Document:

Exhibit 10.121

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT, made and entered into this 4th day of November, 2011, by and between Mt. Kenn Property Holdings, LLC (the “Borrower”), and THE BANK OF LAS VEGAS (“Lender”).

 

W I T N E S S E T H :

 

WHEREAS, Borrower desires financing on certain real property located in Cobb County, Georgia, more particularly described in Exhibit “A” attached hereto and by this reference made a part hereof (“Property”);

 

WHEREAS, of even date herewith, Lender and Borrower entered into that certain loan wherein the Lender agreed to provide a loan (the “Loan”) to Borrower for up to Three Million One Hundred Seventy-Five Thousand Two Hundred and No/100 Dollars ($3,175,200.00) for the refinance of existing debt, closing costs and other permissible uses; and

 

WHEREAS, in order to loan funds to Borrower, Lender enters into this Loan Agreement with Borrower for the purposes herein contained; and

 

WHEREAS, the loan made hereunder will be secured in part by a first security interest in the Property and a first priority security interest in all the furniture, fixtures and equipment, now owned or hereafter acquired and located at the Property.

 

NOW, THEREFORE, for and in consideration of the premises, the sum of Ten ($10.00) Dollars and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

ARTICLE I

AMOUNT AND TERMS OF LOAN

 

1.1                                 RECITALS.  Each of the above recitals are hereby incorporated into and made a part of this Agreement by this reference.

 

1.2                                 LOAN AND NOTE.  The term “Loan” herein shall refer to the indebtedness of Borrower to Lender evidenced by a Note in the original principal amount of Three Million One Hundred Seventy-Five Thousand Two Hundred and No/100 Dollars ($3,175,200.00) in form satisfactory to Lender (the “Note”).

 

 

ARTICLE II

CONDITION OF LENDING

 

2.1                                 CONDITIONS PRECEDENT TO THE LOAN.  As a condition precedent to Lender making the Loan, the Borrower shall deliver to Lender on or before the date of the Loan closing, the following, in form and substance satisfactory to Lender:

 

(a)                                  The Note;

 

(b)                                 The Deed to Secure Debt and Security Agreement to be filed on the Property;

 

(c)                                  Assignment of Leases and Rents to be filed on the Property;

 

(d)                                 UCC-1 Financing Statements;

 

(e)                                  Evidence satisfactory to Lender of ownership of the Collateral by Borrower free and clear of encumbrances of any kind;

 

(f)                                    Corporate guaranties from Mt. Kenn Nursing, LLC, AdCare Health Systems, Inc. and Hearth & Home of Ohio, Inc. (collectively, the “Guarantor”);

 

(g)                                 Such other documents as reasonably may be required by the Lender or Lender’s counsel.

 

The Loan documents as provided above (collectively, the “Loan Documents”), when prepared, shall set forth the matters contained in the Loan Agreement and contain such other provisions as are deemed necessary or desirable by Lender.  The form and substance of all such documents must be satisfactory to Lender prior to disbursement by Lender of any of the proceeds of the Loan.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF BORROWER

 

The Borrower represents and warrants to, and agrees with the Lender as follows:

 

3.1                                 POWER AND AUTHORIZATION.

 

(a)                                  The Borrower has authorized the execution and delivery of the Note and all other documents contemplated by this Loan Agreement, and such execution and delivery will not violate any law, or any other agreement to which Borrower is a party.

 

(b)                                 This Loan Agreement constitutes, and upon execution and delivery thereof, the Note, the Deed to Secure Debt and Security Agreement and the ancillary documents will constitute, legal, valid and binding obligations of the Borrower enforceable against the Borrower.

 

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3.2                                 FINANCIAL CONDITION.  The reports and financial statements of Borrower and Guarantors submitted to Lender in connection with the Loan have been prepared from Borrower’s or Guarantors’ books and records in accordance with generally accepted accounting principles and practices, consistently applied, and fairly reflect the financial condition of Borrower and Guarantors for the periods therein defined.  No material adverse changes have since occurred.

 

Except as disclosed in the aforesaid reports and financial statements, Borrower:

 

(a)                                  Has not incurred any debts, liabilities or other obligations nor committed to incur any debts, liabilities or obligations;

 

(b)                                 Has no liabilities, direct or contingent;

 

(c)                                  Has made no investments in, advances to, or guaranties or obligations of any other company, person, firm, corporation, or other entity;

 

(d)                                 Is not subject to any judgment, nor are there any liens, encumbrances or security interests outstanding against Borrower or any of its properties.

 

3.3                                 LITIGATION. There is no litigation, proceeding, claim or dispute pending or threatened against Borrower, the adverse determination of which would materially affect Borrower’s ability to repay the loan or otherwise perform hereunder.

 

ARTICLE IV

COVENANTS BY BORROWER

 

Until all the obligations of Borrower under this Agreement have been performed and paid in full, Borrower covenants and agrees as follows:

 

4.1                                 INSURANCE.  Borrower shall maintain or require Guarantors to maintain insurance on the Collateral (hereinafter defined) as described in Article VII hereof in such amounts and against such hazards and liabilities as is customarily maintained by other companies in the same geographical area operating similar businesses or as may be otherwise requested by the Lender.  All such policies of insurance shall be in form and substance and with insurance companies satisfactory to Lender, and Borrower shall deliver evidence thereof to Lender upon request.  Further, upon request, Lender shall be designated as loss payee or as Mortgagor under any such policies, as its interests may appear.

 

4.2                                 MAINTENANCE OF BUSINESS AND CORPORATE EXISTENCE.  Borrower shall comply with all valid and applicable statutes, ordinances, rules and regulations and shall keep in force and effect all licenses, permits, bonds and franchises necessary for the proper conduct of its business.

 

4.3                                 ADVERSE CHANGES AND LITIGATION.  Borrower shall immediately inform Lender of any material adverse change in its financial condition, or the financial condition of Guarantors, and shall promptly inform Lender of any litigation or threatened litigation or of the

 

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occurrence of any other event or circumstance which might substantially affect the financial condition or business of Borrower or Guarantors.

 

4.4                                 MANAGEMENT AND OWNERSHIP.  No material adverse change shall be made without the prior written consent of Lender in the management or ownership of Borrower, or in the manner in which its business is conducted.  Said consent shall not be unreasonably withheld by Lender.

 

4.5                                 FINANCIAL STATEMENTS.  Within ninety (90) days of Borrower’s and Guarantor’s fiscal year end, Borrower shall furnish to Lender a copy of its compiled financial statement.  Borrower’s and Guarantor’s financial statements shall contain a balance sheet, profit and loss statement and aging of accounts receivable and accounts payable, all in reasonable detail, prepared in accordance with generally accepted accounting principles, consistently applied.  Each set of financial statements shall be prepared by a certified public accountant or accountants acceptable to Lender and certified by a duly authorized officer of Borrower and Guarantor to be correct and accurate.  Borrower and Guarantor shall also furnish a copy of its income tax returns, and such other or additional financial information as Lender may from time to time request.  Borrower and Guarantor shall also furnish evidence of payment of real estate taxes on the Property to Lender on an annual basis.  Borrower shall maintain a debt service coverage ratio of 1.25 to 1 for the duration of the Loan.

 

4.6                                 OTHER DEBTS.  Other than the loan from Lender of even date herein in the principal amount of $3,175,200.00, that certain subordinate lien in favor of APAX CAPITAL, LLC in the principal amount of $2,222,640.00 which shall subsequently be replaced by a SBA 504 loan in the principal amount o $2,274,000.00, the Borrower shall not directly or indirectly incur, create, assume or permit to exist any obligation for payment of borrowed money, excepting only unsecured current liabilities incurred in the ordinary course of business and obligations contemplated by this Agreement, without the express written consent of Lender, which consent shall not be unreasonably withheld; provided, however, Borrower shall have the right to pledge its accounts receivable to a third party working capital lender, including, without limitation,  Gemino Healthcare Finance, LLC.  Further, Borrower shall not guarantee the obligations of any person or entity, excepting only obligations contemplated by this Agreement.

 

4.7                                 SALE OF COLLATERAL.  Borrower shall not sell, lease, transfer or otherwise dispose of any of the Collateral as described in ARTICLE VII hereof, other than in the ordinary course of Borrower’s business.  If Borrower should desire to sell any of the Collateral, a release price therefor will be determined at the sole discretion of Lender, and upon the sale of that Collateral, the release price will be paid over by Borrower to Lender and applied by Lender to payments due on the Note, in inverse order of the due dates, and Lender shall thereupon release its lien or security interest upon the Collateral sold.

 

4.8                                 BULK SALE.  The Borrower shall not, without the prior written consent of the Lender, sell, transfer or convey all or any part of its interest in its assets to another entity.

 

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4.9                                 ENCUMBRANCES.  Borrower shall not incur or permit to exist nor allow Guarantors to incur or permit to exist any encumbrance, pledge or lien upon or against any of the Collateral, except:

 

(a)                                  Liens or security interests required or expressly contemplated or permitted by this Agreement;

 

(b)                                 Liens for taxes, assessments and other governmental charges not yet due and liens of carriers, warehousemen, mechanics and materialmen incurred in the ordinary course of business for sums not yet due; and

 

(c)                                  Tax liens which are being contested in good faith.

 

4.10                           TAXES.  Borrower shall pay promptly, when due, all taxes, assessments and governmental charges or levies imposed upon the Borrower or upon the income or any property of the Borrower, as well as all claims of any kind (including claims for labor, material, supplies or rent) which, if unpaid, might become a lien upon any or all of the Collateral.

 

4.11                           EXAMINATION OF RECORDS.  Borrower shall permit any representative of Lender to examine and to audit any or all of Borrower’s books and records and to copy portions thereof, and to visit and inspect any of the Collateral upon receipt of reasonable notification and request.

 

ARTICLE V

EVENTS OF DEFAULT

 

The occurrence of any one or more of the following shall constitute an “Event of Default”:

 

(a)                                  Nonpayment, when due, of any principal, accrued interest, premium, fee or other charge due under the Note.

 

(b)                                 Default by Borrower in the due observance or performance of any term, covenant, condition or agreement on its part to be performed under this Loan Agreement, the Note, or under any other document contemplated by this Loan Agreement.

 

(c)                                  If Borrower shall:

 

(1)                                  Make a general assignment for the benefit of its creditors;

 

(2)                                  File a voluntary petition in bankruptcy;

 

(3)                                  Be adjudicated as bankrupt or insolvent;

 

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(4)                                  File any petition or answer seeking, consenting to, or acquiescing in, reorganization, arrangement, composition, liquidation, dissolution or similar relief, under any present or future statute, law or regulation;

 

(5)                                  File an answer admitting or failing to deny the material allegations of the petition against it for any such relief;

 

(6)                                  Admit in writing its inability to pay its debts as they mature;

 

(7)                                  Discontinue business; or

 

(8)                                  Be unable to pay debts as they become due.

 

(d)                                 Borrower fails to have vacated or set aside within thirty (30) days of its entry any court order appointing a receiver or trustee for all or a substantial portion of the Borrower’s property.

 

(e)                                  Any warranty, representation or statements made or furnished to Lender by Borrower in connection with the Loan or in connection with this Agreement (including any warranty, representation or statement in the application of Borrower for the Loan or in any accompanying financial statements) or to induce Lender to make the Loan, proves to be untrue, misleading or false in any material respect.

 

(f)                                    Borrower suffers or permits any lien, encumbrance or security interest to attach to any of its property, except as herein otherwise expressly permitted, or if any judgment shall be entered against Borrower or any attachment shall be made against any property of Borrower, which judgment or attachment shall remain undischarged, unbonded, or undismissed for a period of thirty (30) days.

 

(g)                                 Borrower defaults in the payment of any principal or interest on any obligation to Lender.

 

(h)                                 Borrower shall sell, lease, or otherwise transfer or convey any of the Collateral, or any interest therein without Lender’s prior written approval, except as herein otherwise expressly permitted.

 

(i)                                     Borrower or Mt. Kenn Nursing, LLC defaults under or causes to be revoked, any state or local license or permit which is required in order to operate a skilled nursing facility.

 

ARTICLE VI

REMEDIES ON EVENT OF DEFAULT

 

6.1                                 DECLARE NOTE DUE.  Upon the occurrence of any Event of Default as defined in this Agreement, the Note, the Deed to Secure Debt and Security Agreements, Security Agreement or any other document contemplated by this Agreement, then in any such event (subject however to any notice and cure provision or any grace period), Lender at its option, may

 

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declare the entire unpaid balance of the Note to be forthwith due and payable, and thereupon such balance shall become so due and payable without presentment, protest or further demand or notice of any kind, all of which are hereby expressly waived, and Borrower will forthwith pay to Lender the entire principal of and interest accrued on the Note.

 

6.2                               OTHER REMEDIES.  Upon the occurrence or discovery of an Event of Default, the Lender shall, in addition to its option to declare the entire unpaid amount of the Note due and payable, at its option:

 

(a)                                 Move to protect its rights and remedies as a secured party under the Deeds to Secure Debt and Security Agreements and Security Agreement, by extrajudicial authority as set forth in those instruments, by action at law or equity, or by any other lawful remedy to enforce payment.

 

(b)                                 Apply the proceeds from any disposition of the Collateral to the satisfaction of the following items in the order in which they are listed:

 

(1)                                 The expenses of taking, preserving, insuring, repairing, holding and selling the Collateral, including any legal costs and attorney’s fees.  If any of the Note shall be referred to an attorney for collection, Borrower and all others liable on the Note, jointly and severally agree to pay reasonable attorney’s fees and all costs of collection.

 

(2)                                 The unpaid amount of any interest due on the Note, and all other expenses of Lender.

 

(3)                                 The unpaid principal amounts of the Note.

 

(4)                                 Any other indebtedness of Borrower to Lender.

 

(5)                                 The remainder, if any, to Borrower, it being understood and agreed that if the proceeds realized from the disposition of the Collateral shall fail to satisfy items (1) through (4) above, Borrower shall forthwith pay any such deficiency to Lender upon demand.

 

(c)                                  Exercise any and all rights of setoff which Lender may have against any account, fund or property of any kind, tangible or intangible, belonging to Borrower and which shall be in Lender’s possession or under Lender’s control.

 

ARTICLE VII

COLLATERAL

 

Borrower’s obligation for payment of the Note shall be collateralized by the following (the “Collateral”):

 

7.1                               DEED TO SECURE DEBT AND SECURITY AGREEMENT.  A first Deed to Secure Debt and Security Agreement on the Property.

 

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7.2                               UCC FINANCING STATEMENT.  A first lien on all the furniture, fixtures, and equipment now owned or hereafter acquired and located at the Property.

 

ARTICLE VIII

MISCELLANEOUS

 

8.1                               CLOSING.  The Lender shall not be obligated to make the Loan or advance any funds until Borrower has fully met all requirements herein set forth to be met by Borrower, and until Borrower has paid to Lender and any other parties entitled thereto, all fees and other charges due in connection with the Loan.

 

8.2                               AMENDMENTS.  No amendment of any provisions of this Loan Agreement, nor consent to any departure of Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by Lender and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

8.3                               NOTICES.  All notices and other communications provided for hereunder shall be in writing and mailed or telegraphed or delivered.

 

If to Borrower:

 

3050 Peachtree Road, NW, Suite 355

Two Buckhead Plaza

Atlanta, Georgia 30305

 

If to Lender:

 

622 Douglas Avenue

P.O. Box 3210

Las Vegas, NM 87701

 

8.4                               GOVERNING LAW AND PARTIES BOUND.  This Agreement shall be governed by and construed and enforced in accordance with federal law and the substantive, and not the conflict laws of the State of New Mexico, except and only to the extent of procedural matters related to the perfection and enforcement of Lender’s rights and remedies against the Property, which matters shall be governed by the laws of the State of Georgia.  However, in the event that the enforceability or validity of any provision of this Loan Agreement is challenged or questioned, such provision shall be governed by whichever applicable state or federal law would uphold or would enforce such challenged or questioned provision.  The loan transaction which is evidenced by the Note and this Loan Agreement has been applied for, considered, approved and made, and all necessary loan documents have been accepted by Lender in the State of New Mexico.

 

8.5                               ATTORNEY’S FEES AND EXPENSES.  If Lender shall incur any cost or expense, including, without limitation, reasonable attorney’s fees, in connection with this Agreement, the Note or the Loan, in any manner whatsoever, direct or indirect, whether with 

 

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regard to the collection of amounts due, protection of Collateral, defense of Lender or otherwise, upon demand by Lender, Borrower shall pay the same or shall reimburse Lender therefor in full.

 

8.6                               CHANGES IN OWNERSHIP.  Transfers or changes of majority beneficial ownership in Borrower will be permitted, subject to satisfactory underwriting and compliance with applicable rating agency criteria, subject to the payment of a 1% transfer fee.  Transfers of minority interests in the Borrower will be permitted without the payment of a transfer fee.

 

8.7                               ASSIGNMENT BY BORROWER.  No commitment issued by Lender to Borrower for the Loan nor any of Borrower’s rights hereunder shall be assignable by Borrower without the prior written consent of Lender.

 

8.8                               NO WAIVER: REMEDIES.  No failure on the part of the Lender, and no delay in exercising any right under this Loan Agreement, shall operate as a waiver thereof; nor shall any single or partial exercise of any right under this Loan Agreement preclude any other or further exercise thereof or the exercise of any other right.

 

8.9                               SEVERABILITY.  In the event that any clause or provisions of this Loan Agreement or any document or instrument contemplated by this Agreement shall be held to be invalid by any court of competent jurisdiction, the invalidity of such clause or provision shall not affect any of the remaining portions or provisions of this Loan Agreement.

 

8.10                        TIME.  Time is of the essence of this Agreement.

 

8.11                        GRACE AND NOTICE OF CURE RIGHTS.  Notwithstanding any other provision to the contrary contained in this Agreement or in any of the other Loan Documents, upon the occurrence of a monetary default or a monetary Event of Default under any of the Loan Documents, Lender shall not be required to send written notice to Borrower and/or Guarantors.  All loan payments are due on the first (1st) day of each month, however; payments will not be considered late until ten (10) days thereafter.  In the event the default does not involve the payment of money by Borrower to Lender, Borrower and Guarantors shall have thirty (30) days following receipt of such notice to fully cure such default. In the event the default is cured within such period, it shall be as if no default had occurred.

 

8.12                        MISCELLANEOUS.  Notwithstanding anything contained in this Loan Agreement or in the loan documents, including, without limitation, any security agreement executed in connection with this Loan Agreement (collectively, the “Loan Documents”) evidencing the Loan, Lender agrees that its collateral for the loan expressly excludes (and any definition of “Collateral” in the Loan Documents shall also expressly exclude) all or part of the following property of Mt. Kenn Nursing, LLC:

 

(a) all Accounts; (b) all Payment Intangibles; (c) all Instruments, Chattel Paper (including Electronic Chattel Paper), Documents, Letter-of-Credit Rights, Supporting Obligations and Commercial Tort Claims, in each case to the extent arising out of, relating to or given in exchange for or settlement of or to evidence the obligation to pay any Account or Payment Intangible; (d) all General Intangibles (including contract rights and trademarks, copyrights, patents and other intellectual property) that arise out of or relate to any Account or Payment Intangible or from which any Account or Payment Intangible arises; (e) all remedies, guarantees 

 

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and collateral evidencing, securing or otherwise relating to or associated with any Account or Payment Intangible, including all rights of enforcement and collection; (f) all Commercial Lockboxes, Governmental Lockboxes, Collection Accounts and other Deposit Accounts into which Collections or other proceeds of Collateral or Advances are deposited, and all checks or Instruments from time to time representing or evidencing the same; (g) all cash, currency and other monies at any time in the possession or under the control of Mt. Kenn Nursing, LLC’s working capital or operating lender [the “Operations Lender”] or a bailee of such Operations Lender; (h) all books and records evidencing or relating to or associated with any of the foregoing; (i) all information and data compiled or derived with respect to any of the foregoing (other than any such information and data subject to legal restrictions of patient confidentiality); and (j) all Collections, Accessions, receipts and Proceeds derived from any of the foregoing, all words with capitalized letters being defined in the Uniform Commercial Code or the loan agreement between Mt. Kenn Nursing, LLC and Operations Lender.

 

IN WITNESS WHEREOF, the parties have executed this Loan Agreement as of the date first above written.

 

 

	
 
    	
 
    	
BORROWER:
    
	
 
    	
 
    	
 
    
	
Signed,   sealed and delivered in the presence of:    
    	
 
    	
Mt.   Kenn Property Holdings, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   [Illegible]
    	
 
    	
By:
    	
/s/   Martin Brew
    	
(L.S.)
    
	
Witness
    	
 
    	
Martin   Brew, Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   Ellen Smith
    	
 
    	
 
    
	
Notary   Public
    	
 
    	
 
    

 

 

	
 
    	
 
    	
LENDER:
    
	
 
    	
 
    	
 
    
	
Signed,   sealed and delivered in the presence of:    
    	
 
    	
THE   BANK OF LAS VEGAS
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   [Illegible]
    	
 
    	
 
    
	
Witness
    	
 
    	
By:
    	
/s/   Gilbert N. Vallejos
    	
(L.S.)
    
	
 
    	
 
    	
Name:
    	
Gilbert   N. Vallejos
    
	
 
    	
 
    	
Title:
    	
Executive   Vice President
    
	
/s/   Rosita P. Chavez
    	
 
    	
 
    
	
Notary   Public
    	
 
    	
 
    

 

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The undersigned hereby expressly agree and consent to all of the terms and conditions contained herein and further agree to be bound by all of the terms and conditions contained herein.  This 4th day of November, 2011.

 

	
 
    	
GUARANTORS:
    
	
 
    	
 
    
	
 
    	
MT.   KENN NURSING, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Martin Brew
    	
(L.S.)
    
	
 
    	
Martin   Brew, Chief Financial Officer
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ADCARE   HEALTH SYSTEMS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Martin Brew
    
	
 
    	
Martin   Brew, Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
[Corporate Seal]
    
	
 
    	
 
    
	
 
    	
HEARTH &   HOME OF OHIO, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Martin Brew
    
	
 
    	
Martin   Brew, Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
[CORPORATE SEAL]
    

 

11Exhibit 10.122

 

GUARANTY

 

1.                                       As an inducement for and in consideration of any loan(s), lease(s), or other financial accommodation(s) of even date herewith granted to MT. KENN PROPERTY HOLDINGS, LLC (hereinafter collectively called “Obligor”), by THE BANK OF LAS VEGAS (hereinafter, together with its successors and assigns, called “Lender”), the undersigned, Mt. Kenn Nursing, LLC (hereinafter called “Guarantor”), hereby, jointly and severally if more than one, unconditionally guarantees the full and prompt payment, observance and performance when due, whether at the stated time, by acceleration or otherwise, of all obligations of Obligor to Lender, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, whether or not of the same or similar class or of like kind to any indebtedness incurred contemporaneously with the execution of this Guaranty, and whether now or hereafter existing, or due or to become due, including without limitation, the following:

 

(a)                                  Any and all amounts owed by Obligor under, in connection with, and/or pursuant to the indebtedness evidenced by that certain Promissory Note of even date herewith, in the original principal sum of Three Million One Hundred Seventy-Five Thousand Two Hundred and No/100 Dollars ($3,175,200.00) (the “Note”), with interest thereon according to the provisions thereof, and all obligations of Obligor thereunder, in connection therewith and/or pursuant to any and all agreements and other documents in connection therewith; and

 

(b)                                 All sums advanced or expenses or costs paid or incurred (including without limitation reasonable attorneys’ fees and other legal expenses) by Lender pursuant to or in connection with the Note or any agreements and other documents in connection therewith plus applicable interest on such sums, expenses or costs; and

 

(c)                                  Any extensions, modifications, changes, substitutions, restatements, renewals or increases or decreases of any or all of the indebtedness referenced above; and

 

(d)                                 Any and all other indebtedness, obligations and liabilities of any kind, of Obligor to Lender, now or hereafter existing, absolute or contingent, joint and/or several, due or not due, secured or unsecured, arising by operation of law or otherwise, direct or indirect, including without limitation indebtedness, obligations and liabilities of Obligor to Lender as a member of any partnership, syndicate or association or other group and whether incurred by Obligor as principal, surety, endorser, guarantor, accommodation party or otherwise, and any obligations which give rise to an equitable remedy for breach of performance if such breach gives rise to an obligation by Obligor to pay Lender.

 

2.                                       All of the obligations described in paragraph 1, above, shall be referred to hereafter as the “Liabilities”.  In the event any of the Liabilities shall not be paid or performed according to their terms, Guarantor, shall immediately pay, perform or cause the performance of the same, this Guaranty being a guarantee of full payment and performance and not of collectibility and in no way conditional or contingent.  This Guaranty is an absolute, unconditional and continuing guarantee the Guarantor being jointly and severally liable with the Obligor and is in no way conditioned upon any requirement that Lender first attempt to collect 

 

 

payment or seek performances of any of the Liabilities from Obligor or any other obligor or guarantor, or resort to any other security or other means of obtaining payment or performance of any of the Liabilities, or upon any other contingency whatsoever.

 

3.                                       Guarantor further agrees to pay all expenses (including reasonable attorneys’ fees and legal expenses) paid or incurred by Lender in endeavoring to collect the Liabilities, or any part thereof, and in enforcing or defending this Guaranty, whether or not a lawsuit is commenced.

 

4.                                       Guarantor represents and warrants that Guarantor is either financially interested in Obligor or will receive other material economic benefits as a result of any loan(s), leases(s) or other financial accommodation(s) made or granted to Obligor by Lender from time to time.  Guarantor further represents and warrants that Guarantor is willing to enter into this Guaranty as a material inducement to Lender to extend loan(s) or other financial accommodation(s), or to enter into lease(s), from time to time to or with Obligor, and acknowledges that Lender would not be willing to extend any such loan(s) or other financial accommodation(s) or enter into such lease(s) absent this Guaranty.  In any community property state, if Guarantor is married, Guarantor’s promise is made for the benefit of Guarantor’s marital community.

 

5.                                       Guarantor agrees that the occurrence of any of the following events shall constitute a default under this Guaranty:  (a) the failure of Guarantor to perform or observe any obligation under this Guaranty or (b) the death, incompetency, dissolution or insolvency of Obligor or Guarantor or any other guarantor of any of the Liabilities, or (c) the inability of Obligor or Guarantor or any other guarantor of any of the Liabilities to pay debts as they mature, or (d) an assignment by Obligor or Guarantor or any other guarantor of any of the Liabilities for the benefit of creditors, or (e) the institution of any proceeding by or against Obligor or Guarantor or any other guarantor of any of the Liabilities (under the Bankruptcy Code or otherwise) seeking to adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or seeking the appointment of a receiver, trustee or custodian for itself or for all or a substantial part of its property unless such petition and the case or proceeding initiated thereby are dismissed within thirty (30) days from the date of such filing, or (f) the institution by Guarantor or any other person or entity of any liquidation, dissolution or reorganization proceedings with respect to Guarantor, or (g) the default by Obligor under any other agreement or document concerning or relating to the Liabilities, or (h) the default by Guarantor under the terms of any other obligation of Guarantor to Lender, or (i) any representation or warranty contained herein or in any other document delivered by or on behalf of Guarantor or Obligor to Lender shall be false or misleading in any material respect, or (j) there shall be a material default or event of default under any other agreement or document securing or guaranteeing any of the obligations secured by this Guaranty, or (k) if Guarantor is a corporation, the sale, pledge or assignment by the shareholders of Guarantor of any shares of the stock of Guarantor without the prior written consent of Lender; the transfer of Guarantor’s assets not in the ordinary course of the Guarantor’s business; the merger or consolidation of Guarantor with another company or entity; the liquidation of Guarantor; or the issuance by Guarantor of any new stock or warrants, or the transfer of issued and outstanding treasury stock or warrants of Guarantor, or (l) if Guarantor is a partnership or joint venture, the sale, pledge, transfer or assignment by any of the partners or joint venturers of Guarantor of any of their partnership or joint venture interest in Guarantor; the withdrawal of any general partner(s) or joint venturer(s); or the admittance of any additional partner(s) or joint venturer(s) into Guarantor without the prior 

 

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written consent of Lender.  Upon and after the occurrence of a default hereunder, the Liabilities shall be automatically accelerated and shall become immediately due and payable by Guarantor, or Guarantor’s successor or estate, without presentment, demand, protest, or further notice of any kind, all of which are hereby expressly waived by Guarantor.

 

6.                                       Guarantor further agrees that this Guaranty shall continue to be effective or shall be reinstated, as the case may be, if at any time payment to or for the benefit of Lender of the Liabilities, or any part thereof, is rescinded or must otherwise be returned by Lender due to the insolvency, bankruptcy or reorganization of Obligor or otherwise, all as though such payment to or for the benefit of Lender had not been made.

 

7.                                       Lender may, without demand or notice of any kind, at any time when any amount shall be due and payable hereunder by Guarantor, appropriate and apply toward the payment of such amount, and in such order of application as Lender may from time to time elect, any property, balances, credits, deposits, accounts, instruments or moneys of Guarantor in the possession or control of Lender for any purpose.

 

8.                                       This Guaranty shall be a continuing, absolute and unconditional guaranty of payment and performance and not of collectibility and shall remain in full force and effect as to Guarantor, subject to discontinuance only as follows:  Guarantor, or any person duly authorized and acting on behalf of Guarantor, may give written notice to Lender of discontinuance of this Guaranty, but no such notice shall be effective in any respect until it is actually received by Lender and no such notice shall affect or impair the obligations hereunder of Guarantor with respect to any Liabilities existing at the date of receipt of such notice by Lender (or any Liabilities required or permitted to be advanced by Lender on or after such date), or for renewals or extensions of such Liabilities made after Lender receives Guarantor’s notice, or any interest thereon or any expenses paid or incurred by Lender in endeavoring to collect such Liabilities, or any part thereof, or in enforcing this Guaranty against Guarantor.  Any such notice of discontinuance by or on behalf of any Guarantor shall not affect, impair or release the obligations hereunder of any other guarantor with respect to any of the Liabilities.

 

9.                                       If requested by Lender, Guarantor hereby agrees to provide Lender, within 90 days after the end of each calendar year a financial statement prepared in accordance with generally accepted accounting principles, and within thirty (30) days of filing, a certified copy of Guarantor’s most recent federal tax return, and concurrently therewith a certificate to the effect that such Guarantor is not aware of any condition or event which constitutes a default under this Guaranty, or under any notes or other obligations of Guarantor or which, with the mere passage of time or notice, or both, would constitute a default under this Guaranty.

 

10.                                 Lender may at any time and from time to time, without the consent of, or notice to, Guarantor, and without affecting, impairing or releasing the obligations of Guarantor hereunder, do any or all of the following:  (a) retain or obtain a security interest in any property to secure any of the Liabilities or any obligations hereunder, (b) retain or obtain the primary or secondary liability of any party or parties, in addition to Guarantor, with respect to any of the Liabilities, (c) renew, extend (including extensions beyond the original term), modify, alter, change the interest rate of, release or discharge any of the Liabilities, (d) settle, release or compromise any liability of any other guarantor of any of the Liabilities or any liability of any nature of any other party or parties with respect to the Liabilities or any security therefor, (e) 

 

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accept partial payments of the Liabilities, (f) settle, release (by operation of law or otherwise), compound, compromise, collect or liquidate any of the Liabilities and any property securing any of the Liabilities, (g) consent to the transfer of any property securing any of the Liabilities, (h) resort to Guarantor for payment of any of the Liabilities, whether or not Lender shall have resorted to any property securing any of the Liabilities or any obligation hereunder or shall have proceeded against any other guarantor or any other party primarily or secondarily liable on any of the Liabilities, (i) make any other changes in its agreements with Obligor, and (j) stop lending money or extending other credit to Obligor.

 

11.                                 Any amount received by Lender from whatsoever source and applied by it to the payment of the Liabilities may be applied in such a manner as provided in the Loan Agreement executed of even date herewith.

 

12.                                 Guarantor is now adequately informed of Obligor’s financial condition, and Guarantor agrees to keep so informed.  Guarantor agrees that Lender has no obligation to provide Guarantor with any present or future information concerning the financial condition of Obligor.  Guarantor has not relied on financial information furnished by Lender in deciding to execute this Guaranty.

 

13.                                 Guarantor hereby agrees that any debt of Obligor to Guarantor is expressly subordinate to the right of Lender to payment of the Liabilities, and that Lender shall be entitled to full payment of all of the Liabilities prior to the exercise by Guarantor of any rights to payment or performance of any debt which the Obligor may owe Guarantor.  Guarantor assigns to Lender all rights Guarantor may have in any proceeding under the Federal Bankruptcy Code or any receivership or insolvency proceeding of Obligor, including all rights of Guarantor to be paid by Obligor.  This assignment does not prevent Lender from enforcing Guarantor’s obligations hereunder in any way.

 

14.                                 Guarantor hereby expressly waives: (a) notice of the acceptance of this Guaranty, (b) notice of the existence or creation of all or any of the Liabilities, (c) presentment, demand, notice of dishonor, protest, and all other notices whatsoever, (d) all diligence in collection or protection of or realization upon the Liabilities or any part thereof, any obligation hereunder, or any security for any of the foregoing, (e) all defenses based on suretyship or impairment of collateral, and (f) all events and circumstances which might otherwise constitute a defense or discharge of the obligations of Obligor, Guarantor or any other guarantor.  Guarantor shall not be released or discharged, either in whole or in part, by Lender’s failure to perfect, delay in perfection or failure to continue the perfection of any security interest in any property that secures any of the Liabilities or any obligation of Guarantor hereunder, or to protect the property covered by any such security interest.

 

15.                                 Lender may, without notice to Guarantor or Obligor of any kind, sell, assign, or transfer all or any of the Liabilities, and in such event each and every immediate and successive assignee, transferee, or holder of all or any of the Liabilities shall have the right to enforce this Guaranty, by suit or otherwise, for the benefit of such assignee, transferee, or holder, as fully as if such assignee, transferee or holder were herein by name specifically given such rights, powers and benefits.  Lender shall have an unimpaired right, prior and superior to that of any such assignee, transferee or holder, to enforce this Guaranty for the benefit of Lender as to so much of the Liabilities as it has not sold, assigned, or transferred.

 

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16.                                 No delay on the part of Lender in the exercise of any right or remedy shall operate as a waiver thereof, and no single or partial exercise by Lender of any right or remedy shall preclude other or further exercise thereof or the exercise of any other right or remedy.

 

17.                                 No action of Lender permitted hereunder shall in any way affect, impair or release this Guaranty.

 

18.                                 For purposes of this Guaranty, Liabilities shall include all obligations of Obligor to Lender stated herein, notwithstanding any right or power of Obligor or anyone else to assert any claim or defense as to the payment or performance of such Liabilities, and no such claim or defense shall affect, impair or release the obligations of Guarantor hereunder.

 

19.                                 This Guaranty shall be binding upon Guarantor and the heirs, legal representatives, successors and assigns of Guarantor.  If more than one party shall execute this Guaranty, the term “Guarantor” shall mean all parties executing this Guaranty, and all such parties shall be jointly and severally obligated hereunder.

 

20.                                 As further consideration for the loan(s), lease(s), or other financial accommodation(s) by Lender to Obligor and as a material inducement to Lender to make or enter into the loan(s), lease(s), or other financial accommodation(s) and accept this Guaranty, and notwithstanding anything to the contrary contained in this Guaranty or any other document delivered in connection with this Guaranty, Guarantor hereby irrevocably waives, disclaims and relinquishes any and all claims, rights or remedies which Guarantor may now have or hereafter acquire against Obligor that arise in connection with this Guaranty and/or the performance by Guarantor hereunder, including without limitation any claim, remedy or right of subrogation, reimbursement, exoneration, contribution, indemnification, or participation in any claim, right or remedy of Lender against Obligor or any security which Lender now has or hereafter acquires, whether or not such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise.

 

21.                                 All notices pursuant to this Guaranty shall be in writing and shall be directed to the addresses set forth herein or such other address as may be specified in a notice given in accordance with the requirements of this paragraph.  Except as otherwise specifically provided herein, notices shall be deemed to be given three (3) days after mailing by certified or registered mail, return receipt requested, or one (1) business day after deposit with a recognized overnight courier, or when personally delivered to and received at the required address.

 

22.                                 In the event any provision contained in this Guaranty is invalid, illegal, or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired.

 

23.                                 The Guarantor hereby waives the right to require the Holder of the obligations hereby guaranteed to take action against the Debtor as provided in O.C.G.A. § 10-7-24.

 

24.                               THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH FEDERAL LAW AND THE SUBSTANTIVE, AND NOT THE CONFLICT LAWS OF THE STATE OF NEW MEXICO, EXCEPT AND 

 

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ONLY TO THE EXTENT OF PROCEDURAL MATTERS RELATED TO THE PERFECTION AND ENFORCEMENT OF LENDER’S RIGHTS AND REMEDIES AGAINST THE PROPERTY, WHICH MATTERS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF GEORGIA.  HOWEVER, IN THE EVENT THAT THE ENFORCEABILITY OR VALIDITY OF ANY PROVISION OF THIS GUARANTY IS CHALLENGED OR QUESTIONED, SUCH PROVISION SHALL BE GOVERNED BY WHICHEVER APPLICABLE STATE OR FEDERAL LAW WOULD UPHOLD OR WOULD ENFORCE SUCH CHALLENGED OR QUESTIONED PROVISION.  THE LOAN TRANSACTION WHICH IS EVIDENCED BY THE NOTE AND THIS GUARANTY HAS BEEN APPLIED FOR, CONSIDERED, APPROVED AND MADE, AND ALL NECESSARY LOAN DOCUMENTS HAVE BEEN ACCEPTED BY LENDER IN THE STATE OF NEW MEXICO.

 

GUARANTOR, AND LENDER BY ACCEPTANCE OF THIS GUARANTY, EACH HEREBY WAIVE, TO THE EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY ACTION UNDER OR IN ANY WAY CONNECTED WITH THIS GUARANTY AND IN NO EVENT SHALL LENDER BE LIABLE FOR PUNITIVE OR CONSEQUENTIAL DAMAGES.

 

IN WITNESS WHEREOF, the undersigned has executed this Guaranty as of the date written below.

 

	
November   4, 2011.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Mt. Kenn Nursing, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Martin Brew
    	
(L.S.)
    
	
 
    	
Martin   Brew, Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
Address of Guarantor:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

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