on any and all such amounts remaining
unpaid at the Default Rate of Interest. Accrual of such interest and the
acceptance by the Bank thereof on any one or more occasion shall not constitute
a waiver of the Event of Default occurring upon the failure of the Borrower to
immediately reimburse the Bank for the amount of the Drawing(s) that accrued
such interest.
(b) REMARKETING DRAWING. In the event of any Remarketing Drawing,
the amount of such Remarketing Drawing shall constitute a loan to and
indebtedness of the Borrowers to the Bank upon the following terms:
(i) The amount of any Remarketing Drawing as honored relating
to interest under the Borrower Notes shall be immediately due and payable by
the Borrowers to the Bank and if such amount is not immediately paid to the
Bank, such amount shall bear interest at the Default Rate of Interest from and
after the date such amount becomes payable hereunder. Such interest shall be
payable upon demand of the Bank, or, if demand is not made, monthly in arrears
on the last day of each month.
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(ii) The amount of any Remarketing Drawing as honored relating
to principal under the Borrower Notes shall be repaid from the Borrower Account
(as defined below) in semi-annual installments on the dates set forth in
Schedule I of each of the Borrower Notes. The amount paid on each such date
shall be the difference between the amount set forth on Schedule I of each of
the Borrower Notes and the amount of principal paid under each of the Borrower
Notes. The unpaid balance of such amount shall bear interest at the Interest
Rate, which interest shall be paid to the Bank monthly in arrears on the first
Business Day of each month commencing the month following the month in which
the Remarketing Drawing occurs. In the event that following any optional or
mandatory tender of Notes the Remarketing Agent does not for any reason
remarket all of such Notes, then notwithstanding anything contained in Section
2.07 to the contrary, the Interest Rate Option selected by Borrowers shall be
applicable only to that portion of Notes which the Trustee designates as being
related to the Borrower Notes. The portion of the outstanding principal amount
of each of the Borrower Notes in excess of the amount so designated by the
Trustee shall bear interest at the Interest Rate and be paid to the Bank in
accordance with the terms of this Section 2.03(b) until such time as the Notes
are remarketed.
(c) MONTHLY PAYMENTS. Notwithstanding any provision of the Borrower
Notes to the contrary, Borrowers have agreed to make monthly principal and
interest payments to the Bank. All of such payments shall be made not later
than the Business Day prior to the day on which interest payments are due and
payable under the Borrower Notes. The amount of the interest payments shall be
the amount payable under the Borrower Notes, and the amount of each principal
payment is set forth on EXHIBITS A-1 AND A-2 attached hereto. Such payments
shall be deposited by the Bank into a segregated interest-bearing account (the
"Borrower Account"). All payments of principal and interest on the Borrower
Notes shall be made from the Borrower Account and Bank is hereby authorized and
directed by Borrowers to make all such payments without further instruction.
If at any date provided for in the Borrower Notes for a principal or interest
payment there are insufficient funds in the Borrower Account to make such
payment, the difference between the amount in the Borrower Account and the
payment due shall be immediately due and payable by the Borrower to the Bank
and if such amount is not immediately paid to the Bank, the same shall
constitute an Event of Default under this Agreement and, without limitation of
the foregoing, such amount shall bear interest at the Default Rate of Interest
from and after the date such amount becomes payable hereunder. Such interest
shall be payable upon demand of the Bank, or, if demand is not made, monthly in
arrears as the last day of each month. If any payment of principal or interest
is not made within five (5) days of its due date, a late fee equal to 5% of
such payment shall be immediately due and payable to the Bank from the
Borrowers. The collection of interest and/or late fees by the Bank on any one
or more occasions shall not constitute a waiver of the Event of Default arising
upon failure by Borrower to make payment to the Bank when due of the amounts
with respect to which such interest and late charges accrue.
(d) INTEREST RATE CHANGES. Any change in the Default Rate of
Interest or the Interest Rate resulting from a change in the Index Rate shall
be effective on the effective date of the
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change in the Index Rate. The Default Rate of Interest shall be computed on
the basis of the actual number of days elapsed over a year of 360 days.
(e) FEES AND EXPENSES. The Borrowers hereby agree to pay to the
Bank reasonable charges and expenses (including reasonable attorneys' fees)
attributable to Borrowers or the Guarantors which the Bank may pay or incur
relative to the transfer, drawing upon, change in terms, maintenance, renewal,
extension or cancellation of the Letter of Credit or to any payment by the Bank
thereunder. The Borrowers hereby agree to pay to the Bank on demand sums equal
to any and all amounts which the Bank has paid or incurred (including
reasonable attorneys' fees) relative to the Bank's curing of any Event of
Default resulting from the acts or omissions of the Borrowers or the Guarantors
under this Agreement or under the Security Documents.
(f) FINAL PAYMENT. Borrowers hereby jointly and severally and
absolutely, unconditionally and irrevocably agree to pay all amounts due to the
Bank pursuant to the provisions of this Agreement and the Security Documents,
including without limitation, amounts payable pursuant to Sections 2.02 and
2.03 hereof, on the Expiration Date, or at such earlier time as may be provided
for herein.
Section 2.04. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to
be made hereunder shall be stated to be due on a day which is not a Business
Day, such payment shall be made on the preceding Business Day.
Section 2.05. SECURITY DOCUMENTS. As security for all of the
Borrowers' obligations to the Bank under this Agreement, the Borrowers shall
execute and deliver and cause any of the Guarantors to execute and deliver on
the date hereof the Security Documents required to be executed and delivered as
one of the conditions precedent to the obligation of the Bank to issue the
Letter of Credit.
Section 2.06. PLEDGE OF REMARKETING NOTES.
(a) As security for the payment and performance of all obligations
of the Borrowers to the Bank hereunder and under the Security Documents, the
Borrowers hereby agree that upon the making of a Remarketing Drawing with
respect to the Loan, the Trustee shall cause to be registered with the
Depository in the name of Lender, as pledgor, and in the name of the Bank, as
pledgee, and transferred from the Depository account of Lender to a separate
Depository account of the Trustee, as custodian, Notes free and clear of all
other liens and encumbrances in an aggregate principal amount equal to the
amount of such Remarketing Drawing with respect to the Loan, less (i) any
portion of such Remarketing Drawing representing interest on the Notes so
purchased, and (ii) the amount the Bank is reimbursed by 2:00 p.m. Louisville,
Kentucky time on the date of such Remarketing Drawing (the "Pledged Notes"),
and the Borrowers hereby consent to the grant to the Bank of a security
interest in the Pledged Notes and in the proceeds thereof. If a Depository is
not used, the Borrowers agree that the Remarketing Agent shall
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deliver such Pledged Notes to the Trustee and the Trustee shall register such
Pledged Notes in the name of Lender, as pledgor and in the name of the Bank as
pledgee with Lender's endorsement of the Pledged Notes to the order of the
Bank, and deliver such Notes to the Bank or its designated custodian.
(b) The Borrowers further agree to the Trustee's entering into its
registration books as the address to which payments of interest with respect to
Pledged Notes are to be sent, the Bank's address for notices pursuant to
Section 7.04 hereof as in effect from time to time.
(c) If the Borrowers shall become entitled to receive or shall
receive any Pledged Notes, any payment of interest with respect to the Pledged
Notes from the Trustee, or any and all other proceeds thereof, the Borrowers
shall accept any such items as the Bank's agent, shall hold them in trust for
the Bank, and shall deliver them forthwith to the Bank in the exact form
received, with the Borrowers' endorsement to the order of the Bank when
necessary, to be held by the Bank, subject to the terms hereof, as security for
the payment and performance of all obligations of the Borrowers hereunder and
under the Security Documents, except that the Bank shall credit all payments
and proceeds received by the Bank directly against the Borrowers' obligations
under Sections 2.02 and 2.03 of this Agreement.
(d) All principal and interest paid on the Pledged Notes shall be
retained by the Bank (or if received by a Borrower shall be forthwith delivered
by it to the Bank in the original form received) and applied by the Bank to the
payment of amounts due the Bank from the Borrowers hereunder and under the
Security Documents.
(e) If Borrowers make or cause to be made to the Bank a prepayment
or payment of a Remarketing Drawing pursuant to Section 2.03 hereof, or the
Remarketing Agent resells Pledged Notes on behalf of the Borrowers, the Bank
agrees to release from the lien of this Agreement and to instruct the Trustee
by telephone (confirmed in writing) to cause the appropriate transfer of
Pledged Notes on the books of the Depository (or, if a Depository is not used,
to deliver to the Borrowers or the Remarketing Agent, as the case may be,
Pledged Notes endorsed in blank without recourse) in an aggregate principal
amount equal to the amount of such prepayment or payment with respect to
principal so made, or the principal amount of the Pledged Notes so resold to
the extent that the proceeds of such resale are delivered to the Bank.
(f) In addition to the rights and remedies granted to the Bank in
this Agreement, the Bank shall have all of the rights and remedies of a secured
party under the applicable Uniform Commercial Code and such other rights and
remedies as are granted to a secured party in similar situations to the extent
of the security interest granted under paragraph (a) above. In addition, if
Pledged Notes are issued in "book entry form", the Bank shall be a "Registered
Pledgee" as defined by, and having the rights designated by Article VIII and
Article IX of the New York Uniform Commercial Code and the Kentucky Uniform
Commercial Code.
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(g) The Borrowers shall be liable for the deficiency if the
proceeds of any sale or other disposition of the Pledged Notes by the Bank are
insufficient to pay all amounts to which the Bank is entitled, including
principal and interest as provided herein, and the reasonable fees and expenses
of any outside attorneys employed by the Bank to collect such deficiency.
Section 2.07. INTEREST RATE DETERMINATION UNDER THE BORROWER NOTES.
The following provisions shall apply to the determination of the interest rate
under the Borrower Notes:
(a) INTEREST RATE OPTIONS. The Borrower Notes may bear interest
at the Weekly Rate, the One Year Rate, the Three Year Rate, the Five Year Rate
or the Seven Year Rate, depending upon the Interest Rate Option selected by
Borrowers as hereinafter provided. Once an Interest Rate Option is selected,
it may be changed only in accordance with the provisions of Section 2.07(c),
below.
(b) SELECTION OF INITIAL INTEREST RATE OPTION. Subject to the
provisions of the Borrower Notes, the Borrower Notes shall initially bear
interest at the Weekly Rate, and, until another Interest Rate Option is timely
and properly selected, shall thereafter bear interest at the Weekly Rate
pursuant to Section 2.07(c), below.
(c) CHANGES IN INTEREST RATE OPTION SELECTED. The Borrowers may
jointly elect to change the Interest Rate Option initially selected by making a
Rate Election in accordance with the provisions of this Section 2.07(c).
During any Rate Period when the Borrower Notes bear interest at the Weekly Rate
or at the conclusion of any Rate Period when the Borrower Notes bear interest
at the One Year Rate, the Three Year Rate, the Five Year Rate or the Seven Year
Rate, the Borrowers shall have the option to make a Rate Election. The
Borrowers may exercise this option by written notice given to the Lender, the
Trustee, the Bank and the Remarketing Agent. Such notice shall (i) state the
Borrowers' intention to make a Rate Election (specifying the applicable
Interest Rate Option selected, which shall be an Interest Rate Option permitted
hereunder), (ii) specify the Rate Election Date and (iii) contain the written
approval of the Bank; provided, however, that no Rate Election to a One Year
Rate, a Three Year Rate, a Five Year Rate or a Seven Year Rate shall be
permitted unless, after giving effect to such Rate Election, the term of the
Letter of Credit will exceed the term of the proposed Rate Period by at least
five days. Such notice shall be given at least 45 days prior to the Rate
Election Date. In connection with the Borrowers' Rate Election, the Borrowers
may select more than one interest rate determination method and designate the
principal amount of the Notes to be affected by each such selection; provided,
however, the Borrowers must designate at least $1,000,000 in principal amount
of Notes for each interest rate determination method selected. Where Notes
bear interest at the One Year Rate, the Three Year Rate, the Five Year Rate or
the Seven Year Rate and the Borrowers decline or fail to make a Rate Election,
a Rate Election shall nevertheless be deemed to have been made and the Borrower
Notes shall, from and after the end of the Rate Period until another Rate
Election is made by the Borrowers and becomes effective, bear interest at the
Weekly Rate. In addition, if the Borrower Notes bear interest at the Weekly
Rate, a continuation of the Weekly
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Rate into the next Rate Period shall not constitute a Rate Election, and
neither the Trustee, the Lender nor the Borrowers shall be required to take any
action, or give notice or consent, in order to effect the continuation of the
Weekly Rate applicable to Borrower Notes. Assuming compliance with the
procedures set forth herein and in Section 2.07(d) hereof, the Interest Rate
Option selected by a Rate Election shall become effective on the Rate Election
Date and shall stay continuously in effect until (i) in the case of the Weekly
Rate, the Borrowers make another Rate Election, or (ii) in the case of the One
Year Rate, the Three Year Rate, the Five Year Rate or the Seven Year Rate, the
conclusion of the Rate Period.
A Rate Election where the existing Interest Rate Option is continued
is a circumstance permitting the optional tender of the Notes which correspond
to the Borrower Notes. A Rate Election from one interest rate determination
method to another is a circumstance compelling a mandatory tender of the Notes
which correspond to the Borrower Notes. A tender of such Notes will cause a
Remarketing Drawing.
(d) DETERMINATION OF INTEREST RATE. For all Rate Periods after
the initial Rate Period, the interest rate (i.e. the Weekly Rate, the One Year
Rate, the Three Year Rate, the Five Year Rate or the Seven Year Rate, as
applicable) shall be determined in the following manner. At or before 5:00
p.m., Louisville, Kentucky time, on each Rate Determination Date, the
Remarketing Agent shall determine the interest rate which the Notes shall bear
during the next Rate Period. Such interest rate shall be that interest rate
which, in the sole and exclusive judgment of the Remarketing Agent (having due
regard for the length of the Rate Period, tender options (if any) available to
the Holders of the Notes during the Rate Period, prevailing financial
conditions and the yields at which comparable securities are then being sold),
would equal (but not exceed) the interest rate necessary to enable the
Remarketing Agent to sell the Notes (exclusive of accrued interest, if any) on
the Rate Adjustment Date at a price equal to one hundred percent (100%) of the
principal amount thereof. The interest rate so determined shall be effective
on the next Rate Adjustment Date, or if the Rate Determination Date and the
Rate Adjustment Date are the same day, then on such day. If Notes bearing
interest at the Weekly Rate are tendered during a Rate Period, then the Weekly
Rate may be increased (but not decreased) if, in the sole and exclusive
judgment of the Remarketing Agent, such an increase in the Weekly Rate is
necessary to enable the Remarketing Agent to remarket such Notes (exclusive of
accrued interest, if any) at a price equal to one hundred percent (100%) of the
principal amount thereof.
On each Rate Determination Date for the Weekly Rate and on any date on
which the Weekly Rate is increased pursuant to the last sentence of the
preceding paragraph, the Remarketing Agent shall give the Trustee telephonic
notice, promptly confirmed in writing, of the Weekly Rate determined by the
Remarketing Agent on such date; provided, however, that such notice need not be
given unless the Weekly Rate so determined is different from the Weekly Rate
for the preceding Rate Period. The Trustee shall, promptly after having been
informed of the Weekly Rate, notify the Borrowers of the Weekly Rate. In the
case of the One Year Rate, the Three Year Rate, the Five Year Rate or the Seven
Year Rate, the Remarketing Agent shall, by not later than
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the Business Day following the Rate Determination Date, notify the Trustee of
the One Year Rate, the Three Year Rate, the Five Year Rate or the Seven Year
Rate, as applicable, determined by the Remarketing Agent. The Trustee shall,
within one Business Day after having been so informed, notify the Borrowers of
the One Year Rate, the Three Year Rate, the Five Year Rate or the Seven Year
Rate, as applicable, determined by the Remarketing Agent.
(e) CALCULATION OF INTEREST. During any Rate Period when the
Borrower Notes bear interest at the Weekly Rate, interest on the Borrower Notes
shall be computed on the basis of a 365-day year (366 days during any period
containing a February 29) for the actual number of days elapsed during such
Rate Period. During any Rate Period when the Borrower Notes bear interest at
the One Year Rate, the Three Year Rate, the Five Year Rate or the Seven Year
Rate, interest on the Borrower Notes shall be computed on the basis of a
360-day year (consisting of twelve 30-day months) for the actual number of days
elapsed during such Rate Period. In no event shall any Weekly Rate, any One
Year Rate, any Three Year Rate, any Five Year Rate or any Seven Year Rate
exceed the Maximum Rate. All determinations of any Weekly Rate, any One Year
Rate, any Three Year Rate, any Five Year Rate or any Seven Year Rate shall be
rounded to the nearest one-hundredth of one percent (0.01%) and shall be
conclusive and binding upon the Borrowers.
ARTICLE III
CONDITIONS OF ISSUANCE
Section 3.01. CONDITIONS PRECEDENT TO THIS AGREEMENT. The obligation
of the Bank to enter into this Agreement is subject to the condition precedent
that the Bank shall have received from each Borrower and each Guarantor on or
before the date hereof all such documents, instruments, approvals (and, if
requested by the Bank, certified duplicates of executed copies thereof), and
opinions addressed to the Bank as the Bank may request, including, without
limitation, the following, each dated such date and in form and substance
satisfactory to the Bank:
(a) A certificate of the Secretary or Assistant Secretary of each
Borrower and each Guarantor certifying the accuracy and completeness of copies
of the resolutions or actions by unanimous written consent of the executive
committee of the board of directors of Arbor and the board of directors of
Marshall and each of the Guarantors authorizing or ratifying the execution,
delivery and performance of this Agreement and the Security Documents.
(b) A certificate of the Secretary or Assistant Secretary of each
Borrower and each Guarantor, certifying the names and true signatures of the
officers or other representatives of each Borrower and each Guarantor
authorized to sign this Agreement and the Security Documents.
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(c) Certified copies of the articles of incorporation, bylaws or
code of regulations and certificate of good standing of each Borrower and each
Guarantor.
(d) Opinions of counsel for the Borrowers and the Guarantors,
addressed to the Bank, in substantially the form of Exhibit B hereto.
(e) Full compliance by the Borrowers and the Guarantors with the
conditions of Addendum B to the Commitment Letter.
(f) Executed copies of this Agreement and all Security Documents
and other Transaction Documents required to be delivered as a condition to
issuance of the Notes and Letter of Credit.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS AND
GUARANTORS. Each Borrower and each Guarantor hereby represents and warrants to
the Bank as follows:
(a) Each Borrower and each Guarantor is a corporation, duly
formed, validly existing and in good standing under the laws of: (i) Delaware
in the case of Arbor, (ii) Ohio in the case of Marshall, Arbors East, Arbors at
Toledo, Alternacare and Druggist, (iii) Indiana in the case of Arbors at Ft.
Wayne and (iv) Florida in the case of Home Care and Bay Geriatric. Each
Borrower and each Guarantor has the corporate power to own its properties and
assets, to carry on the businesses in which it is engaged, and to execute and
perform this Agreement and all Security Documents and other Transaction
Documents to be executed by it, and is duly qualified to do business in all
jurisdictions where such qualification is necessary or advisable. All of the
capital stock of Marshall and each Guarantor is owned by Arbor. Arbor has no
Subsidiaries except Marshall and the Guarantors. None of Arbor's Subsidiaries
has any Subsidiaries.
(b) The execution, delivery and performance by each Borrower and
each Guarantor of this Agreement and the execution and delivery of all Security
Documents and other Transaction Documents to which any Borrower or any
Guarantor is a party, have been duly authorized by all requisite action of each
Borrower and each Guarantor and will not violate any provisions of law or of
the respective articles of incorporation, charter or bylaws of the Borrowers or
the Guarantors, or any amendments thereto; will not be in conflict with, result
in a breach of, or constitute a default under, any agreement to which any of
the Borrowers or the Guarantors, respectively, is a party or any order, writ,
injunction or decree of any court or governmental instrumentality; and will not
result in the creation or imposition of any lien, charge or encumbrance upon
any property of any of the Borrowers or the Guarantors other than as created by
the Transaction Documents.
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(c) No registration with, notice to, consent or approval of any
third party, including any governmental agency of any kind, is required for the
due execution and delivery of, or for the enforceability of, this Agreement or
any other Transaction Document. The Person(s) executing and delivering this
Agreement and the other Transaction Documents on behalf of each Borrower and
each Guarantor has been duly authorized to do so, and this Agreement and the
applicable Transaction Documents are legally binding upon each Borrower and
each Guarantor and are enforceable in accordance with their terms.
(d) No litigation or proceeding is pending or threatened in any
court or before any administrative agency, federal, state or local, involving
[i] any of the Project Properties, or [ii] any Borrower or any Guarantor, and
which, if determined adversely to Borrowers or Guarantors, would be material to
the business operations or financial condition of the Borrowers and the
Guarantors taken as a whole.
(e) Arbor's Consolidated financial statements for the period
ending September 30, 1995, heretofore furnished to Bank, have been prepared in
accordance with GAAP. Since the date thereof, there has been no material
adverse change in [i] any of the Project Properties, or [ii] any Borrower's or
Guarantor's financial condition, other properties or businesses that would be
material to the financial condition of Borrowers and Guarantors taken as a
whole which has not been disclosed in writing by Borrower or Guarantor to Bank.
Borrowers and Guarantors have no reason to believe that the fair market values
of the respective Project Properties subject to the appraisals delivered
pursuant to the conditions of the Commitment Letter are less than the fair
market value thereof determined by the appraisals.
(f) Each Borrower and each Guarantor has obtained all
governmental, administrative and other licenses, permits and other
authorizations required by law to be obtained or made in order to permit the
operation of the Borrower's and the Guarantor's operations, including the
Project Properties, and as are necessary to the carrying on of its businesses,
except for Medicare and Medicaid provider certifications for the Project
Property located in St. Petersburg, Florida, and except for any other
authorizations or filings which are not currently so required and which, in the
reasonable judgment of the Borrower or the Guarantor, as applicable, can be
obtained or made without difficulty prior to the time so required. Attached to
this Agreement as SCHEDULE 4.01(f) is a listing, by facility, of the number and
type of beds for which each Project Property is licensed under the law of the
state in which the Project Property is located and the number of beds certified
for Medicaid and Medicare participation by Project Property and category. Each
Borrower and each Guarantor is in material compliance with all laws and
regulations, including without limitation all environmental, occupational
safety and health, and workers' compensation laws and regulations, applicable
to [i] the Project Properties, and [iii] its other businesses where failure to
comply would have a material adverse effect on the business or financial
condition of Borrowers and Guarantors taken as a whole. No Borrower has
received any notice from, or has any knowledge of any notice received by any
other Person from, any governmental or public body, agency or instrumentality
alleging that either [i] any Project Property is operating under
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any deficiencies except such as customarily are likely to be cited from time to
time by agencies regulating nursing homes and sub-acute care facilities similar
to the Project Properties operated by prudent management in accordance with
sound management practices (none of which are believed by Borrowers to be
material or not susceptible to cure prior to the date when material penalties
would attach), or [ii] the operation of any of the Project Properties otherwise
is not in substantial compliance with regulations affecting their respective
operations and licenses. Each Borrower participates in the Medicare and
Medicaid programs for each of the Project Properties owned by it and is
presently in compliance in all material respects with the terms of any of its
provider agreements with such programs, except that application for Medicare
and Medicaid provider certification with respect to the Project Property
located in St. Petersburg, Florida has been made but may not yet have been
received.
(g) Each Borrower and each Guarantor possesses all trademarks,
trademark rights, patents, patent rights, licenses, permits, trade names, trade
name rights, copyrights and approvals which, in its reasonable judgment, are
required to conduct its business as now conducted without conflicting with the
rights of others.
(h) Neither of the Borrowers nor any Guarantor is a party to or
bound by any agreement, contract, instrument or understanding or commitment of
any kind or subject to any corporate or other restriction, the performance or
observance of which by Borrowers and Guarantors now has or, as far as Borrowers
and Guarantors can reasonably foresee, will have a material adverse effect,
financial or otherwise, upon [i] any of the Project Properties, or [ii] the
assets and businesses of Borrowers and Guarantors taken as a whole. Neither of
the Borrowers nor any Guarantor, nor any other Person party to a contract or
agreement material to the financial condition or operations of Borrowers and
Guarantors taken as a whole, is, to the knowledge of Borrowers and Guarantors,
in default thereunder, and to the knowledge of Borrowers and Guarantors no
event has occurred thereunder which, but for the giving of notice or the
passage of time, or both, would constitute a default thereunder.
(i) Neither of the Borrowers nor any Guarantor has incurred any
material accumulated funding deficiency as defined in ERISA and the regulations
promulgated thereunder and no Reportable Event has occurred with respect to any
Pension Plan involving any Borrower or Guarantor nor has The Pension Benefit
Guaranty Corporation asserted that any Borrower or Guarantor has incurred any
material liability in connection with any such pension plans nor has any lien
attached nor any Person threatened to attach a lien on any property of any
Borrower or Guarantor as a result of either Borrower's or any Guarantor's
failure to comply with ERISA or regulations promulgated thereunder.
(j) Except as previously disclosed to the Bank in writing, each
Borrower and each Guarantor has filed all material Federal, state and local tax
returns required to be filed and has paid all taxes shown to be due on such
returns, and has made provision for all material liabilities not so paid or
accrued under returns not yet due. Except as previously disclosed to
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the Bank in writing, neither of the Borrowers nor any Guarantor has any
knowledge of any material pending assessments or adjustments to its taxes
payable with respect to any year.
(k) Neither of the Borrower's nor any Guarantor's obligations
under this Agreement and the Security Documents are subordinate in any manner
to any other obligation of either Borrower or any Guarantor.
(l) There is no claim, action, temporary restraining order,
injunction, suit, proceeding, inquiry or investigation, at law or in equity,
before or by any judicial or administrative court, governmental agency, public
board or body, pending or, to the best of each Borrower's and Guarantor's
knowledge, threatened against or adversely affecting, or adversely involving
either (a) the Project Properties, or (b) the material properties or
businesses, or any securities of the Borrowers or the Guarantors nor, in the
case of this subsection (b), to the best of each Borrower's and Guarantor's
knowledge, is there any basis therefor, (i) contesting the existence or powers
of any Borrower or Guarantor or the authority of their respective directors or
officers, or (ii) wherein an unfavorable decision, ruling or finding would in
any way materially adversely affect Borrowers' and Guarantors' ability taken as
a whole to carry out their obligations under this Agreement or the Security
Documents.
(m) The transactions contemplated by this Agreement, including the
grant by Borrower to the Bank of a security interest in the Pledged Notes
pursuant to Section 2.06 hereof, and the transactions contemplated by the
Security Documents have not been entered into by any of the Borrowers or
Guarantors in contemplation of the Borrowers' or Guarantors' insolvency nor
have such transactions been entered into with the intent to hinder, delay or
defraud the equity holders or the creditors of either Borrower or any
Guarantors.
(n) Neither any Borrower nor any Guarantor is regularly engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System).
(o) To each Borrower's and Guarantor's knowledge with respect to
environmental matters: (a) no Hazardous Substances, except biomedical waste
disposed of in the ordinary course of business and in compliance with all
Environmental Laws, have been placed on or otherwise used on the Project
Properties; (b) no activities or operations have been, are now, or will be in
the future conducted except in compliance with all Environmental Laws; and (c)
no notice or other communication has been received from any governmental
authority which is in any way related to the actual or possible presence of
Hazardous Substances, except biomedical waste disposed of in the ordinary
course of business, on the Project Properties, or the actual or possible
violation of any Environmental Law.
(p) This Agreement and the other Transaction Documents, including
any certificate or other document furnished to Bank by or on behalf of any
Borrower or Guarantor pursuant to any
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Transaction Document do not contain, and will not contain, as of the date
thereof in each case, any untrue statement of a material fact or omit to state
or will omit to state, as of the date thereof in each case, a material fact
necessary in order to make the statements contained herein and therein not
misleading. There are no facts known to any Borrower or any Guarantor which,
individually or in the aggregate, materially adversely affect or involve any
substantial possibility of materially adversely affecting [i] any of the
Project Properties, or [ii] the condition, business or affairs of the Borrowers
and the Guarantors taken as a whole or their respective properties and assets
considered as an entirety which have not been disclosed herein or in written
materials delivered to the Bank in connection with the negotiations for the
Commitment Letter.
ARTICLE V
COVENANTS OF BORROWERS AND GUARANTORS
Section 5.01. FINANCIAL STATEMENTS. (a) Arbor shall furnish to the
Bank as soon as practical at the end of each fiscal quarter except the last
fiscal quarter in each fiscal year and in any event within 45 days thereafter,
internal Consolidated financial statements for Arbor and its Subsidiaries for
the immediately preceding quarter, which shall be in reasonable detail and in a
form acceptable to the Bank. Such statement shall be certified by an officer
of Arbor as being true, complete and accurate in all material respects. On
each occasion on which Arbor is required to furnish internal financial
statements to the Bank pursuant to this Section 5.01(a), Borrowers shall also
furnish to the Bank a certificate in form satisfactory to the Bank ("Compliance
Certificate") that it has reviewed the provisions of the Transaction Documents
and, after reasonable investigation, has no knowledge of the occurrence of any
event or condition which either constitutes or with the lapse of time or giving
of notice or both would constitute an Event of Default, or if either Borrower
has such knowledge, specifying such event or condition and what action such
Borrower has taken, is taking or proposes to take with respect thereto, and
demonstrating in reasonable detail compliance (or non-compliance, as the case
may be) at the end of such accounting period with the financial covenants set
forth in the Transaction Documents. Arbor shall also furnish promptly to the
Bank such other information respecting the business, properties, condition or
operations, financial or otherwise, of any Borrower or Guarantor as the Bank
may reasonably request.
(b) As soon as available after the last day of each fiscal year,
and in any event within one hundred twenty (120) days thereafter, Arbor shall
furnish to the Bank Consolidated financial statements for such fiscal year,
audited by a CPA firm acceptable to the Bank, all in reasonable detail. The
Borrowers shall also furnish promptly to the Bank such other information
respecting the business, properties, condition or operations, financial or
otherwise, of any Borrower or Guarantor, as the Bank may reasonably request.
(c) Promptly following any requests made by the Bank from time to
time, the Borrowers shall provide to the Bank for each of the Project
Properties a copy of the current nursing home license and copies of the most
recent surveys for the nursing home license and
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the Medicare and Medicaid certifications. In addition, each year, the
Borrowers shall provide to the Bank, promptly upon request of Bank made at any
time, a copy of the most recent annual cost reports for the Medicare and
Medicaid Programs.
Section 5.02. NOTIFICATION OF CERTAIN ADVERSE EVENTS. The Borrowers
shall promptly notify Bank if either Borrower learns of the occurrence of (i)
any event which constitutes an Event of Default, together with a detailed
statement by a responsible officer of either Borrower of the steps being taken
to cure the effect of such Event of Default; or (ii) the receipt of any notice
or the taking of any other action by the holder of any promissory note,
debenture or other evidence of indebtedness of either Borrower or of any
security (as defined in the Securities Act of 1993, as amended) of either
Borrower with respect to a claim of default, together with a detailed statement
by a responsible officer of either Borrower specifying the notice given or
other action taken by such holder and the nature of the claimed default and
what action the Borrowers are taking or propose to take with respect thereto;
or (iii) any legal, judicial or regulatory proceedings affecting either
Borrower, or any of the properties of either Borrower in which the amount
involved is material and is not covered by insurance and which, if adversely
determined would have a material adverse effect on either [a] the Project
Properties, or [b] the operations or financial condition of Borrowers and
Guarantors taken as a whole; or (iv) any dispute between either Borrower or any
Guarantor and any governmental or regulatory body or any other Person which, if
adversely determined would have a material adverse effect on either [a] the
Project Properties, or [b] the operations or financial condition of Borrowers
and Guarantors taken as a whole or (v) any material adverse claim relating to
any license or other authorization for Borrowers to operate the Project
Properties as health care facilities, or any material change in the manner,
method or procedure of Medicare reimbursement or Medicaid reimbursement in the
states of Florida or Ohio, or notice from any governmental or public body,
agency or instrumentality that any of the Project Properties or Borrowers are
proposed to be excluded, suspended or debarred from any governmental health
care program, alleging that any of the Project Properties is operating under
any deficiencies which have not been cured by, or cannot be cured by, the
Borrowers in sufficient time to prevent a revocation of any necessary license
or authorization, or advising that any of the Borrowers, in operating the
Project Properties, is not in compliance with statutes or regulations affecting
its operations, including statutes and regulations under the Medicare and
Medicaid programs; or (vi) any event or condition having a material adverse
effect on either [a] any of the Project Properties, or [b] the operations or
financial condition of Borrowers and Guarantors taken as a whole.
Section 5.03. KEEP BOOKS. Each Borrower and each Guarantor shall
keep true and proper books of records and accounts in which full and correct
entries are made of all business transactions, and reflect in its financial
statements adequate accruals and appropriations to reserves, all in accordance
with GAAP.
Section 5.04. INSPECTION OF BOOKS. Upon request by the Bank, each of
the Borrowers and Guarantors shall make available for inspection during normal
business hours, to the Bank or its
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duly authorized representatives, any of its books and records and shall furnish
to the Bank any information regarding its business affairs and financial
condition including copies of any contracts entered into by that Borrower or
Guarantor within a reasonable time after receipt of written request therefor.
Section 5.05. AMENDMENT OF ANY OTHER DOCUMENT. Without the prior
written consent of the Bank, neither of the Borrowers nor any Guarantor shall
enter into or consent to any amendment or modification of the Letter of Credit
or any Security Document. Neither of the Borrowers nor any Guarantor shall
enter into any agreement containing any provision which would be violated or
breached by the performance of its obligations hereunder or under any Security
Document or under any instrument or document delivered or to be delivered by it
or them hereunder or in connection herewith.
Section 5.06. AFFIRMATIVE AND NEGATIVE COVENANTS. Unless the prior
written consent of the Bank is first received, each of the Borrowers and
Guarantors shall comply with those affirmative and negative covenants
applicable to them, respectively, contained on Exhibit C hereto, which are
hereby incorporated herein by reference.
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01. EVENTS OF DEFAULT. The occurrence of any of the
following events shall be an "Event of Default" hereunder:
(a) The Borrowers shall fail to pay when due, or within three (3)
Business Days after written notice from Bank in each case (except that no
written notice shall be required under this Section 6.01(a) if the written
notice required under this Section 6.01(a) already had been given on two (2) or
more occasions during the twelve month period immediately preceding the due
date of the late payment at issue), any amount payable pursuant to Section 2.03
hereof; provided, however, any payment not made promptly on the date when due
shall accrue interest at the Default Rate of Interest; or
(b) The Borrowers shall fail to pay when due, and such failure to
pay shall continue for ten (10) Business Days after notice thereof, any amount,
other than pursuant to Section 2.03 hereof, payable by the Borrowers to the
Bank hereunder or under any Transaction Document; or
(c) The Borrowers shall fail to furnish any financial statements
or other information required by Section 5.01 when required by Section 5.01 and
such failure shall continue for thirty (30) days after notice thereof; or
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(d) Either of the Borrowers or any Guarantor shall fail to perform
or observe any of the terms, covenants or agreements to be performed or
observed by any Borrower or any Guarantor as set forth in this Agreement
including but not limited to those contained in Article V of and EXHIBIT C to
this Agreement (other than the failures described in subsections (a), (b) and
(c) of this Section 6.01), and any such failure shall continue for thirty (30)
days after written notice given to Borrowers; or
(e) Either of the Borrowers or any Guarantor shall be in default
(following any applicable requirement for notice and/or opportunity for cure
provided in the Security Document governing such default) under any of the
Security Documents; or
(f) Any representation or warranty made by either of the Borrowers
or any of the Guarantors (or any of their officers, managers or partners)
herein or in any Security Document or in any of the other Transaction Documents
delivered in connection with this Agreement shall prove to have been incorrect
in any material respect when made; or
(g) Either of the Borrowers or any of the Guarantors, pursuant to
or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case; or
(ii) consents to the entry of an order for relief against
it in an involuntary case; or
(iii) makes a general assignment for the benefit of its
creditors; or
(iv) admits in writing that it is or they are unable to
pay debts as the same become due; or
(h) A court of competent jurisdiction enters an order or decree
under any Bankruptcy law that:
(i) is for relief against either of the Borrowers or any of
the Guarantors in an involuntary case; or
(ii) orders the liquidation of either of the Borrowers or any
of the Guarantors, and the order or decree remains unstayed and in effect for
60 days; or
(i) Either of the Borrowers or any of the Guarantors shall be in
default beyond any applicable cure or grace period under any other obligation
to the Bank or to Bank One, Lima, NA.
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(j) Any revocation or termination of a Guaranty Agreement.
(k) Either (a) the lapse of any license or Medicare or Medicaid
certification as to any portion of any of the Project Properties, other than
decertifications at the request of the Borrowers in the ordinary course of
business that are consistent with all applicable licenses and certificates of
need and permitted under applicable governmental rules and regulations, or (b)
any substantial curtailment of the number of beds in operation in any of the
Project Properties for any reason, for a period of more than 90 days in any
calendar year in each case.
Section 6.02. REMEDIES UPON AN EVENT OF DEFAULT. If any Event of
Default shall have occurred and be continuing and shall not have been
specifically waived pursuant to Section 7.03 hereof, the Bank at its option may
do any one or more of the following:
(a) Notify the Trustee to draw so much of the Letter of Credit as
is necessary to repay the Notes which relate to the Loan and all accrued
interest thereon in full;
(b) Declare the principal of all amounts owing under this
Agreement and the Security Documents (including any amounts drawn under the
Letter of Credit as the result of a notice from the Bank to the Trustee as
provided in subparagraph (a) above) and all other indebtedness of the Borrowers
to the Bank, together with interest thereon, to be forthwith due and payable,
regardless of any other specified maturity or due date, without notice of
default, presentment or demand for payment, protest or notice of nonpayment or
dishonor, or other notices or demands of any kind or character, and without the
necessity of prior recourse to any security;
(c) Exercise any and all of its rights under the Security
Documents, or otherwise as a secured creditor, including, without limitation,
foreclosing on any security, and exercising any other rights with respect to
security whether under the Security Documents or any other agreement or as
provided by law, all in such order and in such manner as the Bank in its sole
discretion may determine;
(d) If the Letter of Credit has not been fully drawn against, Bank
shall be entitled to hold all cash proceeds (in an amount not to exceed the sum
of the undrawn amount of the Letter of Credit plus any drafts drawn against the
same and paid by Bank for which Bank has not been fully reimbursed, including
interest thereon, plus Bank's estimate of the expenses, including reasonable
attorney's fees, incurred or likely to be incurred in realizing on the
collateral for the Letter of Credit and extinguishing the obligations arising
out of the Letter of Credit) from the exercise of such remedies, including from
the collateral, in a non-interest bearing cash collateral account until such
time as the Letter of Credit is either fully drawn against or surrendered and
terminated and all expenses incurred by Bank in connection therewith have been
paid, and Bank shall be entitled to charge said cash collateral account at any
time and from time to time after an Event of Default for the expenses of
realizing on the collateral and for the other obligations (including, without
limitation, reasonable attorneys fees);
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(e) All of the rights and remedies upon occurrence of an Event of
Default shall be cumulative to the greatest extent permitted by law and shall
be in addition to all those rights and remedies afforded at law or in equity or
bankruptcy; and
(f) Borrowers shall cooperate in all reasonable respects with Bank
in the Bank or its designee or assignee making any application for any and all
licenses, permits and governmental approvals and in effectuating a transfer of
medical and other records as may be necessary for Bank to exercise such
remedies.
ARTICLE VII
MISCELLANEOUS
Section 7.01. PAYMENTS AND COMPUTATIONS. The Borrowers shall make
their payments due under this Agreement not later than 2:00 p.m. (Louisville,
Kentucky time) on the date when due in lawful money of the United States of
America to the Bank at its address referred to in Section 7.04 hereof in
immediately available funds. The Borrowers hereby authorize the Bank, if and
to the extent payment is not made when due hereunder, to charge from time to
time against the Borrowers' accounts with the Bank any amount so due. Except
as otherwise specifically provided in this Agreement, computations of interest
and fees hereunder shall be made by the Bank on the basis of a year of 360 days
and the actual number of days (including the first day but excluding the last
day) elapsed.
Section 7.02. OBLIGATIONS ABSOLUTE. The obligations of the Borrowers
and the Guarantors under this Agreement shall be joint and several and
absolute, unconditional (except that the obligations of the Contingent
Guarantors under the Guaranty Agreement executed and delivered by them are
conditioned upon the occurrence of an Event of Default) and irrevocable, and
all amounts payable by the Borrowers hereunder shall be paid strictly in
accordance with the terms of this Agreement under all circumstances, including
without limitation, the following circumstances:
(a) any lack of validity or enforceability of the Letter of
Credit; or
(b) any amendment, waiver of or consent to departure from any or
all of the provisions of this Agreement or any or all of the Security Documents
or other Transaction Documents unless given pursuant to Section 7.03 hereof; or
(c) the existence of any claim, set-off, defense or other right
which the Borrowers may have at any time against any Holder, the Trustee, the
Bank, any beneficiary or any transferee of the Letter of Credit, or any Person
for whom the Trustee, any such beneficiary or any such transferee may be
acting, or any other Person, whether in connection with this
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Agreement, the transactions contemplated herein or in the Security Documents or
any unrelated transaction; or
(d) in the absence of willful misconduct by the Bank or their
officers or employees, any statement or any other document presented hereunder
or with respect to or under the Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect whatsoever; or
(e) payment by the Bank to the Trustee under the Letter of Credit
against presentation of a draft or certificate which does not comply with the
terms of the Letter of Credit; or
(f) any non-application or misapplication by the Trustee of the
proceeds of any drawing on the Letter of Credit.
Section 7.03. AMENDMENTS; WAIVERS. No amendment or waiver of any
provision of this Agreement, nor consent to any departure by the Borrowers or
Guarantors therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Bank, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
Section 7.04. NOTICES Except as otherwise provided herein, whenever
notice is required to be given pursuant to the provisions hereof, such notice
shall be in writing (including facsimile transmission) and shall be given as
follows:
(a) if to the Borrowers
and Guarantors: Arbor Health Care Company
1100 Shawnee Road, Box 840
Lima, Ohio 45802-0840
Attn: William W. Wondolowski
with a copy to: Arbor Health Care Company
1100 Shawnee Road, Box 840
Lima, Ohio 45802-0840
Attn: Brad C. Roush
(b) if to the Bank: Bank One, Kentucky, NA
416 West Jefferson Street
Louisville, Kentucky 40202
Attention: Dennis P. Heishman
Senior Vice President
29
<PAGE> 30
with a copy to: Bank One, Kentucky, NA
416 West Jefferson Street
Louisville, Kentucky 40202
Attention: Legal Department
(c) if to the Trustee: Bank One Trust Company, N.A.
100 East Broad Street
Columbus, Ohio 43271-0181
Attention: Victoria Pavlick
or to such other address as any Person listed in this Section may hereafter
specify for the purpose by written notice to each other Person listed in this
Section. Each such notice shall be effective and conclusively deemed received
(i) if given by facsimile transmission, when such facsimile is transmitted and
the original copy of such notice is deposited in the U.S. mail, first class
postage prepaid, addressed as aforesaid, (ii) if given by certified or
registered U.S. mail, when confirmation of delivery is received or when notice
of refusal to accept delivery is received or (iii) if hand delivered, when
delivered at the address specified in this Section.
Section 7.05. NO WAIVER; REMEDIES. No failure on the part of the
Bank to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof, unless as permitted under Section 7.03 hereof, nor shall
any single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
Section 7.06. ACCOUNTING TERMS. All accounting terms not
specifically defined herein or in Exhibit C hereto shall be construed in
accordance with GAAP.
Section 7.07. COMPUTATIONS. Where the character or amount of any
asset, liability or item of income or expense is required to be determined, or
any consolidation or other accounting computation is required to be made, for
the purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP.
Section 7.08. INDEMNIFICATION.
(a) The Borrowers hereby agree jointly and severally to indemnify
and hold the Bank and its respective officers, directors, shareholders,
employees, agents and servants, harmless from and against any and all claims,
damages, losses, liabilities, costs or expenses (including, without limitation,
reasonable attorneys' fees or expenses to the extent permitted by law) which
the Bank may incur or which may be claimed against the Bank by any Person, by
reason of or in connection with this Agreement and the payment or failure to
make lawful payment under the Letter of Credit; provided, however, that the
Borrowers shall not be required to indemnify the
30
<PAGE> 31
Bank pursuant to this Section 7.08 for any claims, damages, losses,
liabilities, costs or expenses to the extent caused by the Bank's willful
misconduct. If any action, suit or proceeding arising from any of the
foregoing is brought against the Bank or any other Person indemnified pursuant
to this Section 7.08, then the Borrowers, to the extent and in the manner
directed by the Bank, will resist and defend such action, suit or proceeding or
cause the same to be resisted or defended by counsel designated by the Person
or Persons indemnified or intended to be indemnified (which counsel shall be
reasonably acceptable to the Borrowers).
(b) The Borrowers also hereby agree jointly and severally to
indemnify and hold the Bank and its respective officers, directors,
shareholders, employees, agents and servants, harmless from and against any and
all claims, damages, losses, liabilities, costs or expenses (including, without
limitation, reasonable attorneys' fees or expenses to the extent permitted by
law) which the Bank may incur or which may be claimed against the Bank by any
Person relating to (i) the actual or threatened discharge of any Hazardous
Substance on or from any of the Project Properties, including any costs of
removal or remedial action taken with respect to the presence of any Hazardous
Substance on or emanating from any of the Project Properties; and (ii) any
other environmental matter affecting any of the Project Properties within the
jurisdiction of any governmental agency.
(c) The indemnifications in this Section 7.08 shall survive the
termination of this Agreement.
Section 7.09. COSTS, EXPENSES AND TAXES. The Borrowers agree jointly
and severally to pay on demand such costs and expenses (including reasonable
attorneys' fees) reasonably incurred by the Bank in connection with the
preparation, issuance, delivery, filing and recording of this Agreement and the
Security Documents as are specified in the Commitment Letter. In addition, the
Borrowers shall jointly and severally pay all costs and expenses, including
reasonable attorneys' fees, in connection with the administration and
enforcement of this Agreement and the Security Documents and such other
documents which may be delivered in connection with this Agreement and the
Security Documents. In addition, the Borrowers shall jointly and severally pay
any and all stamp and other taxes and fees payable or determined to be payable
by the Bank in connection with the execution, delivery, filing and recording of
this Agreement and the Security Documents, and the Borrowers agree to save the
Bank harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees.
Section 7.10. SETOFF. In addition to any rights and remedies of the
Bank provided by law, the Bank shall have the right, without prior notice to
the Borrowers, any such notice being expressly waived by each of the Borrowers
to the extent permitted by applicable law, on the occurrence of any Event of
Default, to set off and apply against any indebtedness, whether matured or
unmatured, of the Borrowers to the Bank, any amount owing from the Bank to the
Borrowers (whether matured or unmatured), at or at any time after the happening
of any such
31
<PAGE> 32
Event of Default, and such right of setoff may be exercised by the Bank against
the Borrowers or against a debtor-in-possession, assignee for the benefit of
creditors, receiver or execution, judgment or attachment creditor of either of
the Borrowers, or against anyone else claiming through or against either of the
Borrowers or such debtor-in-possession, assignee for the benefit of creditors,
receiver or execution, judgment or attachment creditor, notwithstanding the
fact that such right of set off shall not have been exercised by the Bank
before the occurrence of any such Event of Default. The Bank agrees promptly
to notify the Borrowers after any such setoff and application made by the Bank,
PROVIDED THAT failure to give such notice shall not affect the validity of such
setoff and application.
Section 7.11. FURTHER ASSURANCES. Each Borrower and each Guarantor
agrees to do such further acts and things and to execute and deliver to the
Bank such additional assignments, agreements, powers and instruments, as the
Bank may reasonably require or deem advisable to carry into effect the purposes
of this Agreement or to better assure and confirm unto the Bank its rights,
powers and remedies hereunder.
Section 7.12. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same Agreement.
Section 7.13. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Borrowers, the Guarantors and the Bank
and thereafter shall be binding upon and inure to the benefit of the Borrowers
and the Bank and their respective successors and assigns. The Bank may assign
to any financial institution all or any part of, or any interest (undivided or
divided) in, its rights and benefits under this Agreement, and to the extent of
that assignment such assignee shall have the same rights and benefits against
the Borrowers and the Guarantors hereunder as it would have had if such
assignee were the Bank.
Section 7.14. SEVERABILITY. The parties hereto intend and believe
that each provision in this Agreement comports with all applicable local, state
and Federal laws and judicial decisions. However, if any provision or
provisions, or if any portion of any provision or provisions, in this Agreement
are found by a court of competent jurisdiction to be in violation of any
applicable local, state or Federal ordinance, statute, law, administrative or
judicial decision, or public policy, and if such court should declare such
portion, provision or provisions of this Agreement to be illegal, invalid,
unlawful, void or unenforceable as written, then it is the intent of the
parties hereto that such portion, provision or provisions shall be given force
and effect to the fullest possible extent, that the remainder of this Agreement
shall be construed as if such provision or provisions were not contained herein
and that the rights, obligations and interests of the parties under the
remainder of this Agreement shall continue in full force and effect.
32
<PAGE> 33
Section 7.15. GOVERNING LAW; JURISDICTION. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Kentucky. The parties hereto consent to and by this Agreement submit
themselves to the personal jurisdiction of the Circuit Court of Jefferson
County, Kentucky and the United States District Court for the Louisville
Division of the Western District of Kentucky sitting in Louisville, Kentucky
for the purposes of any judicial proceedings which are instituted with respect
to any matter arising under this Agreement, or any of the Security Documents or
any other agreement, instrument or note related hereto. The parties agree that
venue is proper in said jurisdiction.
Section 7.16. HEADINGS. Section headings and captions in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose and are not to be
considered as defining or limiting in any way the scope or intent of the
provisions of this Agreement.
Section 7.17. TERMINATION. The Borrowers' and Guarantors'
obligations under this Agreement (except the obligations set forth in Sections
2.03, 7.08 and 7.09 of this Agreement and the obligation to pay fees when due
under Section 2.02 of this Agreement, all of which shall survive the
termination of this Agreement) shall terminate upon the Expiration Date.
Section 7.18 TIME OF ESSENCE. Time shall be of the essence in the
performance of all the obligations of Borrowers and Guarantors under the
Transaction Documents.
Section 7.19 ENTIRETY OF AGREEMENT. This Agreement and the other
Transaction Documents contain the final, complete and exclusive agreement of
the parties pertaining to their its subject matter and supersede all prior
written and oral agreements pertaining thereto except to the extent expressly
otherwise provided herein with respect to the Commitment Letter.
Section 7.20 NO THIRD PARTY BENEFICIARIES. The provisions of this
Agreement shall inure to the benefit and responsibility of the parties hereto,
their successors and assigns (but only to the extent such assignment is
permitted herein) and shall not benefit or affect any third party.
Section 7.21 CONSTRUCTION OF PROVISIONS. Each covenant by either
Borrower or any Guarantor contained in this Agreement and the other Transaction
Documents shall be construed without reference to any other such covenant, and
any determination of whether either Borrower or any Guarantor is in compliance
with any such covenant shall be made without reference to whether either
Borrower or any Guarantor is in compliance with any other such covenant. In the
event of any conflict between or among the provisions as contained in one
Transaction Document and other provisions contained in the same or one or more
other Transaction Documents, Bank shall be entitled to resolve the conflict by
selecting which provision shall be applicable.
Section 7.22 EXISTENCE OF FACTS UNDERLYING CONDITIONS. Any condition
of this Agreement which requires the submission of evidence of the existence or
non-existence of a specified fact
33
<PAGE> 34
or facts implies as a condition the existence or non-existence, as the case may
be, of such fact or facts and the Bank shall, at all times, be free
independently to establish to its reasonable satisfaction and in its reasonable
discretion such existence or nonexistence.
Section 7.23 RELEASE OF COLLATERAL. Anything contained in this
Agreement, the Security Documents or any of the other Transaction Documents to
the contrary notwithstanding, Bank agrees to enter into a release (each a
"Release" and collectively, the "Releases") of one, and only one, Project
Property selected by Borrower but subject to the approval of the Bank following
each date (each a "Release Date") that the Stated Amount of the Letter of
Credit has been permanently reduced to $21,500,000, $16,000,000, $11,250,000,
$7,250,000 and $3,250,000, respectively, and no draft has been drawn against
the Letter of Credit which has not been fully reimbursed, expressly subject in
the case of each Release to each of the following covenants and conditions
having been performed and fulfilled to the satisfaction of Bank:
[i] Borrowers shall have made a written request to Bank for the
Release on or after the applicable Release Date;
[ii] No Event of Default, or circumstance or condition which with
the giving of any applicable notice or expiration of any applicable period of
cure required in each case under the Transaction Documents, shall be existing
as of the time of the request made by Borrowers or the time of the Release and,
without limitation of the foregoing, Borrowers shall be in compliance with all
of the financial covenants contained in Section 25 of Exhibit C to this
Agreement, and Bank shall have received the most recent appraisal(s) requested
by Bank pursuant to Section 14 of said Exhibit C;
[iii] The sum of the appraised value of all of the remaining
Project Properties, calculated according to the most recent appraisals in
possession of the Bank and after giving effect to the Release being requested,
shall not be less than twice the Stated Amount;
[iv] Borrower shall select the Project Property, subject to the
approval of the Bank as to the particular Project Property selected, to be the
subject of each Release;
[v] All documentation of each Release (which may include an
endorsement to the loan policy or policies of title insurance insuring the
Mortgage Agreements) shall be satisfactory in scope, form and substance to the
Bank; and
[vi] Borrowers shall pay for all costs and expenses of each
Release, including any endorsements to the policies of title insurance,
recording fees and reasonable attorneys' fees incurred by the Bank.
For purposes of this Section and Section 14 of EXHIBIT C to
this Agreement, Borrowers, Guarantors and Bank stipulate that the appraised
value of the respective Project
34
<PAGE> 35
Properties, as established pursuant to the appraisals thereof delivered in
fulfillment of one of the conditions to closing of this Agreement, are as
follows: [i] $8,500,000 for the Project Property located in Brandon, Florida,
[ii] $9,800,000 for the Project Property located in Milford, Ohio, [iii]
$8,800,000 for the Project Property located in Altamonte Springs, Florida; [iv]
$7,400,000 for the Project Property located at St. Petersburg, Florida, [v]
$10,000,000 for the Project Property located at Melbourne, Florida, and [vi]
$9,700,000 for the Project Property located in Tampa, Florida.
SECTION 7.24. WAIVER OF JURY TRIAL. THE BANK, EACH BORROWER AND EACH
GUARANTOR HEREBY VOLUNTARILY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT
TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, BETWEEN THE BANK AND THE BORROWERS AND/OR THE
GUARANTORS ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THE BANK AND THE BORROWERS PURSUANT TO THIS
AGREEMENT, THE SECURITY DOCUMENTS OR ANY OTHER AGREEMENT OR DOCUMENT EXECUTED
OR DELIVERED IN CONNECTION HEREWITH OR THEREWITH. THIS PROVISION IS A MATERIAL
INDUCEMENT TO THE BANK TO ENTER INTO THE TRANSACTIONS DESCRIBED IN THIS
AGREEMENT. THIS PROVISION SHALL NOT IN ANY WAY AFFECT, WAIVE LIMIT, AMEND OR
MODIFY THE BANK'S ABILITY TO PURSUE ANY REMEDIES AVAILABLE TO IT.
35
<PAGE> 36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective representatives thereunto
duly authorized as of the date first above written.
BANK: GUARANTORS:
BANK ONE, KENTUCKY, NA ARBORS EAST, INC.
By: By:
Title: Title:
BORROWERS: ARBORS AT FORT WAYNE, INC.
ARBOR HEALTH CARE COMPANY
By:
Title:
By:
Title:
ARBORS AT TOLEDO, INC.
MARSHALL PROPERTIES, INC.
By:
Title:
By:
Title:
HOME CARE PHARMACY, INC. OF
FLORIDA
By:
Title:
36
<PAGE> 37
BAY GERIATRIC PHARMACY, INC.
By:
Title:
CONTINGENT GUARANTORS:
ALTERNACARE PLUS ENTERPRISES, INC.
By:
Title:
THE DRUGGIST, INC.
By:
Title:
<TABLE>
<CAPTION>
Attachments:
- - - -----------
<S> <C>
Exhibits A-1
and A-2 - Amounts of Monthly Principal Payments for each of the Borrower Notes
Exhibit B - Form of Borrowers' and Guarantors' Counsel Opinion
Exhibit C - Affirmative and Negative Covenants
Exhibit D - Form of Letter of Credit
Schedule 4.01(f) - Listing of Beds for each Project Property
</TABLE>
37
<PAGE> 38
EXHIBIT A
PRINCIPAL PAYMENT SCHEDULE
FOR PROMISSORY NOTE (SERIES 1996A-1)
The Borrowers will deposit monthly into an account maintained at the
Bank an amount equal to:
<TABLE>
<CAPTION>
Loan Payment Date Amount
----------------- ------
<S> <C>
03/01/96 $24,380.08
04/01/96 24,532.46
05/01/96 24,685.78
06/01/96 24,840.07
07/01/96 24,995.32
08/01/96 25,566.29
09/01/96 25,308.74
10/01/96 25,466.92
11/01/96 25,626.09
12/01/96 25,786.25
01/01/97 25,947.41
02/01/97 25,864.59
03/01/97 26,272.77
04/01/97 26,436.98
05/01/97 26,602.21
06/01/97 26,768.47
07/01/97 26,935.77
08/01/97 26,983.80
09/01/97 27,273.52
10/01/97 27,443.98
11/01/97 27,615.51
12/01/97 27,788.10
01/01/98 27,961.78
02/01/98 27,917.11
03/01/98 28,312.39
04/01/98 28,489.35
05/01/98 28,667.40
06/01/98 28,846.58
07/01/98 29,026.87
08/01/98 29,657.41
09/01/98 29,390.84
10/01/98 29,574.53
11/01/98 29,759.37
12/01/98 29,945.37
01/01/99 30,132.52
02/01/99 30,197.37
03/01/99 30,510.36
04/01/99 30,701.05
05/01/99 30,892.93
06/01/99 31,086.01
07/01/99 31,280.30
</TABLE>
A-1
<PAGE> 39
<TABLE>
<CAPTION>
Loan Payment Date Amount
----------------- ------------
<S> <C>
08/01/99 31,529.35
09/01/99 31,672.52
10/01/99 31,870.48
11/01/99 32,069.67
12/01/99 32,270.10
01/01/2000 32,471.79
02/01/2000 32,645.44
03/01/2000 32,878.96
04/01/2000 33,084.45
05/01/2000 33,291.23
06/01/2000 33,499.30
07/01/2000 33,708.67
08/01/2000 33,537.39
09/01/2000 34,131.34
10/01/2000 34,344.66
11/01/2000 34,559.32
12/01/2000 34,775.31
01/01/2001 34,992.66
02/01/2001 35,196.71
03/01/2001 35,431.44
04/01/2001 35,652.88
05/01/2001 35,875.71
06/01/2001 36,099.94
07/01/2001 36,325.56
08/01/2001 36,614.47
09/01/2001 36,781.05
10/01/2001 37,010.93
11/01/2001 37,242.25
12/01/2001 37,475.01
01/01/2002 37,709.23
02/01/2002 37,781.53
03/01/2002 38,182.07
04/01/2002 38,420.71
05/01/2002 38,660.84
06/01/2002 38,902.47
07/01/2002 39,145.61
08/01/2002 39,688.30
09/01/2002 39,636.46
10/01/2002 39,884.19
11/01/2002 40,133.46
12/01/2002 40,384.30
01/01/2003 40,636.70
02/01/2003* 41,324.89
03/01/2003 41,146.24
04/01/2003 41,403.41
05/01/2003 41,662.18
06/01/2003 41,922.57
07/01/2003 42,184.58
08/01/2003 41,681.02
09/01/2003 42,713.54
</TABLE>
A-2
<PAGE> 40
<TABLE>
<CAPTION>
Loan Payment Date Amount
----------------- ------------
<S> <C>
10/01/2003 42,980.50
11/01/2003 43,249.13
12/01/2003 43,519.43
01/01/2004 43,791.43
02/01/2004 44,745.97
03/01/2004 44,340.53
04/01/2004 44,617.66
05/01/2004 44,896.52
06/01/2004 45,177.13
07/01/2004 45,459.48
08/01/2004 45,508.68
09/01/2004 46,029.50
10/01/2004 46,317.19
11/01/2004 46,606.67
12/01/2004 46,897.96
01/01/2005 47,191.07
02/01/2005 46,957.61
03/01/2005 47,782.80
04/01/2005 48,081.45
05/01/2005 48,381.96
06/01/2005 48,684.34
07/01/2005 48,988.62
08/01/2005 50,080.83
09/01/2005 49,602.89
10/01/2005 49,912.91
11/01/2005 50,224.87
12/01/2005 50,538.77
01/01/2006 50,854.64
02/01/2006 50,865.92
03/01/2006 51,492.31
04/01/2006 51,814.13
05/01/2006 52,137.97
06/01/2006 52,463.83
07/01/2006 52,791.73
08/01/2006 53,300.03
09/01/2006 53,453.69
10/01/2006 53,787.78
11/01/2006 54,123.95
12/01/2006 54,462.23
01/01/2007 54,802.62
02/01/2007 55,369.73
03/01/2007 55,489.79
04/01/2007 55,836.60
05/01/2007 56,185.58
06/01/2007 56,536.74
07/01/2007 56,890.09
08/01/2007 57,061.20
09/01/2007 57,603.44
10/01/2007 57,963.46
11/01/2007 58,325.73
</TABLE>
A-3
<PAGE> 41
<TABLE>
<CAPTION>
Loan Payment Date Amount
----------------- ------------
<S> <C>
12/01/2007 58,690.27
01/01/2008 59,057.08
02/01/2008 59,360.02
03/01/2008 59,797.61
04/01/2008 60,171.34
05/01/2008 60,547.41
06/01/2008 60,925.83
07/01/2008 61,306.62
08/01/2008 61,251.19
09/01/2008 62,075.35
10/01/2008 62,463.32
11/01/2008 62,853.71
12/01/2008 63,246.55
01/01/2009 63,641.84
02/01/2009 64,719.23
03/01/2009 64,439.85
04/01/2009 64,842.60
05/01/2009 65,247.86
06/01/2009 65,655.66
07/01/2009 66,066.01
08/01/2009 65,748.02
09/01/2009 66,894.42
10/01/2009 67,312.51
11/01/2009 67,733.21
12/01/2009 68,156.54
01/01/2010 68,582.52
02/01/2010 69,320.80
03/01/2010 69,442.48
04/01/2010 69,876.50
05/01/2010 70,313.23
06/01/2010 70,752.68
07/01/2010 71,194.89
08/01/2010 71,420.22
09/01/2010 72,087.60
10/01/2010 72,538.15
11/01/2010 72,991.52
12/01/2010 73,447.71
01/01/2011 73,906.76
02/01/2011 75,028.26
03/01/2011 74,833.48
04/01/2011 75,301.19
05/01/2011 75,771.82
06/01/2011 76,245.40
07/01/2011 76,721.93
08/01/2011 77,126.18
09/01/2011 77,683.95
10/01/2011 78,169.48
11/01/2011 78,658.04
12/01/2011 79,149.65
01/01/2012 79,644.33
</TABLE>
A-4
<PAGE> 42
<TABLE>
<CAPTION>
Loan Payment Date Amount
----------------- ------------
<S> <C>
02/01/2012 79,694.55
03/01/2012 80,643.00
04/01/2012 81,147.02
05/01/2012 81,654.19
06/01/2012 82,164.53
07/01/2012 82,678.05
08/01/2012 83,713.21
09/01/2012 83,714.76
10/01/2012 84,237.98
11/01/2012 84,764.46
12/01/2012 85,294.24
01/01/2013 85,827.33
02/01/2013 86,161.23
03/01/2013 86,903.53
04/01/2013 87,446.67
05/01/2013 87,993.21
06/01/2013 88,543.17
07/01/2013 89,096.57
08/01/2013 89,016.85
09/01/2013 90,213.75
10/01/2013 90,777.59
11/01/2013 91,344.95
12/01/2013 91,915.86
01/01/2014 92,490.33
02/01/2014 93,257.52
03/01/2014 93,650.07
04/01/2014 94,235.38
05/01/2014 94,824.36
06/01/2014 95,417.01
07/01/2014 96,013.36
08/01/2014 96,859.82
09/01/2014 97,217.28
10/01/2014 97,824.89
11/01/2014 98,436.30
12/01/2014 99,051.52
01/01/2015 99,670.59
02/01/2015 99,799.42
03/01/2015 100,920.37
04/01/2015 101,551.12
05/01/2015 102,185.82
06/01/2015 102,824.48
07/01/2015 103,467.13
08/01/2015 105,051.08
09/01/2015 104,764.51
10/01/2015 105,419.29
11/01/2015 106,078.16
12/01/2015 106,741.15
</TABLE>
A-5
<PAGE> 43
<TABLE>
<CAPTION>
Loan Payment Date Amount
----------------- ------------
<S> <C>
01/01/2016 107,408.28
02/01/2016 107,588.61
--------------
TOTAL $13,500,000.00
==============
</TABLE>
* If the Letter of Credit is not extended as provided in the
Reimbursement Agreement, the entire unpaid principal amount will be
due and payable on February 1, 2003.
A-6
<PAGE> 44
EXHIBIT A-2
PRINCIPAL PAYMENT SCHEDULE
CLASS A-2 NOTES
The Borrowers will deposit monthly into an account maintained at the Bank an
amount equal to:
<TABLE>
<CAPTION>
Loan Payment Date Amount
- - - ----------------- ------
<S> <C>
03/01/96 $24,380.08
04/01/96 24,532.46
05/01/96 24,685.78
06/01/96 24,840.07
07/01/96 24,995.32
08/01/96 25,566.29
09/01/96 25,308.74
10/01/96 25,466.92
11/01/96 25,626.09
12/01/96 25,786.25
01/01/97 25,947.41
02/01/97 25,864.59
03/01/97 26,272.77
04/01/97 26,436.98
05/01/97 26,602.21
06/01/97 26,768.47
07/01/97 26,935.77
08/01/97 26,983.80
09/01/97 27,273.52
10/01/97 27,443.98
11/01/97 27,615.51
12/01/97 27,788.10
01/01/98 27,961.78
02/01/98 27,917.11
03/01/98 28,312.39
04/01/98 28,489.35
05/01/98 28,667.40
06/01/98 28,846.58
07/01/98 29,026.87
08/01/98 29,657.41
09/01/98 29,390.84
10/01/98 29,574.53
11/01/98 29,759.37
12/01/98 29,945.37
01/01/99 30,132.52
02/01/99 30,197.37
03/01/99 30,510.36
04/01/99 30,701.05
05/01/99 30,892.93
06/01/99 31,086.01
07/01/99 31,280.30
08/01/99 31,529.35
09/01/99 31,672.52
10/01/99 31,870.48
</TABLE>
A-7
<PAGE> 45
<TABLE>
<CAPTION>
Loan Payment Date Amount
- - - ----------------- ------
<S> <C>
11/01/99 32,069.67
12/01/99 32,270.10
01/01/2000 32,471.79
02/01/2000 32,645.44
03/01/2000 32,878.96
04/01/2000 33,084.45
05/01/2000 33,291.23
06/01/2000 33,499.30
07/01/2000 33,708.67
08/01/2000 33,537.39
09/01/2000 34,131.34
10/01/2000 34,344.66
11/01/2000 34,559.32
12/01/2000 34,775.31
01/01/2001 34,992.66
02/01/2001 35,196.71
03/01/2001 35,431.44
04/01/2001 35,652.88
05/01/2001 35,875.71
06/01/2001 36,099.94
07/01/2001 36,325.56
08/01/2001 36,614.47
09/01/2001 36,781.05
10/01/2001 37,010.93
11/01/2001 37,242.25
12/01/2001 37,475.01
01/01/2002 37,709.23
02/01/2002 37,781.53
03/01/2002 38,182.07
04/01/2002 38,420.71
05/01/2002 38,660.84
06/01/2002 38,902.47
07/01/2002 39,145.61
08/01/2002 39,688.30
09/01/2002 39,636.46
10/01/2002 39,884.19
11/01/2002 40,133.46
12/01/2002 40,384.30
01/01/2003 40,636.70
02/01/2003* 41,324.89
03/01/2003 41,146.24
04/01/2003 41,403.41
05/01/2003 41,662.18
06/01/2003 41,922.57
07/01/2003 42,184.58
08/01/2003 41,681.02
09/01/2003 42,713.54
10/01/2003 42,980.50
11/01/2003 43,249.13
12/01/2003 43,519.43
01/01/2004 43,791.43
02/01/2004 44,745.97
</TABLE>
A-8
<PAGE> 46
<TABLE>
<CAPTION>
Loan Payment Date Amount
- - - ----------------- ------
<S> <C>
03/01/2004 44,340.53
04/01/2004 44,617.66
05/01/2004 44,896.52
06/01/2004 45,177.13
07/01/2004 45,459.48
08/01/2004 45,508.68
09/01/2004 46,029.50
10/01/2004 46,317.19
11/01/2004 46,606.67
12/01/2004 46,897.96
01/01/2005 47,191.07
02/01/2005 46,957.61
03/01/2005 47,782.80
04/01/2005 48,081.45
05/01/2005 48,381.96
06/01/2005 48,684.34
07/01/2005 48,988.62
08/01/2005 50,080.83
09/01/2005 49,602.89
10/01/2005 49,912.91
11/01/2005 50,224.87
12/01/2005 50,538.77
01/01/2006 50,854.64
02/01/2006 50,865.92
03/01/2006 51,492.31
04/01/2006 51,814.13
05/01/2006 52,137.97
06/01/2006 52,463.83
07/01/2006 52,791.73
08/01/2006 53,300.03
09/01/2006 53,453.69
10/01/2006 53,787.78
11/01/2006 54,123.95
12/01/2006 54,462.23
01/01/2007 54,802.62
02/01/2007 55,369.73
03/01/2007 55,489.79
04/01/2007 55,836.60
05/01/2007 56,185.58
06/01/2007 56,536.74
07/01/2007 56,890.09
08/01/2007 57,061.20
09/01/2007 57,603.44
10/01/2007 57,963.46
11/01/2007 58,325.73
12/01/2007 58,690.27
01/01/2008 59,057.08
02/01/2008 59,360.02
03/01/2008 59,797.61
04/01/2008 60,171.34
05/01/2008 60,547.41
06/01/2008 60,925.83
</TABLE>
A-9
<PAGE> 47
<TABLE>
<CAPTION>
Loan Payment Date Amount
----------------- ------
<S> <C>
07/01/2008 61,306.62
08/01/2008 61,251.19
09/01/2008 62,075.35
10/01/2008 62,463.32
11/01/2008 62,853.71
12/01/2008 63,246.55
01/01/2009 63,641.84
02/01/2009 64,719.23
03/01/2009 64,439.85
04/01/2009 64,842.60
05/01/2009 65,247.86
06/01/2009 65,655.66
07/01/2009 66,066.01
08/01/2009 65,748.02
09/01/2009 66,894.42
10/01/2009 67,312.51
11/01/2009 67,733.21
12/01/2009 68,156.54
01/01/2010 68,582.52
02/01/2010 69,320.80
03/01/2010 69,442.48
04/01/2010 69,876.50
05/01/2010 70,313.23
06/01/2010 70,752.68
07/01/2010 71,194.89
08/01/2010 71,420.22
09/01/2010 72,087.60
10/01/2010 72,538.15
11/01/2010 72,991.52
12/01/2010 73,447.71
01/01/2011 73,906.76
02/01/2011 75,028.26
03/01/2011 74,833.48
04/01/2011 75,301.19
05/01/2011 75,771.82
06/01/2011 76,245.40
07/01/2011 76,721.93
08/01/2011 77,126.18
09/01/2011 77,683.95
10/01/2011 78,169.48
11/01/2011 78,658.04
12/01/2011 79,149.65
01/01/2012 79,644.33
02/01/2012 79,694.55
03/01/2012 80,643.00
04/01/2012 81,147.02
05/01/2012 81,654.19
06/01/2012 82,164.53
07/01/2012 82,678.05
08/01/2012 83,713.21
09/01/2012 83,714.76
10/01/2012 84,237.98
</TABLE>
A-10
<PAGE> 48
<TABLE>
<CAPTION>
Loan Payment Date Amount
----------------- ------
<S> <C>
11/01/2012 84,764.46
12/01/2012 85,294.24
01/01/2013 85,827.33
02/01/2013 86,161.23
03/01/2013 86,903.53
04/01/2013 87,446.67
05/01/2013 87,993.21
06/01/2013 88,543.17
07/01/2013 89,096.57
08/01/2013 89,016.85
09/01/2013 90,213.75
10/01/2013 90,777.59
11/01/2013 91,344.95
12/01/2013 91,915.86
01/01/2014 92,490.33
02/01/2014 93,257.52
03/01/2014 93,650.07
04/01/2014 94,235.38
05/01/2014 94,824.36
06/01/2014 95,417.01
07/01/2014 96,013.36
08/01/2014 96,859.82
09/01/2014 97,217.28
10/01/2014 97,824.89
11/01/2014 98,436.30
12/01/2014 99,051.52
01/01/2015 99,670.59
02/01/2015 99,799.42
03/01/2015 100,920.37
04/01/2015 101,551.12
05/01/2015 102,185.82
06/01/2015 102,824.48
07/01/2015 103,467.13
08/01/2015 105,051.08
09/01/2015 104,764.51
10/01/2015 105,419.29
11/01/2015 106,078.16
12/01/2015 106,741.15
01/01/2016 107,408.28
02/01/2016 107,588.61
--------------
TOTAL $13,500,000.00
==============
<FN>
* If the Letter of Credit is not extended as provided in the Reimbursement
Agreement, the entire unpaid principal amount will be due and payable on
February 1, 2003.
</TABLE>
A-11
<PAGE> 49
EXHIBIT B
FORM OF BORROWERS' AND GUARANTORS' COUNSEL OPINION
[intentionally omitted; see opinions actually
delivered in conjunction with the closing]
B-1
<PAGE> 50
EXHIBIT C
AFFIRMATIVE AND NEGATIVE COVENANTS
AFFIRMATIVE COVENANTS
1. INSURANCE. Each Borrower and each Guarantor shall maintain fire,
hazard and liability insurance upon all of its assets and business
properties and premises liability insurance with responsible and
reputable insurers of such character as is usually maintained by
companies engaged in like business. The amount of such insurance
shall be at least equal to the loan amount. The Borrowers will
determine if any of the Project Properties are located in a federally
identified flood hazard zone. If flood insurance is required, the
Borrowers will provide flood insurance coverage in a reasonable amount
including, in the case of the Project Property located in St.
Petersburg, Florida, on or before forty-five (45) days after the date
of this Agreement. All insurance policies shall be written for the
benefit of the Borrowers and the Bank as their interest may appear and
shall contain a provision requiring the insurance company to provide
the Bank not less than ten (10) days' written notice prior to
cancellation of any such policy. All insurance policies or
certificates evidencing the same shall be furnished to the Bank.
2. PAYMENT OF TAXES AND CLAIMS. Each Borrower and each Guarantor shall
pay all taxes, assessments and other governmental charges imposed upon
its properties or assets or in respect of any of its franchises,
businesses, income or profits before any material penalty or material
interest accrues thereon, and all claims (including, without
limitation, claims for labor, services, materials and supplies) for
material sums which have become due and payable and which by law have
or might become a lien or charge upon any of its properties or assets,
provided that (unless any material item of property would be lost,
forfeited or materially damaged as a result thereof) no such charge or
claim need be paid if the amount, applicability or validity thereof is
currently being contested in good faith and if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have
been made therefor.
3. COMPLIANCE WITH LAWS. Each Borrower and each Guarantor shall comply
in all substantial respects with all applicable statutes, laws,
ordinances and governmental rules, regulations and orders to which it
is subject or which are applicable to its businesses, properties and
assets if noncompliance therewith would materially adversely affect
any of the Project Properties or the businesses of Arbor and Marshall,
taken as a whole; provided that (unless such contest or noncompliance
would materially adversely affect such businesses) the Borrower or
Guarantor, as applicable, need not so comply if any such statute, law,
ordinance, or governmental rule, regulation or order is currently
being contested in good faith.
C-1
<PAGE> 51
4. MAINTENANCE OF TANGIBLE ASSETS. Each Borrower and each Guarantor
shall maintain its tangible assets, in good condition and repair and
shall not permit any action or omission which might materially impair
the value thereof, normal wear and tear excepted.
5. PERFORMANCE OF CONTRACTS. Each Borrower and each Guarantor shall
perform and comply with in accordance with its terms, all material
provisions of each and every contract, agreement or instrument now or
hereafter binding upon them, respectively, and material to their
ability to perform under this Agreement, except to the extent that the
same shall be contested in good faith and by proper proceedings.
6. PAYOFF OF EXISTING LOANS. The Borrowers each agree to cooperate with
the Bank and to execute and deliver such documents as are necessary in
the opinion of the Bank to release as soon as possible any and all
liens on any property of either of the Borrowers subject to the Bank's
collateral under the Security Documents.
7. CHANGES OF ACCOUNTING REPORTING METHODS AND/OR FINANCIAL STATEMENTS.
Arbor shall provide to the Bank written notice of any material change
in policies, rules or procedures related to accounting reporting
methods or material change in the entries (or financial reporting
thereunder) contained in Arbor's Consolidated financial statements,
other than simple numerical balance entry changes for period to period
from business operations. Arbor shall provide such notice to the Bank
within thirty (30) Business Days after such change has been made.
Upon such change, the Bank working with the Borrowers shall have the
right to reasonably revise the covenants under this Agreement to
reflect any such changes. The purpose of this Item 7 is to allow the
Bank, to the extent possible, to maintain substantially equivalent
financial covenants after any material change by Arbor of its
policies, rules or procedures related to accounting reporting methods
and/or financial statements.
8. FURNISHING OF DISCLOSURE DOCUMENTS. Arbor shall promptly upon
issuance furnish to the Bank copies of all 10-Ks, 10-Qs and 8-Ks, and
promptly upon request of Bank all communications between Arbor and the
Securities and Exchange Commission, including without limitation,
copies of all financial information, annual reports and periodic
filings.
9. EXISTENCE AND GOOD STANDING. Each Borrower and each Guarantor shall
maintain its existence and qualification and good standing to transact
business in all states in which such qualification and good standing
are necessary in order for each Borrower and each Guarantor to conduct
business and own its properties as conducted and owned in such states,
except such jurisdictions, if any, other than any where any of the
Project Properties are located, where the failure to maintain their
existence and qualification and good standing to transact business
will not have a material adverse effect on the business or properties
of the Borrowers and Guarantors taken as a whole.
C-2
<PAGE> 52
10. CHANGES IN ARTICLES OF INCORPORATION, CODE OF REGULATIONS OR BY-LAWS.
Each Borrower and each Guarantor shall promptly provide Bank with
written notice of any material amendments to or changes in its
articles of incorporation, code of regulations and/or bylaws,
including such changes as might affect the structure, condition,
operation or management of the Borrower and the Borrowers' or
Guarantors' obligations to Bank under the terms of the Security
Documents and the other Transaction Documents and shall make such
amended articles, code of regulations or by-laws available for
inspection by Bank upon demand.
11. PRESERVE AND MAINTAIN CORPORATE RIGHTS. Each Borrower and each
Guarantor shall preserve and maintain its corporate existence, rights,
franchisees and privileges in the jurisdiction of its formation, and
qualify and remain qualified as a foreign corporation [i] with respect
to Borrowers and Guarantors, in each jurisdiction where such
qualification is necessary to the operation of their businesses,
except such jurisdictions, if any, where the failure to preserve and
maintain its corporate existence, rights, franchises and privileges,
or qualify or remain qualified will not have a material adverse effect
on the business or property of the Borrowers and Guarantors taken as a
whole, and [ii] without limitation of the foregoing subsection [i],
but with respect to Borrowers only, in each jurisdiction where a
Project Property owned by such Borrower is located.
12. MAINTAIN AND PRESERVE LICENSES, ASSETS AND MANAGEMENT. Each Borrower
and each Guarantor shall use reasonable efforts in good faith to
maintain and preserve in good working order and condition, ordinary
wear and tear expected, all of their respective properties necessary
for the conduct of their businesses, if failure to maintain and
preserve such properties would over a substantial period of time
materially and adversely affect the Borrower. Without limitation of
the foregoing, each Borrower shall maintain at all times, continuously
and without interruption, all licenses required by the States of Ohio
and Florida, respectively, all Certificates of Need, and all pharmacy,
laboratory and other licenses, certifications and registrations
necessary for each of the applicable Project Properties owned by them,
respectively, to continue in operation in the ordinary course of
Borrowers' businesses, and in compliance with all applicable laws and
regulations. On or before December 31, 1996, the Project Property
located in St. Petersburg, Florida, shall be approved as a provider
facility for purposes of Medicare and Medicaid.
13. ERISA REPORTS. Each Borrower and each Guarantor shall, immediately
upon becoming aware of the occurrence of any material "reportable
event" as such term is defined in Section 4043 of ERISA, or of any
material "prohibited transaction" as such term is defined in Section
4975 of the Code in connection with any Plan or any trust created
thereunder, provide to the Bank a written notice signed by an officer
of the Borrower or Guarantor specifying the nature thereof, what
action the Borrower or Guarantor is taking or proposes to take with
respect thereto and, when known, any action taken by the Internal
Revenue Service with respect thereto. Each Borrower and each
Guarantor will fund all current service pension liabilities as they
are incurred under the provisions of all Plans
C-3
<PAGE> 53
from time to time in effect for the benefit of their employees and
comply with all applicable provision of ERISA.
14. MAINTENANCE OF THE RATIO OF THE STATED AMOUNT OF THE LETTER OF CREDIT
TO PROJECT PROPERTIES' APPRAISED VALUE. Promptly upon the Bank's
request made on or after the third anniversary from the date of this
Agreement and on or after each three year interval thereafter, except
more often (but not more than once during any consecutive 12 month
period) if either the Bank in good faith believes that the ratio of
the Stated Amount of the Letter of Credit to the Project Properties'
aggregate appraised value exceeds 75% (the "Reappraisal Maximum LTV
Requirement"), or upon Borrowers requesting a Release of a Project
Property pursuant to Section 7.23 of this Agreement, or following any
Event of Default, the Borrowers shall, at their sole cost and expense,
have each of the Project Properties reappraised by MAI appraisers
selected by the Bank and reasonably acceptable to Borrowers. If the
ratio of the Stated Amount of the Letter of Credit TOProject
Properties' aggregate appraised value resulting from any such
reappraisal exceeds the Reappraisal Maximum LTV Requirement, then the
Borrowers immediately shall make a prepayment under the terms of the
Series 1996A-1 Promissory Note unless and until it is paid in full,
and then to the Series 1996A-2 Promissory Note, permanently reducing
in either case (1) the principal amount of the Loan evidenced thereby,
and (2) the Stated Amount of the Letter of Credit in an amount
sufficient to reduce the resultant ratio of the Stated Amount of the
Letter of Credit to the Project Properties' aggregate appraised value
below the Reappraisal Maximum LTV Requirement.
NEGATIVE COVENANTS
15. ENCUMBERING ASSETS. Except with the prior written consent of Bank,
neither of the Borrowers nor any Guarantor shall create, incur, assume
or permit to continue any mortgage, pledge, encumbrance, lien or
charge of any kind upon or security interest in any of their
respective property or assets, whether now owned or hereafter
acquired, except Permitted Liens as defined herein; provided, however,
neither of the Borrowers nor any Guarantor shall, at any time, pledge
any of the stock it owns in any Subsidiary, except for the pledge of
the capital stock of Arbors at Toledo, Inc. to Hibernia National Bank
pursuant to the Pledge Agreement dated as of June 25, 1990.
16. INCURRING OTHER DEBT. Except with the prior written consent of Bank,
neither of the Borrowers nor any Guarantor shall create, incur, assume
or suffer to exist any indebtedness except: (a) debt represented by
the Loan and Letter of Credit described herein; (b) other indebtedness
to Bank; (c) unsecured indebtedness to trade creditors arising out of
the ordinary course of Borrowers' and Guarantors' businesses; and (d)
indebtedness under credit commitments including any and all short or
long term credit provided by other lenders in the ordinary course of
business that is not secured by any part of any of the Project
Properties. The foregoing subsection (d) includes, without
C-4
<PAGE> 54
limitation, financing and refinancing of long term care facilities
other than the Project Properties.
17. GUARANTY OF OTHERS' DEBTS. Except with the prior written consent of
Bank, and without limitation of Section 16 above entitled "Incurring
Other Debt", neither of the Borrowers shall directly or indirectly
guarantee or otherwise become surety in respect of any obligation or
debt of any other Person, except [a] guaranties by endorsement of
negotiable instruments for deposit, collection, or similar
transactions in the ordinary course of business [b] guaranties of
loans required under management contracts in an amount not to exceed
Seven Hundred Fifty Thousand Dollars ($750,000) on each management
contract, [c] the guaranty of debt of the other Borrower or any other
Subsidiary and [d] other guaranties of up to One Million Five Hundred
Thousand Dollars ($1,500,000) in aggregate.
18. MERGER OR CONSOLIDATION. Except with the prior written consent of
Bank, neither of the Borrowers nor any Guarantor shall merge or
consolidate with any other corporation or any other business entity
unless Arbor is the surviving entity of the merger or consolidation,
and the merger or consolidation does not result in a violation of a
representation, warranty or affirmative covenant hereunder.
19. TRANSFER OF SUBSTANTIAL PORTION OF ASSETS. Except with the prior
written consent of Bank which shall not be unreasonably withheld,
neither of the Borrowers nor any Guarantor shall liquidate or sell,
lease, transfer or otherwise dispose of all or a substantial part of
their respective assets, whether now owned or hereinafter acquired,
other than in the ordinary course of business. This includes, but is
not limited to, with respect to the Project Properties, any
sale/transfer of any nursing home licenses, Medicare/Medicaid
certifications and any rights under the Ohio or Florida CON laws. All
proceeds from any sale, lease or transfer of any property securing the
Letter of Credit shall be remitted to Bank to be applied to the Loan
and Letter of Credit.
20. MAKING LOANS. Except for intercompany loans and advances between and
among the Borrowers and Guarantors, Borrowers and Guarantors shall
not, other than with the prior written consent of Bank, make any loans
or advances (1) in any one fiscal year in excess of an aggregate for
all Borrowers and all Guarantors of Five Million Dollars
($5,000,000.00) and (2) during the term of the Letter of Credit in
excess of an aggregate for all Borrowers and all Guarantors of Ten
Million Dollars ($10,000,000).
21. PURCHASE OF SUBSTANTIAL PORTION OF ASSETS. Except with the prior
written consent of Bank, neither of the Borrowers nor any Guarantor
shall directly or indirectly, (a) purchase, lease, or otherwise
acquire any assets except in the ordinary course of their respective
businesses, which respective businesses include acquisition or
development of health care facilities, except that any Subsidiary,
other than any Subsidiary that is a Contingent Guarantor, may purchase
assets from any other Subsidiary or (b) sell, lease, transfer or
C-5
<PAGE> 55
otherwise dispose of any plant or any manufacturing facility or other
assets except for (i) assets other than the Project Properties sold
for full and adequate consideration which the board of directors or
senior management of the Borrower or Guarantor has determined to be
worn out, obsolete, or no longer needed or useful in its business and
(ii) assets other than the Project Properties sold in the ordinary
course of business provided that the Borrower or Guarantor, as
applicable, receives full and adequate consideration in exchange for
such assets sold.
22. ANNUAL LEASE PAYMENTS. Neither of the Borrowers nor any Guarantor
shall enter into any operating lease, as that term is construed
according to GAAP, as lessee of real or personal property from any
Person if, after giving effect thereto, the aggregate amount of
operating lease payments, exclusive of required insurance, tax or
maintenance payments, under such lease and all other operating leases
in which the Borrower or Guarantor is lessee, would exceed $10,000,000
in the aggregate for all Borrowers and all Guarantors in any period of
twelve consecutive months.
23. SALE OF ACCOUNTS. Neither Borrower shall sell, assign or exchange any
of its Accounts or notes receivable with or without recourse, except
for Accounts that do not result from or arise out of the operation of
any of the Project Properties.
24. TRANSACTIONS WITH SUBSIDIARIES AND AFFILIATES. Neither of the
Borrowers nor any Guarantor shall enter into, or be a party to, any
transaction with any of their respective Subsidiaries, affiliates or
stockholders (including, without limitation, transaction involving the
purchase, sale or exchange of property, the rendering of services or
the sale of stock) except [i] stock option plans duly authorized by
the Boards of Directors of the applicable Borrowers and Guarantors,
and [ii] in all other cases, in the ordinary course of business
pursuant to the reasonable requirements of Borrowers or Guarantors, as
applicable, and upon fair and reasonable terms which are fully
disclosed to Bank and which are no less favorable than would be
obtained in a comparable arms-length transaction with a legal entity
not their Subsidiary, affiliate or stockholder.
25. FINANCIAL COVENANTS. The Consolidated financial statements of Arbor
shall reflect compliance with the following financial covenants.
Unless otherwise noted herein, all financial covenants will be tested
quarterly and will be calculated on a rolling four quarter basis.
a. CONSOLIDATED CASH FLOW COVERAGE RATIO. The ratio of the
Consolidated Cash Flow to the Consolidated Fixed Charges of
Arbor shall not be less than 1.15 TO 1.0.
b. CONSOLIDATED NET WORTH. The Consolidated Net Worth of Arbor
shall not be less than $38,000,000 at 12-31-94 plus 50% of
Consolidated net income for each quarter thereafter beginning
with the first quarter of fiscal 1995 (without any
C-6
<PAGE> 56
deductions for any Consolidated net losses) plus 90% of the
net proceeds of any equity offerings.
c. RATIO OF CONSOLIDATED LIABILITIES TO CONSOLIDATED NET WORTH.
The ratio of the Consolidated Liabilities to the Consolidated
Net Worth of Arbor shall not exceed 4.50 TO 1.0.
d. RATIO OF CONSOLIDATED CURRENT ASSETS TO CONSOLIDATED CURRENT
LIABILITIES. The ratio of the Consolidated Current Assets to
the Consolidated Current Liabilities of Arbor shall not be
less than 1.0 TO 1.0.
e. CONSOLIDATED INTEREST COVERAGE RATIO. The ratio of the sum of
the Consolidated net income, the Consolidated operating lease
rental expense, and the Consolidated interest expense of Arbor
to the sum of the Consolidated interest expense and the
Consolidated operating lease rental expense of Arbor shall not
be less than 1.10 TO 1.0.
26. LIMITATION OF DIVIDENDS. Arbor shall not declare or pay, or set apart
any sum for the purpose of payment of, any dividend or distribution on
or in respect of any shares of its capital stock which, in the
aggregate, exceeds $1,000,000 over any consecutive twelve month
period.
27. ASSIGNMENT OF LICENSES AND CERTIFICATES. Neither of the Borrowers
shall transfer or assign any licenses, permits, certifications or
certificates of need rights under Ohio, Florida or federal law
required for them to operate any of the Project Properties. In
addition, the Borrowers shall cause the 1996 and all subsequent
nursing home licenses and certificates under the Medicare and Medicaid
Programs for the Project Properties to be maintained in the name of
the Borrower that owns the applicable Project Property.
C-7
<PAGE> 57
EXHIBIT D
IRREVOCABLE LETTER OF CREDIT
BANK ONE, KENTUCKY, NA
February 15, 1996
IRREVOCABLE LETTER OF CREDIT NO. S-6122
Bank One Trust Company, NA
100 East Broad Street
Columbus, Ohio 43271-0181
ATTN: Corporate Trust Administration
Re: Capital One Funding Corporation
Floating Rate Option Notes,
Series 1996A
Gentlemen:
1. At the request and for the joint and several account
of each of the Borrowers described in Schedule I hereto, the undersigned Bank
One, Kentucky, NA, a national banking association (the "Bank"), hereby
establishes our Irrevocable Letter of Credit No. S-6122 ("Letter of Credit") in
favor of Bank One Trust Company, NA, as Trustee ("Trustee") under the Master
Trust Indenture II between Capital One Funding Corporation (the "Corporation")
and the Trustee dated as of June 1, 1994 and the Supplemental Series Trust
Indenture No. 10 dated as of February 1, 1996 (as the same may be amended,
supplemented or otherwise modified, collectively referred to herein as the
"Trust Agreement"), for the benefit of Holders of the Corporation's Floating
Rate Option Notes, Series 1996A (the "Notes") in the aggregate principal amount
of $27,000,000 and as tender agent ("Tender Agent") for the Holders under
Article IV of the Trust Agreement. All capitalized terms used herein which are
not defined herein shall be as defined in the Trust Agreement. The Notes shall
bear interest at the Weekly Rate, the One Year Rate, the Three Year Rate, the
Five Year Rate, the Seven Year Rate, the Ten Year Rate
<PAGE> 58
Letter of Credit No. S-6122
February 15, 1996
Page 2
or the Fixed Rate as selected by the Borrowers pursuant to Section 2.02 of the
Trust Agreement. Schedule I hereto sets forth the names of the Borrowers, the
principal portion of the Notes allocable to the Borrowers, the initial rate at
which the Notes will bear interest and the term of the Letter of Credit which
relates to the Notes.
2. This Letter of Credit authorizes you, subject to the terms and
conditions herein set forth, to draw on us, for the account of the Corporation,
an aggregate amount not to exceed Twenty-Seven Million Five Hundred Six
Thousand Two Hundred Fifty Dollars ($27,506,250) (the "Stated Amount"), of
which (i) an aggregate amount not exceeding $27,000,000 may be drawn upon for
payment of (a) the unpaid principal amount of the Notes ("Principal Drawing")
and/or (b) for payment of that portion of the purchase price of the Notes
corresponding to the principal thereof when delivered to the Trustee in
accordance with the provisions of the Trust Agreement and the Notes and which
(together with the interest portion of such purchase price payable on such
Notes pursuant to the provisions of the Trust Agreement and the Notes)
comprises a Remarketing Drawing (as defined below) and (ii) an aggregate amount
not exceeding $506,250 may be drawn upon for payment of (a) up to 45 days'
accrued interest on the Notes at a maximum interest rate of 15% per annum
calculated on the basis of a 360-day year ("Interest Drawing") and/or (b) for
the payment of that portion of a Remarketing Drawing corresponding to the
interest portion thereof.
3. During the period from February 1, 2001 through January 31,
2002, an aggregate amount of $117,320 shall be added to the Stated Amount of
this Letter of Credit and may be drawn upon for payment of the premium due on
the optional redemption of the Notes (the "Premium Drawing"). This amount
represents one percent (1%) of the then outstanding principal amount of the
Notes bearing interest at the Seven Year Rate from the date of this Letter of
Credit.
4. Subject to the other provisions of this Letter of Credit, you
or any duly authorized successor as Trustee and Tender Agent may obtain the
funds available under this Letter of Credit by presentment to us of your sight
draft or drafts drawn upon us. Each draft presented to us must be accompanied
by one or more of the certificates, in the form of the Exhibits described
below, applicable to the type of drawing you are making.
(a) If the drawing is being made for payment of principal
of the Notes whether due upon maturity, mandatory redemption,
extraordinary mandatory redemption, optional redemption, acceleration
or pursuant to any sinking fund requirements of the Trust Agreement, a
written certificate signed by you in the form of Exhibit A attached
hereto appropriately completed (a "Principal Drawing");
<PAGE> 59
Letter of Credit No. S-6122
February 15, 1996
Page 3
(b) If the drawing is being made for the payment of the
purchase price of the Notes delivered or deemed delivered to the
Trustee for purchase pursuant to Article IV of the Trust Agreement, a
written certificate signed by you in the form of Exhibit B attached
hereto appropriately completed (a "Remarketing Drawing");
(c) If the drawing is being made for a payment of
interest on the Notes, a written certificate signed by you in the form
of Exhibit C attached hereto appropriately completed (an "Interest
Drawing"); and
(d) If the drawing is being made for payment of the
premium due upon optional redemption of the Notes, a written
certificate signed by you in the for of Exhibit D attached hereto
appropriately completed (a "Premium Drawing").
5. Presentation of any draft accompanied by a certificate in the
for of Exhibit A, B, C or D may be made only on a Business Day. Your sight
draft accompanied by a certificate in the form of Exhibit A, B, C or D and
presented in full compliance with the terms of this Letter of Credit will be
honored by us from our own funds and not from funds derived from the
Corporation or the Borrowers. If a presentation in respect of payment
accompanied by a certificate in the for of Exhibit A, C or D is made by you
hereunder no later than 11:00 a.m., Louisville, Kentucky time, on a Business
Day, and provided that the documents so presented strictly conform to the terms
and conditions hereof, we will honor your demand for payment no later than
11:00 a.m., Louisville, Kentucky time, on the Business Day next succeeding the
date of presentment. A presentation in respect of payment accompanied by a
certificate in the form of Exhibit A, C or D made by you hereunder later than
11:00 a.m. on a Business Day or on a day other than a Business Day, and
provided that the documents so presented strictly conform to the terms and
conditions hereof, shall be deemed to be presented on the next succeeding
Business Day and, we will honor your demand for payment no later than 11:00
a.m., Louisville, Kentucky time, on the Business Day next succeeding the deemed
date of presentment. If a presentation in respect of payment accompanied by a
certificate in the form of Exhibit B is made by you hereunder no later than 4:00
p.m., Louisville, Kentucky time, on a Business Day, and provided that the
documents so presented strictly conform to the terms and conditions hereof, we
will honor your demand for payment no later than 11:00 a.m., Louisville,
Kentucky time, on the Business Day next succeeding the date of presentment,
provided, however, that if you become aware of the failure of prospective
purchasers of Notes to tender the purchase price therefor prior to 11:30 a.m.,
Louisville, Kentucky time, on any Tender Date and you make a presentation in
respect of payment accompanied by a certificate in the for of Exhibit B no
later than 11:30 a.m., Louisville, Kentucky time, on such Tender Date, and
provided that the documents so presented strictly conform to the terms and
conditions hereof, we will honor your demand for payment no later than 3:30
p.m., Louisville, Kentucky time, on such Tender Date. As used in this Letter
of Credit, "Business Day" means a day of the year, other than (i) a
<PAGE> 60
Letter of Credit No. S-6122
February 15, 1996
Page 4
Saturday, Sunday or legal holiday on which the Bank is authorized or required
by law to close or (ii) a day on which the New York Stock Exchange is closed.
6. Each draft presented for payment under this Letter of
Credit and each accompanying certificate must be dated the date of its
presentation to us. Drafts must be marked conspicuously "Drawn under Bank One,
Kentucky, NA Irrevocable Letter of Credit No. S-6122. The certificates you are
required to submit to us with your draft or drafts should be prepared in the
form of a letter on your letterhead signed by an officer and should be
delivered to us, together with your draft or drafts and any other required
documents or instruments, as well as all notices and other communications to us
in respect of this Letter of Credit, shall be in writing and addressed and
presented to Bank One, Kentucky, NA, 416 West Jefferson Street, Louisville,
Kentucky 40202, Attention: International Department (or at such other office or
offices which may be designated by us by written notice to you), and shall make
specific reference to this Letter of Credit by number. Such documents, notices
and other communications shall be delivered by United States Express Mail or
other means of overnight delivery at our address set forth above, or sent by
facsimile transmission at (502) 566-2200 (confirmed by telephone to (502)
566-3625) to us, followed immediately by the original certificates, drafts and
any other required documents or instruments delivered to us by United States
Express Mail or other means of overnight delivery at our address set forth
above.
7. Upon payment of a drawing hereunder, the Stated
Amount of this Letter of Credit shall be reduced by the amount of such payment
except as follows:
(a) In connection with any Remarketing Drawing, upon
receipt by the Trustee for the benefit of the Corporation of Notes in
the aggregate principal amount equal to the unpaid amount of the
principal portion of such Remarketing Drawing, registered in the name
of the Corporation as pledgor and the Bank or an affiliate of the Bank
as pledgee, or upon notification to the Bank that such aggregate
principal amount of Notes has been credited to the free account of the
Remarketing Agent maintained with The Depository Trust Company, your
right to draw on us by a Remarketing Drawing shall automatically be
reinstated in an amount equal to the principal portion plus the
interest portion of such Remarketing Drawing, and this automatic
reinstatement of your right to make a Remarketing Drawing shall be
applicable to successive Remarketing Drawings so long as this Letter
of Credit shall have not terminated as set forth below and such
reinstatement shall be confirmed by us as provided in Section 4.06 of
the Trust Agreement.
(b) In connection with any Interest Drawing, if you have
not received from us within five (5) calendar days from the date of
any other Interest Drawing, a notice from us in the form of the
certificate attached hereto as Exhibit E appropriately
<PAGE> 61
Letter of Credit No. S-6122
February 15, 1996
Page 5
completed, indicating we have not reinstated the Letter of
Credit for all amounts drawn under such Interest Drawing (such
amounts shall be limited to up to 45 days' interest accruing
on the then outstanding Notes at a maximum interest rate of
15% per annum), your right to draw on us by an Interest
Drawing shall be automatically reinstated in such amount and
this automatic reinstatement of your right to make an Interest
Drawing shall be applicable to successive Interest Drawings so
long as this Letter of Credit shall have not terminated as
set forth below.
8. If the Borrowers make a Rate Election pursuant to
Section 2.02 of the Trust Agreement providing for any portion of the Notes to
bear interest at a rate other than the interest rates listed opposite the
Borrowers' names on Schedule I hereto, you shall deliver to us a certificate in
the form of Exhibit H hereto.
9. Only you as Trustee or as Tender Agent may make a
drawing under this Letter of Credit. Upon payment to you, to your designee or
to your account of the amount specified in a sight draft drawn hereunder, we
shall be fully discharged of our obligation under this Letter of Credit with
respect to such sight draft and we shall not thereafter be obligated to make
any further payments under this Letter of Credit in respect of such sight draft
to you or any other person who may have made to you or makes to you a demand
for payment of principal of, purchase price of, interest on or premium due on
any Note. By paying you an amount demanded in accordance with this Letter of
Credit, we make no representations as to the correctness of the amount demanded
or your calculations and representations on the certificates required to be
delivered by you under this Letter of Credit.
10. Upon the earliest of (i) the honoring by us of the
final drawing available to be made hereunder, (ii) our receipt of a written
certificate signed by your officer and an officer of the Corporation in the
form of Exhibit F hereto appropriately completed, stating that: (a) no Notes
are Outstanding within the meaning of the Trust Agreement; and (b) the officers
signing such certificate on your behalf and on behalf of the Corporation have
been duly authorized to sign such certificate or (iii) February 15, 2003 (the
"Expiration Date"), this Letter of Credit shall automatically terminate and be
delivered to us for cancellation.
11. This Letter of Credit shall be governed by and
construed in accordance with the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.500
("Uniform Customs"). This Letter of Credit shall be deemed to be made under the
laws of the State of Kentucky, including Article S of the Uniform Commercial
Code, and shall, as to matters not governed by the Uniform Customs, be governed
by and construed in accordance with the laws of the State of Kentucky.
<PAGE> 62
Letter of Credit No. S-6122
February 15, 1996
Page 6
12. Anything to the contrary in Article 48 of the Uniform Customs
and Practice notwithstanding, this Letter of Credit is transferable any number
of times, but only in the amount of the full unutilized balance hereof and not
in part. Transfer may be made to any person or entity designated as a successor
Trustee or successor Tender Agent under the Trust Agreement. Transfer of this
Letter of Credit to such successor Trustee and Tender Agent shall be effected
by the presentation to us of this Letter of Credit accompanied by a request
identifying your successor Trustee and Tender Agent in the form of Exhibit G
attached hereto, with the signature and office of the officer signing on your
behalf guaranteed by another one of your officers and the payment of our
customary transfer fee. Upon presentation and payment, we shall forthwith
effect a transfer of this Letter of Credit to such successor Trustee and Tender
Agent.
13. This Letter of Credit (including Exhibits A through H attached
hereto) sets forth in full our undertaking, and such undertaking shall not in
any way be modified, amended, amplified or limited by reference to any
document, instrument or agreement referred to herein (including, without
limitation, the Notes or the Trust Agreement) and any such reference shall not
be deemed to incorporate herein by reference any document, instrument or
agreement; provided, however, that all capitalized terms used herein which are
not defined herein shall be as defined in the Trust Agreement.
Very truly yours,
BANK ONE, KENTUCKY, NA
_______________________________
Dennis P. Heishman
Senior Vice President
<PAGE> 63
Letter of Credit No. S-6122
February 15, 1996
Page 7
SCHEDULE I
<TABLE>
<CAPTION>
====================================================================================================================
PRINCIPAL
PORTION OF TERM OF
NOTES LETTER OF
NAME OF BORROWERS APPLICABLE RATE MODE CREDIT
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------------
Arbor Health Care Company, a Delaware $13,500,000 Weekly 7 years
corporation, and Marshall Properties, Inc.,
an Ohio corporation
-------------------------------------------------------------------------------------------------------------------
Arbor Health Care Company, a Delaware $13,500,000 Seven Year 7 years
corporation, and Marshall Properties, Inc.,
an Ohio corporation
====================================================================================================================
</TABLE>
<PAGE> 64
EXHIBIT A
---------
CERTIFICATE FOR "PRINCIPAL DRAWING"
-----------------------------------
(PRINCIPAL UPON MATURITY, MANDATORY REDEMPTION,
EXTRAORDINARY MANDATORY REDEMPTION, OPTIONAL
REDEMPTION, ACCELERATION OR PURSUANT
TO ANY SINKING FUND REQUIREMENTS)
The undersigned, a duly authorized officer of Bank One Trust Company,
NA, as Trustee (the "Trustee"), hereby certifies to Bank One, Kentucky, NA (the
"Bank") with reference to Bank One, Kentucky, NA Irrevocable Letter of Credit
No. S-6122 (the "Letter of Credit," the capitalized terms defined therein and
not defined herein being used as therein defined) issued by the Bank in favor
of the Trustee that:
(1) The Trustee is the Trustee under the Trust Agreement for the
Holders of the Notes. The total amount of Notes Outstanding (as defined in the
Trust Agreement) is $__________.
(2) The Trustee is making a drawing under the Letter of Credit
with respect to the payment of principal upon the [select one - maturity,
mandatory redemption, extraordinary mandatory redemption, optional redemption,
acceleration or pursuant to the sinking fund requirements of the Trust
Agreement] of the Notes. The amount of such drawing which relates to each
Borrower is set forth on Schedule I hereto.
(3) The amount of principal of the Notes which is due and payable
or which will become due and payable on the first Business Day after the date
hereof is $____________. The amount of the draft accompanying this Certificate
does not exceed such amount.
(4) The amount of the draft accompanying this Certificate,
together with the aggregate of all prior payments made pursuant to drawings
under the Letter of Credit for the payment of the principal amount of the
Notes, including amounts under Remarketing Drawings which have not been
reinstated, does not exceed $___________.
(5) This is a [partial] [final] drawing.
A-1
<PAGE> 65
EXHIBIT A
---------
(6) The amount of the draft accompanying this Certificate was
computed in accordance with the terms and conditions of the Notes and the Trust
Agreement.
(7) Upon receipt by the Trustee of the amount demanded hereby, (a)
the Trustee will apply it directly to the payment when due of the appropriate
amount of principal owing on account of the Notes pursuant to the Trust
Agreement, (b) no portion of it shall be applied by the Trustee for any other
purpose, and (c) no portion of it shall be commingled with other funds held by
the Trustee. This drawing is made in accordance with the provisions of the
Trust Agreement.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the __ day of ________, 199_.
BANK ONE TRUST COMPANY, NA
By:
Title:
A-2
<PAGE> 66
SCHEDULE I TO EXHIBIT A
-----------------------
<TABLE>
<CAPTION>
Amount of Principal Drawing
Name of Borrower Related to Borrower
---------------- ---------------------------
<S> <C>
Total Amount of Principal Drawing
</TABLE>
A-3
<PAGE> 67
EXHIBIT B
---------
CERTIFICATE FOR "REMARKETING DRAWING"
-------------------------------------
(PURCHASE PRICE OF NOTES DELIVERED TO TRUSTEE FOR PURCHASE)
The undersigned, a duly authorized officer of Bank One Trust Company,
NA, as Trustee (the "Trustee") hereby certifies to Bank One, Kentucky, NA (the
"Bank") with reference to Bank One, Kentucky, NA Irrevocable Letter of Credit
No. S-6122 (the "Letter of Credit," the capitalized terms defined therein and
not defined herein being used as therein defined) issued by the Bank in favor
of the Trustee that:
(1) The Trustee is the Trustee under the Trust Agreement for the
Holders of the Notes. The total aggregate principal amount of the Notes
Outstanding (as defined in the Trust Agreement) is $____________.
(2) The Trustee is making a drawing under the Letter of Credit to
pay, pursuant to Section 7.03 of the Trust Agreement, the purchase price of the
Notes which have been duly delivered to the Trustee for purchase or are deemed
to have been so delivered pursuant to the terms of the Trust Agreement.
(3) The Trustee (a) is in possession of the Notes (or will be in
possession of Notes on the Tender Date) with an aggregate principal amount
outstanding equal to the portion of the amount of the draft accompanying this
Certificate representing the principal portion of the purchase price of such
Notes or if the Trustee is not in possession of the Notes, it has been notified
by the Remarketing Agent that such aggregate principal amount of Notes has been
credited to the free account of the Remarketing Agent maintained with The
Depository Trust Company and, unless the Bank has notified the Trustee in
writing that it has been reimbursed in full for the amount of this Remarketing
Drawing, and unless such aggregate principal amount of Notes has been credited
to the free account of the Remarketing Agent maintained with The Depository
Trust Company, the Trustee will deliver or cause to be delivered to the Bank or
an affiliate of the Bank, or to its designated agent within three (3) Business
Days after the date of this Certificate, a principal amount of such Notes,
registered in the name of the Corporation as pledgor and the Bank or an
affiliate of the Bank as pledgee, equal to the amount of the draft accompanying
this Certificate representing the principal portion of the purchase price of
such Notes for which the Bank has not been reimbursed on the date of such
Remarketing Drawing; (b) acknowledges the pledge by the Corporation to the
B-1
<PAGE> 68
EXHIBIT B
---------
Bank or an affiliate of the Bank of the Notes delivered or credited to the free
account of the Remarketing Agent pursuant to subparagraph (a); and (c) agrees
that all payments of principal and interest made on such Notes shall be made to
the Bank or an affiliate of the Bank, so long as such party is the pledgee of
such Notes or such Notes have been credited to the free account of the
Remarketing Agent.
(4) The aggregate principal amount of the Notes delivered or
deemed delivered to the Trustee for purchase pursuant to Article IV of the
Trust Agreement is $_____________. The interest portion of the purchase price
for such Notes, if any, is $____________. The amount of the draft accompanying
this Certificate does not exceed the sum of such amounts due as the purchase
price of such Notes.
(5) The principal amount of the draft accompanying this
Certificate, together with the aggregate of all prior principal payments made
pursuant to Remarketing Drawings which have not been reinstated under the
Letter of Credit for the payment of the principal portion of the purchase price
of the Notes and Principal Drawings, does not exceed $____________. The
interest amount of the draft accompanying this Certificate, together with the
aggregate of all prior interest payments made pursuant to Remarketing Drawings
which have not been reinstated under the Letter of Credit for the interest
portion of the purchase price of the Notes and Interest Drawings does not
exceed $___________.
(6) Upon receipt by the Trustee of the amount demanded hereby, (a)
the Trustee will apply it directly for the purpose of payment of the purchase
price of the Notes referenced in Paragraph 2 hereof, (b) no portion of it shall
be applied by the Trustee for any other purpose, and (c) no portion of it shall
be commingled with other funds held by the Trustee. This drawing is made in
accordance with the provisions of the Trust Agreement.
(7) The amount of the draft accompanying this Certificate was
computed in accordance with the terms and conditions of the Notes and the Trust
Agreement.
B-2
<PAGE> 69
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the __ day of _________, 199_.
BANK ONE TRUST COMPANY, NA
as Trustee
By:
Title:
B-3
<PAGE> 70
EXHIBIT C
---------
CERTIFICATE FOR "INTEREST DRAWING"
----------------------------------
(ACCRUED INTEREST)
The undersigned, a duly authorized officer of Bank One Trust Company,
NA, as Trustee (the "Trustee") hereby certifies to Bank One, Kentucky, NA (the
"Bank") with reference to Bank One, Kentucky, NA Irrevocable Letter of Credit
No. S-6122 (the "Letter of Credit," the capitalized terms defined therein and
not defined herein being used as therein defined) issued by the Bank in favor
of the Trustee that:
(1) The Trustee is the Trustee under the Trust Agreement for the
Holders of the Notes. The total amount of Notes Outstanding (as defined in the
Trust Agreement) is $____________.
(2) The Trustee is making a drawing under the Letter of Credit in
respect of payment of accrued and unpaid interest on the Notes. The amount of
such drawing which relates to each Borrower is set forth on Schedule I hereto.
(3) Interest on the Notes which is due and payable, or which will
become due and payable on the first Business Day after the date hereof and the
amount of the draft accompanying this Certificate does not exceed the amount
available on the date hereof to be drawn under the Letter of Credit in respect
of payment of interest accrued on the Notes.
(4) The amount of the interest accrued on the Notes which is due
and payable, or which will become due and payable on the first Business Day
after the date hereof, is $___________. The amount of the draft accompanying
this Certificate does not exceed such amount due as interest or in respect of
interest.
(5) The amount of the draft accompanying this Certificate,
together with the aggregate of all prior payments made pursuant to drawings
under the Letter of Credit in respect of the payment of interest accrued on the
Notes which, as certified to us by the Bank, the Bank has not reinstated, does
not exceed $____________.
(6) The amount of the draft accompanying this Certificate was
computed in accordance with the terms and conditions of the Notes and the Trust
Agreement.
C-1
<PAGE> 71
EXHIBIT C
---------
(7) Upon receipt by the Trustee of the amount demanded hereby, (a)
the Trustee will apply it directly to the payment when due of the appropriate
interest owing on account of the Notes pursuant to the Trust Agreement, (b) no
portion of it shall be applied by the Trustee for any other purpose, and (c)
no portion of it shall be commingled with other funds held by the Trustee.
This drawing is made in accordance with the provisions of the Trust Agreement.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the __ day of _________, 199_.
BANK ONE TRUST COMPANY, NA
as Trustee
By:
Title:
C-2
<PAGE> 72
SCHEDULE I TO EXHIBIT C
-----------------------
<TABLE>
<CAPTION>
Amount of Interest Drawing
Name of Borrower Related to Borrower
---------------- --------------------------
<S> <C>
Total Amount of Interest Drawing
</TABLE>
C-3
<PAGE> 73
EXHIBIT D
---------
CERTIFICATE OF NONREINSTATEMENT
OF AMOUNTS AVAILABLE FOR INTEREST DRAWING
-----------------------------------------
The undersigned, a duly authorized officer of Bank One, Kentucky, NA
(the "Bank"), hereby certifies to the Trustee under the Trust Agreement (as
defined in the Letter of Credit) between Capital One Funding Corporation (the
"Corporation") and Bank One Trust Company, NA (the "Trustee") (the "Trust
Agreement") with reference to Bank One, Kentucky, NA Irrevocable Letter of
Credit No. S-6122 (the "Letter of Credit") issued by the Bank in favor of the
Trustee that the amount drawn by the Trustee pursuant to its Interest Drawing
dated ________________ has not been reinstated either (a) because the Bank has
not been reimbursed for such Drawing or (b) because an Event of Default has
occurred under the [Reimbursement Agreement/Credit Agreement] dated as of
____________________ between the Bank or an affiliate of the Bank and
____________ ____________________________________, as Borrower, and is
continuing.
The Trustee is hereby directed to cause $_______________ principal
amount of the Notes to be mandatorily redeemed pursuant to the provisions of
Section 3.02(b) of the Trust Agreement.
Except as herein expressly set forth, all other terms and conditions of
the Letter of Credit remain unchanged.
IN WITNESS WHEREOF, the Bank has executed and delivered this
Certificate this _____ day of _________, 199_.
BANK ONE, KENTUCKY, NA
By:
Name:
Title:
D-1
<PAGE> 74
EXHIBIT E
---------
CERTIFICATE THAT NO NOTES ARE OUTSTANDING
-----------------------------------------
The undersigned duly authorized officers of Bank One Trust Company, NA,
as Trustee (the "Trustee"), and Capital One Funding Corporation (the
"Corporation"), hereby certify to Bank One, Kentucky, NA (the "Bank") with
reference to Bank One, Kentucky, NA Irrevocable Letter of Credit No. S-6122
(the "Letter of Credit," the capitalized terms defined therein and not defined
herein being used as therein defined) issued by the Bank in favor of the
Trustee that:
(1) The Trustee is the Trustee under the Trust Agreement for the
Holders of the Notes.
(2) No Notes are outstanding within the meaning of the Trust
Agreement.
(3) The undersigned officer signing on behalf of the Trustee is
duly authorized to sign this Certificate on behalf of the Trustee.
(4) The undersigned officer signing on behalf of the Corporation
is duly authorized to sign this Certificate on behalf of the Corporation.
IN WITNESS WHEREOF, the Trustee and the Corporation have executed and
delivered this Certificate this ___ day of _________, 199_.
TRUSTEE:
BANK ONE TRUST COMPANY, NA
as Trustee
By:
Title:
CORPORATION:
CAPITAL ONE FUNDING CORPORATION
E-1
<PAGE> 75
EXHIBIT E
---------
By:
Title:
E-2
<PAGE> 76
EXHIBIT F
---------
CERTIFICATE TO BE USED TO
NAME SUBSTITUTE TRUSTEE
-----------------------
Bank One, Kentucky, NA
416 West Jefferson Street
Louisville, Kentucky 40202
Attention: International Department
Re: Bank One, Kentucky, NA
Letter of Credit No. S-6122
Ladies and Gentlemen:
For Value Received, the undersigned beneficiary hereby irrevocably
transfers all rights of the undersigned beneficiary to draw under the
above-referenced Letter of Credit in the amount of the full unutilized balance
thereof to the following transferee (the "Transferee"):
[Insert name of Transferee and Address]
The Transferee has succeeded the undersigned as the Trustee and Tender Agent
under the Trust Agreement (as defined in the Letter of Credit).
By this transfer, all rights of the undersigned beneficiary in the
above-referenced Letter of Credit are transferred to the Transferee and the
Transferee shall have the sole rights as beneficiary thereof, including sole
rights relating to any amendments, whether increases or decreases in the
amounts to be drawn thereunder, extensions of the Expiration Date or other
amendments, and whether now existing or hereafter made. All amendments are to
be advised directly to the Transferee without necessity of any consent of or
notice to the undersigned beneficiary.
By its signature below, the Transferee acknowledges that it has duly
succeeded to the undersigned beneficiary as Trustee and Tender Agent under the
Trust Agreement, that it has accepted such appointments, and that it agrees to
be bound by the terms of the Trust Agreement as if it were the Trustee
originally a party thereto.
F-1
<PAGE> 77
EXHIBIT F
---------
F-2
<PAGE> 78
EXHIBIT F
---------
The above-referenced Letter of Credit is returned herewith, and we ask
you to endorse the transfer on the reverse thereof and forward it directly to
the Transferee with your customary notice of transfer.
Very truly yours,
[Insert name of Trustee and Tender Agent]
By
[Insert name and title of authorized officer]
SIGNATURE OF THE ABOVE PARTY,
DULY AUTHORIZED TO ACT ON BEHALF OF
[Insert name of Trustee and Tender Agent],
AUTHENTICATED BY:
[Insert Name and Title]
ACKNOWLEDGED:
[Insert name of Transferee]
By
[Insert name and title of
authorized officer]
F-3
<PAGE> 79
F-4
<PAGE> 80
EXHIBIT G
---------
CERTIFICATE TO BE USED TO NOTIFY BANK
OF CHANGES IN INTEREST MODE
--------------------------------------
The undersigned, a duly authorized officer of Bank One Trust Company,
NA, as Trustee (the "Trustee") hereby certifies to Bank One, Kentucky, NA (the
"Bank") with reference to Bank One, Kentucky, NA Irrevocable Letter of Credit
No. S-6122 (the "Letter of Credit," the capitalized terms defined therein and
not defined herein being used as therein defined) issued by the Bank in favor
of the Trustee that:
(1) The Trustee is the Trustee under the Trust Agreement for the
Holders of the Capital One Funding Corporation Floating Rate Option Notes,
Series 1996A (the "Notes"). ______________ ________ (the "Borrower") has made
a Rate Election pursuant to Section 2.02 of the Trust Agreement to have
$____________ principal amount of Notes bear interest at the [insert Weekly
Rate, One Year Rate, Three Year Rate, Five Year Rate or Seven Year Rate]. Such
Rate Election shall be effective _________ __, 199_.
(2) Upon the effective date of such Rate Election, the term of the
Letter of Credit which relates to the Notes referred to in paragraph (1) is
_____ years and ___ days.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ____ day of _________, 199_.
BANK ONE TRUST COMPANY, NA
as Trustee
By:
Title:
G-1
<PAGE> 81
SCHEDULE 4.01(F)
<TABLE>
<CAPTION>
=============================================================================================================================
Number of Beds Number of Number of
Licensed by Type of Certified Certified
the State Licensure Medicare Beds Medicaid Beds
=============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Arbors at Brandon 88 All 28 120
Nursing
------------------
Total 32
--
120
- - - -----------------------------------------------------------------------------------------------------------------------------
Arbors at Melbourne 60 All 60 120
Nursing
------------------
Total 60
--
120
- - - -----------------------------------------------------------------------------------------------------------------------------
Arbors at Milford 76 100 Nursing 24 100
24 50 Rest Home
------------------
Total 50
--
150
- - - -----------------------------------------------------------------------------------------------------------------------------
Arbors at Orlando 43 All 43 113
Nursing
------------------
Total 70
--
113
- - - -----------------------------------------------------------------------------------------------------------------------------
Arbors at St. Petersburg 48 All 72 120
Nursing
------------------
Total 72
--
120
- - - -----------------------------------------------------------------------------------------------------------------------------
Arbors at Tampa 60 All 60* 120*
Nursing
------------------
Total 60
--
120
=============================================================================================================================
<FN>
*Certification is in the process but has not yet been received.
</TABLE>
As of 1/1/96
<PAGE> 1
Exhibit 4.3
OPEN-END MORTGAGE AND SECURITY AGREEMENT
----------------------------------------
(CLERMONT COUNTY, OHIO)
MAXIMUM PRINCIPAL AMOUNT: $27,506,250.00
THIS OPEN-END MORTGAGE (the "Mortgage") is executed actually
on the dates indicated in the notarial certificate affixed to it, but is made
and delivered effective as of February 12, 1996, by and between [i] MARSHALL
PROPERTIES, INC., an Ohio corporation (referred to herein as the "Borrower"),
having a mailing address of 1100 Shawnee Road, Box 840, Lima, Ohio and [ii]
BANK ONE, KENTUCKY, NA, a national banking association, having a mailing
address of 416 West Jefferson Street, Louisville, Jefferson County, Kentucky
40232 (referred to herein as the "Lender").
W I T N E S S E T H:
Borrower is obligated to lender under and in connection with
the Reimbursement Agreement and the Letter of Credit and the other
"OBLIGATIONS" more particularly described in SCHEDULE 1 hereto (all of the
foregoing are referred to collectively hereinafter as the "OBLIGATIONS");
NOW THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower does hereby MORTGAGE,
WARRANT, GRANT, CONVEY AND ASSIGN to Lender, to secure to Lender the payment
and performance when due of the Obligations strictly in accordance with the
terms thereof, all right, title and interest of Borrower in and to the real
estate described in EXHIBIT A attached hereto and incorporated herein by this
reference (the "LAND");
TOGETHER with all right, title and interest of Borrower in all
buildings, foundations, structures and improvements now or hereafter located on
or in the Land, and all materials now or hereafter intended for construction,
reconstruction, alteration or repair thereof, all of which shall be deemed a
part thereof immediately upon being delivered to the Land (collectively, the
"IMPROVEMENTS");
TOGETHER with all right, title and interest of Borrower now
and hereafter in and to the streets and roads, opened or proposed, abutting the
Land, all strips and gores within or adjoining the Land, the air space and
right to use the air space above the Land, all rights of ingress and egress to
and from the Land, all easements, rights of way, reversions, remainders,
hereditaments, and appurtenances now or hereafter affecting the Land or the
Improvements, all royalties and rights and privileges appertaining to the use
and enjoyment of the Land or the Improvements, including all air, lateral
support, alley, drainage, water, riparian, oil, gas and mineral rights, options
to purchase or lease, and all other interests, estates or claims, in law or in
equity, which Borrower now has or hereafter may acquire in or with respect to
the Land or the Improvements (collectively, the "APPURTENANCES"; the Land, the
Improvements and the Appurtenances
<PAGE> 2
are hereinafter sometimes collectively referred to as the "PREMISES");
TOGETHER with all right, title and interest of Borrower in all
fixtures, equipment (including but not limited to office equipment, motors,
elevators, radiators, gas and electric ranges, refrigerators, freezers, and
plumbing, heating, lighting, ventilating, refrigerating, incinerating, air
conditioning, central energy, sprinklering and fire suppression, waste disposal
and theft protection equipment), fittings, furniture, furnishings (including,
but not limited to awnings, shades, screens, blinds and carpets), appliances,
apparatus, and machinery now existing or hereafter installed in the Premises,
and all building materials, supplies and equipment now existing or hereafter
delivered to the Premises and intended to be installed therein, and all
renewals or replacements of any of the foregoing property or articles in
substitution thereof (collectively, the "EQUIPMENT");
TOGETHER with all right, title and interest of Borrower whether
now existing or hereafter acquired in, to and under all accounts, documents,
instruments, chattel paper, and general intangibles, as the foregoing terms are
defined in the Uniform Commercial Code in effect in the state in which the Land
is located (the "UCC"), that are derived from the Premises or Equipment,
including, to the extent assignable, all contract rights (including, without
limitation, under contracts with all contractors, architects, engineers or
subcontractors relating to the construction or renovation of the Improvements or
Equipment, including payment, performance and materialmen's bonds); franchises;
books; records; plans; specifications; permits; health facility, pharmacy and
other licenses; Certificates of Need; governmental registrations for diagnostic,
laboratory, or any other activities; Medicare and Medicaid provider agreements;
accreditation rights; rights to refunds under any of the foregoing agreements;
other approvals, actions and causes of action, which in the case of any of the
foregoing now or hereafter relate to, are derived from or used in connection
with the Premises or Equipment or the use, operation, maintenance, occupancy or
enjoyment thereof or the conduct of any business or activities thereon
(collectively, the "INTANGIBLES");
TOGETHER with all right, title and interest of Borrower,
whether now existing or hereafter acquired and wherever located, in, to and
under all leases, lettings, tenancies and licenses of the Premises or Equipment
or any part thereof now or hereafter entered into and all amendments,
extensions, renewals and guaranties thereof, all security therefor, and all
moneys payable thereunder (each a "Lease" and collectively, the "LEASES");
TOGETHER with all rents, income, issues, profits, security
deposits and other benefits to which Borrower may now or hereafter be entitled
from the Premises, the Equipment or the Intangibles or under or in connection
with the Leases, including,
2
<PAGE> 3
without limitation, all income received from tenants, lessees, licensees and
concessionaires and other persons occupying space at the Premises and/or
rendering services to tenants thereat (collectively, the "PROPERTY INCOME");
and
TOGETHER with all proceeds, judgments, claims, compensation,
awards of damages and settlements with respect to or hereafter made as a result
of or in lieu of any condemnation or taking of the Premises and/or Equipment by
eminent domain (including severance and consequential damages and change in
grade of streets) or any casualty loss of or damage to any of the Premises, the
Equipment, the Intangibles, the Leases or the Property Income, all refunds with
respect to the payment of property taxes and assessments, and all other
proceeds of the conversion, voluntary or involuntary, of the Premises, the
Equipment, the Intangibles, the Leases or the Property Income, or any part
thereof, into cash or liquidated claims (collectively, the "PROCEEDS"; the
Equipment, the Intangibles, the Leases, the Property Income and the Proceeds
are hereinafter collectively referred to as the "COLLATERAL"; the Premises and
the Collateral being hereinafter sometimes collectively referred to as the
"MORTGAGED PROPERTY").
TO HAVE AND TO HOLD the Mortgaged Property with all the privileges and
appurtenances to the same belonging, and with the possession and right of
possession thereof, unto Lender, its successors and assigns forever, upon the
terms and conditions set forth herein.
AND BORROWER COVENANTS AND WARRANTS lawful seizure of an
indefeasible estate in fee simple of the Mortgaged Property; that the same are
free from all encumbrances and liens whatsoever, except for [i] easements and
restrictions of record on the date hereof, none of which materially interfere
with the use of the Mortgaged Property for the operation thereof intended by
Borrower, [ii] the lien of ad valorem real estate taxes and any assessments for
which payment is not delinquent in either case (the encumbrances and liens
described in the foregoing subsections [i] - [ii] are referred to collectively
as the "PERMITTED EXCEPTIONS"); that Borrower has the legal right, power and
authority to encumber the Mortgaged Property pursuant to this Mortgage, the
execution and delivery and the performance of which will not, either
immediately or with notice and/or passage of time, violate any agreement to
which Borrower is a party or by which Borrower is bound; and that Borrower and
the successors in interest of Borrower will forever WARRANT AND DEFEND the
title to the Mortgaged Property and the lien and priority of this Mortgage
against the claims and demands of all persons whomsoever. All such covenants
and warranties shall run with the land.
AND BORROWER, IN ORDER MORE FULLY TO PROTECT THE SECURITY OF
THIS MORTGAGE, COVENANTS AND AGREES AS FOLLOWS:
3
<PAGE> 4
1. OBLIGATIONS SECURED. This Mortgage is granted to secure the
payment and performance of the Obligations strictly in accordance with the
terms thereof in each case.
2. PAYMENT AND PERFORMANCE OF OBLIGATIONS. Principal of,
interest on, and all other indebtedness and sums constituted by the Obligations
shall be paid at the times and in the manner provided herein and in the other
Loan Documents.
3. PAYMENT OF TAXES AND OTHER IMPOSITIONS. Borrower shall keep
the Mortgaged Property free from statutory liens of every kind; shall pay,
before delinquency and before any penalty for nonpayment attaches thereto, all
taxes, assessments and governmental or municipal or public levies, fees,
charges, fines or impositions of any nature whatsoever (collectively, the
"IMPOSITIONS") which are or may be levied or imposed against or in connection
with the Mortgaged Property or any part thereof, except when payment for such
items has theretofore been made under the Section of this Mortgage entitled
"Monthly Installments of Taxes and Insurance"; shall deliver to Lender, on or
before ten (10) days after request made by Lender therefor, receipted bills
evidencing payment therefor. Notwithstanding the foregoing, so long as no
default, and no circumstance which, with any required notice and/or opportunity
to cure would constitute a default under the Obligations is subsisting,
Borrower shall have the right to contest the validity of any Imposition by
appropriate legal proceedings provided [i] Borrower notifies Lender of
Borrower's intention to contest the same prior to commencing such contest, [ii]
such contest shall preclude enforcement of collection out of or pursuant to the
sale of any of the Mortgaged Property in satisfaction of any Imposition, [iii]
Borrower shall furnish Lender with, at the option of Lender, a bond (pursuant
to Chapter 1311 of Ohio Revised Code) or title insurance or other security for
the Imposition satisfactory to Lender in Lender's sole discretion, [iv] such
contest shall not otherwise create a failure on the part of Borrower to comply
with any other provision or condition of the Loan Documents, and [v] upon a
final and nonappealable determination of the contest that is adverse to the
Borrower, Borrower shall pay the amount of the Imposition.
4. MONTHLY INSTALLMENTS OF TAXES AND INSURANCE. If requested by
Lender at any time [i] after default (including after any applicable
requirement for notice and an opportunity to cure) in any of the Obligations or
[ii] after payment of taxes or insurance in respect of the Mortgaged Property
have become delinquent (whether or not thereafter cured), Borrower shall pay to
Lender, in addition to the amounts of principal and interest and any other sums
due under the terms of the applicable instruments evidencing the Obligations,
monthly on or before the first day of each calendar month, until the
Obligations are paid in full, the following:
4
<PAGE> 5
A sum equal to all taxes, assessments and all other impositions next
due on the Mortgaged Property, all as estimated in good faith by
Lender, plus the premiums that will next become due and payable on
policies of fire and other insurance covering the Mortgaged Property
and required under the terms of this Mortgage, less all sums already
paid therefor in each case, divided by the number of complete calendar
months to elapse prior to the date when such taxes, assessments,
impositions and premiums shall be due and payable.
All such payments described in this Section shall be held by Lender without
accruing and without any obligation arising for the payment of interest thereon
and Borrower waives any right, to the extent permitted by law, to demand or
receive any interest, income or profits on any of the payments so deposited
with Lender. Lender is hereby granted a security interest in all such amounts
as collateral for the Obligations and such sums shall be subject to setoff by
Lender following any default by Borrower (including after any applicable
requirement for notice and/or opportunity to cure) under this Mortgage or the
other Obligations.
5. UTILITIES. Borrower shall pay or cause to be paid all charges
in respect of all water, sewer, electricity, natural gas, telecommunications
and all other utilities consumed on the Mortgaged Property prior to the date
when the same would become delinquent, and shall provide Lender promptly after
request is made by Lender therefor with copies of paid receipts in respect of
all utility charges assessed against the Mortgaged Property.
6. LIABILITY INSURANCE. Borrower shall carry and maintain such
liability and indemnity insurance as in good faith may be required from time to
time by Lender in forms, amounts and with companies reasonably satisfactory to
Lender. Certificates of such insurance, premiums prepaid, naming Lender as an
additional insured, and copies of such policies, shall be deposited, if
requested by Lender, by Borrower with Lender and shall contain provision for
not less than ten (10) days' notice to Lender prior to any cancellation or
modification thereof.
7. HAZARD INSURANCE. Borrower shall keep or cause to be kept all
Improvements and Equipment, whether now existing or hereafter erected on the
Mortgaged Property, insured as may be required from time to time by Lender
against loss or damage by fire, hazards included within the term "broad form
coverage", rent loss, flood (if required by law), and such other hazards,
casualties, liabilities and contingencies in such amounts (not exceeding the
replacement value thereof except in all events sufficient to keep Borrower from
becoming a co-insurer) and for such periods as may be required by Lender
consistent with reasonable and customary commercial practice with regard to
similar properties or as otherwise required in good faith by Lender, and shall
pay promptly, when due, any premiums on such insurance policies. All insurance
5
<PAGE> 6
policies shall be carried with companies having a Best rating of A- or better
and approved by Lender and such policies shall name Lender as a lender loss
payee pursuant to a "standard mortgage" or "New York mortgagee" clause.
Evidence that such policies are in force shall be delivered to Lender on or
before ten (10) days after request by Lender therefor. All such policies shall
contain provision for at least ten (10) days notice to Lender prior to any
cancellation or modification thereof. Borrower shall not carry separate
insurance, concurrent in kind or form and contributing, in the event of loss,
with any insurance required hereunder. In the event of a change in the use and
nature of occupancy of the Mortgaged Property, immediate notice thereof by mail
shall be delivered to all insurers and Lender. In the event of loss, Borrower
will give immediate notice by mail to Lender. Borrower hereby authorizes
Lender, at its option, to collect, adjust and compromise any losses under any
of the insurance policies aforesaid (provided Lender in so adjusting and
compromising any such losses acts in good faith and not in a manner which,
under the circumstances, diminishes the recovery thereunder by an unreasonable
amount), and after deducting all costs of collection to apply the proceeds of
such insurance as follows: [1] provided the gross proceeds from the insurance
do not exceed $100,000, provided no default under any of the terms and
conditions of this Mortgage, or any of the other Obligations secured hereby
shall then or thereafter be subsisting, and provided the proceeds of such
insurance (together with any moneys which may be deposited by Borrower with
Lender for the purpose of repair or restoration of the Mortgaged Property
promptly upon Borrower's becoming aware of any deficiency between the amount of
such insurance proceeds and the amount necessary to restore the Mortgaged
Property as hereinafter provided in this sentence) are sufficient to restore
the Mortgaged Property to the same or better condition as existed immediately
prior to the loss, Lender shall disburse the proceeds of the insurance for the
sole purpose of repairing and restoring the Mortgage Property, which repairs
and restoration, if the cost thereof is reasonably estimated by Lender to
exceed $50,000 shall, at the option of Lender, be under the supervision of an
architect or engineer reasonably acceptable to Lender, shall be made pursuant
to plans and specifications submitted to Lender prior to the commencement
thereof, and which shall be subject to Lender's approval and which proceeds
shall be disbursed by Lender from time to time only upon certification by the
architect or engineer that all of the work theretofore completed was done in
compliance with the plans and specifications approved by Lender, that the sum
requested is justly required to reimburse Borrower for payments by Borrower to
persons performing such work, that the amount of the remaining proceeds shall
be sufficient to pay for the repairs and restoration remaining to be completed
pursuant to the approved plans and specifications, and containing such other
certifications, and subject to such other conditions, including but not limited
to waivers of lien and title insurance coverage, as Lender in good faith deems
necessary or appropriate; or [2] if the gross proceeds
6
<PAGE> 7
from the insurance exceed $100,000, or if a default under any of the terms and
conditions of this Mortgage, or any of the other Obligations secured hereby
shall then or thereafter be subsisting, or any of the other conditions
described above to the proceeds being made available for restoration are not
met, the proceeds shall be applied as a reduction upon or, at the sole option
of Lender, a fund to be retained by Lender as part of the Collateral for the
Obligations secured hereby, in such order as Lender may elect; with the balance
of any proceeds remaining after the disposition of the proceeds as aforesaid to
be paid to Borrower. Upon acquisition of the Mortgaged Property by Lender in
the event of foreclosure of this Mortgage, or other transfer of title to the
Mortgaged Property in extinguishment of all or part of the Obligations secured
hereby, all right, title and interest of Borrower in and to any insurance
policies then in force shall pass to the purchaser or grantee of said property.
8. CONDEMNATION. Borrower shall give Lender immediate notice of
the actual or threatened commencement of any proceedings under eminent domain
affecting all or any part of the Mortgaged Property, including severance and
consequential damage and change in grade of streets, and will deliver to Lender
copies of any and all papers served in connection with any such proceedings.
Borrower further covenants and agrees to make, execute and deliver to Lender,
at any time or times upon request of Lender, free, clear and discharged of any
encumbrances of any kind whatsoever, any and all further assignments and/or
other instruments deemed necessary or appropriate by Lender for the purpose of
validly and sufficiently assigning all awards and other compensation,
heretofore and hereafter to be made to Borrower (including the assignment of
any award from the United States Government at any time after the allowance of
the claim therefor, the ascertainment of the amount thereof and the issuance of
the warranty for payment thereof) for any taking, either permanent or
temporary, under any such proceedings, all of which awards may, at the option
of Lender (subject only to the provisions of any leases of portions of the
Mortgaged Property permitted under the provisions of the Loan Documents and not
subordinate to the rights of Lender with respect to such awards), regardless of
whether a default in any of the Obligations is then subsisting, be applied as a
reduction of or, at the sole option of Lender, a fund to be retained by Lender
as part of the Collateral for the Obligations in such order as Lender may
elect.
9. ALTERATIONS; REPAIRS; WASTE, COMPLIANCE WITH LAWS; INSPECTION.
No additional Improvements shall be constructed on the Land, and no existing
Improvements shall be materially altered, or removed or demolished without the
prior written consent of Lender in each case, provided such consent is not
unreasonably withheld. No Equipment shall be severed or removed without the
prior written consent of Lender except that Borrower may replace in the
ordinary course of business any Equipment with other Equipment at least equal
in quality and condition to that replaced, provided such
7
<PAGE> 8
replacements are free from any security interest in or encumbrance thereon or
reservation of title thereto except for the lien of this Mortgage and any other
encumbrance which may be permitted by the express terms of the Loan Documents.
Borrower shall permit, commit, or suffer no waste, impairment or deterioration
of the Mortgaged Property or any part thereof; shall keep and maintain the same
in good repair and condition, reasonable wear and tear excepted; shall effect
such repairs as Lender may reasonably require, and from time to time to make
all needful and proper replacements so that said Mortgaged Property will, at
all times, be in fit and proper for the respective purposes for which they were
erected or installed. Borrower shall comply with or require compliance with
all statutes, regulations, codes, orders, requirements or decrees relating to
the Mortgaged Property (including but not limited to the Americans with
Disabilities Act) by any federal, state or municipal authority and, without
limitation of the foregoing, shall observe and comply with all conditions and
requirements necessary to preserve and extend any and all rights, licenses,
permits (including but not limited to zoning variances, conditional uses and
non-conforming uses), privileges, franchises and concessions which are
applicable to the Mortgaged Property or which have been granted to or
contracted for by Borrower in connection with any existing or presently
contemplated use of the Mortgaged Property. Borrower shall permit Lender,
during business hours of Borrower and at all other reasonable times, to enter
upon and inspect the Mortgaged Property.
10. PROHIBITION OF OTHER LIENS. Borrower shall not voluntarily
create or otherwise permit to be created or filed against the Mortgaged
Property any mortgage lien (except any securing indebtedness to Lender), or any
statutory or other lien or liens, charge or encumbrance of any nature, whether
inferior or superior to the lien of this Mortgage, without the prior written
consent of Lender, except any which is one of the Permitted Exceptions.
Borrower will not permit any default (whether or not waived by the applicable
mortgagee) to occur under any other mortgage (or under the indebtedness secured
thereby, in each case) on all or any part of the Mortgaged Property. Without
limitation of the foregoing, Borrower shall keep and maintain the Mortgaged
Property free from the claims of all persons now or hereafter supplying labor
or materials thereto notwithstanding by whom such labor or materials may have
been contracted. Notwithstanding the preceding sentence, so long as no
default, and no circumstance which, with any required notice and/or opportunity
to cure would constitute a default under the Obligations is then or thereafter
subsisting, Borrower shall have the right to contest the validity of any such
lien or claim of any person supplying such labor or materials by appropriate
legal proceedings provided [i] Borrower notifies Lender of Borrower's intention
to contest the same prior to commencing such contest, [ii] such contest shall
preclude enforcement or collection out of or pursuant to the sale of any of the
Mortgaged Property in satisfaction of the lien or claim, [iii] Borrower shall
furnish
8
<PAGE> 9
Lender with, at the option of Lender, a bond or title insurance or other
security for such lien or claim satisfactory to Lender in Lender's sole
discretion, [iv] such contest shall not otherwise create a failure on the part
of Borrower to comply with any other provision or condition of the Loan
Documents, and [v] upon a final and nonappealable determination of the contest
that is adverse to the Borrower, Borrower shall pay the amount of the lien or
claim.
11. INDEMNIFICATION OF LENDER. Borrower shall, to the fullest
extent permitted by applicable law, save Lender harmless from all losses, costs
and expenses, including reasonable attorneys' fees, and the cost of a title
search, continuation of abstract and preparation of survey, incurred by reason
of any action, suit, proceeding, hearing, motion or application before any
court or administrative body in and to which Lender may be or become a party by
reason of this Mortgage, including but not limited to condemnation, bankruptcy,
probate and administration proceedings, as well as any other of the foregoing
wherein proof of claim is by law required to be filed or in which it becomes
necessary to defend or uphold the terms of, or the lien created by, this
Mortgage, and all money paid or expended by Lender in that regard, together
with interest thereon from the date of such payment at the Index Rate of Lender
plus two percent (2%) per annum (such interest rate is referred to hereinafter
as the "APPLICABLE RATE") shall be part of the Obligations secured hereby and
shall be due and payable by Borrower immediately upon request made by Lender.
Borrower additionally hereby indemnifies and saves Lender harmless under this
Mortgage from and against all liabilities, obligations, claims, damages.
penalties, causes of action, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) imposed upon, incurred by, or asserted
against Lender on account of [i] any failure of the Borrower to comply with any
of the covenants and conditions on the part of Borrower to be performed or
representations of Borrower contained in this Mortgage, or [ii] any loss or
damage to the Mortgaged Property or any injury to, or death of, any person that
may be occasioned by any cause whatsoever pertaining to the Mortgaged Property
or the use thereof, provided that such indemnity shall be effective only to the
extent of any loss that may be sustained by Lender in excess of any net
proceeds of the insurance received by Lender from any insurance carried with
respect to such loss and provided further that the benefits of this Section
shall not inure to any person other than Lender and its successors and assigns.
Nothing contained in this Section shall require the Borrower to indemnify
Lender against the gross negligence or wantonly malicious acts of Lender. The
indemnities contained in this Section shall survive payment of the Obligations
and the release of this Mortgage, and shall extend to the officers, directors,
employees and duly authorized agents of Lender.
9
<PAGE> 10
12. BOOKS AND RECORDS. Borrower at all times shall keep and
maintain complete and accurate books of accounts and records adequate to
reflect correctly the results of the operation of the Mortgaged Property and
copies of all written contracts, leases, rental agreements, license agreements
and other instruments and agreements that affect the Mortgaged Property. Such
books, records, contracts, leases and other instruments and agreements shall be
subject to examination and inspection at any reasonable time by Lender, and
Borrower shall furnish Lender, at the cost of Borrower, with a copy of all or
any of the same promptly following any request therefor by Lender.
13. RIGHT OF LENDER TO CURE DEFAULTS. Upon default in the
performance of any of the terms, covenants or conditions of this Mortgage or
any of the other Loan Documents, Lender may, at its option and whether or not
electing to declare the whole of the Obligations secured hereby due and
payable, perform the same without waiver of any other remedy, and any amount
paid or advanced by Lender in connection therewith, or any other costs, charges
or expenses, including reasonable attorney's fees, incurred in the protection
of the Mortgaged Property and the maintenance of the lien of this Mortgage,
with interest thereon at the Applicable Rate, shall be repayable by Borrower,
immediately upon demand made by Lender, shall be a lien upon the Mortgaged
Property prior to any right, title to, interest in, or claim thereon attaching
or accruing subsequent to the attachment of lien of this Mortgage and shall be
secured by this Mortgage.
14. AUTHORIZED DETERMINATIONS BY LENDER. Lender in making any
payment herein and hereby authorized, in the place and stead of Borrower [i]
relating to any Impositions, utility charges or liens or other claims asserted
against or in connection with the Mortgaged Property, may do so according to
any bill, statement or estimate procured from the appropriate public office or
other person or entity without inquiry into the accuracy thereof or the
validity of the Imposition, charge, lien or claim; or [ii] relating to any
apparent or threatened adverse title, lien, statement of lien, encumbrance,
claim or charge, shall be the sole judge of the legality or validity of same;
or [iii] relating to the expense of repairs or replacement of any Improvements
or Equipment shall be the sole judge of the state of repairs and the necessity
for incurring the expense of any such repairs or replacement; or [iv] otherwise
relating to any other purpose in and authorized by this Mortgage, but not
enumerated in this Section, may do so whenever, in the judgment and discretion
of Lender, such advance or advances shall seem necessary or desirable to
protect the full security intended to be created by this Mortgage, and provided
further that in connection with any such advance, Lender, at the option of
Lender, may and is hereby authorized to obtain a continuation report of title
prepared by a title insurance company, the cost and expense of which shall be
repayable by Borrower immediately upon demand and shall be secured by this
Mortgage.
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<PAGE> 11
15. ENVIRONMENTAL COMPLIANCE. Borrower represents and warrants
that to the best of Borrower's knowledge and except as previously disclosed in
writing to Lender by Borrower, or by environmental consultants engaged by
Borrower or Lender, that: [i] no hazardous or toxic substance or material or
other waste ("HAZARDOUS SUBSTANCE") as defined in or regulated under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended (42 U.S.C. Section 9601, ET. SEQ.), the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901, ET. SEQ.), The Oil Pollution Act of 1990
(33 U.S.C. Section 2701 ET. SEQ.) or any other federal, state or local law,
order or regulation pertaining to health, safety, or the environment (the
"ENVIRONMENTAL LAWS") has ever been disposed, released, discharged or spilled
on or under any part of the Mortgaged Property, [ii] the Mortgaged Property has
never been used as a dump or landfill, [iii] no litigation or administrative
action or proceeding has been commenced or, to Borrower's knowledge, threatened
against Borrower or any subsidiary or affiliate of Borrower alleging a
violation of any Environmental Laws, and [iv] no underground storage tank,
polychlorinated biphenyls, asbestos, lead-based paint or urea formaldehyde is
located on or under or has been applied to any part of the Mortgaged Property
or contained in any Improvement or Equipment located on the Mortgaged Property.
Borrower will not permit any Hazardous Substance to be placed or stored in or
upon the Mortgaged Property except DE MINIMIS quantities if and, in such event,
as incident to the customary operations of Borrower on the Mortgaged Property,
and then only in compliance with all Environmental Laws. Without limitation of
the preceding sentence, Borrower covenants that the Mortgaged Property at all
times hereafter shall remain free from any contamination by any Hazardous
Substance and that Borrower at all times will comply with all Environmental
Laws affecting Borrower or the Mortgaged Property. Borrower shall notify
Lender promptly upon becoming aware of any contamination of the Mortgaged
Property by any Hazardous Substance, or upon being threatened with receipt of
or receiving any notice, citation, summons, complaint or other communication
alleging violation by Borrower of any Environmental Law or potential liability
of Borrower in connection with any Hazardous Substance. Lender and its agents,
including but not limited to environmental consultants and remediation
contractors engaged by Lender, shall have the right, but not the obligation, to
enter upon the Mortgaged Property at any time to inspect the same and take such
other action as Lender deems necessary or appropriate with respect to any
actual or threatened contamination of the Mortgaged Property by a Hazardous
Substance or any other circumstance relating to a Hazardous Substance or any
Environmental Law which in Lender's sole opinion could impair the security
intended to be afforded by this Mortgage or result in a claim against or
liability of Lender, and all costs and expenses, including reasonable
attorneys' fees and the fees of such consultants and contractors, incurred by
Lender, in so doing shall be paid by Borrower to Lender upon demand and be
secured by the lien of this Mortgage and bear interest at the Applicable Rate.
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<PAGE> 12
Borrower hereby indemnifies Lender and holds Lender wholly harmless from and
against any and all losses, costs, expenses (including but not limited to
reasonable attorneys' fees), injuries, damages, liabilities and claims of any
kind whatsoever paid, incurred or suffered by or asserted against Lender by any
person or entity, including but not limited to any governmental entity,
whatsoever with respect to or as a direct or indirect result of the presence
heretofore, now or hereafter of any Hazardous Substance on or under the
Mortgaged Property, or the violation or alleged violation heretofore, now or
hereafter by Borrower or any subsidiary or affiliate of Borrower of any
Environmental Laws and, without limitation of the foregoing, any inaccuracy of
any representation or warranty by Borrower contained in this Section or any
breach by Borrower of or other default in the covenants contained in this
Section. The indemnification established under the preceding sentence shall
survive the maturity as well as the repayment or other discharge of the
Obligations secured by this Mortgage and any termination of this Mortgage
whether pursuant to repayment of the Obligations secured by it, foreclosure,
deed in lieu of foreclosure or otherwise, to the maximum extent permitted by
law. Borrower expressly acknowledges that any misrepresentation by Borrower
under this Section, or any failure of condition or breach of covenant by
Borrower or other default in any of the obligations of Borrower under this
Section shall be and constitute an immediate default under this Mortgage and
each of the other Loan Documents.
16. ACCELERATION UPON DEFAULT; CERTAIN REMEDIES. That, upon
failure of Borrower to comply with any of the provisions of this Mortgage, if
such failure shall continue for fifteen (15) calendar days after written notice
thereof is given to Borrower by Lender (unless this Mortgage or the applicable
Loan Document in connection with which such non-compliance has occurred
affirmatively provides that no notice and/or period of cure, or that an
explicit alternative period of cure, shall be applicable to such failure by
Borrower, in which case such alternative provision rather than fifteen (15)
days after notice shall control), or (after satisfaction of any applicable
requirement for notice and opportunity to cure contained in the Loan Document
governing the default) upon any default in any of the other Obligations,
including the payment or performance or observance of each and every other
term, covenant, condition or agreement contained in the Loan Documents, then,
in any of said events, the entire Obligations secured hereby shall, at the
option of Lender, become immediately due and payable without relief from
valuation or appraisement laws, and thereupon or at any time thereafter Lender
may proceed to foreclose this Mortgage, and any failure to exercise said option
shall not constitute a waiver of the right to exercise the same at any other
time. In any of such events, Lender may enter upon the Mortgaged Property,
collect the rents, issues and profits thereof and, after paying all expenses of
such collections including reasonable attorney's fees, and a reasonable
compensation for Lender, shall apply the money collected to the satisfaction of
the Obligations hereby secured in
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<PAGE> 13
such order as Lender elects. Lender, thereupon, also shall have all rights and
remedies provided herein, in the Loan Documents, and under the UCC with regard
to any of the Mortgaged Property to which the UCC is applicable, all of which
rights and remedies shall, to the fullest extent permitted by law, be
cumulative.
17. RECEIVER. Lender, in any action to foreclose this Mortgage,
and in addition to all other rights and remedies available to Lender, shall be
entitled to the appointment of a receiver of the rents, issues and profits of
the Mortgaged Property as a matter of right and without notice, with power to
collect the rents, issues and profits of the Mortgaged Property, due and
becoming due during the pendency of such foreclosure suit, such rents, issues
and profits being hereby expressly assigned and pledged as additional security
for the payment of the Obligations secured by this Mortgage without regard to
the value of the Mortgaged Property or the solvency of any person or persons
liable for the payment of such Obligations, and regardless of whether Lender
has an adequate remedy at law. Borrower for itself and any subsequent owner of
the Mortgaged Property hereby waives any and all defenses to the application
for a receiver, as above provided, and hereby specifically consents to such
appointment without notice, except any notice required by law, but nothing
herein contained is to be construed to deprive Lender of any other right,
remedy or privilege Lender may have under the law to have a receiver appointed.
18. FEES AND EXPENSES IN FORECLOSURE. In case of foreclosure of
this Mortgage in any court of law or equity whether or not any order or decree
shall have been entered therein, and to the extent permitted by law, a
reasonable sum shall be allowed for stenographers' fees and for all moneys
expended for documentary evidence and the cost of a complete abstract of title
and title report for the purpose of such foreclosure, such sums to be secured
by the lien of this Mortgage, and, to the extent permitted by law, there shall
be included in any judgment or decree foreclosing this Mortgage and paid out of
said rents, issues and profits from the Mortgaged Property and the proceeds of
any sale made in pursuance of any such judgment or decree: [1] all costs and
expenses of such suit or suits, appraisals, advertising, sale and conveyance,
including stenographers' fees, outlays for documentary evidence and the cost of
said abstract, examination of title and title report; [2] reasonable fees of
legal counsel to Lender, to the fullest extent permitted by law; [3] all moneys
advanced by Lender, if any, for any purposes authorized in this Mortgage, with
interest as herein provided; [4] all the accrued interest remaining unpaid on
the Obligations hereby secured; and [5] all the principal of the Obligations
remaining unpaid. The surplus of the proceeds, if any, shall be paid to
Borrower promptly after request by Borrower, or as the court may direct.
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<PAGE> 14
19. SALE IN ONE OR MORE PARCELS. In case of any foreclosure sale
of the Mortgaged Property, the same may be sold in one or more parcels.
20. NO WAIVER BY LENDER. The failure of Lender to exercise the
option for acceleration of maturity and/or foreclosure following any default by
Borrower in any of the Obligations or to exercise any other option granted to
Lender hereunder or under the other Loan Documents in any one or more
instances, or the acceptance by Lender of partial payments of any of the
Obligations, shall not constitute a waiver of any such default, or extend or
affect any applicable grace period, but such option shall remain continuously
in force. Acceleration of maturity of any of the Obligations, once claimed by
Lender, may, at the option of Lender, be rescinded by Lender by a written
acknowledgement to that effect, but the tender and acceptance of partial
payments alone shall not in any way affect or rescind such acceleration of
maturity, or extend or affect any grace period.
21. LENDER TO SUCCEED TO PRIORITY OF PRIOR LIENS. Should the
proceeds of any loan made by Lender to Borrower as part of any of the
Obligations, or any amount paid out or advanced by Lender, be used directly or
indirectly to pay off, discharge, or satisfy, in whole or in part, any prior
lien or encumbrance upon the Mortgaged Property or any part thereof, then
Lender shall be subrogated to such other lien or encumbrance with respect to
the Mortgaged Property, and shall have the benefit of the priority of all of
same.
22. RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies
provided under this Mortgage and the other Loan Documents, at law, or in equity
are cumulative and Lender as holder of every Obligation secured hereby may
recover judgment thereon, issue execution therefor, and resort to every other
right or remedy available at law or in equity without first exhausting and
without affecting or impairing the security or any right or remedy afforded by
this Mortgage and no enumeration of special rights or powers by any provision
of this Mortgage shall be construed to limit any grant of general rights or
powers, or to take away or limit any rights granted to or vested in Lender by
virtue of the laws of the state in which the Land is located, or any other
jurisdiction, the laws of which are applicable to this Mortgage. Lender may
exercise any right, power or remedy to which Lender is entitled under this
Mortgage or the other Loan Documents at Lender's option and in Lender's sole
and absolute discretion without any obligation to do so, and if, under this
Mortgage or the other Loan Documents, two or more alternative courses of action
and/or remedies are available to Lender, Lender may elect any such action
and/or remedy or combination of actions and/or remedies as Lender shall
determine in the sole and absolute discretion of Lender.
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<PAGE> 15
23. LENDER'S RIGHT TO DEAL WITH BORROWER and Other Parties.
Lender, without notice, and without regard to the consideration, if any, paid
therefor, and notwithstanding the existence at that time of any inferior liens
thereon, may release any part of the Mortgaged Property, or any other security
for all or part of the Obligations, and may release or grant indulgences,
settlements or compromises to any person liable or pledging security for all or
part of the Obligations, without in any way affecting the priority of the lien
of this Mortgage to the full extent of the Obligations remaining unpaid with
regard to any part of the security not expressly released. Lender may agree
from time to time with Borrower or any other party obligated on or pledging
security for any part of the Obligations or having any interest in the
Mortgaged Property to extend the time for payment of any part of the
Obligations or grant any other indulgences, releases, settlements or
compromises and such agreements shall not in any way release or impair the lien
of this Mortgage. In the event Lender [a] releases any part of the Mortgaged
Property, or any person liable for or having pledged security for any of the
Obligations, [b] grants an extension of time for any payments of the
Obligations or grants any other indulgences, releases, settlements or
compromises; [c] takes other or additional security for the payment of any of
the Obligations; [d] waives or fails to exercise any right granted in this
Mortgage or any of the other Loan Documents, said acts or omissions by Lender
shall not release Borrower, subsequent owners of the Mortgaged Property or any
part thereof, or makers or sureties or pledgors of collateral for or any of the
Obligations, under any covenant of this Mortgage or of the other Loan
Documents, nor preclude Lender from exercising any right, power or privilege
herein or in the other Loan Documents granted or intended to be granted in the
event of any other default then existing or any subsequent default.
24. USURY; ILLEGALITY; SEVERABILITY. Nothing contained in this
Mortgage or any of the other Loan Documents or pursuant to any transaction
related thereto shall be construed or shall operate either presently or
prospectively, [a] to require Borrower to pay interest at a rate greater than
is lawful, but shall require payment of interest and other sums only to the
extent of such lawful rate, or [b] to require Borrower to make any payment or
do any act contrary to law, but if any clause or provision contained in this
Mortgage or in any other Loan Document shall otherwise so operate to invalidate
this Mortgage or any other Loan Document, in whole or in part, then such clause
or provision, as the case may be, only shall be held for naught as though not
contained in this Mortgage or in the applicable Loan Document and the remainder
of this Mortgage and other Loan Documents, as applicable, shall remain
operative and in full force and effect.
25. WARRANTY AGAINST VIOLATIONS OF COVENANTS. Borrower represents
and warrants that on the date hereof neither this Mortgage, nor the Mortgaged
Property, nor the contemplated use of
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<PAGE> 16
the Improvements and Equipment, constitute a breach, or a violation of, any
covenants, conditions, easements or restrictions, whether of record or not, or
any zoning laws or land use regulations, or, to the knowledge of Borrower,
other laws or regulations affecting the Mortgaged Property or binding upon
Borrower, and Borrower covenants and agrees that Borrower will take all actions
necessary to prevent any such breach or violation from hereafter occurring.
26. INSOLVENCY. In the event Borrower or any obligor, guarantor
or pledgor of collateral for any of the Obligations shall make a general
assignment for the benefit of creditors, or shall file a voluntary petition in
bankruptcy, or shall be adjudicated a bankrupt or insolvent, or shall file any
petition or answer seeking, consenting to, or acquiescing in, any
reorganization, arrangement, adjustment, composition, liquidation, dissolution
or similar relief, under any present or future statute, law or regulation, or
shall file an answer admitting or shall fail to deny the material allegations
of a petition against it for any such relief, or if any such proceeding against
Borrower or such obligor, guarantor or pledging seeking any such relief shall
not have been dismissed within sixty (60) days after the commencement thereof;
or if a trustee, receiver or liquidator of Borrower or any obligor, guarantor
or pledgor of collateral for the Obligations or any substantial part of their
respective properties or assets shall be appointed with the consent or
acquiescence of Borrower or such obligor, guarantor or pledgor or if any such
appointment, if not so consented to or acquiesced in, shall remain unvacated or
unstayed for an aggregate of sixty (60) days, then the whole of the principal
sum and all of the other Obligations secured hereby automatically shall be
deemed to have become immediately due and payable and the same, with interest
thereon at the Applicable Rate, and with all other costs and charges payable
under the Loan Documents, including reasonable attorney's fees, shall thereupon
be collectible by suit at law or in the exercise of any remedy available under
this Mortgage or in equity in the same manner as if the whole of the
Obligations had been made payable at the time when any of the foregoing
contingencies shall have occurred.
27. VOLUNTARY ZONING CHANGES. Borrower covenants not to change
the use that Borrower intended for the Mortgaged Property at the time Borrower
executed this Mortgage, or initiate, join in, consent to, or permit any change
in any zoning ordinance, private restrictive covenant or other public or
private restriction changing, limiting or restricting the uses which may be
made of the Mortgaged Property, without the prior written consent of Lender
obtained in each instance.
28. RESTRICTIONS ON TRANSFER. Except as expressly permitted by,
and subject to the provisions of the Loan Documents, Borrower shall not enter
into any lease of all or any part of the Mortgaged Property, or otherwise sell,
transfer or convey, or enter into any agreement to sell, transfer or convey,
all or any part of the
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<PAGE> 17
Mortgaged Property, or any legal or beneficial interest therein, by operation
of law (including but not limited to, as applicable, a merger, consolidation or
transfer of capital stock, or other ownership interest in Borrower) or
otherwise, without Lender's prior written consent, and upon any breach of this
Section Lender may immediately, at Lender's option, and without notice, declare
all of the Obligations to be immediately due and payable and exercise all
rights and remedies available to Lender upon a default under this Mortgage.
29. NOTICES. Except for any notice required under applicable law
to be given in another manner, any notice given under this Mortgage shall be
given in the manner stipulated by the Series 1 Reimbursement Agreement
described in SCHEDULE 1 to this Mortgage.
30. SECURITY AGREEMENT; FINANCING STATEMENTS. Borrower promptly
upon request by Lender shall execute, acknowledge and deliver to Lender any
financing statement, affidavit, continuation statement or certificate or other
document that Lender reasonably may request in order to perfect, preserve,
maintain or continue the security interest in the Mortgaged Property under this
Mortgage and the priority of such security interest, and upon any failure by
Borrower to do so Lender automatically shall be vested with power of attorney
for Borrower, coupled with an interest, for such purposes. Borrower further
agrees to pay to Lender on demand all costs and expenses incurred by Lender in
connection with the preparation, execution, recording, filing and refiling of
any such documents. In addition to being a mortgage this Mortgage is intended
to be a security agreement and a fixture filing pursuant to the UCC for the
items specified above as part of the Mortgaged Property (including goods
constituting part of the Collateral that are or are to become fixtures) which,
under applicable law, may be subject to a security interest pursuant to the
UCC, and Borrower hereby grants to Lender a security interest in said items as
security for the Obligations. Without limitation of the foregoing, Borrower
agrees that Lender may file this Mortgage in any personal property or real
estate records or other appropriate index as a financing statement for all or
any of the items specified above as part of the Mortgaged Property. A carbon,
photographic or other reproduction of this Mortgage or of a financing statement
shall be sufficient as a financing statement.
31. SUCCESSORS AND ASSIGNS; MODIFICATIONS IN WRITING. Subject to
the Section of this Mortgage entitled "Restrictions on Transfer," this Mortgage
shall be binding upon Borrower and its permitted successors and assigns, and
all persons claiming under or through Borrower or any such successor or assign,
and shall inure to the benefit of and be enforceable by Lender and its
successors and assigns. This Mortgage may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.
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<PAGE> 18
32. AFTER ACQUIRED PROPERTY. All property of every kind and
description acquired by Borrower after the date hereof which by the terms
hereof is required or intended to be subjected to the lien of this Mortgage
shall, immediately upon the acquisition thereof by Borrower, and without any
further mortgage, conveyance, assignment or transfer, become subject to the
lien and security interest of this Mortgage. Nevertheless, Borrower, at any
time, upon the request of Lender, will execute, acknowledge and deliver all
such additional papers and instruments and all such further assurances of title
and will do or cause to be done all further acts and things as may, subject to
the conditions contained in this Mortgage, be proper or reasonably necessary
for carrying out the intent of this Mortgage.
33. GOVERNING LAW. This Mortgage was negotiated in the
Commonwealth of Kentucky, the Reimbursement Agreements were delivered by
Borrower and accepted by Lender in the Commonwealth of Kentucky, and the
Letters of Credit were issued in the Commonwealth of Kentucky, which state
Borrower and Lender agree has a substantial relationship to Borrower and Lender
and to the underlying transaction in connection with which this Mortgage was
granted. This Mortgage, including matters of construction, validity and
performance, and the obligations arising hereunder, shall be construed in
accordance with and otherwise governed in all respects by the laws of the
Commonwealth of Kentucky applicable to contracts made and performed in such
state and any applicable law of the United States of America except to the
extent that the real and personal property laws of the State of Ohio, including
laws relating to the perfection, priority and enforcement of liens on real and
personal property located in Ohio, necessarily shall apply to enforcement of
the security covered by this Mortgage. Borrower hereby irrevocably agrees that
any legal action, suit, or proceeding against it with respect to its
obligations, liabilities or any other matter under or arising out of or in
connection with this Mortgage or the other Loan Documents or for recognition or
enforcement of any judgment rendered in any such action, suit or proceeding may
be brought in the United States Courts for the Western District of Kentucky, or
in the courts of the Commonwealth of Kentucky, as Lender may elect, and by
execution and delivery of this Mortgage, Borrower hereby irrevocably accepts
and submits to the non- exclusive jurisdiction of each of the aforesaid courts
IN PERSONA, generally and unconditionally with respect to any such action,
suit, or proceeding for Borrower and in respect of Borrower's property.
Borrower further agrees that final judgment against Borrower in any action,
suit or proceeding referred to herein shall be conclusive and may be enforced
in any other jurisdiction, by suit on the judgment, a certified or exemplified
copy of which shall be conclusive evidence of the fact and of the amount of the
indebtedness of Borrower.
34. WAIVER OF EXEMPTION. To the extent permitted by law with
respect to the Obligations secured hereby including any renewals or
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<PAGE> 19
extensions thereof, Borrower waives and renounces any and all homestead and
exemption rights, as well as the benefit of all valuation and appraisement
privileges, and stay, redemption and moratoriums under and by virtue of the
constitution and laws of the state in which the Land is located, and of any
other state or the United States, now existing or hereafter enacted.
35. JOINT AND SEVERAL LIABILITY; COVENANTS RUN WITH LAND. All of
the obligations of Borrower hereunder shall be joint and several. All of the
covenants of this Mortgage shall run with the land.
36. PROVISIONS SEVERABLE. In the event that any provision of this
Mortgage or any of the other Loan Documents conflicts with applicable law, such
conflict shall not affect other provisions of this Mortgage or the other Loan
Documents that can be given effect without the conflicting provisions, and to
this end the provisions of this Mortgage and the other Loan Documents are
declared to be severable.
37. INTERPRETATION. Whenever used, the singular number shall
include the plural, the plural the singular and the use of any gender shall
include all genders. The captions to the various sections of this Mortgage are
inserted for convenience only and shall be ignored in interpreting its
provisions.
38. WAIVER OF MARSHALLING. Notwithstanding the existence of any
other security interests in the Mortgaged Property held by Lender or by any
other person or entity, Lender shall have the right to determine the order in
which any or all of the Mortgaged Property shall be subjected to the remedies
provided herein, and the order in which any or all portions of the Obligations
secured hereby are satisfied from the proceeds realized upon the exercise of
the remedies provided herein. Borrower, any guarantor of or pledgor of
collateral for any of the Obligations, and any other person or entity now or
hereafter acquiring a security interest in the Mortgaged Property and having
actual or constructive notice of this Mortgage, each waives any and all right
to require the marshalling of assets in connection with the exercise of any of
the remedies permitted by applicable law or in equity or provided in this
Mortgage. Without limitation of the foregoing, if all or any part of the
Obligations are secured not only by this Mortgage but also by one or more other
mortgages, deeds of trust, deeds to secure debt or other encumbrances of
property located in this or other jurisdictions or states (collectively, the
"ADDITIONAL SECURITY INSTRUMENTS"), Lender, following any default (including
after any required notice and applicable period of cure) under this Mortgage or
any of the Additional Security Instruments, may proceed, concurrently or at any
time thereafter and from time to time, to exercise the rights and remedies of
Lender under this Mortgage and/or one or more of the Additional Security
Instruments or other Loan Documents by proceedings that are appropriate in the
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<PAGE> 20
jurisdiction or state wherein the property encumbered thereby is located, and
no such action (or failure to act) by Lender shall impair any rights or
remedies of Lender under this Mortgage, any of the Additional Security
Instruments, at law or in equity.
39. WAIVER OF TRIAL BY JURY. THE LENDER AND BORROWER ACKNOWLEDGE
------------------------
THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE TIME AND
EXPENSE REQUIRED FOR A BENCH TRIAL AND HEREBY KNOWINGLY AND VOLUNTARILY WAIVE,
TO THE FULLEST EXTENT PERMITTED BY LAW, AND AFTER HAVING CONSULTED OR HAVING
HAD AMPLE OPPORTUNITY TO CONSULT THEIR RESPECTIVE LEGAL COUNSEL CONCERNING THE
CONSEQUENCES OF SUCH WAIVER, TRIAL BY JURY IN ANY ACTION OR OTHER PROCEEDING
BROUGHT TO ENFORCE OR DEFEND AGAINST COLLECTION OF OR OTHERWISE IN CONNECTION
WITH THIS MORTGAGE OR THE OTHER LOAN DOCUMENTS.
<THE BALANCE OF THIS PAGE INTENTIONALLY HAS BEEN LEFT BLANK>
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<PAGE> 21
IN TESTIMONY WHEREOF, witness the signature of Borrower to this Mortgage as of
the date set forth above.
BORROWER:
Signed, acknowledged and MARSHALL PROPERTIES, INC., an
delivered in the presence Ohio corporation
of:
__________________________ By: ___________________________
Signature
__________________________ Printed Name: _________________
Printed Name
Title: ________________________
__________________________
Signature
__________________________
Printed Name
STATE OF OHIO )
) SS:
COUNTY OF _________)
The foregoing instrument was acknowledged before me this _____
day of February, 1996, by _______________________________ (name) as
________________________ (title) of Marshall Properties, Inc., an Ohio
corporation, on behalf of the corporation.
My commission expires: _________________________.
_________________________________________
NOTARY PUBLIC
[AFFIX NOTARY SEAL]
This Instrument Prepared By:
____________________________
Arthur Adams Rouse
WYATT, TARRANT & COMBS
2700 Citizens Plaza
Louisville, Kentucky 40202
(502) 589-5235
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<PAGE> 22
SCHEDULE 1
----------
TO
OPEN-END MORTGAGE AND SECURITY AGREEMENT ("AGREEMENT)
BETWEEN MARSHALL PROPERTIES, INC.
AND BANK ONE, KENTUCKY, NA
(DESCRIPTION OF OBLIGATIONS)
The "OBLIGATIONS" referred to in the foregoing Agreement are
as follows:
A. All indebtedness, liabilities and obligations arising
under or evidenced by, and the performance of all covenants, conditions and
agreements undertaken by each of the Borrowers hereinafter described in
connection with, each of the following documents, including any renewals,
extensions and amendments of any of them or substitutions or replacements for
any of them (referred to hereinafter as the "REIMBURSEMENT AGREEMENT"):
(1) Reimbursement Agreement dated as of February
12, 1996, to which Arbor Health Care Company, a Delaware corporation ("ARBOR"),
Marshall Properties, Inc., an Ohio corporation ("MARSHALL") (Arbor and Marshall
are referred to each individually as a "BORROWER" and collectively as the
"BORROWERS"), and Bank One, Kentucky, NA, a national banking association
("LENDER"), are parties referable to Letter of Credit No. S-6122 in the face
amount of $27,506,250 issued by Lender for the joint and several account of
Borrowers (the "LETTER OF CREDIT") as security for Promissory Note (Series
1996A-1) and Promissory Note (Series 1996A-2), both dated as of February 15,
1996, made jointly and severally by Borrowers to the order of Capital One
Funding Corporation ("CAPITAL") in face principal amount of $13,500,000 and
maturing on February 1, 2003.
B. The payment, performance and discharge of any and all
obligations and liabilities of each Borrower, whether direct or indirect,
absolute or contingent, due or not due, now existing or hereafter arising, in
conjunction with issuance of the Letter of Credit (collectively, together with
any extensions, renewals, amendments, substitutions or replacements thereof and
therefor, the "LETTER OF CREDIT"), including but not limited to the obligations
of each Borrower contained in any and all applications for the Letter of Credit
(collectively, the "APPLICATIONS") executed and delivered as a condition to
issuance of the Letter of Credit, and to pay on demand all drafts drawn under
the Letter of Credit, and to reimburse Lender on demand of Lender for any
amounts advanced by Lender for the account of either Borrower, at the option
and in the exercise of the sole and absolute discretion of Lender, to satisfy
such drafts, and to indemnify Lender from all loss or liability incurred by
Lender in connection with the issuance of the Letter of Credit; and the payment
of all fees and all other sums due under, and the performance of all covenants,
conditions and other obligations due under or in connection with, the
Reimbursement
<PAGE> 23
Agreement, the Applications, and any security agreements, mortgages, deeds of
trust, guaranties, pledge agreements, assignments, subordination agreements,
and any other documents or instruments heretofore, contemporaneously herewith
or hereafter entered into by any Borrower or any other person or entity, with
or for the benefit of Lender to evidence, secure or guarantee payment of the
Letter of Credit, or otherwise entered into in connection with the Letter of
Credit (such security agreements, mortgages, deeds of trust, guaranties, pledge
agreements, assignments, subordination agreements, and other documents and
instruments evidencing, securing, guaranteeing or otherwise entered into in
connection with the Letter of Credit are referred to collectively as the "LOAN
DOCUMENTS").
C. All expenses, costs and charges, of any nature
whatsoever, including, without limitation, taxes, assessments, insurance
premiums, repairs, rent, storage costs, expenses of collection and sale, and
reasonable attorneys' fees, incurred by or for the account of Lender in
preserving collateral for the Obligations and/or enforcing or seeking to
enforce any of the rights and remedies of Lender under any of the Loan
Documents.
<PAGE> 24
EXHIBIT A
---------
to Mortgage
Situated in the Township of Miami, County of Clermont, State of Ohio
in Dix Military Survey Number 992, being more particularly described
as follows: Beginning at an iron pin in the future south right-of-way
line of Meadowcreek Drive said point being North 81 degrees 39 minutes
31 seconds West 664.00 feet North 78 degrees 52 minutes 51 seconds
West 168.74 feet and South 13 degrees 53 minutes 48 seconds West 25.00
feet from the centerline intersection of said Drive and Cook Road;
thence South 04 degrees 38 minutes 10 seconds West 433.96 feet to an
iron pin; thence North 84 degrees 25 minutes 11 seconds West, 291.41
feet to an iron pipe; thence North 85 degrees 26 minutes 42 seconds
West 245.76 feet to an iron pin; thence North 47 degrees 21 minutes 55
seconds West 165.00 feet to an iron pin; thence North 26 degrees 35
minutes 18 seconds West 265.18 feet to an iron pin; thence with the
arc of a circle curving to the right and having a radius of 475.00
feet a distance of 252.98 feet; thence North 88 degrees 27 minutes 27
seconds East 289.40 feet; thence with the arc of a circle curving to
the right and having a radius of 728.33 feet a distance of 222.55
feet; thence with the arc of a circle curving to the left and having a
radius of 1765.99 feet a distance of 63.76 feet to the point of
beginning containing 7.042 acres of land subject to legal highways and
easements of record.
<PAGE> 1
Exhibit 4.4
This Mortgage and Security Agreement
is one of five Mortgage and Security
Agreements all securing a single
Promissory Note, which are being recorded
simultaneously in Hillsborough County,
Pinellas County, Seminole County and
Brevard County, Florida.
The documentary stamps and intangible
taxes on all of the Mortgages and Security
Agreements, and on the Promissory
Note have been paid in Hillsborough County
in connection with recording the
Mortgage and Security Agreements in that
County.
This Instrument Prepared By:
______________________________
Arthur Adams Rouse
WYATT, TARRANT & COMBS
2700 Citizens Plaza
Louisville, Kentucky 40202
(502) 589-5235
MORTGAGE AND SECURITY AGREEMENT
HILLSBOROUGH COUNTY, FLORIDA
THIS MORTGAGE (the "Mortgage") is executed actually on the
dates indicated in the notarial certificate affixed to it, but is made and
delivered effective as of February 12, 1996, by and between [i] MARSHALL
PROPERTIES, INC., an Ohio corporation (referred to herein as the "BORROWER"),
having a mailing address of 1100 Shawnee Road, Box 840, Lima, Ohio and [ii]
BANK ONE, KENTUCKY, NA, a national banking association, having a mailing
address of 416 West Jefferson Street, Louisville, Jefferson County, Kentucky
40232 (referred to herein as the "LENDER").
W I T N E S S E T H:
Borrower is obligated to Lender under and in connection with
the Reimbursement Agreement and the Letter of Credit and the Loan Documents
("LOAN DOCUMENTS") and the other "OBLIGATIONS" more particularly described in
SCHEDULE 1 hereto (all of the foregoing are referred to collectively
hereinafter as the "OBLIGATIONS");
<PAGE> 2
NOW THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower does hereby MORTGAGE,
WARRANT, GRANT, CONVEY AND ASSIGN to Lender, to secure to Lender the payment
and performance when due of the Obligations strictly in accordance with the
terms thereof, all right, title and interest of Borrower in and to the real
estate described in EXHIBIT A attached hereto and incorporated herein by this
reference (the "LAND");
TOGETHER with all right, title and interest of Borrower in all
buildings, foundations, structures and improvements now or hereafter located on
or in the Land, and all materials now or hereafter intended for construction,
reconstruction, alteration or repair thereof, all of which shall be deemed a
part thereof immediately upon being delivered to the Land (collectively, the
"IMPROVEMENTS");
TOGETHER with all right, title and interest of Borrower now
and hereafter in and to the streets and roads, opened or proposed, abutting the
Land, all strips and gores within or adjoining the Land, the air space and
right to use the air space above the Land, all rights of ingress and egress to
and from the Land, all easements, rights of way, reversions, remainders,
hereditaments, and appurtenances now or hereafter affecting the Land or the
Improvements, all royalties and rights and privileges appertaining to the use
and enjoyment of the Land or the Improvements, including all air, lateral
support, alley, drainage, water, riparian, oil, gas and mineral rights, options
to purchase or lease, and all other interests, estates or claims, in law or in
equity, which Borrower now has or hereafter may acquire in or with respect to
the Land or the Improvements (collectively, the "APPURTENANCES"; the Land, the
Improvements and the Appurtenances are hereinafter sometimes collectively
referred to as the "PREMISES");
2
<PAGE> 3
TOGETHER with all right, title and interest of Borrower in all
fixtures, equipment (including but not limited to office equipment, motors,
elevators, radiators, gas and electric ranges, refrigerators, freezers, and
plumbing, heating, lighting, ventilating, refrigerating, incinerating, air
conditioning, central energy, sprinklering and fire suppression, waste disposal
and theft protection equipment), fittings, furniture, furnishings (including,
but not limited to awnings, shades, screens, blinds and carpets), appliances,
apparatus, and machinery now existing or hereafter installed in the Premises,
and all building materials, supplies and equipment now existing or hereafter
delivered to the Premises and intended to be installed therein, and all
renewals or replacements of any of the foregoing property or articles in
substitution thereof (collectively, the "EQUIPMENT");
TOGETHER with all right, title and interest of Borrower
whether now existing or hereafter acquired in, to and under all accounts,
documents, instruments, chattel paper, and general intangibles, as the
foregoing terms are defined in the Uniform Commercial Code in effect in the
state in which the Land is located (the "UCC"), that are derived from the
Premises or Equipment, including, to the extent assignable, all contract rights
(including, without limitation, under contracts with all contractors,
architects, engineers or subcontractors relating to the construction or
renovation of the Improvements or Equipment, including payment, performance and
materialmen's bonds); franchises; books and records; plans; specifications;
permits; health facility, pharmacy and other licenses; Certificates of Need;
governmental registrations for diagnostic, laboratory, or any other activities;
Medicare and Medicaid provider agreements; accreditation rights; rights to
refunds under any of the foregoing agreements; and other approvals, actions and
causes of action; which in the case of any of the foregoing now or hereafter
relate to, are derived from or used in connection with the Premises or
Equipment or the use, operation, maintenance, occupancy or enjoyment thereof or
the conduct of any business or activities thereon (collectively, the
"INTANGIBLES");
TOGETHER with all right, title and interest of Borrower,
whether now existing or hereafter acquired and wherever located, in, to and
under all leases, lettings, tenancies and licenses of the Premises or Equipment
or any part thereof now or hereafter entered into and all amendments,
extensions, renewals and guaranties thereof, all security therefor, and all
moneys payable thereunder (each a "Lease" and collectively, the "LEASES");
TOGETHER with all rents, income, issues, profits, security
deposits and other benefits to which Borrower may now or hereafter be entitled
from the Premises, the Equipment or the Intangibles or under or in connection
with the Leases, including, without limitation, all income received from
tenants, lessees, licensees and concessionaires and other persons occupying
space at the Premises and/or rendering services to tenants thereat
(collectively, the "PROPERTY INCOME"); and
TOGETHER with all proceeds, judgments, claims, compensation,
awards of damages and settlements with respect to or hereafter made as a result
of or in lieu of any condemnation or taking of the Premises and/or Equipment by
eminent domain (including severance and consequential damages and change in
grade of streets) or any casualty loss of or damage to any of the Premises, the
Equipment, the
3
<PAGE> 4
Intangibles, the Leases or the Property Income, all refunds with respect to the
payment of property taxes and assessments, and all other proceeds of the
conversion, voluntary or involuntary, of the Premises, the Equipment, the
Intangibles, the Leases or the Property Income, or any part thereof, into cash
or liquidated claims (collectively, the "PROCEEDS"; the Equipment, the
Intangibles, the Leases, the Property Income and the Proceeds are hereinafter
collectively referred to as the "COLLATERAL"; the Premises and the Collateral
being hereinafter sometimes collectively referred to as the "MORTGAGED
PROPERTY").
TO HAVE AND TO HOLD the Mortgaged Property with all the privileges and
appurtenances to the same belonging, and with the possession and right of
possession thereof, unto Lender, its successors and assigns forever, upon the
terms and conditions set forth herein.
AND BORROWER COVENANTS AND WARRANTS lawful seizure of an
indefeasible estate in fee simple of the Mortgaged Property; that the same are
free from all encumbrances and liens whatsoever, except for [i] easements and
restrictions of record on the date hereof, none of which materially interfere
with the use of the Mortgaged Property for the operation thereof intended by
Borrower, [ii] the lien of ad valorem real estate taxes and any assessments for
which payment is not delinquent in either case (the encumbrances and liens
described in the foregoing subsections [i] - [ii] are referred to collectively
as the "PERMITTED EXCEPTIONS"); that Borrower has the legal right, power and
authority to encumber the Mortgaged Property pursuant to this Mortgage, the
execution and delivery and the performance of which will not, either
immediately or with notice and/or passage of time, violate any agreement to
which Borrower is a party or by which Borrower is bound; and that Borrower and
the successors in interest of Borrower will forever WARRANT AND DEFEND the
title to the Mortgaged Property and the lien and priority of this Mortgage
against the claims and demands of all persons whomsoever. All such covenants
and warranties shall run with the land.
AND BORROWER, IN ORDER MORE FULLY TO PROTECT THE SECURITY OF
THIS MORTGAGE, COVENANTS AND AGREES AS FOLLOWS:
1. OBLIGATIONS SECURED. This Mortgage is granted to secure the
payment and performance of the Obligations strictly in accordance with the
terms thereof in each case.
2. PAYMENT AND PERFORMANCE OF OBLIGATIONS. Principal of,
interest on, and all other indebtedness and sums constituted by the Obligations
shall be paid at the times and in the manner provided herein and in the other
Loan Documents.
3. PAYMENT OF TAXES AND OTHER IMPOSITIONS. Borrower shall keep
the Mortgaged Property free from statutory liens of every kind; shall pay,
before delinquency and before any penalty for nonpayment attaches thereto, all
taxes, assessments and governmental or municipal or public levies, fees,
charges, fines or impositions of any nature whatsoever (collectively, the
"IMPOSITIONS") which are or may be levied or imposed against or in connection
with the Mortgaged Property or any part thereof, except when payment for such
items has theretofore been made under the
4
<PAGE> 5
Section of this Mortgage entitled "Monthly Installments of Taxes and
Insurance"; shall deliver to Lender, on or before ten (10) days after request
made by Lender therefor, receipted bills evidencing payment therefor.
Notwithstanding the foregoing, so long as no default, and no circumstance
which, with any required notice and/or opportunity to cure would constitute a
default under the Obligations is subsisting, Borrower shall have the right to
contest the validity of any Imposition by appropriate legal proceedings
provided [i] Borrower notifies Lender of Borrower's intention to contest the
same prior to commencing such contest, [ii] such contest shall preclude
enforcement of collection out of or pursuant to the sale of any of the
Mortgaged Property in satisfaction of any Imposition, [iii] Borrower shall
furnish Lender with, at the option of Lender, a bond (pursuant to Florida
statutes) or title insurance or other security for the Imposition satisfactory
to Lender in Lender's sole discretion, [iv] such contest shall not otherwise
create a failure on the part of Borrower to comply with any other provision or
condition of the Loan Documents, and [v] upon a final and nonappealable
determination of the contest that is adverse to the Borrower, Borrower shall
pay the amount of the Imposition.
4. MONTHLY INSTALLMENTS OF TAXES AND INSURANCE. If requested by
Lender at any time [i] after default (including after any applicable
requirement for notice and an opportunity to cure) in any of the Obligations or
[ii] after payment of taxes or insurance in respect of the Mortgaged Property
have become delinquent (whether or not thereafter cured), Borrower shall pay to
Lender, in addition to the amounts of principal and interest and any other sums
due under the terms of the applicable instruments evidencing the Obligations,
monthly on or before the first day of each calendar month, until the
Obligations are paid in full, the following:
A sum equal to all taxes, assessments and all other impositions next
due on the Mortgaged Property, all as estimated in good faith by
Lender, plus the premiums that will next become due and payable on
policies of fire and other insurance covering the Mortgaged Property
and required under the terms of this Mortgage, less all sums already
paid therefor in each case, divided by the number of complete calendar
months to elapse prior to the date when such taxes, assessments,
impositions and premiums shall be due and payable.
All such payments described in this Section shall be held by Lender without
accruing and without any obligation arising for the payment of interest thereon
and Borrower waives any right, to the extent permitted by law, to demand or
receive any interest, income or profits on any of the payments so deposited
with Lender. Lender is hereby granted a security interest in all such amounts
as collateral for the Obligations and such sums shall be subject to setoff by
Lender following any default by Borrower (including after any
5
<PAGE> 6
applicable requirement for notice and/or opportunity to cure) under this
Mortgage or the other Obligations.
5. UTILITIES. Borrower shall pay or cause to be paid all charges
in respect of all water, sewer, electricity, natural gas, telecommunications
and all other utilities consumed on the Mortgaged Property prior to the date
when the same would become delinquent, and shall provide Lender promptly after
request is made by Lender therefor with copies of paid receipts in respect of
all utility charges assessed against the Mortgaged Property.
6. LIABILITY INSURANCE. Borrower shall carry and maintain such
liability and indemnity insurance as in good faith may be required from time to
time by Lender in forms, amounts and with companies reasonably satisfactory to
Lender. Certificates of such insurance, premiums prepaid, naming Lender as an
additional insured, and copies of such policies, shall be deposited, if
requested by Lender, by Borrower with Lender and shall contain provision for
not less than ten (10) days' notice to Lender prior to any cancellation or
modification thereof.
7. HAZARD INSURANCE. Borrower shall keep or cause to be kept all
Improvements and Equipment, whether now existing or hereafter erected on the
Mortgaged Property, insured as may be required from time to time by Lender
against loss or damage by fire, hazards included within the term "broad form
coverage", rent loss, flood (if required by law), and such other hazards,
casualties, liabilities and contingencies in such amounts (not exceeding the
replacement value thereof except in all events sufficient to keep Borrower from
becoming a co-insurer) and for such periods as may be required by Lender
consistent with reasonable and customary commercial practice with regard to
similar properties or as otherwise required in good faith by Lender, and shall
pay promptly, when due, any premiums on such insurance policies. All insurance
policies shall be carried with companies having a Best rating of A- or better
and approved by Lender and such policies shall name Lender as a lender loss
payee pursuant to a "standard mortgage" or "New York mortgagee" clause.
Evidence that such policies are in force shall be delivered to Lender on or
before ten (10) days after request by Lender therefor. All such policies shall
contain provision for at least ten (10) days notice to Lender prior to any
cancellation or modification thereof. Borrower shall not carry separate
insurance, concurrent in kind or form and contributing, in the event of loss,
with any insurance required hereunder. In the event of a change in the use and
nature of occupancy of the Mortgaged Property, immediate notice thereof by mail
shall be delivered to all insurers and Lender. In the event of loss, Borrower
will give immediate notice by mail to Lender. Borrower hereby authorizes
Lender, at its option, to collect, adjust and compromise any losses under any
of the insurance policies aforesaid (provided Lender in so adjusting and
compromising any such losses acts in good faith and not in a manner which,
under the circum-
6
<PAGE> 7
stances, diminishes the recovery thereunder by an unreasonable amount), and
after deducting all costs of collection to apply the proceeds of such insurance
as follows: [1] provided the gross proceeds from the insurance do not exceed
$100,000 provided no default under any of the terms and conditions of this
Mortgage, or any of the other Obligations secured hereby shall then or
thereafter be subsisting, and provided the proceeds of such insurance (together
with any moneys which may be deposited by Borrower with Lender for the purpose
of repair or restoration of the Mortgaged Property promptly upon Borrower's
becoming aware of any deficiency between the amount of such insurance proceeds
and the amount necessary to restore the Mortgaged Property as hereinafter
provided in this sentence) are sufficient to restore the Mortgaged Property to
the same or better condition as existed immediately prior to the loss, Lender
shall disburse the proceeds of the insurance for the sole purpose of repairing
and restoring the Mortgage Property, which repairs and restoration, if the cost
thereof is reasonably estimated by Lender to exceed $50,000 shall, at the
option of Lender, be under the supervision of an architect or engineer
reasonably acceptable to Lender, shall be made pursuant to plans and
specifications submitted to Lender prior to the commencement thereof, and which
shall be subject to Lender's approval and which proceeds shall be disbursed by
Lender from time to time only upon certification by the architect or engineer
that all of the work theretofore completed was done in compliance with the
plans and specifications approved by Lender, that the sum requested is justly
required to reimburse Borrower for payments by Borrower to persons performing
such work, that the amount of the remaining proceeds shall be sufficient to pay
for the repairs and restoration remaining to be completed pursuant to the
approved plans and specifications, and containing such other certifications,
and subject to such other conditions, including but not limited to waivers of
lien and title insurance coverage, as Lender in good faith deems necessary or
appropriate; or [2] if the gross proceeds from the insurance exceed $100,000,
or if a default under any of the terms and conditions of this Mortgage, or any
of the other Obligations secured hereby shall then or thereafter be subsisting,
or any of the other conditions described above to the proceeds being made
available for restoration are not met, the proceeds shall be applied as a
reduction upon or, at the sole option of Lender, as a fund to be retained by
Lender as part of the Collateral for, the Obligations secured hereby, in such
order as Lender may elect; with the balance of any proceeds remaining after the
disposition of the proceeds as aforesaid to be paid to Borrower. Upon
acquisition of the Mortgaged Property by Lender in the event of foreclosure of
this Mortgage, or other transfer of title to the Mortgaged Property in
extinguishment of all or part of the Obligations secured hereby, all right,
title and interest of Borrower in and to any insurance policies then in force
shall pass to the purchaser or grantee of said property.
7
<PAGE> 8
8. CONDEMNATION. Borrower shall give Lender immediate notice of
the actual or threatened commencement of any proceedings under eminent domain
affecting all or any part of the Mortgaged Property, including severance and
consequential damage and change in grade of streets, and will deliver to Lender
copies of any and all papers served in connection with any such proceedings.
Borrower further covenants and agrees to make, execute and deliver to Lender,
at any time or times upon request of Lender, free, clear and discharged of any
encumbrances of any kind whatsoever, any and all further assignments and/or
other instruments deemed necessary or appropriate by Lender for the purpose of
validly and sufficiently assigning all awards and other compensation,
heretofore and hereafter to be made to Borrower (including the assignment of
any award from the United States Government at any time after the allowance of
the claim therefor, the ascertainment of the amount thereof and the issuance of
the warranty for payment thereof) for any taking, either permanent or
temporary, under any such proceedings, all of which awards may, at the option
of Lender (subject only to the provisions of any leases of portions of the
Mortgaged Property permitted under the provisions of the Loan Documents and not
subordinate to the rights of Lender with respect to such awards), regardless of
whether a default in any of the Obligations is then subsisting, be applied as a
reduction of or, at the sole option of Lender, as a fund to be retained by
Lender as part of the Collateral for, the Obligations in such order as Lender
may elect.
9. ALTERATIONS; REPAIRS; WASTE, COMPLIANCE WITH LAWS; INSPECTION.
No additional Improvements shall be constructed on the Land, and no existing
Improvements shall be materially altered, or removed or demolished without the
prior written consent of Lender in each case, provided such consent is not
unreasonably withheld. No Equipment shall be severed or removed without the
prior written consent of Lender except that Borrower may replace in the
ordinary course of business any Equipment with other Equipment at least equal
in quality and condition to that replaced, provided such replacements are free
from any security interest in or encumbrance thereon or reservation of title
thereto except for the lien of this Mortgage and any other encumbrance which
may be permitted by the express terms of the Loan Documents. Borrower shall
permit, commit, or suffer no waste, impairment or deterioration of the
Mortgaged Property or any part thereof; shall keep and maintain the same in
good repair and condition, reasonable wear and tear excepted; shall effect such
repairs as Lender may reasonably require, and from time to time to make all
needful and proper replacements so that said Mortgaged Property will, at all
times, be in fit and proper for the respective purposes for which they were
erected or installed. Borrower shall comply with or require compliance with
all statutes, regulations, codes, orders, requirements or decrees relating to
the Mortgaged Property (including but not limited to the Americans with
Disabilities Act) by any federal, state or municipal authority and, without
limitation of the foregoing, shall observe and comply with all conditions and
requirements necessary
8
<PAGE> 9
to preserve and extend any and all rights, licenses, permits (including but not
limited to zoning variances, conditional uses and non- conforming uses),
privileges, franchises and concessions which are applicable to the Mortgaged
Property or which have been granted to or contracted for by Borrower in
connection with any existing or presently contemplated use of the Mortgaged
Property. Borrower shall permit Lender, during business hours of Borrower and
at all other reasonable times, to enter upon and inspect the Mortgaged
Property.
10. PROHIBITION OF OTHER LIENS. Borrower shall not voluntarily
create or otherwise permit to be created or filed against the Mortgaged
Property any mortgage lien (except any securing indebtedness to Lender), or any
statutory or other lien or liens, charge or encumbrance of any nature, whether
inferior or superior to the lien of this Mortgage, without the prior written
consent of Lender, except any which is one of the Permitted Exceptions.
Borrower will not permit any default (whether or not waived by the applicable
mortgagee) to occur under any other mortgage (or under the indebtedness secured
thereby, in each case) on all or any part of the Mortgaged Property. Without
limitation of the foregoing, Borrower shall keep and maintain the Mortgaged
Property free from the claims of all persons now or hereafter supplying labor
or materials thereto notwithstanding by whom such labor or materials may have
been contracted. Notwithstanding the preceding sentence, so long as no
default, and no circumstance which, with any required notice and/or opportunity
to cure would constitute a default under the Obligations is then or thereafter
subsisting, Borrower shall have the right to contest the validity of any such
lien or claim of any person supplying such labor or materials by appropriate
legal proceedings provided [i] Borrower notifies Lender of Borrower's intention
to contest the same prior to commencing such contest, [ii] such contest shall
preclude enforcement or collection out of or pursuant to the sale of any of the
Mortgaged Property in satisfaction of the lien or claim, [iii] Borrower shall
furnish Lender with, at the option of Lender, a bond or title insurance or
other security for such lien or claim satisfactory to Lender in Lender's sole
discretion, [iv] such contest shall not otherwise create a failure on the part
of Borrower to comply with any other provision or condition of the Loan
Documents, and [v] upon a final and nonappealable determination of the contest
that is adverse to the Borrower, Borrower shall pay the amount of the lien or
claim.
11. INDEMNIFICATION OF LENDER. Borrower shall, to the fullest
extent permitted by applicable law, save Lender harmless from all losses, costs
and expenses, including reasonable attorneys' fees, and the cost of a title
search, continuation of abstract and preparation of survey, incurred by reason
of any action, suit, proceeding, hearing, motion or application before any
court or administrative body in and to which Lender may be or become a party by
reason of this Mortgage, including but not limited to condemnation, bankruptcy,
probate and administration
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<PAGE> 10
proceedings, as well as any other of the foregoing wherein proof of claim is by
law required to be filed or in which it becomes necessary to defend or uphold
the terms of, or the lien created by, this Mortgage, and all money paid or
expended by Lender in that regard, together with interest thereon from the date
of such payment at the Index Rate of Lender plus 2% per annum (such interest
rate is referred to hereinafter as the "APPLICABLE RATE") shall be part of the
Obligations secured hereby and shall be due and payable by Borrower immediately
upon request made by Lender. Borrower additionally hereby indemnifies and
saves Lender harmless under this Mortgage from and against all liabilities,
obligations, claims, damages. penalties, causes of action, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
imposed upon, incurred by, or asserted against Lender on account of [i] any
failure of the Borrower to comply with any of the covenants and conditions on
the part of Borrower to be performed or representations of Borrower contained
in this Mortgage, or [ii] any loss or damage to the Mortgaged Property or any
injury to, or death of, any person that may be occasioned by any cause
whatsoever pertaining to the Mortgaged Property or the use thereof, provided
that such indemnity shall be effective only to the extent of any loss that may
be sustained by Lender in excess of any net proceeds of the insurance received
by Lender from any insurance carried with respect to such loss and provided
further that the benefits of this Section shall not inure to any person other
than Lender and its successors and assigns. Nothing contained in this Section
shall require the Borrower to indemnify Lender against the gross negligence or
wantonly malicious acts of Lender. The indemnities contained in this Section
shall survive payment of the Obligations, the release of this Mortgage,
Foreclosure of this Mortgage, or a deed in lieu of foreclosure, and shall
extend to the officers, directors, employees and duly authorized agents of
Lender.
12. BOOKS AND RECORDS. Borrower at all times shall keep and
maintain complete and accurate books of accounts and records adequate to
reflect correctly the results of the operation of the Mortgaged Property and
copies of all written contracts, leases, rental agreements, license agreements
and other instruments and agreements that affect the Mortgaged Property. Such
books, records, contracts, leases and other instruments and agreements shall be
subject to examination and inspection at any reasonable time by Lender, and
Borrower shall furnish Lender, at the cost of Borrower, with a copy of all or
any of the same promptly following any request therefor by Lender.
13. RIGHT OF LENDER TO CURE DEFAULTS. Upon default in the
performance of any of the terms, covenants or conditions of this Mortgage or
any of the other Loan Documents, Lender may, at its option and whether or not
electing to declare the whole of the Obligations secured hereby due and
payable, perform the same without waiver of any other remedy, and any amount
paid or advanced
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<PAGE> 11
by Lender in connection therewith, or any other costs, charges or expenses,
including reasonable attorney's fees, incurred in the protection of the
Mortgaged Property and the maintenance of the lien of this Mortgage, with
interest thereon at the Applicable Rate, shall be repayable by Borrower,
immediately upon demand made by Lender, shall be a lien upon the Mortgaged
Property prior to any right, title to, interest in, or claim thereon attaching
or accruing subsequent to the attachment of lien of this Mortgage and shall be
secured by this Mortgage.
14. AUTHORIZED DETERMINATIONS BY LENDER. Lender in making any
payment herein and hereby authorized, in the place and stead of Borrower [i]
relating to any Impositions, utility charges or liens or other claims asserted
against or in connection with the Mortgaged Property, may do so according to
any bill, statement or estimate procured from the appropriate public office or
other person or entity without inquiry into the accuracy thereof or the
validity of the Imposition, charge, lien or claim; or [ii] relating to any
apparent or threatened adverse title, lien, statement of lien, encumbrance,
claim or charge, shall be the sole judge of the legality or validity of same;
or [iii] relating to the expense of repairs or replacement of any Improvements
or Equipment shall be the sole judge of the state of repairs and the necessity
for incurring the expense of any such repairs or replacement; or [iv] otherwise
relating to any other purpose in and authorized by this Mortgage, but not
enumerated in this Section, may do so whenever, in the judgment and discretion
of Lender, such advance or advances shall seem necessary or desirable to
protect the full security intended to be created by this Mortgage, and provided
further that in connection with any such advance, Lender, at the option of
Lender, may and is hereby authorized to obtain a continuation report of title
prepared by a title insurance company, the cost and expense of which shall be
repayable by Borrower immediately upon demand and shall be secured by this
Mortgage.
15. ENVIRONMENTAL COMPLIANCE. Borrower represents and warrants
that to the best of Borrower's knowledge and except as previously disclosed in
writing to Lender by Borrower, or by environmental consultants engaged by
Borrower or Lender, that: [i] no hazardous or toxic substance or material or
other waste ("HAZARDOUS SUBSTANCE") as defined in or regulated under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended (42 U.S.C. Section 9601, ET. SEQ.), the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901, ET. SEQ.), The Oil Pollution Act of 1990
(33 U.S.C. Section 2701 ET. SEQ.) or any other federal, state or local law,
order or regulation pertaining to health, safety, or the environment (the
"ENVIRONMENTAL LAWS") has ever been disposed, released, discharged or spilled
on or under any part of the Mortgaged Property, [ii] the Mortgaged Property has
never been used as a dump or landfill, [iii] no litigation or administrative
action or proceeding has been commenced or, to Borrower's knowledge, threatened
against Borrower or any subsidiary
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<PAGE> 12
or affiliate of Borrower alleging a violation of any Environmental Laws, and
[iv] no underground storage tank, polychlorinated biphenyls, asbestos,
lead-based paint or urea formaldehyde is located on or under or has been
applied to any part of the Mortgaged Property or contained in any Improvement
or Equipment located on the Mortgaged Property. Borrower will not permit any
Hazardous Substance to be placed or stored in or upon the Mortgaged Property
except DE MINIMIS quantities if and, in such event, as incident to the
customary operations of Borrower on the Mortgaged Property, and then only in
compliance with all Environmental Laws. Without limitation of the preceding
sentence, Borrower covenants that the Mortgaged Property at all times hereafter
shall remain free from any contamination by any Hazardous Substance and that
Borrower at all times will comply with all Environmental Laws affecting
Borrower or the Mortgaged Property. Borrower shall notify Lender promptly upon
becoming aware of any contamination of the Mortgaged Property by any Hazardous
Substance, or upon being threatened with receipt of or receiving any notice,
citation, summons, complaint or other communication alleging violation by
Borrower of any Environmental Law or potential liability of Borrower in
connection with any Hazardous Substance. Lender and its agents, including but
not limited to environmental consultants and remediation contractors engaged by
Lender, shall have the right, but not the obligation, to enter upon the
Mortgaged Property at any time to inspect the same and take such other action
as Lender deems necessary or appropriate with respect to any actual or
threatened contamination of the Mortgaged Property by a Hazardous Substance or
any other circumstance relating to a Hazardous Substance or any Environmental
Law which in Lender's sole opinion could impair the security intended to be
afforded by this Mortgage or result in a claim against or liability of Lender,
and all costs and expenses, including reasonable attorneys' fees and the fees
of such consultants and contractors, incurred by Lender, in so doing shall be
paid by Borrower to Lender upon demand and be secured by the lien of this
Mortgage and bear interest at the Applicable Rate. Borrower hereby indemnifies
Lender and holds Lender wholly harmless from and against any and all losses,
costs, expenses (including but not limited to reasonable attorneys' fees),
injuries, damages, liabilities and claims of any kind whatsoever paid, incurred
or suffered by or asserted against Lender by any person or entity, including
but not limited to any governmental entity, whatsoever with respect to or as a
direct or indirect result of the presence heretofore, now or hereafter of any
Hazardous Substance on or under the Mortgaged Property, or the violation or
alleged violation heretofore, now or hereafter by Borrower or any subsidiary or
affiliate of Borrower of any Environmental Laws and, without limitation of the
foregoing, any inaccuracy of any representation or warranty by Borrower
contained in this Section or any breach by Borrower of or other default in the
covenants contained in this Section. The indemnification established under the
preceding sentence shall survive the maturity as well as the repayment or other
discharge of the Obligations secured by this Mortgage and any
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<PAGE> 13
termination of this Mortgage whether pursuant to repayment of the Obligations
secured by it, foreclosure, deed in lieu of foreclosure or otherwise, to the
maximum extent permitted by law. Borrower expressly acknowledges that any
misrepresentation by Borrower under this Section, or any failure of condition
or breach of covenant by Borrower or other default in any of the obligations of
Borrower under this Section shall be and constitute an immediate default under
this Mortgage and each of the other Loan Documents.
16. ACCELERATION UPON DEFAULT; CERTAIN REMEDIES. That, upon
failure of Borrower to comply with any of the provisions of this Mortgage, if
such failure shall continue for fifteen (15) calendar days after written notice
thereof is given to Borrower by Lender (unless this Mortgage or the applicable
Loan Document in connection with which such non-compliance has occurred
affirmatively provides that no notice and/or period of cure, or that an
explicit alternative period of cure, shall be applicable to such failure by
Borrower, in which case such alternative provision rather than fifteen (15)
days after notice shall control), or (after satisfaction of any applicable
requirement for notice and opportunity to cure contained in the Loan Document
governing the default) upon any default in any of the other Obligations,
including the payment or performance or observance of each and every other
term, covenant, condition or agreement contained in the Loan Documents, then,
in any of said events, the entire Obligations secured hereby shall, at the
option of Lender, become immediately due and payable without relief from
valuation or appraisement laws, and thereupon or at any time thereafter Lender
may proceed to foreclose this Mortgage, and any failure to exercise said option
shall not constitute a waiver of the right to exercise the same at any other
time. In any of such events, Lender may enter upon the Mortgaged Property,
collect the rents, issues and profits thereof and, after paying all expenses of
such collections including reasonable attorney's fees, and a reasonable
compensation for Lender, shall apply the money collected to the satisfaction of
the Obligations hereby secured in such order as Lender elects. Lender,
thereupon, also shall have all rights and remedies provided herein, in the Loan
Documents, and under the UCC with regard to any of the Mortgaged Property to
which the UCC is applicable, all of which rights and remedies shall, to the
fullest extent permitted by law, be cumulative.
17. RECEIVER. Lender, in any action to foreclose this Mortgage,
and in addition to all other rights and remedies available to Lender, shall be
entitled to the appointment of a receiver of the rents, issues and profits of
the Mortgaged Property as a matter of right and without notice, with power to
collect the rents, issues and profits of the Mortgaged Property, due and
becoming due during the pendency of such foreclosure suit, such rents, issues
and profits being hereby expressly assigned and pledged as additional security
for the payment of the Obligations secured by this Mortgage without regard to
the value of the Mortgaged Property or the solvency of any person or persons
liable
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<PAGE> 14
for the payment of such Obligations, and regardless of whether Lender has an
adequate remedy at law. Borrower for itself and any subsequent owner of the
Mortgaged Property hereby waives any and all defenses to the application for a
receiver, as above provided, and hereby specifically consents to such
appointment without notice, except any notice required by law, but nothing
herein contained is to be construed to deprive Lender of any other right,
remedy or privilege Lender may have under the law to have a receiver appointed.
18. FEES AND EXPENSES IN FORECLOSURE. In case of foreclosure of
this Mortgage in any court of law or equity whether or not any order or decree
shall have been entered therein, and to the extent permitted by law, a
reasonable sum shall be allowed for stenographers' fees and for all moneys
expended for documentary evidence and the cost of a complete abstract of title
and title report for the purpose of such foreclosure, such sums to be secured
by the lien of this Mortgage, and, to the extent permitted by law, there shall
be included in any judgment or decree foreclosing this Mortgage and paid out of
said rents, issues and profits from the Mortgaged Property and the proceeds of
any sale made in pursuance of any such judgment or decree: [1] all costs and
expenses of such suit or suits, appraisals, advertising, sale and conveyance,
including stenographers' fees, outlays for documentary evidence and the cost of
said abstract, examination of title and title report; [2] reasonable fees of
legal counsel to Lender, to the fullest extent permitted by law; [3] all moneys
advanced by Lender, if any, for any purposes authorized in this Mortgage, with
interest as herein provided; [4] all the accrued interest remaining unpaid on
the Obligations hereby secured; and [5] all the principal of the Obligations
remaining unpaid. The surplus of the proceeds, if any, shall be paid to
Borrower promptly after request by Borrower, or as the court may direct.
19. SALE IN ONE OR MORE PARCELS. In case of any foreclosure sale
of the Mortgaged Property, the same may be sold in one or more parcels.
20. NO WAIVER BY LENDER. The failure of Lender to exercise the
option for acceleration of maturity and/or foreclosure following any default by
Borrower in any of the Obligations or to exercise any other option granted to
Lender hereunder or under the other Loan Documents in any one or more
instances, or the acceptance by Lender of partial payments of any of the
Obligations, shall not constitute a waiver of any such default, or extend or
affect any applicable grace period, but such option shall remain continuously
in force. Acceleration of maturity of any of the Obligations, once claimed by
Lender, may, at the option of Lender, be rescinded by Lender by a written
acknowledgement to that effect, but the tender and acceptance of partial
payments alone shall not in any way affect or rescind such acceleration of
maturity, or extend or affect any grace period.
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<PAGE> 15
21. LENDER TO SUCCEED TO PRIORITY OF PRIOR LIENS. Should the
proceeds of any loan made by Lender to Borrower as part of any of the
Obligations, or any amount paid out or advanced by Lender, be used directly or
indirectly to pay off, discharge, or satisfy, in whole or in part, any prior
lien or encumbrance upon the Mortgaged Property or any part thereof, then
Lender shall be subrogated to such other lien or encumbrance with respect to
the Mortgaged Property, and shall have the benefit of the priority of all of
same.
22. RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies
provided under this Mortgage and the other Loan Documents, at law, or in equity
are cumulative and Lender as holder of every Obligation secured hereby may
recover judgment thereon, issue execution therefor, and resort to every other
right or remedy available at law or in equity without first exhausting and
without affecting or impairing the security or any right or remedy afforded by
this Mortgage and no enumeration of special rights or powers by any provision
of this Mortgage shall be construed to limit any grant of general rights or
powers, or to take away or limit any rights granted to or vested in Lender by
virtue of the laws of the state in which the Land is located, or any other
jurisdiction, the laws of which are applicable to this Mortgage. Lender may
exercise any right, power or remedy to which Lender is entitled under this
Mortgage or the other Loan Documents at Lender's option and in Lender's sole
and absolute discretion without any obligation to do so, and if, under this
Mortgage or the other Loan Documents, two or more alternative courses of action
and/or remedies are available to Lender, Lender may elect any such action
and/or remedy or combination of actions and/or remedies as Lender shall
determine in the sole and absolute discretion of Lender.
23. LENDER'S RIGHT TO DEAL WITH BORROWER AND OTHER PARTIES.
Lender, without notice, and without regard to the consideration, if any, paid
therefor, and notwithstanding the existence at that time of any inferior liens
thereon, may release any part of the Mortgaged Property, or any other security
for all or part of the Obligations, and may release or grant indulgences,
settlements or compromises to any person liable or pledging security for all or
part of the Obligations, without in any way affecting the priority of the lien
of this Mortgage to the full extent of the Obligations remaining unpaid with
regard to any part of the security not expressly released. Lender may agree
from time to time with Borrower or any other party obligated on or pledging
security for any part of the Obligations or having any interest in the
Mortgaged Property to extend the time for payment of any part of the
Obligations or grant any other indulgences, releases, settlements or
compromises and such agreements shall not in any way release or impair the lien
of this Mortgage. In the event Lender [a] releases any part of the Mortgaged
Property, or any person liable for or having pledged security for any of the
Obligations, [b] grants an extension of time for any payments of the
Obligations or grants any
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<PAGE> 16
other indulgences, releases, settlements or compromises; [c] takes other or
additional security for the payment of any of the Obligations; [d] waives or
fails to exercise any right granted in this Mortgage or any of the other Loan
Documents, said acts or omissions by Lender shall not release Borrower,
subsequent owners of the Mortgaged Property or any part thereof, or makers or
sureties or pledgors of collateral for or any of the Obligations, under any
covenant of this Mortgage or of the other Loan Documents, nor preclude Lender
from exercising any right, power or privilege herein or in the other Loan
Documents granted or intended to be granted in the event of any other default
then existing or any subsequent default.
24. USURY; ILLEGALITY; SEVERABILITY. Nothing contained in this
Mortgage or any of the other Loan Documents or pursuant to any transaction
related thereto shall be construed or shall operate either presently or
prospectively, [a] to require Borrower to pay interest at a rate greater than
is lawful, but shall require payment of interest and other sums only to the
extent of such lawful rate, or [b] to require Borrower to make any payment or
do any act contrary to law, but if any clause or provision contained in this
Mortgage or in any other Loan Document shall otherwise so operate to invalidate
this Mortgage or any other Loan Document, in whole or in part, then such clause
or provision, as the case may be, only shall be held for naught as though not
contained in this Mortgage or in the applicable Loan Document and the remainder
of this Mortgage and other Loan Documents, as applicable, shall remain
operative and in full force and effect.
25. WARRANTY AGAINST VIOLATIONS OF COVENANTS. Borrower represents
and warrants that on the date hereof neither this Mortgage, nor the Mortgaged
Property, nor the contemplated use of the Improvements and Equipment,
constitute a breach, or a violation of, any covenants, conditions, easements or
restrictions, whether of record or not, or any zoning laws or land use
regulations, or, to the knowledge of Borrower, other laws or regulations
affecting the Mortgaged Property or binding upon Borrower, and Borrower
covenants and agrees that Borrower will take all actions necessary to prevent
any such breach or violation from hereafter occurring.
26. INSOLVENCY. In the event Borrower or any obligor, guarantor
or pledgor of collateral for any of the Obligations shall make a general
assignment for the benefit of creditors, or shall file a voluntary petition in
bankruptcy, or shall be adjudicated a bankrupt or insolvent, or shall file any
petition or answer seeking, consenting to, or acquiescing in, any
reorganization, arrangement, adjustment, composition, liquidation, dissolution
or similar relief, under any present or future statute, law or regulation, or
shall file an answer admitting or shall fail to deny the material allegations
of a petition against it for any such relief, or if any such proceeding against
Borrower or such obligor, guarantor or pledging seeking any such relief shall
not have been
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<PAGE> 17
dismissed within sixty (60) days after the commencement thereof; or if a
trustee, receiver or liquidator of Borrower or any obligor, guarantor or
pledgor of collateral for the Obligations or any substantial part of their
respective properties or assets shall be appointed with the consent or
acquiescence of Borrower or such obligor, guarantor or pledgor or if any such
appointment, if not so consented to or acquiesced in, shall remain unvacated or
unstayed for an aggregate of sixty (60) days, then the whole of the principal
sum and all of the other Obligations secured hereby automatically shall be
deemed to have become immediately due and payable and the same, with interest
thereon at the Applicable Rate, and with all other costs and charges payable
under the Loan Documents, including reasonable attorney's fees, shall thereupon
be collectible by suit at law or in the exercise of any remedy available under
this Mortgage or in equity in the same manner as if the whole of the
Obligations had been made payable at the time when any of the foregoing
contingencies shall have occurred.
27. VOLUNTARY ZONING CHANGES. Borrower covenants not to change
the use that Borrower intended for the Mortgaged Property at the time Borrower
executed this Mortgage, or initiate, join in, consent to, or permit any change
in any zoning ordinance, private restrictive covenant or other public or
private restriction changing, limiting or restricting the uses which may be
made of the Mortgaged Property, without the prior written consent of Lender
obtained in each instance.
28. RESTRICTIONS ON TRANSFER. Except as expressly permitted by,
and subject to the provisions of the Loan Documents, Borrower shall not enter
into any lease of all or any part of the Mortgaged Property, or otherwise sell,
transfer or convey, or enter into any agreement to sell, transfer or convey,
all or any part of the Mortgaged Property, or any legal or beneficial interest
therein, by operation of law (including but not limited to, as applicable, a
merger, consolidation or transfer of capital stock, or other ownership interest
in Borrower) or otherwise, without Lender's prior written consent, and upon any
breach of this Section Lender may immediately, at Lender's option, and without
notice, declare all of the Obligations to be immediately due and payable and
exercise all rights and remedies available to Lender upon a default under this
Mortgage.
29. NOTICES. Except for any notice required under applicable law
to be given in another manner, any notice given under this Mortgage shall be
given in the manner stipulated by the Series 1 Reimbursement Agreement
described in SCHEDULE 1 to this Mortgage.
30. SECURITY AGREEMENT; FINANCING STATEMENTS. Borrower promptly
upon request by Lender shall execute, acknowledge and deliver to Lender any
financing statement, affidavit, continuation statement or certificate or other
document that Lender reasonably may request in order to perfect, preserve,
maintain or continue the
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<PAGE> 18
security interest in the Mortgaged Property under this Mortgage and the
priority of such security interest, and upon any failure by Borrower to do so
Lender automatically shall be vested with power of attorney for Borrower,
coupled with an interest, for such purposes. Borrower further agrees to pay to
Lender on demand all costs and expenses incurred by Lender in connection with
the preparation, execution, recording, filing and refiling of any such
documents. In addition to being a mortgage this Mortgage is intended to be a
security agreement and a fixture filing pursuant to the UCC for the items
specified above as part of the Mortgaged Property (including goods constituting
part of the Collateral that are or are to become fixtures) which, under
applicable law, may be subject to a security interest pursuant to the UCC, and
Borrower hereby grants to Lender a security interest in said items as security
for the Obligations. Without limitation of the foregoing, Borrower agrees that
Lender may file this Mortgage in any personal property or real estate records
or other appropriate index as a financing statement for all or any of the items
specified above as part of the Mortgaged Property. A carbon, photographic or
other reproduction of this Mortgage or of a financing statement shall be
sufficient as a financing statement.
31. SUCCESSORS AND ASSIGNS; MODIFICATIONS IN WRITING. Subject to
the Section of this Mortgage entitled "Restrictions on Transfer," this Mortgage
shall be binding upon Borrower and its permitted successors and assigns, and
all persons claiming under or through Borrower or any such successor or assign,
and shall inure to the benefit of and be enforceable by Lender and its
successors and assigns. This Mortgage may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.
32. AFTER ACQUIRED PROPERTY. All property of every kind and
description acquired by Borrower after the date hereof which by the terms
hereof is required or intended to be subjected to the lien of this Mortgage
shall, immediately upon the acquisition thereof by Borrower, and without any
further mortgage, conveyance, assignment or transfer, become subject to the
lien and security interest of this Mortgage. Nevertheless, Borrower, at any
time, upon the request of Lender, will execute, acknowledge and deliver all
such additional papers and instruments and all such further assurances of title
and will do or cause to be done all further acts and things as may, subject to
the conditions contained in this Mortgage, be proper or reasonably necessary
for carrying out the intent of this Mortgage.
33. GOVERNING LAW. This Mortgage was negotiated in the
Commonwealth of Kentucky, the Reimbursement Agreements were delivered by
Borrower and accepted by Lender in the Commonwealth of Kentucky, and the
Letters of Credit were issued in the Commonwealth of Kentucky, which state
Borrower and Lender agree has a substan-
18
<PAGE> 19
tial relationship to Borrower and Lender and to the underlying transaction in
connection with which this Mortgage was granted. This Mortgage, including
matters of construction, validity and performance, and the obligations arising
hereunder, shall be construed in accordance with and otherwise governed in all
respects by the laws of the Commonwealth of Kentucky applicable to contracts
made and performed in such state and any applicable law of the United States of
America except to the extent that the real and personal property laws of the
State of Florida, including laws relating to the perfection, priority and
enforcement of liens on real and personal property located in Florida,
necessarily shall apply to enforcement of the security covered by this
Mortgage. Borrower hereby irrevocably agrees that any legal action, suit, or
proceeding against it with respect to its obligations, liabilities or any other
matter under or arising out of or in connection with this Mortgage or the other
Loan Documents or for recognition or enforcement of any judgment rendered in
any such action, suit or proceeding may be brought in the United States Courts
for the Western District of Kentucky, or in the courts of the Commonwealth of
Kentucky, as Lender may elect, and by execution and delivery of this Mortgage,
Borrower hereby irrevocably accepts and submits to the non-exclusive
jurisdiction of each of the aforesaid courts IN PERSONA, generally and
unconditionally with respect to any such action, suit, or proceeding for
Borrower and in respect of Borrower's property. Borrower further agrees that
final judgment against Borrower in any action, suit or proceeding referred to
herein shall be conclusive and may be enforced in any other jurisdiction, by
suit on the judgment, a certified or exemplified copy of which shall be
conclusive evidence of the fact and of the amount of the indebtedness of
Borrower.
34. WAIVER OF EXEMPTION. To the extent permitted by law with
respect to the Obligations secured hereby including any renewals or extensions
thereof, Borrower waives and renounces any and all homestead and exemption
rights, as well as the benefit of all valuation and appraisement privileges,
and stay, redemption and moratoriums under and by virtue of the constitution
and laws of the state in which the Land is located, and of any other state or
the United States, now existing or hereafter enacted.
35. JOINT AND SEVERAL LIABILITY; COVENANTS RUN WITH LAND. All of
the obligations of Borrower hereunder shall be joint and several. All of the
covenants of this Mortgage shall run with the land.
36. PROVISIONS SEVERABLE. In the event that any provision of this
Mortgage or any of the other Loan Documents conflicts with applicable law, such
conflict shall not affect other provisions of this Mortgage or the other Loan
Documents that can be given effect without the conflicting provisions, and to
this end the provisions of this Mortgage and the other Loan Documents are
declared to be severable.
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<PAGE> 20
37. INTERPRETATION. Whenever used, the singular number shall
include the plural, the plural the singular and the use of any gender shall
include all genders. The captions to the various sections of this Mortgage are
inserted for convenience only and shall be ignored in interpreting its
provisions.
38. WAIVER OF MARSHALLING. Notwithstanding the existence of any
other security interests in the Mortgaged Property held by Lender or by any
other person or entity, Lender shall have the right to determine the order in
which any or all of the Mortgaged Property shall be subjected to the remedies
provided herein, and the order in which any or all portions of the Obligations
secured hereby are satisfied from the proceeds realized upon the exercise of
the remedies provided herein. Borrower, any guarantor of or pledgor of
collateral for any of the Obligations, and any other person or entity now or
hereafter acquiring a security interest in the Mortgaged Property and having
actual or constructive notice of this Mortgage, each waives any and all right
to require the marshalling of assets in connection with the exercise of any of
the remedies permitted by applicable law or in equity or provided in this
Mortgage. Without limitation of the foregoing, if all or any part of the
Obligations are secured not only by this Mortgage but also by one or more other
mortgages, deeds of trust, deeds to secure debt or other encumbrances of
property located in this or other jurisdictions or states (collectively, the
"ADDITIONAL SECURITY INSTRUMENTS"), Lender, following any default (including
after any required notice and applicable period of cure) under this Mortgage or
any of the Additional Security Instruments, may proceed, concurrently or at any
time thereafter and from time to time, to exercise the rights and remedies of
Lender under this Mortgage and/or one or more of the Additional Security
Instruments or other Loan Documents by proceedings that are appropriate in the
jurisdiction or state wherein the property encumbered thereby is located, and
no such action (or failure to act) by Lender shall impair any rights or
remedies of Lender under this Mortgage, any of the Additional Security
Instruments, at law or in equity.
39. WAIVER OF TRIAL BY JURY. THE LENDER AND BORROWER ACKNOWLEDGE
THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE TIME AND
EXPENSE REQUIRED FOR A BENCH TRIAL AND HEREBY KNOWINGLY AND VOLUNTARILY WAIVE,
TO THE FULLEST EXTENT PERMITTED BY LAW, AND AFTER HAVING CONSULTED OR HAVING
HAD AMPLE OPPORTUNITY TO CONSULT THEIR RESPECTIVE LEGAL COUNSEL CONCERNING THE
CONSEQUENCES OF SUCH WAIVER, TRIAL BY JURY IN ANY ACTION OR OTHER PROCEEDING
BROUGHT TO ENFORCE OR DEFEND AGAINST COLLECTION OF OR OTHERWISE IN CONNECTION
WITH THIS MORTGAGE OR THE OTHER LOAN DOCUMENTS.
<THE BALANCE OF THIS PAGE INTENTIONALLY HAS BEEN LEFT BLANK>
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<PAGE> 21
IN TESTIMONY WHEREOF, witness the signature of Borrower to
this Mortgage as of the date set forth above.
BORROWER:
--------
Signed, acknowledged and MARSHALL PROPERTIES, INC., an Ohio
delivered in the presence corporation
of:
__________________________ By: ___________________________
Signature
__________________________ Printed Name: _________________
Printed Name
Title: ________________________
__________________________
Signature
__________________________
Printed Name
STATE OF _______________ )
: SS
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this ____
day of February, 1996, by ______________________________ (name), as
______________________________ (title) of Marhsall Properties, Inc., an Ohio
corporation, on behalf of the corporation.
He/She:
(check one) ______ is personally known to me, or has
______ produced ____________________________
as identification.
__________________________________________
__________________________________________
Name: (Please Print)
Notary Public, State of __________________
[AFFIX NOTARY SEAL]
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<PAGE> 22
SCHEDULE 1
----------
TO
MORTGAGE AND SECURITY AGREEMENT ("AGREEMENT)
BETWEEN MARSHALL PROPERTIES, INC.
AND BANK ONE, KENTUCKY, NA
(DESCRIPTION OF OBLIGATIONS)
The "OBLIGATIONS" referred to in the foregoing Agreement are
as follows:
A. All indebtedness, liabilities and obligations arising
under or evidenced by, and the performance of all covenants, conditions and
agreements undertaken by each of the Borrowers hereinafter described in
connection with, each of the following documents, including any renewals,
extensions and amendments of any of them or substitutions or replacements for
any of them (referred to hereinafter as the "REIMBURSEMENT AGREEMENT"):
(1) Reimbursement Agreement dated as of February
12, 1996, to which Arbor Health Care Company, a Delaware corporation ("ARBOR"),
Marshall Properties, Inc., an Ohio corporation ("MARSHALL") (Arbor and Marshall
are referred to each individually as a "BORROWER" and collectively as the
"BORROWERS"), and Bank One, Kentucky, NA, a national banking association
("LENDER"), are parties, referable to Letter of Credit No. S-6122 in the face
amount of $27,506,250 issued by Lender for the joint and several account of
Borrowers (the "LETTER OF CREDIT") as security for Promissory Note (Series
1996A-1) and Promissory Note (Series 1996A-2), both dated as of February 15,
1996, made jointly and severally by Borrowers to the order of Capital One
Funding Corporation ("CAPITAL") in face principal amount of $13,500,000 and
maturing on February 1, 2003.
B. The payment, performance and discharge of any and all
obligations and liabilities of each Borrower, whether direct or indirect,
absolute or contingent, due or not due, now existing or hereafter arising, in
conjunction with issuance of the Letter of Credit (collectively, together with
any extensions, renewals, amendments, substitutions or replacements thereof and
therefor, the "LETTER OF CREDIT"), including but not limited to the obligations
of each Borrower contained in any and all applications for the Letter of Credit
(collectively, the "APPLICATIONS") executed and delivered as a condition to
issuance of the Letter of Credit, and to pay on demand all drafts drawn under
the Letter of Credit, and to reimburse Lender on demand of Lender for any
amounts advanced by Lender for the account of either Borrower, at the option
and in the exercise of the sole and absolute discretion of Lender, to satisfy
such drafts, and to indemnify Lender from all loss or liability incurred by
Lender in connection with the issuance of the Letter of Credit; and the payment
of all fees and all other sums due under, and the performance of all covenants,
conditions and other obligations due under or in connection with, the
Reimbursement
<PAGE> 23
Agreement, the Applications, and any security agreements, mortgages, deeds of
trust, guaranties, pledge agreements, assignments, subordination agreements,
and any other documents or instruments heretofore, contemporaneously herewith
or hereafter entered into by any Borrower or any other person or entity, with
or for the benefit of Lender to evidence, secure or guarantee payment of the
Letter of Credit, or otherwise entered into in connection with the Letter of
Credit (such security agreements, mortgages, deeds of trust, guaranties, pledge
agreements, assignments, subordination agreements, and other documents and
instruments evidencing, securing, guaranteeing or otherwise entered into in
connection with the Letter of Credit are referred to collectively as the "LOAN
DOCUMENTS").
C. All expenses, costs and charges, of any nature
whatsoever, including, without limitation, taxes, assessments, insurance
premiums, repairs, rent, storage costs, expenses of collection and sale, and
reasonable attorneys' fees, incurred by or for the account of Lender in
preserving collateral for the Obligations and/or enforcing or seeking to
enforce any of the rights and remedies of Lender under any of the Loan
Documents.
<PAGE> 24
EXHIBIT A
---------
TO MORTGAGE
The Northeast 1/4 of the Northeast 1/4 of the Southwest 1/4 of Section 22,
Township 29 South, Range 20 East, Hillsborough County, Florida, LESS that
portion in use as road right-of-way for Victoria Street off the North side AND
LESS that part in use as road right-of-way for Kings Avenue off the East side
thereof.
<PAGE> 25
This Mortgage and Security Agreement
is one of five Mortgage and Security
Agreements all securing a single
Promissory Note, which are being recorded
simultaneously in Hillsborough County,
Pinellas County, Seminole County and
Brevard County, Florida
The documentary stamps and intangible
taxes on all of the Mortgages and Security
Agreements, and on the Promissory Note
have been paid in Hillsborough County
in connection with recording the
Mortgage and Security Agreements in that
County.
This Instrument Prepared By:
______________________________
Arthur Adams Rouse
WYATT, TARRANT & COMBS
2700 Citizens Plaza
Louisville, Kentucky 40202
(502) 589-5235
MORTGAGE AND SECURITY AGREEMENT
-------------------------------
HILLSBOROUGH COUNTY, FLORIDA
THIS MORTGAGE (the "Mortgage") is executed actually on the
dates indicated in the notarial certificate affixed to it, but is made and
delivered effective as of February 12, 1996, by and between [i] ARBOR HEALTH
CARE COMPANY, a Delaware corporation (referred to herein as the "BORROWER"),
having a mailing address of 1100 Shawnee Road, Box 840, Lima, Ohio and [ii]
BANK ONE, KENTUCKY, NA, a national banking association, having a mailing
address of 416 West Jefferson Street, Louisville, Jefferson County, Kentucky
40232 (referred to herein as the "LENDER").
W I T N E S S E T H:
Borrower is obligated to Lender under and in connection with
the Reimbursement Agreement and the Letter of Credit and the Loan Documents
("LOAN DOCUMENTS") and the other "OBLIGATIONS" more particularly described in
SCHEDULE 1 hereto (all of the foregoing are referred to collectively
hereinafter as the "OBLIGATIONS");
<PAGE> 26
NOW THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower does hereby MORTGAGE,
WARRANT, GRANT, CONVEY AND ASSIGN to Lender, to secure to Lender the payment
and performance when due of the Obligations strictly in accordance with the
terms thereof, all right, title and interest of Borrower in and to the real
estate described in EXHIBIT A attached hereto and incorporated herein by this
reference (the "LAND");
TOGETHER with all right, title and interest of Borrower in all
buildings, foundations, structures and improvements now or hereafter located on
or in the Land, and all materials now or hereafter intended for construction,
reconstruction, alteration or repair thereof, all of which shall be deemed a
part thereof immediately upon being delivered to the Land (collectively, the
"IMPROVEMENTS");
TOGETHER with all right, title and interest of Borrower now
and hereafter in and to the streets and roads, opened or proposed, abutting the
Land, all strips and gores within or adjoining the Land, the air space and
right to use the air space above the Land, all rights of ingress and egress to
and from the Land, all easements, rights of way, reversions, remainders,
hereditaments, and appurtenances now or hereafter affecting the Land or the
Improvements, all royalties and rights and privileges appertaining to the use
and enjoyment of the Land or the Improvements, including all air, lateral
support, alley, drainage, water, riparian, oil, gas and mineral rights, options
to purchase or lease, and all other interests, estates or claims, in law or in
equity, which Borrower now has or hereafter may acquire in or with respect to
the Land or the Improvements (collectively, the "APPURTENANCES"; the Land, the
Improvements and the Appurtenances are hereinafter sometimes collectively
referred to as the "PREMISES");
TOGETHER with all right, title and interest of Borrower in all
fixtures, equipment (including but not limited to office equipment, motors,
elevators, radiators, gas and electric ranges, refrigerators, freezers, and
plumbing, heating, lighting, ventilating, refrigerating, incinerating, air
conditioning, central energy, sprinklering and fire suppression, waste disposal
and theft protection equipment), fittings, furniture, furnishings (including,
but not limited to awnings, shades, screens, blinds and carpets), appliances,
apparatus, and machinery now existing or hereafter installed in the Premises,
and all building materials, supplies and equipment now existing or hereafter
delivered to the Premises and intended to be installed therein, and all
renewals or replacements of any of the foregoing property or articles in
substitution thereof (collectively, the "EQUIPMENT");
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<PAGE> 27
TOGETHER with all right, title and interest of Borrower
whether now existing or hereafter acquired in, to and under all accounts,
documents, instruments, chattel paper, and general intangibles, as the
foregoing terms are defined in the Uniform Commercial Code in effect in the
state in which the Land is located (the "UCC"), that are derived from the
Premises or Equipment, including, to the extent assignable, all contract rights
(including, without limitation, under contracts with all contractors,
architects, engineers or subcontractors relating to the construction or
renovation of the Improvements or Equipment, including payment, performance and
materialmen's bonds); franchises; books and records; plans; specifications;
permits; health facility, pharmacy and other licenses; Certificates of Need;
governmental registrations for diagnostic, laboratory, or any other activities;
Medicare and Medicaid provider agreements; accreditation rights; rights to
refunds under any of the foregoing agreements; and other approvals, actions and
causes of action; which in the case of any of the foregoing now or hereafter
relate to, are derived from or used in connection with the Premises or
Equipment or the use, operation, maintenance, occupancy or enjoyment thereof or
the conduct of any business or activities thereon (collectively, the
"INTANGIBLES");
TOGETHER with all right, title and interest of Borrower,
whether now existing or hereafter acquired and wherever located, in, to and
under all leases, lettings, tenancies and licenses of the Premises or Equipment
or any part thereof now or hereafter entered into and all amendments,
extensions, renewals and guaranties thereof, all security therefor, and all
moneys payable thereunder (each a "Lease" and collectively, the "LEASES");
TOGETHER with all rents, income, issues, profits, security
deposits and other benefits to which Borrower may now or hereafter be entitled
from the Premises, the Equipment or the Intangibles or under or in connection
with the Leases, including, without limitation, all income received from
tenants, lessees, licensees and concessionaires and other persons occupying
space at the Premises and/or rendering services to tenants thereat
(collectively, the "PROPERTY INCOME"); and
TOGETHER with all proceeds, judgments, claims, compensation,
awards of damages and settlements with respect to or hereafter made as a result
of or in lieu of any condemnation or taking of the Premises and/or Equipment by
eminent domain (including severance and consequential damages and change in
grade of streets) or any casualty loss of or damage to any of the Premises, the
Equipment, the Intangibles, the Leases or the Property Income, all refunds with
respect to the payment of property taxes and assessments, and all other
proceeds of the conversion, voluntary or involuntary, of the Premises, the
Equipment, the Intangibles, the Leases or the Property Income, or any part
thereof, into cash or liquidated claims (collectively, the "PROCEEDS"; the
Equipment, the
3
<PAGE> 28
Intangibles, the Leases, the Property Income and the Proceeds are hereinafter
collectively referred to as the "COLLATERAL"; the Premises and the Collateral
being hereinafter sometimes collectively referred to as the "MORTGAGED
PROPERTY").
TO HAVE AND TO HOLD the Mortgaged Property with all the privileges and
appurtenances to the same belonging, and with the possession and right of
possession thereof, unto Lender, its successors and assigns forever, upon the
terms and conditions set forth herein.
AND BORROWER COVENANTS AND WARRANTS lawful seizure of an
indefeasible estate in fee simple of the Mortgaged Property; that the same are
free from all encumbrances and liens whatsoever, except for [i] easements and
restrictions of record on the date hereof, none of which materially interfere
with the use of the Mortgaged Property for the operation thereof intended by
Borrower, [ii] the lien of ad valorem real estate taxes and any assessments for
which payment is not delinquent in either case (the encumbrances and liens
described in the foregoing subsections [i] - [ii] are referred to collectively
as the "PERMITTED EXCEPTIONS"); that Borrower has the legal right, power and
authority to encumber the Mortgaged Property pursuant to this Mortgage, the
execution and delivery and the performance of which will not, either
immediately or with notice and/or passage of time, violate any agreement to
which Borrower is a party or by which Borrower is bound; and that Borrower and
the successors in interest of Borrower will forever WARRANT AND DEFEND the
title to the Mortgaged Property and the lien and priority of this Mortgage
against the claims and demands of all persons whomsoever. All such covenants
and warranties shall run with the land.
AND BORROWER, IN ORDER MORE FULLY TO PROTECT THE SECURITY OF
THIS MORTGAGE, COVENANTS AND AGREES AS FOLLOWS:
1. OBLIGATIONS SECURED. This Mortgage is granted to secure the
payment and performance of the Obligations strictly in accordance with the
terms thereof in each case.
2. PAYMENT AND PERFORMANCE OF OBLIGATIONS. Principal of,
interest on, and all other indebtedness and sums constituted by the Obligations
shall be paid at the times and in the manner provided herein and in the other
Loan Documents.
3. PAYMENT OF TAXES AND OTHER IMPOSITIONS. Borrower shall keep
the Mortgaged Property free from statutory liens of every kind; shall pay,
before delinquency and before any penalty for nonpayment attaches thereto, all
taxes, assessments and governmental or municipal or public levies, fees,
charges, fines or impositions of any nature whatsoever (collectively, the
"IMPOSITIONS") which are or may be levied or imposed against or in connection
with the Mortgaged Property or any part thereof, except when payment for such
items has theretofore been made under the
4
<PAGE> 29
Section of this Mortgage entitled "Monthly Installments of Taxes and
Insurance"; shall deliver to Lender, on or before ten (10) days after request
made by Lender therefor, receipted bills evidencing payment therefor.
Notwithstanding the foregoing, so long as no default, and no circumstance
which, with any required notice and/or opportunity to cure would constitute a
default under the Obligations is subsisting, Borrower shall have the right to
contest the validity of any Imposition by appropriate legal proceedings
provided [i] Borrower notifies Lender of Borrower's intention to contest the
same prior to commencing such contest, [ii] such contest shall preclude
enforcement of collection out of or pursuant to the sale of any of the
Mortgaged Property in satisfaction of any Imposition, [iii] Borrower shall
furnish Lender with, at the option of Lender, a bond (pursuant to Florida
statutes) or title insurance or other security for the Imposition satisfactory
to Lender in Lender's sole discretion, [iv] such contest shall not otherwise
create a failure on the part of Borrower to comply with any other provision or
condition of the Loan Documents, and [v] upon a final and nonappealable
determination of the contest that is adverse to the Borrower, Borrower shall
pay the amount of the Imposition.
4. MONTHLY INSTALLMENTS OF TAXES AND INSURANCE. If requested by
Lender at any time [i] after default (including after any applicable
requirement for notice and an opportunity to cure) in any of the Obligations or
[ii] after payment of taxes or insurance in respect of the Mortgaged Property
have become delinquent (whether or not thereafter cured), Borrower shall pay to
Lender, in addition to the amounts of principal and interest and any other sums
due under the terms of the applicable instruments evidencing the Obligations,
monthly on or before the first day of each calendar month, until the
Obligations are paid in full, the following:
A sum equal to all taxes, assessments and all other impositions next
due on the Mortgaged Property, all as estimated in good faith by
Lender, plus the premiums that will next become due and payable on
policies of fire and other insurance covering the Mortgaged Property
and required under the terms of this Mortgage, less all sums already
paid therefor in each case, divided by the number of complete calendar
months to elapse prior to the date when such taxes, assessments,
impositions and premiums shall be due and payable.
All such payments described in this Section shall be held by Lender without
accruing and without any obligation arising for the payment of interest thereon
and Borrower waives any right, to the extent permitted by law, to demand or
receive any interest, income or profits on any of the payments so deposited
with Lender. Lender is hereby granted a security interest in all such amounts
as collateral for the Obligations and such sums shall be subject to setoff by
Lender following any default by Borrower (including after any
5
<PAGE> 30
applicable requirement for notice and/or opportunity to cure) under this
Mortgage or the other Obligations.
5. UTILITIES. Borrower shall pay or cause to be paid all charges
in respect of all water, sewer, electricity, natural gas, telecommunications
and all other utilities consumed on the Mortgaged Property prior to the date
when the same would become delinquent, and shall provide Lender promptly after
request is made by Lender therefor with copies of paid receipts in respect of
all utility charges assessed against the Mortgaged Property.
6. LIABILITY INSURANCE. Borrower shall carry and maintain such
liability and indemnity insurance as in good faith may be required from time to
time by Lender in forms, amounts and with companies reasonably satisfactory to
Lender. Certificates of such insurance, premiums prepaid, naming Lender as an
additional insured, and copies of such policies, shall be deposited, if
requested by Lender, by Borrower with Lender and shall contain provision for
not less than ten (10) days' notice to Lender prior to any cancellation or
modification thereof.
7. HAZARD INSURANCE. Borrower shall keep or cause to be kept all
Improvements and Equipment, whether now existing or hereafter erected on the
Mortgaged Property, insured as may be required from time to time by Lender
against loss or damage by fire, hazards included within the term "broad form
coverage", rent loss, flood (if required by law), and such other hazards,
casualties, liabilities and contingencies in such amounts (not exceeding the
replacement value thereof except in all events sufficient to keep Borrower from
becoming a co-insurer) and for such periods as may be required by Lender
consistent with reasonable and customary commercial practice with regard to
similar properties or as otherwise required in good faith by Lender, and shall
pay promptly, when due, any premiums on such insurance policies. All insurance
policies shall be carried with companies having a Best rating of A- or better
and approved by Lender and such policies shall name Lender as a lender loss
payee pursuant to a "standard mortgage" or "New York mortgagee" clause.
Evidence that such policies are in force shall be delivered to Lender on or
before ten (10) days after request by Lender therefor. All such policies shall
contain provision for at least ten (10) days notice to Lender prior to any
cancellation or modification thereof. Borrower shall not carry separate
insurance, concurrent in kind or form and contributing, in the event of loss,
with any insurance required hereunder. In the event of a change in the use and
nature of occupancy of the Mortgaged Property, immediate notice thereof by mail
shall be delivered to all insurers and Lender. In the event of loss, Borrower
will give immediate notice by mail to Lender. Borrower hereby authorizes
Lender, at its option, to collect, adjust and compromise any losses under any
of the insurance policies aforesaid (provided Lender in so adjusting and
compromising any such losses acts in good faith and not in a manner which,
under the circum-
6
<PAGE> 31
stances, diminishes the recovery thereunder by an unreasonable amount), and
after deducting all costs of collection to apply the proceeds of such insurance
as follows: [1] provided the gross proceeds from the insurance do not exceed
$100,000 provided no default under any of the terms and conditions of this
Mortgage, or any of the other Obligations secured hereby shall then or
thereafter be subsisting, and provided the proceeds of such insurance (together
with any moneys which may be deposited by Borrower with Lender for the purpose
of repair or restoration of the Mortgaged Property promptly upon Borrower's
becoming aware of any deficiency between the amount of such insurance proceeds
and the amount necessary to restore the Mortgaged Property as hereinafter
provided in this sentence) are sufficient to restore the Mortgaged Property to
the same or better condition as existed immediately prior to the loss, Lender
shall disburse the proceeds of the insurance for the sole purpose of repairing
and restoring the Mortgage Property, which repairs and restoration, if the cost
thereof is reasonably estimated by Lender to exceed $50,000 shall, at the
option of Lender, be under the supervision of an architect or engineer
reasonably acceptable to Lender, shall be made pursuant to plans and
specifications submitted to Lender prior to the commencement thereof, and which
shall be subject to Lender's approval and which proceeds shall be disbursed by
Lender from time to time only upon certification by the architect or engineer
that all of the work theretofore completed was done in compliance with the
plans and specifications approved by Lender, that the sum requested is justly
required to reimburse Borrower for payments by Borrower to persons performing
such work, that the amount of the remaining proceeds shall be sufficient to pay
for the repairs and restoration remaining to be completed pursuant to the
approved plans and specifications, and containing such other certifications,
and subject to such other conditions, including but not limited to waivers of
lien and title insurance coverage, as Lender in good faith deems necessary or
appropriate; or [2] if the gross proceeds from the insurance exceed $100,000,
or if a default under any of the terms and conditions of this Mortgage, or any
of the other Obligations secured hereby shall then or thereafter be subsisting,
or any of the other conditions described above to the proceeds being made
available for restoration are not met, the proceeds shall be applied as a
reduction upon or, at the sole option of Lender, as a fund to be retained by
Lender as part of the Collateral for, the Obligations secured hereby, in such
order as Lender may elect; with the balance of any proceeds remaining after the
disposition of the proceeds as aforesaid to be paid to Borrower. Upon
acquisition of the Mortgaged Property by Lender in the event of foreclosure of
this Mortgage, or other transfer of title to the Mortgaged Property in
extinguishment of all or part of the Obligations secured hereby, all right,
title and interest of Borrower in and to any insurance policies then in force
shall pass to the purchaser or grantee of said property.
7
<PAGE> 32
8. CONDEMNATION. Borrower shall give Lender immediate notice of
the actual or threatened commencement of any proceedings under eminent domain
affecting all or any part of the Mortgaged Property, including severance and
consequential damage and change in grade of streets, and will deliver to Lender
copies of any and all papers served in connection with any such proceedings.
Borrower further covenants and agrees to make, execute and deliver to Lender,
at any time or times upon request of Lender, free, clear and discharged of any
encumbrances of any kind whatsoever, any and all further assignments and/or
other instruments deemed necessary or appropriate by Lender for the purpose of
validly and sufficiently assigning all awards and other compensation,
heretofore and hereafter to be made to Borrower (including the assignment of
any award from the United States Government at any time after the allowance of
the claim therefor, the ascertainment of the amount thereof and the issuance of
the warranty for payment thereof) for any taking, either permanent or
temporary, under any such proceedings, all of which awards may, at the option
of Lender (subject only to the provisions of any leases of portions of the
Mortgaged Property permitted under the provisions of the Loan Documents and not
subordinate to the rights of Lender with respect to such awards), regardless of
whether a default in any of the Obligations is then subsisting, be applied as a
reduction of or, at the sole option of Lender, as a fund to be retained by
Lender as part of the Collateral for, the Obligations in such order as Lender
may elect.
9. ALTERATIONS; REPAIRS; WASTE, COMPLIANCE WITH LAWS; INSPECTION.
No additional Improvements shall be constructed on the Land, and no existing
Improvements shall be materially altered, or removed or demolished without the
prior written consent of Lender in each case, provided such consent is not
unreasonably withheld. No Equipment shall be severed or removed without the
prior written consent of Lender except that Borrower may replace in the
ordinary course of business any Equipment with other Equipment at least equal
in quality and condition to that replaced, provided such replacements are free
from any security interest in or encumbrance thereon or reservation of title
thereto except for the lien of this Mortgage and any other encumbrance which
may be permitted by the express terms of the Loan Documents. Borrower shall
permit, commit, or suffer no waste, impairment or deterioration of the
Mortgaged Property or any part thereof; shall keep and maintain the same in
good repair and condition, reasonable wear and tear excepted; shall effect such
repairs as Lender may reasonably require, and from time to time to make all
needful and proper replacements so that said Mortgaged Property will, at all
times, be in fit and proper for the respective purposes for which they were
erected or installed. Borrower shall comply with or require compliance with
all statutes, regulations, codes, orders, requirements or decrees relating to
the Mortgaged Property (including but not limited to the Americans with
Disabilities Act) by any federal, state or municipal authority and, without
limitation of the foregoing, shall observe and comply with all conditions and
requirements necessary
8
<PAGE> 33
to preserve and extend any and all rights, licenses, permits (including but not
limited to zoning variances, conditional uses and non-conforming uses),
privileges, franchises and concessions which are applicable to the Mortgaged
Property or which have been granted to or contracted for by Borrower in
connection with any existing or presently contemplated use of the Mortgaged
Property. Borrower shall permit Lender, during business hours of Borrower and
at all other reasonable times, to enter upon and inspect the Mortgaged
Property.
10. PROHIBITION OF OTHER LIENS. Borrower shall not voluntarily
create or otherwise permit to be created or filed against the Mortgaged
Property any mortgage lien (except any securing indebtedness to Lender), or any
statutory or other lien or liens, charge or encumbrance of any nature, whether
inferior or superior to the lien of this Mortgage, without the prior written
consent of Lender, except any which is one of the Permitted Exceptions.
Borrower will not permit any default (whether or not waived by the applicable
mortgagee) to occur under any other mortgage (or under the indebtedness secured
thereby, in each case) on all or any part of the Mortgaged Property. Without
limitation of the foregoing, Borrower shall keep and maintain the Mortgaged
Property free from the claims of all persons now or hereafter supplying labor
or materials thereto notwithstanding by whom such labor or materials may have
been contracted. Notwithstanding the preceding sentence, so long as no
default, and no circumstance which, with any required notice and/or opportunity
to cure would constitute a default under the Obligations is then or thereafter
subsisting, Borrower shall have the right to contest the validity of any such
lien or claim of any person supplying such labor or materials by appropriate
legal proceedings provided [i] Borrower notifies Lender of Borrower's intention
to contest the same prior to commencing such contest, [ii] such contest shall
preclude enforcement or collection out of or pursuant to the sale of any of the
Mortgaged Property in satisfaction of the lien or claim, [iii] Borrower shall
furnish Lender with, at the option of Lender, a bond or title insurance or
other security for such lien or claim satisfactory to Lender in Lender's sole
discretion, [iv] such contest shall not otherwise create a failure on the part
of Borrower to comply with any other provision or condition of the Loan
Documents, and [v] upon a final and nonappealable determination of the contest
that is adverse to the Borrower, Borrower shall pay the amount of the lien or
claim.
11. INDEMNIFICATION OF LENDER. Borrower shall, to the fullest
extent permitted by applicable law, save Lender harmless from all losses, costs
and expenses, including reasonable attorneys' fees, and the cost of a title
search, continuation of abstract and preparation of survey, incurred by reason
of any action, suit, proceeding, hearing, motion or application before any
court or administrative body in and to which Lender may be or become a party by
reason of this Mortgage, including but not limited to condemnation, bankruptcy,
probate and administration
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<PAGE> 34
proceedings, as well as any other of the foregoing wherein proof of claim is by
law required to be filed or in which it becomes necessary to defend or uphold
the terms of, or the lien created by, this Mortgage, and all money paid or
expended by Lender in that regard, together with interest thereon from the date
of such payment at the Index Rate of Lender plus 2% per annum (such interest
rate is referred to hereinafter as the "APPLICABLE RATE") shall be part of the
Obligations secured hereby and shall be due and payable by Borrower immediately
upon request made by Lender. Borrower additionally hereby indemnifies and
saves Lender harmless under this Mortgage from and against all liabilities,
obligations, claims, damages. penalties, causes of action, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
imposed upon, incurred by, or asserted against Lender on account of [i] any
failure of the Borrower to comply with any of the covenants and conditions on
the part of Borrower to be performed or representations of Borrower contained
in this Mortgage, or [ii] any loss or damage to the Mortgaged Property or any
injury to, or death of, any person that may be occasioned by any cause
whatsoever pertaining to the Mortgaged Property or the use thereof, provided
that such indemnity shall be effective only to the extent of any loss that may
be sustained by Lender in excess of any net proceeds of the insurance received
by Lender from any insurance carried with respect to such loss and provided
further that the benefits of this Section shall not inure to any person other
than Lender and its successors and assigns. Nothing contained in this Section
shall require the Borrower to indemnify Lender against the gross negligence or
wantonly malicious acts of Lender. The indemnities contained in this Section
shall survive payment of the Obligations, the release of this Mortgage,
Foreclosure of this Mortgage, or a deed in lieu of foreclosure, and shall
extend to the officers, directors, employees and duly authorized agents of
Lender.
12. BOOKS AND RECORDS. Borrower at all times shall keep and
maintain complete and accurate books of accounts and records adequate to
reflect correctly the results of the operation of the Mortgaged Property and
copies of all written contracts, leases, rental agreements, license agreements
and other instruments and agreements that affect the Mortgaged Property. Such
books, records, contracts, leases and other instruments and agreements shall be
subject to examination and inspection at any reasonable time by Lender, and
Borrower shall furnish Lender, at the cost of Borrower, with a copy of all or
any of the same promptly following any request therefor by Lender.
13. RIGHT OF LENDER TO CURE DEFAULTS. Upon default in the
performance of any of the terms, covenants or conditions of this Mortgage or
any of the other Loan Documents, Lender may, at its option and whether or not
electing to declare the whole of the Obligations secured hereby due and
payable, perform the same without waiver of any other remedy, and any amount
paid or advanced
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<PAGE> 35
by Lender in connection therewith, or any other costs, charges or expenses,
including reasonable attorney's fees, incurred in the protection of the
Mortgaged Property and the maintenance of the lien of this Mortgage, with
interest thereon at the Applicable Rate, shall be repayable by Borrower,
immediately upon demand made by Lender, shall be a lien upon the Mortgaged
Property prior to any right, title to, interest in, or claim thereon attaching
or accruing subsequent to the attachment of lien of this Mortgage and shall be
secured by this Mortgage.
14. AUTHORIZED DETERMINATIONS BY LENDER. Lender in making any
payment herein and hereby authorized, in the place and stead of Borrower [i]
relating to any Impositions, utility charges or liens or other claims asserted
against or in connection with the Mortgaged Property, may do so according to
any bill, statement or estimate procured from the appropriate public office or
other person or entity without inquiry into the accuracy thereof or the
validity of the Imposition, charge, lien or claim; or [ii] relating to any
apparent or threatened adverse title, lien, statement of lien, encumbrance,
claim or charge, shall be the sole judge of the legality or validity of same;
or [iii] relating to the expense of repairs or replacement of any Improvements
or Equipment shall be the sole judge of the state of repairs and the necessity
for incurring the expense of any such repairs or replacement; or [iv] otherwise
relating to any other purpose in and authorized by this Mortgage, but not
enumerated in this Section, may do so whenever, in the judgment and discretion
of Lender, such advance or advances shall seem necessary or desirable to
protect the full security intended to be created by this Mortgage, and provided
further that in connection with any such advance, Lender, at the option of
Lender, may and is hereby authorized to obtain a continuation report of title
prepared by a title insurance company, the cost and expense of which shall be
repayable by Borrower immediately upon demand and shall be secured by this
Mortgage.
15. ENVIRONMENTAL COMPLIANCE. Borrower represents and warrants
that to the best of Borrower's knowledge and except as previously disclosed in
writing to Lender by Borrower, or by environmental consultants engaged by
Borrower or Lender, that: [i] no hazardous or toxic substance or material or
other waste ("HAZARDOUS SUBSTANCE") as defined in or regulated under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended (42 U.S.C. Section 9601, ET. SEQ.), the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901, ET. SEQ.), The Oil Pollution Act of 1990
(33 U.S.C. Section 2701 ET. SEQ.) or any other federal, state or local law,
order or regulation pertaining to health, safety, or the environment (the
"ENVIRONMENTAL LAWS") has ever been disposed, released, discharged or spilled
on or under any part of the Mortgaged Property, [ii] the Mortgaged Property has
never been used as a dump or landfill, [iii] no litigation or administrative
action or proceeding has been commenced or, to Borrower's knowledge, threatened
against Borrower or any subsidiary
11
<PAGE> 36
or affiliate of Borrower alleging a violation of any Environmental Laws, and
[iv] no underground storage tank, polychlorinated biphenyls, asbestos,
lead-based paint or urea formaldehyde is located on or under or has been
applied to any part of the Mortgaged Property or contained in any Improvement
or Equipment located on the Mortgaged Property. Borrower will not permit any
Hazardous Substance to be placed or stored in or upon the Mortgaged Property
except DE MINIMIS quantities if and, in such event, as incident to the
customary operations of Borrower on the Mortgaged Property, and then only in
compliance with all Environmental Laws. Without limitation of the preceding
sentence, Borrower covenants that the Mortgaged Property at all times hereafter
shall remain free from any contamination by any Hazardous Substance and that
Borrower at all times will comply with all Environmental Laws affecting
Borrower or the Mortgaged Property. Borrower shall notify Lender promptly upon
becoming aware of any contamination of the Mortgaged Property by any Hazardous
Substance, or upon being threatened with receipt of or receiving any notice,
citation, summons, complaint or other communication alleging violation by
Borrower of any Environmental Law or potential liability of Borrower in
connection with any Hazardous Substance. Lender and its agents, including but
not limited to environmental consultants and remediation contractors engaged by
Lender, shall have the right, but not the obligation, to enter upon the
Mortgaged Property at any time to inspect the same and take such other action
as Lender deems necessary or appropriate with respect to any actual or
threatened contamination of the Mortgaged Property by a Hazardous Substance or
any other circumstance relating to a Hazardous Substance or any Environmental
Law which in Lender's sole opinion could impair the security intended to be
afforded by this Mortgage or result in a claim against or liability of Lender,
and all costs and expenses, including reasonable attorneys' fees and the fees
of such consultants and contractors, incurred by Lender, in so doing shall be
paid by Borrower to Lender upon demand and be secured by the lien of this
Mortgage and bear interest at the Applicable Rate. Borrower hereby indemnifies
Lender and holds Lender wholly harmless from and against any and all losses,
costs, expenses (including but not limited to reasonable attorneys' fees),
injuries, damages, liabilities and claims of any kind whatsoever paid, incurred
or suffered by or asserted against Lender by any person or entity, including
but not limited to any governmental entity, whatsoever with respect to or as a
direct or indirect result of the presence heretofore, now or hereafter of any
Hazardous Substance on or under the Mortgaged Property, or the violation or
alleged violation heretofore, now or hereafter by Borrower or any subsidiary or
affiliate of Borrower of any Environmental Laws and, without limitation of the
foregoing, any inaccuracy of any representation or warranty by Borrower
contained in this Section or any breach by Borrower of or other default in the
covenants contained in this Section. The indemnification established under the
preceding sentence shall survive the maturity as well as the repayment or other
discharge of the Obligations secured by this Mortgage and any
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<PAGE> 37
termination of this Mortgage whether pursuant to repayment of the Obligations
secured by it, foreclosure, deed in lieu of foreclosure or otherwise, to the
maximum extent permitted by law. Borrower expressly acknowledges that any
misrepresentation by Borrower under this Section, or any failure of condition
or breach of covenant by Borrower or other default in any of the obligations of
Borrower under this Section shall be and constitute an immediate default under
this Mortgage and each of the other Loan Documents.
16. ACCELERATION UPON DEFAULT; CERTAIN REMEDIES. That, upon
failure of Borrower to comply with any of the provisions of this Mortgage, if
such failure shall continue for fifteen (15) calendar days after written notice
thereof is given to Borrower by Lender (unless this Mortgage or the applicable
Loan Document in connection with which such non-compliance has occurred
affirmatively provides that no notice and/or period of cure, or that an
explicit alternative period of cure, shall be applicable to such failure by
Borrower, in which case such alternative provision rather than fifteen (15)
days after notice shall control), or (after satisfaction of any applicable
requirement for notice and opportunity to cure contained in the Loan Document
governing the default) upon any default in any of the other Obligations,
including the payment or performance or observance of each and every other
term, covenant, condition or agreement contained in the Loan Documents, then,
in any of said events, the entire Obligations secured hereby shall, at the
option of Lender, become immediately due and payable without relief from
valuation or appraisement laws, and thereupon or at any time thereafter Lender
may proceed to foreclose this Mortgage, and any failure to exercise said option
shall not constitute a waiver of the right to exercise the same at any other
time. In any of such events, Lender may enter upon the Mortgaged Property,
collect the rents, issues and profits thereof and, after paying all expenses of
such collections including reasonable attorney's fees, and a reasonable
compensation for Lender, shall apply the money collected to the satisfaction of
the Obligations hereby secured in such order as Lender elects. Lender,
thereupon, also shall have all rights and remedies provided herein, in the Loan
Documents, and under the UCC with regard to any of the Mortgaged Property to
which the UCC is applicable, all of which rights and remedies shall, to the
fullest extent permitted by law, be cumulative.
17. RECEIVER. Lender, in any action to foreclose this Mortgage,
and in addition to all other rights and remedies available to Lender, shall be
entitled to the appointment of a receiver of the rents, issues and profits of
the Mortgaged Property as a matter of right and without notice, with power to
collect the rents, issues and profits of the Mortgaged Property, due and
becoming due during the pendency of such foreclosure suit, such rents, issues
and profits being hereby expressly assigned and pledged as additional security
for the payment of the Obligations secured by this Mortgage without regard to
the value of the Mortgaged Property or the solvency of any person or persons
liable
13
<PAGE> 38
for the payment of such Obligations, and regardless of whether Lender has an
adequate remedy at law. Borrower for itself and any subsequent owner of the
Mortgaged Property hereby waives any and all defenses to the application for a
receiver, as above provided, and hereby specifically consents to such
appointment without notice, except any notice required by law, but nothing
herein contained is to be construed to deprive Lender of any other right,
remedy or privilege Lender may have under the law to have a receiver appointed.
18. FEES AND EXPENSES IN FORECLOSURE. In case of foreclosure of
this Mortgage in any court of law or equity whether or not any order or decree
shall have been entered therein, and to the extent permitted by law, a
reasonable sum shall be allowed for stenographers' fees and for all moneys
expended for documentary evidence and the cost of a complete abstract of title
and title report for the purpose of such foreclosure, such sums to be secured
by the lien of this Mortgage, and, to the extent permitted by law, there shall
be included in any judgment or decree foreclosing this Mortgage and paid out of
said rents, issues and profits from the Mortgaged Property and the proceeds of
any sale made in pursuance of any such judgment or decree: [1] all costs and
expenses of such suit or suits, appraisals, advertising, sale and conveyance,
including stenographers' fees, outlays for documentary evidence and the cost of
said abstract, examination of title and title report; [2] reasonable fees of
legal counsel to Lender, to the fullest extent permitted by law; [3] all moneys
advanced by Lender, if any, for any purposes authorized in this Mortgage, with
interest as herein provided; [4] all the accrued interest remaining unpaid on
the Obligations hereby secured; and [5] all the principal of the Obligations
remaining unpaid. The surplus of the proceeds, if any, shall be paid to
Borrower promptly after request by Borrower, or as the court may direct.
19. SALE IN ONE OR MORE PARCELS. In case of any foreclosure sale
of the Mortgaged Property, the same may be sold in one or more parcels.
20. NO WAIVER BY LENDER. The failure of Lender to exercise the
option for acceleration of maturity and/or foreclosure following any default by
Borrower in any of the Obligations or to exercise any other option granted to
Lender hereunder or under the other Loan Documents in any one or more
instances, or the acceptance by Lender of partial payments of any of the
Obligations, shall not constitute a waiver of any such default, or extend or
affect any applicable grace period, but such option shall remain continuously
in force. Acceleration of maturity of any of the Obligations, once claimed by
Lender, may, at the option of Lender, be rescinded by Lender by a written
acknowledgement to that effect, but the tender and acceptance of partial
payments alone shall not in any way affect or rescind such acceleration of
maturity, or extend or affect any grace period.
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<PAGE> 39
21. LENDER TO SUCCEED TO PRIORITY OF PRIOR LIENS. Should the
proceeds of any loan made by Lender to Borrower as part of any of the
Obligations, or any amount paid out or advanced by Lender, be used directly or
indirectly to pay off, discharge, or satisfy, in whole or in part, any prior
lien or encumbrance upon the Mortgaged Property or any part thereof, then
Lender shall be subrogated to such other lien or encumbrance with respect to
the Mortgaged Property, and shall have the benefit of the priority of all of
same.
22. RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies
provided under this Mortgage and the other Loan Documents, at law, or in equity
are cumulative and Lender as holder of every Obligation secured hereby may
recover judgment thereon, issue execution therefor, and resort to every other
right or remedy available at law or in equity without first exhausting and
without affecting or impairing the security or any right or remedy afforded by
this Mortgage and no enumeration of special rights or powers by any provision
of this Mortgage shall be construed to limit any grant of general rights or
powers, or to take away or limit any rights granted to or vested in Lender by
virtue of the laws of the state in which the Land is located, or any other
jurisdiction, the laws of which are applicable to this Mortgage. Lender may
exercise any right, power or remedy to which Lender is entitled under this
Mortgage or the other Loan Documents at Lender's option and in Lender's sole
and absolute discretion without any obligation to do so, and if, under this
Mortgage or the other Loan Documents, two or more alternative courses of action
and/or remedies are available to Lender, Lender may elect any such action
and/or remedy or combination of actions and/or remedies as Lender shall
determine in the sole and absolute discretion of Lender.
23. LENDER'S RIGHT TO DEAL WITH BORROWER AND OTHER PARTIES.
Lender, without notice, and without regard to the consideration, if any, paid
therefor, and notwithstanding the existence at that time of any inferior liens
thereon, may release any part of the Mortgaged Property, or any other security
for all or part of the Obligations, and may release or grant indulgences,
settlements or compromises to any person liable or pledging security for all or
part of the Obligations, without in any way affecting the priority of the lien
of this Mortgage to the full extent of the Obligations remaining unpaid with
regard to any part of the security not expressly released. Lender may agree
from time to time with Borrower or any other party obligated on or pledging
security for any part of the Obligations or having any interest in the
Mortgaged Property to extend the time for payment of any part of the
Obligations or grant any other indulgences, releases, settlements or
compromises and such agreements shall not in any way release or impair the lien
of this Mortgage. In the event Lender [a] releases any part of the Mortgaged
Property, or any person liable for or having pledged security for any of the
Obligations, [b] grants an extension of time for any payments of the
Obligations or grants any
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<PAGE> 40
other indulgences, releases, settlements or compromises; [c] takes other or
additional security for the payment of any of the Obligations; [d] waives or
fails to exercise any right granted in this Mortgage or any of the other Loan
Documents, said acts or omissions by Lender shall not release Borrower,
subsequent owners of the Mortgaged Property or any part thereof, or makers or
sureties or pledgors of collateral for or any of the Obligations, under any
covenant of this Mortgage or of the other Loan Documents, nor preclude Lender
from exercising any right, power or privilege herein or in the other Loan
Documents granted or intended to be granted in the event of any other default
then existing or any subsequent default.
24. USURY; ILLEGALITY; SEVERABILITY. Nothing contained in this
Mortgage or any of the other Loan Documents or pursuant to any transaction
related thereto shall be construed or shall operate either presently or
prospectively, [a] to require Borrower to pay interest at a rate greater than
is lawful, but shall require payment of interest and other sums only to the
extent of such lawful rate, or [b] to require Borrower to make any payment or
do any act contrary to law, but if any clause or provision contained in this
Mortgage or in any other Loan Document shall otherwise so operate to invalidate
this Mortgage or any other Loan Document, in whole or in part, then such clause
or provision, as the case may be, only shall be held for naught as though not
contained in this Mortgage or in the applicable Loan Document and the remainder
of this Mortgage and other Loan Documents, as applicable, shall remain
operative and in full force and effect.
25. WARRANTY AGAINST VIOLATIONS OF COVENANTS. Borrower represents
and warrants that on the date hereof neither this Mortgage, nor the Mortgaged
Property, nor the contemplated use of the Improvements and Equipment,
constitute a breach, or a violation of, any covenants, conditions, easements or
restrictions, whether of record or not, or any zoning laws or land use
regulations, or, to the knowledge of Borrower, other laws or regulations
affecting the Mortgaged Property or binding upon Borrower, and Borrower
covenants and agrees that Borrower will take all actions necessary to prevent
any such breach or violation from hereafter occurring.
26. INSOLVENCY. In the event Borrower or any obligor, guarantor
or pledgor of collateral for any of the Obligations shall make a general
assignment for the benefit of creditors, or shall file a voluntary petition in
bankruptcy, or shall be adjudicated a bankrupt or insolvent, or shall file any
petition or answer seeking, consenting to, or acquiescing in, any
reorganization, arrangement, adjustment, composition, liquidation, dissolution
or similar relief, under any present or future statute, law or regulation, or
shall file an answer admitting or shall fail to deny the material allegations
of a petition against it for any such relief, or if any such proceeding against
Borrower or such obligor, guarantor or pledging seeking any such relief shall
not have been
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<PAGE> 41
dismissed within sixty (60) days after the commencement thereof; or if a
trustee, receiver or liquidator of Borrower or any obligor, guarantor or
pledgor of collateral for the Obligations or any substantial part of their
respective properties or assets shall be appointed with the consent or
acquiescence of Borrower or such obligor, guarantor or pledgor or if any such
appointment, if not so consented to or acquiesced in, shall remain unvacated or
unstayed for an aggregate of sixty (60) days, then the whole of the principal
sum and all of the other Obligations secured hereby automatically shall be
deemed to have become immediately due and payable and the same, with interest
thereon at the Applicable Rate, and with all other costs and charges payable
under the Loan Documents, including reasonable attorney's fees, shall thereupon
be collectible by suit at law or in the exercise of any remedy available under
this Mortgage or in equity in the same manner as if the whole of the
Obligations had been made payable at the time when any of the foregoing
contingencies shall have occurred.
27. VOLUNTARY ZONING CHANGES. Borrower covenants not to change
the use that Borrower intended for the Mortgaged Property at the time Borrower
executed this Mortgage, or initiate, join in, consent to, or permit any change
in any zoning ordinance, private restrictive covenant or other public or
private restriction changing, limiting or restricting the uses which may be
made of the Mortgaged Property, without the prior written consent of Lender
obtained in each instance.
28. RESTRICTIONS ON TRANSFER. Except as expressly permitted by,
and subject to the provisions of the Loan Documents, Borrower shall not enter
into any lease of all or any part of the Mortgaged Property, or otherwise sell,
transfer or convey, or enter into any agreement to sell, transfer or convey,
all or any part of the Mortgaged Property, or any legal or beneficial interest
therein, by operation of law (including but not limited to, as applicable, a
merger, consolidation or transfer of capital stock, or other ownership interest
in Borrower) or otherwise, without Lender's prior written consent, and upon any
breach of this Section Lender may immediately, at Lender's option, and without
notice, declare all of the Obligations to be immediately due and payable and
exercise all rights and remedies available to Lender upon a default under this
Mortgage.
29. NOTICES. Except for any notice required under applicable law
to be given in another manner, any notice given under this Mortgage shall be
given in the manner stipulated by the Series 1 Reimbursement Agreement
described in SCHEDULE 1 to this Mortgage.
30. SECURITY AGREEMENT; FINANCING STATEMENTS. Borrower promptly
upon request by Lender shall execute, acknowledge and deliver to Lender any
financing statement, affidavit, continuation statement or certificate or other
document that Lender reasonably may request in order to perfect, preserve,
maintain or continue the
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<PAGE> 42
security interest in the Mortgaged Property under this Mortgage and the
priority of such security interest, and upon any failure by Borrower to do so
Lender automatically shall be vested with power of attorney for Borrower,
coupled with an interest, for such purposes. Borrower further agrees to pay to
Lender on demand all costs and expenses incurred by Lender in connection with
the preparation, execution, recording, filing and refiling of any such
documents. In addition to being a mortgage this Mortgage is intended to be a
security agreement and a fixture filing pursuant to the UCC for the items
specified above as part of the Mortgaged Property (including goods constituting
part of the Collateral that are or are to become fixtures) which, under
applicable law, may be subject to a security interest pursuant to the UCC, and
Borrower hereby grants to Lender a security interest in said items as security
for the Obligations. Without limitation of the foregoing, Borrower agrees that
Lender may file this Mortgage in any personal property or real estate records
or other appropriate index as a financing statement for all or any of the items
specified above as part of the Mortgaged Property. A carbon, photographic or
other reproduction of this Mortgage or of a financing statement shall be
sufficient as a financing statement.
31. SUCCESSORS AND ASSIGNS; MODIFICATIONS IN WRITING. Subject to
the Section of this Mortgage entitled "Restrictions on Transfer," this Mortgage
shall be binding upon Borrower and its permitted successors and assigns, and
all persons claiming under or through Borrower or any such successor or assign,
and shall inure to the benefit of and be enforceable by Lender and its
successors and assigns. This Mortgage may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.
32. AFTER ACQUIRED PROPERTY. All property of every kind and
description acquired by Borrower after the date hereof which by the terms
hereof is required or intended to be subjected to the lien of this Mortgage
shall, immediately upon the acquisition thereof by Borrower, and without any
further mortgage, conveyance, assignment or transfer, become subject to the
lien and security interest of this Mortgage. Nevertheless, Borrower, at any
time, upon the request of Lender, will execute, acknowledge and deliver all
such additional papers and instruments and all such further assurances of title
and will do or cause to be done all further acts and things as may, subject to
the conditions contained in this Mortgage, be proper or reasonably necessary
for carrying out the intent of this Mortgage.
33. GOVERNING LAW. This Mortgage was negotiated in the
Commonwealth of Kentucky, the Reimbursement Agreements were delivered by
Borrower and accepted by Lender in the Commonwealth of Kentucky, and the
Letters of Credit were issued in the Commonwealth of Kentucky, which state
Borrower and Lender agree has a substan-
18
<PAGE> 43
tial relationship to Borrower and Lender and to the underlying transaction in
connection with which this Mortgage was granted. This Mortgage, including
matters of construction, validity and performance, and the obligations arising
hereunder, shall be construed in accordance with and otherwise governed in all
respects by the laws of the Commonwealth of Kentucky applicable to contracts
made and performed in such state and any applicable law of the United States of
America except to the extent that the real and personal property laws of the
State of Florida, including laws relating to the perfection, priority and
enforcement of liens on real and personal property located in Florida,
necessarily shall apply to enforcement of the security covered by this
Mortgage. Borrower hereby irrevocably agrees that any legal action, suit, or
proceeding against it with respect to its obligations, liabilities or any other
matter under or arising out of or in connection with this Mortgage or the other
Loan Documents or for recognition or enforcement of any judgment rendered in
any such action, suit or proceeding may be brought in the United States Courts
for the Western District of Kentucky, or in the courts of the Commonwealth of
Kentucky, as Lender may elect, and by execution and delivery of this Mortgage,
Borrower hereby irrevocably accepts and submits to the non-exclusive
jurisdiction of each of the aforesaid courts IN PERSONA, generally and
unconditionally with respect to any such action, suit, or proceeding for
Borrower and in respect of Borrower's property. Borrower further agrees that
final judgment against Borrower in any action, suit or proceeding referred to
herein shall be conclusive and may be enforced in any other jurisdiction, by
suit on the judgment, a certified or exemplified copy of which shall be
conclusive evidence of the fact and of the amount of the indebtedness of
Borrower.
34. WAIVER OF EXEMPTION. To the extent permitted by law with
respect to the Obligations secured hereby including any renewals or extensions
thereof, Borrower waives and renounces any and all homestead and exemption
rights, as well as the benefit of all valuation and appraisement privileges,
and stay, redemption and moratoriums under and by virtue of the constitution
and laws of the state in which the Land is located, and of any other state or
the United States, now existing or hereafter enacted.
35. JOINT AND SEVERAL LIABILITY; COVENANTS RUN WITH LAND. All of
the obligations of Borrower hereunder shall be joint and several. All of the
covenants of this Mortgage shall run with the land.
36. PROVISIONS SEVERABLE. In the event that any provision of this
Mortgage or any of the other Loan Documents conflicts with applicable law, such
conflict shall not affect other provisions of this Mortgage or the other Loan
Documents that can be given effect without the conflicting provisions, and to
this end the provisions of this Mortgage and the other Loan Documents are
declared to be severable.
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<PAGE> 44
37. INTERPRETATION. Whenever used, the singular number shall
include the plural, the plural the singular and the use of any gender shall
include all genders. The captions to the various sections of this Mortgage are
inserted for convenience only and shall be ignored in interpreting its
provisions.
38. WAIVER OF MARSHALLING. Notwithstanding the existence of any
other security interests in the Mortgaged Property held by Lender or by any
other person or entity, Lender shall have the right to determine the order in
which any or all of the Mortgaged Property shall be subjected to the remedies
provided herein, and the order in which any or all portions of the Obligations
secured hereby are satisfied from the proceeds realized upon the exercise of
the remedies provided herein. Borrower, any guarantor of or pledgor of
collateral for any of the Obligations, and any other person or entity now or
hereafter acquiring a security interest in the Mortgaged Property and having
actual or constructive notice of this Mortgage, each waives any and all right
to require the marshalling of assets in connection with the exercise of any of
the remedies permitted by applicable law or in equity or provided in this
Mortgage. Without limitation of the foregoing, if all or any part of the
Obligations are secured not only by this Mortgage but also by one or more other
mortgages, deeds of trust, deeds to secure debt or other encumbrances of
property located in this or other jurisdictions or states (collectively, the
"ADDITIONAL SECURITY INSTRUMENTS"), Lender, following any default (including
after any required notice and applicable period of cure) under this Mortgage or
any of the Additional Security Instruments, may proceed, concurrently or at any
time thereafter and from time to time, to exercise the rights and remedies of
Lender under this Mortgage and/or one or more of the Additional Security
Instruments or other Loan Documents by proceedings that are appropriate in the
jurisdiction or state wherein the property encumbered thereby is located, and
no such action (or failure to act) by Lender shall impair any rights or
remedies of Lender under this Mortgage, any of the Additional Security
Instruments, at law or in equity.
39. WAIVER OF TRIAL BY JURY. THE LENDER AND BORROWER ACKNOWLEDGE
THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE TIME AND
EXPENSE REQUIRED FOR A BENCH TRIAL AND HEREBY KNOWINGLY AND VOLUNTARILY WAIVE,
TO THE FULLEST EXTENT PERMITTED BY LAW, AND AFTER HAVING CONSULTED OR HAVING
HAD AMPLE OPPORTUNITY TO CONSULT THEIR RESPECTIVE LEGAL COUNSEL CONCERNING THE
CONSEQUENCES OF SUCH WAIVER, TRIAL BY JURY IN ANY ACTION OR OTHER PROCEEDING
BROUGHT TO ENFORCE OR DEFEND AGAINST COLLECTION OF OR OTHERWISE IN CONNECTION
WITH THIS MORTGAGE OR THE OTHER LOAN DOCUMENTS.
<THE BALANCE OF THIS PAGE INTENTIONALLY HAS BEEN LEFT BLANK>
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<PAGE> 45
IN TESTIMONY WHEREOF, witness the signature of Borrower to
this Mortgage as of the date set forth above.
BORROWER:
--------
Signed, acknowledged and ARBOR HEALTH CARE COMPANY, a
delivered in the presence Delaware corporation
of:
__________________________ By: ___________________________
Signature
__________________________ Printed Name: _________________
Printed Name
Title: ________________________
__________________________
Signature
__________________________
Printed Name
STATE OF _______________ )
: SS
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this ____
day of February, 1996, by ______________________________ (name), as
______________________________ (title) of Arbor Health Care Company, a Delaware
corporation, on behalf of the corporation. He/She:
(check one) ______ is personally known to me, or has
______ produced ____________________________
as identification.
__________________________________________
__________________________________________
Name: (Please Print)
Notary Public, State of __________________
[AFFIX NOTARY SEAL]
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<PAGE> 46
SCHEDULE 1
----------
TO
MORTGAGE AND SECURITY AGREEMENT ("AGREEMENT)
BETWEEN ARBOR HEALTH CARE COMPANY
AND BANK ONE, KENTUCKY, NA
(DESCRIPTION OF OBLIGATIONS)
The "OBLIGATIONS" referred to in the foregoing Agreement are
as follows:
A. All indebtedness, liabilities and obligations arising
under or evidenced by, and the performance of all covenants, conditions and
agreements undertaken by each of the Borrowers hereinafter described in
connection with, each of the following documents, including any renewals,
extensions and amendments of any of them or substitutions or replacements for
any of them (referred to hereinafter as the "REIMBURSEMENT AGREEMENT"):
(1) Reimbursement Agreement dated as of February
12, 1996, to which Arbor Health Care Company, a Delaware corporation ("ARBOR"),
Marshall Properties, Inc., an Ohio corporation ("MARSHALL") (Arbor and Marshall
are referred to each individually as a "BORROWER" and collectively as the
"BORROWERS"), and Bank One, Kentucky, NA, a national banking association
("LENDER"), are parties, referable to Letter of Credit No. S-6122 in the face
amount of $27,506,250 issued by Lender for the joint and several account of
Borrowers (the "LETTER OF CREDIT") as security for Promissory Note (Series
1996A-1) and Promissory Note (Series 1996A-2), both dated as of February 15,
1996, made jointly and severally by Borrowers to the order of Capital One
Funding Corporation ("CAPITAL") in face principal amount of $13,500,000 and
maturing on February 1, 2003.
B. The payment, performance and discharge of any and all
obligations and liabilities of each Borrower, whether direct or indirect,
absolute or contingent, due or not due, now existing or hereafter arising, in
conjunction with issuance of the Letter of Credit (collectively, together with
any extensions, renewals, amendments, substitutions or replacements thereof and
therefor, the "LETTER OF CREDIT"), including but not limited to the obligations
of each Borrower contained in any and all applications for the Letter of Credit
(collectively, the "APPLICATIONS") executed and delivered as a condition to
issuance of the Letter of Credit, and to pay on demand all drafts drawn under
the Letter of Credit, and to reimburse Lender on demand of Lender for any
amounts advanced by Lender for the account of either Borrower, at the option
and in the exercise of the sole and absolute discretion of Lender, to satisfy
such drafts, and to indemnify Lender from all loss or liability incurred by
Lender in connection with the issuance of the Letter of Credit; and the payment
of all fees and all other sums due under, and the performance of all covenants,
conditions and other obligations due under or in connection with, the
Reimbursement
<PAGE> 47
Agreement, the Applications, and any security agreements, mortgages, deeds of
trust, guaranties, pledge agreements, assignments, subordination agreements,
and any other documents or instruments heretofore, contemporaneously herewith
or hereafter entered into by any Borrower or any other person or entity, with
or for the benefit of Lender to evidence, secure or guarantee payment of the
Letter of Credit, or otherwise entered into in connection with the Letter of
Credit (such security agreements, mortgages, deeds of trust, guaranties, pledge
agreements, assignments, subordination agreements, and other documents and
instruments evidencing, securing, guaranteeing or otherwise entered into in
connection with the Letter of Credit are referred to collectively as the "LOAN
DOCUMENTS").
C. All expenses, costs and charges, of any nature
whatsoever, including, without limitation, taxes, assessments, insurance
premiums, repairs, rent, storage costs, expenses of collection and sale, and
reasonable attorneys' fees, incurred by or for the account of Lender in
preserving collateral for the Obligations and/or enforcing or seeking to
enforce any of the rights and remedies of Lender under any of the Loan
Documents.
<PAGE> 48
EXHIBIT A
---------
TO MORTGAGE
That part of the East 1/2 of the Northeast 1/4 of the Southwest 1/4 of Section
8, Township 28 South, Range 19 East, Hillsborough County, Florida, being more
particularly described as follows:
From the Southeast corner of the said East 1/2 run North 00 degrees 00 minutes
35 seconds West along the East boundary of said East 1/2, a distance of 45.00
feet for a POINT OF BEGINNING; continue North 00 degrees 00 minutes 35 seconds
West along the East boundary of said East 1/2, a distance 61.42 feet; run
thence West 245.98 feet; run thence North 00 degrees 00 minutes 35 seconds West
along a line parallel to and 245.98 feet West of the East boundary of said East
1/2, a distance of 570.22 feet to a point on the South right-of-way boundary of
Campus Hill Drive; run thence West along the South right-of-way boundary of
Campus Hill Drive a distance of 419.82 feet to a point on the West boundary of
said East 1/2, also being the East boundary of CAMPUS HILL PARK-UNIT 1, as per
plat recorded in Plat Book 37, page 28 of the public records of Hillsborough
County, Florida; run thence South 00 degrees 00 minutes 36 seconds East along
said West boundary of said East 1/2, a distance of 539.56 feet; run thence
North 89 degrees 44 minutes 56 seconds East along a line parallel to and 140.00
feet North of the South boundary of said East 1/2, a distance of 40.00 feet;
run thence South 00 degrees 00 minutes 36 seconds East along a line parallel to
and 40 feet East of the West boundary of said East 1/2, a distance of 95.00
feet; run thence North 89 degrees 44 minutes 56 seconds East along a line
parallel to and 45.00 feet North of the South boundary of said East 1/2, a
distance of 625.80 feet to the POINT OF BEGINNING.
<PAGE> 49
This Mortgage and Security Agreement
is one of five Mortgage and Security
Agreements all securing a single
Promissory Note, which are being recorded
simultaneously in Hillsborough County,
Pinellas County, Seminole County and
Brevard County, Florida
The documentary stamps and intangible
taxes on all of the Mortgages and Security
Agreements, and on the Promissory Note
have been paid in Hillsborough County
in connection with recording the
Mortgage and Security Agreements in that
County.
This Instrument Prepared By:
______________________________
Arthur Adams Rouse
WYATT, TARRANT & COMBS
2700 Citizens Plaza
Louisville, Kentucky 40202
(502) 589-5235
MORTGAGE AND SECURITY AGREEMENT
-------------------------------
PINELLAS COUNTY, FLORIDA
THIS MORTGAGE (the "Mortgage") is executed actually on the
dates indicated in the notarial certificate affixed to it, but is made and
delivered effective as of February 12, 1996, by and between [i] ARBOR HEALTH
CARE COMPANY, a Delaware corporation (referred to herein as the "BORROWER"),
having a mailing address of 1100 Shawnee Road, Box 840, Lima, Ohio and [ii]
BANK ONE, KENTUCKY, NA, a national banking association, having a mailing
address of 416 West Jefferson Street, Louisville, Jefferson County, Kentucky
40232 (referred to herein as the "LENDER").
W I T N E S S E T H:
Borrower is obligated to Lender under and in connection with
the Reimbursement Agreement and the Letter of Credit and the Loan Documents
("LOAN DOCUMENTS") and the other "OBLIGATIONS" more particularly described in
SCHEDULE 1 hereto (all of the foregoing are referred to collectively
hereinafter as the "OBLIGATIONS");
<PAGE> 50
NOW THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower does hereby MORTGAGE,
WARRANT, GRANT, CONVEY AND ASSIGN to Lender, to secure to Lender the payment
and performance when due of the Obligations strictly in accordance with the
terms thereof, all right, title and interest of Borrower in and to the real
estate described in EXHIBIT A attached hereto and incorporated herein by this
reference (the "LAND");
TOGETHER with all right, title and interest of Borrower in all
buildings, foundations, structures and improvements now or hereafter located on
or in the Land, and all materials now or hereafter intended for construction,
reconstruction, alteration or repair thereof, all of which shall be deemed a
part thereof immediately upon being delivered to the Land (collectively, the
"IMPROVEMENTS");
TOGETHER with all right, title and interest of Borrower now
and hereafter in and to the streets and roads, opened or proposed, abutting the
Land, all strips and gores within or adjoining the Land, the air space and
right to use the air space above the Land, all rights of ingress and egress to
and from the Land, all easements, rights of way, reversions, remainders,
hereditaments, and appurtenances now or hereafter affecting the Land or the
Improvements, all royalties and rights and privileges appertaining to the use
and enjoyment of the Land or the Improvements, including all air, lateral
support, alley, drainage, water, riparian, oil, gas and mineral rights, options
to purchase or lease, and all other interests, estates or claims, in law or in
equity, which Borrower now has or hereafter may acquire in or with respect to
the Land or the Improvements (collectively, the "APPURTENANCES"; the Land, the
Improvements and the Appurtenances are hereinafter sometimes collectively
referred to as the "PREMISES");
TOGETHER with all right, title and interest of Borrower in all
fixtures, equipment (including but not limited to office equipment, motors,
elevators, radiators, gas and electric ranges, refrigerators, freezers, and
plumbing, heating, lighting, ventilating, refrigerating, incinerating, air
conditioning, central energy, sprinklering and fire suppression, waste disposal
and theft protection equipment), fittings, furniture, furnishings (including,
but not limited to awnings, shades, screens, blinds and carpets), appliances,
apparatus, and machinery now existing or hereafter installed in the Premises,
and all building materials, supplies and equipment now existing or hereafter
delivered to the Premises and intended to be installed therein, and all
renewals or replacements of any of the foregoing property or articles in
substitution thereof (collectively, the "EQUIPMENT");
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<PAGE> 51
TOGETHER with all right, title and interest of Borrower
whether now existing or hereafter acquired in, to and under all accounts,
documents, instruments, chattel paper, and general intangibles, as the
foregoing terms are defined in the Uniform Commercial Code in effect in the
state in which the Land is located (the "UCC"), that are derived from the
Premises or Equipment, including, to the extent assignable, all contract rights
(including, without limitation, under contracts with all contractors,
architects, engineers or subcontractors relating to the construction or
renovation of the Improvements or Equipment, including payment, performance and
materialmen's bonds); franchises; books and records; plans; specifications;
permits; health facility, pharmacy and other licenses; Certificates of Need;
governmental registrations for diagnostic, laboratory, or any other activities;
Medicare and Medicaid provider agreements; accreditation rights; rights to
refunds under any of the foregoing agreements; and other approvals, actions and
causes of action; which in the case of any of the foregoing now or hereafter
relate to, are derived from or used in connection with the Premises or
Equipment or the use, operation, maintenance, occupancy or enjoyment thereof or
the conduct of any business or activities thereon (collectively, the
"INTANGIBLES");
TOGETHER with all right, title and interest of Borrower,
whether now existing or hereafter acquired and wherever located, in, to and
under all leases, lettings, tenancies and licenses of the Premises or Equipment
or any part thereof now or hereafter entered into and all amendments,
extensions, renewals and guaranties thereof, all security therefor, and all
moneys payable thereunder (each a "Lease" and collectively, the "LEASES");
TOGETHER with all rents, income, issues, profits, security
deposits and other benefits to which Borrower may now or hereafter be entitled
from the Premises, the Equipment or the Intangibles or under or in connection
with the Leases, including, without limitation, all income received from
tenants, lessees, licensees and concessionaires and other persons occupying
space at the Premises and/or rendering services to tenants thereat
(collectively, the "PROPERTY INCOME"); and
TOGETHER with all proceeds, judgments, claims, compensation,
awards of damages and settlements with respect to or hereafter made as a result
of or in lieu of any condemnation or taking of the Premises and/or Equipment by
eminent domain (including severance and consequential damages and change in
grade of streets) or any casualty loss of or damage to any of the Premises, the
Equipment, the Intangibles, the Leases or the Property Income, all refunds with
respect to the payment of property taxes and assessments, and all other
proceeds of the conversion, voluntary or involuntary, of the Premises, the
Equipment, the Intangibles, the Leases or the Property Income, or any part
thereof, into cash or liquidated claims (collectively, the "PROCEEDS"; the
Equipment, the
3
<PAGE> 52
Intangibles, the Leases, the Property Income and the Proceeds are hereinafter
collectively referred to as the "COLLATERAL"; the Premises and the Collateral
being hereinafter sometimes collectively referred to as the "MORTGAGED
PROPERTY").
TO HAVE AND TO HOLD the Mortgaged Property with all the privileges and
appurtenances to the same belonging, and with the possession and right of
possession thereof, unto Lender, its successors and assigns forever, upon the
terms and conditions set forth herein.
AND BORROWER COVENANTS AND WARRANTS lawful seizure of an
indefeasible estate in fee simple of the Mortgaged Property; that the same are
free from all encumbrances and liens whatsoever, except for [i] easements and
restrictions of record on the date hereof, none of which materially interfere
with the use of the Mortgaged Property for the operation thereof intended by
Borrower, [ii] the lien of ad valorem real estate taxes and any assessments for
which payment is not delinquent in either case (the encumbrances and liens
described in the foregoing subsections [i] - [ii] are referred to collectively
as the "PERMITTED EXCEPTIONS"); that Borrower has the legal right, power and
authority to encumber the Mortgaged Property pursuant to this Mortgage, the
execution and delivery and the performance of which will not, either
immediately or with notice and/or passage of time, violate any agreement to
which Borrower is a party or by which Borrower is bound; and that Borrower and
the successors in interest of Borrower will forever WARRANT AND DEFEND the
title to the Mortgaged Property and the lien and priority of this Mortgage
against the claims and demands of all persons whomsoever. All such covenants
and warranties shall run with the land.
AND BORROWER, IN ORDER MORE FULLY TO PROTECT THE SECURITY OF
THIS MORTGAGE, COVENANTS AND AGREES AS FOLLOWS:
1. OBLIGATIONS SECURED. This Mortgage is granted to secure the
payment and performance of the Obligations strictly in accordance with the
terms thereof in each case.
2. PAYMENT AND PERFORMANCE OF OBLIGATIONS. Principal of,
interest on, and all other indebtedness and sums constituted by the Obligations
shall be paid at the times and in the manner provided herein and in the other
Loan Documents.
3. PAYMENT OF TAXES AND OTHER IMPOSITIONS. Borrower shall keep
the Mortgaged Property free from statutory liens of every kind; shall pay,
before delinquency and before any penalty for nonpayment attaches thereto, all
taxes, assessments and governmental or municipal or public levies, fees,
charges, fines or impositions of any nature whatsoever (collectively, the
"IMPOSITIONS") which are or may be levied or imposed against or in connection
with the Mortgaged Property or any part thereof, except when payment for such
items has theretofore been made under the
4
<PAGE> 53
Section of this Mortgage entitled "Monthly Installments of Taxes and
Insurance"; shall deliver to Lender, on or before ten (10) days after request
made by Lender therefor, receipted bills evidencing payment therefor.
Notwithstanding the foregoing, so long as no default, and no circumstance
which, with any required notice and/or opportunity to cure would constitute a
default under the Obligations is subsisting, Borrower shall have the right to
contest the validity of any Imposition by appropriate legal proceedings
provided [i] Borrower notifies Lender of Borrower's intention to contest the
same prior to commencing such contest, [ii] such contest shall preclude
enforcement of collection out of or pursuant to the sale of any of the
Mortgaged Property in satisfaction of any Imposition, [iii] Borrower shall
furnish Lender with, at the option of Lender, a bond (pursuant to Florida
statutes) or title insurance or other security for the Imposition satisfactory
to Lender in Lender's sole discretion, [iv] such contest shall not otherwise
create a failure on the part of Borrower to comply with any other provision or
condition of the Loan Documents, and [v] upon a final and nonappealable
determination of the contest that is adverse to the Borrower, Borrower shall
pay the amount of the Imposition.
4. MONTHLY INSTALLMENTS OF TAXES AND INSURANCE. If requested by
Lender at any time [i] after default (including after any applicable
requirement for notice and an opportunity to cure) in any of the Obligations or
[ii] after payment of taxes or insurance in respect of the Mortgaged Property
have become delinquent (whether or not thereafter cured), Borrower shall pay to
Lender, in addition to the amounts of principal and interest and any other sums
due under the terms of the applicable instruments evidencing the Obligations,
monthly on or before the first day of each calendar month, until the
Obligations are paid in full, the following:
A sum equal to all taxes, assessments and all other impositions next
due on the Mortgaged Property, all as estimated in good faith by
Lender, plus the premiums that will next become due and payable on
policies of fire and other insurance covering the Mortgaged Property
and required under the terms of this Mortgage, less all sums already
paid therefor in each case, divided by the number of complete calendar
months to elapse prior to the date when such taxes, assessments,
impositions and premiums shall be due and payable.
All such payments described in this Section shall be held by Lender without
accruing and without any obligation arising for the payment of interest thereon
and Borrower waives any right, to the extent permitted by law, to demand or
receive any interest, income or profits on any of the payments so deposited
with Lender. Lender is hereby granted a security interest in all such amounts
as collateral for the Obligations and such sums shall be subject to setoff by
Lender following any default by Borrower (including after any
5
<PAGE> 54
applicable requirement for notice and/or opportunity to cure) under this
Mortgage or the other Obligations.
5. UTILITIES. Borrower shall pay or cause to be paid all charges
in respect of all water, sewer, electricity, natural gas, telecommunications
and all other utilities consumed on the Mortgaged Property prior to the date
when the same would become delinquent, and shall provide Lender promptly after
request is made by Lender therefor with copies of paid receipts in respect of
all utility charges assessed against the Mortgaged Property.
6. LIABILITY INSURANCE. Borrower shall carry and maintain such
liability and indemnity insurance as in good faith may be required from time to
time by Lender in forms, amounts and with companies reasonably satisfactory to
Lender. Certificates of such insurance, premiums prepaid, naming Lender as an
additional insured, and copies of such policies, shall be deposited, if
requested by Lender, by Borrower with Lender and shall contain provision for
not less than ten (10) days' notice to Lender prior to any cancellation or
modification thereof.
7. HAZARD INSURANCE. Borrower shall keep or cause to be kept all
Improvements and Equipment, whether now existing or hereafter erected on the
Mortgaged Property, insured as may be required from time to time by Lender
against loss or damage by fire, hazards included within the term "broad form
coverage", rent loss, flood (if required by law), and such other hazards,
casualties, liabilities and contingencies in such amounts (not exceeding the
replacement value thereof except in all events sufficient to keep Borrower from
becoming a co-insurer) and for such periods as may be required by Lender
consistent with reasonable and customary commercial practice with regard to
similar properties or as otherwise required in good faith by Lender, and shall
pay promptly, when due, any premiums on such insurance policies. All insurance
policies shall be carried with companies having a Best rating of A- or better
and approved by Lender and such policies shall name Lender as a lender loss
payee pursuant to a "standard mortgage" or "New York mortgagee" clause.
Evidence that such policies are in force shall be delivered to Lender on or
before ten (10) days after request by Lender therefor. All such policies shall
contain provision for at least ten (10) days notice to Lender prior to any
cancellation or modification thereof. Borrower shall not carry separate
insurance, concurrent in kind or form and contributing, in the event of loss,
with any insurance required hereunder. In the event of a change in the use and
nature of occupancy of the Mortgaged Property, immediate notice thereof by mail
shall be delivered to all insurers and Lender. In the event of loss, Borrower
will give immediate notice by mail to Lender. Borrower hereby authorizes
Lender, at its option, to collect, adjust and compromise any losses under any
of the insurance policies aforesaid (provided Lender in so adjusting and
compromising any such losses acts in good faith and not in a manner which,
under the circum-
6
<PAGE> 55
stances, diminishes the recovery thereunder by an unreasonable amount), and
after deducting all costs of collection to apply the proceeds of such insurance
as follows: [1] provided the gross proceeds from the insurance do not exceed
$100,000 provided no default under any of the terms and conditions of this
Mortgage, or any of the other Obligations secured hereby shall then or
thereafter be subsisting, and provided the proceeds of such insurance (together
with any moneys which may be deposited by Borrower with Lender for the purpose
of repair or restoration of the Mortgaged Property promptly upon Borrower's
becoming aware of any deficiency between the amount of such insurance proceeds
and the amount necessary to restore the Mortgaged Property as hereinafter
provided in this sentence) are sufficient to restore the Mortgaged Property to
the same or better condition as existed immediately prior to the loss, Lender
shall disburse the proceeds of the insurance for the sole purpose of repairing
and restoring the Mortgage Property, which repairs and restoration, if the cost
thereof is reasonably estimated by Lender to exceed $50,000 shall, at the
option of Lender, be under the supervision of an architect or engineer
reasonably acceptable to Lender, shall be made pursuant to plans and
specifications submitted to Lender prior to the commencement thereof, and which
shall be subject to Lender's approval and which proceeds shall be disbursed by
Lender from time to time only upon certification by the architect or engineer
that all of the work theretofore completed was done in compliance with the
plans and specifications approved by Lender, that the sum requested is justly
required to reimburse Borrower for payments by Borrower to persons performing
such work, that the amount of the remaining proceeds shall be sufficient to pay
for the repairs and restoration remaining to be completed pursuant to the
approved plans and specifications, and containing such other certifications,
and subject to such other conditions, including but not limited to waivers of
lien and title insurance coverage, as Lender in good faith deems necessary or
appropriate; or [2] if the gross proceeds from the insurance exceed $100,000,
or if a default under any of the terms and conditions of this Mortgage, or any
of the other Obligations secured hereby shall then or thereafter be subsisting,
or any of the other conditions described above to the proceeds being made
available for restoration are not met, the proceeds shall be applied as a
reduction upon or, at the sole option of Lender, as a fund to be retained by
Lender as part of the Collateral for, the Obligations secured hereby, in such
order as Lender may elect; with the balance of any proceeds remaining after the
disposition of the proceeds as aforesaid to be paid to Borrower. Upon
acquisition of the Mortgaged Property by Lender in the event of foreclosure of
this Mortgage, or other transfer of title to the Mortgaged Property in
extinguishment of all or part of the Obligations secured hereby, all right,
title and interest of Borrower in and to any insurance policies then in force
shall pass to the purchaser or grantee of said property.
7
<PAGE> 56
8. CONDEMNATION. Borrower shall give Lender immediate notice of
the actual or threatened commencement of any proceedings under eminent domain
affecting all or any part of the Mortgaged Property, including severance and
consequential damage and change in grade of streets, and will deliver to Lender
copies of any and all papers served in connection with any such proceedings.
Borrower further covenants and agrees to make, execute and deliver to Lender,
at any time or times upon request of Lender, free, clear and discharged of any
encumbrances of any kind whatsoever, any and all further assignments and/or
other instruments deemed necessary or appropriate by Lender for the purpose of
validly and sufficiently assigning all awards and other compensation,
heretofore and hereafter to be made to Borrower (including the assignment of
any award from the United States Government at any time after the allowance of
the claim therefor, the ascertainment of the amount thereof and the issuance of
the warranty for payment thereof) for any taking, either permanent or
temporary, under any such proceedings, all of which awards may, at the option
of Lender (subject only to the provisions of any leases of portions of the
Mortgaged Property permitted under the provisions of the Loan Documents and not
subordinate to the rights of Lender with respect to such awards), regardless of
whether a default in any of the Obligations is then subsisting, be applied as a
reduction of or, at the sole option of Lender, as a fund to be retained by
Lender as part of the Collateral for, the Obligations in such order as Lender
may elect.
9. ALTERATIONS; REPAIRS; WASTE, COMPLIANCE WITH LAWS; INSPECTION.
No additional Improvements shall be constructed on the Land, and no existing
Improvements shall be materially altered, or removed or demolished without the
prior written consent of Lender in each case, provided such consent is not
unreasonably withheld. No Equipment shall be severed or removed without the
prior written consent of Lender except that Borrower may replace in the
ordinary course of business any Equipment with other Equipment at least equal
in quality and condition to that replaced, provided such replacements are free
from any security interest in or encumbrance thereon or reservation of title
thereto except for the lien of this Mortgage and any other encumbrance which
may be permitted by the express terms of the Loan Documents. Borrower shall
permit, commit, or suffer no waste, impairment or deterioration of the
Mortgaged Property or any part thereof; shall keep and maintain the same in
good repair and condition, reasonable wear and tear excepted; shall effect such
repairs as Lender may reasonably require, and from time to time to make all
needful and proper replacements so that said Mortgaged Property will, at all
times, be in fit and proper for the respective purposes for which they were
erected or installed. Borrower shall comply with or require compliance with
all statutes, regulations, codes, orders, requirements or decrees relating to
the Mortgaged Property (including but not limited to the Americans with
Disabilities Act) by any federal, state or municipal authority and, without
limitation of the foregoing, shall observe and comply with all conditions and
requirements necessary
8
<PAGE> 57
to preserve and extend any and all rights, licenses, permits (including but not
limited to zoning variances, conditional uses and non-conforming uses),
privileges, franchises and concessions which are applicable to the Mortgaged
Property or which have been granted to or contracted for by Borrower in
connection with any existing or presently contemplated use of the Mortgaged
Property. Borrower shall permit Lender, during business hours of Borrower and
at all other reasonable times, to enter upon and inspect the Mortgaged
Property.
10. PROHIBITION OF OTHER LIENS. Borrower shall not voluntarily
create or otherwise permit to be created or filed against the Mortgaged
Property any mortgage lien (except any securing indebtedness to Lender), or any
statutory or other lien or liens, charge or encumbrance of any nature, whether
inferior or superior to the lien of this Mortgage, without the prior written
consent of Lender, except any which is one of the Permitted Exceptions.
Borrower will not permit any default (whether or not waived by the applicable
mortgagee) to occur under any other mortgage (or under the indebtedness secured
thereby, in each case) on all or any part of the Mortgaged Property. Without
limitation of the foregoing, Borrower shall keep and maintain the Mortgaged
Property free from the claims of all persons now or hereafter supplying labor
or materials thereto notwithstanding by whom such labor or materials may have
been contracted. Notwithstanding the preceding sentence, so long as no
default, and no circumstance which, with any required notice and/or opportunity
to cure would constitute a default under the Obligations is then or thereafter
subsisting, Borrower shall have the right to contest the validity of any such
lien or claim of any person supplying such labor or materials by appropriate
legal proceedings provided [i] Borrower notifies Lender of Borrower's intention
to contest the same prior to commencing such contest, [ii] such contest shall
preclude enforcement or collection out of or pursuant to the sale of any of the
Mortgaged Property in satisfaction of the lien or claim, [iii] Borrower shall
furnish Lender with, at the option of Lender, a bond or title insurance or
other security for such lien or claim satisfactory to Lender in Lender's sole
discretion, [iv] such contest shall not otherwise create a failure on the part
of Borrower to comply with any other provision or condition of the Loan
Documents, and [v] upon a final and nonappealable determination of the contest
that is adverse to the Borrower, Borrower shall pay the amount of the lien or
claim.
11. INDEMNIFICATION OF LENDER. Borrower shall, to the fullest
extent permitted by applicable law, save Lender harmless from all losses, costs
and expenses, including reasonable attorneys' fees, and the cost of a title
search, continuation of abstract and preparation of survey, incurred by reason
of any action, suit, proceeding, hearing, motion or application before any
court or administrative body in and to which Lender may be or become a party by
reason of this Mortgage, including but not limited to condemnation, bankruptcy,
probate and administration
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<PAGE> 58
proceedings, as well as any other of the foregoing wherein proof of claim is by
law required to be filed or in which it becomes necessary to defend or uphold
the terms of, or the lien created by, this Mortgage, and all money paid or
expended by Lender in that regard, together with interest thereon from the date
of such payment at the Index Rate of Lender plus 2% per annum (such interest
rate is referred to hereinafter as the "APPLICABLE RATE") shall be part of the
Obligations secured hereby and shall be due and payable by Borrower immediately
upon request made by Lender. Borrower additionally hereby indemnifies and
saves Lender harmless under this Mortgage from and against all liabilities,
obligations, claims, damages. penalties, causes of action, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
imposed upon, incurred by, or asserted against Lender on account of [i] any
failure of the Borrower to comply with any of the covenants and conditions on
the part of Borrower to be performed or representations of Borrower contained
in this Mortgage, or [ii] any loss or damage to the Mortgaged Property or any
injury to, or death of, any person that may be occasioned by any cause
whatsoever pertaining to the Mortgaged Property or the use thereof, provided
that such indemnity shall be effective only to the extent of any loss that may
be sustained by Lender in excess of any net proceeds of the insurance received
by Lender from any insurance carried with respect to such loss and provided
further that the benefits of this Section shall not inure to any person other
than Lender and its successors and assigns. Nothing contained in this Section
shall require the Borrower to indemnify Lender against the gross negligence or
wantonly malicious acts of Lender. The indemnities contained in this Section
shall survive payment of the Obligations, the release of this Mortgage,
Foreclosure of this Mortgage, or a deed in lieu of foreclosure, and shall
extend to the officers, directors, employees and duly authorized agents of
Lender.
12. BOOKS AND RECORDS. Borrower at all times shall keep and
maintain complete and accurate books of accounts and records adequate to
reflect correctly the results of the operation of the Mortgaged Property and
copies of all written contracts, leases, rental agreements, license agreements
and other instruments and agreements that affect the Mortgaged Property. Such
books, records, contracts, leases and other instruments and agreements shall be
subject to examination and inspection at any reasonable time by Lender, and
Borrower shall furnish Lender, at the cost of Borrower, with a copy of all or
any of the same promptly following any request therefor by Lender.
13. RIGHT OF LENDER TO CURE DEFAULTS. Upon default in the
performance of any of the terms, covenants or conditions of this Mortgage or
any of the other Loan Documents, Lender may, at its option and whether or not
electing to declare the whole of the Obligations secured hereby due and
payable, perform the same without waiver of any other remedy, and any amount
paid or advanced
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<PAGE> 59
by Lender in connection therewith, or any other costs, charges or expenses,
including reasonable attorney's fees, incurred in the protection of the
Mortgaged Property and the maintenance of the lien of this Mortgage, with
interest thereon at the Applicable Rate, shall be repayable by Borrower,
immediately upon demand made by Lender, shall be a lien upon the Mortgaged
Property prior to any right, title to, interest in, or claim thereon attaching
or accruing subsequent to the attachment of lien of this Mortgage and shall be
secured by this Mortgage.
14. AUTHORIZED DETERMINATIONS BY LENDER. Lender in making any
payment herein and hereby authorized, in the place and stead of Borrower [i]
relating to any Impositions, utility charges or liens or other claims asserted
against or in connection with the Mortgaged Property, may do so according to
any bill, statement or estimate procured from the appropriate public office or
other person or entity without inquiry into the accuracy thereof or the
validity of the Imposition, charge, lien or claim; or [ii] relating to any
apparent or threatened adverse title, lien, statement of lien, encumbrance,
claim or charge, shall be the sole judge of the legality or validity of same;
or [iii] relating to the expense of repairs or replacement of any Improvements
or Equipment shall be the sole judge of the state of repairs and the necessity
for incurring the expense of any such repairs or replacement; or [iv] otherwise
relating to any other purpose in and authorized by this Mortgage, but not
enumerated in this Section, may do so whenever, in the judgment and discretion
of Lender, such advance or advances shall seem necessary or desirable to
protect the full security intended to be created by this Mortgage, and provided
further that in connection with any such advance, Lender, at the option of
Lender, may and is hereby authorized to obtain a continuation report of title
prepared by a title insurance company, the cost and expense of which shall be
repayable by Borrower immediately upon demand and shall be secured by this
Mortgage.
15. ENVIRONMENTAL COMPLIANCE. Borrower represents and warrants
that to the best of Borrower's knowledge and except as previously disclosed in
writing to Lender by Borrower, or by environmental consultants engaged by
Borrower or Lender, that: [i] no hazardous or toxic substance or material or
other waste ("HAZARDOUS SUBSTANCE") as defined in or regulated under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended (42 U.S.C. Section 9601, ET. SEQ.), the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901, ET. SEQ.), The Oil Pollution Act of 1990
(33 U.S.C. Section 2701 ET. SEQ.) or any other federal, state or local law,
order or regulation pertaining to health, safety, or the environment (the
"ENVIRONMENTAL LAWS") has ever been disposed, released, discharged or spilled
on or under any part of the Mortgaged Property, [ii] the Mortgaged Property has
never been used as a dump or landfill, [iii] no litigation or administrative
action or proceeding has been commenced or, to Borrower's knowledge, threatened
against Borrower or any subsidiary
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<PAGE> 60
or affiliate of Borrower alleging a violation of any Environmental Laws, and
[iv] no underground storage tank, polychlorinated biphenyls, asbestos,
lead-based paint or urea formaldehyde is located on or under or has been
applied to any part of the Mortgaged Property or contained in any Improvement
or Equipment located on the Mortgaged Property. Borrower will not permit any
Hazardous Substance to be placed or stored in or upon the Mortgaged Property
except DE MINIMIS quantities if and, in such event, as incident to the
customary operations of Borrower on the Mortgaged Property, and then only in
compliance with all Environmental Laws. Without limitation of the preceding
sentence, Borrower covenants that the Mortgaged Property at all times hereafter
shall remain free from any contamination by any Hazardous Substance and that
Borrower at all times will comply with all Environmental Laws affecting
Borrower or the Mortgaged Property. Borrower shall notify Lender promptly upon
becoming aware of any contamination of the Mortgaged Property by any Hazardous
Substance, or upon being threatened with receipt of or receiving any notice,
citation, summons, complaint or other communication alleging violation by
Borrower of any Environmental Law or potential liability of Borrower in
connection with any Hazardous Substance. Lender and its agents, including but
not limited to environmental consultants and remediation contractors engaged by
Lender, shall have the right, but not the obligation, to enter upon the
Mortgaged Property at any time to inspect the same and take such other action
as Lender deems necessary or appropriate with respect to any actual or
threatened contamination of the Mortgaged Property by a Hazardous Substance or
any other circumstance relating to a Hazardous Substance or any Environmental
Law which in Lender's sole opinion could impair the security intended to be
afforded by this Mortgage or result in a claim against or liability of Lender,
and all costs and expenses, including reasonable attorneys' fees and the fees
of such consultants and contractors, incurred by Lender, in so doing shall be
paid by Borrower to Lender upon demand and be secured by the lien of this
Mortgage and bear interest at the Applicable Rate. Borrower hereby indemnifies
Lender and holds Lender wholly harmless from and against any and all losses,
costs, expenses (including but not limited to reasonable attorneys' fees),
injuries, damages, liabilities and claims of any kind whatsoever paid, incurred
or suffered by or asserted against Lender by any person or entity, including
but not limited to any governmental entity, whatsoever with respect to or as a
direct or indirect result of the presence heretofore, now or hereafter of any
Hazardous Substance on or under the Mortgaged Property, or the violation or
alleged violation heretofore, now or hereafter by Borrower or any subsidiary or
affiliate of Borrower of any Environmental Laws and, without limitation of the
foregoing, any inaccuracy of any representation or warranty by Borrower
contained in this Section or any breach by Borrower of or other default in the
covenants contained in this Section. The indemnification established under the
preceding sentence shall survive the maturity as well as the repayment or other
discharge of the Obligations secured by this Mortgage and any
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<PAGE> 61
termination of this Mortgage whether pursuant to repayment of the Obligations
secured by it, foreclosure, deed in lieu of foreclosure or otherwise, to the
maximum extent permitted by law. Borrower expressly acknowledges that any
misrepresentation by Borrower under this Section, or any failure of condition
or breach of covenant by Borrower or other default in any of the obligations of
Borrower under this Section shall be and constitute an immediate default under
this Mortgage and each of the other Loan Documents.
16. ACCELERATION UPON DEFAULT; CERTAIN REMEDIES. That, upon
failure of Borrower to comply with any of the provisions of this Mortgage, if
such failure shall continue for fifteen (15) calendar days after written notice
thereof is given to Borrower by Lender (unless this Mortgage or the applicable
Loan Document in connection with which such non-compliance has occurred
affirmatively provides that no notice and/or period of cure, or that an
explicit alternative period of cure, shall be applicable to such failure by
Borrower, in which case such alternative provision rather than fifteen (15)
days after notice shall control), or (after satisfaction of any applicable
requirement for notice and opportunity to cure contained in the Loan Document
governing the default) upon any default in any of the other Obligations,
including the payment or performance or observance of each and every other
term, covenant, condition or agreement contained in the Loan Documents, then,
in any of said events, the entire Obligations secured hereby shall, at the
option of Lender, become immediately due and payable without relief from
valuation or appraisement laws, and thereupon or at any time thereafter Lender
may proceed to foreclose this Mortgage, and any failure to exercise said option
shall not constitute a waiver of the right to exercise the same at any other
time. In any of such events, Lender may enter upon the Mortgaged Property,
collect the rents, issues and profits thereof and, after paying all expenses of
such collections including reasonable attorney's fees, and a reasonable
compensation for Lender, shall apply the money collected to the satisfaction of
the Obligations hereby secured in such order as Lender elects. Lender,
thereupon, also shall have all rights and remedies provided herein, in the Loan
Documents, and under the UCC with regard to any of the Mortgaged Property to
which the UCC is applicable, all of which rights and remedies shall, to the
fullest extent permitted by law, be cumulative.
17. RECEIVER. Lender, in any action to foreclose this Mortgage,
and in addition to all other rights and remedies available to Lender, shall be
entitled to the appointment of a receiver of the rents, issues and profits of
the Mortgaged Property as a matter of right and without notice, with power to
collect the rents, issues and profits of the Mortgaged Property, due and
becoming due during the pendency of such foreclosure suit, such rents, issues
and profits being hereby expressly assigned and pledged as additional security
for the payment of the Obligations secured by this Mortgage without regard to
the value of the Mortgaged Property or the solvency of any person or persons
liable
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<PAGE> 62
for the payment of such Obligations, and regardless of whether Lender has an
adequate remedy at law. Borrower for itself and any subsequent owner of the
Mortgaged Property hereby waives any and all defenses to the application for a
receiver, as above provided, and hereby specifically consents to such
appointment without notice, except any notice required by law, but nothing
herein contained is to be construed to deprive Lender of any other right,
remedy or privilege Lender may have under the law to have a receiver appointed.
18. FEES AND EXPENSES IN FORECLOSURE. In case of foreclosure of
this Mortgage in any court of law or equity whether or not any order or decree
shall have been entered therein, and to the extent permitted by law, a
reasonable sum shall be allowed for stenographers' fees and for all moneys
expended for documentary evidence and the cost of a complete abstract of title
and title report for the purpose of such foreclosure, such sums to be secured
by the lien of this Mortgage, and, to the extent permitted by law, there shall
be included in any judgment or decree foreclosing this Mortgage and paid out of
said rents, issues and profits from the Mortgaged Property and the proceeds of
any sale made in pursuance of any such judgment or decree: [1] all costs and
expenses of such suit or suits, appraisals, advertising, sale and conveyance,
including stenographers' fees, outlays for documentary evidence and the cost of
said abstract, examination of title and title report; [2] reasonable fees of
legal counsel to Lender, to the fullest extent permitted by law; [3] all moneys
advanced by Lender, if any, for any purposes authorized in this Mortgage, with
interest as herein provided; [4] all the accrued interest remaining unpaid on
the Obligations hereby secured; and [5] all the principal of the Obligations
remaining unpaid. The surplus of the proceeds, if any, shall be paid to
Borrower promptly after request by Borrower, or as the court may direct.
19. SALE IN ONE OR MORE PARCELS. In case of any foreclosure sale
of the Mortgaged Property, the same may be sold in one or more parcels.
20. NO WAIVER BY LENDER. The failure of Lender to exercise the
option for acceleration of maturity and/or foreclosure following any default by
Borrower in any of the Obligations or to exercise any other option granted to
Lender hereunder or under the other Loan Documents in any one or more
instances, or the acceptance by Lender of partial payments of any of the
Obligations, shall not constitute a waiver of any such default, or extend or
affect any applicable grace period, but such option shall remain continuously
in force. Acceleration of maturity of any of the Obligations, once claimed by
Lender, may, at the option of Lender, be rescinded by Lender by a written
acknowledgement to that effect, but the tender and acceptance of partial
payments alone shall not in any way affect or rescind such acceleration of
maturity, or extend or affect any grace period.
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<PAGE> 63
21. LENDER TO SUCCEED TO PRIORITY OF PRIOR LIENS. Should the
proceeds of any loan made by Lender to Borrower as part of any of the
Obligations, or any amount paid out or advanced by Lender, be used directly or
indirectly to pay off, discharge, or satisfy, in whole or in part, any prior
lien or encumbrance upon the Mortgaged Property or any part thereof, then
Lender shall be subrogated to such other lien or encumbrance with respect to
the Mortgaged Property, and shall have the benefit of the priority of all of
same.
22. RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies
provided under this Mortgage and the other Loan Documents, at law, or in equity
are cumulative and Lender as holder of every Obligation secured hereby may
recover judgment thereon, issue execution therefor, and resort to every other
right or remedy available at law or in equity without first exhausting and
without affecting or impairing the security or any right or remedy afforded by
this Mortgage and no enumeration of special rights or powers by any provision
of this Mortgage shall be construed to limit any grant of general rights or
powers, or to take away or limit any rights granted to or vested in Lender by
virtue of the laws of the state in which the Land is located, or any other
jurisdiction, the laws of which are applicable to this Mortgage. Lender may
exercise any right, power or remedy to which Lender is entitled under this
Mortgage or the other Loan Documents at Lender's option and in Lender's sole
and absolute discretion without any obligation to do so, and if, under this
Mortgage or the other Loan Documents, two or more alternative courses of action
and/or remedies are available to Lender, Lender may elect any such action
and/or remedy or combination of actions and/or remedies as Lender shall
determine in the sole and absolute discretion of Lender.
23. LENDER'S RIGHT TO DEAL WITH BORROWER AND OTHER PARTIES.
Lender, without notice, and without regard to the consideration, if any, paid
therefor, and notwithstanding the existence at that time of any inferior liens
thereon, may release any part of the Mortgaged Property, or any other security
for all or part of the Obligations, and may release or grant indulgences,
settlements or compromises to any person liable or pledging security for all or
part of the Obligations, without in any way affecting the priority of the lien
of this Mortgage to the full extent of the Obligations remaining unpaid with
regard to any part of the security not expressly released. Lender may agree
from time to time with Borrower or any other party obligated on or pledging
security for any part of the Obligations or having any interest in the
Mortgaged Property to extend the time for payment of any part of the
Obligations or grant any other indulgences, releases, settlements or
compromises and such agreements shall not in any way release or impair the lien
of this Mortgage. In the event Lender [a] releases any part of the Mortgaged
Property, or any person liable for or having pledged security for any of the
Obligations, [b] grants an extension of time for any payments of the
Obligations or grants any
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<PAGE> 64
other indulgences, releases, settlements or compromises; [c] takes other or
additional security for the payment of any of the Obligations; [d] waives or
fails to exercise any right granted in this Mortgage or any of the other Loan
Documents, said acts or omissions by Lender shall not release Borrower,
subsequent owners of the Mortgaged Property or any part thereof, or makers or
sureties or pledgors of collateral for or any of the Obligations, under any
covenant of this Mortgage or of the other Loan Documents, nor preclude Lender
from exercising any right, power or privilege herein or in the other Loan
Documents granted or intended to be granted in the event of any other default
then existing or any subsequent default.
24. USURY; ILLEGALITY; SEVERABILITY. Nothing contained in this
Mortgage or any of the other Loan Documents or pursuant to any transaction
related thereto shall be construed or shall operate either presently or
prospectively, [a] to require Borrower to pay interest at a rate greater than
is lawful, but shall require payment of interest and other sums only to the
extent of such lawful rate, or [b] to require Borrower to make any payment or
do any act contrary to law, but if any clause or provision contained in this
Mortgage or in any other Loan Document shall otherwise so operate to invalidate
this Mortgage or any other Loan Document, in whole or in part, then such clause
or provision, as the case may be, only shall be held for naught as though not
contained in this Mortgage or in the applicable Loan Document and the remainder
of this Mortgage and other Loan Documents, as applicable, shall remain
operative and in full force and effect.
25. WARRANTY AGAINST VIOLATIONS OF COVENANTS. Borrower represents
and warrants that on the date hereof neither this Mortgage, nor the Mortgaged
Property, nor the contemplated use of the Improvements and Equipment,
constitute a breach, or a violation of, any covenants, conditions, easements or
restrictions, whether of record or not, or any zoning laws or land use
regulations, or, to the knowledge of Borrower, other laws or regulations
affecting the Mortgaged Property or binding upon Borrower, and Borrower
covenants and agrees that Borrower will take all actions necessary to prevent
any such breach or violation from hereafter occurring.
26. INSOLVENCY. In the event Borrower or any obligor, guarantor
or pledgor of collateral for any of the Obligations shall make a general
assignment for the benefit of creditors, or shall file a voluntary petition in
bankruptcy, or shall be adjudicated a bankrupt or insolvent, or shall file any
petition or answer seeking, consenting to, or acquiescing in, any
reorganization, arrangement, adjustment, composition, liquidation, dissolution
or similar relief, under any present or future statute, law or regulation, or
shall file an answer admitting or shall fail to deny the material allegations
of a petition against it for any such relief, or if any such proceeding against
Borrower or such obligor, guarantor or pledging seeking any such relief shall
not have been
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<PAGE> 65
dismissed within sixty (60) days after the commencement thereof; or if a
trustee, receiver or liquidator of Borrower or any obligor, guarantor or
pledgor of collateral for the Obligations or any substantial part of their
respective properties or assets shall be appointed with the consent or
acquiescence of Borrower or such obligor, guarantor or pledgor or if any such
appointment, if not so consented to or acquiesced in, shall remain unvacated or
unstayed for an aggregate of sixty (60) days, then the whole of the principal
sum and all of the other Obligations secured hereby automatically shall be
deemed to have become immediately due and payable and the same, with interest
thereon at the Applicable Rate, and with all other costs and charges payable
under the Loan Documents, including reasonable attorney's fees, shall thereupon
be collectible by suit at law or in the exercise of any remedy available under
this Mortgage or in equity in the same manner as if the whole of the
Obligations had been made payable at the time when any of the foregoing
contingencies shall have occurred.
27. VOLUNTARY ZONING CHANGES. Borrower covenants not to change
the use that Borrower intended for the Mortgaged Property at the time Borrower
executed this Mortgage, or initiate, join in, consent to, or permit any change
in any zoning ordinance, private restrictive covenant or other public or
private restriction changing, limiting or restricting the uses which may be
made of the Mortgaged Property, without the prior written consent of Lender
obtained in each instance.
28. RESTRICTIONS ON TRANSFER. Except as expressly permitted by,
and subject to the provisions of the Loan Documents, Borrower shall not enter
into any lease of all or any part of the Mortgaged Property, or otherwise sell,
transfer or convey, or enter into any agreement to sell, transfer or convey,
all or any part of the Mortgaged Property, or any legal or beneficial interest
therein, by operation of law (including but not limited to, as applicable, a
merger, consolidation or transfer of capital stock, or other ownership interest
in Borrower) or otherwise, without Lender's prior written consent, and upon any
breach of this Section Lender may immediately, at Lender's option, and without
notice, declare all of the Obligations to be immediately due and payable and
exercise all rights and remedies available to Lender upon a default under this
Mortgage.
29. NOTICES. Except for any notice required under applicable law
to be given in another manner, any notice given under this Mortgage shall be
given in the manner stipulated by the Series 1 Reimbursement Agreement
described in SCHEDULE 1 to this Mortgage.
30. SECURITY AGREEMENT; FINANCING STATEMENTS. Borrower promptly
upon request by Lender shall execute, acknowledge and deliver to Lender any
financing statement, affidavit, continuation statement or certificate or other
document that Lender reasonably may request in order to perfect, preserve,
maintain or continue the
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<PAGE> 66
security interest in the Mortgaged Property under this Mortgage and the
priority of such security interest, and upon any failure by Borrower to do so
Lender automatically shall be vested with power of attorney for Borrower,
coupled with an interest, for such purposes. Borrower further agrees to pay to
Lender on demand all costs and expenses incurred by Lender in connection with
the preparation, execution, recording, filing and refiling of any such
documents. In addition to being a mortgage this Mortgage is intended to be a
security agreement and a fixture filing pursuant to the UCC for the items
specified above as part of the Mortgaged Property (including goods constituting
part of the Collateral that are or are to become fixtures) which, under
applicable law, may be subject to a security interest pursuant to the UCC, and
Borrower hereby grants to Lender a security interest in said items as security
for the Obligations. Without limitation of the foregoing, Borrower agrees that
Lender may file this Mortgage in any personal property or real estate records
or other appropriate index as a financing statement for all or any of the items
specified above as part of the Mortgaged Property. A carbon, photographic or
other reproduction of this Mortgage or of a financing statement shall be
sufficient as a financing statement.
31. SUCCESSORS AND ASSIGNS; MODIFICATIONS IN WRITING. Subject to
the Section of this Mortgage entitled "Restrictions on Transfer," this Mortgage
shall be binding upon Borrower and its permitted successors and assigns, and
all persons claiming under or through Borrower or any such successor or assign,
and shall inure to the benefit of and be enforceable by Lender and its
successors and assigns. This Mortgage may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.
32. AFTER ACQUIRED PROPERTY. All property of every kind and
description acquired by Borrower after the date hereof which by the terms
hereof is required or intended to be subjected to the lien of this Mortgage
shall, immediately upon the acquisition thereof by Borrower, and without any
further mortgage, conveyance, assignment or transfer, become subject to the
lien and security interest of this Mortgage. Nevertheless, Borrower, at any
time, upon the request of Lender, will execute, acknowledge and deliver all
such additional papers and instruments and all such further assurances of title
and will do or cause to be done all further acts and things as may, subject to
the conditions contained in this Mortgage, be proper or reasonably necessary
for carrying out the intent of this Mortgage.
33. GOVERNING LAW. This Mortgage was negotiated in the
Commonwealth of Kentucky, the Reimbursement Agreements were delivered by
Borrower and accepted by Lender in the Commonwealth of Kentucky, and the
Letters of Credit were issued in the Commonwealth of Kentucky, which state
Borrower and Lender agree has a substan-
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<PAGE> 67
tial relationship to Borrower and Lender and to the underlying transaction in
connection with which this Mortgage was granted. This Mortgage, including
matters of construction, validity and performance, and the obligations arising
hereunder, shall be construed in accordance with and otherwise governed in all
respects by the laws of the Commonwealth of Kentucky applicable to contracts
made and performed in such state and any applicable law of the United States of
America except to the extent that the real and personal property laws of the
State of Florida, including laws relating to the perfection, priority and
enforcement of liens on real and personal property located in Florida,
necessarily shall apply to enforcement of the security covered by this
Mortgage. Borrower hereby irrevocably agrees that any legal action, suit, or
proceeding against it with respect to its obligations, liabilities or any other
matter under or arising out of or in connection with this Mortgage or the other
Loan Documents or for recognition or enforcement of any judgment rendered in
any such action, suit or proceeding may be brought in the United States Courts
for the Western District of Kentucky, or in the courts of the Commonwealth of
Kentucky, as Lender may elect, and by execution and delivery of this Mortgage,
Borrower hereby irrevocably accepts and submits to the non-exclusive
jurisdiction of each of the aforesaid courts IN PERSONA, generally and
unconditionally with respect to any such action, suit, or proceeding for
Borrower and in respect of Borrower's property. Borrower further agrees that
final judgment against Borrower in any action, suit or proceeding referred to
herein shall be conclusive and may be enforced in any other jurisdiction, by
suit on the judgment, a certified or exemplified copy of which shall be
conclusive evidence of the fact and of the amount of the indebtedness of
Borrower.
34. WAIVER OF EXEMPTION. To the extent permitted by law with
respect to the Obligations secured hereby including any renewals or extensions
thereof, Borrower waives and renounces any and all homestead and exemption
rights, as well as the benefit of all valuation and appraisement privileges,
and stay, redemption and moratoriums under and by virtue of the constitution
and laws of the state in which the Land is located, and of any other state or
the United States, now existing or hereafter enacted.
35. JOINT AND SEVERAL LIABILITY; COVENANTS RUN WITH LAND. All of
the obligations of Borrower hereunder shall be joint and several. All of the
covenants of this Mortgage shall run with the land.
36. PROVISIONS SEVERABLE. In the event that any provision of this
Mortgage or any of the other Loan Documents conflicts with applicable law, such
conflict shall not affect other provisions of this Mortgage or the other Loan
Documents that can be given effect without the conflicting provisions, and to
this end the provisions of this Mortgage and the other Loan Documents are
declared to be severable.
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<PAGE> 68
37. INTERPRETATION. Whenever used, the singular number shall
include the plural, the plural the singular and the use of any gender shall
include all genders. The captions to the various sections of this Mortgage are
inserted for convenience only and shall be ignored in interpreting its
provisions.
38. WAIVER OF MARSHALLING. Notwithstanding the existence of any
other security interests in the Mortgaged Property held by Lender or by any
other person or entity, Lender shall have the right to determine the order in
which any or all of the Mortgaged Property shall be subjected to the remedies
provided herein, and the order in which any or all portions of the Obligations
secured hereby are satisfied from the proceeds realized upon the exercise of
the remedies provided herein. Borrower, any guarantor of or pledgor of
collateral for any of the Obligations, and any other person or entity now or
hereafter acquiring a security interest in the Mortgaged Property and having
actual or constructive notice of this Mortgage, each waives any and all right
to require the marshalling of assets in connection with the exercise of any of
the remedies permitted by applicable law or in equity or provided in this
Mortgage. Without limitation of the foregoing, if all or any part of the
Obligations are secured not only by this Mortgage but also by one or more other
mortgages, deeds of trust, deeds to secure debt or other encumbrances of
property located in this or other jurisdictions or states (collectively, the
"ADDITIONAL SECURITY INSTRUMENTS"), Lender, following any default (including
after any required notice and applicable period of cure) under this Mortgage or
any of the Additional Security Instruments, may proceed, concurrently or at any
time thereafter and from time to time, to exercise the rights and remedies of
Lender under this Mortgage and/or one or more of the Additional Security
Instruments or other Loan Documents by proceedings that are appropriate in the
jurisdiction or state wherein the property encumbered thereby is located, and
no such action (or failure to act) by Lender shall impair any rights or
remedies of Lender under this Mortgage, any of the Additional Security
Instruments, at law or in equity.
39. WAIVER OF TRIAL BY JURY. THE LENDER AND BORROWER ACKNOWLEDGE
THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE TIME AND
EXPENSE REQUIRED FOR A BENCH TRIAL AND HEREBY KNOWINGLY AND VOLUNTARILY WAIVE,
TO THE FULLEST EXTENT PERMITTED BY LAW, AND AFTER HAVING CONSULTED OR HAVING
HAD AMPLE OPPORTUNITY TO CONSULT THEIR RESPECTIVE LEGAL COUNSEL CONCERNING THE
CONSEQUENCES OF SUCH WAIVER, TRIAL BY JURY IN ANY ACTION OR OTHER PROCEEDING
BROUGHT TO ENFORCE OR DEFEND AGAINST COLLECTION OF OR OTHERWISE IN CONNECTION
WITH THIS MORTGAGE OR THE OTHER LOAN DOCUMENTS.
<THE BALANCE OF THIS PAGE INTENTIONALLY HAS BEEN LEFT BLANK>
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<PAGE> 69
IN TESTIMONY WHEREOF, witness the signature of Borrower to
this Mortgage as of the date set forth above.
BORROWER:
--------
Signed, acknowledged and ARBOR HEALTH CARE COMPANY, a
delivered in the presence Delaware corporation
of:
__________________________ By: ___________________________
Signature
__________________________ Printed Name: _________________
Printed Name
Title: ________________________
__________________________
Signature
__________________________
Printed Name
STATE OF _______________ )
: SS
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this ____
day of February, 1996, by ______________________________ (name), as
______________________________ (title) of Arbor Health Care Company, a Delaware
corporation, on behalf of the corporation. He/She:
(check one) ______ is personally known to me, or has
______ produced ____________________________
as identification.
__________________________________________
__________________________________________
Name: (Please Print)
Notary Public, State of __________________
[AFFIX NOTARY SEAL]
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<PAGE> 70
SCHEDULE 1
----------
TO
MORTGAGE AND SECURITY AGREEMENT ("AGREEMENT)
BETWEEN ARBOR HEALTH CARE COMPANY
AND BANK ONE, KENTUCKY, NA
(DESCRIPTION OF OBLIGATIONS)
The "OBLIGATIONS" referred to in the foregoing Agreement are
as follows:
A. All indebtedness, liabilities and obligations arising
under or evidenced by, and the performance of all covenants, conditions and
agreements undertaken by each of the Borrowers hereinafter described in
connection with, each of the following documents, including any renewals,
extensions and amendments of any of them or substitutions or replacements for
any of them (referred to hereinafter as the "REIMBURSEMENT AGREEMENT"):
(1) Reimbursement Agreement dated as of February
12, 1996, to which Arbor Health Care Company, a Delaware corporation ("ARBOR"),
Marshall Properties, Inc., an Ohio corporation ("MARSHALL") (Arbor and Marshall
are referred to each individually as a "BORROWER" and collectively as the
"BORROWERS"), and Bank One, Kentucky, NA, a national banking association
("LENDER"), are parties, referable to Letter of Credit No. S-6122 in the face
amount of $27,506,250 issued by Lender for the joint and several account of
Borrowers (the "LETTER OF CREDIT") as security for Promissory Note (Series
1996A-1) and Promissory Note (Series 1996A-2), both dated as of February 15,
1996, made jointly and severally by Borrowers to the order of Capital One
Funding Corporation ("CAPITAL") in face principal amount of $13,500,000 and
maturing on February 1, 2003.
B. The payment, performance and discharge of any and all
obligations and liabilities of each Borrower, whether direct or indirect,
absolute or contingent, due or not due, now existing or hereafter arising, in
conjunction with issuance of the Letter of Credit (collectively, together with
any extensions, renewals, amendments, substitutions or replacements thereof and
therefor, the "LETTER OF CREDIT"), including but not limited to the obligations
of each Borrower contained in any and all applications for the Letter of Credit
(collectively, the "APPLICATIONS") executed and delivered as a condition to
issuance of the Letter of Credit, and to pay on demand all drafts drawn under
the Letter of Credit, and to reimburse Lender on demand of Lender for any
amounts advanced by Lender for the account of either Borrower, at the option
and in the exercise of the sole and absolute discretion of Lender, to satisfy
such drafts, and to indemnify Lender from all loss or liability incurred by
Lender in connection with the issuance of the Letter of Credit; and the payment
of all fees and all other sums due under, and the performance of all covenants,
conditions and other obligations due under or in connection with, the
Reimbursement
<PAGE> 71
Agreement, the Applications, and any security agreements, mortgages, deeds of
trust, guaranties, pledge agreements, assignments, subordination agreements,
and any other documents or instruments heretofore, contemporaneously herewith
or hereafter entered into by any Borrower or any other person or entity, with
or for the benefit of Lender to evidence, secure or guarantee payment of the
Letter of Credit, or otherwise entered into in connection with the Letter of
Credit (such security agreements, mortgages, deeds of trust, guaranties, pledge
agreements, assignments, subordination agreements, and other documents and
instruments evidencing, securing, guaranteeing or otherwise entered into in
connection with the Letter of Credit are referred to collectively as the "LOAN
DOCUMENTS").
C. All expenses, costs and charges, of any nature
whatsoever, including, without limitation, taxes, assessments, insurance
premiums, repairs, rent, storage costs, expenses of collection and sale, and
reasonable attorneys' fees, incurred by or for the account of Lender in
preserving collateral for the Obligations and/or enforcing or seeking to
enforce any of the rights and remedies of Lender under any of the Loan
Documents.
<PAGE> 72
EXHIBIT A
---------
TO MORTGAGE
Lot 10, less the South 50 feet thereof, Plat of Pinellas Groves, in the
Southeast 1/4 of Section 26, Township 30 South, Range 15 East, according to
Plat Book 1, Page 55, of the public records of Pinellas County, Florida; also,
less and except the following: The North 5.0 feet of the South 55.0 feet of
the East 1/2 of the Southwest quarter (SW 1/4) of the Northwest quarter (NW
1/4) of the Southeast 1/4 (SE 1/4) of Section 26, Township 30 South, Range 15
East. being a part of Lot 10, Pinellas Groves Subdivision, in the Southeast
quarter (SE 1/4) of said Section 26, as recorded in Plat Book 1, Page 55,
public records of Pinellas County, Florida.
Being more particularly described as follows:
From the Southeast corner of the Northeast 1/4 of said Section 26, Township 30
South, Range 15 East as a Point of Commencement, proceed N. 89 deg 48 min 01
sec W along a 40 acre line a distance of 1989.15 feet; then N. 0 deg. 13 min 30
sec E, a distance of 55.0 feet to an intersection with the Northerly right of
way of Park Boulevard (SR 694) as a Point of Beginning; thence proceed N. 89
deg 48 min 01 sec W along said right of way, parallel to and 55 feet North of
said 40 acre line, a distance of 331.52 feet to the Westerly boundary of the
East 1/2 of the Southwest 1/4 of the Northwest 1/4 of the Southeast 1/4 said
Section 26; thence N. 0 deg 12 min 53 sec E along said Westerly boundary a
distance of 611.10 feet to an intersection with the Northerly boundary of the
Southwest 1/4 of the Northwest 1/4 of the Southeast 1/4 of said Section 26
(being also the boundary of the Plat of "The Gardens" 101, a Condominium, as
recorded in Condo Book 12, Pages 45-48); thence proceed S. 89 deg 48 min 02 sec
E (S. 89 deg 45 min 51 sec E per plat) along said boundary a distance of
331.65; thence S. 0 deg 13 min 30 sec W along said 10 acre line a distance of
611.10 feet to the Point of Beginning.
<PAGE> 73
This Mortgage and Security Agreement
is one of five Mortgage and Security
Agreements all securing a single
Promissory Note, which are being recorded
simultaneously in Hillsborough County,
Pinellas County, Seminole County and
Brevard County, Florida
The documentary stamps and intangible
taxes on all of the Mortgages and Security
Agreements, and on the Promissory Note
have been paid in Hillsborough County
in connection with recording the
Mortgage and Security Agreements in that
County.
This Instrument Prepared By:
______________________________
Arthur Adams Rouse
WYATT, TARRANT & COMBS
2700 Citizens Plaza
Louisville, Kentucky 40202
(502) 589-5235
MORTGAGE AND SECURITY AGREEMENT
-------------------------------
SEMINOLE COUNTY, FLORIDA
THIS MORTGAGE (the "Mortgage") is executed actually on the
dates indicated in the notarial certificate affixed to it, but is made and
delivered effective as of February 12, 1996, by and between [i] ARBOR HEALTH
CARE COMPANY, a Delaware corporation (referred to herein as the "BORROWER"),
having a mailing address of 1100 Shawnee Road, Box 840, Lima, Ohio and [ii]
BANK ONE, KENTUCKY, NA, a national banking association, having a mailing
address of 416 West Jefferson Street, Louisville, Jefferson County, Kentucky
40232 (referred to herein as the "LENDER").
W I T N E S S E T H:
Borrower is obligated to Lender under and in connection with
the Reimbursement Agreement and the Letter of Credit and the Loan Documents
("LOAN DOCUMENTS") and the other "OBLIGATIONS" more particularly described in
SCHEDULE 1 hereto (all of the foregoing are referred to collectively
hereinafter as the "OBLIGATIONS");
<PAGE> 74
NOW THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower does hereby MORTGAGE,
WARRANT, GRANT, CONVEY AND ASSIGN to Lender, to secure to Lender the payment
and performance when due of the Obligations strictly in accordance with the
terms thereof, all right, title and interest of Borrower in and to the real
estate described in EXHIBIT A attached hereto and incorporated herein by this
reference (the "LAND");
TOGETHER with all right, title and interest of Borrower in all
buildings, foundations, structures and improvements now or hereafter located on
or in the Land, and all materials now or hereafter intended for construction,
reconstruction, alteration or repair thereof, all of which shall be deemed a
part thereof immediately upon being delivered to the Land (collectively, the
"IMPROVEMENTS");
TOGETHER with all right, title and interest of Borrower now
and hereafter in and to the streets and roads, opened or proposed, abutting the
Land, all strips and gores within or adjoining the Land, the air space and
right to use the air space above the Land, all rights of ingress and egress to
and from the Land, all easements, rights of way, reversions, remainders,
hereditaments, and appurtenances now or hereafter affecting the Land or the
Improvements, all royalties and rights and privileges appertaining to the use
and enjoyment of the Land or the Improvements, including all air, lateral
support, alley, drainage, water, riparian, oil, gas and mineral rights, options
to purchase or lease, and all other interests, estates or claims, in law or in
equity, which Borrower now has or hereafter may acquire in or with respect to
the Land or the Improvements (collectively, the "APPURTENANCES"; the Land, the
Improvements and the Appurtenances are hereinafter sometimes collectively
referred to as the "PREMISES");
TOGETHER with all right, title and interest of Borrower in all
fixtures, equipment (including but not limited to office equipment, motors,
elevators, radiators, gas and electric ranges, refrigerators, freezers, and
plumbing, heating, lighting, ventilating, refrigerating, incinerating, air
conditioning, central energy, sprinklering and fire suppression, waste disposal
and theft protection equipment), fittings, furniture, furnishings (including,
but not limited to awnings, shades, screens, blinds and carpets), appliances,
apparatus, and machinery now existing or hereafter installed in the Premises,
and all building materials, supplies and equipment now existing or hereafter
delivered to the Premises and intended to be installed therein, and all
renewals or replacements of any of the foregoing property or articles in
substitution thereof (collectively, the "EQUIPMENT");
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<PAGE> 75
TOGETHER with all right, title and interest of Borrower
whether now existing or hereafter acquired in, to and under all accounts,
documents, instruments, chattel paper, and general intangibles, as the
foregoing terms are defined in the Uniform Commercial Code in effect in the
state in which the Land is located (the "UCC"), that are derived from the
Premises or Equipment, including, to the extent assignable, all contract rights
(including, without limitation, under contracts with all contractors,
architects, engineers or subcontractors relating to the construction or
renovation of the Improvements or Equipment, including payment, performance and
materialmen's bonds); franchises; books and records; plans; specifications;
permits; health facility, pharmacy and other licenses; Certificates of Need;
governmental registrations for diagnostic, laboratory, or any other activities;
Medicare and Medicaid provider agreements; accreditation rights; rights to
refunds under any of the foregoing agreements; and other approvals, actions and
causes of action; which in the case of any of the foregoing now or hereafter
relate to, are derived from or used in connection with the Premises or
Equipment or the use, operation, maintenance, occupancy or enjoyment thereof or
the conduct of any business or activities thereon (collectively, the
"INTANGIBLES");
TOGETHER with all right, title and interest of Borrower,
whether now existing or hereafter acquired and wherever located, in, to and
under all leases, lettings, tenancies and licenses of the Premises or Equipment
or any part thereof now or hereafter entered into and all amendments,
extensions, renewals and guaranties thereof, all security therefor, and all
moneys payable thereunder (each a "Lease" and collectively, the "LEASES");
TOGETHER with all rents, income, issues, profits, security
deposits and other benefits to which Borrower may now or hereafter be entitled
from the Premises, the Equipment or the Intangibles or under or in connection
with the Leases, including, without limitation, all income received from
tenants, lessees, licensees and concessionaires and other persons occupying
space at the Premises and/or rendering services to tenants thereat
(collectively, the "PROPERTY INCOME"); and
TOGETHER with all proceeds, judgments, claims, compensation,
awards of damages and settlements with respect to or hereafter made as a result
of or in lieu of any condemnation or taking of the Premises and/or Equipment by
eminent domain (including severance and consequential damages and change in
grade of streets) or any casualty loss of or damage to any of the Premises, the
Equipment, the Intangibles, the Leases or the Property Income, all refunds with
respect to the payment of property taxes and assessments, and all other
proceeds of the conversion, voluntary or involuntary, of the Premises, the
Equipment, the Intangibles, the Leases or the Property Income, or any part
thereof, into cash or liquidated claims (collectively, the "PROCEEDS"; the
Equipment, the
3
<PAGE> 76
Intangibles, the Leases, the Property Income and the Proceeds are hereinafter
collectively referred to as the "COLLATERAL"; the Premises and the Collateral
being hereinafter sometimes collectively referred to as the "MORTGAGED
PROPERTY").
TO HAVE AND TO HOLD the Mortgaged Property with all the privileges and
appurtenances to the same belonging, and with the possession and right of
possession thereof, unto Lender, its successors and assigns forever, upon the
terms and conditions set forth herein.
AND BORROWER COVENANTS AND WARRANTS lawful seizure of an
indefeasible estate in fee simple of the Mortgaged Property; that the same are
free from all encumbrances and liens whatsoever, except for [i] easements and
restrictions of record on the date hereof, none of which materially interfere
with the use of the Mortgaged Property for the operation thereof intended by
Borrower, [ii] the lien of ad valorem real estate taxes and any assessments for
which payment is not delinquent in either case (the encumbrances and liens
described in the foregoing subsections [i] - [ii] are referred to collectively
as the "PERMITTED EXCEPTIONS"); that Borrower has the legal right, power and
authority to encumber the Mortgaged Property pursuant to this Mortgage, the
execution and delivery and the performance of which will not, either
immediately or with notice and/or passage of time, violate any agreement to
which Borrower is a party or by which Borrower is bound; and that Borrower and
the successors in interest of Borrower will forever WARRANT AND DEFEND the
title to the Mortgaged Property and the lien and priority of this Mortgage
against the claims and demands of all persons whomsoever. All such covenants
and warranties shall run with the land.
AND BORROWER, IN ORDER MORE FULLY TO PROTECT THE SECURITY OF
THIS MORTGAGE, COVENANTS AND AGREES AS FOLLOWS:
1. OBLIGATIONS SECURED. This Mortgage is granted to secure the
payment and performance of the Obligations strictly in accordance with the
terms thereof in each case.
2. PAYMENT AND PERFORMANCE OF OBLIGATIONS. Principal of,
interest on, and all other indebtedness and sums constituted by the Obligations
shall be paid at the times and in the manner provided herein and in the other
Loan Documents.
3. PAYMENT OF TAXES AND OTHER IMPOSITIONS. Borrower shall keep
the Mortgaged Property free from statutory liens of every kind; shall pay,
before delinquency and before any penalty for nonpayment attaches thereto, all
taxes, assessments and governmental or municipal or public levies, fees,
charges, fines or impositions of any nature whatsoever (collectively, the
"IMPOSITIONS") which are or may be levied or imposed against or in connection
with the Mortgaged Property or any part thereof, except when payment for such
items has theretofore been made under the
4
<PAGE> 77
Section of this Mortgage entitled "Monthly Installments of Taxes and
Insurance"; shall deliver to Lender, on or before ten (10) days after request
made by Lender therefor, receipted bills evidencing payment therefor.
Notwithstanding the foregoing, so long as no default, and no circumstance
which, with any required notice and/or opportunity to cure would constitute a
default under the Obligations is subsisting, Borrower shall have the right to
contest the validity of any Imposition by appropriate legal proceedings
provided [i] Borrower notifies Lender of Borrower's intention to contest the
same prior to commencing such contest, [ii] such contest shall preclude
enforcement of collection out of or pursuant to the sale of any of the
Mortgaged Property in satisfaction of any Imposition, [iii] Borrower shall
furnish Lender with, at the option of Lender, a bond (pursuant to Florida
statutes) or title insurance or other security for the Imposition satisfactory
to Lender in Lender's sole discretion, [iv] such contest shall not otherwise
create a failure on the part of Borrower to comply with any other provision or
condition of the Loan Documents, and [v] upon a final and nonappealable
determination of the contest that is adverse to the Borrower, Borrower shall
pay the amount of the Imposition.
4. MONTHLY INSTALLMENTS OF TAXES AND INSURANCE. If requested by
Lender at any time [i] after default (including after any applicable
requirement for notice and an opportunity to cure) in any of the Obligations or
[ii] after payment of taxes or insurance in respect of the Mortgaged Property
have become delinquent (whether or not thereafter cured), Borrower shall pay to
Lender, in addition to the amounts of principal and interest and any other sums
due under the terms of the applicable instruments evidencing the Obligations,
monthly on or before the first day of each calendar month, until the
Obligations are paid in full, the following:
A sum equal to all taxes, assessments and all other impositions next
due on the Mortgaged Property, all as estimated in good faith by
Lender, plus the premiums that will next become due and payable on
policies of fire and other insurance covering the Mortgaged Property
and required under the terms of this Mortgage, less all sums already
paid therefor in each case, divided by the number of complete calendar
months to elapse prior to the date when such taxes, assessments,
impositions and premiums shall be due and payable.
All such payments described in this Section shall be held by Lender without
accruing and without any obligation arising for the payment of interest thereon
and Borrower waives any right, to the extent permitted by law, to demand or
receive any interest, income or profits on any of the payments so deposited
with Lender. Lender is hereby granted a security interest in all such amounts
as collateral for the Obligations and such sums shall be subject to setoff by
Lender following any default by Borrower (including after any
5
<PAGE> 78
applicable requirement for notice and/or opportunity to cure) under this
Mortgage or the other Obligations.
5. UTILITIES. Borrower shall pay or cause to be paid all charges
in respect of all water, sewer, electricity, natural gas, telecommunications
and all other utilities consumed on the Mortgaged Property prior to the date
when the same would become delinquent, and shall provide Lender promptly after
request is made by Lender therefor with copies of paid receipts in respect of
all utility charges assessed against the Mortgaged Property.
6. LIABILITY INSURANCE. Borrower shall carry and maintain such
liability and indemnity insurance as in good faith may be required from time to
time by Lender in forms, amounts and with companies reasonably satisfactory to
Lender. Certificates of such insurance, premiums prepaid, naming Lender as an
additional insured, and copies of such policies, shall be deposited, if
requested by Lender, by Borrower with Lender and shall contain provision for
not less than ten (10) days' notice to Lender prior to any cancellation or
modification thereof.
7. HAZARD INSURANCE. Borrower shall keep or cause to be kept all
Improvements and Equipment, whether now existing or hereafter erected on the
Mortgaged Property, insured as may be required from time to time by Lender
against loss or damage by fire, hazards included within the term "broad form
coverage", rent loss, flood (if required by law), and such other hazards,
casualties, liabilities and contingencies in such amounts (not exceeding the
replacement value thereof except in all events sufficient to keep Borrower from
becoming a co-insurer) and for such periods as may be required by Lender
consistent with reasonable and customary commercial practice with regard to
similar properties or as otherwise required in good faith by Lender, and shall
pay promptly, when due, any premiums on such insurance policies. All insurance
policies shall be carried with companies having a Best rating of A- or better
and approved by Lender and such policies shall name Lender as a lender loss
payee pursuant to a "standard mortgage" or "New York mortgagee" clause.
Evidence that such policies are in force shall be delivered to Lender on or
before ten (10) days after request by Lender therefor. All such policies shall
contain provision for at least ten (10) days notice to Lender prior to any
cancellation or modification thereof. Borrower shall not carry separate
insurance, concurrent in kind or form and contributing, in the event of loss,
with any insurance required hereunder. In the event of a change in the use and
nature of occupancy of the Mortgaged Property, immediate notice thereof by mail
shall be delivered to all insurers and Lender. In the event of loss, Borrower
will give immediate notice by mail to Lender. Borrower hereby authorizes
Lender, at its option, to collect, adjust and compromise any losses under any
of the insurance policies aforesaid (provided Lender in so adjusting and
compromising any such losses acts in good faith and not in a manner which,
under the circum-
6
<PAGE> 79
stances, diminishes the recovery thereunder by an unreasonable amount), and
after deducting all costs of collection to apply the proceeds of such insurance
as follows: [1] provided the gross proceeds from the insurance do not exceed
$100,000 provided no default under any of the terms and conditions of this
Mortgage, or any of the other Obligations secured hereby shall then or
thereafter be subsisting, and provided the proceeds of such insurance (together
with any moneys which may be deposited by Borrower with Lender for the purpose
of repair or restoration of the Mortgaged Property promptly upon Borrower's
becoming aware of any deficiency between the amount of such insurance proceeds
and the amount necessary to restore the Mortgaged Property as hereinafter
provided in this sentence) are sufficient to restore the Mortgaged Property to
the same or better condition as existed immediately prior to the loss, Lender
shall disburse the proceeds of the insurance for the sole purpose of repairing
and restoring the Mortgage Property, which repairs and restoration, if the cost
thereof is reasonably estimated by Lender to exceed $50,000 shall, at the
option of Lender, be under the supervision of an architect or engineer
reasonably acceptable to Lender, shall be made pursuant to plans and
specifications submitted to Lender prior to the commencement thereof, and which
shall be subject to Lender's approval and which proceeds shall be disbursed by
Lender from time to time only upon certification by the architect or engineer
that all of the work theretofore completed was done in compliance with the
plans and specifications approved by Lender, that the sum requested is justly
required to reimburse Borrower for payments by Borrower to persons performing
such work, that the amount of the remaining proceeds shall be sufficient to pay
for the repairs and restoration remaining to be completed pursuant to the
approved plans and specifications, and containing such other certifications,
and subject to such other conditions, including but not limited to waivers of
lien and title insurance coverage, as Lender in good faith deems necessary or
appropriate; or [2] if the gross proceeds from the insurance exceed $100,000,
or if a default under any of the terms and conditions of this Mortgage, or any
of the other Obligations secured hereby shall then or thereafter be subsisting,
or any of the other conditions described above to the proceeds being made
available for restoration are not met, the proceeds shall be applied as a
reduction upon or, at the sole option of Lender, as a fund to be retained by
Lender as part of the Collateral for, the Obligations secured hereby, in such
order as Lender may elect; with the balance of any proceeds remaining after the
disposition of the proceeds as aforesaid to be paid to Borrower. Upon
acquisition of the Mortgaged Property by Lender in the event of foreclosure of
this Mortgage, or other transfer of title to the Mortgaged Property in
extinguishment of all or part of the Obligations secured hereby, all right,
title and interest of Borrower in and to any insurance policies then in force
shall pass to the purchaser or grantee of said property.
7
<PAGE> 80
8. CONDEMNATION. Borrower shall give Lender immediate notice of
the actual or threatened commencement of any proceedings under eminent domain
affecting all or any part of the Mortgaged Property, including severance and
consequential damage and change in grade of streets, and will deliver to Lender
copies of any and all papers served in connection with any such proceedings.
Borrower further covenants and agrees to make, execute and deliver to Lender,
at any time or times upon request of Lender, free, clear and discharged of any
encumbrances of any kind whatsoever, any and all further assignments and/or
other instruments deemed necessary or appropriate by Lender for the purpose of
validly and sufficiently assigning all awards and other compensation,
heretofore and hereafter to be made to Borrower (including the assignment of
any award from the United States Government at any time after the allowance of
the claim therefor, the ascertainment of the amount thereof and the issuance of
the warranty for payment thereof) for any taking, either permanent or
temporary, under any such proceedings, all of which awards may, at the option
of Lender (subject only to the provisions of any leases of portions of the
Mortgaged Property permitted under the provisions of the Loan Documents and not
subordinate to the rights of Lender with respect to such awards), regardless of
whether a default in any of the Obligations is then subsisting, be applied as a
reduction of or, at the sole option of Lender, as a fund to be retained by
Lender as part of the Collateral for, the Obligations in such order as Lender
may elect.
9. ALTERATIONS; REPAIRS; WASTE, COMPLIANCE WITH LAWS; INSPECTION.
No additional Improvements shall be constructed on the Land, and no existing
Improvements shall be materially altered, or removed or demolished without the
prior written consent of Lender in each case, provided such consent is not
unreasonably withheld. No Equipment shall be severed or removed without the
prior written consent of Lender except that Borrower may replace in the
ordinary course of business any Equipment with other Equipment at least equal
in quality and condition to that replaced, provided such replacements are free
from any security interest in or encumbrance thereon or reservation of title
thereto except for the lien of this Mortgage and any other encumbrance which
may be permitted by the express terms of the Loan Documents. Borrower shall
permit, commit, or suffer no waste, impairment or deterioration of the
Mortgaged Property or any part thereof; shall keep and maintain the same in
good repair and condition, reasonable wear and tear excepted; shall effect such
repairs as Lender may reasonably require, and from time to time to make all
needful and proper replacements so that said Mortgaged Property will, at all
times, be in fit and proper for the respective purposes for which they were
erected or installed. Borrower shall comply with or require compliance with
all statutes, regulations, codes, orders, requirements or decrees relating to
the Mortgaged Property (including but not limited to the Americans with
Disabilities Act) by any federal, state or municipal authority and, without
limitation of the foregoing, shall observe and comply with all conditions and
requirements necessary
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<PAGE> 81
to preserve and extend any and all rights, licenses, permits (including but not
limited to zoning variances, conditional uses and non- conforming uses),
privileges, franchises and concessions which are applicable to the Mortgaged
Property or which have been granted to or contracted for by Borrower in
connection with any existing or presently contemplated use of the Mortgaged
Property. Borrower shall permit Lender, during business hours of Borrower and
at all other reasonable times, to enter upon and inspect the Mortgaged
Property.
10. PROHIBITION OF OTHER LIENS. Borrower shall not voluntarily
create or otherwise permit to be created or filed against the Mortgaged
Property any mortgage lien (except any securing indebtedness to Lender), or any
statutory or other lien or liens, charge or encumbrance of any nature, whether
inferior or superior to the lien of this Mortgage, without the prior written
consent of Lender, except any which is one of the Permitted Exceptions.
Borrower will not permit any default (whether or not waived by the applicable
mortgagee) to occur under any other mortgage (or under the indebtedness secured
thereby, in each case) on all or any part of the Mortgaged Property. Without
limitation of the foregoing, Borrower shall keep and maintain the Mortgaged
Property free from the claims of all persons now or hereafter supplying labor
or materials thereto notwithstanding by whom such labor or materials may have
been contracted. Notwithstanding the preceding sentence, so long as no
default, and no circumstance which, with any required notice and/or opportunity
to cure would constitute a default under the Obligations is then or thereafter
subsisting, Borrower shall have the right to contest the validity of any such
lien or claim of any person supplying such labor or materials by appropriate
legal proceedings provided [i] Borrower notifies Lender of Borrower's intention
to contest the same prior to commencing such contest, [ii] such contest shall
preclude enforcement or collection out of or pursuant to the sale of any of the
Mortgaged Property in satisfaction of the lien or claim, [iii] Borrower shall
furnish Lender with, at the option of Lender, a bond or title insurance or
other security for such lien or claim satisfactory to Lender in Lender's sole
discretion, [iv] such contest shall not otherwise create a failure on the part
of Borrower to comply with any other provision or condition of the Loan
Documents, and [v] upon a final and nonappealable determination of the contest
that is adverse to the Borrower, Borrower shall pay the amount of the lien or
claim.
11. INDEMNIFICATION OF LENDER. Borrower shall, to the fullest
extent permitted by applicable law, save Lender harmless from all losses, costs
and expenses, including reasonable attorneys' fees, and the cost of a title
search, continuation of abstract and preparation of survey, incurred by reason
of any action, suit, proceeding, hearing, motion or application before any
court or administrative body in and to which Lender may be or become a party by
reason of this Mortgage, including but not limited to condemnation, bankruptcy,
probate and administration
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<PAGE> 82
proceedings, as well as any other of the foregoing wherein proof of claim is by
law required to be filed or in which it becomes necessary to defend or uphold
the terms of, or the lien created by, this Mortgage, and all money paid or
expended by Lender in that regard, together with interest thereon from the date
of such payment at the Index Rate of Lender plus 2% per annum (such interest
rate is referred to hereinafter as the "APPLICABLE RATE") shall be part of the
Obligations secured hereby and shall be due and payable by Borrower immediately
upon request made by Lender. Borrower additionally hereby indemnifies and
saves Lender harmless under this Mortgage from and against all liabilities,
obligations, claims, damages. penalties, causes of action, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
imposed upon, incurred by, or asserted against Lender on account of [i] any
failure of the Borrower to comply with any of the covenants and conditions on
the part of Borrower to be performed or representations of Borrower contained
in this Mortgage, or [ii] any loss or damage to the Mortgaged Property or any
injury to, or death of, any person that may be occasioned by any cause
whatsoever pertaining to the Mortgaged Property or the use thereof, provided
that such indemnity shall be effective only to the extent of any loss that may
be sustained by Lender in excess of any net proceeds of the insurance received
by Lender from any insurance carried with respect to such loss and provided
further that the benefits of this Section shall not inure to any person other
than Lender and its successors and assigns. Nothing contained in this Section
shall require the Borrower to indemnify Lender against the gross negligence or
wantonly malicious acts of Lender. The indemnities contained in this Section
shall survive payment of the Obligations, the release of this Mortgage,
Foreclosure of this Mortgage, or a deed in lieu of foreclosure, and shall
extend to the officers, directors, employees and duly authorized agents of
Lender.
12. BOOKS AND RECORDS. Borrower at all times shall keep and
maintain complete and accurate books of accounts and records adequate to
reflect correctly the results of the operation of the Mortgaged Property and
copies of all written contracts, leases, rental agreements, license agreements
and other instruments and agreements that affect the Mortgaged Property. Such
books, records, contracts, leases and other instruments and agreements shall be
subject to examination and inspection at any reasonable time by Lender, and
Borrower shall furnish Lender, at the cost of Borrower, with a copy of all or
any of the same promptly following any request therefor by Lender.
13. RIGHT OF LENDER TO CURE DEFAULTS. Upon default in the
performance of any of the terms, covenants or conditions of this Mortgage or
any of the other Loan Documents, Lender may, at its option and whether or not
electing to declare the whole of the Obligations secured hereby due and
payable, perform the same without waiver of any other remedy, and any amount
paid or advanced
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by Lender in connection therewith, or any other costs, charges or expenses,
including reasonable attorney's fees, incurred in the protection of the
Mortgaged Property and the maintenance of the lien of this Mortgage, with
interest thereon at the Applicable Rate, shall be repayable by Borrower,
immediately upon demand made by Lender, shall be a lien upon the Mortgaged
Property prior to any right, title to, interest in, or claim thereon attaching
or accruing subsequent to the attachment of lien of this Mortgage and shall be
secured by this Mortgage.
14. AUTHORIZED DETERMINATIONS BY LENDER. Lender in making any
payment herein and hereby authorized, in the place and stead of Borrower [i]
relating to any Impositions, utility charges or liens or other claims asserted
against or in connection with the Mortgaged Property, may do so according to
any bill, statement or estimate procured from the appropriate public office or
other person or entity without inquiry into the accuracy thereof or the
validity of the Imposition, charge, lien or claim; or [ii] relating to any
apparent or threatened adverse title, lien, statement of lien, encumbrance,
claim or charge, shall be the sole judge of the legality or validity of same;
or [iii] relating to the expense of repairs or replacement of any Improvements
or Equipment shall be the sole judge of the state of repairs and the necessity
for incurring the expense of any such repairs or replacement; or [iv] otherwise
relating to any other purpose in and authorized by this Mortgage, but not
enumerated in this Section, may do so whenever, in the judgment and discretion
of Lender, such advance or advances shall seem necessary or desirable to
protect the full security intended to be created by this Mortgage, and provided
further that in connection with any such advance, Lender, at the option of
Lender, may and is hereby authorized to obtain a continuation report of title
prepared by a title insurance company, the cost and expense of which shall be
repayable by Borrower immediately upon demand and shall be secured by this
Mortgage.
15. ENVIRONMENTAL COMPLIANCE. Borrower represents and warrants
that to the best of Borrower's knowledge and except as previously disclosed in
writing to Lender by Borrower, or by environmental consultants engaged by
Borrower or Lender, that: [i] no hazardous or toxic substance or material or
other waste ("HAZARDOUS SUBSTANCE") as defined in or regulated under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended (42 U.S.C. Section 9601, ET. SEQ.), the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901, ET. SEQ.), The Oil Pollution Act of 1990
(33 U.S.C. Section 2701 ET. SEQ.) or any other federal, state or local law,
order or regulation pertaining to health, safety, or the environment (the
"ENVIRONMENTAL LAWS") has ever been disposed, released, discharged or spilled
on or under any part of the Mortgaged Property, [ii] the Mortgaged Property has
never been used as a dump or landfill, [iii] no litigation or administrative
action or proceeding has been commenced or, to Borrower's knowledge, threatened
against Borrower or any subsidiary
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or affiliate of Borrower alleging a violation of any Environmental Laws, and
[iv] no underground storage tank, polychlorinated biphenyls, asbestos,
lead-based paint or urea formaldehyde is located on or under or has been
applied to any part of the Mortgaged Property or contained in any Improvement
or Equipment located on the Mortgaged Property. Borrower will not permit any
Hazardous Substance to be placed or stored in or upon the Mortgaged Property
except DE MINIMIS quantities if and, in such event, as incident to the
customary operations of Borrower on the Mortgaged Property, and then only in
compliance with all Environmental Laws. Without limitation of the preceding
sentence, Borrower covenants that the Mortgaged Property at all times hereafter
shall remain free from any contamination by any Hazardous Substance and that
Borrower at all times will comply with all Environmental Laws affecting
Borrower or the Mortgaged Property. Borrower shall notify Lender promptly upon
becoming aware of any contamination of the Mortgaged Property by any Hazardous
Substance, or upon being threatened with receipt of or receiving any notice,
citation, summons, complaint or other communication alleging violation by
Borrower of any Environmental Law or potential liability of Borrower in
connection with any Hazardous Substance. Lender and its agents, including but
not limited to environmental consultants and remediation contractors engaged by
Lender, shall have the right, but not the obligation, to enter upon the
Mortgaged Property at any time to inspect the same and take such other action
as Lender deems necessary or appropriate with respect to any actual or
threatened contamination of the Mortgaged Property by a Hazardous Substance or
any other circumstance relating to a Hazardous Substance or any Environmental
Law which in Lender's sole opinion could impair the security intended to be
afforded by this Mortgage or result in a claim against or liability of Lender,
and all costs and expenses, including reasonable attorneys' fees and the fees
of such consultants and contractors, incurred by Lender, in so doing shall be
paid by Borrower to Lender upon demand and be secured by the lien of this
Mortgage and bear interest at the Applicable Rate. Borrower hereby indemnifies
Lender and holds Lender wholly harmless from and against any and all losses,
costs, expenses (including but not limited to reasonable attorneys' fees),
injuries, damages, liabilities and claims of any kind whatsoever paid, incurred
or suffered by or asserted against Lender by any person or entity, including
but not limited to any governmental entity, whatsoever with respect to or as a
direct or indirect result of the presence heretofore, now or hereafter of any
Hazardous Substance on or under the Mortgaged Property, or the violation or
alleged violation heretofore, now or hereafter by Borrower or any subsidiary or
affiliate of Borrower of any Environmental Laws and, without limitation of the
foregoing, any inaccuracy of any representation or warranty by Borrower
contained in this Section or any breach by Borrower of or other default in the
covenants contained in this Section. The indemnification established under the
preceding sentence shall survive the maturity as well as the repayment or other
discharge of the Obligations secured by this Mortgage and any
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termination of this Mortgage whether pursuant to repayment of the Obligations
secured by it, foreclosure, deed in lieu of foreclosure or otherwise, to the
maximum extent permitted by law. Borrower expressly acknowledges that any
misrepresentation by Borrower under this Section, or any failure of condition
or breach of covenant by Borrower or other default in any of the obligations of
Borrower under this Section shall be and constitute an immediate default under
this Mortgage and each of the other Loan Documents.
16. ACCELERATION UPON DEFAULT; CERTAIN REMEDIES. That, upon
failure of Borrower to comply with any of the provisions of this Mortgage, if
such failure shall continue for fifteen (15) calendar days after written notice
thereof is given to Borrower by Lender (unless this Mortgage or the applicable
Loan Document in connection with which such non-compliance has occurred
affirmatively provides that no notice and/or period of cure, or that an
explicit alternative period of cure, shall be applicable to such failure by
Borrower, in which case such alternative provision rather than fifteen (15)
days after notice shall control), or (after satisfaction of any applicable
requirement for notice and opportunity to cure contained in the Loan Document
governing the default) upon any default in any of the other Obligations,
including the payment or performance or observance of each and every other
term, covenant, condition or agreement contained in the Loan Documents, then,
in any of said events, the entire Obligations secured hereby shall, at the
option of Lender, become immediately due and payable without relief from
valuation or appraisement laws, and thereupon or at any time thereafter Lender
may proceed to foreclose this Mortgage, and any failure to exercise said option
shall not constitute a waiver of the right to exercise the same at any other
time. In any of such events, Lender may enter upon the Mortgaged Property,
collect the rents, issues and profits thereof and, after paying all expenses of
such collections including reasonable attorney's fees, and a reasonable
compensation for Lender, shall apply the money collected to the satisfaction of
the Obligations hereby secured in such order as Lender elects. Lender,
thereupon, also shall have all rights and remedies provided herein, in the Loan
Documents, and under the UCC with regard to any of the Mortgaged Property to
which the UCC is applicable, all of which rights and remedies shall, to the
fullest extent permitted by law, be cumulative.
17. RECEIVER. Lender, in any action to foreclose this Mortgage,
and in addition to all other rights and remedies available to Lender, shall be
entitled to the appointment of a receiver of the rents, issues and profits of
the Mortgaged Property as a matter of right and without notice, with power to
collect the rents, issues and profits of the Mortgaged Property, due and
becoming due during the pendency of such foreclosure suit, such rents, issues
and profits being hereby expressly assigned and pledged as additional security
for the payment of the Obligations secured by this Mortgage without regard to
the value of the Mortgaged Property or the solvency of any person or persons
liable
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for the payment of such Obligations, and regardless of whether Lender has an
adequate remedy at law. Borrower for itself and any subsequent owner of the
Mortgaged Property hereby waives any and all defenses to the application for a
receiver, as above provided, and hereby specifically consents to such
appointment without notice, except any notice required by law, but nothing
herein contained is to be construed to deprive Lender of any other right,
remedy or privilege Lender may have under the law to have a receiver appointed.
18. FEES AND EXPENSES IN FORECLOSURE. In case of foreclosure of
this Mortgage in any court of law or equity whether or not any order or decree
shall have been entered therein, and to the extent permitted by law, a
reasonable sum shall be allowed for stenographers' fees and for all moneys
expended for documentary evidence and the cost of a complete abstract of title
and title report for the purpose of such foreclosure, such sums to be secured
by the lien of this Mortgage, and, to the extent permitted by law, there shall
be included in any judgment or decree foreclosing this Mortgage and paid out of
said rents, issues and profits from the Mortgaged Property and the proceeds of
any sale made in pursuance of any such judgment or decree: [1] all costs and
expenses of such suit or suits, appraisals, advertising, sale and conveyance,
including stenographers' fees, outlays for documentary evidence and the cost of
said abstract, examination of title and title report; [2] reasonable fees of
legal counsel to Lender, to the fullest extent permitted by law; [3] all moneys
advanced by Lender, if any, for any purposes authorized in this Mortgage, with
interest as herein provided; [4] all the accrued interest remaining unpaid on
the Obligations hereby secured; and [5] all the principal of the Obligations
remaining unpaid. The surplus of the proceeds, if any, shall be paid to
Borrower promptly after request by Borrower, or as the court may direct.
19. SALE IN ONE OR MORE PARCELS. In case of any foreclosure sale
of the Mortgaged Property, the same may be sold in one or more parcels.
20. NO WAIVER BY LENDER. The failure of Lender to exercise the
option for acceleration of maturity and/or foreclosure following any default by
Borrower in any of the Obligations or to exercise any other option granted to
Lender hereunder or under the other Loan Documents in any one or more
instances, or the acceptance by Lender of partial payments of any of the
Obligations, shall not constitute a waiver of any such default, or extend or
affect any applicable grace period, but such option shall remain continuously
in force. Acceleration of maturity of any of the Obligations, once claimed by
Lender, may, at the option of Lender, be rescinded by Lender by a written
acknowledgement to that effect, but the tender and acceptance of partial
payments alone shall not in any way affect or rescind such acceleration of
maturity, or extend or affect any grace period.
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21. LENDER TO SUCCEED TO PRIORITY OF PRIOR LIENS. Should the
proceeds of any loan made by Lender to Borrower as part of any of the
Obligations, or any amount paid out or advanced by Lender, be used directly or
indirectly to pay off, discharge, or satisfy, in whole or in part, any prior
lien or encumbrance upon the Mortgaged Property or any part thereof, then
Lender shall be subrogated to such other lien or encumbrance with respect to
the Mortgaged Property, and shall have the benefit of the priority of all of
same.
22. RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies
provided under this Mortgage and the other Loan Documents, at law, or in equity
are cumulative and Lender as holder of every Obligation secured hereby may
recover judgment thereon, issue execution therefor, and resort to every other
right or remedy available at law or in equity without first exhausting and
without affecting or impairing the security or any right or remedy afforded by
this Mortgage and no enumeration of special rights or powers by any provision
of this Mortgage shall be construed to limit any grant of general rights or
powers, or to take away or limit any rights granted to or vested in Lender by
virtue of the laws of the state in which the Land is located, or any other
jurisdiction, the laws of which are applicable to this Mortgage. Lender may
exercise any right, power or remedy to which Lender is entitled under this
Mortgage or the other Loan Documents at Lender's option and in Lender's sole
and absolute discretion without any obligation to do so, and if, under this
Mortgage or the other Loan Documents, two or more alternative courses of action
and/or remedies are available to Lender, Lender may elect any such action
and/or remedy or combination of actions and/or remedies as Lender shall
determine in the sole and absolute discretion of Lender.
23. LENDER'S RIGHT TO DEAL WITH BORROWER AND OTHER PARTIES.
Lender, without notice, and without regard to the consideration, if any, paid
therefor, and notwithstanding the existence at that time of any inferior liens
thereon, may release any part of the Mortgaged Property, or any other security
for all or part of the Obligations, and may release or grant indulgences,
settlements or compromises to any person liable or pledging security for all or
part of the Obligations, without in any way affecting the priority of the lien
of this Mortgage to the full extent of the Obligations remaining unpaid with
regard to any part of the security not expressly released. Lender may agree
from time to time with Borrower or any other party obligated on or pledging
security for any part of the Obligations or having any interest in the
Mortgaged Property to extend the time for payment of any part of the
Obligations or grant any other indulgences, releases, settlements or
compromises and such agreements shall not in any way release or impair the lien
of this Mortgage. In the event Lender [a] releases any part of the Mortgaged
Property, or any person liable for or having pledged security for any of the
Obligations, [b] grants an extension of time for any payments of the
Obligations or grants any
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other indulgences, releases, settlements or compromises; [c] takes other or
additional security for the payment of any of the Obligations; [d] waives or
fails to exercise any right granted in this Mortgage or any of the other Loan
Documents, said acts or omissions by Lender shall not release Borrower,
subsequent owners of the Mortgaged Property or any part thereof, or makers or
sureties or pledgors of collateral for or any of the Obligations, under any
covenant of this Mortgage or of the other Loan Documents, nor preclude Lender
from exercising any right, power or privilege herein or in the other Loan
Documents granted or intended to be granted in the event of any other default
then existing or any subsequent default.
24. USURY; ILLEGALITY; SEVERABILITY. Nothing contained in this
Mortgage or any of the other Loan Documents or pursuant to any transaction
related thereto shall be construed or shall operate either presently or
prospectively, [a] to require Borrower to pay interest at a rate greater than
is lawful, but shall require payment of interest and other sums only to the
extent of such lawful rate, or [b] to require Borrower to make any payment or
do any act contrary to law, but if any clause or provision contained in this
Mortgage or in any other Loan Document shall otherwise so operate to invalidate
this Mortgage or any other Loan Document, in whole or in part, then such clause
or provision, as the case may be, only shall be held for naught as though not
contained in this Mortgage or in the applicable Loan Document and the remainder
of this Mortgage and other Loan Documents, as applicable, shall remain
operative and in full force and effect.
25. WARRANTY AGAINST VIOLATIONS OF COVENANTS. Borrower represents
and warrants that on the date hereof neither this Mortgage, nor the Mortgaged
Property, nor the contemplated use of the Improvements and Equipment,
constitute a breach, or a violation of, any covenants, conditions, easements or
restrictions, whether of record or not, or any zoning laws or land use
regulations, or, to the knowledge of Borrower, other laws or regulations
affecting the Mortgaged Property or binding upon Borrower, and Borrower
covenants and agrees that Borrower will take all actions necessary to prevent
any such breach or violation from hereafter occurring.
26. INSOLVENCY. In the event Borrower or any obligor, guarantor
or pledgor of collateral for any of the Obligations shall make a general
assignment for the benefit of creditors, or shall file a voluntary petition in
bankruptcy, or shall be adjudicated a bankrupt or insolvent, or shall file any
petition or answer seeking, consenting to, or acquiescing in, any
reorganization, arrangement, adjustment, composition, liquidation, dissolution
or similar relief, under any present or future statute, law or regulation, or
shall file an answer admitting or shall fail to deny the material allegations
of a petition against it for any such relief, or if any such proceeding against
Borrower or such obligor, guarantor or pledging seeking any such relief shall
not have been
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dismissed within sixty (60) days after the commencement thereof; or if a
trustee, receiver or liquidator of Borrower or any obligor, guarantor or
pledgor of collateral for the Obligations or any substantial part of their
respective properties or assets shall be appointed with the consent or
acquiescence of Borrower or such obligor, guarantor or pledgor or if any such
appointment, if not so consented to or acquiesced in, shall remain unvacated or
unstayed for an aggregate of sixty (60) days, then the whole of the principal
sum and all of the other Obligations secured hereby automatically shall be
deemed to have become immediately due and payable and the same, with interest
thereon at the Applicable Rate, and with all other costs and charges payable
under the Loan Documents, including reasonable attorney's fees, shall thereupon
be collectible by suit at law or in the exercise of any remedy available under
this Mortgage or in equity in the same manner as if the whole of the
Obligations had been made payable at the time when any of the foregoing
contingencies shall have occurred.
27. VOLUNTARY ZONING CHANGES. Borrower covenants not to change
the use that Borrower intended for the Mortgaged Property at the time Borrower
executed this Mortgage, or initiate, join in, consent to, or permit any change
in any zoning ordinance, private restrictive covenant or other public or
private restriction changing, limiting or restricting the uses which may be
made of the Mortgaged Property, without the prior written consent of Lender
obtained in each instance.
28. RESTRICTIONS ON TRANSFER. Except as expressly permitted by,
and subject to the provisions of the Loan Documents, Borrower shall not enter
into any lease of all or any part of the Mortgaged Property, or otherwise sell,
transfer or convey, or enter into any agreement to sell, transfer or convey,
all or any part of the Mortgaged Property, or any legal or beneficial interest
therein, by operation of law (including but not limited to, as applicable, a
merger, consolidation or transfer of capital stock, or other ownership interest
in Borrower) or otherwise, without Lender's prior written consent, and upon any
breach of this Section Lender may immediately, at Lender's option, and without
notice, declare all of the Obligations to be immediately due and payable and
exercise all rights and remedies available to Lender upon a default under this
Mortgage.
29. NOTICES. Except for any notice required under applicable law
to be given in another manner, any notice given under this Mortgage shall be
given in the manner stipulated by the Series 1 Reimbursement Agreement
described in SCHEDULE 1 to this Mortgage.
30. SECURITY AGREEMENT; FINANCING STATEMENTS. Borrower promptly
upon request by Lender shall execute, acknowledge and deliver to Lender any
financing statement, affidavit, continuation statement or certificate or other
document that Lender reasonably may request in order to perfect, preserve,
maintain or continue the
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security interest in the Mortgaged Property under this Mortgage and the
priority of such security interest, and upon any failure by Borrower to do so
Lender automatically shall be vested with power of attorney for Borrower,
coupled with an interest, for such purposes. Borrower further agrees to pay to
Lender on demand all costs and expenses incurred by Lender in connection with
the preparation, execution, recording, filing and refiling of any such
documents. In addition to being a mortgage this Mortgage is intended to be a
security agreement and a fixture filing pursuant to the UCC for the items
specified above as part of the Mortgaged Property (including goods constituting
part of the Collateral that are or are to become fixtures) which, under
applicable law, may be subject to a security interest pursuant to the UCC, and
Borrower hereby grants to Lender a security interest in said items as security
for the Obligations. Without limitation of the foregoing, Borrower agrees that
Lender may file this Mortgage in any personal property or real estate records
or other appropriate index as a financing statement for all or any of the items
specified above as part of the Mortgaged Property. A carbon, photographic or
other reproduction of this Mortgage or of a financing statement shall be
sufficient as a financing statement.
31. SUCCESSORS AND ASSIGNS; MODIFICATIONS IN WRITING. Subject to
the Section of this Mortgage entitled "Restrictions on Transfer," this Mortgage
shall be binding upon Borrower and its permitted successors and assigns, and
all persons claiming under or through Borrower or any such successor or assign,
and shall inure to the benefit of and be enforceable by Lender and its
successors and assigns. This Mortgage may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.
32. AFTER ACQUIRED PROPERTY. All property of every kind and
description acquired by Borrower after the date hereof which by the terms
hereof is required or intended to be subjected to the lien of this Mortgage
shall, immediately upon the acquisition thereof by Borrower, and without any
further mortgage, conveyance, assignment or transfer, become subject to the
lien and security interest of this Mortgage. Nevertheless, Borrower, at any
time, upon the request of Lender, will execute, acknowledge and deliver all
such additional papers and instruments and all such further assurances of title
and will do or cause to be done all further acts and things as may, subject to
the conditions contained in this Mortgage, be proper or reasonably necessary
for carrying out the intent of this Mortgage.
33. GOVERNING LAW. This Mortgage was negotiated in the
Commonwealth of Kentucky, the Reimbursement Agreements were delivered by
Borrower and accepted by Lender in the Commonwealth of Kentucky, and the
Letters of Credit were issued in the Commonwealth of Kentucky, which state
Borrower and Lender agree has a substan-
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tial relationship to Borrower and Lender and to the underlying transaction in
connection with which this Mortgage was granted. This Mortgage, including
matters of construction, validity and performance, and the obligations arising
hereunder, shall be construed in accordance with and otherwise governed in all
respects by the laws of the Commonwealth of Kentucky applicable to contracts
made and performed in such state and any applicable law of the United States of
America except to the extent that the real and personal property laws of the
State of Florida, including laws relating to the perfection, priority and
enforcement of liens on real and personal property located in Florida,
necessarily shall apply to enforcement of the security covered by this
Mortgage. Borrower hereby irrevocably agrees that any legal action, suit, or
proceeding against it with respect to its obligations, liabilities or any other
matter under or arising out of or in connection with this Mortgage or the other
Loan Documents or for recognition or enforcement of any judgment rendered in
any such action, suit or proceeding may be brought in the United States Courts
for the Western District of Kentucky, or in the courts of the Commonwealth of
Kentucky, as Lender may elect, and by execution and delivery of this Mortgage,
Borrower hereby irrevocably accepts and submits to the non-exclusive
jurisdiction of each of the aforesaid courts IN PERSONA, generally and
unconditionally with respect to any such action, suit, or proceeding for
Borrower and in respect of Borrower's property. Borrower further agrees that
final judgment against Borrower in any action, suit or proceeding referred to
herein shall be conclusive and may be enforced in any other jurisdiction, by
suit on the judgment, a certified or exemplified copy of which shall be
conclusive evidence of the fact and of the amount of the indebtedness of
Borrower.
34. WAIVER OF EXEMPTION. To the extent permitted by law with
respect to the Obligations secured hereby including any renewals or extensions
thereof, Borrower waives and renounces any and all homestead and exemption
rights, as well as the benefit of all valuation and appraisement privileges,
and stay, redemption and moratoriums under and by virtue of the constitution
and laws of the state in which the Land is located, and of any other state or
the United States, now existing or hereafter enacted.
35. JOINT AND SEVERAL LIABILITY; COVENANTS RUN WITH LAND. All of
the obligations of Borrower hereunder shall be joint and several. All of the
covenants of this Mortgage shall run with the land.
36. PROVISIONS SEVERABLE. In the event that any provision of this
Mortgage or any of the other Loan Documents conflicts with applicable law, such
conflict shall not affect other provisions of this Mortgage or the other Loan
Documents that can be given effect without the conflicting provisions, and to
this end the provisions of this Mortgage and the other Loan Documents are
declared to be severable.
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37. INTERPRETATION. Whenever used, the singular number shall
include the plural, the plural the singular and the use of any gender shall
include all genders. The captions to the various sections of this Mortgage are
inserted for convenience only and shall be ignored in interpreting its
provisions.
38. WAIVER OF MARSHALLING. Notwithstanding the existence of any
other security interests in the Mortgaged Property held by Lender or by any
other person or entity, Lender shall have the right to determine the order in
which any or all of the Mortgaged Property shall be subjected to the remedies
provided herein, and the order in which any or all portions of the Obligations
secured hereby are satisfied from the proceeds realized upon the exercise of
the remedies provided herein. Borrower, any guarantor of or pledgor of
collateral for any of the Obligations, and any other person or entity now or
hereafter acquiring a security interest in the Mortgaged Property and having
actual or constructive notice of this Mortgage, each waives any and all right
to require the marshalling of assets in connection with the exercise of any of
the remedies permitted by applicable law or in equity or provided in this
Mortgage. Without limitation of the foregoing, if all or any part of the
Obligations are secured not only by this Mortgage but also by one or more other
mortgages, deeds of trust, deeds to secure debt or other encumbrances of
property located in this or other jurisdictions or states (collectively, the
"ADDITIONAL SECURITY INSTRUMENTS"), Lender, following any default (including
after any required notice and applicable period of cure) under this Mortgage or
any of the Additional Security Instruments, may proceed, concurrently or at any
time thereafter and from time to time, to exercise the rights and remedies of
Lender under this Mortgage and/or one or more of the Additional Security
Instruments or other Loan Documents by proceedings that are appropriate in the
jurisdiction or state wherein the property encumbered thereby is located, and
no such action (or failure to act) by Lender shall impair any rights or
remedies of Lender under this Mortgage, any of the Additional Security
Instruments, at law or in equity.
39. WAIVER OF TRIAL BY JURY. THE LENDER AND BORROWER ACKNOWLEDGE
THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE TIME AND
EXPENSE REQUIRED FOR A BENCH TRIAL AND HEREBY KNOWINGLY AND VOLUNTARILY WAIVE,
TO THE FULLEST EXTENT PERMITTED BY LAW, AND AFTER HAVING CONSULTED OR HAVING
HAD AMPLE OPPORTUNITY TO CONSULT THEIR RESPECTIVE LEGAL COUNSEL CONCERNING THE
CONSEQUENCES OF SUCH WAIVER, TRIAL BY JURY IN ANY ACTION OR OTHER PROCEEDING
BROUGHT TO ENFORCE OR DEFEND AGAINST COLLECTION OF OR OTHERWISE IN CONNECTION
WITH THIS MORTGAGE OR THE OTHER LOAN DOCUMENTS.
<THE BALANCE OF THIS PAGE INTENTIONALLY HAS BEEN LEFT BLANK>
20
<PAGE> 93
IN TESTIMONY WHEREOF, witness the signature of Borrower to
this Mortgage as of the date set forth above.
BORROWER:
--------
Signed, acknowledged and ARBOR HEALTH CARE COMPANY, a
delivered in the presence Delaware corporation
of:
__________________________ By: ___________________________
Signature
__________________________ Printed Name: _________________
Printed Name
Title: ________________________
__________________________
Signature
__________________________
Printed Name
STATE OF _______________ )
: SS
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this ____
day of February, 1996, by ______________________________ (name), as
______________________________ (title) of Arbor Health Care Company, a Delaware
corporation, on behalf of the corporation. He/She:
(check one) ______ is personally known to me, or has
______ produced ____________________________
as identification.
__________________________________________
__________________________________________
Name: (Please Print)
Notary Public, State of __________________
[AFFIX NOTARY SEAL]
21
<PAGE> 94
SCHEDULE 1
----------
TO
MORTGAGE AND SECURITY AGREEMENT ("AGREEMENT)
BETWEEN ARBOR HEALTH CARE COMPANY
AND BANK ONE, KENTUCKY, NA
(DESCRIPTION OF OBLIGATIONS)
The "OBLIGATIONS" referred to in the foregoing Agreement are
as follows:
A. All indebtedness, liabilities and obligations arising
under or evidenced by, and the performance of all covenants, conditions and
agreements undertaken by each of the Borrowers hereinafter described in
connection with, each of the following documents, including any renewals,
extensions and amendments of any of them or substitutions or replacements for
any of them (referred to hereinafter as the "REIMBURSEMENT AGREEMENT"):
(1) Reimbursement Agreement dated as of February
12, 1996, to which Arbor Health Care Company, a Delaware corporation ("ARBOR"),
Marshall Properties, Inc., an Ohio corporation ("MARSHALL") (Arbor and Marshall
are referred to each individually as a "BORROWER" and collectively as the
"BORROWERS"), and Bank One, Kentucky, NA, a national banking association
("LENDER"), are parties, referable to Letter of Credit No. S-6122 in the face
amount of $27,506,250 issued by Lender for the joint and several account of
Borrowers (the "LETTER OF CREDIT") as security for Promissory Note (Series
1996A-1) and Promissory Note (Series 1996A-2), both dated as of February 15,
1996, made jointly and severally by Borrowers to the order of Capital One
Funding Corporation ("CAPITAL") in face principal amount of $13,500,000 and
maturing on February 1, 2003.
B. The payment, performance and discharge of any and all
obligations and liabilities of each Borrower, whether direct or indirect,
absolute or contingent, due or not due, now existing or hereafter arising, in
conjunction with issuance of the Letter of Credit (collectively, together with
any extensions, renewals, amendments, substitutions or replacements thereof and
therefor, the "LETTER OF CREDIT"), including but not limited to the obligations
of each Borrower contained in any and all applications for the Letter of Credit
(collectively, the "APPLICATIONS") executed and delivered as a condition to
issuance of the Letter of Credit, and to pay on demand all drafts drawn under
the Letter of Credit, and to reimburse Lender on demand of Lender for any
amounts advanced by Lender for the account of either Borrower, at the option
and in the exercise of the sole and absolute discretion of Lender, to satisfy
such drafts, and to indemnify Lender from all loss or liability incurred by
Lender in connection with the issuance of the Letter of Credit; and the payment
of all fees and all other sums due under, and the performance of all covenants,
conditions and other obligations due under or in connection with, the
Reimbursement
<PAGE> 95
Agreement, the Applications, and any security agreements, mortgages, deeds of
trust, guaranties, pledge agreements, assignments, subordination agreements,
and any other documents or instruments heretofore, contemporaneously herewith
or hereafter entered into by any Borrower or any other person or entity, with
or for the benefit of Lender to evidence, secure or guarantee payment of the
Letter of Credit, or otherwise entered into in connection with the Letter of
Credit (such security agreements, mortgages, deeds of trust, guaranties, pledge
agreements, assignments, subordination agreements, and other documents and
instruments evidencing, securing, guaranteeing or otherwise entered into in
connection with the Letter of Credit are referred to collectively as the "LOAN
DOCUMENTS").
C. All expenses, costs and charges, of any nature
whatsoever, including, without limitation, taxes, assessments, insurance
premiums, repairs, rent, storage costs, expenses of collection and sale, and
reasonable attorneys' fees, incurred by or for the account of Lender in
preserving collateral for the Obligations and/or enforcing or seeking to
enforce any of the rights and remedies of Lender under any of the Loan
Documents.
<PAGE> 96
EXHIBIT A
---------
TO MORTGAGE
Lots 1 and 2 of THE ARBORS AT ALTAMONTE SPRINGS, according to the Plat thereof,
as recorded in Plat Book 46, Page 30, of the Public Records of Seminole County,
Florida.
LESS AND EXCEPT:
That part of Lot 1 of THE ARBORS AT ALTAMONTE SPRINGS, according to the Plat
thereof, as recorded in Plat Book 46, Page 30, of the Public Records of
Seminole County, Florida, being more particularly described as follows:
Commence at the West Quarter corner of Section 16, Township 21 South, Range 29
East; thence run South 89 degrees 51 minutes 00 seconds East along the North
line of the Southwest Quarter of said Section 16, a distance of 20.00 feet to
the existing Easterly right-of-way line of Peal Lake Causeway; thence run South
00 degrees 15 minutes 47 seconds West along said Easterly right-of-way line a
distance of 444.40 feet to the North line of a 30.00 foot wide right-of-way, as
described and recorded in Official Records Book 2012, Page 554, of the Public
Records of Seminole County, Florida; thence run South 89 degrees 44 minutes 13
seconds East, along said North line, 30.00 fee; thence run South 00 degrees 15
minutes 47 seconds West, along the East line of said right-of-way being
parallel with and 50.00 feet East of, when measured perpendicular to, the West
line of said Southwest Quarter, a distance of 771.58 feet for a POINT OF
BEGINNING; thence leaving said East right-of-way line run South 44 degrees 47
minutes 08 seconds East, 35.33 feet to the North line of a 55.00 foot wide
right-of-way, as described and recorded in Official Records Book 1997, Page
1734, of the Public Records of Seminole County, Florida, said point being 75.00
feet North of, when measured perpendicular to, the South line of the Northwest
Quarter of the Southwest Quarter of said Section 16; thence run North 89
degrees 50 minutes 03 seconds West, along said North right-of-way line, a
distance of 25.00 feet to an intersection with the aforementioned East
right-of-way line of Peal Lake Causeway, as recorded in said Official Records
Book 2012, Page 554; thence run North 00 degrees 15 minutes 47 seconds East,
along said East right-of-way line, a distance of 25.00 feet to the POINT OF
BEGINNING.
TOGETHER with those certain easements created by Reciprocal Easement Agreement
filed June 25, 1993, recorded in Official Records Book 2605, Page 1182.
<PAGE> 97
This Mortgage and Security Agreement
is one of five Mortgage and Security
Agreements all securing a single
Promissory Note, which are being recorded
simultaneously in Hillsborough County,
Pinellas County, Seminole County and
Brevard County, Florida
The documentary stamps and intangible
taxes on all of the Mortgages and Security
Agreements, and on the Promissory Note
have been paid in Hillsborough County
in connection with recording the
Mortgage and Security Agreements in that
County.
This Instrument Prepared By:
______________________________
Arthur Adams Rouse
WYATT, TARRANT & COMBS
2700 Citizens Plaza
Louisville, Kentucky 40202
(502) 589-5235
MORTGAGE AND SECURITY AGREEMENT
-------------------------------
BREVARD COUNTY, FLORIDA
THIS MORTGAGE (the "Mortgage") is executed actually on the
dates indicated in the notarial certificate affixed to it, but is made and
delivered effective as of February 12, 1996, by and between [i] ARBOR HEALTH
CARE COMPANY, a Delaware corporation (referred to herein as the "BORROWER"),
having a mailing address of 1100 Shawnee Road, Box 840, Lima, Ohio and [ii]
BANK ONE, KENTUCKY, NA, a national banking association, having a mailing
address of 416 West Jefferson Street, Louisville, Jefferson County, Kentucky
40232 (referred to herein as the "LENDER").
W I T N E S S E T H:
Borrower is obligated to Lender under and in connection with
the Reimbursement Agreement and the Letter of Credit and the Loan Documents
("LOAN DOCUMENTS") and the other "OBLIGATIONS" more particularly described in
SCHEDULE 1 hereto (all of the foregoing are referred to collectively
hereinafter as the "OBLIGATIONS");
<PAGE> 98
NOW THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower does hereby MORTGAGE,
WARRANT, GRANT, CONVEY AND ASSIGN to Lender, to secure to Lender the payment
and performance when due of the Obligations strictly in accordance with the
terms thereof, all right, title and interest of Borrower in and to the real
estate described in EXHIBIT A attached hereto and incorporated herein by this
reference (the "LAND");
TOGETHER with all right, title and interest of Borrower in all
buildings, foundations, structures and improvements now or hereafter located on
or in the Land, and all materials now or hereafter intended for construction,
reconstruction, alteration or repair thereof, all of which shall be deemed a
part thereof immediately upon being delivered to the Land (collectively, the
"IMPROVEMENTS");
TOGETHER with all right, title and interest of Borrower now
and hereafter in and to the streets and roads, opened or proposed, abutting the
Land, all strips and gores within or adjoining the Land, the air space and
right to use the air space above the Land, all rights of ingress and egress to
and from the Land, all easements, rights of way, reversions, remainders,
hereditaments, and appurtenances now or hereafter affecting the Land or the
Improvements, all royalties and rights and privileges appertaining to the use
and enjoyment of the Land or the Improvements, including all air, lateral
support, alley, drainage, water, riparian, oil, gas and mineral rights, options
to purchase or lease, and all other interests, estates or claims, in law or in
equity, which Borrower now has or hereafter may acquire in or with respect to
the Land or the Improvements (collectively, the "APPURTENANCES"; the Land, the
Improvements and the Appurtenances are hereinafter sometimes collectively
referred to as the "PREMISES");
TOGETHER with all right, title and interest of Borrower in all
fixtures, equipment (including but not limited to office equipment, motors,
elevators, radiators, gas and electric ranges, refrigerators, freezers, and
plumbing, heating, lighting, ventilating, refrigerating, incinerating, air
conditioning, central energy, sprinklering and fire suppression, waste disposal
and theft protection equipment), fittings, furniture, furnishings (including,
but not limited to awnings, shades, screens, blinds and carpets), appliances,
apparatus, and machinery now existing or hereafter installed in the Premises,
and all building materials, supplies and equipment now existing or hereafter
delivered to the Premises and intended to be installed therein, and all
renewals or replacements of any of the foregoing property or articles in
substitution thereof (collectively, the "EQUIPMENT");
2
<PAGE> 99
TOGETHER with all right, title and interest of Borrower
whether now existing or hereafter acquired in, to and under all accounts,
documents, instruments, chattel paper, and general intangibles, as the
foregoing terms are defined in the Uniform Commercial Code in effect in the
state in which the Land is located (the "UCC"), that are derived from the
Premises or Equipment, including, to the extent assignable, all contract rights
(including, without limitation, under contracts with all contractors,
architects, engineers or subcontractors relating to the construction or
renovation of the Improvements or Equipment, including payment, performance and
materialmen's bonds); franchises; books and records; plans; specifications;
permits; health facility, pharmacy and other licenses; Certificates of Need;
governmental registrations for diagnostic, laboratory, or any other activities;
Medicare and Medicaid provider agreements; accreditation rights; rights to
refunds under any of the foregoing agreements; and other approvals, actions and
causes of action; which in the case of any of the foregoing now or hereafter
relate to, are derived from or used in connection with the Premises or
Equipment or the use, operation, maintenance, occupancy or enjoyment thereof or
the conduct of any business or activities thereon (collectively, the
"INTANGIBLES");
TOGETHER with all right, title and interest of Borrower,
whether now existing or hereafter acquired and wherever located, in, to and
under all leases, lettings, tenancies and licenses of the Premises or Equipment
or any part thereof now or hereafter entered into and all amendments,
extensions, renewals and guaranties thereof, all security therefor, and all
moneys payable thereunder (each a "Lease" and collectively, the "LEASES");
TOGETHER with all rents, income, issues, profits, security
deposits and other benefits to which Borrower may now or hereafter be entitled
from the Premises, the Equipment or the Intangibles or under or in connection
with the Leases, including, without limitation, all income received from
tenants, lessees, licensees and concessionaires and other persons occupying
space at the Premises and/or rendering services to tenants thereat
(collectively, the "PROPERTY INCOME"); and
TOGETHER with all proceeds, judgments, claims, compensation,
awards of damages and settlements with respect to or hereafter made as a result
of or in lieu of any condemnation or taking of the Premises and/or Equipment by
eminent domain (including severance and consequential damages and change in
grade of streets) or any casualty loss of or damage to any of the Premises, the
Equipment, the Intangibles, the Leases or the Property Income, all refunds with
respect to the payment of property taxes and assessments, and all other
proceeds of the conversion, voluntary or involuntary, of the Premises, the
Equipment, the Intangibles, the Leases or the Property Income, or any part
thereof, into cash or liquidated claims (collectively, the "PROCEEDS"; the
Equipment, the
3
<PAGE> 100
Intangibles, the Leases, the Property Income and the Proceeds are hereinafter
collectively referred to as the "COLLATERAL"; the Premises and the Collateral
being hereinafter sometimes collectively referred to as the "MORTGAGED
PROPERTY").
TO HAVE AND TO HOLD the Mortgaged Property with all the privileges and
appurtenances to the same belonging, and with the possession and right of
possession thereof, unto Lender, its successors and assigns forever, upon the
terms and conditions set forth herein.
AND BORROWER COVENANTS AND WARRANTS lawful seizure of an
indefeasible estate in fee simple of the Mortgaged Property; that the same are
free from all encumbrances and liens whatsoever, except for [i] easements and
restrictions of record on the date hereof, none of which materially interfere
with the use of the Mortgaged Property for the operation thereof intended by
Borrower, [ii] the lien of ad valorem real estate taxes and any assessments for
which payment is not delinquent in either case (the encumbrances and liens
described in the foregoing subsections [i] - [ii] are referred to collectively
as the "PERMITTED EXCEPTIONS"); that Borrower has the legal right, power and
authority to encumber the Mortgaged Property pursuant to this Mortgage, the
execution and delivery and the performance of which will not, either
immediately or with notice and/or passage of time, violate any agreement to
which Borrower is a party or by which Borrower is bound; and that Borrower and
the successors in interest of Borrower will forever WARRANT AND DEFEND the
title to the Mortgaged Property and the lien and priority of this Mortgage
against the claims and demands of all persons whomsoever. All such covenants
and warranties shall run with the land.
AND BORROWER, IN ORDER MORE FULLY TO PROTECT THE SECURITY OF
THIS MORTGAGE, COVENANTS AND AGREES AS FOLLOWS:
1. OBLIGATIONS SECURED. This Mortgage is granted to secure the
payment and performance of the Obligations strictly in accordance with the
terms thereof in each case.
2. PAYMENT AND PERFORMANCE OF OBLIGATIONS. Principal of,
interest on, and all other indebtedness and sums constituted by the Obligations
shall be paid at the times and in the manner provided herein and in the other
Loan Documents.
3. PAYMENT OF TAXES AND OTHER IMPOSITIONS. Borrower shall keep
the Mortgaged Property free from statutory liens of every kind; shall pay,
before delinquency and before any penalty for nonpayment attaches thereto, all
taxes, assessments and governmental or municipal or public levies, fees,
charges, fines or impositions of any nature whatsoever (collectively, the
"IMPOSITIONS") which are or may be levied or imposed against or in connection
with the Mortgaged Property or any part thereof, except when payment for such
items has theretofore been made under the
4
<PAGE> 101
Section of this Mortgage entitled "Monthly Installments of Taxes and
Insurance"; shall deliver to Lender, on or before ten (10) days after request
made by Lender therefor, receipted bills evidencing payment therefor.
Notwithstanding the foregoing, so long as no default, and no circumstance
which, with any required notice and/or opportunity to cure would constitute a
default under the Obligations is subsisting, Borrower shall have the right to
contest the validity of any Imposition by appropriate legal proceedings
provided [i] Borrower notifies Lender of Borrower's intention to contest the
same prior to commencing such contest, [ii] such contest shall preclude
enforcement of collection out of or pursuant to the sale of any of the
Mortgaged Property in satisfaction of any Imposition, [iii] Borrower shall
furnish Lender with, at the option of Lender, a bond (pursuant to Florida
statutes) or title insurance or other security for the Imposition satisfactory
to Lender in Lender's sole discretion, [iv] such contest shall not otherwise
create a failure on the part of Borrower to comply with any other provision or
condition of the Loan Documents, and [v] upon a final and nonappealable
determination of the contest that is adverse to the Borrower, Borrower shall
pay the amount of the Imposition.
4. MONTHLY INSTALLMENTS OF TAXES AND INSURANCE. If requested by
Lender at any time [i] after default (including after any applicable
requirement for notice and an opportunity to cure) in any of the Obligations or
[ii] after payment of taxes or insurance in respect of the Mortgaged Property
have become delinquent (whether or not thereafter cured), Borrower shall pay to
Lender, in addition to the amounts of principal and interest and any other sums
due under the terms of the applicable instruments evidencing the Obligations,
monthly on or before the first day of each calendar month, until the
Obligations are paid in full, the following:
A sum equal to all taxes, assessments and all other impositions next
due on the Mortgaged Property, all as estimated in good faith by
Lender, plus the premiums that will next become due and payable on
policies of fire and other insurance covering the Mortgaged Property
and required under the terms of this Mortgage, less all sums already
paid therefor in each case, divided by the number of complete calendar
months to elapse prior to the date when such taxes, assessments,
impositions and premiums shall be due and payable.
All such payments described in this Section shall be held by Lender without
accruing and without any obligation arising for the payment of interest thereon
and Borrower waives any right, to the extent permitted by law, to demand or
receive any interest, income or profits on any of the payments so deposited
with Lender. Lender is hereby granted a security interest in all such amounts
as collateral for the Obligations and such sums shall be subject to setoff by
Lender following any default by Borrower (including after any
5
<PAGE> 102
applicable requirement for notice and/or opportunity to cure) under this
Mortgage or the other Obligations.
5. UTILITIES. Borrower shall pay or cause to be paid all charges
in respect of all water, sewer, electricity, natural gas, telecommunications
and all other utilities consumed on the Mortgaged Property prior to the date
when the same would become delinquent, and shall provide Lender promptly after
request is made by Lender therefor with copies of paid receipts in respect of
all utility charges assessed against the Mortgaged Property.
6. LIABILITY INSURANCE. Borrower shall carry and maintain such
liability and indemnity insurance as in good faith may be required from time to
time by Lender in forms, amounts and with companies reasonably satisfactory to
Lender. Certificates of such insurance, premiums prepaid, naming Lender as an
additional insured, and copies of such policies, shall be deposited, if
requested by Lender, by Borrower with Lender and shall contain provision for
not less than ten (10) days' notice to Lender prior to any cancellation or
modification thereof.
7. HAZARD INSURANCE. Borrower shall keep or cause to be kept all
Improvements and Equipment, whether now existing or hereafter erected on the
Mortgaged Property, insured as may be required from time to time by Lender
against loss or damage by fire, hazards included within the term "broad form
coverage", rent loss, flood (if required by law), and such other hazards,
casualties, liabilities and contingencies in such amounts (not exceeding the
replacement value thereof except in all events sufficient to keep Borrower from
becoming a co-insurer) and for such periods as may be required by Lender
consistent with reasonable and customary commercial practice with regard to
similar properties or as otherwise required in good faith by Lender, and shall
pay promptly, when due, any premiums on such insurance policies. All insurance
policies shall be carried with companies having a Best rating of A- or better
and approved by Lender and such policies shall name Lender as a lender loss
payee pursuant to a "standard mortgage" or "New York mortgagee" clause.
Evidence that such policies are in force shall be delivered to Lender on or
before ten (10) days after request by Lender therefor. All such policies shall
contain provision for at least ten (10) days notice to Lender prior to any
cancellation or modification thereof. Borrower shall not carry separate
insurance, concurrent in kind or form and contributing, in the event of loss,
with any insurance required hereunder. In the event of a change in the use and
nature of occupancy of the Mortgaged Property, immediate notice thereof by mail
shall be delivered to all insurers and Lender. In the event of loss, Borrower
will give immediate notice by mail to Lender. Borrower hereby authorizes
Lender, at its option, to collect, adjust and compromise any losses under any
of the insurance policies aforesaid (provided Lender in so adjusting and
compromising any such losses acts in good faith and not in a manner which,
under the circum-
6
<PAGE> 103
stances, diminishes the recovery thereunder by an unreasonable amount), and
after deducting all costs of collection to apply the proceeds of such insurance
as follows: [1] provided the gross proceeds from the insurance do not exceed
$100,000 provided no default under any of the terms and conditions of this
Mortgage, or any of the other Obligations secured hereby shall then or
thereafter be subsisting, and provided the proceeds of such insurance (together
with any moneys which may be deposited by Borrower with Lender for the purpose
of repair or restoration of the Mortgaged Property promptly upon Borrower's
becoming aware of any deficiency between the amount of such insurance proceeds
and the amount necessary to restore the Mortgaged Property as hereinafter
provided in this sentence) are sufficient to restore the Mortgaged Property to
the same or better condition as existed immediately prior to the loss, Lender
shall disburse the proceeds of the insurance for the sole purpose of repairing
and restoring the Mortgage Property, which repairs and restoration, if the cost
thereof is reasonably estimated by Lender to exceed $50,000 shall, at the
option of Lender, be under the supervision of an architect or engineer
reasonably acceptable to Lender, shall be made pursuant to plans and
specifications submitted to Lender prior to the commencement thereof, and which
shall be subject to Lender's approval and which proceeds shall be disbursed by
Lender from time to time only upon certification by the architect or engineer
that all of the work theretofore completed was done in compliance with the
plans and specifications approved by Lender, that the sum requested is justly
required to reimburse Borrower for payments by Borrower to persons performing
such work, that the amount of the remaining proceeds shall be sufficient to pay
for the repairs and restoration remaining to be completed pursuant to the
approved plans and specifications, and containing such other certifications,
and subject to such other conditions, including but not limited to waivers of
lien and title insurance coverage, as Lender in good faith deems necessary or
appropriate; or [2] if the gross proceeds from the insurance exceed $100,000,
or if a default under any of the terms and conditions of this Mortgage, or any
of the other Obligations secured hereby shall then or thereafter be subsisting,
or any of the other conditions described above to the proceeds being made
available for restoration are not met, the proceeds shall be applied as a
reduction upon or, at the sole option of Lender, as a fund to be retained by
Lender as part of the Collateral for, the Obligations secured hereby, in such
order as Lender may elect; with the balance of any proceeds remaining after the
disposition of the proceeds as aforesaid to be paid to Borrower. Upon
acquisition of the Mortgaged Property by Lender in the event of foreclosure of
this Mortgage, or other transfer of title to the Mortgaged Property in
extinguishment of all or part of the Obligations secured hereby, all right,
title and interest of Borrower in and to any insurance policies then in force
shall pass to the purchaser or grantee of said property.
7
<PAGE> 104
8. CONDEMNATION. Borrower shall give Lender immediate notice of
the actual or threatened commencement of any proceedings under eminent domain
affecting all or any part of the Mortgaged Property, including severance and
consequential damage and change in grade of streets, and will deliver to Lender
copies of any and all papers served in connection with any such proceedings.
Borrower further covenants and agrees to make, execute and deliver to Lender,
at any time or times upon request of Lender, free, clear and discharged of any
encumbrances of any kind whatsoever, any and all further assignments and/or
other instruments deemed necessary or appropriate by Lender for the purpose of
validly and sufficiently assigning all awards and other compensation,
heretofore and hereafter to be made to Borrower (including the assignment of
any award from the United States Government at any time after the allowance of
the claim therefor, the ascertainment of the amount thereof and the issuance of
the warranty for payment thereof) for any taking, either permanent or
temporary, under any such proceedings, all of which awards may, at the option
of Lender (subject only to the provisions of any leases of portions of the
Mortgaged Property permitted under the provisions of the Loan Documents and not
subordinate to the rights of Lender with respect to such awards), regardless of
whether a default in any of the Obligations is then subsisting, be applied as a
reduction of or, at the sole option of Lender, as a fund to be retained by
Lender as part of the Collateral for, the Obligations in such order as Lender
may elect.
9. ALTERATIONS; REPAIRS; WASTE, COMPLIANCE WITH LAWS; INSPECTION.
No additional Improvements shall be constructed on the Land, and no existing
Improvements shall be materially altered, or removed or demolished without the
prior written consent of Lender in each case, provided such consent is not
unreasonably withheld. No Equipment shall be severed or removed without the
prior written consent of Lender except that Borrower may replace in the
ordinary course of business any Equipment with other Equipment at least equal
in quality and condition to that replaced, provided such replacements are free
from any security interest in or encumbrance thereon or reservation of title
thereto except for the lien of this Mortgage and any other encumbrance which
may be permitted by the express terms of the Loan Documents. Borrower shall
permit, commit, or suffer no waste, impairment or deterioration of the
Mortgaged Property or any part thereof; shall keep and maintain the same in
good repair and condition, reasonable wear and tear excepted; shall effect such
repairs as Lender may reasonably require, and from time to time to make all
needful and proper replacements so that said Mortgaged Property will, at all
times, be in fit and proper for the respective purposes for which they were
erected or installed. Borrower shall comply with or require compliance with
all statutes, regulations, codes, orders, requirements or decrees relating to
the Mortgaged Property (including but not limited to the Americans with
Disabilities Act) by any federal, state or municipal authority and, without
limitation of the foregoing, shall observe and comply with all conditions and
requirements necessary
8
<PAGE> 105
to preserve and extend any and all rights, licenses, permits (including but not
limited to zoning variances, conditional uses and non-conforming uses),
privileges, franchises and concessions which are applicable to the Mortgaged
Property or which have been granted to or contracted for by Borrower in
connection with any existing or presently contemplated use of the Mortgaged
Property. Borrower shall permit Lender, during business hours of Borrower and
at all other reasonable times, to enter upon and inspect the Mortgaged
Property.
10. PROHIBITION OF OTHER LIENS. Borrower shall not voluntarily
create or otherwise permit to be created or filed against the Mortgaged
Property any mortgage lien (except any securing indebtedness to Lender), or any
statutory or other lien or liens, charge or encumbrance of any nature, whether
inferior or superior to the lien of this Mortgage, without the prior written
consent of Lender, except any which is one of the Permitted Exceptions.
Borrower will not permit any default (whether or not waived by the applicable
mortgagee) to occur under any other mortgage (or under the indebtedness secured
thereby, in each case) on all or any part of the Mortgaged Property. Without
limitation of the foregoing, Borrower shall keep and maintain the Mortgaged
Property free from the claims of all persons now or hereafter supplying labor
or materials thereto notwithstanding by whom such labor or materials may have
been contracted. Notwithstanding the preceding sentence, so long as no
default, and no circumstance which, with any required notice and/or opportunity
to cure would constitute a default under the Obligations is then or thereafter
subsisting, Borrower shall have the right to contest the validity of any such
lien or claim of any person supplying such labor or materials by appropriate
legal proceedings provided [i] Borrower notifies Lender of Borrower's intention
to contest the same prior to commencing such contest, [ii] such contest shall
preclude enforcement or collection out of or pursuant to the sale of any of the
Mortgaged Property in satisfaction of the lien or claim, [iii] Borrower shall
furnish Lender with, at the option of Lender, a bond or title insurance or
other security for such lien or claim satisfactory to Lender in Lender's sole
discretion, [iv] such contest shall not otherwise create a failure on the part
of Borrower to comply with any other provision or condition of the Loan
Documents, and [v] upon a final and nonappealable determination of the contest
that is adverse to the Borrower, Borrower shall pay the amount of the lien or
claim.
11. INDEMNIFICATION OF LENDER. Borrower shall, to the fullest
extent permitted by applicable law, save Lender harmless from all losses, costs
and expenses, including reasonable attorneys' fees, and the cost of a title
search, continuation of abstract and preparation of survey, incurred by reason
of any action, suit, proceeding, hearing, motion or application before any
court or administrative body in and to which Lender may be or become a party by
reason of this Mortgage, including but not limited to condemnation, bankruptcy,
probate and administration
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proceedings, as well as any other of the foregoing wherein proof of claim is by
law required to be filed or in which it becomes necessary to defend or uphold
the terms of, or the lien created by, this Mortgage, and all money paid or
expended by Lender in that regard, together with interest thereon from the date
of such payment at the Index Rate of Lender plus 2% per annum (such interest
rate is referred to hereinafter as the "APPLICABLE RATE") shall be part of the
Obligations secured hereby and shall be due and payable by Borrower immediately
upon request made by Lender. Borrower additionally hereby indemnifies and
saves Lender harmless under this Mortgage from and against all liabilities,
obligations, claims, damages. penalties, causes of action, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
imposed upon, incurred by, or asserted against Lender on account of [i] any
failure of the Borrower to comply with any of the covenants and conditions on
the part of Borrower to be performed or representations of Borrower contained
in this Mortgage, or [ii] any loss or damage to the Mortgaged Property or any
injury to, or death of, any person that may be occasioned by any cause
whatsoever pertaining to the Mortgaged Property or the use thereof, provided
that such indemnity shall be effective only to the extent of any loss that may
be sustained by Lender in excess of any net proceeds of the insurance received
by Lender from any insurance carried with respect to such loss and provided
further that the benefits of this Section shall not inure to any person other
than Lender and its successors and assigns. Nothing contained in this Section
shall require the Borrower to indemnify Lender against the gross negligence or
wantonly malicious acts of Lender. The indemnities contained in this Section
shall survive payment of the Obligations, the release of this Mortgage,
Foreclosure of this Mortgage, or a deed in lieu of foreclosure, and shall
extend to the officers, directors, employees and duly authorized agents of
Lender.
12. BOOKS AND RECORDS. Borrower at all times shall keep and
maintain complete and accurate books of accounts and records adequate to
reflect correctly the results of the operation of the Mortgaged Property and
copies of all written contracts, leases, rental agreements, license agreements
and other instruments and agreements that affect the Mortgaged Property. Such
books, records, contracts, leases and other instruments and agreements shall be
subject to examination and inspection at any reasonable time by Lender, and
Borrower shall furnish Lender, at the cost of Borrower, with a copy of all or
any of the same promptly following any request therefor by Lender.
13. RIGHT OF LENDER TO CURE DEFAULTS. Upon default in the
performance of any of the terms, covenants or conditions of this Mortgage or
any of the other Loan Documents, Lender may, at its option and whether or not
electing to declare the whole of the Obligations secured hereby due and
payable, perform the same without waiver of any other remedy, and any amount
paid or advanced
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by Lender in connection therewith, or any other costs, charges or expenses,
including reasonable attorney's fees, incurred in the protection of the
Mortgaged Property and the maintenance of the lien of this Mortgage, with
interest thereon at the Applicable Rate, shall be repayable by Borrower,
immediately upon demand made by Lender, shall be a lien upon the Mortgaged
Property prior to any right, title to, interest in, or claim thereon attaching
or accruing subsequent to the attachment of lien of this Mortgage and shall be
secured by this Mortgage.
14. AUTHORIZED DETERMINATIONS BY LENDER. Lender in making any
payment herein and hereby authorized, in the place and stead of Borrower [i]
relating to any Impositions, utility charges or liens or other claims asserted
against or in connection with the Mortgaged Property, may do so according to
any bill, statement or estimate procured from the appropriate public office or
other person or entity without inquiry into the accuracy thereof or the
validity of the Imposition, charge, lien or claim; or [ii] relating to any
apparent or threatened adverse title, lien, statement of lien, encumbrance,
claim or charge, shall be the sole judge of the legality or validity of same;
or [iii] relating to the expense of repairs or replacement of any Improvements
or Equipment shall be the sole judge of the state of repairs and the necessity
for incurring the expense of any such repairs or replacement; or [iv] otherwise
relating to any other purpose in and authorized by this Mortgage, but not
enumerated in this Section, may do so whenever, in the judgment and discretion
of Lender, such advance or advances shall seem necessary or desirable to
protect the full security intended to be created by this Mortgage, and provided
further that in connection with any such advance, Lender, at the option of
Lender, may and is hereby authorized to obtain a continuation report of title
prepared by a title insurance company, the cost and expense of which shall be
repayable by Borrower immediately upon demand and shall be secured by this
Mortgage.
15. ENVIRONMENTAL COMPLIANCE. Borrower represents and warrants
that to the best of Borrower's knowledge and except as previously disclosed in
writing to Lender by Borrower, or by environmental consultants engaged by
Borrower or Lender, that: [i] no hazardous or toxic substance or material or
other waste ("HAZARDOUS SUBSTANCE") as defined in or regulated under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended (42 U.S.C. Section 9601, ET. SEQ.), the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901, ET. SEQ.), The Oil Pollution Act of 1990
(33 U.S.C. Section 2701 ET. SEQ.) or any other federal, state or local law,
order or regulation pertaining to health, safety, or the environment (the
"ENVIRONMENTAL LAWS") has ever been disposed, released, discharged or spilled
on or under any part of the Mortgaged Property, [ii] the Mortgaged Property has
never been used as a dump or landfill, [iii] no litigation or administrative
action or proceeding has been commenced or, to Borrower's knowledge, threatened
against Borrower or any subsidiary
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or affiliate of Borrower alleging a violation of any Environmental Laws, and
[iv] no underground storage tank, polychlorinated biphenyls, asbestos,
lead-based paint or urea formaldehyde is located on or under or has been
applied to any part of the Mortgaged Property or contained in any Improvement
or Equipment located on the Mortgaged Property. Borrower will not permit any
Hazardous Substance to be placed or stored in or upon the Mortgaged Property
except DE MINIMIS quantities if and, in such event, as incident to the
customary operations of Borrower on the Mortgaged Property, and then only in
compliance with all Environmental Laws. Without limitation of the preceding
sentence, Borrower covenants that the Mortgaged Property at all times hereafter
shall remain free from any contamination by any Hazardous Substance and that
Borrower at all times will comply with all Environmental Laws affecting
Borrower or the Mortgaged Property. Borrower shall notify Lender promptly upon
becoming aware of any contamination of the Mortgaged Property by any Hazardous
Substance, or upon being threatened with receipt of or receiving any notice,
citation, summons, complaint or other communication alleging violation by
Borrower of any Environmental Law or potential liability of Borrower in
connection with any Hazardous Substance. Lender and its agents, including but
not limited to environmental consultants and remediation contractors engaged by
Lender, shall have the right, but not the obligation, to enter upon the
Mortgaged Property at any time to inspect the same and take such other action
as Lender deems necessary or appropriate with respect to any actual or
threatened contamination of the Mortgaged Property by a Hazardous Substance or
any other circumstance relating to a Hazardous Substance or any Environmental
Law which in Lender's sole opinion could impair the security intended to be
afforded by this Mortgage or result in a claim against or liability of Lender,
and all costs and expenses, including reasonable attorneys' fees and the fees
of such consultants and contractors, incurred by Lender, in so doing shall be
paid by Borrower to Lender upon demand and be secured by the lien of this
Mortgage and bear interest at the Applicable Rate. Borrower hereby indemnifies
Lender and holds Lender wholly harmless from and against any and all losses,
costs, expenses (including but not limited to reasonable attorneys' fees),
injuries, damages, liabilities and claims of any kind whatsoever paid, incurred
or suffered by or asserted against Lender by any person or entity, including
but not limited to any governmental entity, whatsoever with respect to or as a
direct or indirect result of the presence heretofore, now or hereafter of any
Hazardous Substance on or under the Mortgaged Property, or the violation or
alleged violation heretofore, now or hereafter by Borrower or any subsidiary or
affiliate of Borrower of any Environmental Laws and, without limitation of the
foregoing, any inaccuracy of any representation or warranty by Borrower
contained in this Section or any breach by Borrower of or other default in the
covenants contained in this Section. The indemnification established under the
preceding sentence shall survive the maturity as well as the repayment or other
discharge of the Obligations secured by this Mortgage and any
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termination of this Mortgage whether pursuant to repayment of the Obligations
secured by it, foreclosure, deed in lieu of foreclosure or otherwise, to the
maximum extent permitted by law. Borrower expressly acknowledges that any
misrepresentation by Borrower under this Section, or any failure of condition
or breach of covenant by Borrower or other default in any of the obligations of
Borrower under this Section shall be and constitute an immediate default under
this Mortgage and each of the other Loan Documents.
16. ACCELERATION UPON DEFAULT; CERTAIN REMEDIES. That, upon
failure of Borrower to comply with any of the provisions of this Mortgage, if
such failure shall continue for fifteen (15) calendar days after written notice
thereof is given to Borrower by Lender (unless this Mortgage or the applicable
Loan Document in connection with which such non-compliance has occurred
affirmatively provides that no notice and/or period of cure, or that an
explicit alternative period of cure, shall be applicable to such failure by
Borrower, in which case such alternative provision rather than fifteen (15)
days after notice shall control), or (after satisfaction of any applicable
requirement for notice and opportunity to cure contained in the Loan Document
governing the default) upon any default in any of the other Obligations,
including the payment or performance or observance of each and every other
term, covenant, condition or agreement contained in the Loan Documents, then,
in any of said events, the entire Obligations secured hereby shall, at the
option of Lender, become immediately due and payable without relief from
valuation or appraisement laws, and thereupon or at any time thereafter Lender
may proceed to foreclose this Mortgage, and any failure to exercise said option
shall not constitute a waiver of the right to exercise the same at any other
time. In any of such events, Lender may enter upon the Mortgaged Property,
collect the rents, issues and profits thereof and, after paying all expenses of
such collections including reasonable attorney's fees, and a reasonable
compensation for Lender, shall apply the money collected to the satisfaction of
the Obligations hereby secured in such order as Lender elects. Lender,
thereupon, also shall have all rights and remedies provided herein, in the Loan
Documents, and under the UCC with regard to any of the Mortgaged Property to
which the UCC is applicable, all of which rights and remedies shall, to the
fullest extent permitted by law, be cumulative.
17. RECEIVER. Lender, in any action to foreclose this Mortgage,
and in addition to all other rights and remedies available to Lender, shall be
entitled to the appointment of a receiver of the rents, issues and profits of
the Mortgaged Property as a matter of right and without notice, with power to
collect the rents, issues and profits of the Mortgaged Property, due and
becoming due during the pendency of such foreclosure suit, such rents, issues
and profits being hereby expressly assigned and pledged as additional security
for the payment of the Obligations secured by this Mortgage without regard to
the value of the Mortgaged Property or the solvency of any person or persons
liable
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for the payment of such Obligations, and regardless of whether Lender has an
adequate remedy at law. Borrower for itself and any subsequent owner of the
Mortgaged Property hereby waives any and all defenses to the application for a
receiver, as above provided, and hereby specifically consents to such
appointment without notice, except any notice required by law, but nothing
herein contained is to be construed to deprive Lender of any other right,
remedy or privilege Lender may have under the law to have a receiver appointed.
18. FEES AND EXPENSES IN FORECLOSURE. In case of foreclosure of
this Mortgage in any court of law or equity whether or not any order or decree
shall have been entered therein, and to the extent permitted by law, a
reasonable sum shall be allowed for stenographers' fees and for all moneys
expended for documentary evidence and the cost of a complete abstract of title
and title report for the purpose of such foreclosure, such sums to be secured
by the lien of this Mortgage, and, to the extent permitted by law, there shall
be included in any judgment or decree foreclosing this Mortgage and paid out of
said rents, issues and profits from the Mortgaged Property and the proceeds of
any sale made in pursuance of any such judgment or decree: [1] all costs and
expenses of such suit or suits, appraisals, advertising, sale and conveyance,
including stenographers' fees, outlays for documentary evidence and the cost of
said abstract, examination of title and title report; [2] reasonable fees of
legal counsel to Lender, to the fullest extent permitted by law; [3] all moneys
advanced by Lender, if any, for any purposes authorized in this Mortgage, with
interest as herein provided; [4] all the accrued interest remaining unpaid on
the Obligations hereby secured; and [5] all the principal of the Obligations
remaining unpaid. The surplus of the proceeds, if any, shall be paid to
Borrower promptly after request by Borrower, or as the court may direct.
19. SALE IN ONE OR MORE PARCELS. In case of any foreclosure sale
of the Mortgaged Property, the same may be sold in one or more parcels.
20. NO WAIVER BY LENDER. The failure of Lender to exercise the
option for acceleration of maturity and/or foreclosure following any default by
Borrower in any of the Obligations or to exercise any other option granted to
Lender hereunder or under the other Loan Documents in any one or more
instances, or the acceptance by Lender of partial payments of any of the
Obligations, shall not constitute a waiver of any such default, or extend or
affect any applicable grace period, but such option shall remain continuously
in force. Acceleration of maturity of any of the Obligations, once claimed by
Lender, may, at the option of Lender, be rescinded by Lender by a written
acknowledgement to that effect, but the tender and acceptance of partial
payments alone shall not in any way affect or rescind such acceleration of
maturity, or extend or affect any grace period.
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21. LENDER TO SUCCEED TO PRIORITY OF PRIOR LIENS. Should the
proceeds of any loan made by Lender to Borrower as part of any of the
Obligations, or any amount paid out or advanced by Lender, be used directly or
indirectly to pay off, discharge, or satisfy, in whole or in part, any prior
lien or encumbrance upon the Mortgaged Property or any part thereof, then
Lender shall be subrogated to such other lien or encumbrance with respect to
the Mortgaged Property, and shall have the benefit of the priority of all of
same.
22. RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies
provided under this Mortgage and the other Loan Documents, at law, or in equity
are cumulative and Lender as holder of every Obligation secured hereby may
recover judgment thereon, issue execution therefor, and resort to every other
right or remedy available at law or in equity without first exhausting and
without affecting or impairing the security or any right or remedy afforded by
this Mortgage and no enumeration of special rights or powers by any provision
of this Mortgage shall be construed to limit any grant of general rights or
powers, or to take away or limit any rights granted to or vested in Lender by
virtue of the laws of the state in which the Land is located, or any other
jurisdiction, the laws of which are applicable to this Mortgage. Lender may
exercise any right, power or remedy to which Lender is entitled under this
Mortgage or the other Loan Documents at Lender's option and in Lender's sole
and absolute discretion without any obligation to do so, and if, under this
Mortgage or the other Loan Documents, two or more alternative courses of action
and/or remedies are available to Lender, Lender may elect any such action
and/or remedy or combination of actions and/or remedies as Lender shall
determine in the sole and absolute discretion of Lender.
23. LENDER'S RIGHT TO DEAL WITH BORROWER AND OTHER PARTIES.
Lender, without notice, and without regard to the consideration, if any, paid
therefor, and notwithstanding the existence at that time of any inferior liens
thereon, may release any part of the Mortgaged Property, or any other security
for all or part of the Obligations, and may release or grant indulgences,
settlements or compromises to any person liable or pledging security for all or
part of the Obligations, without in any way affecting the priority of the lien
of this Mortgage to the full extent of the Obligations remaining unpaid with
regard to any part of the security not expressly released. Lender may agree
from time to time with Borrower or any other party obligated on or pledging
security for any part of the Obligations or having any interest in the
Mortgaged Property to extend the time for payment of any part of the
Obligations or grant any other indulgences, releases, settlements or
compromises and such agreements shall not in any way release or impair the lien
of this Mortgage. In the event Lender [a] releases any part of the Mortgaged
Property, or any person liable for or having pledged security for any of the
Obligations, [b] grants an extension of time for any payments of the
Obligations or grants any
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other indulgences, releases, settlements or compromises; [c] takes other or
additional security for the payment of any of the Obligations; [d] waives or
fails to exercise any right granted in this Mortgage or any of the other Loan
Documents, said acts or omissions by Lender shall not release Borrower,
subsequent owners of the Mortgaged Property or any part thereof, or makers or
sureties or pledgors of collateral for or any of the Obligations, under any
covenant of this Mortgage or of the other Loan Documents, nor preclude Lender
from exercising any right, power or privilege herein or in the other Loan
Documents granted or intended to be granted in the event of any other default
then existing or any subsequent default.
24. USURY; ILLEGALITY; SEVERABILITY. Nothing contained in this
Mortgage or any of the other Loan Documents or pursuant to any transaction
related thereto shall be construed or shall operate either presently or
prospectively, [a] to require Borrower to pay interest at a rate greater than
is lawful, but shall require payment of interest and other sums only to the
extent of such lawful rate, or [b] to require Borrower to make any payment or
do any act contrary to law, but if any clause or provision contained in this
Mortgage or in any other Loan Document shall otherwise so operate to invalidate
this Mortgage or any other Loan Document, in whole or in part, then such clause
or provision, as the case may be, only shall be held for naught as though not
contained in this Mortgage or in the applicable Loan Document and the remainder
of this Mortgage and other Loan Documents, as applicable, shall remain
operative and in full force and effect.
25. WARRANTY AGAINST VIOLATIONS OF COVENANTS. Borrower represents
and warrants that on the date hereof neither this Mortgage, nor the Mortgaged
Property, nor the contemplated use of the Improvements and Equipment,
constitute a breach, or a violation of, any covenants, conditions, easements or
restrictions, whether of record or not, or any zoning laws or land use
regulations, or, to the knowledge of Borrower, other laws or regulations
affecting the Mortgaged Property or binding upon Borrower, and Borrower
covenants and agrees that Borrower will take all actions necessary to prevent
any such breach or violation from hereafter occurring.
26. INSOLVENCY. In the event Borrower or any obligor, guarantor
or pledgor of collateral for any of the Obligations shall make a general
assignment for the benefit of creditors, or shall file a voluntary petition in
bankruptcy, or shall be adjudicated a bankrupt or insolvent, or shall file any
petition or answer seeking, consenting to, or acquiescing in, any
reorganization, arrangement, adjustment, composition, liquidation, dissolution
or similar relief, under any present or future statute, law or regulation, or
shall file an answer admitting or shall fail to deny the material allegations
of a petition against it for any such relief, or if any such proceeding against
Borrower or such obligor, guarantor or pledging seeking any such relief shall
not have been
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dismissed within sixty (60) days after the commencement thereof; or if a
trustee, receiver or liquidator of Borrower or any obligor, guarantor or
pledgor of collateral for the Obligations or any substantial part of their
respective properties or assets shall be appointed with the consent or
acquiescence of Borrower or such obligor, guarantor or pledgor or if any such
appointment, if not so consented to or acquiesced in, shall remain unvacated or
unstayed for an aggregate of sixty (60) days, then the whole of the principal
sum and all of the other Obligations secured hereby automatically shall be
deemed to have become immediately due and payable and the same, with interest
thereon at the Applicable Rate, and with all other costs and charges payable
under the Loan Documents, including reasonable attorney's fees, shall thereupon
be collectible by suit at law or in the exercise of any remedy available under
this Mortgage or in equity in the same manner as if the whole of the
Obligations had been made payable at the time when any of the foregoing
contingencies shall have occurred.
27. VOLUNTARY ZONING CHANGES. Borrower covenants not to change
the use that Borrower intended for the Mortgaged Property at the time Borrower
executed this Mortgage, or initiate, join in, consent to, or permit any change
in any zoning ordinance, private restrictive covenant or other public or
private restriction changing, limiting or restricting the uses which may be
made of the Mortgaged Property, without the prior written consent of Lender
obtained in each instance.
28. RESTRICTIONS ON TRANSFER. Except as expressly permitted by,
and subject to the provisions of the Loan Documents, Borrower shall not enter
into any lease of all or any part of the Mortgaged Property, or otherwise sell,
transfer or convey, or enter into any agreement to sell, transfer or convey,
all or any part of the Mortgaged Property, or any legal or beneficial interest
therein, by operation of law (including but not limited to, as applicable, a
merger, consolidation or transfer of capital stock, or other ownership interest
in Borrower) or otherwise, without Lender's prior written consent, and upon any
breach of this Section Lender may immediately, at Lender's option, and without
notice, declare all of the Obligations to be immediately due and payable and
exercise all rights and remedies available to Lender upon a default under this
Mortgage.
29. NOTICES. Except for any notice required under applicable law
to be given in another manner, any notice given under this Mortgage shall be
given in the manner stipulated by the Series 1 Reimbursement Agreement
described in SCHEDULE 1 to this Mortgage.
30. SECURITY AGREEMENT; FINANCING STATEMENTS. Borrower promptly
upon request by Lender shall execute, acknowledge and deliver to Lender any
financing statement, affidavit, continuation statement or certificate or other
document that Lender reasonably may request in order to perfect, preserve,
maintain or continue the
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security interest in the Mortgaged Property under this Mortgage and the
priority of such security interest, and upon any failure by Borrower to do so
Lender automatically shall be vested with power of attorney for Borrower,
coupled with an interest, for such purposes. Borrower further agrees to pay to
Lender on demand all costs and expenses incurred by Lender in connection with
the preparation, execution, recording, filing and refiling of any such
documents. In addition to being a mortgage this Mortgage is intended to be a
security agreement and a fixture filing pursuant to the UCC for the items
specified above as part of the Mortgaged Property (including goods constituting
part of the Collateral that are or are to become fixtures) which, under
applicable law, may be subject to a security interest pursuant to the UCC, and
Borrower hereby grants to Lender a security interest in said items as security
for the Obligations. Without limitation of the foregoing, Borrower agrees that
Lender may file this Mortgage in any personal property or real estate records
or other appropriate index as a financing statement for all or any of the items
specified above as part of the Mortgaged Property. A carbon, photographic or
other reproduction of this Mortgage or of a financing statement shall be
sufficient as a financing statement.
31. SUCCESSORS AND ASSIGNS; MODIFICATIONS IN WRITING. Subject to
the Section of this Mortgage entitled "Restrictions on Transfer," this Mortgage
shall be binding upon Borrower and its permitted successors and assigns, and
all persons claiming under or through Borrower or any such successor or assign,
and shall inure to the benefit of and be enforceable by Lender and its
successors and assigns. This Mortgage may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.
32. AFTER ACQUIRED PROPERTY. All property of every kind and
description acquired by Borrower after the date hereof which by the terms
hereof is required or intended to be subjected to the lien of this Mortgage
shall, immediately upon the acquisition thereof by Borrower, and without any
further mortgage, conveyance, assignment or transfer, become subject to the
lien and security interest of this Mortgage. Nevertheless, Borrower, at any
time, upon the request of Lender, will execute, acknowledge and deliver all
such additional papers and instruments and all such further assurances of title
and will do or cause to be done all further acts and things as may, subject to
the conditions contained in this Mortgage, be proper or reasonably necessary
for carrying out the intent of this Mortgage.
33. GOVERNING LAW. This Mortgage was negotiated in the
Commonwealth of Kentucky, the Reimbursement Agreements were delivered by
Borrower and accepted by Lender in the Commonwealth of Kentucky, and the
Letters of Credit were issued in the Commonwealth of Kentucky, which state
Borrower and Lender agree has a substan-
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tial relationship to Borrower and Lender and to the underlying transaction in
connection with which this Mortgage was granted. This Mortgage, including
matters of construction, validity and performance, and the obligations arising
hereunder, shall be construed in accordance with and otherwise governed in all
respects by the laws of the Commonwealth of Kentucky applicable to contracts
made and performed in such state and any applicable law of the United States of
America except to the extent that the real and personal property laws of the
State of Florida, including laws relating to the perfection, priority and
enforcement of liens on real and personal property located in Florida,
necessarily shall apply to enforcement of the security covered by this
Mortgage. Borrower hereby irrevocably agrees that any legal action, suit, or
proceeding against it with respect to its obligations, liabilities or any other
matter under or arising out of or in connection with this Mortgage or the other
Loan Documents or for recognition or enforcement of any judgment rendered in
any such action, suit or proceeding may be brought in the United States Courts
for the Western District of Kentucky, or in the courts of the Commonwealth of
Kentucky, as Lender may elect, and by execution and delivery of this Mortgage,
Borrower hereby irrevocably accepts and submits to the non-exclusive
jurisdiction of each of the aforesaid courts IN PERSONA, generally and
unconditionally with respect to any such action, suit, or proceeding for
Borrower and in respect of Borrower's property. Borrower further agrees that
final judgment against Borrower in any action, suit or proceeding referred to
herein shall be conclusive and may be enforced in any other jurisdiction, by
suit on the judgment, a certified or exemplified copy of which shall be
conclusive evidence of the fact and of the amount of the indebtedness of
Borrower.
34. WAIVER OF EXEMPTION. To the extent permitted by law with
respect to the Obligations secured hereby including any renewals or extensions
thereof, Borrower waives and renounces any and all homestead and exemption
rights, as well as the benefit of all valuation and appraisement privileges,
and stay, redemption and moratoriums under and by virtue of the constitution
and laws of the state in which the Land is located, and of any other state or
the United States, now existing or hereafter enacted.
35. JOINT AND SEVERAL LIABILITY; COVENANTS RUN WITH LAND. All of
the obligations of Borrower hereunder shall be joint and several. All of the
covenants of this Mortgage shall run with the land.
36. PROVISIONS SEVERABLE. In the event that any provision of this
Mortgage or any of the other Loan Documents conflicts with applicable law, such
conflict shall not affect other provisions of this Mortgage or the other Loan
Documents that can be given effect without the conflicting provisions, and to
this end the provisions of this Mortgage and the other Loan Documents are
declared to be severable.
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37. INTERPRETATION. Whenever used, the singular number shall
include the plural, the plural the singular and the use of any gender shall
include all genders. The captions to the various sections of this Mortgage are
inserted for convenience only and shall be ignored in interpreting its
provisions.
38. WAIVER OF MARSHALLING. Notwithstanding the existence of any
other security interests in the Mortgaged Property held by Lender or by any
other person or entity, Lender shall have the right to determine the order in
which any or all of the Mortgaged Property shall be subjected to the remedies
provided herein, and the order in which any or all portions of the Obligations
secured hereby are satisfied from the proceeds realized upon the exercise of
the remedies provided herein. Borrower, any guarantor of or pledgor of
collateral for any of the Obligations, and any other person or entity now or
hereafter acquiring a security interest in the Mortgaged Property and having
actual or constructive notice of this Mortgage, each waives any and all right
to require the marshalling of assets in connection with the exercise of any of
the remedies permitted by applicable law or in equity or provided in this
Mortgage. Without limitation of the foregoing, if all or any part of the
Obligations are secured not only by this Mortgage but also by one or more other
mortgages, deeds of trust, deeds to secure debt or other encumbrances of
property located in this or other jurisdictions or states (collectively, the
"ADDITIONAL SECURITY INSTRUMENTS"), Lender, following any default (including
after any required notice and applicable period of cure) under this Mortgage or
any of the Additional Security Instruments, may proceed, concurrently or at any
time thereafter and from time to time, to exercise the rights and remedies of
Lender under this Mortgage and/or one or more of the Additional Security
Instruments or other Loan Documents by proceedings that are appropriate in the
jurisdiction or state wherein the property encumbered thereby is located, and
no such action (or failure to act) by Lender shall impair any rights or
remedies of Lender under this Mortgage, any of the Additional Security
Instruments, at law or in equity.
39. WAIVER OF TRIAL BY JURY. THE LENDER AND BORROWER ACKNOWLEDGE
THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE TIME AND
EXPENSE REQUIRED FOR A BENCH TRIAL AND HEREBY KNOWINGLY AND VOLUNTARILY WAIVE,
TO THE FULLEST EXTENT PERMITTED BY LAW, AND AFTER HAVING CONSULTED OR HAVING
HAD AMPLE OPPORTUNITY TO CONSULT THEIR RESPECTIVE LEGAL COUNSEL CONCERNING THE
CONSEQUENCES OF SUCH WAIVER, TRIAL BY JURY IN ANY ACTION OR OTHER PROCEEDING
BROUGHT TO ENFORCE OR DEFEND AGAINST COLLECTION OF OR OTHERWISE IN CONNECTION
WITH THIS MORTGAGE OR THE OTHER LOAN DOCUMENTS.
<THE BALANCE OF THIS PAGE INTENTIONALLY HAS BEEN LEFT BLANK>
20
<PAGE> 117
IN TESTIMONY WHEREOF, witness the signature of Borrower to
this Mortgage as of the date set forth above.
BORROWER:
--------
Signed, acknowledged and ARBOR HEALTH CARE COMPANY, a
delivered in the presence Delaware corporation
of:
__________________________ By: ___________________________
Signature
__________________________ Printed Name: _________________
Printed Name
Title: ________________________
__________________________
Signature
__________________________
Printed Name
STATE OF _______________ )
: SS
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this ____
day of February, 1996, by ______________________________ (name), as
______________________________ (title) of Arbor Health Care Company, a Delaware
corporation, on behalf of the corporation.
He/She:
(check one) ______ is personally known to me, or has
______ produced ____________________________
as identification.
__________________________________________
__________________________________________
Name: (Please Print)
Notary Public, State of __________________
[AFFIX NOTARY SEAL]
21
<PAGE> 118
SCHEDULE 1
----------
TO
MORTGAGE AND SECURITY AGREEMENT ("AGREEMENT)
BETWEEN ARBOR HEALTH CARE COMPANY
AND BANK ONE, KENTUCKY, NA
(DESCRIPTION OF OBLIGATIONS)
The "OBLIGATIONS" referred to in the foregoing Agreement are
as follows:
A. All indebtedness, liabilities and obligations arising
under or evidenced by, and the performance of all covenants, conditions and
agreements undertaken by each of the Borrowers hereinafter described in
connection with, each of the following documents, including any renewals,
extensions and amendments of any of them or substitutions or replacements for
any of them (referred to hereinafter as the "REIMBURSEMENT AGREEMENT"):
(1) Reimbursement Agreement dated as of February
12, 1996, to which Arbor Health Care Company, a Delaware corporation ("ARBOR"),
Marshall Properties, Inc., an Ohio corporation ("MARSHALL") (Arbor and Marshall
are referred to each individually as a "BORROWER" and collectively as the
"BORROWERS"), and Bank One, Kentucky, NA, a national banking association
("LENDER"), are parties, referable to Letter of Credit No. S-6122 in the face
amount of $27,506,250 issued by Lender for the joint and several account of
Borrowers (the "LETTER OF CREDIT") as security for Promissory Note (Series
1996A-1) and Promissory Note (Series 1996A-2), both dated as of February 15,
1996, made jointly and severally by Borrowers to the order of Capital One
Funding Corporation ("CAPITAL") in face principal amount of $13,500,000 and
maturing on February 1, 2003.
B. The payment, performance and discharge of any and all
obligations and liabilities of each Borrower, whether direct or indirect,
absolute or contingent, due or not due, now existing or hereafter arising, in
conjunction with issuance of the Letter of Credit (collectively, together with
any extensions, renewals, amendments, substitutions or replacements thereof and
therefor, the "LETTER OF CREDIT"), including but not limited to the obligations
of each Borrower contained in any and all applications for the Letter of Credit
(collectively, the "APPLICATIONS") executed and delivered as a condition to
issuance of the Letter of Credit, and to pay on demand all drafts drawn under
the Letter of Credit, and to reimburse Lender on demand of Lender for any
amounts advanced by Lender for the account of either Borrower, at the option
and in the exercise of the sole and absolute discretion of Lender, to satisfy
such drafts, and to indemnify Lender from all loss or liability incurred by
Lender in connection with the issuance of the Letter of Credit; and the payment
of all fees and all other sums due under, and the performance of all covenants,
conditions and other obligations due under or in connection with, the
Reimbursement
<PAGE> 119
Agreement, the Applications, and any security agreements, mortgages, deeds of
trust, guaranties, pledge agreements, assignments, subordination agreements,
and any other documents or instruments heretofore, contemporaneously herewith
or hereafter entered into by any Borrower or any other person or entity, with
or for the benefit of Lender to evidence, secure or guarantee payment of the
Letter of Credit, or otherwise entered into in connection with the Letter of
Credit (such security agreements, mortgages, deeds of trust, guaranties, pledge
agreements, assignments, subordination agreements, and other documents and
instruments evidencing, securing, guaranteeing or otherwise entered into in
connection with the Letter of Credit are referred to collectively as the "LOAN
DOCUMENTS").
C. All expenses, costs and charges, of any nature
whatsoever, including, without limitation, taxes, assessments, insurance
premiums, repairs, rent, storage costs, expenses of collection and sale, and
reasonable attorneys' fees, incurred by or for the account of Lender in
preserving collateral for the Obligations and/or enforcing or seeking to
enforce any of the rights and remedies of Lender under any of the Loan
Documents.
<PAGE> 120
EXHIBIT A
---------
TO MORTGAGE
From the Northwest corner of the East Half of the Southeast Quarter of Section
24, Township 27 South, Range 36 East, Brevard County, Florida, run North 88
degrees 11 minutes 30 seconds East along the South right of way line of Sarno
Road and the North line of the Southeast Quarter of Section 24 a distance of
100.00 feet to the POINT OF BEGINNING of the herein described parcel; thence
continue North 88 degrees 11 minutes 30 seconds East along the South right of
way line of Sarno Road a distance of 977.04 feet to the West line of property
described in Brevard County Official Records Book 823, Page 230; thence South
01 degrees 48 minutes 30 seconds East along said West line a distance of 200.00
feet; thence South 88 degrees 11 minutes 30 seconds West 135.00 feet; thence
South 01 degrees 48 minutes 30 seconds East 187.00 feet; thence South 88
degrees 11 minutes 30 seconds West 859.34 feet; thence North 00 degrees 45
minutes 03 seconds East parallel with the West line of the East Half of
Southwest Quarter of Section 24 a distance of 387.39 feet to the POINT OF
BEGINNING.
Together with an ingress/egress easement through and upon the South 30 feet of
that certain property described in Official Records Book 1328, Page 945, the
Public Records of Brevard County, Florida.
TAX ID #27-36-24-00-750.1
<PAGE> 1
Exhibit 4.5
THIS INSTRUMENT PREPARED BY:
__________________________
Arthur A. Rouse, Esq.
WYATT, TARRANT & COMBS
2700 Citizens Plaza
Louisville, Kentucky 40202
(502) 589-5235
ASSIGNMENT OF LEASES AND RENTS
------------------------------
(Hillsborough County, Florida)
THIS ASSIGNMENT OF LEASES AND RENTS (the "Assignment") is
executed actually on the date indicated in the notarial certificate affixed
hereto but is made effective as of February 12, 1996 by [i] MARSHALL
PROPERTIES, INC., an Ohio corporation ("ASSIGNOR"), having a mailing address of
1100 Shawnee Road, Box 840, Lima, Ohio in favor of [ii] BANK ONE, KENTUCKY,
N.A., a national banking association, having a mailing address of 416 West
Jefferson Street, Louisville, Jefferson County, Kentucky 40232 ("ASSIGNEE").
W I T N E S S E T H:
-------------------
WHEREAS, Assignor is obligated to Assignee under and in
connection with the Reimbursement Agreements and the Letters of Credit and the
other "OBLIGATIONS" more particularly described in SCHEDULE 1 attached to and
made a part hereof; and
WHEREAS, in connection with the execution and delivery of the
Reimbursement Agreements, Assignee has required that Assignor absolutely assign
and convey to Assignee all of Assignor's right, title and interest in, to and
under any and all leases (hereinafter collectively referred to as the "LEASES"
and singularly as a "LEASE") now or hereafter in existence (as amended or
supplemented from time to time) and covering space in or applicable to the real
estate more particularly described in EXHIBIT A attached to and made a part
hereof (hereinafter referred to as the "PREMISES"), and Assignor desires and
intends by this Assignment to absolutely assign and convey to Assignee all of
Assignor's right, title and interest in, to and under the Leases;
NOW, THEREFORE, for valuable consideration, the receipt of
which is hereby acknowledged, and intending to be legally bound, Assignor
agrees as follows:
<PAGE> 2
1. ABSOLUTE ASSIGNMENT. Assignor does hereby absolutely sell,
assign, transfer, convey and set over unto Assignee and its successors and
assigns, all of the right, title and interest of Assignor in, to and under the
Leases, together with all rents, earnings, income, issues and profits, arising
from either the Premises, the Leases, or both the Premises and the Leases, and
all other sums due or to become due under and pursuant thereto in each case
(including but not limited to any early termination or other fees or charges
payable by any tenant thereunder and any award or damages payable to Assignor
pursuant to any bankruptcy, insolvency or reorganization proceeding affecting
any tenant), together with any and all guaranties of or under any of said
Leases, and security therefor, and together with all rights, powers,
privileges, options and other benefits of Assignor in its capacity as lessor
under the Leases, including, without limitation: the immediate and continuing
right to receive and collect all rents, income, revenues, issues, profits,
fees, condemnation awards, insurance proceeds, moneys and security payable or
receivable under the Leases or pursuant to any of the provisions thereof,
whether as rent or otherwise, the right to make all waivers and agreements, to
give and receive all notices, consents and releases, and to take such action
and exercise such remedies upon the happening of a default under any Lease,
including the commencement, conduct and consummation of proceedings at law or
in equity as shall be permitted under any provision of any Lease or by any law,
and to do any and all other things whatsoever which the Assignor is or may
become entitled to do under any such Lease. Notwithstanding the provisions of
this Section 1, so long as no default shall exist under any of the Loan
Documents defined in SCHEDULE 1 ("LOAN DOCUMENTS"), and no event shall have
occurred which by the lapse of time or the giving of notice, or both, has or
would become an event of default thereunder, Assignor shall have the right and
license to occupy the Premises as landlord or otherwise and to collect, use and
enjoy the rents, issues and profits and other sums payable under and by virtue
of any Lease (but only as the same become due under the provisions of such
Lease) and to enforce (subject to the provisions of this Assignment) the
covenants of the Leases.
2. DURATION OF ASSIGNMENT. This Assignment is made and given and
shall remain in full force and effect until the payment, performance and
observance, as applicable, of all of the terms, covenants and conditions to be
paid, performed or observed under each of the Loan Documents, and promptly upon
request of Assignor thereafter Assignee shall, at the cost and expense of
Assignor and conditioned upon payment by Assignor of such costs and expenses,
cause this Assignment (if the same has been recorded) to be released of record.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF ASSIGNOR.
Assignor represents, warrants, covenants and agrees: [a] that Assignor has
good right and authority to make this Assignment, and Assignor holds the entire
and unencumbered rights of the landlord
2
<PAGE> 3
under each of the Leases; [b] that neither Assignor nor any predecessor lessor
has heretofore alienated, assigned, pledged or otherwise disposed of or
encumbered the Leases or any of the sums due or to become due thereunder and
that neither Assignor nor any predecessor lessor has performed any acts or
executed any other instruments which might prevent Assignee from operating
under any of the terms and conditions of this Assignment or which would limit
Assignee in such operation; [c], except for any deposits received in the
ordinary course of business from occupants of the Premises for which the
Premises are duly licensed (collectively, the "LICENSEES"), that Assignor has
not accepted or collected rent or any other payments under any Lease for any
period subsequent to the current period for which such rent or other payment
has already become due and payable; [d] that Assignor has not executed or
granted any amendment or modification whatever of any of the Leases, either
orally or in writing, except as theretofore disclosed in writing by Assignor to
Assignee (and approved by Assignee, if such approval be required hereunder or
under any other Loan Document); [e] that, except any defaults under agreements
with Licensees, there is no default under any of the Leases now existing and no
event has occurred and is continuing which, with the lapse of time or the
giving of notice or both, would constitute an event of default under any of the
Leases; [f] that Assignor will observe, perform and discharge, duly and
punctually, all and singular the obligations, terms, covenants, conditions and
warranties of the Loan Documents, this Assignment, and each other Lease, on the
part of Assignor to be kept, observed and performed; [g] to enforce the
performance of each and every obligation, term, covenant, condition and
agreement in said Leases by any tenant to be performed; [h] to appear in and
defend any action or proceeding arising under, occurring out of, or in any
manner connected with said Leases or the obligations, duties or liabilities of
Assignor or any tenant thereunder, and upon request by Assignee, to do so in
the name and on behalf of Assignee, but at the expense of Assignor; [i] that
Assignor will, upon the request of Assignee, execute and deliver to Assignee
such further instruments and do and perform such other acts and things as
Assignee reasonably may deem necessary or appropriate to make effective this
Assignment and the various covenants of Assignor herein contained, and to more
effectively vest in Assignee the sums due or hereafter to become due under the
Leases, including, without limitation, the execution of such additional
assignments as shall be deemed necessary by Assignee effectively to vest in
Assignee all rents, income and profits from any and all Leases; [j] that,
except for copies prior to an Event of Default of occupancy agreements with
Licensees, Assignor will from time to time, promptly upon demand therefor,
deliver to Assignee an executed counterpart of each and every Lease then
affecting all or any portion of the Premises; and [k] that in the event any
warranty or representation of Assignor herein shall be false, misleading or
materially inaccurate or Assignor shall default in the observance or
performance of any obligation, term, covenant or condition hereof, then, in
each instance at the option
3
<PAGE> 4
of Assignee, after the giving by Assignee of any applicable notice and
following the expiration of any period for cure provided for in the Loan
Documents, the same shall vest Assignee with the absolute right to declare all
sums evidenced thereby or due thereunder immediately due and payable and to
exercise any and all rights and remedies provided thereunder and hereunder and
under the other Loan Documents as well as such remedies as may be available at
law or in equity, all of which rights and remedies shall be cumulative.
4. ADDITIONAL COVENANTS OF ASSIGNOR. Assignor covenants and
agrees that Assignor will not, without first obtaining in each instance the
prior written consent of Assignee: [a] enter into any Lease without the prior
written consent of Assignee, which consent may be granted or withheld in the
sole and absolute discretion of Assignee; [b] either cancel any Lease nor
accept a surrender thereof (except that Assignor may, with the prior written
consent of Assignee and provided the reason for any refusal by Assignee so to
consent is not patently unreasonable or capricious, terminate a Lease for which
the tenant thereunder is in default); [c] either reduce the rent payable under
any Lease or accept payment of any installment of rent in advance of the due
date thereof; [d] change, amend, alter or modify any Lease or any of the terms
or provisions thereof, or grant any concession in connection therewith; [e]
consent to the release or reduction of the obligations of the tenant under any
Lease; [f] assign, pledge encumber or otherwise transfer any Lease or
Assignor's rights thereunder; [g] consent to an assignment of tenant's interest
under any Lease or to a subletting thereof, except to the extent any such
assignment or subletting is specifically authorized by such Lease; or [h] incur
any indebtedness to the tenant or guarantor of any Lease, for borrowed money or
otherwise, which may under any circumstances be availed of as an offset against
the rent or other payments due thereunder; and any of the above acts, if done
without the consent of Assignee, shall be, at the option of Assignee, null and
void, and shall constitute a default hereunder.
5. APPEARANCE IN ACTIONS. Assignee shall have the right, at
Assignor's sole cost and expense, to appear in and defend any action or
proceeding arising under or out of or in any manner connected with any Lease or
the obligations, duties or liabilities of the landlord or tenant thereunder,
and Assignor agrees to pay immediately upon request of Assignor all costs and
expenses of Assignee, including reasonable attorneys' fees, in any such action
or proceeding in which the Assignee in its sole discretion may appear.
Assignor shall give prompt notice to Lender of any notice received by Assignor
of default by landlord or tenant under any Lease, or of a purported termination
or intention of a tenant to terminate a Lease, together with a complete copy of
any such notice.
6. DIRECTION TO TENANTS. Assignor hereby consents to and
irrevocably authorizes and directs the tenants under the Leases and
4
<PAGE> 5
any successor to the interest of any of said tenants, upon demand and notice
from Assignee of Assignee's right to receive the rents and other amounts under
such Leases, to pay to Assignee the rents and other amounts due or to become
due under the Leases, and said tenants shall have the right to rely upon such
demand and notice from Assignee and shall pay such rents and other amounts to
Assignee without any obligation or right to determine the actual existence of
any default or event claimed by Assignee as the basis for Assignee's right to
receive such rents and other amounts and notwithstanding any notice from or
claim of Assignor to the contrary, and Assignor shall have no right to claim
against said tenants for any such rents and other amounts so paid by said
tenants to Assignee.
7. ADDITIONAL RIGHTS UPON A DEFAULT. Upon the occurrence of a
default under this Assignment or any of the other Loan Documents, Assignee, at
its option, after the giving of any notice and expiration of opportunity for
cure provided in the applicable Loan Documents, shall have the complete right,
power and authority [a] without taking possession, to demand, collect and
receive and sue for the rents and other sums payable under the Leases and,
after deducting all reasonable costs and expenses of collection (including,
without limitation, reasonable attorneys' fees) as determined by Assignee,
apply the net proceeds thereof to the payment of any sums from time to time due
under the Loan Documents; [b] to declare all sums due under the Loan Documents
immediately due and payable, and, at the option of Assignee, to exercise any
and all of the rights and remedies contained in the Loan Documents; and [c]
without regard to the adequacy of any security for any of the Obligations
described in SCHEDULE 1 hereto, at the option of Assignee, with or without
process of law, personally or by agent or attorney, or by or by a receiver to
be appointed by the court upon motion of Assignee, then and thereafter to enter
upon, take and maintain possession of and operate the Premises, or any part
thereof, together with all documents, books, records, papers, and accounts
relating thereto and exclude Assignor and its agents and servants therefrom and
hold, operate, manage and control the Premises or any part thereof as fully and
to the same extent as Assignor could do if in possession and in such event,
without limitation and at the expense of Assignor, from time to time, cause to
be made all necessary or proper repairs, renewals, replacements, useful
alterations, additions, betterments and improvements to the Premises, or any
part thereof, as Assignee deems judicious, and pay taxes, assessments and prior
or proper charges on the Premises, or any part thereof, and insure and reinsure
the same, and lease the Premises, or any part thereof, for such terms and on
such terms as Assignee deems desirable, including leases for terms expiring
beyond the maturity of the indebtedness evidenced by any of the Loan Documents,
and cancel any Lease or sublease thereof for any cause or on any ground which
would entitle Assignor to cancel the same. Without limitation of the
foregoing, Assignee, in addition to all other rights and remedies available to
Assignee, shall be
5
<PAGE> 6
entitled to the appointment of a receiver of the rents, issues and profits of
the Premises (including the Leases) as a matter of right and without notice,
with power to collect such rents, issues and profits due and becoming due after
default under this Assignment or the other Loan Documents, without regard to
the value of the Premises (including the Leases) or the solvency of person or
persons liable for the payment of the Obligations under the Loan Documents, and
regardless of whether Assignee has an adequate remedy at law. Assignor for
itself and any subsequent owner of the Premises (including the Leases) hereby
waives any and all defenses to the application for a receiver, as above
provided, and hereby specifically consents to such appointment without notice,
except any notice required by law, but nothing herein contained is to be
construed to deprive Assignee of any other right, remedy or privilege Assignee
may have under the law to have a receiver appointed.
8. APPLICATION OF AMOUNTS. After payment of all proper charges
and expenses, including the just and reasonable compensation for the services
of Assignee, its attorneys, agents, clerks, servants and others employed by
Assignee in connection with the operation, management and control of the
Premises and the conduct of the business thereof, and such further sums as may
be sufficient to indemnify Assignee from and against any liability, loss or
damage on account of any matter or thing done in good faith in pursuance of the
rights and powers of Assignee hereunder, Assignee will credit the net amount of
income which Assignee may receive by virtue of this Assignment and from the
Premises to any and all amounts due or owing to Assignee from Assignor under
the terms and provisions of the Loan Documents or otherwise in respect of any
of the Obligations of Assignor to Assignee. The balance of such net income
shall be released to or upon the order of Assignor. The manner of the
application of such net income and the item or items which shall be credited
shall be within the sole discretion of Assignee. In no event will the absolute
assignment effected hereby reduce any sums due under any of the Loan Documents
except to the extent, if any, that cash is actually received by Assignee and
applied to the payment of such sums.
9. LIMITATION OF LIABILITY. The acceptance by Assignee of this
Assignment, with all of the rights, powers, privileges and authority so
created, shall neither be deemed nor construed to constitute Assignee a
mortgagee in possession nor at any time or in any event to impose any
obligation whatsoever upon Assignee to appear in or defend any action or
proceeding relating to the Leases or the Premises, or to take any action
hereunder, or to expend any money or incur any expenses, or perform or
discharge any obligation, duty or liability under the Leases, or to assume any
obligation or responsibility for any security deposits or other deposits
delivered to Assignor by any tenant and not assigned and delivered to Assignee,
or render Assignee liable in any way for any
6
<PAGE> 7
injury or damage to person or property sustained by any person or entity in, on
or about the Premises.
10. SECURITY DEPOSITS. Upon any default (after the giving of any
applicable required notice and/or expiration of cure provided under the Loan
Documents) under this Assignment or the other Loan Documents, Assignor shall on
demand of Assignee transfer to Assignee any security deposits held by Assignor
under the terms of the Leases to be held by Assignee and applied in accordance
with the provisions of the Leases. Until Assignee makes such demand and the
deposits are paid over to Assignee the Assignee assumes no responsibility for
any such security deposits. Assignor at all times shall deposit the same in an
account, separated from its general funds, and if such deposits are required by
law to be refunded to the respective tenants with interest thereon, such
account shall be an interest bearing account.
11. ATTORNEY IN FACT. Assignor hereby irrevocably appoints
Assignee and its successors and assigns as the agent and attorney in fact of
Assignor, which appointment is coupled with an interest and is irrevocable, to
exercise any rights or remedies hereunder and under the Leases and to execute
and deliver during the term of this Assignment such instruments as Assignee may
deem necessary to more effectively convey the Leases and the other interests
hereunder to Assignee and to provide constructive notice to third parties of
this Assignment.
12. NO WAIVERS. No modifications, indulgences, waivers,
compromises, settlements, or variations of any of the terms of any of the Loan
Documents shall impair in any manner any of the rights and remedies of Assignee
under this Assignment. Assignor agrees that neither the collection of rents
and the application thereof by Assignee to the payment of any of the sums due
under the Loan Documents and otherwise as authorized by this Assignment, nor
the entry upon and taking of possession of the Premises, or any part thereof,
by Assignee shall cure or waive any default, or waive, modify or affect any
notice of default under any of the Loan Documents, or invalidate any act done
pursuant to such notice, and the enforcement of such rights and remedies by
Assignee, once exercised, shall continue for so long as Assignee shall elect.
If Assignee shall thereafter elect to discontinue the exercise of any such
right or remedy, the same or any other right or remedy hereunder may be
reasserted at any time and from time to time following any subsequent default.
13. REMEDIES CUMULATIVE. The rights and remedies of Assignee
hereunder are cumulative and not in lieu of, but are in addition to, any rights
or remedies which Assignee shall have under any of the Loan Documents, or at
law or in equity, which rights and remedies may be exercised by Assignee either
prior to, simultaneously with, or subsequent to, any action taken hereunder.
The rights and remedies of Assignee may be exercised from time to time
7
<PAGE> 8
and as often as such exercise is deemed expedient, and the failure of Assignee
to avail itself of any of the terms, provisions and conditions of this
Assignment for any period of time, at any time or times, shall not be construed
or deemed to be a waiver of any rights under the terms hereof.
14. RIGHTS SURVIVE FORECLOSURE PROCEEDING. The right of Assignee
to collect and receive the rents assigned hereunder or to take possession of
the Premises, or to exercise any of the rights or powers herein granted to
Assignee shall, to the extent not prohibited by law, also extend to the period
from and after the filing of any suit to foreclose any lien created under any
of the Loan Documents pertaining to the Premises, including any period allowed
by law for the redemption of the Premises after any foreclosure sale.
15. INDEMNIFICATION. Assignor agrees to indemnify and hold
Assignee harmless of, from and against any and all liability, loss, damage or
expense, which Assignee may or might incur under or by reason of this
Assignment, and of and from any and all claims and demands whatsoever which may
be asserted against Assignee by reason of any alleged obligation or undertaking
on the part of Assignee (other than obligations or undertakings of Assignee
alleged to have arisen after the time, if applicable, at which Assignee entered
into possession of the Premises) to perform or discharge any of the terms,
covenants or agreements contained in the Leases. Should Assignee incur any
such liability, loss or damage under or by reason of this Assignment, or in the
defense of any such claims or demands, the amount thereof, including costs,
expenses and reasonable attorneys' fees, together with interest thereon at the
Index Rate of Lender plus 2%, shall be payable out of amounts collected by
Assignee pursuant to this Assignment and the other Loan Documents, and Assignor
shall reimburse Assignee therefor immediately upon demand, and upon failure of
Assignor so to do, the same shall be a default hereunder, and Assignee may at
Assignee's sole option exercise all rights and remedies available to Assignee
thereupon under this Assignment and the other Loan Documents.
16. MISCELLANEOUS.
-------------
A. This Assignment shall be assignable by Assignee and
all representations, warranties, covenants, powers and rights herein contained
shall be binding upon, and inure to the benefit of, Assignor and Assignee and
their respective successors and assigns.
B. Except for any notice required under applicable law
to be given in another manner, any notice given hereunder shall be given in the
manner stipulated by the Reimbursement Agreements described in SCHEDULE 1
hereto. Nothing contained in this Assignment shall be deemed to waive or
modify in any respect any prohibition, restriction or condition contained in
any mortgage
8
<PAGE> 9
from Assignor to Assignee applicable to Assignor's entering into any Lease of
all or any part of the Premises or in any other Loan Document.
C. This Assignment may be executed, acknowledged and
delivered in any number of counterparts and each such counterpart shall
constitute an original, but together such counterparts shall constitute only
one instrument.
D. If any one or more of the provisions of this
Assignment, or the applicability of any such provision to a specific situation,
shall be held invalid or unenforceable, such provision shall be modified to the
minimum extent necessary to make it or its application valid and enforceable,
and the validity and enforceability of all other provisions of this Assignment
and all other applications of any such provision shall not be affected thereby.
E. Upon any sale, conveyance, transfer or exchange of
all or a part of the Premises, the term "Assignor" as used herein shall include
the transferee or grantee in such transaction. The preceding sentence shall
not be deemed to permit any sale, conveyance, transfer or exchange which is
prohibited or restricted by the terms of any of the Loan Documents.
F. The captions and headings of the various sections of
this Assignment are for convenience only and are not to be construed as
confining or limiting in any way the scope or intent of the provisions hereof.
Whenever the context requires or permits, the singular shall include the
plural, the plural shall include the singular and the masculine, feminine and
neuter shall be freely interchangeable.
G. This Assignment contains the final, complete and
exclusive agreement of Assignor and Assignee concerning its subject matter, and
may not be modified except in a writing signed by each of Assignor and
Assignee.
17. GOVERNING LAW. This Assignment was negotiated in the
Commonwealth of Kentucky, the Reimbursement Agreements were delivered by
Assignor and accepted by Assignee in the Commonwealth of Kentucky, and the
Letters of Credit were issued from the Commonwealth of Kentucky, which state
Assignor and Assignee agree has a substantial relationship to Assignor and
Assignee and to the underlying transaction in connection with which this
Assignment was granted. This Assignment, including matters of construction,
validity and performance, and the obligations arising hereunder, shall be
construed in accordance with and otherwise governed in all respects by the laws
of the Commonwealth of Kentucky applicable to contracts made and performed in
such state and any applicable law of the United States of America except to the
extent that the real and personal property laws of the State of Florida,
including laws
9
<PAGE> 10
relating to the perfection, priority and enforcement of interests in real
property located in Florida, necessarily shall apply to enforcement of this
Assignment. Assignor hereby irrevocably agrees that any legal action, suit, or
proceeding against Assignor with respect to the obligations or liabilities of
Assignor or any other matter under or arising out of or in connection with this
Assignment or the other Loan Documents or for recognition or enforcement of any
judgment rendered in any such action, suit or proceeding may be brought in the
United States Courts for the Western District of Kentucky, or in the courts of
the Commonwealth of Kentucky, as Lender may elect, and by execution and
delivery of this Assignment, Assignor hereby irrevocably accepts and submits to
the non-exclusive jurisdiction of each of the aforesaid courts IN PERSONA,
generally and unconditionally with respect to any such action, suit, or
proceeding for Assignor and in respect of Assignor's property. Assignor
further agrees that final judgment against Assignor in any action, suit or
proceeding referred to herein shall be conclusive and may be enforced in any
other jurisdiction, by suit on the judgment, a certified or exemplified copy of
which shall be conclusive evidence of the fact and of the amount of the
indebtedness of Assignor.
18. WAIVER OF TRIAL BY JURY. THE ASSIGNOR AND ASSIGNEE
ACKNOWLEDGE THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE
TIME AND EXPENSE REQUIRED FOR A BENCH TRIAL AND HEREBY KNOWINGLY AND
VOLUNTARILY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, AND AFTER HAVING
CONSULTED OR HAVING HAD AMPLE OPPORTUNITY TO CONSULT THEIR RESPECTIVE LEGAL
COUNSEL CONCERNING THE CONSEQUENCES OF SUCH WAIVER, TRIAL BY JURY IN ANY ACTION
OR OTHER PROCEEDING BROUGHT TO ENFORCE OR DEFEND AGAINST COLLECTION OF OR
OTHERWISE IN CONNECTION WITH THIS ASSIGNMENT OR THE OTHER LOAN DOCUMENTS.
<THE BALANCE OF THIS PAGE INTENTIONALLY HAS BEEN LEFT BLANK>
10
<PAGE> 11
IN WITNESS WHEREOF, Assignor has executed this Assignment as of the date
first above written.
"ASSIGNOR"
Signed, acknowledged and MARSHALL PROPERTIES, INC., an Ohio
delivered in the presence corporation
of:
__________________________ By: ___________________________
Signature
__________________________ Printed Name: _________________
Printed Name
Title: ________________________
__________________________
Signature
__________________________
Printed Name
STATE OF _______________ )
: SS
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me
this ____ day of February, 1996, by ______________________________ (name)
as ______________________________ (title) of Marshall Properties, Inc., an
Ohio corporation, on behalf of the corporation.
He/She:
(check one) ______ is personally known to me, or has
______ produced ____________________________
as identification.
__________________________________________
__________________________________________
Name: (Please Print)
Notary Public, State of __________________
[AFFIX NOTARY SEAL]
11
<PAGE> 12
SCHEDULE 1
----------
TO
ASSIGNMENT OF LEASES AND RENTS ("AGREEMENT)
BETWEEN MARSHALL PROPERTIES, INC.
AND BANK ONE, KENTUCKY, NA
(DESCRIPTION OF OBLIGATIONS)
The "OBLIGATIONS" referred to in the foregoing Agreement are
as follows:
A. All indebtedness, liabilities and obligations arising
under or evidenced by, and the performance of all covenants, conditions and
agreements undertaken by each of the Borrowers hereinafter described in
connection with, each of the following documents, including any renewals,
extensions and amendments of any of them or substitutions or replacements for
any of them (referred to hereinafter as the "REIMBURSEMENT AGREEMENT"):
(1) Reimbursement Agreement dated as of February
12, 1996, to which Arbor Health Care Company, a Delaware corporation ("ARBOR"),
Marshall Properties, Inc., an Ohio corporation ("MARSHALL") (Arbor and Marshall
are referred to each individually as a "BORROWER" and collectively as the
"BORROWERS"), and Bank One, Kentucky, NA, a national banking association
("LENDER"), are parties, referable to Letter of Credit No. S-6122 in the face
amount of $27,506,250 issued by Lender for the joint and several account of
Borrowers (the "LETTER OF CREDIT") as security for Promissory Note (Series
1996A-1) and Promissory Note (Series 1996A-2), both dated as of February 15,
1996, made jointly and severally by Borrowers to the order of Capital One
Funding Corporation ("CAPITAL") in face principal amount of $13,500,000 and
maturing on February 1, 2003.
B. The payment, performance and discharge of any and all
obligations and liabilities of each Borrower, whether direct or indirect,
absolute or contingent, due or not due, now existing or hereafter arising, in
conjunction with issuance of the Letter of Credit (collectively, together with
any extensions, renewals, amendments, substitutions or replacements thereof and
therefor, the "LETTER OF CREDIT"), including but not limited to the obligations
of each Borrower contained in any and all applications for the Letter of Credit
(collectively, the "APPLICATIONS") executed and delivered as a condition to
issuance of the Letter of Credit, and to pay on demand all drafts drawn under
the Letter of Credit, and to reimburse Lender on demand of Lender for any
amounts advanced by Lender for the account of either Borrower, at the option
and in the exercise of the sole and absolute discretion of Lender, to satisfy
such drafts, and to indemnify Lender from all loss or liability incurred by
Lender in connection with the issuance of the Letter of Credit; and the payment
of all fees and all other sums due under,
12
<PAGE> 13
and the performance of all covenants, conditions and other obligations due
under or in connection with, the Reimbursement Agreement, the Applications, and
any security agreements, mortgages, deeds of trust, guaranties, pledge
agreements, assignments, subordination agreements, and any other documents or
instruments heretofore, contemporaneously herewith or hereafter entered into by
any Borrower or any other person or entity, with or for the benefit of Lender
to evidence, secure or guarantee payment of the Letter of Credit, or otherwise
entered into in connection with the Letter of Credit (such security agreements,
mortgages, deeds of trust, guaranties, pledge agreements, assignments,
subordination agreements, and other documents and instruments evidencing,
securing, guaranteeing or otherwise entered into in connection with the Letter
of Credit are referred to collectively as the "LOAN DOCUMENTS").
C. All expenses, costs and charges, of any nature
whatsoever, including, without limitation, taxes, assessments, insurance
premiums, repairs, rent, storage costs, expenses of collection and sale, and
reasonable attorneys' fees, incurred by or for the account of Lender in
preserving collateral for the Obligations and/or enforcing or seeking to
enforce any of the rights and remedies of Lender under any of the Loan
Documents.
13
<PAGE> 14
EXHIBIT A
---------
to
Assignment of Leases and Rents
The Northeast 1/4 of the Northeast 1/4 of the Southwest 1/4 of Section
22, Township 29 South, Range 20 East, Hillsborough County, Florida,
LESS that portion in use as road right-of-way for Victoria Street off
the North side AND LESS that part in use as road right-of-way for
Kings Avenue off the East side thereof.
14
<PAGE> 15
THIS INSTRUMENT PREPARED BY:
__________________________
Arthur A. Rouse, Esq.
WYATT, TARRANT & COMBS
2700 Citizens Plaza
Louisville, Kentucky 40202
(502) 589-5235
ASSIGNMENT OF LEASES AND RENTS
------------------------------
(Hillsborough County, Florida)
THIS ASSIGNMENT OF LEASES AND RENTS (the "Assignment") is
executed actually on the date indicated in the notarial certificate affixed
hereto but is made effective as of February 12, 1996 by [i] ARBOR HEALTH CARE
COMPANY, a Delaware corporation ("ASSIGNOR"), having a mailing address of 1100
Shawnee Road, Box 840, Lima, Ohio in favor of [ii] BANK ONE, KENTUCKY, N.A., a
national banking association, having a mailing address of 416 West Jefferson
Street, Louisville, Jefferson County, Kentucky 40232 ("ASSIGNEE").
W I T N E S S E T H:
-------------------
WHEREAS, Assignor is obligated to Assignee under and in
connection with the Reimbursement Agreements and the Letters of Credit and the
other "OBLIGATIONS" more particularly described in SCHEDULE 1 attached to and
made a part hereof; and
WHEREAS, in connection with the execution and delivery of the
Reimbursement Agreements, Assignee has required that Assignor absolutely assign
and convey to Assignee all of Assignor's right, title and interest in, to and
under any and all leases (hereinafter collectively referred to as the "LEASES"
and singularly as a "LEASE") now or hereafter in existence (as amended or
supplemented from time to time) and covering space in or applicable to the real
estate more particularly described in EXHIBIT A attached to and made a part
hereof (hereinafter referred to as the "PREMISES"), and Assignor desires and
intends by this Assignment to absolutely assign and convey to Assignee all of
Assignor's right, title and interest in, to and under the Leases;
NOW, THEREFORE, for valuable consideration, the receipt of
which is hereby acknowledged, and intending to be legally bound, Assignor
agrees as follows:
<PAGE> 16
1. ABSOLUTE ASSIGNMENT. Assignor does hereby absolutely sell,
assign, transfer, convey and set over unto Assignee and its successors and
assigns, all of the right, title and interest of Assignor in, to and under the
Leases, together with all rents, earnings, income, issues and profits, arising
from either the Premises, the Leases, or both the Premises and the Leases, and
all other sums due or to become due under and pursuant thereto in each case
(including but not limited to any early termination or other fees or charges
payable by any tenant thereunder and any award or damages payable to Assignor
pursuant to any bankruptcy, insolvency or reorganization proceeding affecting
any tenant), together with any and all guaranties of or under any of said
Leases, and security therefor, and together with all rights, powers,
privileges, options and other benefits of Assignor in its capacity as lessor
under the Leases, including, without limitation: the immediate and continuing
right to receive and collect all rents, income, revenues, issues, profits,
fees, condemnation awards, insurance proceeds, moneys and security payable or
receivable under the Leases or pursuant to any of the provisions thereof,
whether as rent or otherwise, the right to make all waivers and agreements, to
give and receive all notices, consents and releases, and to take such action
and exercise such remedies upon the happening of a default under any Lease,
including the commencement, conduct and consummation of proceedings at law or
in equity as shall be permitted under any provision of any Lease or by any law,
and to do any and all other things whatsoever which the Assignor is or may
become entitled to do under any such Lease. Notwithstanding the provisions of
this Section 1, so long as no default shall exist under any of the Loan
Documents defined in SCHEDULE 1 ("LOAN DOCUMENTS"), and no event shall have
occurred which by the lapse of time or the giving of notice, or both, has or
would become an event of default thereunder, Assignor shall have the right and
license to occupy the Premises as landlord or otherwise and to collect, use and
enjoy the rents, issues and profits and other sums payable under and by virtue
of any Lease (but only as the same become due under the provisions of such
Lease) and to enforce (subject to the provisions of this Assignment) the
covenants of the Leases.
2. DURATION OF ASSIGNMENT. This Assignment is made and given and
shall remain in full force and effect until the payment, performance and
observance, as applicable, of all of the terms, covenants and conditions to be
paid, performed or observed under each of the Loan Documents, and promptly upon
request of Assignor thereafter Assignee shall, at the cost and expense of
Assignor and conditioned upon payment by Assignor of such costs and expenses,
cause this Assignment (if the same has been recorded) to be released of record.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF ASSIGNOR.
Assignor represents, warrants, covenants and agrees: [a] that Assignor has
good right and authority to make this Assignment, and Assignor holds the entire
and unencumbered rights of the landlord
2
<PAGE> 17
under each of the Leases; [b] that neither Assignor nor any predecessor lessor
has heretofore alienated, assigned, pledged or otherwise disposed of or
encumbered the Leases or any of the sums due or to become due thereunder and
that neither Assignor nor any predecessor lessor has performed any acts or
executed any other instruments which might prevent Assignee from operating
under any of the terms and conditions of this Assignment or which would limit
Assignee in such operation; [c], except for any deposits received in the
ordinary course of business from occupants of the Premises for which the
Premises are duly licensed (collectively, the "LICENSEES"), that Assignor has
not accepted or collected rent or any other payments under any Lease for any
period subsequent to the current period for which such rent or other payment
has already become due and payable; [d] that Assignor has not executed or
granted any amendment or modification whatever of any of the Leases, either
orally or in writing, except as theretofore disclosed in writing by Assignor to
Assignee (and approved by Assignee, if such approval be required hereunder or
under any other Loan Document); [e] that, except any defaults under agreements
with Licensees, there is no default under any of the Leases now existing and no
event has occurred and is continuing which, with the lapse of time or the
giving of notice or both, would constitute an event of default under any of the
Leases; [f] that Assignor will observe, perform and discharge, duly and
punctually, all and singular the obligations, terms, covenants, conditions and
warranties of the Loan Documents, this Assignment, and each other Lease, on the
part of Assignor to be kept, observed and performed; [g] to enforce the
performance of each and every obligation, term, covenant, condition and
agreement in said Leases by any tenant to be performed; [h] to appear in and
defend any action or proceeding arising under, occurring out of, or in any
manner connected with said Leases or the obligations, duties or liabilities of
Assignor or any tenant thereunder, and upon request by Assignee, to do so in
the name and on behalf of Assignee, but at the expense of Assignor; [i] that
Assignor will, upon the request of Assignee, execute and deliver to Assignee
such further instruments and do and perform such other acts and things as
Assignee reasonably may deem necessary or appropriate to make effective this
Assignment and the various covenants of Assignor herein contained, and to more
effectively vest in Assignee the sums due or hereafter to become due under the
Leases, including, without limitation, the execution of such additional
assignments as shall be deemed necessary by Assignee effectively to vest in
Assignee all rents, income and profits from any and all Leases; [j] that,
except for copies prior to an Event of Default of occupancy agreements with
Licensees, Assignor will from time to time, promptly upon demand therefor,
deliver to Assignee an executed counterpart of each and every Lease then
affecting all or any portion of the Premises; and [k] that in the event any
warranty or representation of Assignor herein shall be false, misleading or
materially inaccurate or Assignor shall default in the observance or
performance of any obligation, term, covenant or condition hereof, then, in
each instance at the option
3
<PAGE> 18
of Assignee, after the giving by Assignee of any applicable notice and
following the expiration of any period for cure provided for in the Loan
Documents, the same shall vest Assignee with the absolute right to declare all
sums evidenced thereby or due thereunder immediately due and payable and to
exercise any and all rights and remedies provided thereunder and hereunder and
under the other Loan Documents as well as such remedies as may be available at
law or in equity, all of which rights and remedies shall be cumulative.
4. ADDITIONAL COVENANTS OF ASSIGNOR. Assignor covenants and
agrees that Assignor will not, without first obtaining in each instance the
prior written consent of Assignee: [a] enter into any Lease without the prior
written consent of Assignee, which consent may be granted or withheld in the
sole and absolute discretion of Assignee; [b] either cancel any Lease nor
accept a surrender thereof (except that Assignor may, with the prior written
consent of Assignee and provided the reason for any refusal by Assignee so to
consent is not patently unreasonable or capricious, terminate a Lease for which
the tenant thereunder is in default); [c] either reduce the rent payable under
any Lease or accept payment of any installment of rent in advance of the due
date thereof; [d] change, amend, alter or modify any Lease or any of the terms
or provisions thereof, or grant any concession in connection therewith; [e]
consent to the release or reduction of the obligations of the tenant under any
Lease; [f] assign, pledge encumber or otherwise transfer any Lease or
Assignor's rights thereunder; [g] consent to an assignment of tenant's interest
under any Lease or to a subletting thereof, except to the extent any such
assignment or subletting is specifically authorized by such Lease; or [h] incur
any indebtedness to the tenant or guarantor of any Lease, for borrowed money or
otherwise, which may under any circumstances be availed of as an offset against
the rent or other payments due thereunder; and any of the above acts, if done
without the consent of Assignee, shall be, at the option of Assignee, null and
void, and shall constitute a default hereunder.
5. APPEARANCE IN ACTIONS. Assignee shall have the right, at
Assignor's sole cost and expense, to appear in and defend any action or
proceeding arising under or out of or in any manner connected with any Lease or
the obligations, duties or liabilities of the landlord or tenant thereunder,
and Assignor agrees to pay immediately upon request of Assignor all costs and
expenses of Assignee, including reasonable attorneys' fees, in any such action
or proceeding in which the Assignee in its sole discretion may appear.
Assignor shall give prompt notice to Lender of any notice received by Assignor
of default by landlord or tenant under any Lease, or of a purported termination
or intention of a tenant to terminate a Lease, together with a complete copy of
any such notice.
6. DIRECTION TO TENANTS. Assignor hereby consents to and
irrevocably authorizes and directs the tenants under the Leases and
4
<PAGE> 19
any successor to the interest of any of said tenants, upon demand and notice
from Assignee of Assignee's right to receive the rents and other amounts under
such Leases, to pay to Assignee the rents and other amounts due or to become
due under the Leases, and said tenants shall have the right to rely upon such
demand and notice from Assignee and shall pay such rents and other amounts to
Assignee without any obligation or right to determine the actual existence of
any default or event claimed by Assignee as the basis for Assignee's right to
receive such rents and other amounts and notwithstanding any notice from or
claim of Assignor to the contrary, and Assignor shall have no right to claim
against said tenants for any such rents and other amounts so paid by said
tenants to Assignee.
7. ADDITIONAL RIGHTS UPON A DEFAULT. Upon the occurrence of a
default under this Assignment or any of the other Loan Documents, Assignee, at
its option, after the giving of any notice and expiration of opportunity for
cure provided in the applicable Loan Documents, shall have the complete right,
power and authority [a] without taking possession, to demand, collect and
receive and sue for the rents and other sums payable under the Leases and,
after deducting all reasonable costs and expenses of collection (including,
without limitation, reasonable attorneys' fees) as determined by Assignee,
apply the net proceeds thereof to the payment of any sums from time to time due
under the Loan Documents; [b] to declare all sums due under the Loan Documents
immediately due and payable, and, at the option of Assignee, to exercise any
and all of the rights and remedies contained in the Loan Documents; and [c]
without regard to the adequacy of any security for any of the Obligations
described in SCHEDULE 1 hereto, at the option of Assignee, with or without
process of law, personally or by agent or attorney, or by or by a receiver to
be appointed by the court upon motion of Assignee, then and thereafter to enter
upon, take and maintain possession of and operate the Premises, or any part
thereof, together with all documents, books, records, papers, and accounts
relating thereto and exclude Assignor and its agents and servants therefrom and
hold, operate, manage and control the Premises or any part thereof as fully and
to the same extent as Assignor could do if in possession and in such event,
without limitation and at the expense of Assignor, from time to time, cause to
be made all necessary or proper repairs, renewals, replacements, useful
alterations, additions, betterments and improvements to the Premises, or any
part thereof, as Assignee deems judicious, and pay taxes, assessments and prior
or proper charges on the Premises, or any part thereof, and insure and reinsure
the same, and lease the Premises, or any part thereof, for such terms and on
such terms as Assignee deems desirable, including leases for terms expiring
beyond the maturity of the indebtedness evidenced by any of the Loan Documents,
and cancel any Lease or sublease thereof for any cause or on any ground which
would entitle Assignor to cancel the same. Without limitation of the
foregoing, Assignee, in addition to all other rights and remedies available to
Assignee, shall be
5
<PAGE> 20
entitled to the appointment of a receiver of the rents, issues and profits of
the Premises (including the Leases) as a matter of right and without notice,
with power to collect such rents, issues and profits due and becoming due after
default under this Assignment or the other Loan Documents, without regard to
the value of the Premises (including the Leases) or the solvency of person or
persons liable for the payment of the Obligations under the Loan Documents, and
regardless of whether Assignee has an adequate remedy at law. Assignor for
itself and any subsequent owner of the Premises (including the Leases) hereby
waives any and all defenses to the application for a receiver, as above
provided, and hereby specifically consents to such appointment without notice,
except any notice required by law, but nothing herein contained is to be
construed to deprive Assignee of any other right, remedy or privilege Assignee
may have under the law to have a receiver appointed.
8. APPLICATION OF AMOUNTS. After payment of all proper charges
and expenses, including the just and reasonable compensation for the services
of Assignee, its attorneys, agents, clerks, servants and others employed by
Assignee in connection with the operation, management and control of the
Premises and the conduct of the business thereof, and such further sums as may
be sufficient to indemnify Assignee from and against any liability, loss or
damage on account of any matter or thing done in good faith in pursuance of the
rights and powers of Assignee hereunder, Assignee will credit the net amount of
income which Assignee may receive by virtue of this Assignment and from the
Premises to any and all amounts due or owing to Assignee from Assignor under
the terms and provisions of the Loan Documents or otherwise in respect of any
of the Obligations of Assignor to Assignee. The balance of such net income
shall be released to or upon the order of Assignor. The manner of the
application of such net income and the item or items which shall be credited
shall be within the sole discretion of Assignee. In no event will the absolute
assignment effected hereby reduce any sums due under any of the Loan Documents
except to the extent, if any, that cash is actually received by Assignee and
applied to the payment of such sums.
9. LIMITATION OF LIABILITY. The acceptance by Assignee of this
Assignment, with all of the rights, powers, privileges and authority so
created, shall neither be deemed nor construed to constitute Assignee a
mortgagee in possession nor at any time or in any event to impose any
obligation whatsoever upon Assignee to appear in or defend any action or
proceeding relating to the Leases or the Premises, or to take any action
hereunder, or to expend any money or incur any expenses, or perform or
discharge any obligation, duty or liability under the Leases, or to assume any
obligation or responsibility for any security deposits or other deposits
delivered to Assignor by any tenant and not assigned and delivered to Assignee,
or render Assignee liable in any way for any
6
<PAGE> 21
injury or damage to person or property sustained by any person or entity in, on
or about the Premises.
10. SECURITY DEPOSITS. Upon any default (after the giving of any
applicable required notice and/or expiration of cure provided under the Loan
Documents) under this Assignment or the other Loan Documents, Assignor shall on
demand of Assignee transfer to Assignee any security deposits held by Assignor
under the terms of the Leases to be held by Assignee and applied in accordance
with the provisions of the Leases. Until Assignee makes such demand and the
deposits are paid over to Assignee the Assignee assumes no responsibility for
any such security deposits. Assignor at all times shall deposit the same in an
account, separated from its general funds, and if such deposits are required by
law to be refunded to the respective tenants with interest thereon, such
account shall be an interest bearing account.
11. ATTORNEY IN FACT. Assignor hereby irrevocably appoints
Assignee and its successors and assigns as the agent and attorney in fact of
Assignor, which appointment is coupled with an interest and is irrevocable, to
exercise any rights or remedies hereunder and under the Leases and to execute
and deliver during the term of this Assignment such instruments as Assignee may
deem necessary to more effectively convey the Leases and the other interests
hereunder to Assignee and to provide constructive notice to third parties of
this Assignment.
12. NO WAIVERS. No modifications, indulgences, waivers,
compromises, settlements, or variations of any of the terms of any of the Loan
Documents shall impair in any manner any of the rights and remedies of Assignee
under this Assignment. Assignor agrees that neither the collection of rents
and the application thereof by Assignee to the payment of any of the sums due
under the Loan Documents and otherwise as authorized by this Assignment, nor
the entry upon and taking of possession of the Premises, or any part thereof,
by Assignee shall cure or waive any default, or waive, modify or affect any
notice of default under any of the Loan Documents, or invalidate any act done
pursuant to such notice, and the enforcement of such rights and remedies by
Assignee, once exercised, shall continue for so long as Assignee shall elect.
If Assignee shall thereafter elect to discontinue the exercise of any such
right or remedy, the same or any other right or remedy hereunder may be
reasserted at any time and from time to time following any subsequent default.
13. REMEDIES CUMULATIVE. The rights and remedies of Assignee
hereunder are cumulative and not in lieu of, but are in addition to, any rights
or remedies which Assignee shall have under any of the Loan Documents, or at
law or in equity, which rights and remedies may be exercised by Assignee either
prior to, simultaneously with, or subsequent to, any action taken hereunder.
The rights and remedies of Assignee may be exercised from time to time
7
<PAGE> 22
and as often as such exercise is deemed expedient, and the failure of Assignee
to avail itself of any of the terms, provisions and conditions of this
Assignment for any period of time, at any time or times, shall not be construed
or deemed to be a waiver of any rights under the terms hereof.
14. RIGHTS SURVIVE FORECLOSURE PROCEEDING. The right of Assignee
to collect and receive the rents assigned hereunder or to take possession of
the Premises, or to exercise any of the rights or powers herein granted to
Assignee shall, to the extent not prohibited by law, also extend to the period
from and after the filing of any suit to foreclose any lien created under any
of the Loan Documents pertaining to the Premises, including any period allowed
by law for the redemption of the Premises after any foreclosure sale.
15. INDEMNIFICATION. Assignor agrees to indemnify and hold
Assignee harmless of, from and against any and all liability, loss, damage or
expense, which Assignee may or might incur under or by reason of this
Assignment, and of and from any and all claims and demands whatsoever which may
be asserted against Assignee by reason of any alleged obligation or undertaking
on the part of Assignee (other than obligations or undertakings of Assignee
alleged to have arisen after the time, if applicable, at which Assignee entered
into possession of the Premises) to perform or discharge any of the terms,
covenants or agreements contained in the Leases. Should Assignee incur any
such liability, loss or damage under or by reason of this Assignment, or in the
defense of any such claims or demands, the amount thereof, including costs,
expenses and reasonable attorneys' fees, together with interest thereon at the
Index Rate of Lender plus 2%, shall be payable out of amounts collected by
Assignee pursuant to this Assignment and the other Loan Documents, and Assignor
shall reimburse Assignee therefor immediately upon demand, and upon failure of
Assignor so to do, the same shall be a default hereunder, and Assignee may at
Assignee's sole option exercise all rights and remedies available to Assignee
thereupon under this Assignment and the other Loan Documents.
16. MISCELLANEOUS.
-------------
A. This Assignment shall be assignable by Assignee and
all representations, warranties, covenants, powers and rights herein contained
shall be binding upon, and inure to the benefit of, Assignor and Assignee and
their respective successors and assigns.
B. Except for any notice required under applicable law
to be given in another manner, any notice given hereunder shall be given in the
manner stipulated by the Reimbursement Agreements described in SCHEDULE 1
hereto. Nothing contained in this Assignment shall be deemed to waive or
modify in any respect any prohibition, restriction or condition contained in
any mortgage
8
<PAGE> 23
from Assignor to Assignee applicable to Assignor's entering into any Lease of
all or any part of the Premises or in any other Loan Document.
C. This Assignment may be executed, acknowledged and
delivered in any number of counterparts and each such counterpart shall
constitute an original, but together such counterparts shall constitute only
one instrument.
D. If any one or more of the provisions of this
Assignment, or the applicability of any such provision to a specific situation,
shall be held invalid or unenforceable, such provision shall be modified to the
minimum extent necessary to make it or its application valid and enforceable,
and the validity and enforceability of all other provisions of this Assignment
and all other applications of any such provision shall not be affected thereby.
E. Upon any sale, conveyance, transfer or exchange of
all or a part of the Premises, the term "Assignor" as used herein shall include
the transferee or grantee in such transaction. The preceding sentence shall
not be deemed to permit any sale, conveyance, transfer or exchange which is
prohibited or restricted by the terms of any of the Loan Documents.
F. The captions and headings of the various sections of
this Assignment are for convenience only and are not to be construed as
confining or limiting in any way the scope or intent of the provisions hereof.
Whenever the context requires or permits, the singular shall include the
plural, the plural shall include the singular and the masculine, feminine and
neuter shall be freely interchangeable.
G. This Assignment contains the final, complete and
exclusive agreement of Assignor and Assignee concerning its subject matter, and
may not be modified except in a writing signed by each of Assignor and
Assignee.
17. GOVERNING LAW. This Assignment was negotiated in the
Commonwealth of Kentucky, the Reimbursement Agreements were delivered by
Assignor and accepted by Assignee in the Commonwealth of Kentucky, and the
Letters of Credit were issued from the Commonwealth of Kentucky, which state
Assignor and Assignee agree has a substantial relationship to Assignor and
Assignee and to the underlying transaction in connection with which this
Assignment was granted. This Assignment, including matters of construction,
validity and performance, and the obligations arising hereunder, shall be
construed in accordance with and otherwise governed in all respects by the laws
of the Commonwealth of Kentucky applicable to contracts made and performed in
such state and any applicable law of the United States of America except to the
extent that the real and personal property laws of the State of Florida,
including laws
9
<PAGE> 24
relating to the perfection, priority and enforcement of interests in real
property located in Florida, necessarily shall apply to enforcement of this
Assignment. Assignor hereby irrevocably agrees that any legal action, suit, or
proceeding against Assignor with respect to the obligations or liabilities of
Assignor or any other matter under or arising out of or in connection with this
Assignment or the other Loan Documents or for recognition or enforcement of any
judgment rendered in any such action, suit or proceeding may be brought in the
United States Courts for the Western District of Kentucky, or in the courts of
the Commonwealth of Kentucky, as Lender may elect, and by execution and
delivery of this Assignment, Assignor hereby irrevocably accepts and submits to
the non-exclusive jurisdiction of each of the aforesaid courts IN PERSONA,
generally and unconditionally with respect to any such action, suit, or
proceeding for Assignor and in respect of Assignor's property. Assignor
further agrees that final judgment against Assignor in any action, suit or
proceeding referred to herein shall be conclusive and may be enforced in any
other jurisdiction, by suit on the judgment, a certified or exemplified copy of
which shall be conclusive evidence of the fact and of the amount of the
indebtedness of Assignor.
18. WAIVER OF TRIAL BY JURY. THE ASSIGNOR AND ASSIGNEE
ACKNOWLEDGE THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE
TIME AND EXPENSE REQUIRED FOR A BENCH TRIAL AND HEREBY KNOWINGLY AND
VOLUNTARILY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, AND AFTER HAVING
CONSULTED OR HAVING HAD AMPLE OPPORTUNITY TO CONSULT THEIR RESPECTIVE LEGAL
COUNSEL CONCERNING THE CONSEQUENCES OF SUCH WAIVER, TRIAL BY JURY IN ANY ACTION
OR OTHER PROCEEDING BROUGHT TO ENFORCE OR DEFEND AGAINST COLLECTION OF OR
OTHERWISE IN CONNECTION WITH THIS ASSIGNMENT OR THE OTHER LOAN DOCUMENTS.
<THE BALANCE OF THIS PAGE INTENTIONALLY HAS BEEN LEFT BLANK>
10
<PAGE> 25
IN WITNESS WHEREOF, Assignor has executed this Assignment as of the
date first above written.
"ASSIGNOR"
Signed, acknowledged and ARBOR HEALTH CARE COMPANY, a
delivered in the presence Delaware corporation
of:
__________________________ By: ___________________________
Signature
__________________________ Printed Name: _________________
Printed Name
Title: ________________________
__________________________
Signature
__________________________
Printed Name
STATE OF _______________ )
: SS
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this ____ day of
February, 1996, by ______________________________ (name) as __________________
(title) of Arbor Health Care Company, a Delaware corporation, on behalf of the
corporation.
He/She:
(check one) ______ is personally known to me, or has
______ produced ____________________________
as identification.
__________________________________________
__________________________________________
Name: (Please Print)
Notary Public, State of __________________
[AFFIX NOTARY SEAL]
11
<PAGE> 26
SCHEDULE 1
----------
TO
ASSIGNMENT OF LEASES AND RENTS ("AGREEMENT)
BETWEEN ARBOR HEALTH CARE COMPANY
AND BANK ONE, KENTUCKY, NA
(DESCRIPTION OF OBLIGATIONS)
The "OBLIGATIONS" referred to in the foregoing Agreement are
as follows:
A. All indebtedness, liabilities and obligations arising
under or evidenced by, and the performance of all covenants, conditions and
agreements undertaken by each of the Borrowers hereinafter described in
connection with, each of the following documents, including any renewals,
extensions and amendments of any of them or substitutions or replacements for
any of them (referred to hereinafter as the "REIMBURSEMENT AGREEMENT"):
(1) Reimbursement Agreement dated as of February
12, 1996, to which Arbor Health Care Company, a Delaware corporation ("ARBOR"),
Marshall Properties, Inc., an Ohio corporation ("MARSHALL") (Arbor and Marshall
are referred to each individually as a "BORROWER" and collectively as the
"BORROWERS"), and Bank One, Kentucky, NA, a national banking association
("LENDER"), are parties, referable to Letter of Credit No. S-6122 in the face
amount of $27,506,250 issued by Lender for the joint and several account of
Borrowers (the "LETTER OF CREDIT") as security for Promissory Note (Series
1996A-1) and Promissory Note (Series 1996A-2), both dated as of February 15,
1996, made jointly and severally by Borrowers to the order of Capital One
Funding Corporation ("CAPITAL") in face principal amount of $13,500,000 and
maturing on February 1, 2003.
B. The payment, performance and discharge of any and all
obligations and liabilities of each Borrower, whether direct or indirect,
absolute or contingent, due or not due, now existing or hereafter arising, in
conjunction with issuance of the Letter of Credit (collectively, together with
any extensions, renewals, amendments, substitutions or replacements thereof and
therefor, the "LETTER OF CREDIT"), including but not limited to the obligations
of each Borrower contained in any and all applications for the Letter of Credit
(collectively, the "APPLICATIONS") executed and delivered as a condition to
issuance of the Letter of Credit, and to pay on demand all drafts drawn under
the Letter of Credit, and to reimburse Lender on demand of Lender for any
amounts advanced by Lender for the account of either Borrower, at the option
and in the exercise of the sole and absolute discretion of Lender, to satisfy
such drafts, and to indemnify Lender from all loss or liability incurred by
Lender in connection with the issuance of the Letter of Credit; and the payment
of all fees and all other sums due under,
12
<PAGE> 27
and the performance of all covenants, conditions and other obligations due
under or in connection with, the Reimbursement Agreement, the Applications, and
any security agreements, mortgages, deeds of trust, guaranties, pledge
agreements, assignments, subordination agreements, and any other documents or
instruments heretofore, contemporaneously herewith or hereafter entered into by
any Borrower or any other person or entity, with or for the benefit of Lender
to evidence, secure or guarantee payment of the Letter of Credit, or otherwise
entered into in connection with the Letter of Credit (such security agreements,
mortgages, deeds of trust, guaranties, pledge agreements, assignments,
subordination agreements, and other documents and instruments evidencing,
securing, guaranteeing or otherwise entered into in connection with the Letter
of Credit are referred to collectively as the "LOAN DOCUMENTS").
C. All expenses, costs and charges, of any nature
whatsoever, including, without limitation, taxes, assessments, insurance
premiums, repairs, rent, storage costs, expenses of collection and sale, and
reasonable attorneys' fees, incurred by or for the account of Lender in
preserving collateral for the Obligations and/or enforcing or seeking to
enforce any of the rights and remedies of Lender under any of the Loan
Documents.
13
<PAGE> 28
EXHIBIT A
---------
to
Assignment of Leases and Rents
That part of the East 1/2 of the Northeast 1/4 of the Southwest 1/4 of
Section 8, Township 28 South, Range 19 East, Hillsborough County,
Florida, being more particularly described as follows:
From the Southeast corner of the said East 1/2 run North 00 degrees 00
minutes 35 seconds West along the East boundary of said East 1/2, a
distance of 45.00 feet for a POINT OF BEGINNING; continue North 00
degrees 00 minutes 35 seconds West along the East boundary of said
East 1/2, a distance 61.42 feet; run thence West 245.98 feet; run
thence North 00 degrees 00 minutes 35 seconds West along a line
parallel to and 245.98 feet West of the East boundary of said East
1/2, a distance of 570.22 feet to a point on the South right-of-way
boundary of Campus Hill Drive; run thence West along the South
right-of-way boundary of Campus Hill Drive a distance of 419.82 feet
to a point on the West boundary of said East 1/2, also being the East
boundary of CAMPUS HILL PARK-UNIT 1, as per plat recorded in Plat Book
37, page 28 of the public records of Hillsborough County, Florida; run
thence South 00 degrees 00 minutes 36 seconds East along said West
boundary of said East 1/2, a distance of 539.56 feet; run thence North
89 degrees 44 minutes 56 seconds East along a line parallel to and
140.00 feet North of the South boundary of said East 1/2, a distance
of 40.00 feet; run thence South 00 degrees 00 minutes 36 seconds East
along a line parallel to and 40 feet East of the West boundary of said
East 1/2, a distance of 95.00 feet; run thence North 89 degrees 44
minutes 56 seconds East along a line parallel to and 45.00 feet North
of the South boundary of said East 1/2, a distance of 625.80 feet to
the POINT OF BEGINNING.
14
<PAGE> 29
THIS INSTRUMENT PREPARED BY:
__________________________
Arthur A. Rouse, Esq.
WYATT, TARRANT & COMBS
2700 Citizens Plaza
Louisville, Kentucky 40202
(502) 589-5235
ASSIGNMENT OF LEASES AND RENTS
------------------------------
(Pinellas County, Florida)
THIS ASSIGNMENT OF LEASES AND RENTS (the "Assignment") is
executed actually on the date indicated in the notarial certificate affixed
hereto but is made effective as of February 12, 1996 by [i] ARBOR HEALTH CARE
COMPANY, a Delaware corporation ("ASSIGNOR"), having a mailing address of 1100
Shawnee Road, Box 840, Lima, Ohio in favor of [ii] BANK ONE, KENTUCKY, N.A., a
national banking association, having a mailing address of 416 West Jefferson
Street, Louisville, Jefferson County, Kentucky 40232 ("ASSIGNEE").
W I T N E S S E T H:
-------------------
WHEREAS, Assignor is obligated to Assignee under and in
connection with the Reimbursement Agreements and the Letters of Credit and the
other "OBLIGATIONS" more particularly described in SCHEDULE 1 attached to and
made a part hereof; and
WHEREAS, in connection with the execution and delivery of the
Reimbursement Agreements, Assignee has required that Assignor absolutely assign
and convey to Assignee all of Assignor's right, title and interest in, to and
under any and all leases (hereinafter collectively referred to as the "LEASES"
and singularly as a "LEASE") now or hereafter in existence (as amended or
supplemented from time to time) and covering space in or applicable to the real
estate more particularly described in EXHIBIT A attached to and made a part
hereof (hereinafter referred to as the "PREMISES"), and Assignor desires and
intends by this Assignment to absolutely assign and convey to Assignee all of
Assignor's right, title and interest in, to and under the Leases;
NOW, THEREFORE, for valuable consideration, the receipt of
which is hereby acknowledged, and intending to be legally bound, Assignor
agrees as follows:
<PAGE> 30
1. ABSOLUTE ASSIGNMENT. Assignor does hereby absolutely sell,
assign, transfer, convey and set over unto Assignee and its successors and
assigns, all of the right, title and interest of Assignor in, to and under the
Leases, together with all rents, earnings, income, issues and profits, arising
from either the Premises, the Leases, or both the Premises and the Leases, and
all other sums due or to become due under and pursuant thereto in each case
(including but not limited to any early termination or other fees or charges
payable by any tenant thereunder and any award or damages payable to Assignor
pursuant to any bankruptcy, insolvency or reorganization proceeding affecting
any tenant), together with any and all guaranties of or under any of said
Leases, and security therefor, and together with all rights, powers,
privileges, options and other benefits of Assignor in its capacity as lessor
under the Leases, including, without limitation: the immediate and continuing
right to receive and collect all rents, income, revenues, issues, profits,
fees, condemnation awards, insurance proceeds, moneys and security payable or
receivable under the Leases or pursuant to any of the provisions thereof,
whether as rent or otherwise, the right to make all waivers and agreements, to
give and receive all notices, consents and releases, and to take such action
and exercise such remedies upon the happening of a default under any Lease,
including the commencement, conduct and consummation of proceedings at law or
in equity as shall be permitted under any provision of any Lease or by any law,
and to do any and all other things whatsoever which the Assignor is or may
become entitled to do under any such Lease. Notwithstanding the provisions of
this Section 1, so long as no default shall exist under any of the Loan
Documents defined in SCHEDULE 1 ("LOAN DOCUMENTS"), and no event shall have
occurred which by the lapse of time or the giving of notice, or both, has or
would become an event of default thereunder, Assignor shall have the right and
license to occupy the Premises as landlord or otherwise and to collect, use and
enjoy the rents, issues and profits and other sums payable under and by virtue
of any Lease (but only as the same become due under the provisions of such
Lease) and to enforce (subject to the provisions of this Assignment) the
covenants of the Leases.
2. DURATION OF ASSIGNMENT. This Assignment is made and given and
shall remain in full force and effect until the payment, performance and
observance, as applicable, of all of the terms, covenants and conditions to be
paid, performed or observed under each of the Loan Documents, and promptly upon
request of Assignor thereafter Assignee shall, at the cost and expense of
Assignor and conditioned upon payment by Assignor of such costs and expenses,
cause this Assignment (if the same has been recorded) to be released of record.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF ASSIGNOR.
Assignor represents, warrants, covenants and agrees: [a] that Assignor has
good right and authority to make this Assignment, and Assignor holds the entire
and unencumbered rights of the landlord
2
<PAGE> 31
under each of the Leases; [b] that neither Assignor nor any predecessor lessor
has heretofore alienated, assigned, pledged or otherwise disposed of or
encumbered the Leases or any of the sums due or to become due thereunder and
that neither Assignor nor any predecessor lessor has performed any acts or
executed any other instruments which might prevent Assignee from operating
under any of the terms and conditions of this Assignment or which would limit
Assignee in such operation; [c], except for any deposits received in the
ordinary course of business from occupants of the Premises for which the
Premises are duly licensed (collectively, the "LICENSEES"), that Assignor has
not accepted or collected rent or any other payments under any Lease for any
period subsequent to the current period for which such rent or other payment
has already become due and payable; [d] that Assignor has not executed or
granted any amendment or modification whatever of any of the Leases, either
orally or in writing, except as theretofore disclosed in writing by Assignor to
Assignee (and approved by Assignee, if such approval be required hereunder or
under any other Loan Document); [e] that, except any defaults under agreements
with Licensees, there is no default under any of the Leases now existing and no
event has occurred and is continuing which, with the lapse of time or the
giving of notice or both, would constitute an event of default under any of the
Leases; [f] that Assignor will observe, perform and discharge, duly and
punctually, all and singular the obligations, terms, covenants, conditions and
warranties of the Loan Documents, this Assignment, and each other Lease, on the
part of Assignor to be kept, observed and performed; [g] to enforce the
performance of each and every obligation, term, covenant, condition and
agreement in said Leases by any tenant to be performed; [h] to appear in and
defend any action or proceeding arising under, occurring out of, or in any
manner connected with said Leases or the obligations, duties or liabilities of
Assignor or any tenant thereunder, and upon request by Assignee, to do so in
the name and on behalf of Assignee, but at the expense of Assignor; [i] that
Assignor will, upon the request of Assignee, execute and deliver to Assignee
such further instruments and do and perform such other acts and things as
Assignee reasonably may deem necessary or appropriate to make effective this
Assignment and the various covenants of Assignor herein contained, and to more
effectively vest in Assignee the sums due or hereafter to become due under the
Leases, including, without limitation, the execution of such additional
assignments as shall be deemed necessary by Assignee effectively to vest in
Assignee all rents, income and profits from any and all Leases; [j] that,
except for copies prior to an Event of Default of occupancy agreements with
Licensees, Assignor will from time to time, promptly upon demand therefor,
deliver to Assignee an executed counterpart of each and every Lease then
affecting all or any portion of the Premises; and [k] that in the event any
warranty or representation of Assignor herein shall be false, misleading or
materially inaccurate or Assignor shall default in the observance or
performance of any obligation, term, covenant or condition hereof, then, in
each instance at the option
3
<PAGE> 32
of Assignee, after the giving by Assignee of any applicable notice and
following the expiration of any period for cure provided for in the Loan
Documents, the same shall vest Assignee with the absolute right to declare all
sums evidenced thereby or due thereunder immediately due and payable and to
exercise any and all rights and remedies provided thereunder and hereunder and
under the other Loan Documents as well as such remedies as may be available at
law or in equity, all of which rights and remedies shall be cumulative.
4. ADDITIONAL COVENANTS OF ASSIGNOR. Assignor covenants and
agrees that Assignor will not, without first obtaining in each instance the
prior written consent of Assignee: [a] enter into any Lease without the prior
written consent of Assignee, which consent may be granted or withheld in the
sole and absolute discretion of Assignee; [b] either cancel any Lease nor
accept a surrender thereof (except that Assignor may, with the prior written
consent of Assignee and provided the reason for any refusal by Assignee so to
consent is not patently unreasonable or capricious, terminate a Lease for which
the tenant thereunder is in default); [c] either reduce the rent payable under
any Lease or accept payment of any installment of rent in advance of the due
date thereof; [d] change, amend, alter or modify any Lease or any of the terms
or provisions thereof, or grant any concession in connection therewith; [e]
consent to the release or reduction of the obligations of the tenant under any
Lease; [f] assign, pledge encumber or otherwise transfer any Lease or
Assignor's rights thereunder; [g] consent to an assignment of tenant's interest
under any Lease or to a subletting thereof, except to the extent any such
assignment or subletting is specifically authorized by such Lease; or [h] incur
any indebtedness to the tenant or guarantor of any Lease, for borrowed money or
otherwise, which may under any circumstances be availed of as an offset against
the rent or other payments due thereunder; and any of the above acts, if done
without the consent of Assignee, shall be, at the option of Assignee, null and
void, and shall constitute a default hereunder.
5. APPEARANCE IN ACTIONS. Assignee shall have the right, at
Assignor's sole cost and expense, to appear in and defend any action or
proceeding arising under or out of or in any manner connected with any Lease or
the obligations, duties or liabilities of the landlord or tenant thereunder,
and Assignor agrees to pay immediately upon request of Assignor all costs and
expenses of Assignee, including reasonable attorneys' fees, in any such action
or proceeding in which the Assignee in its sole discretion may appear.
Assignor shall give prompt notice to Lender of any notice received by Assignor
of default by landlord or tenant under any Lease, or of a purported termination
or intention of a tenant to terminate a Lease, together with a complete copy of
any such notice.
6. DIRECTION TO TENANTS. Assignor hereby consents to and
irrevocably authorizes and directs the tenants under the Leases and
4
<PAGE> 33
any successor to the interest of any of said tenants, upon demand and notice
from Assignee of Assignee's right to receive the rents and other amounts under
such Leases, to pay to Assignee the rents and other amounts due or to become
due under the Leases, and said tenants shall have the right to rely upon such
demand and notice from Assignee and shall pay such rents and other amounts to
Assignee without any obligation or right to determine the actual existence of
any default or event claimed by Assignee as the basis for Assignee's right to
receive such rents and other amounts and notwithstanding any notice from or
claim of Assignor to the contrary, and Assignor shall have no right to claim
against said tenants for any such rents and other amounts so paid by said
tenants to Assignee.
7. ADDITIONAL RIGHTS UPON A DEFAULT. Upon the occurrence of a
default under this Assignment or any of the other Loan Documents, Assignee, at
its option, after the giving of any notice and expiration of opportunity for
cure provided in the applicable Loan Documents, shall have the complete right,
power and authority [a] without taking possession, to demand, collect and
receive and sue for the rents and other sums payable under the Leases and,
after deducting all reasonable costs and expenses of collection (including,
without limitation, reasonable attorneys' fees) as determined by Assignee,
apply the net proceeds thereof to the payment of any sums from time to time due
under the Loan Documents; [b] to declare all sums due under the Loan Documents
immediately due and payable, and, at the option of Assignee, to exercise any
and all of the rights and remedies contained in the Loan Documents; and [c]
without regard to the adequacy of any security for any of the Obligations
described in SCHEDULE 1 hereto, at the option of Assignee, with or without
process of law, personally or by agent or attorney, or by or by a receiver to
be appointed by the court upon motion of Assignee, then and thereafter to enter
upon, take and maintain possession of and operate the Premises, or any part
thereof, together with all documents, books, records, papers, and accounts
relating thereto and exclude Assignor and its agents and servants therefrom and
hold, operate, manage and control the Premises or any part thereof as fully and
to the same extent as Assignor could do if in possession and in such event,
without limitation and at the expense of Assignor, from time to time, cause to
be made all necessary or proper repairs, renewals, replacements, useful
alterations, additions, betterments and improvements to the Premises, or any
part thereof, as Assignee deems judicious, and pay taxes, assessments and prior
or proper charges on the Premises, or any part thereof, and insure and reinsure
the same, and lease the Premises, or any part thereof, for such terms and on
such terms as Assignee deems desirable, including leases for terms expiring
beyond the maturity of the indebtedness evidenced by any of the Loan Documents,
and cancel any Lease or sublease thereof for any cause or on any ground which
would entitle Assignor to cancel the same. Without limitation of the
foregoing, Assignee, in addition to all other rights and remedies available to
Assignee, shall be
5
<PAGE> 34
entitled to the appointment of a receiver of the rents, issues and profits of
the Premises (including the Leases) as a matter of right and without notice,
with power to collect such rents, issues and profits due and becoming due after
default under this Assignment or the other Loan Documents, without regard to
the value of the Premises (including the Leases) or the solvency of person or
persons liable for the payment of the Obligations under the Loan Documents, and
regardless of whether Assignee has an adequate remedy at law. Assignor for
itself and any subsequent owner of the Premises (including the Leases) hereby
waives any and all defenses to the application for a receiver, as above
provided, and hereby specifically consents to such appointment without notice,
except any notice required by law, but nothing herein contained is to be
construed to deprive Assignee of any other right, remedy or privilege Assignee
may have under the law to have a receiver appointed.
8. APPLICATION OF AMOUNTS. After payment of all proper charges
and expenses, including the just and reasonable compensation for the services
of Assignee, its attorneys, agents, clerks, servants and others employed by
Assignee in connection with the operation, management and control of the
Premises and the conduct of the business thereof, and such further sums as may
be sufficient to indemnify Assignee from and against any liability, loss or
damage on account of any matter or thing done in good faith in pursuance of the
rights and powers of Assignee hereunder, Assignee will credit the net amount of
income which Assignee may receive by virtue of this Assignment and from the
Premises to any and all amounts due or owing to Assignee from Assignor under
the terms and provisions of the Loan Documents or otherwise in respect of any
of the Obligations of Assignor to Assignee. The balance of such net income
shall be released to or upon the order of Assignor. The manner of the
application of such net income and the item or items which shall be credited
shall be within the sole discretion of Assignee. In no event will the absolute
assignment effected hereby reduce any sums due under any of the Loan Documents
except to the extent, if any, that cash is actually received by Assignee and
applied to the payment of such sums.
9. LIMITATION OF LIABILITY. The acceptance by Assignee of this
Assignment, with all of the rights, powers, privileges and authority so
created, shall neither be deemed nor construed to constitute Assignee a
mortgagee in possession nor at any time or in any event to impose any
obligation whatsoever upon Assignee to appear in or defend any action or
proceeding relating to the Leases or the Premises, or to take any action
hereunder, or to expend any money or incur any expenses, or perform or
discharge any obligation, duty or liability under the Leases, or to assume any
obligation or responsibility for any security deposits or other deposits
delivered to Assignor by any tenant and not assigned and delivered to Assignee,
or render Assignee liable in any way for any
6
<PAGE> 35
injury or damage to person or property sustained by any person or entity in, on
or about the Premises.
10. SECURITY DEPOSITS. Upon any default (after the giving of any
applicable required notice and/or expiration of cure provided under the Loan
Documents) under this Assignment or the other Loan Documents, Assignor shall on
demand of Assignee transfer to Assignee any security deposits held by Assignor
under the terms of the Leases to be held by Assignee and applied in accordance
with the provisions of the Leases. Until Assignee makes such demand and the
deposits are paid over to Assignee the Assignee assumes no responsibility for
any such security deposits. Assignor at all times shall deposit the same in an
account, separated from its general funds, and if such deposits are required by
law to be refunded to the respective tenants with interest thereon, such
account shall be an interest bearing account.
11. ATTORNEY IN FACT. Assignor hereby irrevocably appoints
Assignee and its successors and assigns as the agent and attorney in fact of
Assignor, which appointment is coupled with an interest and is irrevocable, to
exercise any rights or remedies hereunder and under the Leases and to execute
and deliver during the term of this Assignment such instruments as Assignee may
deem necessary to more effectively convey the Leases and the other interests
hereunder to Assignee and to provide constructive notice to third parties of
this Assignment.
12. NO WAIVERS. No modifications, indulgences, waivers,
compromises, settlements, or variations of any of the terms of any of the Loan
Documents shall impair in any manner any of the rights and remedies of Assignee
under this Assignment. Assignor agrees that neither the collection of rents
and the application thereof by Assignee to the payment of any of the sums due
under the Loan Documents and otherwise as authorized by this Assignment, nor
the entry upon and taking of possession of the Premises, or any part thereof,
by Assignee shall cure or waive any default, or waive, modify or affect any
notice of default under any of the Loan Documents, or invalidate any act done
pursuant to such notice, and the enforcement of such rights and remedies by
Assignee, once exercised, shall continue for so long as Assignee shall elect.
If Assignee shall thereafter elect to discontinue the exercise of any such
right or remedy, the same or any other right or remedy hereunder may be
reasserted at any time and from time to time following any subsequent default.
13. REMEDIES CUMULATIVE. The rights and remedies of Assignee
hereunder are cumulative and not in lieu of, but are in addition to, any rights
or remedies which Assignee shall have under any of the Loan Documents, or at
law or in equity, which rights and remedies may be exercised by Assignee either
prior to, simultaneously with, or subsequent to, any action taken hereunder.
The rights and remedies of Assignee may be exercised from time to time
7
<PAGE> 36
and as often as such exercise is deemed expedient, and the failure of Assignee
to avail itself of any of the terms, provisions and conditions of this
Assignment for any period of time, at any time or times, shall not be construed
or deemed to be a waiver of any rights under the terms hereof.
14. RIGHTS SURVIVE FORECLOSURE PROCEEDING. The right of Assignee
to collect and receive the rents assigned hereunder or to take possession of
the Premises, or to exercise any of the rights or powers herein granted to
Assignee shall, to the extent not prohibited by law, also extend to the period
from and after the filing of any suit to foreclose any lien created under any
of the Loan Documents pertaining to the Premises, including any period allowed
by law for the redemption of the Premises after any foreclosure sale.
15. INDEMNIFICATION. Assignor agrees to indemnify and hold
Assignee harmless of, from and against any and all liability, loss, damage or
expense, which Assignee may or might incur under or by reason of this
Assignment, and of and from any and all claims and demands whatsoever which may
be asserted against Assignee by reason of any alleged obligation or undertaking
on the part of Assignee (other than obligations or undertakings of Assignee
alleged to have arisen after the time, if applicable, at which Assignee entered
into possession of the Premises) to perform or discharge any of the terms,
covenants or agreements contained in the Leases. Should Assignee incur any
such liability, loss or damage under or by reason of this Assignment, or in the
defense of any such claims or demands, the amount thereof, including costs,
expenses and reasonable attorneys' fees, together with interest thereon at the
Index Rate of Lender plus 2%, shall be payable out of amounts collected by
Assignee pursuant to this Assignment and the other Loan Documents, and Assignor
shall reimburse Assignee therefor immediately upon demand, and upon failure of
Assignor so to do, the same shall be a default hereunder, and Assignee may at
Assignee's sole option exercise all rights and remedies available to Assignee
thereupon under this Assignment and the other Loan Documents.
16. MISCELLANEOUS.
-------------
A. This Assignment shall be assignable by Assignee and
all representations, warranties, covenants, powers and rights herein contained
shall be binding upon, and inure to the benefit of, Assignor and Assignee and
their respective successors and assigns.
B. Except for any notice required under applicable law
to be given in another manner, any notice given hereunder shall be given in the
manner stipulated by the Reimbursement Agreements described in SCHEDULE 1
hereto. Nothing contained in this Assignment shall be deemed to waive or
modify in any respect any prohibition, restriction or condition contained in
any mortgage
8
<PAGE> 37
from Assignor to Assignee applicable to Assignor's entering into any Lease of
all or any part of the Premises or in any other Loan Document.
C. This Assignment may be executed, acknowledged and
delivered in any number of counterparts and each such counterpart shall
constitute an original, but together such counterparts shall constitute only
one instrument.
D. If any one or more of the provisions of this
Assignment, or the applicability of any such provision to a specific situation,
shall be held invalid or unenforceable, such provision shall be modified to the
minimum extent necessary to make it or its application valid and enforceable,
and the validity and enforceability of all other provisions of this Assignment
and all other applications of any such provision shall not be affected thereby.
E. Upon any sale, conveyance, transfer or exchange of
all or a part of the Premises, the term "Assignor" as used herein shall include
the transferee or grantee in such transaction. The preceding sentence shall
not be deemed to permit any sale, conveyance, transfer or exchange which is
prohibited or restricted by the terms of any of the Loan Documents.
F. The captions and headings of the various sections of
this Assignment are for convenience only and are not to be construed as
confining or limiting in any way the scope or intent of the provisions hereof.
Whenever the context requires or permits, the singular shall include the
plural, the plural shall include the singular and the masculine, feminine and
neuter shall be freely interchangeable.
G. This Assignment contains the final, complete and
exclusive agreement of Assignor and Assignee concerning its subject matter, and
may not be modified except in a writing signed by each of Assignor and
Assignee.
17. GOVERNING LAW. This Assignment was negotiated in the
Commonwealth of Kentucky, the Reimbursement Agreements were delivered by
Assignor and accepted by Assignee in the Commonwealth of Kentucky, and the
Letters of Credit were issued from the Commonwealth of Kentucky, which state
Assignor and Assignee agree has a substantial relationship to Assignor and
Assignee and to the underlying transaction in connection with which this
Assignment was granted. This Assignment, including matters of construction,
validity and performance, and the obligations arising hereunder, shall be
construed in accordance with and otherwise governed in all respects by the laws
of the Commonwealth of Kentucky applicable to contracts made and performed in
such state and any applicable law of the United States of America except to the
extent that the real and personal property laws of the State of Florida,
including laws
9
<PAGE> 38
relating to the perfection, priority and enforcement of interests in real
property located in Florida, necessarily shall apply to enforcement of this
Assignment. Assignor hereby irrevocably agrees that any legal action, suit, or
proceeding against Assignor with respect to the obligations or liabilities of
Assignor or any other matter under or arising out of or in connection with this
Assignment or the other Loan Documents or for recognition or enforcement of any
judgment rendered in any such action, suit or proceeding may be brought in the
United States Courts for the Western District of Kentucky, or in the courts of
the Commonwealth of Kentucky, as Lender may elect, and by execution and
delivery of this Assignment, Assignor hereby irrevocably accepts and submits to
the non-exclusive jurisdiction of each of the aforesaid courts IN PERSONA,
generally and unconditionally with respect to any such action, suit, or
proceeding for Assignor and in respect of Assignor's property. Assignor
further agrees that final judgment against Assignor in any action, suit or
proceeding referred to herein shall be conclusive and may be enforced in any
other jurisdiction, by suit on the judgment, a certified or exemplified copy of
which shall be conclusive evidence of the fact and of the amount of the
indebtedness of Assignor.
18. WAIVER OF TRIAL BY JURY. THE ASSIGNOR AND ASSIGNEE
ACKNOWLEDGE THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE
TIME AND EXPENSE REQUIRED FOR A BENCH TRIAL AND HEREBY KNOWINGLY AND
VOLUNTARILY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, AND AFTER HAVING
CONSULTED OR HAVING HAD AMPLE OPPORTUNITY TO CONSULT THEIR RESPECTIVE LEGAL
COUNSEL CONCERNING THE CONSEQUENCES OF SUCH WAIVER, TRIAL BY JURY IN ANY ACTION
OR OTHER PROCEEDING BROUGHT TO ENFORCE OR DEFEND AGAINST COLLECTION OF OR
OTHERWISE IN CONNECTION WITH THIS ASSIGNMENT OR THE OTHER LOAN DOCUMENTS.
<THE BALANCE OF THIS PAGE INTENTIONALLY HAS BEEN LEFT BLANK>
10
<PAGE> 39
IN WITNESS WHEREOF, Assignor has executed this Assignment as of the
date first above written.
"ASSIGNOR"
Signed, acknowledged and ARBOR HEALTH CARE COMPANY, a
delivered in the presence Delaware corporation
of:
__________________________ By: ___________________________
Signature
__________________________ Printed Name: _________________
Printed Name
Title: ________________________
__________________________
Signature
__________________________
Printed Name
STATE OF _______________ )
: SS
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this ____ day of
February, 1996, by ______________________________ (name) as __________________
(title) of Arbor Health Care Company, a Delaware corporation, on behalf of the
corporation.
He/She:
(check one) ______ is personally known to me, or has
______ produced ____________________________
as identification.
__________________________________________
__________________________________________
Name: (Please Print)
Notary Public, State of __________________
[AFFIX NOTARY SEAL]
11
<PAGE> 40
SCHEDULE 1
----------
TO
ASSIGNMENT OF LEASES AND RENTS ("AGREEMENT)
BETWEEN ARBOR HEALTH CARE COMPANY
AND BANK ONE, KENTUCKY, NA
(DESCRIPTION OF OBLIGATIONS)
The "OBLIGATIONS" referred to in the foregoing Agreement are
as follows:
A. All indebtedness, liabilities and obligations arising
under or evidenced by, and the performance of all covenants, conditions and
agreements undertaken by each of the Borrowers hereinafter described in
connection with, each of the following documents, including any renewals,
extensions and amendments of any of them or substitutions or replacements for
any of them (referred to hereinafter as the "REIMBURSEMENT AGREEMENT"):
(1) Reimbursement Agreement dated as of February
12, 1996, to which Arbor Health Care Company, a Delaware corporation ("ARBOR"),
Marshall Properties, Inc., an Ohio corporation ("MARSHALL") (Arbor and Marshall
are referred to each individually as a "BORROWER" and collectively as the
"BORROWERS"), and Bank One, Kentucky, NA, a national banking association
("LENDER"), are parties, referable to Letter of Credit No. S-6122 in the face
amount of $27,506,250 issued by Lender for the joint and several account of
Borrowers (the "LETTER OF CREDIT") as security for Promissory Note (Series
1996A-1) and Promissory Note (Series 1996A-2), both dated as of February 15,
1996, made jointly and severally by Borrowers to the order of Capital One
Funding Corporation ("CAPITAL") in face principal amount of $13,500,000 and
maturing on February 1, 2003.
B. The payment, performance and discharge of any and all
obligations and liabilities of each Borrower, whether direct or indirect,
absolute or contingent, due or not due, now existing or hereafter arising, in
conjunction with issuance of the Letter of Credit (collectively, together with
any extensions, renewals, amendments, substitutions or replacements thereof and
therefor, the "LETTER OF CREDIT"), including but not limited to the obligations
of each Borrower contained in any and all applications for the Letter of Credit
(collectively, the "APPLICATIONS") executed and delivered as a condition to
issuance of the Letter of Credit, and to pay on demand all drafts drawn under
the Letter of Credit, and to reimburse Lender on demand of Lender for any
amounts advanced by Lender for the account of either Borrower, at the option
and in the exercise of the sole and absolute discretion of Lender, to satisfy
such drafts, and to indemnify Lender from all loss or liability incurred by
Lender in connection with the issuance of the Letter of Credit; and the payment
of all fees and all other sums due under,
12
<PAGE> 41
and the performance of all covenants, conditions and other obligations due
under or in connection with, the Reimbursement Agreement, the Applications, and
any security agreements, mortgages, deeds of trust, guaranties, pledge
agreements, assignments, subordination agreements, and any other documents or
instruments heretofore, contemporaneously herewith or hereafter entered into by
any Borrower or any other person or entity, with or for the benefit of Lender
to evidence, secure or guarantee payment of the Letter of Credit, or otherwise
entered into in connection with the Letter of Credit (such security agreements,
mortgages, deeds of trust, guaranties, pledge agreements, assignments,
subordination agreements, and other documents and instruments evidencing,
securing, guaranteeing or otherwise entered into in connection with the Letter
of Credit are referred to collectively as the "LOAN DOCUMENTS").
C. All expenses, costs and charges, of any nature
whatsoever, including, without limitation, taxes, assessments, insurance
premiums, repairs, rent, storage costs, expenses of collection and sale, and
reasonable attorneys' fees, incurred by or for the account of Lender in
preserving collateral for the Obligations and/or enforcing or seeking to
enforce any of the rights and remedies of Lender under any of the Loan
Documents.
13
<PAGE> 42
EXHIBIT AS
----------
to
Assignment of Leases and Rents
Lot 10, less the South 50 feet thereof, Plat of Pinellas Groves, in
the Southeast 1/4 of Section 26, Township 30 South, Range 15 East,
according to Plat Book 1, Page 55, of the public records of Pinellas
County, Florida; also, less and except the following: The North 5.0
feet of the South 55.0 feet of the East 1/2 of the Southwest quarter
(SW 1/4) of the Northwest quarter (NW 1/4) of the Southeast 1/4 (SE
1/4) of Section 26, Township 30 South, Range 15 East. being a part of
Lot 10, Pinellas Groves Subdivision, in the Southeast quarter (SE 1/4)
of said Section 26, as recorded in Plat Book 1, Page 55, public
records of Pinellas County, Florida.
Being more particularly described as follows:
From the Southeast corner of the Northeast 1/4 of said Section 26,
Township 30 South, Range 15 East as a Point of Commencement, proceed
N. 89 deg 48 min 01 sec W along a 40 acre line a distance of 1989.15
feet; then N. 0 deg. 13 min 30 sec E, a distance of 55.0 feet to an
intersection with the Northerly right of way of Park Boulevard (SR
694) as a Point of Beginning; thence proceed N. 89 deg 48 min 01 sec W
along said right of way, parallel to and 55 feet North of said 40 acre
line, a distance of 331.52 feet to the Westerly boundary of the East
1/2 of the Southwest 1/4 of the Northwest 1/4 of the Southeast 1/4
said Section 26; thence N. 0 deg 12 min 53 sec E along said Westerly
boundary a distance of 611.10 feet to an intersection with the
Northerly boundary of the Southwest 1/4 of the Northwest 1/4 of the
Southeast 1/4 of said Section 26 (being also the boundary of the Plat
of "The Gardens" 101, a Condominium, as recorded in Condo Book 12,
Pages 45-48); thence proceed S. 89 deg 48 min 02 sec E (S. 89 deg 45
min 51 sec E per plat) along said boundary a distance of 331.65;
thence S. 0 deg 13 min 30 sec W along said 10 acre line a distance of
611.10 feet to the Point of Beginning.
14
<PAGE> 43
THIS INSTRUMENT PREPARED BY:
__________________________
Arthur A. Rouse, Esq.
WYATT, TARRANT & COMBS
2700 Citizens Plaza
Louisville, Kentucky 40202
(502) 589-5235
ASSIGNMENT OF LEASES AND RENTS
------------------------------
(Seminole County, Florida)
THIS ASSIGNMENT OF LEASES AND RENTS (the "Assignment") is
executed actually on the date indicated in the notarial certificate affixed
hereto but is made effective as of February 12, 1996 by [i] ARBOR HEALTH CARE
COMPANY, a Delaware corporation ("ASSIGNOR"), having a mailing address of 1100
Shawnee Road, Box 840, Lima, Ohio in favor of [ii] BANK ONE, KENTUCKY, N.A., a
national banking association, having a mailing address of 416 West Jefferson
Street, Louisville, Jefferson County, Kentucky 40232 ("ASSIGNEE").
W I T N E S S E T H:
-------------------
WHEREAS, Assignor is obligated to Assignee under and in
connection with the Reimbursement Agreements and the Letters of Credit and the
other "OBLIGATIONS" more particularly described in SCHEDULE 1 attached to and
made a part hereof; and
WHEREAS, in connection with the execution and delivery of the
Reimbursement Agreements, Assignee has required that Assignor absolutely assign
and convey to Assignee all of Assignor's right, title and interest in, to and
under any and all leases (hereinafter collectively referred to as the "LEASES"
and singularly as a "LEASE") now or hereafter in existence (as amended or
supplemented from time to time) and covering space in or applicable to the real
estate more particularly described in EXHIBIT A attached to and made a part
hereof (hereinafter referred to as the "PREMISES"), and Assignor desires and
intends by this Assignment to absolutely assign and convey to Assignee all of
Assignor's right, title and interest in, to and under the Leases;
NOW, THEREFORE, for valuable consideration, the receipt of
which is hereby acknowledged, and intending to be legally bound, Assignor
agrees as follows:
<PAGE> 44
1. ABSOLUTE ASSIGNMENT. Assignor does hereby absolutely sell,
assign, transfer, convey and set over unto Assignee and its successors and
assigns, all of the right, title and interest of Assignor in, to and under the
Leases, together with all rents, earnings, income, issues and profits, arising
from either the Premises, the Leases, or both the Premises and the Leases, and
all other sums due or to become due under and pursuant thereto in each case
(including but not limited to any early termination or other fees or charges
payable by any tenant thereunder and any award or damages payable to Assignor
pursuant to any bankruptcy, insolvency or reorganization proceeding affecting
any tenant), together with any and all guaranties of or under any of said
Leases, and security therefor, and together with all rights, powers,
privileges, options and other benefits of Assignor in its capacity as lessor
under the Leases, including, without limitation: the immediate and continuing
right to receive and collect all rents, income, revenues, issues, profits,
fees, condemnation awards, insurance proceeds, moneys and security payable or
receivable under the Leases or pursuant to any of the provisions thereof,
whether as rent or otherwise, the right to make all waivers and agreements, to
give and receive all notices, consents and releases, and to take such action
and exercise such remedies upon the happening of a default under any Lease,
including the commencement, conduct and consummation of proceedings at law or
in equity as shall be permitted under any provision of any Lease or by any law,
and to do any and all other things whatsoever which the Assignor is or may
become entitled to do under any such Lease. Notwithstanding the provisions of
this Section 1, so long as no default shall exist under any of the Loan
Documents defined in SCHEDULE 1 ("LOAN DOCUMENTS"), and no event shall have
occurred which by the lapse of time or the giving of notice, or both, has or
would become an event of default thereunder, Assignor shall have the right and
license to occupy the Premises as landlord or otherwise and to collect, use and
enjoy the rents, issues and profits and other sums payable under and by virtue
of any Lease (but only as the same become due under the provisions of such
Lease) and to enforce (subject to the provisions of this Assignment) the
covenants of the Leases.
2. DURATION OF ASSIGNMENT. This Assignment is made and given and
shall remain in full force and effect until the payment, performance and
observance, as applicable, of all of the terms, covenants and conditions to be
paid, performed or observed under each of the Loan Documents, and promptly upon
request of Assignor thereafter Assignee shall, at the cost and expense of
Assignor and conditioned upon payment by Assignor of such costs and expenses,
cause this Assignment (if the same has been recorded) to be released of record.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF ASSIGNOR.
Assignor represents, warrants, covenants and agrees: [a] that Assignor has
good right and authority to make this Assignment, and Assignor holds the entire
and unencumbered rights of the landlord
2
<PAGE> 45
under each of the Leases; [b] that neither Assignor nor any predecessor lessor
has heretofore alienated, assigned, pledged or otherwise disposed of or
encumbered the Leases or any of the sums due or to become due thereunder and
that neither Assignor nor any predecessor lessor has performed any acts or
executed any other instruments which might prevent Assignee from operating
under any of the terms and conditions of this Assignment or which would limit
Assignee in such operation; [c], except for any deposits received in the
ordinary course of business from occupants of the Premises for which the
Premises are duly licensed (collectively, the "LICENSEES"), that Assignor has
not accepted or collected rent or any other payments under any Lease for any
period subsequent to the current period for which such rent or other payment
has already become due and payable; [d] that Assignor has not executed or
granted any amendment or modification whatever of any of the Leases, either
orally or in writing, except as theretofore disclosed in writing by Assignor to
Assignee (and approved by Assignee, if such approval be required hereunder or
under any other Loan Document); [e] that, except any defaults under agreements
with Licensees, there is no default under any of the Leases now existing and no
event has occurred and is continuing which, with the lapse of time or the
giving of notice or both, would constitute an event of default under any of the
Leases; [f] that Assignor will observe, perform and discharge, duly and
punctually, all and singular the obligations, terms, covenants, conditions and
warranties of the Loan Documents, this Assignment, and each other Lease, on the
part of Assignor to be kept, observed and performed; [g] to enforce the
performance of each and every obligation, term, covenant, condition and
agreement in said Leases by any tenant to be performed; [h] to appear in and
defend any action or proceeding arising under, occurring out of, or in any
manner connected with said Leases or the obligations, duties or liabilities of
Assignor or any tenant thereunder, and upon request by Assignee, to do so in
the name and on behalf of Assignee, but at the expense of Assignor; [i] that
Assignor will, upon the request of Assignee, execute and deliver to Assignee
such further instruments and do and perform such other acts and things as
Assignee reasonably may deem necessary or appropriate to make effective this
Assignment and the various covenants of Assignor herein contained, and to more
effectively vest in Assignee the sums due or hereafter to become due under the
Leases, including, without limitation, the execution of such additional
assignments as shall be deemed necessary by Assignee effectively to vest in
Assignee all rents, income and profits from any and all Leases; [j] that,
except for copies prior to an Event of Default of occupancy agreements with
Licensees, Assignor will from time to time, promptly upon demand therefor,
deliver to Assignee an executed counterpart of each and every Lease then
affecting all or any portion of the Premises; and [k] that in the event any
warranty or representation of Assignor herein shall be false, misleading or
materially inaccurate or Assignor shall default in the observance or
performance of any obligation, term, covenant or condition hereof, then, in
each instance at the option
3
<PAGE> 46
of Assignee, after the giving by Assignee of any applicable notice and
following the expiration of any period for cure provided for in the Loan
Documents, the same shall vest Assignee with the absolute right to declare all
sums evidenced thereby or due thereunder immediately due and payable and to
exercise any and all rights and remedies provided thereunder and hereunder and
under the other Loan Documents as well as such remedies as may be available at
law or in equity, all of which rights and remedies shall be cumulative.
4. ADDITIONAL COVENANTS OF ASSIGNOR. Assignor covenants and
agrees that Assignor will not, without first obtaining in each instance the
prior written consent of Assignee: [a] enter into any Lease without the prior
written consent of Assignee, which consent may be granted or withheld in the
sole and absolute discretion of Assignee; [b] either cancel any Lease nor
accept a surrender thereof (except that Assignor may, with the prior written
consent of Assignee and provided the reason for any refusal by Assignee so to
consent is not patently unreasonable or capricious, terminate a Lease for which
the tenant thereunder is in default); [c] either reduce the rent payable under
any Lease or accept payment of any installment of rent in advance of the due
date thereof; [d] change, amend, alter or modify any Lease or any of the terms
or provisions thereof, or grant any concession in connection therewith; [e]
consent to the release or reduction of the obligations of the tenant under any
Lease; [f] assign, pledge encumber or otherwise transfer any Lease or
Assignor's rights thereunder; [g] consent to an assignment of tenant's interest
under any Lease or to a subletting thereof, except to the extent any such
assignment or subletting is specifically authorized by such Lease; or [h] incur
any indebtedness to the tenant or guarantor of any Lease, for borrowed money or
otherwise, which may under any circumstances be availed of as an offset against
the rent or other payments due thereunder; and any of the above acts, if done
without the consent of Assignee, shall be, at the option of Assignee, null and
void, and shall constitute a default hereunder.
5. APPEARANCE IN ACTIONS. Assignee shall have the right, at
Assignor's sole cost and expense, to appear in and defend any action or
proceeding arising under or out of or in any manner connected with any Lease or
the obligations, duties or liabilities of the landlord or tenant thereunder,
and Assignor agrees to pay immediately upon request of Assignor all costs and
expenses of Assignee, including reasonable attorneys' fees, in any such action
or proceeding in which the Assignee in its sole discretion may appear.
Assignor shall give prompt notice to Lender of any notice received by Assignor
of default by landlord or tenant under any Lease, or of a purported termination
or intention of a tenant to terminate a Lease, together with a complete copy of
any such notice.
6. DIRECTION TO TENANTS. Assignor hereby consents to and
irrevocably authorizes and directs the tenants under the Leases and
4
<PAGE> 47
any successor to the interest of any of said tenants, upon demand and notice
from Assignee of Assignee's right to receive the rents and other amounts under
such Leases, to pay to Assignee the rents and other amounts due or to become
due under the Leases, and said tenants shall have the right to rely upon such
demand and notice from Assignee and shall pay such rents and other amounts to
Assignee without any obligation or right to determine the actual existence of
any default or event claimed by Assignee as the basis for Assignee's right to
receive such rents and other amounts and notwithstanding any notice from or
claim of Assignor to the contrary, and Assignor shall have no right to claim
against said tenants for any such rents and other amounts so paid by said
tenants to Assignee.
7. ADDITIONAL RIGHTS UPON A DEFAULT. Upon the occurrence of a
default under this Assignment or any of the other Loan Documents, Assignee, at
its option, after the giving of any notice and expiration of opportunity for
cure provided in the applicable Loan Documents, shall have the complete right,
power and authority [a] without taking possession, to demand, collect and
receive and sue for the rents and other sums payable under the Leases and,
after deducting all reasonable costs and expenses of collection (including,
without limitation, reasonable attorneys' fees) as determined by Assignee,
apply the net proceeds thereof to the payment of any sums from time to time due
under the Loan Documents; [b] to declare all sums due under the Loan Documents
immediately due and payable, and, at the option of Assignee, to exercise any
and all of the rights and remedies contained in the Loan Documents; and [c]
without regard to the adequacy of any security for any of the Obligations
described in SCHEDULE 1 hereto, at the option of Assignee, with or without
process of law, personally or by agent or attorney, or by or by a receiver to
be appointed by the court upon motion of Assignee, then and thereafter to enter
upon, take and maintain possession of and operate the Premises, or any part
thereof, together with all documents, books, records, papers, and accounts
relating thereto and exclude Assignor and its agents and servants therefrom and
hold, operate, manage and control the Premises or any part thereof as fully and
to the same extent as Assignor could do if in possession and in such event,
without limitation and at the expense of Assignor, from time to time, cause to
be made all necessary or proper repairs, renewals, replacements, useful
alterations, additions, betterments and improvements to the Premises, or any
part thereof, as Assignee deems judicious, and pay taxes, assessments and prior
or proper charges on the Premises, or any part thereof, and insure and reinsure
the same, and lease the Premises, or any part thereof, for such terms and on
such terms as Assignee deems desirable, including leases for terms expiring
beyond the maturity of the indebtedness evidenced by any of the Loan Documents,
and cancel any Lease or sublease thereof for any cause or on any ground which
would entitle Assignor to cancel the same. Without limitation of the
foregoing, Assignee, in addition to all other rights and remedies available to
Assignee, shall be
5
<PAGE> 48
entitled to the appointment of a receiver of the rents, issues and profits of
the Premises (including the Leases) as a matter of right and without notice,
with power to collect such rents, issues and profits due and becoming due after
default under this Assignment or the other Loan Documents, without regard to
the value of the Premises (including the Leases) or the solvency of person or
persons liable for the payment of the Obligations under the Loan Documents, and
regardless of whether Assignee has an adequate remedy at law. Assignor for
itself and any subsequent owner of the Premises (including the Leases) hereby
waives any and all defenses to the application for a receiver, as above
provided, and hereby specifically consents to such appointment without notice,
except any notice required by law, but nothing herein contained is to be
construed to deprive Assignee of any other right, remedy or privilege Assignee
may have under the law to have a receiver appointed.
8. APPLICATION OF AMOUNTS. After payment of all proper charges
and expenses, including the just and reasonable compensation for the services
of Assignee, its attorneys, agents, clerks, servants and others employed by
Assignee in connection with the operation, management and control of the
Premises and the conduct of the business thereof, and such further sums as may
be sufficient to indemnify Assignee from and against any liability, loss or
damage on account of any matter or thing done in good faith in pursuance of the
rights and powers of Assignee hereunder, Assignee will credit the net amount of
income which Assignee may receive by virtue of this Assignment and from the
Premises to any and all amounts due or owing to Assignee from Assignor under
the terms and provisions of the Loan Documents or otherwise in respect of any
of the Obligations of Assignor to Assignee. The balance of such net income
shall be released to or upon the order of Assignor. The manner of the
application of such net income and the item or items which shall be credited
shall be within the sole discretion of Assignee. In no event will the absolute
assignment effected hereby reduce any sums due under any of the Loan Documents
except to the extent, if any, that cash is actually received by Assignee and
applied to the payment of such sums.
9. LIMITATION OF LIABILITY. The acceptance by Assignee of this
Assignment, with all of the rights, powers, privileges and authority so
created, shall neither be deemed nor construed to constitute Assignee a
mortgagee in possession nor at any time or in any event to impose any
obligation whatsoever upon Assignee to appear in or defend any action or
proceeding relating to the Leases or the Premises, or to take any action
hereunder, or to expend any money or incur any expenses, or perform or
discharge any obligation, duty or liability under the Leases, or to assume any
obligation or responsibility for any security deposits or other deposits
delivered to Assignor by any tenant and not assigned and delivered to Assignee,
or render Assignee liable in any way for any
6
<PAGE> 49
injury or damage to person or property sustained by any person or entity in, on
or about the Premises.
10. SECURITY DEPOSITS. Upon any default (after the giving of any
applicable required notice and/or expiration of cure provided under the Loan
Documents) under this Assignment or the other Loan Documents, Assignor shall on
demand of Assignee transfer to Assignee any security deposits held by Assignor
under the terms of the Leases to be held by Assignee and applied in accordance
with the provisions of the Leases. Until Assignee makes such demand and the
deposits are paid over to Assignee the Assignee assumes no responsibility for
any such security deposits. Assignor at all times shall deposit the same in an
account, separated from its general funds, and if such deposits are required by
law to be refunded to the respective tenants with interest thereon, such
account shall be an interest bearing account.
11. ATTORNEY IN FACT. Assignor hereby irrevocably appoints
Assignee and its successors and assigns as the agent and attorney in fact of
Assignor, which appointment is coupled with an interest and is irrevocable, to
exercise any rights or remedies hereunder and under the Leases and to execute
and deliver during the term of this Assignment such instruments as Assignee may
deem necessary to more effectively convey the Leases and the other interests
hereunder to Assignee and to provide constructive notice to third parties of
this Assignment.
12. NO WAIVERS. No modifications, indulgences, waivers,
compromises, settlements, or variations of any of the terms of any of the Loan
Documents shall impair in any manner any of the rights and remedies of Assignee
under this Assignment. Assignor agrees that neither the collection of rents
and the application thereof by Assignee to the payment of any of the sums due
under the Loan Documents and otherwise as authorized by this Assignment, nor
the entry upon and taking of possession of the Premises, or any part thereof,
by Assignee shall cure or waive any default, or waive, modify or affect any
notice of default under any of the Loan Documents, or invalidate any act done
pursuant to such notice, and the enforcement of such rights and remedies by
Assignee, once exercised, shall continue for so long as Assignee shall elect.
If Assignee shall thereafter elect to discontinue the exercise of any such
right or remedy, the same or any other right or remedy hereunder may be
reasserted at any time and from time to time following any subsequent default.
13. REMEDIES CUMULATIVE. The rights and remedies of Assignee
hereunder are cumulative and not in lieu of, but are in addition to, any rights
or remedies which Assignee shall have under any of the Loan Documents, or at
law or in equity, which rights and remedies may be exercised by Assignee either
prior to, simultaneously with, or subsequent to, any action taken hereunder.
The rights and remedies of Assignee may be exercised from time to time
7
<PAGE> 50
and as often as such exercise is deemed expedient, and the failure of Assignee
to avail itself of any of the terms, provisions and conditions of this
Assignment for any period of time, at any time or times, shall not be construed
or deemed to be a waiver of any rights under the terms hereof.
14. RIGHTS SURVIVE FORECLOSURE PROCEEDING. The right of Assignee
to collect and receive the rents assigned hereunder or to take possession of
the Premises, or to exercise any of the rights or powers herein granted to
Assignee shall, to the extent not prohibited by law, also extend to the period
from and after the filing of any suit to foreclose any lien created under any
of the Loan Documents pertaining to the Premises, including any period allowed
by law for the redemption of the Premises after any foreclosure sale.
15. INDEMNIFICATION. Assignor agrees to indemnify and hold
Assignee harmless of, from and against any and all liability, loss, damage or
expense, which Assignee may or might incur under or by reason of this
Assignment, and of and from any and all claims and demands whatsoever which may
be asserted against Assignee by reason of any alleged obligation or undertaking
on the part of Assignee (other than obligations or undertakings of Assignee
alleged to have arisen after the time, if applicable, at which Assignee entered
into possession of the Premises) to perform or discharge any of the terms,
covenants or agreements contained in the Leases. Should Assignee incur any
such liability, loss or damage under or by reason of this Assignment, or in the
defense of any such claims or demands, the amount thereof, including costs,
expenses and reasonable attorneys' fees, together with interest thereon at the
Index Rate of Lender plus 2%, shall be payable out of amounts collected by
Assignee pursuant to this Assignment and the other Loan Documents, and Assignor
shall reimburse Assignee therefor immediately upon demand, and upon failure of
Assignor so to do, the same shall be a default hereunder, and Assignee may at
Assignee's sole option exercise all rights and remedies available to Assignee
thereupon under this Assignment and the other Loan Documents.
16. MISCELLANEOUS.
-------------
A. This Assignment shall be assignable by Assignee and
all representations, warranties, covenants, powers and rights herein contained
shall be binding upon, and inure to the benefit of, Assignor and Assignee and
their respective successors and assigns.
B. Except for any notice required under applicable law
to be given in another manner, any notice given hereunder shall be given in the
manner stipulated by the Reimbursement Agreements described in SCHEDULE 1
hereto. Nothing contained in this Assignment shall be deemed to waive or
modify in any respect any prohibition, restriction or condition contained in
any mortgage
8
<PAGE> 51
from Assignor to Assignee applicable to Assignor's entering into any Lease of
all or any part of the Premises or in any other Loan Document.
C. This Assignment may be executed, acknowledged and
delivered in any number of counterparts and each such counterpart shall
constitute an original, but together such counterparts shall constitute only
one instrument.
D. If any one or more of the provisions of this
Assignment, or the applicability of any such provision to a specific situation,
shall be held invalid or unenforceable, such provision shall be modified to the
minimum extent necessary to make it or its application valid and enforceable,
and the validity and enforceability of all other provisions of this Assignment
and all other applications of any such provision shall not be affected thereby.
E. Upon any sale, conveyance, transfer or exchange of
all or a part of the Premises, the term "Assignor" as used herein shall include
the transferee or grantee in such transaction. The preceding sentence shall
not be deemed to permit any sale, conveyance, transfer or exchange which is
prohibited or restricted by the terms of any of the Loan Documents.
F. The captions and headings of the various sections of
this Assignment are for convenience only and are not to be construed as
confining or limiting in any way the scope or intent of the provisions hereof.
Whenever the context requires or permits, the singular shall include the
plural, the plural shall include the singular and the masculine, feminine and
neuter shall be freely interchangeable.
G. This Assignment contains the final, complete and
exclusive agreement of Assignor and Assignee concerning its subject matter, and
may not be modified except in a writing signed by each of Assignor and
Assignee.
17. GOVERNING LAW. This Assignment was negotiated in the
Commonwealth of Kentucky, the Reimbursement Agreements were delivered by
Assignor and accepted by Assignee in the Commonwealth of Kentucky, and the
Letters of Credit were issued from the Commonwealth of Kentucky, which state
Assignor and Assignee agree has a substantial relationship to Assignor and
Assignee and to the underlying transaction in connection with which this
Assignment was granted. This Assignment, including matters of construction,
validity and performance, and the obligations arising hereunder, shall be
construed in accordance with and otherwise governed in all respects by the laws
of the Commonwealth of Kentucky applicable to contracts made and performed in
such state and any applicable law of the United States of America except to the
extent that the real and personal property laws of the State of Florida,
including laws
9
<PAGE> 52
relating to the perfection, priority and enforcement of interests in real
property located in Florida, necessarily shall apply to enforcement of this
Assignment. Assignor hereby irrevocably agrees that any legal action, suit, or
proceeding against Assignor with respect to the obligations or liabilities of
Assignor or any other matter under or arising out of or in connection with this
Assignment or the other Loan Documents or for recognition or enforcement of any
judgment rendered in any such action, suit or proceeding may be brought in the
United States Courts for the Western District of Kentucky, or in the courts of
the Commonwealth of Kentucky, as Lender may elect, and by execution and
delivery of this Assignment, Assignor hereby irrevocably accepts and submits to
the non-exclusive jurisdiction of each of the aforesaid courts IN PERSONA,
generally and unconditionally with respect to any such action, suit, or
proceeding for Assignor and in respect of Assignor's property. Assignor
further agrees that final judgment against Assignor in any action, suit or
proceeding referred to herein shall be conclusive and may be enforced in any
other jurisdiction, by suit on the judgment, a certified or exemplified copy of
which shall be conclusive evidence of the fact and of the amount of the
indebtedness of Assignor.
18. WAIVER OF TRIAL BY JURY. THE ASSIGNOR AND ASSIGNEE
ACKNOWLEDGE THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE
TIME AND EXPENSE REQUIRED FOR A BENCH TRIAL AND HEREBY KNOWINGLY AND
VOLUNTARILY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, AND AFTER HAVING
CONSULTED OR HAVING HAD AMPLE OPPORTUNITY TO CONSULT THEIR RESPECTIVE LEGAL
COUNSEL CONCERNING THE CONSEQUENCES OF SUCH WAIVER, TRIAL BY JURY IN ANY ACTION
OR OTHER PROCEEDING BROUGHT TO ENFORCE OR DEFEND AGAINST COLLECTION OF OR
OTHERWISE IN CONNECTION WITH THIS ASSIGNMENT OR THE OTHER LOAN DOCUMENTS.
<THE BALANCE OF THIS PAGE INTENTIONALLY HAS BEEN LEFT BLANK>
10
<PAGE> 53
IN WITNESS WHEREOF, Assignor has executed this Assignment as of the
date first above written.
"ASSIGNOR"
Signed, acknowledged and ARBOR HEALTH CARE COMPANY, a
delivered in the presence Delaware corporation
of:
__________________________ By: ___________________________
Signature
__________________________ Printed Name: _________________
Printed Name
Title: ________________________
__________________________
Signature
__________________________
Printed Name
STATE OF _______________ )
: SS
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this ____ day of
February, 1996, by ______________________________ (name) as __________________
(title) of Arbor Health Care Company, a Delaware corporation, on behalf of the
corporation.
He/She:
(check one) ______ is personally known to me, or has
______ produced ____________________________
as identification.
__________________________________________
__________________________________________
Name: (Please Print)
Notary Public, State of __________________
[AFFIX NOTARY SEAL]
11
<PAGE> 54
SCHEDULE 1
----------
TO
ASSIGNMENT OF LEASES AND RENTS ("AGREEMENT)
BETWEEN ARBOR HEALTH CARE COMPANY
AND BANK ONE, KENTUCKY, NA
(DESCRIPTION OF OBLIGATIONS)
The "OBLIGATIONS" referred to in the foregoing Agreement are
as follows:
A. All indebtedness, liabilities and obligations arising
under or evidenced by, and the performance of all covenants, conditions and
agreements undertaken by each of the Borrowers hereinafter described in
connection with, each of the following documents, including any renewals,
extensions and amendments of any of them or substitutions or replacements for
any of them (referred to hereinafter as the "REIMBURSEMENT AGREEMENT"):
(1) Reimbursement Agreement dated as of February
12, 1996, to which Arbor Health Care Company, a Delaware corporation ("ARBOR"),
Marshall Properties, Inc., an Ohio corporation ("MARSHALL") (Arbor and Marshall
are referred to each individually as a "BORROWER" and collectively as the
"BORROWERS"), and Bank One, Kentucky, NA, a national banking association
("LENDER"), are parties, referable to Letter of Credit No. S-6122 in the face
amount of $27,506,250 issued by Lender for the joint and several account of
Borrowers (the "LETTER OF CREDIT") as security for Promissory Note (Series
1996A-1) and Promissory Note (Series 1996A-2), both dated as of February 15,
1996, made jointly and severally by Borrowers to the order of Capital One
Funding Corporation ("CAPITAL") in face principal amount of $13,500,000 and
maturing on February 1, 2003.
B. The payment, performance and discharge of any and all
obligations and liabilities of each Borrower, whether direct or indirect,
absolute or contingent, due or not due, now existing or hereafter arising, in
conjunction with issuance of the Letter of Credit (collectively, together with
any extensions, renewals, amendments, substitutions or replacements thereof and
therefor, the "LETTER OF CREDIT"), including but not limited to the obligations
of each Borrower contained in any and all applications for the Letter of Credit
(collectively, the "APPLICATIONS") executed and delivered as a condition to
issuance of the Letter of Credit, and to pay on demand all drafts drawn under
the Letter of Credit, and to reimburse Lender on demand of Lender for any
amounts advanced by Lender for the account of either Borrower, at the option
and in the exercise of the sole and absolute discretion of Lender, to satisfy
such drafts, and to indemnify Lender from all loss or liability incurred by
Lender in connection with the issuance of the Letter of Credit; and the payment
of all fees and all other sums due under,
12
<PAGE> 55
and the performance of all covenants, conditions and other obligations due
under or in connection with, the Reimbursement Agreement, the Applications, and
any security agreements, mortgages, deeds of trust, guaranties, pledge
agreements, assignments, subordination agreements, and any other documents or
instruments heretofore, contemporaneously herewith or hereafter entered into by
any Borrower or any other person or entity, with or for the benefit of Lender
to evidence, secure or guarantee payment of the Letter of Credit, or otherwise
entered into in connection with the Letter of Credit (such security agreements,
mortgages, deeds of trust, guaranties, pledge agreements, assignments,
subordination agreements, and other documents and instruments evidencing,
securing, guaranteeing or otherwise entered into in connection with the Letter
of Credit are referred to collectively as the "LOAN DOCUMENTS").
C. All expenses, costs and charges, of any nature
whatsoever, including, without limitation, taxes, assessments, insurance
premiums, repairs, rent, storage costs, expenses of collection and sale, and
reasonable attorneys' fees, incurred by or for the account of Lender in
preserving collateral for the Obligations and/or enforcing or seeking to
enforce any of the rights and remedies of Lender under any of the Loan
Documents.
13
<PAGE> 56
EXHIBIT A
---------
to
Assignment of Leases and Rents
Lots 1 and 2 of THE ARBORS AT ALTAMONTE SPRINGS, according to the
Plat thereof, as recorded in Plat Book 46, Page 30, of the Public
Records of Seminole County, Florida.
LESS AND EXCEPT:
That part of Lot 1 of THE ARBORS AT ALTAMONTE SPRINGS, according to the
Plat thereof, as recorded in Plat Book 46, Page 30, of the Public
Records of Seminole County, Florida, being more particularly described
as follows:
Commence at the West Quarter corner of Section 16, Township 21 South,
Range 29 East; thence run South 89 degrees 51 minutes 00 seconds East
along the North line of the Southwest Quarter of said Section 16, a
distance of 20.00 feet to the existing Easterly right-of-way line of
Peal Lake Causeway; thence run South 00 degrees 15 minutes 47 seconds
West along said Easterly right-of-way line a distance of 444.40 feet to
the North line of a 30.00 foot wide right-of-way, as described and
recorded in Official Records Book 2012, Page 554, of the Public Records
of Seminole County, Florida; thence run South 89 degrees 44 minutes 13
seconds East, along said North line, 30.00 fee; thence run South 00
degrees 15 minutes 47 seconds West, along the East line of said
right-of-way being parallel with and 50.00 feet East of, when measured
perpendicular to, the West line of said Southwest Quarter, a distance
of 771.58 feet for a POINT OF BEGINNING; thence leaving said East
right-of-way line run South 44 degrees 47 minutes 08 seconds East,
35.33 feet to the North line of a 55.00 foot wide right-of-way, as
described and recorded in Official Records Book 1997, Page 1734, of the
Public Records of Seminole County, Florida, said point being 75.00 feet
North of, when measured perpendicular to, the South line of the North-
west Quarter of the Southwest Quarter of said Section 16; thence run
North 89 degrees 50 minutes 03 seconds West, along said North
right-of-way line, a distance of 25.00 feet to an intersection with the
aforementioned East right-of-way line of Peal Lake Causeway, as
recorded in said Official Records Book 2012, Page 554; thence run North
00 degrees 15 minutes 47 seconds East, along said East right-of-way
line, a distance of 25.00 feet to the POINT OF BEGINNING.
14
<PAGE> 57
TOGETHER with those certain easements created by Reciprocal Easement
Agreement filed June 25, 1993, recorded in Official Records Book 2605,
Page 1182.
15
<PAGE> 58
THIS INSTRUMENT PREPARED BY:
__________________________
Arthur A. Rouse, Esq.
WYATT, TARRANT & COMBS
2700 Citizens Plaza
Louisville, Kentucky 40202
(502) 589-5235
ASSIGNMENT OF LEASES AND RENTS
------------------------------
(Brevard County, Florida)
THIS ASSIGNMENT OF LEASES AND RENTS (the "Assignment") is
executed actually on the date indicated in the notarial certificate affixed
hereto but is made effective as of February 12, 1996 by [i] ARBOR HEALTH CARE
COMPANY, a Delaware corporation ("ASSIGNOR"), having a mailing address of 1100
Shawnee Road, Box 840, Lima, Ohio in favor of [ii] BANK ONE, KENTUCKY, N.A., a
national banking association, having a mailing address of 416 West Jefferson
Street, Louisville, Jefferson County, Kentucky 40232 ("ASSIGNEE").
W I T N E S S E T H:
-------------------
WHEREAS, Assignor is obligated to Assignee under and in
connection with the Reimbursement Agreements and the Letters of Credit and the
other "OBLIGATIONS" more particularly described in SCHEDULE 1 attached to and
made a part hereof; and
WHEREAS, in connection with the execution and delivery of the
Reimbursement Agreements, Assignee has required that Assignor absolutely assign
and convey to Assignee all of Assignor's right, title and interest in, to and
under any and all leases (hereinafter collectively referred to as the "LEASES"
and singularly as a "LEASE") now or hereafter in existence (as amended or
supplemented from time to time) and covering space in or applicable to the real
estate more particularly described in EXHIBIT A attached to and made a part
hereof (hereinafter referred to as the "PREMISES"), and Assignor desires and
intends by this Assignment to absolutely assign and convey to Assignee all of
Assignor's right, title and interest in, to and under the Leases;
NOW, THEREFORE, for valuable consideration, the receipt of
which is hereby acknowledged, and intending to be legally bound, Assignor
agrees as follows:
<PAGE> 59
1. ABSOLUTE ASSIGNMENT. Assignor does hereby absolutely sell,
assign, transfer, convey and set over unto Assignee and its successors and
assigns, all of the right, title and interest of Assignor in, to and under the
Leases, together with all rents, earnings, income, issues and profits, arising
from either the Premises, the Leases, or both the Premises and the Leases, and
all other sums due or to become due under and pursuant thereto in each case
(including but not limited to any early termination or other fees or charges
payable by any tenant thereunder and any award or damages payable to Assignor
pursuant to any bankruptcy, insolvency or reorganization proceeding affecting
any tenant), together with any and all guaranties of or under any of said
Leases, and security therefor, and together with all rights, powers,
privileges, options and other benefits of Assignor in its capacity as lessor
under the Leases, including, without limitation: the immediate and continuing
right to receive and collect all rents, income, revenues, issues, profits,
fees, condemnation awards, insurance proceeds, moneys and security payable or
receivable under the Leases or pursuant to any of the provisions thereof,
whether as rent or otherwise, the right to make all waivers and agreements, to
give and receive all notices, consents and releases, and to take such action
and exercise such remedies upon the happening of a default under any Lease,
including the commencement, conduct and consummation of proceedings at law or
in equity as shall be permitted under any provision of any Lease or by any law,
and to do any and all other things whatsoever which the Assignor is or may
become entitled to do under any such Lease. Notwithstanding the provisions of
this Section 1, so long as no default shall exist under any of the Loan
Documents defined in SCHEDULE 1 ("LOAN DOCUMENTS"), and no event shall have
occurred which by the lapse of time or the giving of notice, or both, has or
would become an event of default thereunder, Assignor shall have the right and
license to occupy the Premises as landlord or otherwise and to collect, use and
enjoy the rents, issues and profits and other sums payable under and by virtue
of any Lease (but only as the same become due under the provisions of such
Lease) and to enforce (subject to the provisions of this Assignment) the
covenants of the Leases.
2. DURATION OF ASSIGNMENT. This Assignment is made and given and
shall remain in full force and effect until the payment, performance and
observance, as applicable, of all of the terms, covenants and conditions to be
paid, performed or observed under each of the Loan Documents, and promptly upon
request of Assignor thereafter Assignee shall, at the cost and expense of
Assignor and conditioned upon payment by Assignor of such costs and expenses,
cause this Assignment (if the same has been recorded) to be released of record.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF ASSIGNOR.
Assignor represents, warrants, covenants and agrees: [a] that Assignor has
good right and authority to make this Assignment, and Assignor holds the entire
and unencumbered rights of the landlord
2
<PAGE> 60
under each of the Leases; [b] that neither Assignor nor any predecessor lessor
has heretofore alienated, assigned, pledged or otherwise disposed of or
encumbered the Leases or any of the sums due or to become due thereunder and
that neither Assignor nor any predecessor lessor has performed any acts or
executed any other instruments which might prevent Assignee from operating
under any of the terms and conditions of this Assignment or which would limit
Assignee in such operation; [c], except for any deposits received in the
ordinary course of business from occupants of the Premises for which the
Premises are duly licensed (collectively, the "LICENSEES"), that Assignor has
not accepted or collected rent or any other payments under any Lease for any
period subsequent to the current period for which such rent or other payment
has already become due and payable; [d] that Assignor has not executed or
granted any amendment or modification whatever of any of the Leases, either
orally or in writing, except as theretofore disclosed in writing by Assignor to
Assignee (and approved by Assignee, if such approval be required hereunder or
under any other Loan Document); [e] that, except any defaults under agreements
with Licensees, there is no default under any of the Leases now existing and no
event has occurred and is continuing which, with the lapse of time or the
giving of notice or both, would constitute an event of default under any of the
Leases; [f] that Assignor will observe, perform and discharge, duly and
punctually, all and singular the obligations, terms, covenants, conditions and
warranties of the Loan Documents, this Assignment, and each other Lease, on the
part of Assignor to be kept, observed and performed; [g] to enforce the
performance of each and every obligation, term, covenant, condition and
agreement in said Leases by any tenant to be performed; [h] to appear in and
defend any action or proceeding arising under, occurring out of, or in any
manner connected with said Leases or the obligations, duties or liabilities of
Assignor or any tenant thereunder, and upon request by Assignee, to do so in
the name and on behalf of Assignee, but at the expense of Assignor; [i] that
Assignor will, upon the request of Assignee, execute and deliver to Assignee
such further instruments and do and perform such other acts and things as
Assignee reasonably may deem necessary or appropriate to make effective this
Assignment and the various covenants of Assignor herein contained, and to more
effectively vest in Assignee the sums due or hereafter to become due under the
Leases, including, without limitation, the execution of such additional
assignments as shall be deemed necessary by Assignee effectively to vest in
Assignee all rents, income and profits from any and all Leases; [j] that,
except for copies prior to an Event of Default of occupancy agreements with
Licensees, Assignor will from time to time, promptly upon demand therefor,
deliver to Assignee an executed counterpart of each and every Lease then
affecting all or any portion of the Premises; and [k] that in the event any
warranty or representation of Assignor herein shall be false, misleading or
materially inaccurate or Assignor shall default in the observance or
performance of any obligation, term, covenant or condition hereof, then, in
each instance at the option
3
<PAGE> 61
of Assignee, after the giving by Assignee of any applicable notice and
following the expiration of any period for cure provided for in the Loan
Documents, the same shall vest Assignee with the absolute right to declare all
sums evidenced thereby or due thereunder immediately due and payable and to
exercise any and all rights and remedies provided thereunder and hereunder and
under the other Loan Documents as well as such remedies as may be available at
law or in equity, all of which rights and remedies shall be cumulative.
4. ADDITIONAL COVENANTS OF ASSIGNOR. Assignor covenants and
agrees that Assignor will not, without first obtaining in each instance the
prior written consent of Assignee: [a] enter into any Lease without the prior
written consent of Assignee, which consent may be granted or withheld in the
sole and absolute discretion of Assignee; [b] either cancel any Lease nor
accept a surrender thereof (except that Assignor may, with the prior written
consent of Assignee and provided the reason for any refusal by Assignee so to
consent is not patently unreasonable or capricious, terminate a Lease for which
the tenant thereunder is in default); [c] either reduce the rent payable under
any Lease or accept payment of any installment of rent in advance of the due
date thereof; [d] change, amend, alter or modify any Lease or any of the terms
or provisions thereof, or grant any concession in connection therewith; [e]
consent to the release or reduction of the obligations of the tenant under any
Lease; [f] assign, pledge encumber or otherwise transfer any Lease or
Assignor's rights thereunder; [g] consent to an assignment of tenant's interest
under any Lease or to a subletting thereof, except to the extent any such
assignment or subletting is specifically authorized by such Lease; or [h] incur
any indebtedness to the tenant or guarantor of any Lease, for borrowed money or
otherwise, which may under any circumstances be availed of as an offset against
the rent or other payments due thereunder; and any of the above acts, if done
without the consent of Assignee, shall be, at the option of Assignee, null and
void, and shall constitute a default hereunder.
5. APPEARANCE IN ACTIONS. Assignee shall have the right, at
Assignor's sole cost and expense, to appear in and defend any action or
proceeding arising under or out of or in any manner connected with any Lease or
the obligations, duties or liabilities of the landlord or tenant thereunder,
and Assignor agrees to pay immediately upon request of Assignor all costs and
expenses of Assignee, including reasonable attorneys' fees, in any such action
or proceeding in which the Assignee in its sole discretion may appear.
Assignor shall give prompt notice to Lender of any notice received by Assignor
of default by landlord or tenant under any Lease, or of a purported termination
or intention of a tenant to terminate a Lease, together with a complete copy of
any such notice.
6. DIRECTION TO TENANTS. Assignor hereby consents to and
irrevocably authorizes and directs the tenants under the Leases and
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<PAGE> 62
any successor to the interest of any of said tenants, upon demand and notice
from Assignee of Assignee's right to receive the rents and other amounts under
such Leases, to pay to Assignee the rents and other amounts due or to become
due under the Leases, and said tenants shall have the right to rely upon such
demand and notice from Assignee and shall pay such rents and other amounts to
Assignee without any obligation or right to determine the actual existence of
any default or event claimed by Assignee as the basis for Assignee's right to
receive such rents and other amounts and notwithstanding any notice from or
claim of Assignor to the contrary, and Assignor shall have no right to claim
against said tenants for any such rents and other amounts so paid by said
tenants to Assignee.
7. ADDITIONAL RIGHTS UPON A DEFAULT. Upon the occurrence of a
default under this Assignment or any of the other Loan Documents, Assignee, at
its option, after the giving of any notice and expiration of opportunity for
cure provided in the applicable Loan Documents, shall have the complete right,
power and authority [a] without taking possession, to demand, collect and
receive and sue for the rents and other sums payable under the Leases and,
after deducting all reasonable costs and expenses of collection (including,
without limitation, reasonable attorneys' fees) as determined by Assignee,
apply the net proceeds thereof to the payment of any sums from time to time due
under the Loan Documents; [b] to declare all sums due under the Loan Documents
immediately due and payable, and, at the option of Assignee, to exercise any
and all of the rights and remedies contained in the Loan Documents; and [c]
without regard to the adequacy of any security for any of the Obligations
described in SCHEDULE 1 hereto, at the option of Assignee, with or without
process of law, personally or by agent or attorney, or by or by a receiver to
be appointed by the court upon motion of Assignee, then and thereafter to enter
upon, take and maintain possession of and operate the Premises, or any part
thereof, together with all documents, books, records, papers, and accounts
relating thereto and exclude Assignor and its agents and servants therefrom and
hold, operate, manage and control the Premises or any part thereof as fully and
to the same extent as Assignor could do if in possession and in such event,
without limitation and at the expense of Assignor, from time to time, cause to
be made all necessary or proper repairs, renewals, replacements, useful
alterations, additions, betterments and improvements to the Premises, or any
part thereof, as Assignee deems judicious, and pay taxes, assessments and prior
or proper charges on the Premises, or any part thereof, and insure and reinsure
the same, and lease the Premises, or any part thereof, for such terms and on
such terms as Assignee deems desirable, including leases for terms expiring
beyond the maturity of the indebtedness evidenced by any of the Loan Documents,
and cancel any Lease or sublease thereof for any cause or on any ground which
would entitle Assignor to cancel the same. Without limitation of the
foregoing, Assignee, in addition to all other rights and remedies available to
Assignee, shall be
5
<PAGE> 63
entitled to the appointment of a receiver of the rents, issues and profits of
the Premises (including the Leases) as a matter of right and without notice,
with power to collect such rents, issues and profits due and becoming due after
default under this Assignment or the other Loan Documents, without regard to
the value of the Premises (including the Leases) or the solvency of person or
persons liable for the payment of the Obligations under the Loan Documents, and
regardless of whether Assignee has an adequate remedy at law. Assignor for
itself and any subsequent owner of the Premises (including the Leases) hereby
waives any and all defenses to the application for a receiver, as above
provided, and hereby specifically consents to such appointment without notice,
except any notice required by law, but nothing herein contained is to be
construed to deprive Assignee of any other right, remedy or privilege Assignee
may have under the law to have a receiver appointed.
8. APPLICATION OF AMOUNTS. After payment of all proper charges
and expenses, including the just and reasonable compensation for the services
of Assignee, its attorneys, agents, clerks, servants and others employed by
Assignee in connection with the operation, management and control of the
Premises and the conduct of the business thereof, and such further sums as may
be sufficient to indemnify Assignee from and against any liability, loss or
damage on account of any matter or thing done in good faith in pursuance of the
rights and powers of Assignee hereunder, Assignee will credit the net amount of
income which Assignee may receive by virtue of this Assignment and from the
Premises to any and all amounts due or owing to Assignee from Assignor under
the terms and provisions of the Loan Documents or otherwise in respect of any
of the Obligations of Assignor to Assignee. The balance of such net income
shall be released to or upon the order of Assignor. The manner of the
application of such net income and the item or items which shall be credited
shall be within the sole discretion of Assignee. In no event will the absolute
assignment effected hereby reduce any sums due under any of the Loan Documents
except to the extent, if any, that cash is actually received by Assignee and
applied to the payment of such sums.
9. LIMITATION OF LIABILITY. The acceptance by Assignee of this
Assignment, with all of the rights, powers, privileges and authority so
created, shall neither be deemed nor construed to constitute Assignee a
mortgagee in possession nor at any time or in any event to impose any
obligation whatsoever upon Assignee to appear in or defend any action or
proceeding relating to the Leases or the Premises, or to take any action
hereunder, or to expend any money or incur any expenses, or perform or
discharge any obligation, duty or liability under the Leases, or to assume any
obligation or responsibility for any security deposits or other deposits
delivered to Assignor by any tenant and not assigned and delivered to Assignee,
or render Assignee liable in any way for any
6
<PAGE> 64
injury or damage to person or property sustained by any person or entity in, on
or about the Premises.
10. SECURITY DEPOSITS. Upon any default (after the giving of any
applicable required notice and/or expiration of cure provided under the Loan
Documents) under this Assignment or the other Loan Documents, Assignor shall on
demand of Assignee transfer to Assignee any security deposits held by Assignor
under the terms of the Leases to be held by Assignee and applied in accordance
with the provisions of the Leases. Until Assignee makes such demand and the
deposits are paid over to Assignee the Assignee assumes no responsibility for
any such security deposits. Assignor at all times shall deposit the same in an
account, separated from its general funds, and if such deposits are required by
law to be refunded to the respective tenants with interest thereon, such
account shall be an interest bearing account.
11. ATTORNEY IN FACT. Assignor hereby irrevocably appoints
Assignee and its successors and assigns as the agent and attorney in fact of
Assignor, which appointment is coupled with an interest and is irrevocable, to
exercise any rights or remedies hereunder and under the Leases and to execute
and deliver during the term of this Assignment such instruments as Assignee may
deem necessary to more effectively convey the Leases and the other interests
hereunder to Assignee and to provide constructive notice to third parties of
this Assignment.
12. NO WAIVERS. No modifications, indulgences, waivers,
compromises, settlements, or variations of any of the terms of any of the Loan
Documents shall impair in any manner any of the rights and remedies of Assignee
under this Assignment. Assignor agrees that neither the collection of rents
and the application thereof by Assignee to the payment of any of the sums due
under the Loan Documents and otherwise as authorized by this Assignment, nor
the entry upon and taking of possession of the Premises, or any part thereof,
by Assignee shall cure or waive any default, or waive, modify or affect any
notice of default under any of the Loan Documents, or invalidate any act done
pursuant to such notice, and the enforcement of such rights and remedies by
Assignee, once exercised, shall continue for so long as Assignee shall elect.
If Assignee shall thereafter elect to discontinue the exercise of any such
right or remedy, the same or any other right or remedy hereunder may be
reasserted at any time and from time to time following any subsequent default.
13. REMEDIES CUMULATIVE. The rights and remedies of Assignee
hereunder are cumulative and not in lieu of, but are in addition to, any rights
or remedies which Assignee shall have under any of the Loan Documents, or at
law or in equity, which rights and remedies may be exercised by Assignee either
prior to, simultaneously with, or subsequent to, any action taken hereunder.
The rights and remedies of Assignee may be exercised from time to time
7
<PAGE> 65
and as often as such exercise is deemed expedient, and the failure of Assignee
to avail itself of any of the terms, provisions and conditions of this
Assignment for any period of time, at any time or times, shall not be construed
or deemed to be a waiver of any rights under the terms hereof.
14. RIGHTS SURVIVE FORECLOSURE PROCEEDING. The right of Assignee
to collect and receive the rents assigned hereunder or to take possession of
the Premises, or to exercise any of the rights or powers herein granted to
Assignee shall, to the extent not prohibited by law, also extend to the period
from and after the filing of any suit to foreclose any lien created under any
of the Loan Documents pertaining to the Premises, including any period allowed
by law for the redemption of the Premises after any foreclosure sale.
15. INDEMNIFICATION. Assignor agrees to indemnify and hold
Assignee harmless of, from and against any and all liability, loss, damage or
expense, which Assignee may or might incur under or by reason of this
Assignment, and of and from any and all claims and demands whatsoever which may
be asserted against Assignee by reason of any alleged obligation or undertaking
on the part of Assignee (other than obligations or undertakings of Assignee
alleged to have arisen after the time, if applicable, at which Assignee entered
into possession of the Premises) to perform or discharge any of the terms,
covenants or agreements contained in the Leases. Should Assignee incur any
such liability, loss or damage under or by reason of this Assignment, or in the
defense of any such claims or demands, the amount thereof, including costs,
expenses and reasonable attorneys' fees, together with interest thereon at the
Index Rate of Lender plus 2%, shall be payable out of amounts collected by
Assignee pursuant to this Assignment and the other Loan Documents, and Assignor
shall reimburse Assignee therefor immediately upon demand, and upon failure of
Assignor so to do, the same shall be a default hereunder, and Assignee may at
Assignee's sole option exercise all rights and remedies available to Assignee
thereupon under this Assignment and the other Loan Documents.
16. MISCELLANEOUS.
-------------
A. This Assignment shall be assignable by Assignee and
all representations, warranties, covenants, powers and rights herein contained
shall be binding upon, and inure to the benefit of, Assignor and Assignee and
their respective successors and assigns.
B. Except for any notice required under applicable law
to be given in another manner, any notice given hereunder shall be given in the
manner stipulated by the Reimbursement Agreements described in SCHEDULE 1
hereto. Nothing contained in this Assignment shall be deemed to waive or
modify in any respect any prohibition, restriction or condition contained in
any mortgage
8
<PAGE> 66
from Assignor to Assignee applicable to Assignor's entering into any Lease of
all or any part of the Premises or in any other Loan Document.
C. This Assignment may be executed, acknowledged and
delivered in any number of counterparts and each such counterpart shall
constitute an original, but together such counterparts shall constitute only
one instrument.
D. If any one or more of the provisions of this
Assignment, or the applicability of any such provision to a specific situation,
shall be held invalid or unenforceable, such provision shall be modified to the
minimum extent necessary to make it or its application valid and enforceable,
and the validity and enforceability of all other provisions of this Assignment
and all other applications of any such provision shall not be affected thereby.
E. Upon any sale, conveyance, transfer or exchange of
all or a part of the Premises, the term "Assignor" as used herein shall include
the transferee or grantee in such transaction. The preceding sentence shall
not be deemed to permit any sale, conveyance, transfer or exchange which is
prohibited or restricted by the terms of any of the Loan Documents.
F. The captions and headings of the various sections of
this Assignment are for convenience only and are not to be construed as
confining or limiting in any way the scope or intent of the provisions hereof.
Whenever the context requires or permits, the singular shall include the
plural, the plural shall include the singular and the masculine, feminine and
neuter shall be freely interchangeable.
G. This Assignment contains the final, complete and
exclusive agreement of Assignor and Assignee concerning its subject matter, and
may not be modified except in a writing signed by each of Assignor and
Assignee.
17. GOVERNING LAW. This Assignment was negotiated in the
Commonwealth of Kentucky, the Reimbursement Agreements were delivered by
Assignor and accepted by Assignee in the Commonwealth of Kentucky, and the
Letters of Credit were issued from the Commonwealth of Kentucky, which state
Assignor and Assignee agree has a substantial relationship to Assignor and
Assignee and to the underlying transaction in connection with which this
Assignment was granted. This Assignment, including matters of construction,
validity and performance, and the obligations arising hereunder, shall be
construed in accordance with and otherwise governed in all respects by the laws
of the Commonwealth of Kentucky applicable to contracts made and performed in
such state and any applicable law of the United States of America except to the
extent that the real and personal property laws of the State of Florida,
including laws
9
<PAGE> 67
relating to the perfection, priority and enforcement of interests in real
property located in Florida, necessarily shall apply to enforcement of this
Assignment. Assignor hereby irrevocably agrees that any legal action, suit, or
proceeding against Assignor with respect to the obligations or liabilities of
Assignor or any other matter under or arising out of or in connection with this
Assignment or the other Loan Documents or for recognition or enforcement of any
judgment rendered in any such action, suit or proceeding may be brought in the
United States Courts for the Western District of Kentucky, or in the courts of
the Commonwealth of Kentucky, as Lender may elect, and by execution and
delivery of this Assignment, Assignor hereby irrevocably accepts and submits to
the non-exclusive jurisdiction of each of the aforesaid courts IN PERSONA,
generally and unconditionally with respect to any such action, suit, or
proceeding for Assignor and in respect of Assignor's property. Assignor
further agrees that final judgment against Assignor in any action, suit or
proceeding referred to herein shall be conclusive and may be enforced in any
other jurisdiction, by suit on the judgment, a certified or exemplified copy of
which shall be conclusive evidence of the fact and of the amount of the
indebtedness of Assignor.
18. WAIVER OF TRIAL BY JURY. THE ASSIGNOR AND ASSIGNEE
ACKNOWLEDGE THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE
TIME AND EXPENSE REQUIRED FOR A BENCH TRIAL AND HEREBY KNOWINGLY AND
VOLUNTARILY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, AND AFTER HAVING
CONSULTED OR HAVING HAD AMPLE OPPORTUNITY TO CONSULT THEIR RESPECTIVE LEGAL
COUNSEL CONCERNING THE CONSEQUENCES OF SUCH WAIVER, TRIAL BY JURY IN ANY ACTION
OR OTHER PROCEEDING BROUGHT TO ENFORCE OR DEFEND AGAINST COLLECTION OF OR
OTHERWISE IN CONNECTION WITH THIS ASSIGNMENT OR THE OTHER LOAN DOCUMENTS.
<THE BALANCE OF THIS PAGE INTENTIONALLY HAS BEEN LEFT BLANK>
10
<PAGE> 68
IN WITNESS WHEREOF, Assignor has executed this Assignment as of the
date first above written.
"ASSIGNOR"
Signed, acknowledged and ARBOR HEALTH CARE COMPANY, a
delivered in the presence Delaware corporation
of:
__________________________ By: ___________________________
Signature
__________________________ Printed Name: _________________
Printed Name
Title: ________________________
__________________________
Signature
__________________________
Printed Name
STATE OF _______________ )
: SS
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this ____
day of February, 1996, by ______________________________ (name)as _____________
(title) of Arbor Health Care Company, a Delaware corporation, on behalf of the
corporation.
He/She:
(check one) ______ is personally known to me, or has
______ produced ____________________________
as identification.
__________________________________________
__________________________________________
Name: (Please Print)
Notary Public, State of __________________
[AFFIX NOTARY SEAL]
11
<PAGE> 69
SCHEDULE 1
----------
TO
ASSIGNMENT OF LEASES AND RENTS ("AGREEMENT)
BETWEEN ARBOR HEALTH CARE COMPANY
AND BANK ONE, KENTUCKY, NA
(DESCRIPTION OF OBLIGATIONS)
The "OBLIGATIONS" referred to in the foregoing Agreement are
as follows:
A. All indebtedness, liabilities and obligations arising
under or evidenced by, and the performance of all covenants, conditions and
agreements undertaken by each of the Borrowers hereinafter described in
connection with, each of the following documents, including any renewals,
extensions and amendments of any of them or substitutions or replacements for
any of them (referred to hereinafter as the "REIMBURSEMENT AGREEMENT"):
(1) Reimbursement Agreement dated as of February
12, 1996, to which Arbor Health Care Company, a Delaware corporation ("ARBOR"),
Marshall Properties, Inc., an Ohio corporation ("MARSHALL") (Arbor and Marshall
are referred to each individually as a "BORROWER" and collectively as the
"BORROWERS"), and Bank One, Kentucky, NA, a national banking association
("LENDER"), are parties, referable to Letter of Credit No. S-6122 in the face
amount of $27,506,250 issued by Lender for the joint and several account of
Borrowers (the "LETTER OF CREDIT") as security for Promissory Note (Series
1996A-1) and Promissory Note (Series 1996A-2), both dated as of February 15,
1996, made jointly and severally by Borrowers to the order of Capital One
Funding Corporation ("CAPITAL") in face principal amount of $13,500,000 and
maturing on February 1, 2003.
B. The payment, performance and discharge of any and all
obligations and liabilities of each Borrower, whether direct or indirect,
absolute or contingent, due or not due, now existing or hereafter arising, in
conjunction with issuance of the Letter of Credit (collectively, together with
any extensions, renewals, amendments, substitutions or replacements thereof and
therefor, the "LETTER OF CREDIT"), including but not limited to the obligations
of each Borrower contained in any and all applications for the Letter of Credit
(collectively, the "APPLICATIONS") executed and delivered as a condition to
issuance of the Letter of Credit, and to pay on demand all drafts drawn under
the Letter of Credit, and to reimburse Lender on demand of Lender for any
amounts advanced by Lender for the account of either Borrower, at the option
and in the exercise of the sole and absolute discretion of Lender, to satisfy
such drafts, and to indemnify Lender from all loss or liability incurred by
Lender in connection with the issuance of the Letter of Credit; and the payment
of all fees and all other sums due under,
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<PAGE> 70
and the performance of all covenants, conditions and other obligations due
under or in connection with, the Reimbursement Agreement, the Applications, and
any security agreements, mortgages, deeds of trust, guaranties, pledge
agreements, assignments, subordination agreements, and any other documents or
instruments heretofore, contemporaneously herewith or hereafter entered into by
any Borrower or any other person or entity, with or for the benefit of Lender
to evidence, secure or guarantee payment of the Letter of Credit, or otherwise
entered into in connection with the Letter of Credit (such security agreements,
mortgages, deeds of trust, guaranties, pledge agreements, assignments,
subordination agreements, and other documents and instruments evidencing,
securing, guaranteeing or otherwise entered into in connection with the Letter
of Credit are referred to collectively as the "LOAN DOCUMENTS").
C. All expenses, costs and charges, of any nature
whatsoever, including, without limitation, taxes, assessments, insurance
premiums, repairs, rent, storage costs, expenses of collection and sale, and
reasonable attorneys' fees, incurred by or for the account of Lender in
preserving collateral for the Obligations and/or enforcing or seeking to
enforce any of the rights and remedies of Lender under any of the Loan
Documents.
13
<PAGE> 71
EXHIBIT A
---------
to
Assignment of Leases and Rents
From the Northwest corner of the East Half of the Southeast Quarter of
Section 24, Township 27 South, Range 36 East, Brevard County, Florida,
run North 88 degrees 11 minutes 30 seconds East along the South right
of way line of Sarno Road and the North line of the Southeast Quarter
of Section 24 a distance of 100.00 feet to the POINT OF BEGINNING of
the herein described parcel; thence continue North 88 degrees 11
minutes 30 seconds East along the South right of way line of Sarno
Road a distance of 977.04 feet to the West line of property described
in Brevard County Official Records Book 823, Page 230; thence South 01
degrees 48 minutes 30 seconds East along said West line a distance of
200.00 feet; thence South 88 degrees 11 minutes 30 seconds West 135.00
feet; thence South 01 degrees 48 minutes 30 seconds East 187.00 feet;
thence South 88 degrees 11 minutes 30 seconds West 859.34 feet; thence
North 00 degrees 45 minutes 03 seconds East parallel with the West
line of the East Half of Southwest Quarter of Section 24 a distance of
387.39 feet to the POINT OF BEGINNING.
Together with an ingress/egress easement through and upon the South 30
feet of that certain property described in Official Records Book 1328,
Page 945, the Public Records of Brevard County, Florida.
TAX ID #27-36-24-00-750.1
14
<PAGE> 72
THIS INSTRUMENT PREPARED BY:
____________________________
Arthur A. Rouse, Esq.
WYATT, TARRANT & COMBS
2700 Citizens Plaza
Louisville, Kentucky 40202
(502) 589-5235
ASSIGNMENT OF LEASES AND RENTS
------------------------------
(CLERMONT COUNTY, OHIO)
THIS ASSIGNMENT OF LEASES AND RENTS (the "Assignment") is
executed actually on the date indicated in the notarial certificate affixed
hereto but is made effective as of February 12, 1996 by [i] MARSHALL
PROPERTIES, INC., an Ohio corporation ("Assignor"), having a mailing address of
1100 Shawnee Road, Box 840, Lima, Ohio in favor of [ii] BANK ONE, KENTUCKY, NA,
a national banking association, having a mailing address of 416 West Jefferson
Street, Louisville, Jefferson County, Kentucky 40232 ("Assignee");
W I T N E S S E T H:
-------------------
WHEREAS, Assignor is obligated to Assignee under and in
connection with the Reimbursement Agreements and the Letters of Credit and the
other "Obligations" more particularly described in SCHEDULE 1 attached and made
a part hereof; and
WHEREAS, in connection with the execution and delivery of the
Reimbursement Agreements, Assignee has required that Assignor absolutely assign
and convey to Assignee all of Assignor's right, title and interest in, to and
under any and all leases (hereinafter collectively referred to as the "LEASES"
and singularly as a "LEASE") now or hereafter in existence (as amended or
supplemented from time to time) and covering space in or applicable to the real
estate more particularly described in EXHIBIT A attached to and made a part
hereof (hereinafter referred to as the "PREMISES"), and Assignor desires and
intends by this Assignment to absolutely assign and convey to Assignee all of
Assignor's right, title and interest in, to and under the Leases;
NOW, THEREFORE, for valuable consideration, the receipt of
which is hereby acknowledged, and intending to be legally bound, Assignor
agrees as follows:
1. ABSOLUTE ASSIGNMENT. Assignor does hereby absolutely sell,
assign, transfer, convey and set over unto Assignee and its successors and
assigns, all of the right, title and interest of Assignor in, to and under the
Leases, together with all rents, earnings, income, issues and profits, arising
from either the
<PAGE> 73
Premises, the Leases, or both the Premises and the Leases, and all other sums
due or to become due under and pursuant thereto in each case (including but not
limited to any early termination or other fees or charges payable by any tenant
thereunder and any award or damages payable to Assignor pursuant to any
bankruptcy, insolvency or reorganization proceeding affecting any tenant),
together with any and all guaranties of or under any of said Leases, and
security therefor, and together with all rights, powers, privileges, options
and other benefits of Assignor in its capacity as lessor under the Leases,
including, without limitation: the immediate and continuing right to receive
and collect all rents, income, revenues, issues, profits, fees, condemnation
awards, insurance proceeds, moneys and security payable or receivable under the
Leases or pursuant to any of the provisions thereof, whether as rent or
otherwise, the right to make all waivers and agreements, to give and receive
all notices, consents and releases, and to take such action and exercise such
remedies upon the happening of a default under any Lease, including the
commencement, conduct and consummation of proceedings at law or in equity as
shall be permitted under any provision of any Lease or by any law, and to do
any and all other things whatsoever which the Assignor is or may become
entitled to do under any such Lease. Notwithstanding the provisions of this
Section 1, so long as no default shall exist under any of the Loan Documents
defined in SCHEDULE 1 ("LOAN DOCUMENTS"), and no event shall have occurred
which by the lapse of time or the giving of notice, or both, has or would
become an event of default thereunder, Assignor shall have the right and
license to occupy the Premises as landlord or otherwise and to collect, use and
enjoy the rents, issues and profits and other sums payable under and by virtue
of any Lease (but only as the same become due under the provisions of such
Lease) and to enforce (subject to the provisions of this Assignment) the
covenants of the Leases.
2. DURATION OF ASSIGNMENT. This Assignment is made and given and
shall remain in full force and effect until the payment, performance and
observance, as applicable, of all of the terms, covenants and conditions to be
paid, performed or observed under each of the Loan Documents, and promptly upon
request of Assignor thereafter Assignee shall, at the cost and expense of
Assignor and conditioned upon payment by Assignor of such costs and expenses,
cause this Assignment (if the same has been recorded) to be released of record.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF ASSIGNOR.
Assignor represents, warrants, covenants and agrees: [a] that Assignor has
good right and authority to make this Assignment, and Assignor holds the entire
and unencumbered rights of the landlord under each of the Leases; [b] that
neither Assignor nor any predecessor lessor has heretofore alienated, assigned,
pledged or otherwise disposed of or encumbered the Leases or any of the sums
due or to become due thereunder and that neither Assignor nor any predecessor
lessor has performed any acts or executed any other
2
<PAGE> 74
instruments which might prevent Assignee from operating under any of the terms
and conditions of this Assignment or which would limit Assignee in such
operation; [c] that, except for any deposits received in the ordinary course of
business from occupants of the Premises for which the Premises are duly
licensed (collectively, the "LICENSEES"), Assignor has not accepted or
collected rent or any other payments under any Lease for any period subsequent
to the current period for which such rent or other payment has already become
due and payable; [d] that Assignor has not executed or granted any amendment or
modification whatever of any of the Leases, either orally or in writing, except
as theretofore disclosed in writing by Assignor to Assignee (and approved by
Assignee, if such approval be required hereunder or under any other Loan
Document); [e] that, excepting any defaults under agreements with Licensees,
there is no default under any of the Leases now existing and no event has
occurred and is continuing which, with the lapse of time or the giving of
notice or both, would constitute an event of default under any of the Leases;
[f] that Assignor will observe, perform and discharge, duly and punctually, all
and singular the obligations, terms, covenants, conditions and warranties of
the Loan Documents, this Assignment, and each other Lease, on the part of
Assignor to be kept, observed and performed; [g] to enforce the performance of
each and every obligation, term, covenant, condition and agreement in said
Leases by any tenant to be performed; [h] to appear in and defend any action or
proceeding arising under, occurring out of, or in any manner connected with
said Leases or the obligations, duties or liabilities of Assignor or any tenant
thereunder, and upon request by Assignee, to do so in the name and on behalf of
Assignee, but at the expense of Assignor; [i] that Assignor will, upon the
request of Assignee, execute and deliver to Assignee such further instruments
and do and perform such other acts and things as Assignee reasonably may deem
necessary or appropriate to make effective this Assignment and the various
covenants of Assignor herein contained, and to more effectively vest in
Assignee the sums due or hereafter to become due under the Leases, including,
without limitation, the execution of such additional assignments as shall be
deemed necessary by Assignee effectively to vest in Assignee all rents, income
and profits from any and all Leases; [j] that, except for copies prior to an
Event of Default of occupancy agreements with Licensees, Assignor will from
time to time, promptly upon demand therefor, deliver to Assignee an executed
counterpart of each and every Lease then affecting all or any portion of the
Premises; and [k] that in the event any warranty or representation of Assignor
herein shall be false, misleading or materially inaccurate or Assignor shall
default in the observance or performance of any obligation, term, covenant or
condition hereof, then, in each instance at the option of Assignee, after the
giving by Assignee of any applicable notice and following the expiration of any
period for cure provided for in the Loan Documents, the same shall vest
Assignee with the absolute right to declare all sums evidenced thereby or due
thereunder immediately due and payable and to exercise any and all rights and
3
<PAGE> 75
remedies provided thereunder and hereunder and under the other Loan Documents
as well as such remedies as may be available at law or in equity, all of which
rights and remedies shall be cumulative.
4. ADDITIONAL COVENANTS OF ASSIGNOR. Assignor covenants and
agrees that Assignor will not, without first obtaining in each instance the
prior written consent of Assignee: [a] enter into any Lease without the prior
written consent of Assignee, which consent may be granted or withheld in the
sole and absolute discretion of Assignee; [b] either cancel any Lease nor
accept a surrender thereof (except that Assignor may, with the prior written
consent of Assignee and provided the reason for any refusal by Assignee so to
consent is not patently unreasonable or capricious, terminate a Lease for which
the tenant thereunder is in default); [c] either reduce the rent payable under
any Lease or accept payment of any installment of rent in advance of the due
date thereof; [d] change, amend, alter or modify any Lease or any of the terms
or provisions thereof, or grant any concession in connection therewith; [e]
consent to the release or reduction of the obligations of the tenant under any
Lease; [f] assign, pledge encumber or otherwise transfer any Lease or
Assignor's rights thereunder; [g] consent to an assignment of tenant's interest
under any Lease or to a subletting thereof, except to the extent any such
assignment or subletting is specifically authorized by such Lease; or [h] incur
any indebtedness to the tenant or guarantor of any Lease, for borrowed money or
otherwise, which may under any circumstances be availed of as an offset against
the rent or other payments due thereunder; and any of the above acts, if done
without the consent of Assignee, shall be, at the option of Assignee, null and
void, and shall constitute a default hereunder.
5. APPEARANCE IN ACTIONS. Assignee shall have the right, at
Assignor's sole cost and expense, to appear in and defend any action or
proceeding arising under or out of or in any manner connected with any Lease or
the obligations, duties or liabilities of the landlord or tenant thereunder,
and Assignor agrees to pay immediately upon request of Assignor all costs and
expenses of Assignee, including reasonable attorneys' fees, in any such action
or proceeding in which the Assignee in its sole discretion may appear.
Assignor shall give prompt notice to Lender of any notice received by Assignor
of default by landlord or tenant under any Lease, or of a purported termination
or intention of a tenant to terminate a Lease, together with a complete copy of
any such notice.
6. DIRECTION TO TENANTS. Assignor hereby consents to and
irrevocably authorizes and directs the tenants under the Leases and any
successor to the interest of any of said tenants, upon demand and notice from
Assignee of Assignee's right to receive the rents and other amounts under such
Leases, to pay to Assignee the rents and other amounts due or to become due
under the Leases, and said tenants shall have the right to rely upon such
demand and notice
4
<PAGE> 76
from Assignee and shall pay such rents and other amounts to Assignee without
any obligation or right to determine the actual existence of any default or
event claimed by Assignee as the basis for Assignee's right to receive such
rents and other amounts and notwithstanding any notice from or claim of
Assignor to the contrary, and Assignor shall have no right to claim against
said tenants for any such rents and other amounts so paid by said tenants to
Assignee.
7. ADDITIONAL RIGHTS UPON A DEFAULT. Upon the occurrence of a
default under this Assignment, or any of the other Loan Documents, Assignee, at
its option, after the giving of any notice and expiration of opportunity for
cure provided in the applicable Loan Documents, shall have the complete right,
power and authority [a] without taking possession, to demand, collect and
receive and sue for the rents and other sums payable under the Leases and,
after deducting all reasonable costs and expenses of collection (including,
without limitation, reasonable attorneys' fees) as determined by Assignee,
apply the net proceeds thereof to the payment of any sums from time to time due
under the Loan Documents; [b] to declare all sums due under the Loan Documents
immediately due and payable, and, at the option of Assignee, to exercise any
and all of the rights and remedies contained in the Loan Documents; and [c]
without regard to the adequacy of any security for any of the Obligations
described in SCHEDULE 1 hereto, at the option of Assignee, with or without
process of law, personally or by agent or attorney, or by or by a receiver to
be appointed by the court upon motion of Assignee, then and thereafter to enter
upon, take and maintain possession of and operate the Premises, or any part
thereof, together with all documents, books, records, papers, and accounts
relating thereto and exclude Assignor and its agents and servants therefrom and
hold, operate, manage and control the Premises or any part thereof as fully and
to the same extent as Assignor could do if in possession and in such event,
without limitation and at the expense of Assignor, from time to time, cause to
be made all necessary or proper repairs, renewals, replacements, useful
alterations, additions, betterments and improvements to the Premises, or any
part thereof, as Assignee deems judicious, and pay taxes, assessments and prior
or proper charges on the Premises, or any part thereof, and insure and reinsure
the same, and lease the Premises, or any part thereof, for such terms and on
such terms as Assignee deems desirable, including leases for terms expiring
beyond the maturity of the indebtedness evidenced by any of the Loan Documents,
and cancel any Lease or sublease thereof for any cause or on any ground which
would entitle Assignor to cancel the same. Without limitation of the
foregoing, Assignee, in addition to all other rights and remedies available to
Assignee, shall be entitled to the appointment of a receiver of the rents,
issues and profits of the Premises (including the Leases) as a matter of right
and without notice, with power to collect such rents, issues and profits due
and becoming due after default under this Assignment, or the other Loan
Documents, without regard to the value of the
5
<PAGE> 77
Premises (including the Leases) or the solvency of person or persons liable for
the payment of the other Obligations under the Loan Documents, and regardless
of whether Assignee has an adequate remedy at law. Assignor for itself and any
subsequent owner of the Premises (including the Leases) hereby waives any and
all defenses to the application for a receiver, as above provided, and hereby
specifically consents to such appointment without notice, except any notice
required by law, but nothing herein contained is to be construed to deprive
Assignee of any other right, remedy or privilege Assignee may have under the
law to have a receiver appointed.
8. APPLICATION OF AMOUNTS. After payment of all proper charges
and expenses, including the just and reasonable compensation for the services
of Assignee, its attorneys, agents, clerks, servants and others employed by
Assignee in connection with the operation, management and control of the
Premises and the conduct of the business thereof, and such further sums as may
be sufficient to indemnify Assignee from and against any liability, loss or
damage on account of any matter or thing done in good faith in pursuance of the
rights and powers of Assignee hereunder, Assignee will credit the net amount of
income which Assignee may receive by virtue of this Assignment and from the
Premises to any and all amounts due or owing to Assignee from Assignor under
the terms and provisions of the Loan Documents or otherwise in respect of any
of the Obligations of Assignor to Assignee. The balance of such net income
shall be released to or upon the order of Assignor. The manner of the
application of such net income and the item or items which shall be credited
shall be within the sole discretion of Assignee. In no event will the absolute
assignment effected hereby reduce any sums due under any of the Loan Documents
except to the extent, if any, that cash is actually received by Assignee and
applied to the payment of such sums.
9. LIMITATION OF LIABILITY. The acceptance by Assignee of this
Assignment, with all of the rights, powers, privileges and authority so
created, shall neither be deemed nor construed to constitute Assignee a
mortgagee in possession nor at any time or in any event to impose any
obligation whatsoever upon Assignee to appear in or defend any action or
proceeding relating to the Leases or the Premises, or to take any action
hereunder, or to expend any money or incur any expenses, or perform or
discharge any obligation, duty or liability under the Leases, or to assume any
obligation or responsibility for any security deposits or other deposits
delivered to Assignor by any tenant and not assigned and delivered to Assignee,
or render Assignee liable in any way for any injury or damage to person or
property sustained by any person or entity in, on or about the Premises.
10. SECURITY DEPOSITS. Upon any default (after the giving of any
applicable required notice and/or expiration of cure provided under the Loan
Documents) under this Assignment, the other Loan
6
<PAGE> 78
Documents, Assignor shall on demand of Assignee transfer to Assignee any
security deposits held by Assignor under the terms of the Leases to be held by
Assignee and applied in accordance with the provisions of the Leases. Until
Assignee makes such demand and the deposits are paid over to Assignee the
Assignee assumes no responsibility for any such security deposits. Assignor at
all times shall deposit the same in an account, separated from its general
funds, and if such deposits are required by law to be refunded to the
respective tenants with interest thereon, such account shall be an interest
bearing account.
11. ATTORNEY IN FACT. Assignor hereby irrevocably appoints
Assignee and its successors and assigns as the agent and attorney in fact of
Assignor, which appointment is coupled with an interest and is irrevocable, to
exercise any rights or remedies hereunder and under the Leases and to execute
and deliver during the term of this Assignment such instruments as Assignee may
deem necessary to more effectively convey the Leases and the other interests
hereunder to Assignee and to provide constructive notice to third parties of
this Assignment.
12. NO WAIVERS. No modifications, indulgences, waivers,
compromises, settlements, or variations of any of the terms of any of the Loan
Documents shall impair in any manner any of the rights and remedies of Assignee
under this Assignment. Assignor agrees that neither the collection of rents
and the application thereof by Assignee to the payment of any of the sums due
under the Loan Documents and otherwise as authorized by this Assignment, nor
the entry upon and taking of possession of the Premises, or any part thereof,
by Assignee shall cure or waive any default, or waive, modify or affect any
notice of default under any of the Loan Documents, or invalidate any act done
pursuant to such notice, and the enforcement of such rights and remedies by
Assignee, once exercised, shall continue for so long as Assignee shall elect.
If Assignee shall thereafter elect to discontinue the exercise of any such
right or remedy, the same or any other right or remedy hereunder may be
reasserted at any time and from time to time following any subsequent default.
13. REMEDIES CUMULATIVE. The rights and remedies of Assignee
hereunder are cumulative and not in lieu of, but are in addition to, any rights
or remedies which Assignee shall have under any of the Loan Documents, or at
law or in equity, which rights and remedies may be exercised by Assignee either
prior to, simultaneously with, or subsequent to, any action taken hereunder.
The rights and remedies of Assignee may be exercised from time to time and as
often as such exercise is deemed expedient, and the failure of Assignee to
avail itself of any of the terms, provisions and conditions of this Assignment
for any period of time, at any time or times, shall not be construed or deemed
to be a waiver of any rights under the terms hereof.
7
<PAGE> 79
14. RIGHTS SURVIVE FORECLOSURE PROCEEDING. The right of Assignee
to collect and receive the rents assigned hereunder or to take possession of
the Premises, or to exercise any of the rights or powers herein granted to
Assignee shall, to the extent not prohibited by law, also extend to the period
from and after the filing of any suit to foreclose any lien created under any
of the Loan Documents pertaining to the Premises, including any period allowed
by law for the redemption of the Premises after any foreclosure sale.
15. INDEMNIFICATION. Assignor agrees to indemnify and hold
Assignee harmless of, from and against any and all liability, loss, damage or
expense, which Assignee may or might incur under or by reason of this
Assignment, and of and from any and all claims and demands whatsoever which may
be asserted against Assignee by reason of any alleged obligation or undertaking
on the part of Assignee (other than obligations or undertakings of Assignee
alleged to have arisen after the time, if applicable, at which Assignee entered
into possession of the Premises) to perform or discharge any of the terms,
covenants or agreements contained in the Leases. Should Assignee incur any
such liability, loss or damage under or by reason of this Assignment, or in the
defense of any such claims or demands, the amount thereof, including costs,
expenses and reasonable attorneys' fees, together with interest thereon at the
Index Rate of Lender plus 2% shall be payable out of amounts collected by
Assignee pursuant to this Assignment and the other Loan Documents, and Assignor
shall reimburse Assignee therefor immediately upon demand, and upon failure of
Assignor so to do, the same shall be a default hereunder, and Assignee may at
Assignee's sole option exercise all rights and remedies available to Assignee
thereupon under this Assignment and the other Loan Documents.
16. MISCELLANEOUS.
-------------
A. This Assignment shall be assignable by Assignee and
all representations, warranties, covenants, powers and rights herein contained
shall be binding upon, and inure to the benefit of, Assignor and Assignee and
their respective successors and assigns.
B. Except for any notice required under applicable law
to be given in another manner, any notice given hereunder shall be given in the
manner stipulated by the Reimbursement Agreements described in SCHEDULE 1
hereto. Nothing contained in this Assignment shall be deemed to waive or
modify in any respect any prohibition, restriction or condition contained in
any mortgage from Assignor to Assignee applicable to Assignor's entering into
any Lease of all or any part of the Premises or in any other Loan Document.
C. This Assignment may be executed, acknowledged and
delivered in any number of counterparts and each such counterpart
8
<PAGE> 80
shall constitute an original, but together such counterparts shall constitute
only one instrument.
D. If any one or more of the provisions of this
Assignment, or the applicability of any such provision to a specific situation,
shall be held invalid or unenforceable, such provision shall be modified to the
minimum extent necessary to make it or its application valid and enforceable,
and the validity and enforceability of all other provisions of this Assignment
and all other applications of any such provision shall not be affected thereby.
E. Upon any sale, conveyance, transfer or exchange of
all or a part of the Premises, the term "Assignor" as used herein shall include
the transferee or grantee in such transaction. The preceding sentence shall
not be deemed to permit any sale, conveyance, transfer or exchange which is
prohibited or restricted by the terms of any of the Loan Documents.
F. The captions and headings of the various sections of
this Assignment are for convenience only and are not to be construed as
confining or limiting in any way the scope or intent of the provisions hereof.
Whenever the context requires or permits, the singular shall include the
plural, the plural shall include the singular and the masculine, feminine and
neuter shall be freely interchangeable.
G. This Assignment contains the final, complete and
exclusive agreement of Assignor and Assignee concerning its subject matter, and
may not be modified except in a writing signed by each of Assignor and
Assignee.
17. GOVERNING LAW. This Assignment was negotiated in the
Commonwealth of Kentucky, the Reimbursement Agreements were delivered by
Assignor and accepted by Assignee in the Commonwealth of Kentucky, and the
Letters of Credit were issued from the Commonwealth of Kentucky, which state
Assignor and Assignee agree has a substantial relationship to Assignor and
Assignee and to the underlying transaction in connection with which this
Assignment was granted. This Assignment, including matters of construction,
validity and performance, and the obligations arising hereunder, shall be
construed in accordance with and otherwise governed in all respects by the laws
of the Commonwealth of Kentucky applicable to contracts made and performed in
such state and any applicable law of the United States of America except to the
extent that the real and personal property laws of the State of Ohio, including
laws relating to the perfection, priority and enforcement of interests in real
property located in Ohio, necessarily shall apply to enforcement of this
Assignment. Assignor hereby irrevocably agrees that any legal action, suit, or
proceeding against Assignor with respect to the obligations or liabilities of
Assignor or any other matter under or arising out of or in connection with this
Assign-
9
<PAGE> 81
ment or the other Loan Documents or for recognition or enforcement of any
judgment rendered in any such action, suit or proceeding may be brought in the
United States Courts for the Western District of Kentucky, or in the courts of
the Commonwealth of Kentucky, as Lender may elect, and by execution and
delivery of this Assignment, Assignor hereby irrevocably accepts and submits to
the non-exclusive jurisdiction of each of the aforesaid courts IN PERSONA,
generally and unconditionally with respect to any such action, suit, or
proceeding for Assignor and in respect of Assignor's property. Assignor
further agrees that final judgment against Assignor in any action, suit or
proceeding referred to herein shall be conclusive and may be enforced in any
other jurisdiction, by suit on the judgment, a certified or exemplified copy of
which shall be conclusive evidence of the fact and of the amount of the
indebtedness of Assignor.
18. WAIVER OF TRIAL BY JURY. THE ASSIGNOR AND ASSIGNEE
ACKNOWLEDGE THAT THE TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE
TIME AND EXPENSE REQUIRED FOR A BENCH TRIAL AND HEREBY KNOWINGLY AND
VOLUNTARILY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, AND AFTER HAVING
CONSULTED OR HAVING HAD AMPLE OPPORTUNITY TO CONSULT THEIR RESPECTIVE LEGAL
COUNSEL CONCERNING THE CONSEQUENCES OF SUCH WAIVER, TRIAL BY JURY IN ANY ACTION
OR OTHER PROCEEDING BROUGHT TO ENFORCE OR DEFEND AGAINST COLLECTION OF OR
OTHERWISE IN CONNECTION WITH THIS ASSIGNMENT OR THE OTHER LOAN DOCUMENTS.
<THE BALANCE OF THIS PAGE INTENTIONALLY HAS BEEN LEFT BLANK>
10
<PAGE> 82
IN WITNESS WHEREOF, Assignor has executed this Assignment as of the
date first above written.
"ASSIGNOR"
Signed, acknowledged and MARSHALL PROPERTIES, INC., an
delivered in the presence Ohio corporation
of:
__________________________ By: ___________________________
Signature
__________________________ Printed Name: _________________
Printed Name
Title: ________________________
__________________________
Signature
__________________________
Printed Name
STATE OF OHIO )
)SS:
COUNTY OF _________)
The foregoing instrument was acknowledged before me this _____ day of
February, 1996, by _______________________________(name) as __________________
(title) of Marshall Properties, Inc., an Ohio corporation, on behalf of the
corporation.
My commission expires: _________________________.
_________________________________________
NOTARY PUBLIC
[AFFIX NOTARY SEAL]
11
<PAGE> 83
SCHEDULE 1
----------
TO
ASSIGNMENT OF LEASES AND RENTS AGREEMENT ("AGREEMENT)
BETWEEN MARSHALL PROPERTIES, INC.
AND BANK ONE, KENTUCKY, NA
(DESCRIPTION OF OBLIGATIONS)
The "OBLIGATIONS" referred to in the foregoing Agreement are
as follows:
A. All indebtedness, liabilities and obligations arising
under or evidenced by, and the performance of all covenants, conditions and
agreements undertaken by each of the Borrowers hereinafter described in
connection with, each of the following documents, including any renewals,
extensions and amendments of any of them or substitutions or replacements for
any of them (referred to hereinafter as the "REIMBURSEMENT AGREEMENT"):
(1) Reimbursement Agreement dated as of February
12, 1996, to which Arbor Health Care Company, a Delaware corporation ("ARBOR"),
Marshall Properties, Inc., an Ohio corporation ("MARSHALL") (Arbor and Marshall
are referred to each individually as a "BORROWER" and collectively as the
"BORROWERS"), and Bank One, Kentucky, NA, a national banking association
("LENDER"), are parties, referable to Letter of Credit No. S-6122 in the face
amount of $27,506,250 issued by Lender for the joint and several account of
Borrowers (the "LETTER OF CREDIT") as security for Promissory Note (Series
1996A-1) and Promissory Note (Series 1996A-2), both dated as of February 15,
1996, made jointly and severally by Borrowers to the order of Capital One
Funding Corporation ("CAPITAL") in face principal amount of $13,500,000 and
maturing on February 1, 2003.
B. The payment, performance and discharge of any and all
obligations and liabilities of each Borrower, whether direct or indirect,
absolute or contingent, due or not due, now existing or hereafter arising, in
conjunction with issuance of the Letter of Credit (collectively, together with
any extensions, renewals, amendments, substitutions or replacements thereof and
therefor, the "LETTER OF CREDIT"), including but not limited to the obligations
of each Borrower contained in any and all applications for the Letter of Credit
(collectively, the "APPLICATIONS") executed and delivered as a condition to
issuance of the Letter of Credit, and to pay on demand all drafts drawn under
the Letter of Credit, and to reimburse Lender on demand of Lender for any
amounts advanced by Lender for the account of either Borrower, at the option
and in the exercise of the sole and absolute discretion of Lender, to satisfy
such drafts, and to indemnify Lender from all loss or liability incurred by
Lender in connection with the issuance of the Letter of Credit; and the payment
of all fees and all other sums due under,
12
<PAGE> 84
and the performance of all covenants, conditions and other obligations due
under or in connection with, the Reimbursement Agreement, the Applications, and
any security agreements, mortgages, deeds of trust, guaranties, pledge
agreements, assignments, subordination agreements, and any other documents or
instruments heretofore, contemporaneously herewith or hereafter entered into by
any Borrower or any other person or entity, with or for the benefit of Lender
to evidence, secure or guarantee payment of the Letter of Credit, or otherwise
entered into in connection with the Letter of Credit (such security agreements,
mortgages, deeds of trust, guaranties, pledge agreements, assignments,
subordination agreements, and other documents and instruments evidencing,
securing, guaranteeing or otherwise entered into in connection with the Letter
of Credit are referred to collectively as the "LOAN DOCUMENTS").
C. All expenses, costs and charges, of any nature
whatsoever, including, without limitation, taxes, assessments, insurance
premiums, repairs, rent, storage costs, expenses of collection and sale, and
reasonable attorneys' fees, incurred by or for the account of Lender in
preserving collateral for the Obligations and/or enforcing or seeking to
enforce any of the rights and remedies of Lender under any of the Loan
Documents.
13
<PAGE> 85
EXHIBIT A
---------
to
Assignment of Leases and Rents
Situated in the Township of Miami, County of Clermont, State of Ohio
in Dix Military Survey Number 992, being more particularly described
as follows: Beginning at an iron pin in the future south right-of-way
line of Meadowcreek Drive said point being North 81 degrees 39 minutes
31 seconds West 664.00 feet North 78 degrees 52 minutes 51 seconds
West 168.74 feet and South 13 degrees 53 minutes 48 seconds West 25.00
feet from the centerline intersection of said Drive and Cook Road;
thence South 04 degrees 38 minutes 10 seconds West 433.96 feet to an
iron pin; thence North 84 degrees 25 minutes 11 seconds West, 291.41
feet to an iron pipe; thence North 85 degrees 26 minutes 42 seconds
West 245.76 feet to an iron pin; thence North 47 degrees 21 minutes 55
seconds West 165.00 feet to an iron pin; thence North 26 degrees 35
minutes 18 seconds West 265.18 feet to an iron pin; thence with the
arc of a circle curving to the right and having a radius of 475.00
feet a distance of 252.98 feet; thence North 88 degrees 27 minutes 27
seconds East 289.40 feet; thence with the arc of a circle curving to
the right and having a radius of 728.33 feet a distance of 222.55
feet; thence with the arc of a circle curving to the left and having a
radius of 1765.99 feet a distance of 63.76 feet to the point of
beginning containing 7.042 acres of land subject to legal highways and
easements of record.
14
<PAGE> 1
Exhibit 4.6
GUARANTY AGREEMENT
------------------
February 12, 1996
WHEREAS, ARBOR HEALTH CARE COMPANY, a Delaware corporation and
MARSHALL PROPERTIES, INC., an Ohio corporation (collectively, the "Borrower"),
having an address of 1100 Shawnee Road, Box 840, Lima, Ohio 45802-0840, desire
to transact business with and to obtain credit from BANK ONE, KENTUCKY, NA, a
national banking association, having an address at 416 West Jefferson Street,
Louisville, Kentucky 40232 ("Lender"); and
WHEREAS, Lender is unwilling to extend credit to Borrower
unless the undersigned [I] ARBORS EAST, INC., an Ohio corporation; [II] ARBORS
AT FORT WAYNE, INC., an Indiana corporation; [III] ARBORS AT TOLEDO, INC., an
Ohio corporation; [IV] HOME CARE PHARMACY, INC. OF FLORIDA, a Florida
corporation; and [V] BAY GERIATRIC PHARMACY, INC., a Florida corporation, each
(each a "Guarantor and collectively the "Guarantors") shall guarantee payment
to Lender of the Obligations, as hereinafter defined; and
WHEREAS, each of the Guarantors is an affiliate of Borrower
and is financially interested in the business and affairs of Borrower;
NOW THEREFORE, in consideration of the premises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the Guarantors, and to
induce Lender from time to time, in its discretion, to extend or continue
credit to Borrower, and acknowledging that Lender in extending such credit
shall rely on this Guaranty Agreement, each Guarantor, for Guarantors and their
respective successors (including, without limitation, by operation of law) and
assigns, hereby unconditionally and jointly and severally (together with any
other guarantor of all or any part of the Obligations hereinafter described,
whether or not such guarantor is a party to this Agreement) guarantees to
Lender, its successors and assigns, including each and every holder or owner of
any Obligations of Borrower which are guaranteed hereby (each reference to
Lender shall be construed to refer to each such holder or owner), the prompt
payment when due and at all times thereafter of all of the Obligations of
Borrower described in SCHEDULE 1 attached to and made a part of this Guaranty
Agreement (all of which are hereinafter collectively referred to as the
"Obligations") plus interest and fees constituting part of the Obligations, and
fees, charges and costs of collecting the Obligations, including reasonable
attorneys' fees.
This Guaranty Agreement is a continuing guaranty and shall
remain in full force and effect so long as any of the Obligations have not been
fully paid or performed; provided, however, anything contained in this Guaranty
Agreement to the
<PAGE> 2
contrary notwithstanding, this Guaranty Agreement shall terminate on February
1, 2004, except that such termination shall not affect the liability of any of
the Guarantors with respect to [a] Obligations created or incurred prior to
such date, or [b] extensions or renewals of, interest accruing on, or fees,
costs or expenses, including reasonable attorneys' fees, incurred with respect
to, such Obligations on or after such date. The liability of each Guarantor
under this Guaranty Agreement shall continue, notwithstanding the payment in
full of the Obligations, if any payments made on the Obligations are
subsequently recovered from Lender under any federal, state or other
bankruptcy, insolvency or similar law. Lender shall have the right of immediate
recourse against each of the Guarantors for full and immediate payment of the
Obligations guaranteed at any time after the Obligations, or any part thereof,
have not been paid in full according to the tenor and under the terms of the
instrument governing such Obligations, whether on demand, at fixed maturity, or
maturity accelerated by reason of a default.
This Guaranty Agreement is a guaranty of payment, not of
collection, and each Guarantor therefore agrees that Lender shall not be
obligated prior to or as a condition to seeking recourse against or receiving
payment from any Guarantor, to do any of the following (although Lender may do
so, in whole or in part, at its sole option), all of which are hereby
unconditionally waived by each Guarantor:
1. take any steps whatsoever to collect from Borrower or to file
a claim of any kind against Borrower; or
2. take any steps whatsoever to accept, perfect Lender's security
interest in, foreclose, realize on or deal in any manner with collateral
security, if any, for the payment of the Obligations, or any other guaranty of
the Obligations; or
3. in any other respect exercise any diligence whatever in
collecting or attempting to collect any of the Obligations by any means.
The liability of each Guarantor for payment of the Obligations
shall be absolute and unconditional, and nothing whatever except actual full
payment to the Lender of all the Obligations guaranteed by Guarantors hereunder
shall operate to discharge any Guarantor's liability. Accordingly, each
Guarantor unconditionally and irrevocably waives each and every defense which,
under principles of guarantee or suretyship law, would otherwise operate to
impair or diminish the liability of Guarantor. Without limiting the generality
of the foregoing, each Guarantor hereby consents to the following and agrees
that none of the following shall diminish or impair the liability of Guarantor
in any respect (all of which may be done without notice to any Guarantor of any
kind):
2
<PAGE> 3
A. any extensions or renewals (regardless of the
duration of such renewal term) of any of the Obligations, or any modifications,
indulgences, adjustments, forebearances, waivers, compromises, settlements, or
variations of, with regard to, affecting or in connection with of the interest
rate, times of payment of principal or interest, or any of the other terms of
any of the Obligations or of any agreement entered into with Borrower, any
Guarantor or any other person liable or having granted security for or
otherwise having entered into an agreement in connection with any part of the
Obligations;
B. the voluntary or involuntary discharge or release of
any of the Obligations, or of any person liable therefor, by reason of
bankruptcy or insolvency laws or otherwise;
C. the acceptance or release, with or without
substitution, by Lender of any collateral security or other guaranty, or
collateral security for such other guaranty, or any settlement, compromise or
extension with respect to any collateral security, other guaranty or collateral
security for such other guaranty;
D. the invalidity, illegality or unenforceability of all
or any part of the Obligations, or any document or agreement executed in
connection with the Obligations, for any reason whatsoever, including without
limitation the fact that (i) the act of creating the Obligations or any part
thereof is or was ULTRA VIRES, (ii) the officers or representatives executing
the documents or otherwise creating the Obligations acted in excess of their
authority, (iii) Borrower has valid defenses, claims or offsets (whether at
law, in equity or by agreement) which render the Obligations wholly or
partially uncollectible from Borrower, (iv) the creation, performance or
repayment of the Obligations (or the execution, delivery and performance of any
document or instrument representing part of the Obligations or executed in
connection with the Obligations, or given to secure the repayment of the
Obligations) is illegal, uncollectible, legally impossible or unenforceable, or
(v) the documents or instruments pertaining to the Obligations have been forged
or otherwise are irregular or not genuine or authentic;
E. any full or partial release of the liability of
Borrower on the Obligations or any part thereof, of Guarantors or any
guarantors now or hereafter that are not parties to this Guaranty Agreement, or
any other person or entity now or hereafter liable, whether directly or
indirectly, jointly, severally, or jointly and severally, to pay, perform,
guarantee or assure the payment of the Obligations or any part thereof;
F. any surrender, exchange, deterioration, waste, loss
or impairment (including without limitation negligent, willful, unreasonable or
unjustifiable impairment) of any collateral,
3
<PAGE> 4
property or security, at any time existing in connection with, or assuring or
securing payment of, all or any part of the Obligations;
G. the fact that any collateral, security, security
interest or lien contemplated or intended to be given, created or granted as
security for the repayment of the Obligations shall not be properly perfected
or created, or shall prove to be unenforceable or subordinate to any other
security interest or lien;
H. the application or allocation by Lender of payments,
collections or credits on any portion of the Obligations regardless of what
portion of the Obligations remains unpaid;
I. the creation of any new Obligations covered by this
Guaranty Agreement or renewal of any existing Obligations;
J. the extension of credit by Lender to Borrower in an
aggregate amount exceeding the maximum aggregate liability of any Guarantor
hereunder;
K. the making of a demand, or absence of demand, for
payment of the Obligations or giving, or failing to give, any notice of
dishonor or protest or any other notice;
L. the voluntary or involuntary subordination by Lender
of its claim(s) with regard to the Obligations or any collateral security for
the Obligations;
M. disclosure by the Lender or the failure of Lender to
disclose to any Guarantor any information regarding the Borrower or any other
guarantor of the Obligations;
N. any change in the Borrower or the relationship of any
Guarantor to the Borrower or any other guarantor of the Obligations; or
O. any lack of diligence by Lender in collecting or
attempting to collect any of the Obligations or attempting to realize upon the
value of any collateral.
Guarantor unconditionally waives:
A. any acceptance or notice of acceptance of this
Guaranty Agreement; and
B. any set-offs or counterclaims against Lender which
would impair Lender's rights against any Guarantor hereunder; and
C. any notice to which any Guarantor may be otherwise
entitled at law or in equity, including but not limited to, notice regarding
sale or disposal of any collateral securing the Obliga-
4
<PAGE> 5
tions or this Guaranty Agreement, and further waives to the maximum extent
permitted by law any obligation of the Lender to otherwise sell or deal with
such collateral in a commercially reasonable manner.
D. any and all rights of subrogation, reimbursement,
indemnity, contribution, recourse or other recovery against Borrower to the
extent any of the same would impair Lender's rights against Borrower or the
property of Borrower or any Guarantor hereunder.
Each Guarantor confirms to Lender that Guarantor independently
and without any reliance upon any advice or information from Lender in
determining whether to enter into this Guaranty has investigated the
operations, business and finances of Borrower to Guarantor's satisfaction and
has adequate means of assessing those factors in the future, and acknowledges
and agrees that Lender shall have no duty or obligation to advise any Guarantor
or supply any Guarantor with any information whatsoever concerning the present
or future financial condition or business or affairs of Borrower.
Each Guarantor agrees that in the event of any bankruptcy,
reorganization, winding up, or similar proceedings with respect to Borrower, no
limitation on the liability of Borrower on any of the Obligations that may now
or hereafter be imposed by any federal, state or other statute, law, regulation
or judicial or administrative determination applicable to such proceedings
shall in any way limit the obligation hereunder of any of the Guarantors, which
obligation is co-extensive with the liability of Borrower as set forth in the
Obligations without regard to any such limitation. In the event any payment by
Borrower to Lender is held to constitute a preference under the bankruptcy
laws, or for any other reason Lender is required to refund such payment or pay
the amount thereof to any other party, such payment by Lender to Borrower shall
not constitute a release of any Guarantor from any liability hereunder but each
Guarantor agrees to pay such amount to Lender upon demand.
It is the intention of each of the Guarantors and Lender that
the amount of the Obligations guaranteed by each Guarantor by this Guaranty
Agreement shall not be in excess of the maximum amount permitted by fraudulent
conveyance, fraudulent transfer or similar laws applicable to any of the
Guarantors. Accordingly, notwithstanding anything to the contrary contained in
this Guaranty Agreement or any other agreement or instrument now or hereafter
executed in connection with any of the Obligations, the amount of the
Obligations guaranteed by each Guarantor by this Guaranty Agreement shall be
limited to such amount which after giving effect thereto (i) would not render
such Guarantor insolvent, (ii) would not result in the fair salable value of
the assets of such Guarantor being less than the amount required to pay such
5
<PAGE> 6
Guarantor's debts and other liabilities (including contingent liabilities) as
they mature, or (iii) leave such Guarantor with unreasonably small capital to
carry out Guarantor's business as now conducted and as proposed to be
conducted, including Guarantor's capital needs, as such concepts described in
(i), (ii) and (iii) of this paragraph are determined under applicable law, if
the obligations of such Guarantor hereunder would otherwise be set aside,
terminated, discharged, annulled or voided for such reason by a court of
competent jurisdiction in a proceeding actually pending before such court. For
purposes of this paragraph, the term "applicable law" means as to any Guarantor
each statute, law, ordinance, regulation, order, judgment, injunction or decree
of the United States or any state or Commonwealth, any municipality, any
foreign country, or any territory, possession or tribunal applicable to such
Guarantor.
The liability of each Guarantor as to the Obligations
guaranteed hereby shall be joint and several with any and each other guarantor
of all or any portion of the Obligations.
If Lender shall have exculpated Borrower or any other
guarantor of the Obligations from liability in whole or in part, said
exculpation or agreement shall not affect the obligations of any Guarantor
hereunder, each Guarantor hereby acknowledging that the obligations under this
Guaranty Agreement are independent of the Obligations of the Borrower and are
to be construed as if no such exculpation or agreement have been granted to the
Borrower or such other guarantor by the Lender.
This Guaranty Agreement shall inure to the benefit of Lender,
its successors and assigns, including each and every holder or owner of any of
the Obligations guaranteed hereby and this Guaranty Agreement shall be deemed a
separate contract with each such holder and owner.
No invalidity, irregularity or unenforceability of all or any
part of the Obligations hereby guaranteed or of any security therefor shall
affect, impair or be a defense to this guaranty, and this guaranty is a primary
obligation of each Guarantor.
Lender shall have the right to set-off at any time after
default by Borrower with respect to any of the Obligations, without notice to
any Guarantor, any and all deposits or other sums at any time or times credited
by or due from Lender to any Guarantor (or to any of Guarantors jointly),
whether or not held by Lender in a special account or other account or
represented by a certificate of deposit (whether or not matured), which
deposits and other sums shall at all times constitute additional security for
the Obligations and the obligations and warranties arising under this Guaranty
Agreement. Each Guarantor hereby grants to Lender a lien on and a continuing
security interest in all instruments, documents, securities, cash, chattel
paper, general intangibles,
6
<PAGE> 7
deposits, certificates of deposit, all other property and the proceeds of any
of the foregoing, owned by Guarantor or in which Guarantor has an interest,
which now or hereafter are at any time in possession or control of Lender, or
in transit by mail or carrier to or from Lender or in the possession of any
third party on behalf of Lender, without regard to whether Lender received the
same in pledge, for safekeeping, as agent for collection or transmission or
otherwise, or whether Lender had conditionally released the same, all of which
shall at all times constitute additional security for the Obligations and the
obligations and warranties arising under this Guaranty Agreement, and all of
which may be applied at any time after default with respect to any of the
Obligations, without notice to Borrower or to any Guarantor, to the Obligations
of Borrower in such order as Lender may determine.
No amendment, modification or waiver of this Guaranty
Agreement shall be deemed to be made by Lender unless in a writing signed by a
duly authorized officer of Lender, and any such amendment, modification or
waiver shall be strictly construed. No waiver by Lender shall be construed or
deemed to be a waiver of any other provision or condition of this Guaranty
Agreement or a waiver of a subsequent breach of the same provision or
condition.
Without limitation of the other Obligations, Guarantors shall
be jointly and severally liable for and shall pay to Lender all expenses, costs
and charges, of any nature whatsoever, including, without limitation,
reasonable attorneys' fees, incurred by Lender in enforcing or seeking to
enforce any of the rights of Lender under this Guaranty Agreement or collecting
or seeking to collect any amounts payable under this Guaranty Agreement.
The invalidity or unenforceability of any one or more
provisions of this Guaranty Agreement shall not impair the validity and
enforceability of all of the other provisions of this Guaranty Agreement.
Any notice given to Lender or to any Guarantor hereunder shall
be given in the manner stipulated in the Reimbursement Agreement described in
SCHEDULE 1 hereto.
This Guaranty Agreement was negotiated in the Commonwealth of
Kentucky and delivered by Guarantors and accepted by Lender in the Commonwealth
of Kentucky, and proceeds of the Obligations have been and/or will be disbursed
from the Commonwealth of Kentucky, which state Guarantors and Lender agree has
a substantial relationship to Guarantors and Lender and to the underlying
transaction in connection with which this Guaranty Agreement is delivered.
This Guaranty Agreement, including matters of construction, validity and
performance, and the obligations arising hereunder, shall be construed in
accordance with and otherwise governed in all respects by the laws of the
Commonwealth of Kentucky applicable to contracts made and performed in such
7
<PAGE> 8
state and any applicable law of the United States of America, and no defense
given or allowed by the laws of any other state or country shall be interposed
in any action hereon unless such defense is also given or allowed by the laws
of the Commonwealth of Kentucky.
This Guaranty Agreement supplements and is in addition to any
other guaranties given by any Guarantor and other persons and entities,
respectively, to Lender of obligations, indebtedness and liabilities of
Borrower to Lender, and shall not be deemed to be in substitution for nor
otherwise impair in any manner the enforceability of such other guaranties
against any Guarantor or any other person or entity which is a party to any
such other guaranties. Any guaranty which is written on any promissory note
guaranteed hereby is intended to supplement this Guaranty Agreement , and in
the event of any conflict between the terms of any guaranty which is written on
any promissory note and this Guaranty Agreement, this Guaranty Agreement shall
control, except that the unenforceability of this Guaranty Agreement, in whole
or in part, shall not affect the enforceability of any guaranty which is
written on any promissory note.
THE LENDER AND EACH OF THE GUARANTORS ACKNOWLEDGE THAT THE
TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE TIME AND EXPENSE
REQUIRED FOR A BENCH TRIAL AND HEREBY KNOWINGLY AND VOLUNTARILY WAIVE, TO THE
EXTENT PERMITTED BY LAW, AND AFTER HAVING CONSULTED OR HAVING HAD AMPLE
OPPORTUNITY TO CONSULT THEIR RESPECTIVE LEGAL COUNSEL CONCERNING THE
CONSEQUENCES OF SUCH WAIVER, TRIAL BY JURY IN ANY ACTION OR OTHER PROCEEDING
BROUGHT TO ENFORCE OR DEFEND AGAINST COLLECTION OF OR OTHERWISE IN CONNECTION
WITH THIS GUARANTY AGREEMENT OR ANY OF THE OBLIGATIONS.
<THE BALANCE OF THIS PAGE INTENTIONALLY HAS BEEN LEFT BLANK>
8
<PAGE> 9
IN TESTIMONY WHEREOF, witness the signature of Guarantors as
of the date disclosed by the notarial certificate below, but effective as of
the date first above set forth.
<TABLE>
<S> <C>
"Guarantors"
Signed, acknowledged and ARBORS EAST, INC., an
delivered in the presence Ohio corporation
of:
__________________________ By: ___________________________
Signature
__________________________ Printed Name:__________________
Printed Name
Title: ________________________
__________________________
Signature
__________________________
Printed Name
STATE OF OHIO )
)SS:
COUNTY OF _________)
</TABLE>
The foregoing instrument was sworn to, subscribed and
acknowledged before me this _____ day of February, 1996, by
_________________________, as _________________________ of Arbors East, Inc., an
Ohio corporation, on behalf of the corporation.
My commission expires: _________________________.
_________________________________________
NOTARY PUBLIC
[AFFIX NOTARY SEAL]
9
<PAGE> 10
<TABLE>
<S> <C>
ARBORS AT FORT WAYNE, INC., an
Indiana corporation
By: ___________________________
Printed Name:__________________
Title: ________________________
STATE OF INDIANA )
) SS:
COUNTY OF ______________ )
</TABLE>
The foregoing instrument was sworn to, subscribed and
acknowledged before me this ____ day of February, 1996, by
_________________________, as _________________________ of Arbors at Fort Wayne,
Inc., an Indiana corporation, on behalf of the corporation.
My commission expires: _____________________.
[SEAL]
____________________________________
Notary Public, State at Large
10
<PAGE> 11
<TABLE>
<S> <C>
Signed, acknowledged and ARBORS AT TOLEDO, INC., an
delivered in the presence Ohio corporation
of:
__________________________ By: ___________________________
Signature
__________________________ Printed Name:__________________
Printed Name
Title: ________________________
__________________________
Signature
__________________________
Printed Name
STATE OF OHIO )
) SS:
COUNTY OF ______________ )
</TABLE>
The foregoing instrument was sworn to, subscribed and
acknowledged before me this ____ day of February, 1996, by
_________________________, as _________________________ of Arbors at Toledo,
Inc., an Ohio corporation, on behalf of the corporation.
My commission expires: _____________________.
[SEAL]
___________________________________
Notary Public, State at Large
11
<PAGE> 12
<TABLE>
<S> <C>
Signed, acknowledged and HOME CARE PHARMACY, INC. OF FLORIDA,
delivered in the presence a Florida corporation
of:
__________________________ By: ___________________________
Signature
__________________________ Printed Name: _________________
Printed Name
Title: ________________________
__________________________
Signature
__________________________
Printed Name
STATE OF _______________ )
: SS
COUNTY OF ______________ )
</TABLE>
The foregoing instrument was sworn to, subscribed and
acknowledged before me this ____ day of February, 1996, by
_________________________, as _________________________ of Home Care Pharmacy,
Inc. of Florida, a Florida corporation, on behalf of the corporation. He/She:
(check one) ______ is personally known to me, or has
______ produced ____________________________
as identification.
__________________________________________
__________________________________________
Name: (Please Print)
Notary Public, State of __________________
[AFFIX NOTARY SEAL]
12
<PAGE> 13
<TABLE>
<S> <C>
Signed, acknowledged and BAY GERIATRIC PHARMACY, INC.,
delivered in the presence a Florida corporation
of:
__________________________ By: ___________________________
Signature
__________________________ Printed Name: _________________
Printed Name
Title: ________________________
__________________________
Signature
__________________________
Printed Name
STATE OF _______________ )
: SS
COUNTY OF ______________ )
</TABLE>
The foregoing instrument was sworn to, subscribed and
acknowledged before me this ____ day of February, 1996, by
_________________________, as _________________________ of Bay Geriatric
Pharmacy, Inc., a Florida corporation, on behalf of the corporation. He/She:
(check one) ______ is personally known to me, or has
______ produced ____________________________
as identification.
__________________________________________
__________________________________________
Name: (Please Print)
Notary Public, State of __________________
[AFFIX NOTARY SEAL]
13
<PAGE> 14
<TABLE>
<S> <C>
"Lender"
Accepted: BANK ONE, KENTUCKY, NA, a national
banking association
February ____, 1996 By_______________________________________
(signature)
Name_____________________________________
(type or print)
Title____________________________________
(type or print)
</TABLE>
Attachments:
- - - -----------
Schedule 1 - Description of Obligations
14
<PAGE> 15
SCHEDULE 1
----------
TO
GUARANTY AGREEMENT ("AGREEMENT)
AMONG ARBORS EAST, INC. ET AL.
AND BANK ONE, KENTUCKY, NA
(DESCRIPTION OF OBLIGATIONS)
The "OBLIGATIONS" referred to in the foregoing Agreement are
as follows:
A. All indebtedness, liabilities and obligations arising
under or evidenced by, and the performance of all covenants, conditions and
agreements undertaken by each of the Borrowers hereinafter described in
connection with, each of the following documents, including any renewals,
extensions and amendments of any of them or substitutions or replacements for
any of them (referred to hereinafter as the "REIMBURSEMENT AGREEMENT"):
[i] Reimbursement Agreement dated as of February
12, 1996, among Arbor Health Care Company, a Delaware corporation ("ARBOR"),
Marshall Properties, Inc., an Ohio corporation ("MARSHALL") (Arbor and Marshall
are referred to each individually as a "BORROWER" and collectively as the
"BORROWERS"), Bank One, Kentucky, NA, a national banking association
("LENDER"), and joined by each of the Guarantors referable to Letter of Credit
No. S-6122 in the face amount of $27,506,250 issued by Lender for the joint and
several account of Borrowers (the "LETTER OF CREDIT") as security for
Promissory Note (Series 1996A-1) and Promissory Note (Series 1996A-2), both
dated as of February 15, 1996, made jointly and severally by Borrowers to the
order of Capital One Funding Corporation ("CAPITAL") in face principal amount
of $13,500,000 and maturing on February 1, 2003.
B. The payment, performance and discharge of any and all
obligations and liabilities of each Borrower, whether direct or indirect,
absolute or contingent, due or not due, now existing or hereafter arising, in
conjunction with issuance of the Letter of Credit (collectively, together with
any extensions, renewals, amendments, substitutions or replacements thereof and
therefor, the "LETTER OF CREDIT"), including but not limited to the obligations
of each Borrower contained in any and all applications for the Letter of Credit
(collectively, the "APPLICATIONS") executed and delivered as a condition to
issuance of the Letter of Credit, and to pay on demand all drafts drawn under
the Letter of Credit, and to reimburse Lender on demand of Lender for any
amounts advanced by Lender for the account of either Borrower, at the option
and in the exercise of the sole and absolute discretion of Lender, to satisfy
such drafts, and to indemnify Lender from all loss or liability incurred by
Lender in connection with the issuance of the Letter of Credit; and the payment
of all fees and all other sums due under,
15
<PAGE> 16
and the performance of all covenants, conditions and other obligations due
under or in connection with, the Reimbursement Agreement, the Applications, and
any security agreements, mortgages, deeds of trust, guaranties, pledge
agreements, assignments, subordination agreements, and any other documents or
instruments heretofore, contemporaneously herewith or hereafter entered into by
any Borrower or any other person or entity, with or for the benefit of Lender
to evidence, secure or guarantee payment of the Letter of Credit, or otherwise
entered into in connection with the Letter of Credit (such security agreements,
mortgages, deeds of trust, guaranties, pledge agreements, assignments,
subordination agreements, and other documents and instruments evidencing,
securing, guaranteeing or otherwise entered into in connection with the Letter
of Credit are referred to collectively as the "LOAN DOCUMENTS").
C. All expenses, costs and charges, of any nature
whatsoever, including, without limitation, taxes, assessments, insurance
premiums, repairs, rent, storage costs, expenses of collection and sale, and
reasonable attorneys' fees, incurred by or for the account of Lender in
preserving collateral for the Obligations and/or enforcing or seeking to
enforce any of the rights and remedies of Lender under any of the Loan
Documents.
16
<PAGE> 1
Exhibit 4.7
CONTINGENT GUARANTY AGREEMENT
- - - -----------------------------
February 12, 1996
WHEREAS, ARBOR HEALTH CARE COMPANY, a Delaware corporation,
and MARSHALL PROPERTIES, INC., an Ohio corporation (collectively, the
"Borrower"), having an address of 1100 Shawnee Road, Box 840, Lima, Ohio
45802-0840, desire to transact business with and to obtain credit from BANK
ONE, KENTUCKY, NA, a national banking association, having an address at 416
West Jefferson Street, Louisville, Kentucky 40232 ("Lender"); and
WHEREAS, Lender is unwilling to extend credit to Borrower
unless the undersigned [I] ALTERNACARE PLUS ENTERPRISES, INC., an Ohio
corporation, and [II] THE DRUGGIST, INC., an Ohio corporation, each (each a
"Guarantor and collectively the "Guarantors") shall guarantee payment to Lender
of the Obligations, as hereinafter defined; and
WHEREAS, each of the Guarantors is an affiliate of Borrower
and is financially interested in the business and affairs of Borrower;
NOW THEREFORE, in consideration of the premises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the Guarantors, and to
induce Lender from time to time, in its discretion, to extend or continue
credit to Borrower, and acknowledging that Lender in extending such credit
shall rely on this Guaranty Agreement, each Guarantor, for Guarantors and their
respective successors (including, without limitation, by operation of law) and
assigns, hereby unconditionally and jointly and severally (together with any
other guarantor of all or any part of the Obligations hereinafter described,
whether or not such guarantor is a party to this Agreement) guarantees to
Lender, its successors and assigns, including each and every holder or owner of
any Obligations of Borrower which are guaranteed hereby (each reference to
Lender shall be construed to refer to each such holder or owner), the prompt
payment when due and at all times thereafter of all of the Obligations of
Borrower described in SCHEDULE 1 attached to and made a part of this Guaranty
Agreement (all of which are hereinafter collectively referred to as the
"Obligations") plus interest and fees constituting part of the Obligations, and
fees, charges and costs of collecting the Obligations, including reasonable
attorneys' fees.
This Guaranty Agreement is a continuing guaranty and shall
remain in full force and effect so long as any of the Obligations have not been
fully paid or performed; provided, however, anything contained in this Guaranty
Agreement to the
<PAGE> 2
contrary notwithstanding, this Guaranty Agreement shall terminate on February
1, 2004, except that such termination shall not affect the liability of any of
the Guarantors with respect to [a] Obligations created or incurred prior to
such date, or [b] extensions or renewals of, interest accruing on, or fees,
costs or expenses, including reasonable attorneys' fees, incurred with respect
to, such Obligations on or after such date. The liability of each Guarantor
under this Guaranty Agreement shall continue, notwithstanding the payment in
full of the Obligations, if any payments made on the Obligations are
subsequently recovered from Lender under any federal, state or other
bankruptcy, insolvency or similar law. Lender shall have the right of immediate
recourse against each of the Guarantors for full and immediate payment of the
Obligations guaranteed at any time after the Obligations, or any part thereof,
have not been paid in full according to the tenor and under the terms of the
instrument governing such Obligations, whether on demand, at fixed maturity, or
maturity accelerated by reason of a default.
This Guaranty Agreement is a guaranty of payment, not of
collection, and each Guarantor therefore agrees that Lender shall not be
obligated prior to or as a condition to seeking recourse against or receiving
payment from any Guarantor, to do any of the following (although Lender may do
so, in whole or in part, at its sole option), all of which are hereby
unconditionally waived by each Guarantor:
1. Take any steps whatsoever to collect from Borrower or to file
a claim of any kind against Borrower; or
2. Take any steps whatsoever to accept, perfect Lender's security
interest in, foreclose, realize on or deal in any manner with collateral
security, if any, for the payment of the Obligations, or any other guaranty of
the Obligations; or
3. In any other respect exercise any diligence whatever in
collecting or attempting to collect any of the Obligations by any means.
The liability of each Guarantor for payment of the Obligations
shall be absolute and unconditional, and nothing whatever except actual full
payment to the Lender of all the Obligations guaranteed by Guarantors hereunder
shall operate to discharge any Guarantor's liability. Accordingly, each
Guarantor unconditionally and irrevocably waives each and every defense which,
under principles of guarantee or suretyship law, would otherwise operate to
impair or diminish the liability of Guarantor. Without limiting the generality
of the foregoing, each Guarantor hereby consents to the following and agrees
that none of the following shall diminish or impair the liability of Guarantor
in any respect (all of which may be done without notice to any Guarantor of any
kind):
2
<PAGE> 3
A. Any extensions or renewals (regardless of the
duration of such renewal term) of any of the Obligations, or any modifications,
indulgences, adjustments, forebearances, waivers, compromises, settlements, or
variations of, with regard to, affecting or in connection with of the interest
rate, times of payment of principal or interest, or any of the other terms of
any of the Obligations or of any agreement entered into with Borrower, any
Guarantor or any other person liable or having granted security for or
otherwise having entered into an agreement in connection with any part of the
Obligations;
B. The voluntary or involuntary discharge or release of
any of the Obligations, or of any person liable therefor, by reason of
bankruptcy or insolvency laws or otherwise;
C. The acceptance or release, with or without
substitution, by Lender of any collateral security or other guaranty, or
collateral security for such other guaranty, or any settlement, compromise or
extension with respect to any collateral security, other guaranty or collateral
security for such other guaranty;
D. The invalidity, illegality or unenforceability of all
or any part of the Obligations, or any document or agreement executed in
connection with the Obligations, for any reason whatsoever, including without
limitation the fact that (i) the act of creating the Obligations or any part
thereof is or was ULTRA VIRES, (ii) the officers or representatives executing
the documents or otherwise creating the Obligations acted in excess of their
authority, (iii) Borrower has valid defenses, claims or offsets (whether at
law, in equity or by agreement) which render the Obligations wholly or
partially uncollectible from Borrower, (iv) the creation, performance or
repayment of the Obligations (or the execution, delivery and performance of any
document or instrument representing part of the Obligations or executed in
connection with the Obligations, or given to secure the repayment of the
Obligations) is illegal, uncollectible, legally impossible or unenforceable, or
(v) the documents or instruments pertaining to the Obligations have been forged
or otherwise are irregular or not genuine or authentic;
E. Any full or partial release of the liability of
Borrower on the Obligations or any part thereof, of Guarantors or any
guarantors now or hereafter that are not parties to this Guaranty Agreement, or
any other person or entity now or hereafter liable, whether directly or
indirectly, jointly, severally, or jointly and severally, to pay, perform,
guarantee or assure the payment of the Obligations or any part thereof;
F. Any surrender, exchange, deterioration, waste, loss
or impairment (including without limitation negligent, willful, unreasonable or
unjustifiable impairment) of any collateral,
3
<PAGE> 4
property or security, at any time existing in connection with, or assuring or
securing payment of, all or any part of the Obligations;
G. The fact that any collateral, security, security
interest or lien contemplated or intended to be given, created or granted as
security for the repayment of the Obligations shall not be properly perfected
or created, or shall prove to be unenforceable or subordinate to any other
security interest or lien;
H. The application or allocation by Lender of payments,
collections or credits on any portion of the Obligations regardless of what
portion of the Obligations remains unpaid;
I. The creation of any new Obligations covered by this
Guaranty Agreement or renewal of any existing Obligations;
J. The extension of credit by Lender to Borrower in an
aggregate amount exceeding the maximum aggregate liability of any Guarantor
hereunder;
K. The making of a demand, or absence of demand, for
payment of the Obligations or giving, or failing to give, any notice of
dishonor or protest or any other notice;
L. The voluntary or involuntary subordination by Lender
of its claim(s) with regard to the Obligations or any collateral security for
the Obligations;
M. Disclosure by the Lender or the failure of Lender to
disclose to any Guarantor any information regarding the Borrower or any other
guarantor of the Obligations;
N. Any change in the Borrower or the relationship of any
Guarantor to the Borrower or any other guarantor of the Obligations; or
O. Any lack of diligence by Lender in collecting or
attempting to collect any of the Obligations or attempting to realize upon the
value of any collateral.
Guarantor unconditionally waives:
1. Any acceptance or notice of acceptance of this Guaranty
Agreement;
2. Any set-offs or counterclaims against Lender which would impair
Lender's rights against any Guarantor hereunder;
3. Any notice to which any Guarantor may be otherwise entitled at
law or in equity, including but not limited to, notice regarding sale or
disposal of any collateral securing the Obliga-
4
<PAGE> 5
tions or this Guaranty Agreement, and further waives to the maximum extent
permitted by law any obligation of the Lender to otherwise sell or deal with
such collateral in a commercially reasonable manner; and
4. Any and all rights of subrogation, reimbursement, indemnity,
contribution, recourse or other recovery against Borrower to the extent any of
the same would impair Lender's rights against Borrower or the property of
Borrower or any Guarantor hereunder.
Each Guarantor confirms to Lender that Guarantor independently
and without any reliance upon any advice or information from Lender in
determining whether to enter into this Guaranty has investigated the
operations, business and finances of Borrower to Guarantor's satisfaction and
has adequate means of assessing those factors in the future, and acknowledges
and agrees that Lender shall have no duty or obligation to advise any Guarantor
or supply any Guarantor with any information whatsoever concerning the present
or future financial condition or business or affairs of Borrower.
Each Guarantor agrees that in the event of any bankruptcy,
reorganization, winding up, or similar proceedings with respect to Borrower, no
limitation on the liability of Borrower on any of the Obligations that may now
or hereafter be imposed by any federal, state or other statute, law, regulation
or judicial or administrative determination applicable to such proceedings
shall in any way limit the obligation hereunder of any of the Guarantors, which
obligation is co-extensive with the liability of Borrower as set forth in the
Obligations without regard to any such limitation. In the event any payment by
Borrower to Lender is held to constitute a preference under the bankruptcy
laws, or for any other reason Lender is required to refund such payment or pay
the amount thereof to any other party, such payment by Lender to Borrower shall
not constitute a release of any Guarantor from any liability hereunder but each
Guarantor agrees to pay such amount to Lender upon demand.
It is the intention of each of the Guarantors and Lender that
the amount of the Obligations guaranteed by each Guarantor by this Guaranty
Agreement shall not be in excess of the maximum amount permitted by fraudulent
conveyance, fraudulent transfer or similar laws applicable to any of the
Guarantors. Accordingly, notwithstanding anything to the contrary contained in
this Guaranty Agreement or any other agreement or instrument now or hereafter
executed in connection with any of the Obligations, the amount of the
Obligations guaranteed by each Guarantor by this Guaranty Agreement shall be
limited to such amount which after giving effect thereto (i) would not render
such Guarantor insolvent, (ii) would not result in the fair salable value of
the assets of such Guarantor being less than the amount required to pay such
5
<PAGE> 6
Guarantor's debts and other liabilities (including contingent liabilities) as
they mature, or (iii) leave such Guarantor with unreasonably small capital to
carry out Guarantor's business as now conducted and as proposed to be
conducted, including Guarantor's capital needs, as such concepts described in
(i), (ii) and (iii) of this paragraph are determined under applicable law, if
the obligations of such Guarantor hereunder would otherwise be set aside,
terminated, discharged, annulled or voided for such reason by a court of
competent jurisdiction in a proceeding actually pending before such court. For
purposes of this paragraph, the term "applicable law" means as to any Guarantor
each statute, law, ordinance, regulation, order, judgment, injunction or decree
of the United States or any state or Commonwealth, any municipality, any
foreign country, or any territory, possession or tribunal applicable to such
Guarantor.
If any Guarantor is a natural person, then notwithstanding the
death or adjudication of incompetency of any such Guarantors, this Guaranty
Agreement shall be binding on the estate or committee of such Guarantor and
shall continue in full force and effect, and apply to all Obligations,
including all extensions, renewals and modifications arising after such death
or adjudication of incompetency.
The liability of each Guarantor as to the Obligations
guaranteed hereby shall be joint and several with any and each other guarantor
of all or any portion of the Obligations.
If Lender shall have exculpated Borrower or any other
guarantor of the Obligations from liability in whole or in part, said
exculpation or agreement shall not affect the obligations of any Guarantor
hereunder, each Guarantor hereby acknowledging that the obligations under this
Guaranty Agreement are independent of the Obligations of the Borrower and are
to be construed as if no such exculpation or agreement have been granted to the
Borrower or such other guarantor by the Lender.
This Guaranty Agreement shall inure to the benefit of Lender,
its successors and assigns, including each and every holder or owner of any of
the Obligations guaranteed hereby and this Guaranty Agreement shall be deemed a
separate contract with each such holder and owner.
No invalidity, irregularity or unenforceability of all or any
part of the Obligations hereby guaranteed or of any security therefor shall
affect, impair or be a defense to this guaranty, and this guaranty is a primary
obligation of each Guarantor.
Lender shall have the right to set-off at any time after
default by Borrower with respect to any of the Obligations, without notice to
any Guarantor, any and all deposits or other sums at any time or times credited
by or due from Lender to any Guarantor (or
6
<PAGE> 7
to any of Guarantors jointly), whether or not held by Lender in a special
account or other account or represented by a certificate of deposit (whether or
not matured), which deposits and other sums shall at all times constitute
additional security for the Obligations and the obligations and warranties
arising under this Guaranty Agreement. Each Guarantor hereby grants to Lender
a lien on and a continuing security interest in all instruments, documents,
securities, cash, chattel paper, general intangibles, deposits, certificates of
deposit, all other property and the proceeds of any of the foregoing, owned by
Guarantor or in which Guarantor has an interest, which now or hereafter are at
any time in possession or control of Lender, or in transit by mail or carrier
to or from Lender or in the possession of any third party on behalf of Lender,
without regard to whether Lender received the same in pledge, for safekeeping,
as agent for collection or transmission or otherwise, or whether Lender had
conditionally released the same, all of which shall at all times constitute
additional security for the Obligations and the obligations and warranties
arising under this Guaranty Agreement, and all of which may be applied at any
time after default with respect to any of the Obligations, without notice to
Borrower or to any Guarantor, to the Obligations of Borrower in such order as
Lender may determine.
No amendment, modification or waiver of this Guaranty
Agreement shall be deemed to be made by Lender unless in a writing signed by a
duly authorized officer of Lender, and any such amendment, modification or
waiver shall be strictly construed. No waiver by Lender shall be construed or
deemed to be a waiver of any other provision or condition of this Guaranty
Agreement or a waiver of a subsequent breach of the same provision or
condition.
Without limitation of the other Obligations, Guarantors shall
be jointly and severally liable for and shall pay to Lender all expenses, costs
and charges, of any nature whatsoever, including, without limitation,
reasonable attorneys' fees, incurred by Lender in enforcing or seeking to
enforce any of the rights of Lender under this Guaranty Agreement or collecting
or seeking to collect any amounts payable under this Guaranty Agreement.
The invalidity or unenforceability of any one or more
provisions of this Guaranty Agreement shall not impair the validity and
enforceability of all of the other provisions of this Guaranty Agreement.
Any notice given to Lender or to any Guarantor hereunder shall
be given in the manner stipulated in the Reimbursement Agreement described in
SCHEDULE 1 hereto.
This Guaranty Agreement was negotiated in the Commonwealth of
Kentucky and delivered by Guarantors and accepted by Lender in the Commonwealth
of Kentucky, and proceeds of the Obligations have been and/or will be disbursed
from the Common-
7
<PAGE> 8
wealth of Kentucky, which state Guarantors and Lender agree has a substantial
relationship to Guarantors and Lender and to the underlying transaction in
connection with which this Guaranty Agreement is delivered. This Guaranty
Agreement, including matters of construction, validity and performance, and the
obligations arising hereunder, shall be construed in accordance with and
otherwise governed in all respects by the laws of the Commonwealth of Kentucky
applicable to contracts made and performed in such state and any applicable law
of the United States of America, and no defense given or allowed by the laws of
any other state or country shall be interposed in any action hereon unless such
defense is also given or allowed by the laws of the Commonwealth of Kentucky.
This Guaranty Agreement supplements and is in addition to any
other guaranties given by any Guarantor and other persons and entities,
respectively, to Lender of obligations, indebtedness and liabilities of
Borrower to Lender, and shall not be deemed to be in substitution for nor
otherwise impair in any manner the enforceability of such other guaranties
against any Guarantor or any other person or entity which is a party to any
such other guaranties. Any guaranty which is written on any promissory note
guaranteed hereby is intended to supplement this Guaranty Agreement , and in
the event of any conflict between the terms of any guaranty which is written on
any promissory note and this Guaranty Agreement, this Guaranty Agreement shall
control, except that the unenforceability of this Guaranty Agreement, in whole
or in part, shall not affect the enforceability of any guaranty which is
written on any promissory note.
NOTWITHSTANDING ANYTHING CONTAINED IN THIS GUARANTY AGREEMENT
TO THE CONTRARY, EACH GUARANTOR'S OBLIGATIONS UNDER THE TERMS AND CONDITIONS OF
THIS GUARANTY AGREEMENT SHALL NOT BECOME EFFECTIVE, NOR SHALL EITHER GUARANTOR
BE OBLIGATED TO PERFORM PURSUANT TO THE TERMS OF THIS GUARANTY AGREEMENT, UNTIL
AN EVENT OF DEFAULT HAS OCCURRED, AS THE TERM EVENT OF DEFAULT IS DEFINED AND
DETERMINED IN THAT CERTAIN REIMBURSEMENT AGREEMENT MORE PARTICULARLY DESCRIBED
IN SCHEDULE 1 TO THIS GUARANTY.
THE LENDER AND EACH OF THE GUARANTORS ACKNOWLEDGE THAT THE
TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE TIME AND EXPENSE
REQUIRED FOR A BENCH TRIAL AND HEREBY KNOWINGLY AND VOLUNTARILY WAIVE, TO THE
EXTENT PERMITTED BY LAW, AND AFTER HAVING CONSULTED OR HAVING HAD AMPLE
OPPORTUNITY TO CONSULT THEIR RESPECTIVE LEGAL COUNSEL CONCERNING THE
CONSEQUENCES OF SUCH WAIVER, TRIAL BY JURY IN ANY ACTION OR OTHER PROCEEDING
BROUGHT TO ENFORCE OR DEFEND AGAINST COLLECTION OF OR OTHERWISE IN CONNECTION
WITH THIS GUARANTY AGREEMENT OR ANY OF THE OBLIGATIONS.
<THE BALANCE OF THIS PAGE INTENTIONALLY HAS BEEN LEFT BLANK>
8
<PAGE> 9
9
<PAGE> 10
IN TESTIMONY WHEREOF, witness the signature of Guarantors as
of the date disclosed by the notarial certificate below, but effective as of
the date first above set forth.
"Guarantors"
Signed, acknowledged and ALTERNACARE PLUS ENTERPRISES, INC.
delivered in the presence an Ohio corporation
of:
__________________________ By: ___________________________
Signature
__________________________ Printed Name:__________________
Printed Name
Title: ________________________
__________________________
Signature
__________________________
Printed Name
STATE OF OHIO )
)SS:
COUNTY OF _________)
The foregoing instrument was sworn to, subscribed and
acknowledged before me this _____ day of February, 1996, by
_________________________, as _________________________ of Alternacare Plus
Enterprises, Inc., an Ohio corporation, on behalf of the corporation.
My commission expires: _________________________.
_________________________________________
NOTARY PUBLIC
[AFFIX NOTARY SEAL]
10
<PAGE> 11
Signed, acknowledged and THE DRUGGIST, INC., an Ohio
delivered in the presence corporation
of:
__________________________ By: ___________________________
Signature
__________________________ Printed Name:__________________
Printed Name
Title: ________________________
__________________________
Signature
__________________________
Printed Name
STATE OF OHIO )
)SS:
COUNTY OF _________)
The foregoing instrument was sworn to, subscribed and
acknowledged before me this _____ day of February, 1996, by
_________________________, as _________________________ of The Druggist, Inc.,
an Ohio corporation, on behalf of the corporation.
My commission expires: _________________________.
_________________________________________
NOTARY PUBLIC
[AFFIX NOTARY SEAL]
11
<PAGE> 12
"Lender"
Accepted: BANK ONE, KENTUCKY, NA, a national
banking association
February _____, 1996 By_________________________________
(signature)
Name_______________________________
(type or print)
Title______________________________
(type or print)
Attachments:
- - - ------------
Schedule 1 - Description of Obligations
12
<PAGE> 13
SCHEDULE 1
----------
TO
CONTINGENT GUARANTY AGREEMENT ("AGREEMENT)
AMONG
ALTERNACARE PLUS ENTERPRISES, INC.,
THE DRUGGIST, INC.
AND
BANK ONE, KENTUCKY, NA
(DESCRIPTION OF OBLIGATIONS)
The "OBLIGATIONS" referred to in the foregoing Agreement are as
follows:
A. All indebtedness, liabilities and obligations arising
under or evidenced by, and the performance of all covenants, conditions and
agreements undertaken by each of the Borrowers hereinafter described in
connection with, each of the following documents, including any renewals,
extensions and amendments of any of them or substitutions or replacements for
any of them (referred to hereinafter as the "REIMBURSEMENT AGREEMENT"):
(1) Reimbursement Agreement dated as of February
12, 1996, among Arbor Health Care Company, a Delaware corporation ("ARBOR"),
Marshall Properties, Inc., an Ohio corporation ("MARSHALL") (Arbor and Marshall
are referred to each individually as a "BORROWER" and collectively as the
"BORROWERS"), Bank One, Kentucky, NA, a national banking association
("LENDER"), and joined by each of the Guarantors referable to Letter of Credit
No. S-6122 in the face amount of $27,506,250 issued by Lender for the joint and
several account of Borrowers (the "LETTER OF CREDIT") as security for
Promissory Note (Series 1996A-1) and Promissory Note (Series 1996A-2), both
dated as of February 15, 1996, made jointly and severally by Borrowers to the
order of Capital One Funding Corporation ("CAPITAL") in face principal amount
of $13,500,000, and maturing on February 1, 2003.
B. The payment, performance and discharge of any and all
obligations and liabilities of each Borrower, whether direct or indirect,
absolute or contingent, due or not due, now existing or hereafter arising, in
conjunction with issuance of the Letter of Credit (collectively, together with
any extensions, renewals, amendments, substitutions or replacements thereof and
therefor, the "LETTER OF CREDIT"), including but not limited to the obligations
of each Borrower contained in any and all applications for the Letter of Credit
(collectively, the "APPLICATIONS") executed and delivered as a condition to
issuance of the Letter of Credit, and to pay on demand all drafts drawn under
the Letter of Credit, and to reimburse Lender on demand of Lender for any
amounts advanced by Lender for the account of either Borrower, at the option
and in the exercise of the sole and absolute discretion of Lender, to satisfy
13
<PAGE> 14
such drafts, and to indemnify Lender from all loss or liability incurred by
Lender in connection with the issuance of the Letter of Credit; and the payment
of all fees and all other sums due under, and the performance of all covenants,
conditions and other obligations due under or in connection with, the
Reimbursement Agreement, the Applications, and any security agreements,
mortgages, deeds of trust, guaranties, pledge agreements, assignments,
subordination agreements, and any other documents or instruments heretofore,
contemporaneously herewith or hereafter entered into by any Borrower or any
other person or entity, with or for the benefit of Lender to evidence, secure
or guarantee payment of the Letter of Credit, or otherwise entered into in
connection with the Letter of Credit (such security agreements, mortgages,
deeds of trust, guaranties, pledge agreements, assignments, subordination
agreements, and other documents and instruments evidencing, securing,
guaranteeing or otherwise entered into in connection with the Letter of Credit
are referred to collectively as the "LOAN DOCUMENTS").
C. All expenses, costs and charges, of any nature
whatsoever, including, without limitation, taxes, assessments, insurance
premiums, repairs, rent, storage costs, expenses of collection and sale, and
reasonable attorneys' fees, incurred by or for the account of Lender in
preserving collateral for the Obligations and/or enforcing or seeking to
enforce any of the rights and remedies of Lender under any of the Loan
Documents.
14
<PAGE> 1
Exhibit 4.8
[SOCIETY LOGO] SOCIETY NATIONAL BANK
A KeyCorp Bank
P.O. Box 10099 DIRK VANHEYST
Toledo, Ohio 43699-0099 Vice President
Dated as of March 31, 1996
Mr. William Wondolowski
Treasurer
Arbor Health Care Company
1100 Shawnee Road - P.O. Box 840
Lima, OH 45802-0840
RE: $2,000,000 LINE OF CREDIT
Dear Bill:
I am pleased to inform you that Society National Bank (the "Bank") has extended
a Line of Credit of $2,000,000 in favor of Arbor Health Care Company (the
"Company"), upon such terms and conditions as may be mutually agreed upon, and
until May 31, 1997, at which time, this Line of Credit will automatically
expire, unless reaffirmed in writing by the Bank.
The interest rate on loan advances under the Line of Credit will be a floating
rate, per annum, equal to the Prime Rate, in effect at the Bank from time to
time by the Bank as its Prime Rate whether or not such rate is publicly
announced and may not be the lowest rate charged by the Bank for commercial or
other extensions of credit.
This Line of Credit is also subject to the condition that the Company will
promptly deliver to the Bank, the quarterly and annual financial statements of
the Company, including a balance sheet and consolidated statements of income
and surplus for the Company and its subsidiaries, if any, covering such
financial and other information as the Bank may reasonably request and, that
the Company hereafter maintain the ratios and all other factors relating to its
consolidated financial conditions in favorable conditions acceptable to the
Bank.
<PAGE> 2
ARBOR HEALTH CARE COMPANY
DATED AS OF MARCH 31, 1996
PAGE TWO
The following is required for the Line of Credit:
SECURITY INTEREST IN ACCOUNTS RECEIVABLE, CONTRACT RIGHTS, AND
INVENTORY, MORE FULLY DESCRIBED IN SECURITY AGREEMENT, DATED
JULY 24, 1987.
If the foregoing terms are satisfactory to you, please indicate your agreement
and acceptance by signing and returning the enclosed copy of this letter on, or
before April 30, 1996.
We are pleased to make this credit facility available to you and look forward
to working with you in the future.
Sincerely,
/s/ Dirk VanHeyst
-----------------
Dirk VanHeyst
Vice President
THE UNDERSIGNED, A DULY AUTHORIZED OFFICER OF ARBOR HEALTH CARE COMPANY,
ACCEPTS THE TERMS AND CONDITIONS OF THIS LETTER.
BY: /s/ William Wondolowski
------------------------
TITLE: VP Treasurer
---------------------
DATE: 3/31/96
----------------------
<PAGE> 1
Exhibit 4.9
[LOGO SOCIETY] SOCIETY NATIONAL BANK
A KeyCorp Bank
P.O. Box 10099 DIRK VANHEYST
Toledo, Ohio 43699-0099 Vice President
Dated as of March 31, 1996
Mr. William Wondolowski
Treasurer
Arbor Health Care Company
1100 Shawnee Road - P.O. Box 840
Lima, OH 45802-0840
Dear Bill:
We are pleased to inform you that Society National Bank (the "Bank") has
approved a Line of Credit for Letters of Credit of $2,000,000 in favor
of Arbor Health Care Company (the "Company"), upon such terms and
conditions as may be mutually agreed upon, and until May 31, 1997, at
which time, this Line of Credit will automatically expire, unless
reaffirmed in writing by the Bank.
In the event there are draws under the Letters of Credit, the interest
rate on loan advances under the Line of Credit will be a floating rate,
per annum, equal to the Prime Rate, in effect at the Bank from time to
time by the Bank as its Prime Rate whether or not such rate is publicly
announced and may not be the lowest rate charged by the Bank for
commercial or other extensions of credit.
This Line of Credit is also subject to the condition that the Company
will promptly deliver to the Bank, the quarterly and annual financial
statements of the Company, including a balance sheet and consolidated
statements of income and surplus for the Company and its subsidiaries,
if any, covering such financial and other information as the Bank may
reasonably request and that the Company hereafter maintain the ratios
and all other factors relating to its consolidated financial conditions
in favorable conditions acceptable to the Bank, more fully described in
the Amended and Restated Revolving Credit Agreement dated June 1, 1995
by and between Bank and Company, as amended from time to time.
<PAGE> 2
ARBOR HEALTH CARE COMPANY
DATED AS OF MARCH 31, 1996
PAGE TWO
The following is required for the Line of Credit:
1. Security interest in accounts receivable,
contract rights, and inventory, more
fully described in Security Agreement,
dated July 24, 1987.
2. A 1 1/2% per annum fee on the Letters of
Credit issued; payable quarterly in
arrears.
If the foregoing terms are satisfactory to you, please indicate your
agreement and acceptance by signing and returning the enclosed copy of
this letter on, or before April 30, 1996.
We are pleased to make this credit facility available to you and look
forward to working with you in the future.
Sincerely,
/s/ Dirk VanHeyst
-----------------
Dirk VanHeyst
Vice President
<PAGE> 3
ARBOR HEALTH CARE COMPANY
DATED AS OF MARCH 31, 1996
PAGE THREE
ACCEPTED:
THE UNDERSIGNED, A DULY AUTHORIZED OFFICER OF ARBOR HEALTH CARE COMPANY,
ACCEPTS THE TERMS AND CONDITIONS OF THIS LETTER.
BY: /s/ William Wondolowski
------------------------
TITLE: V P Treasurer
---------------------
DATE: 3/31/96
----------------------
<PAGE> 1
Exhibit 4.10
[SOCIETY LOGO] SOCIETY NATIONAL BAND
A KeyCorp Bank
P.O. Box 10099 DIRK VANHEYST
Toledo, Ohio 43699-0099 Vice President
Dated as of March 31, 1996
Mr. William Wondolowski
Treasurer
Arbor Health Care Company
1100 Shawnee Road - P.O. Box 840
Lima, OH 45802 - 0840
RE: $15,000,000 ACQUISITION AND DEVELOPMENT REVOLVER
Dear Bill:
We are pleased to inform you that Society National Bank (the "Bank") has
extended a Revolving Credit Facility to Arbor Health Care Company (the
"Company") in the amount of $15,000,000 upon such terms and conditions
as may be mutually agreed upon and until May 31, 1997 at which time the
Revolving Credit Facility will automatically expire unless reaffirmed in
writing by the Bank.
The terms and conditions of the Revolving Credit facility are as follows:
BORROWER: Arbor Health Care Company
AMOUNT: $15,000,000.00
PURPOSE: To purchase, refinance and/or develop
health care and retirement centers.
COLLATERAL: Bank has option to require a first
lien position on individual facilities
purchased with the Revolving Credit
Facility.
<PAGE> 2
ARBOR HEALTH CARE COMPANY
DATED AS OF MARCH 31, 1996
PAGE TWO
RATE: The Revolving Credit Facility shall
bear interest at a floating rate per
annum in accordance with the pricing
grid below:
<TABLE>
<CAPTION>
YEARS LEVERAGE PRIME PLUS
----- -------- ----------
<S> <C> <C> <C>
1-2 4.0 < = Leverage < 5.0 1/2%
1-2 3.0 < = Leverage < 4.0 1/4%
*1-2 2.0 < = Leverage < 3.0 0%
*1-2 Leverage < 2.0 LIBOR + 200 Basis Points
</TABLE>
*Eligibility for the last two rate
options also requires Net Worth to
be greater than $30MM.
For years 3-7, the applicable rate
would increase 1/4%.
<TABLE>
<CAPTION>
REPAYMENT: YEAR PAYMENT
<S> <C> <C>
1-2 Monthly interest only payments.
3 Monthly principal and interest
payments based on a 15 year mortgage
amortization.
4-7 Any advance not repaid by that time will
be repaid in sixteen equal quarterly
principal plus interest payments.
</TABLE>
FEE: 1/4% on the unused portion, billed
quarterly in arrears.
LOAN
AGREEMENT: The Amended and Restated Revolving
Credit Agreement dated June 1, 1995
will remain in full force and
effect.
<PAGE> 3
ARBOR HEALTH CARE COMPANY
DATED AS OF MARCH 31, 1996
PAGE THREE
OTHER
CONDITIONS: The Bank shall require an appraisal
and Phase I Environmental Audit on the
properties financed to be accomplished
by firms and in format satisfactory to
the Bank.
If the Bank requires a mortgage, the
Borrower shall provide an ALTA Mortgagee
policy of title insurance to be issued by a
company acceptable to Bank in an amount not
less than the loan amount.
The loan amount is subject to a maximum 90%
of the cost of the project.
Borrower shall provide evidence satisfactory
to Bank that a prepaid fire, extended
coverage insurance policy for the full
insurance value shall be in effect.
If the foregoing terms are satisfactory to you, please indicate your
agreement and acceptance by signing and returning the enclosed copy of
this letter on or before April 30, 1996.
We are pleased to continue to make the credit facility available to you
and look forward to working with you in the future.
Sincerely,
/s/ Dirk VanHeyst
-----------------
Dirk VanHeyst
Senior Vice President
<PAGE> 4
ARBOR HEALTH CARE COMPANY
DATED AS OF MARCH 31, 1996
PAGE FOUR
THE UNDERSIGNED, A DULY AUTHORIZED OFFICER OF ARBOR HEALTH CARE COMPANY,
ACCEPTS THE TERMS AND CONDITIONS OF THIS LETTER.
ARBOR HEALTH CARE COMPANY
BY: /s/ William Wondolowski
------------------------
TITLE: V P Treasurer
---------------------
DATE: 3/31/96
----------------------
<PAGE> 1
Exhibit 4.11
SECOND AMENDMENT TO AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT
----------------------------------------
This Second Amendment to Amended and Restated Revolving Credit and
Term Loan Agreement is made February 9, 1996, by and between ARBOR HEALTH CARE
COMPANY, a Delaware corporation, ("Company"), and SOCIETY NATIONAL BANK, a
national banking association, ("Bank").
WITNESSETH:
WHEREAS, Company and Bank entered into a certain Revolving Credit and
Term Loan Agreement dated September 30, 1993, as amended and restated by the
Amended and Restated Revolving Credit and Term Loan Agreement dated June 1,
1995, as amended June 30, 1995 (collectively the "Loan Agreement"); and
WHEREAS, Company and Bank have agreed to further amend the Loan
Agreement; and
WHEREAS, terms not specifically defined herein shall have the same
meaning as defined in the Loan Agreement.
NOW, THEREFORE, for valuable consideration received to their
satisfaction, Company and Bank hereby amend the Loan Agreement as follows:
1. On page 9, Section 6.4, add a new subclause (g) at the end of
said Section as follows: "; and (g) guaranties by Subsidiaries of the
debts of Company and other Subsidiaries."
2. This Amendment is a modification only and not a novation.
Except for the above-quoted modification, the Loan Agreement, and all other
Loan Documents, and all the terms and conditions thereof, shall be and remain
in full force and effect. This Amendment is to be considered attached to the
Loan Agreement and made a part thereof. This Amendment shall not release or
affect the liability of any guarantor, surety or endorser of the Loan, the Loan
Agreement, or any Loan Document, or release any owner of collateral securing
the Loan or Loan Agreement. The validity, priority and enforceability of the
Loan, the Loan Agreement, or any Loan Document, shall not be impaired hereby.
To the extent that any provision of this Amendment conflicts with any term or
condition set forth in the Loan Agreement, or any agreement or security
document executed in conjunction therewith, the provisions of this Amendment
shall supersede and control.
IN WITNESS WHEREOF, the parties have executed this Amendment effective
as of the day and year first above written.
ARBOR HEALTH CARE COMPANY, SOCIETY NATIONAL BANK,
A DELAWARE CORPORATION A NATIONAL BANKING ASSOCIATION
By:______________________________ By:__________________________________
Name:____________________________ Name:________________________________
Title:___________________________ Title:_______________________________
1
<PAGE> 1
Exhibit 4.12
AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT
------------------------------------------------
THIS AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT ("Amendment") is made
and entered into as of January 1, 1996 by and between Arbor Health Care
Company, a corporation organized and existing under the laws of the State
of Delaware, located at 1100 Shawnee Road, Lima, Ohio 45805 ("Company"), and
Bank One, Lima, NA, 121 West High Street, Lima, Ohio 45802, ("Bank One").
WITNESSETH:
----------
WHEREAS, Company and Bank One entered into an Amended and Restated Loan
Agreement dated August 1, 1995, (the "Agreement") pursuant to which Company
obtained loans from Bank One up to the maximum amount of Fourteen
Million Dollars ($14,000,000.00); and
WHEREAS, Company and Bank have agreed to amend the Agreement in order to
allow related party guarantees upon the terms and conditions hereinafter set
forth;
NOW, THEREFORE, the parties agree as follows:
A. Section 5.3 of the Agreement is hereby deleted and replaced by
the following:
5.3 GUARANTY OF OTHERS' DEBTS. Directly or indirectly, guarantee
or otherwise become surety in respect of any obligation or debt of
any other Person, except guaranties by endorsement of
negotiable instruments for deposit, collection, or similar
transactions in the ordinary course of business and for guaranties of
loans required under management contracts in an amount not to exceed
Seven Hundred Fifty Thousand Dollars ($750,000.00) on each
management contract, except for the guaranty of the due performance
by Fairlawn Associates Limited Partnership on certain Four
Million Six Hundred Thousand Dollars ($4,600,000.00) County of
Summit, Ohio Industrial Development Bonds dated as of June 1, 1986,
issued on or about June 26, 1986, except for the guaranty of debt
of Company or any Subsidiary, and except for other guarantees of
up to One Million Five Hundred Thousand Dollars ($1,500,000.00) in
aggregate.
B. This Amendment is a revision only and nor a novation, and except
as specifically modified by the terms and conditions of this
Amendment, all of the terms and conditions of the Agreement remain
in full force and effect.
THE PARTIES HAVE HEREUNTO SET THEIR HANDS and caused this Amendment to be
duly executed by their respective duly-authorized officers on the day and
year set forth below.
BANK ONE, LIMA, NA ARBOR HEALTH CARE COMPANY
By:_____________________________ By:________________________________
Its:____________________________ Its:_______________________________
Date:___________________________ Date:______________________________
<PAGE> 1
Exhibit 10.1
SECOND AMENDMENT TO LEASE AGREEMENT
THIS SECOND AMENDMENT TO LEASE AGREEMENT (the "Second Amendment") is
entered into as of the ____ day of March, 1996, by and between V&V Properties,
an Ohio general partnership ("Lessor") and Arbor Health Care Company, a
Delaware corporation ("Lessee").
RECITALS
--------
A. Lessor and Lessee entered into a Lease Agreement dated as of
June 2, 1988 and into a First Amendment to Lease Agreement
dated as of March 11, 1994 (collectively, the "Lease"). The
capitalized terms herein shall have the same meaning as in the
Lease unless a contrary meaning is indicated.
B. The parties desire to amend certain terms and conditions of
the Lease regarding exercise of the Renewal Term(s) by Lessee
in accordance with the provisions hereof.
NOW, THEREFORE, in consideration of the premises, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
1. A new paragraph shall be added at the end of Section 2, as
follows:
In addition to the above described notice(s) to renew this
Lease for the Extended Term(s) and notwithstanding anything to
the contrary stated herein, Lessee may, in its sole and
absolute discretion so long as: (i) no event of default shall
have occurred and be continuing, and (ii) Lessee has
substantially completed the Addition, exercise either or both
of the Extended Terms at any time from and after the date
hereof. As used herein, the Addition shall mean the proposed
improvements to the Facility described as follows:
Approximately 1700 sq. ft. added to the south end of
the Facility adjacent to the main entrance consisting
of offices, storage and a lobby/reception area.
Other improvements which are within the limits of the
existing structure include conversion of an existing
resident lounge into a physical therapy space. A new
resident (smoker's) lounge will be located elsewhere
in the Facility. The addition shall be in character
with the design motif of the existing Facility and
shall include the necessary systems such as
electrical, mechanical, plumbing, fire alarm and fire
protection.
For example, after substantial completion of the Addition,
Lessee may notify Lessor that Lessee desires to exercise both of the Extended
Terms simultaneously at any time prior to the expiration of the original Lease
term, thereby extending the term of the Lease through June 30, 2008.
<PAGE> 2
2. Except as modified herein, Lessor and Lessee ratify and
confirm the Lease as amended by this Second Amendment.
IN WITNESS WHEREOF, Lessor and Lessee have executed this First
Amendment as of the date first written above.
Signed and Acknowledged V&V Properties, an Ohio
in the Presence of: general partnership
_______________________________ By ____________________________
(as to both) Gerald E. Vallee, General Partner
____________________________ By __________________________
(as to both) Richard Vallee, General Partner
ARBOR HEALTH CARE COMPANY,
a Delaware corporation
____________________________ By __________________________
Pier C. Borra, President
____________________________
STATE OF OHIO )
) SS:
COUNTY OF GALLIA )
The foregoing instrument was acknowledged before me this _____ day of
March, 1996, by Gerald E. Vallee and Richard Vallee, as sole general partners
of V&V Properties, an Ohio general partnership, on behalf of the partnership.
______________________________________
Notary Public
My commission expires: ________________
2
<PAGE> 3
STATE OF OHIO )
) SS:
COUNTY OF ALLEN )
The foregoing instrument was acknowledged before me this _____ day of
March, 1996, by Pier C. Borra, the President of Arbor Health Care Company, a
Delaware corporation, on behalf of the corporation.
____________________________________
Notary Public
My Commission Expires: _______________
3
<PAGE> 1
ARBOR HEALTH CARE COMPANY AND SUBSIDIARIES Exhibit 11.1
STATEMENT RE COMPUTATION OF NET INCOME PER SHARE
(In thousands except per share data)
<TABLE>
<CAPTION>
Three Months
Ended March 31
------------------------
1995 1996
------- ------
<S> <C> <C>
Net income(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,625 $2,023
======= ======
Weighted average shares outstanding
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,806 6,893
Common Stock equivalents based upon the treasury
stock method . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 77
------- ------
Totals(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,849 6,970
======= ======
Net income per share (1) / (2) . . . . . . . . . . . . . . . . . . . . $.24 $.29
======= ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ARBOR
HEALTH CARE COMPANY AND SUBSIDIARIES' CONSOLIDATED BALANCE SHEETS AND
CONSOLIDATED STATEMENTS OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,722
<SECURITIES> 0
<RECEIVABLES> 39,396
<ALLOWANCES> 1,460
<INVENTORY> 0
<CURRENT-ASSETS> 47,633
<PP&E> 153,237
<DEPRECIATION> 29,236
<TOTAL-ASSETS> 184,282
<CURRENT-LIABILITIES> 44,579
<BONDS> 78,651
<COMMON> 207
0
0
<OTHER-SE> 57,469
<TOTAL-LIABILITY-AND-EQUITY> 184,282
<SALES> 0
<TOTAL-REVENUES> 52,476
<CGS> 0
<TOTAL-COSTS> 41,324
<OTHER-EXPENSES> 5,807
<LOSS-PROVISION> 357
<INTEREST-EXPENSE> 1,620
<INCOME-PRETAX> 3,368
<INCOME-TAX> 1,345
<INCOME-CONTINUING> 2,023
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,023
<EPS-PRIMARY> .29
<EPS-DILUTED> .29
</TABLE>
