Document:

Exhibit 10.39

 

FIRST AMENDMENT TO

LOAN AGREEMENT

AND INDENTURE OF FIRST MORTGAGE

 

	
 
    	
 
    	
Doc 12002046636
    
	
 
    	
 
    	
Bk 8391
    
	
 
    	
 
    	
Pg 399-413
    
	
 
    	
 
    	
DATE 03/27/02 14:05:50
    
	
 
    	
 
    	
Filing Fee $41.00
    
	
 
    	
 
    	
Documentary Tax $0.00
    
	
 
    	
Among
    	
State of Oklahoma
    
	
 
    	
 
    	
County of Oklahoma
    
	
 
    	
 
    	
Oklahoma County Clerk
    
	
 
    	
 
    	
Carolynn Caudill
    

 

OKLAHOMA COUNTY INDUSTRIAL AUTHORITY,

a public trust

 

and

 

WESTLAKE NURSING HOME, L.P.,

an Oklahoma limited partnership

 

and

 

BANK ONE TRUST COMPANY, N.A., as Trustee

Oklahoma City, Oklahoma

 

000113

 

	
TREASURER’S ENDORSEMENT
    	
 
    	
 
    
	
I hereby certify that I received $ [ILLEGIBLE] 
    	
 
    	
 
    
	
Therefore is payment of mortgage tax on the within mortgage,
    	
 
    	
 
    
	
Dated this 27 day of MAR ,2002.
    	
 
    	
 
    
	
FORREST BUTCH FREEMAN, County Treasurer
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By
    	
Pauls wells
    	
, Deputy [ILLEGIBLE]
    	
 
    	
 
    
					

 

The interest of the OKLAHOMA COUNTY INDUSTRIAL AUTHORITY in this First Amendment to Loan Agreement and Indenture of First Mortgage has been assigned to Bank One Trust Company, N.A., as Trustee

 

	
 
    	
WHEN RECORDED MAIL ID
    	
 
    
	
NAME
    	
 
    	
G. Blaine Schwabe, III
    	
 
    
	
ADDRESS
    	
 
    	
211 N. Robinson, 14th Floor
    	
 
    
	
CITY &
    	
 
    	
Two Leadership Square
    	
 
    
	
STATE
    	
 
    	
Oklahoma City, OK 73102
    	
 
    
					

 

 

FIRST AMENDMENT TO LOAN AGREEMENT

AND INDENTURE OF FIRST MORTGAGE

 

THIS AGREEMENT is entered into as of the 1st day of September, 2001, by and among WESTLAKE NURSING HOME, L.P., an Oklahoma limited partnership (hereinafter called the “Borrower”), and the OKLAHOMA COUNTY INDUSTRIAL AUTHORITY, a public trust (hereinafter called the “Authority”) and BANK ONE TRUST COMPANY, N.A., as Trustee (hereafter called the “Trustee”).

 

WITNESSETH:

 

WHEREAS, the Oklahoma County Industrial Authority is an Oklahoma public trust duly created and existing under Title 60, Oklahoma Statutes 1991, Section 176-180.3, inclusive, as amended (the “Act”); and

 

WHEREAS, the Borrower has heretofore acquired, constructed, furnished and equipped a 100-bed intermediate care nursing home facility (the “Development”) located in Oklahoma County, State of Oklahoma, and the cost of such acquisition, construction, and equipping and expenses incidental thereto was $4,000,000; and

 

WHEREAS, the Borrower has previously received a loan from the Authority in the aggregate principal amount of $4,000,000 to finance the costs of the Development and the costs related to such financing pursuant to a Loan Agreement and Indenture of First Mortgage by and among the Borrower, the Authority and the Trustee dated as of September 1, 1986 and recorded in Book 5577 at Pages 541-611, inclusive in the records of the Oklahoma County Clerk (the “Loan Agreement”); and

 

WHEREAS, the Authority has previously issued its Industrial Development Revenue Bonds, 1986 Series A (Westlake Nursing Center Project) (the “1986 Bonds”), in the aggregate principal amount of $4,000,000 pursuant to a Bond Indenture between the Trustee and the Authority dated as of September 1, 1986 (the “Bond Indenture”), and intends to issue its Industrial Development Ratable Share Revenue Bonds, Series 2001 (Westlake Nursing Center Project) (hereinafter referred to as the “Series 2001 Ratable Share Bonds”), pursuant to a First Supplemental Bond Indenture dated as of September 1, 2001, and exchange the Series 2001 Ratable Share Bonds for all the outstanding 1986 Bonds pursuant to a First Revised Amended Plan of Reorganization of Westlake Nursing Home, L.P., filed October 31, 2001, as modified by two modifications (non-material) filed on December 19 and 20, 2001, and confirmed by Order of the United States Bankruptcy Court for the Western District of Oklahoma on December 20, 2001 (collectively the “Plan”); and

 

WHEREAS, the Authority has found and determined that the restructuring of the indebtedness evidenced by the 1986 Bonds will further the purposes of the Act and will serve the public interest by assisting in the development of industry in Oklahoma County, State of Oklahoma, which purposes are authorized and proper functions of me Authority.

 

2

 

NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS CONTAINED HEREIN, THE BORROWER, THE AUTHORITY AND THE TRUSTEE HEREBY AGREE AND COVENANT TO AMEND THE LOAN AGREEMENT TO READ IN PART AS FOLLOWS:

 

A.      Article I, Section 101, of the Loan Agreement is amended by deleting therefrom the following definitions and all references thereto in the Loan Agreement:

 

1.        Administrative Payments

2.        Debt Service Reserve Fund

3.        Letter of Credit

4.        Letter of Credit Bank

5.        Underwriter

 

B.       Article I, Section 101 of the Loan Agreement is further amended by amending the following definitions to read as follows:

 

“Authorized Owner Representative” means Ronald E. Lusk, president of the general partner of the Owner, or any other person at the time designated to act on behalf of the Owner by written certificate furnished to the Authority and the Trustee containing the specimen signature of such person and signed on behalf of the Owner by an authorized representative. Such certificate may designate an alternate or alternates.

 

“Bond Counsel to the Authority” shall mean an attorney or firm of attorneys of nationally recognized standing in matters pertaining to the issuance of bonds by states and their political subdivisions, appointed by the Authority.

 

“Bonds” means the Oklahoma County Industrial Authority, Industrial Development Ratable Share Revenue Bonds, Series 2001 (Westlake Nursing Center Project), issued by the Authority, dated as of September 1, 2001, maturing September 1, 2016, which are from time to time outstanding under the Indenture.

 

“Indenture” means the Bond Indenture, dated as of September 1, 1986, as amended and supplemented by a First Supplemental Bond Indenture dated as of September 1, 2001, both between the Trustee and the Authority, and all amendments and supplements thereto from time to time executed.

 

“Loan Agreement” means the Loan Agreement and Indenture of First Mortgage, dated as of September 1, 1986, as amended and supplemented by a First Amendment to Loan Agreement dated as of September 1, 2001, both by and among the Authority, the Owner and the Trustee, and such term shall include any further instrument supplementing or amending such Loan Agreement.

 

“Owner” means Westlake Nursing Home, L.P., an Oklahoma limited partnership having Westlake Management Company, a Texas corporation, as the General Partner; and permitted successors in ownership of the Project pursuant to Section 432 of this Loan Agreement.

 

3

 

“Owner’s Note” means the Amended and Restated First Mortgage Promissory Note dated as of September 1, 2001 in the face principal amount of $2,800,000, made payable to the Authority and assigned to the Trustee as set forth therein and issued by the Owner under and pursuant to the terms of this Loan Agreement in the form attached hereto as Schedule “B” and incorporated herein by reference.

 

“Trust Estate” means the property conveyed to the Trustee pursuant to the First and Third Granting Clauses of the Indenture.

 

“Trustee” shall mean Bank One Trust Company, N.A., as successor to The Liberty National Bank and Trust Company of Oklahoma City, Oklahoma, and its successors, and any corporation resulting from or surviving any consolidation or merger to which it or its successors may be a party and any successor at the time serving as successor trustee hereunder.

 

C.    Article III, Section 301 of the Loan Agreement is amended in its entirety to read as follows:

 

“SECTION 301.  Authorization, Terms, Conditions, and Form of Owner’s Note. The Owner hereby authorizes the issuance of the Owner’s Note in the principal amount of $2,800,000, dated as of September 1, 2001, to be executed by Westlake Management Company, a Texas corporation, as the general partner acting for and on behalf of the Owner, and to be in the form attached to this Loan Agreement as Schedule “B”. On the date of delivery of the Bonds the Owner shall deliver the Owner’s Note to the Trustee pursuant to the direction of the Authority.”

 

D.    Article VI, Section 603 of the Loan Agreement is amended in its entirety to read as follows:

 

“SECTION 603.  Notice. Any notice, demand, direction, request or other instrument authorized or required by this Loan Agreement to be given or filed with the Authority, the Owner or Trustee shall be deemed to have been sufficiently given or filed for all purposes of this Loan Agreement if and when sent by registered mail:

 

(i)                    To the Authority at Suite 1900 First National Center West, Oklahoma City, Oklahoma (73102).

 

(ii)                    To the Owner c/o WestLake Management Company,c/o The Phoenix Corporation, 801 East Campbell Rd., Suite 345, Richardson, TX 75081, ATTN: Ronald E. Lusk..

 

(iii)              To the Trustee at P.O. Box 25848, Oklahoma City, Oklahoma (73125), ATTN: Corporate Trust Department.”

 

E.     Schedule A of the Loan Agreement is hereby restated in its entirety as follows:

 

4

 

“SCHEDULE A

 

DESCRIPTION OF REAL AND PERSONAL PROPERTY

 

Real Property

 

The following described real property, all located within Oklahoma County, State of Oklahoma, and being legally described as follows:

 

A part of the Northeast Quarter (NE/4) of Section 16, Township 13 North, Range 4 West of the Indian Meridian in the City of Oklahoma City, Oklahoma County, Oklahoma, said part being more particularly described as follows:

 

Original Tract: Beginning at a point located South 00°28’33” East a distance of 503.87 feet and North 89°31’27” East a distance of 30.00 feet from the Northwest corner of the said NE/4; thence from said POINT OF BEGINNING South 00°28’33” East a distance of 293.65 feet to a point on a curve to the right, said curve having a central angle of 15°52’38” and a radius of 205.65 feet; thence along the arc of said curve in a Southwesterly direction a distance of 56.99 feet; thence South 89°51’09” East a distance of 407.84 feet; thence North 00°28’33” West a distance of 350.00 feet; thence North 89°51’09” West a distance of 400.00 feet to the point of beginning, containing 140,137.93 square feet more or less, OR 3.2171 Acres more or less; and

 

Additional Tract: Beginning at a point located South 00°28’33” East a distance of 503.87 feet and North 89°31’27” East a distance of 30.00 feet from the Northwest corner of said NE/4; thence East a distance of 400.00’; thence East 350.00’; thence South 314.50’; thence West 350.00’; thence North 314.50’ to the point of beginning, containing 110,068.49 square feet more or less, OR 2.5268 Acres more or less.

 

Personal Property

 

The personal property covered under this instrument consists of all buildings, structures, fixtures, improvements and personal property, whether now-owned or hereafter acquired by Westlake Nursing Home Limited Partnership, an Oklahoma limited partnership, and its successors or assigns, together with all other real estate and all accounts, contract rights, inventory, rents and income, general intangibles (including certificate of need and/or license(s) and related rights), fixtures, furnishings and equipment whether attached to the above-described Real Property or not and whether now-owned or hereafter acquired by Westlake Nursing Home Limited Partnership, an Oklahoma limited partnership, and its successors or assigns.”

 

F.      Schedule B of the Loan Agreement is hereby amended in its entirety to read as follows:

 

5

 

“SCHEDULE B

 

AMENDED AND RESTATED

FIRST MORTGAGE PROMISSORY NOTE

 

	
September 1, 2001
    	
$2,800,000.00
    

 

FOR VALUE RECEIVED, the undersigned, WESTLAKE NURSING HOME, L.P., an Oklahoma limited partnership (“Maker”) promises to pay to the order of the Trustees of the OKLAHOMA COUNTY INDUSTRIAL AUTHORITY (together with their successors and assigns, the “Payee”), their successors and assigns, at BANK ONE TRUST COMPANY, N.A., Oklahoma City, Oklahoma (the “Trustee”), whose mailing address is Post Office Box 25848, Oklahoma City, Oklahoma (73125), or any other place as the Payee may designate to Maker in writing from time to time, the principal sum of Two Million Eight Hundred Thousand Dollars ($2,800,000), together with interest thereon from and after September 1, 2001, at the rate of ten and one-quarter percent per annum (10.25%), payable in the manner and on the dates set forth herein, in lawful money of the United States of America, which shall be at the time of payment legal tender for all debts, public and private.

 

Principal and interest shall be payable in monthly installments commencing March 27, 2002, and continuing on the 27th day of each calendar month thereafter through and including August 27, 2016, equal to (1) a minimum monthly payment of $17,500, plus (2) 25% of Maker’s net cash flow (i.e. earnings before interest, taxes, depreciation and amortization), up to a maximum additional payment of $7,500 per month, for a total maximum monthly payment of $25,000 per month. Any amount paid less than the full $25,000 per month shall bear interest from and after the due date until paid as set forth above; PROVIDED, that in any event (regardless of the amount of net cash flow available in any month or cumulatively), the Maker shall pay no less than a total of $100,000 within each 120-day period during the term hereof. All unpaid principal and interest shall be due and payable in full on August 27, 2016. All payments hereunder shall be applied by the Trustee as set forth in the Bond Indenture dated as of September 1, 1986, as amended and supplemented by the First Supplemental Bond Indenture dated as of September 1, 2001, both between the Payee and the Trustee.

 

The acceptance of any partial payment by the Payee, after the time when it becomes due as herein set forth, shall not be held to establish a custom, or waive any rights of the Payee to enforce prompt payment of this Note.

 

The Maker hereby:

 

(a)                         Waives demand, presentment for payment, protest, notice of nonpayment or protest, notice of dishonor and diligence in collection;

(b)                        Agrees that the maturity hereof may be from time to time extended for any term or terms without discharging the liability of the Maker; and

(c)                         Agrees that if this Note be not paid at maturity (whether by acceleration, extension or otherwise) and be placed with an attorney or attorneys for collection, the Maker will pay, in addition to unpaid principal and accrued interest, a reasonable attorney fee.

 

None of the rights or remedies of the Payee are to be deemed waived or affected by failure to exercise or delay in exercising same. All remedies conferred by the Maker upon the Payee in this Note or any other instrument or agreement securing this Note shall be cumulative, and none is exclusive and such remedies may be exercised concurrently or consecutively at the Payee’s option. This instrument shall be

 

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governed as to validity, enforcement, interpretation, construction, effect and in all other respects by the laws of the State of Oklahoma.

 

The outstanding principal amount of this Note may be prepaid without notice, in whole or in part, at the option of the Maker, on any September 1 and March 1 on or prior to maturity, at par plus accrued interest to the prepayment date.

 

This Note is issued pursuant and subject to, and payment of principal and interest on this Note are secured by, a Loan Agreement and Indenture of First Mortgage (herein called “Loan Agreement”), dated as of September 1, 1986 as amended by a First Amendment to Loan Agreement and Indenture of First Mortgage (herein called the “First Amendment”) dated as of September 1, 2001, each by and among the Payee, the Maker and the Trustee (which Loan Agreement and First Amendment are herein sometimes collectively referred to as the “Agreement”). All terms defined in the Agreement are incorporated herein in full.

 

This Note is issued for the purpose of refinancing a Project Loan made to finance part of the cost of acquiring, constructing, developing and equipping a 100-bed intermediate care nursing home facility (the “Project”) owned and operated by the Maker and mortgaged, pledged and assigned under the Agreement.

 

Reference is hereby made to the Agreement for a more complete description of the mortgaged, pledged and assigned Project, the nature and extent of the security for this Note, a statement of the terms and conditions on which this Note is issued and secured, the rights, duties and obligations of the Maker, the Trustee, the Payee, the owners and holders of the Industrial Development Ratable Share Revenue Bonds, Series 2001 (Westlake Nursing Center Project) (the “Series 2001 Ratable Share Bonds”), issued by the initial Payee hereof, and the Project Documents securing and relating to payment of such Series 2001 Ratable Share Bonds and this Note.

 

The interest rate provided for hereinabove shall be computed on the balance of the principal amount hereof from time to time outstanding and unpaid, based on a three hundred sixty (360) day year consisting of twelve 30-day months at the aforesaid rate.

 

If any installment of principal and interest on this Note or any part of any such installment be not paid within five (5) days of the date when due (whether by maturity, acceleration or otherwise) the past due sum shall bear interest at an interest rate of four percent (4%) per annum from its due date until paid; all past due sums to be paid as a condition to the curing of any default hereunder. During the existence of any such default, the Payee may apply payments received on any amount due hereunder, or may apply such payments under the terms of any instrument now or hereafter securing this Note, as the Payee may determine in accordance with the terms of the Loan Agreement. The Payee may collect a late charge, not to exceed an amount equal to one-half of one percent (1/2 of 1 %) of each payment which is not paid within fifteen (15) days from the due date hereof, for the purpose of covering expenses involved in the handling of delinquent payments. If any installment of principal or interest of this Note be not paid when due or if any Default identified in the Loan Agreement occurs, the Payee may, without notice to any party, declare the entire unpaid principal and all accumulated interest on this Note to be immediately due and payable.

 

If any due date for payment of any installment of principal or interest as stipulated above shall not be a Business Day, then such date for payment of principal or interest shall be the immediately preceding Business Day.

 

7

 

It is the intent of the Payee and Maker to conform strictly to the usury laws of the State of Oklahoma, and any interest on the principal sum hereof in excess of that allowed by such usury laws shall be subject to reduction to the maximum amount of interest allowed under such laws. If any interest in excess of the maximum amount of interest allowable by such usury laws is inadvertently paid to the Payee, at any time, such excess interest shall be refunded by the Payee to the party entitled to the same after receiving notice of excess interest.

 

The records of the Payee shall be prima facie evidence of the amount owing on this Note.

 

IN WITNESS WHEREOF, the Maker has caused this instrument to be executed by its general partner this       day of March, 2002, but shall be effective as of the day and month first above written.

 

	
 
    	
 
    	
WESTLAKE NURSING HOME, L.P.,
    
	
 
    	
 
    	
an Oklahoma Limited Partnership
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By its General Partner:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
WESTLAKE MANAGEMENT COMPANY
    
	
 
    	
 
    	
a Texas Corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ATTEST:
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Ronald E. Lusk, President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Secretary
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(Seal)
    	
 
    	
 
    
						

 

(FORM OF ASSIGNMENT)

 

For value received, the Trustees of the Oklahoma County Industrial Authority assign and transfer this Note unto Bank One Trust Company, N.A., Oklahoma City, Oklahoma, as Trustee for the registered owners of the Series 2001 Ratable Share Bonds herein referred to.

 

DATED: March         , 2002

 

 

	
 
    	
OKLAHOMA COUNTY INDUSTRIAL AUTHORITY
    
	
(SEAL)
    	
 
    
	
 
    	
By:
    	
 
    

 

8

 

	
 
    	
 
    	
Chairman of Trustees
    
	
ATTEST:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Assistant Secretary”
    	
 
    	
 
    

 

 

G.        All of the remaining provisions, covenants, representation, warranties and agreements contained in the Loan Agreement are hereby incorporated by reference herein and this First Amendment to Loan Agreement and the Loan Agreement shall be taken, read and construed as one and the same document. The Borrower Note shall be and continue to be secured by the Loan Agreement as amended by this First Amendment to Loan Agreement.

 

H.       Except as otherwise defined or modified herein, all terms used in this First Amendment to Loan Agreement which are defined in the Loan Agreement shall have the same meanings given to such terms in the Loan Agreement.

 

I.         Except as amended by this First Amendment to Loan Agreement, the Loan Agreement shall continue in full force and effect and the Loan Agreement and this First Amendment to Loan Agreement shall be read, taken and construed as one and the same instrument.

 

J.         Notwithstanding the provisions of Article XV. H of the Plan, in the event of any inconsistency or conflict in any material regard between this First Amendment to Loan Agreement and the Plan, the Plan shall control and govern. In addition, in the event of any inconsistency or conflict between the terms and provisions of the Loan Agreement and this First Amendment to Loan Agreement, the terms and provisions of this First Amendment to Loan Agreement, shall control and govern.

 

9

 

IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed as of the day and year first above written.

 

	
 
    	
 
    	
WESTLAKE NURSING HOME, L.P.
    
	
 
    	
 
    	
an Oklahoma limited partnership
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Westlake Management Company,
    
	
 
    	
 
    	
 
    	
a Texas corporation, General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Ronald E. Lusk
    
	
ATTEST:
    	
 
    	
 
    	
Ronald E. Lusk, President
    
	
 
    	
 
    	
 
    
	
[ILLEGIBLE]
    	
 
    	
 
    
	
Secretary
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
“BORROWER”
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
OKLAHOMA COUNTY INDUSTRIAL AUTHORITY,
    
	
 
    	
 
    	
a public trust
    
	
ATTEST:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/ [ILLEGIBLE]
    
	
/s/ [ILLEGIBLE]
    	
 
    	
Chairman of Trustees
    
	
Assistant Secretary of Trustees
    	
 
    	
 
    
	
(SEAL)
    	
 
    	
 
    
	
 
    	
 
    	
“AUTHORITY”
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
BANK ONE TRUST COMPANY, N.A.
    
	
 
    	
 
    	
as Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ [ILLEGIBLE]
    
	
 
    	
 
    	
 
    	
Authorized Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
“TRUSTEE”
    

 

10

 

	
STATE OF OKLAHOMA
    	
)
    
	
 
    	
)   ss.
    
	
COUNTY OF OKLAHOMA
    	
)
    

 

The foregoing instrument was acknowledged before me this 18th day of March, 2002, by Richard Burpee, Chairman of Trustees of the Oklahoma County Industrial Authority, a public trust, on behalf of the trust.

 

 

	
 
    	
 
    	
/s/ [ILLEGIBLE]
    
	
 
    	
 
    	
Notary Public
    
	
 
    	
 
    	
 
    
	
My Commission Expires:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
9/9/2004
    	
 
    	
 
    

 

	
 

(SEAL)
    	

    	
PAULA G. FOSTER

Cleveland County

Notary Public in and for

State of Oklahoma

My commission expires             .
    	
 
    	
 
    

 

 

	
STATE OF OHIO
    	
)
    
	
 
    	
)   ss.
    
	
COUNTY OF DELAWARE
    	
)
    

 

The foregoing instrument was acknowledged before me this 20th day of March, 2002, by DONNA J. PARISI, an authorized officer, of. BANK ONE TRUST COMPANY, N.A., a national association, on behalf of said national banking association.

 

 

	
 
    	
 
    	
/s/ [ILLEGIBLE]
    
	
 
    	
 
    	
Notary Public
    
	
 
    	
 
    	
 
    
	
My Commission Expires:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
N/A
    	
 
    	
 
    	
[ILLEGIBLE]
    
	
 
    	
 
    	
[ILLEGIBLE]
    	
My commission has no   expiration date.
    
	
(SEAL)
    	
 
    	
 
    	
Section 147 03 R.C.
    

 

11

 

	
STATE OF TEXAS
    
	
 
    
	
COUNTY OF DALLAS
    

 

The foregoing instrument was acknowledged before me this 20 day of March 2002, by Ronald E. Lusk, as President of Westlake Management Company, a Texas corporation, on behalf of said corporation, general partner of Westlake Nursing Home, L. P., an Oklahoma limited partnership, on behalf of said limited partnership.

 

 

	
 
    	
 
    	
/s/ [ILLEGIBLE]
    
	
 
    	
 
    	
Notary Public
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
My Commission Expires:
    	
4/12/04
    	
 
    	

    	
SHANNA A. RAYMOND
    
	
 
    	
 
    	
Notary public, State of   Texas
    
	
(Seal)
    	
 
    	
My Commission Expires   04-12-04Exhibit 10.40

 

BOND PURCHASE AGREEMENT

 

$6,610,000

THE CITY OF SPRINGFIELD, OHIO

First Mortgage Revenue Bonds

(Eaglewood Property Holdings, LLC Project)

Series 2012A

 

and

 

$620,000

THE CITY OF SPRINGFIELD, OHIO

First Mortgage Revenue Bonds

(Eaglewood Property Holdings, LLC Project)

Taxable Series 2012B

 

	
 
    	
April 10,   2012
    	
 
    

 

The City of Springfield, Ohio

76 East High Street

Springfield, Ohio 45502

 

Attn: Mark Beckdahl, Director of Finance

 

Eaglewood Property Holdings, LLC

Two Buckhead Plaza

3050 Peachtree Road NW, Suite 355

Atlanta, Georgia 30305

 

Attn: Christopher F. Brogdon

 

Dear Ladies and Gentlemen:

 

The undersigned (the “Underwriter”) offers to enter into this Bond Purchase Agreement (this “Bond Purchase Agreement”) with The City of Springfield, Ohio (the “Issuer”), and Eaglewood Property Holdings, LLC, a Georgia limited liability company (the “Borrower”), which, upon acceptance of this offer by the Issuer and the Borrower, will be binding upon the Issuer, the Borrower and the Underwriter.  This offer is made subject to written acceptance hereof by the Issuer and the Borrower at or before 6:00 P.M., Eastern Time, on the date hereof, unless extended by agreement by the parties.

 

1

 

BACKGROUND AND INTRODUCTION.

 

Pursuant to a ordinance adopted by the Issuer on March 27, 2012 (the “Bond Ordinance”), and an Indenture of Trust, dated as of April 12, 2012 (the “Indenture”), between the Issuer and BOKF, NA, dba Bank of Oklahoma, as trustee (the “Trustee”), the Issuer expects to issue its: (i) $6,610,000 The City of Springfield, Ohio, First Mortgage Revenue Bonds (Eaglewood Property Holdings, LLC Project), Series 2012A (the “Series 2012A Bonds”); and (ii) $620,000 The City of Springfield, Ohio, First Mortgage Revenue Bonds (Eaglewood Property Holdings, LLC Project), Taxable Series 2012B (the “Series 2012B Bonds” and, together with the Series 2012A Bonds, the “Series 2012 Bonds”).  The Series 2012 Bonds will be issued, in book entry form only, on a pari  passu basis.  Interest on the Series 2012A Bonds is expected to be excludable from the gross income of the holders thereof for federal income tax purposes.

 

The Issuer will, pursuant to a Loan Agreement, dated as of April 12, 2012 (the “Loan Agreement”), lend the proceeds from the sale of the Series 2012 Bonds to Eaglewood Property Holdings, LLC, a Georgia limited liability company (the “Borrower”), which will use such proceeds to undertake a project (the “Project”) consisting of: (i) re-financing the costs of its acquisition of an 80-unit assisted living facility, which is located in Springfield, Ohio (the “Facility”), which the Borrower leases to Eaglewood Village, LLC, an affiliated entity (the “Operator”), pursuant to a Facility Lease, dated December 29, 2011 (as amended by a First Amendment to Facility Lease, dated as of April 12, 2012, the “Lease”); (ii) making certain initial deposits into the funds and accounts established under the Indenture, including a debt service reserve fund for the Series 2012 Bonds; and (iii) paying certain costs of issuance of the Series 2012 Bonds.

 

The Borrower will be required to make all of its payment obligations under the Loan Agreement (the “Loan Payments”) directly to the Trustee in such amounts as will enable the Trustee to pay, when due, the principal of, premium, if any, and interest on, the Series 2012 Bonds and all other amounts, fees, penalties, premiums, adjustments, expenses, counsel fees and other payments due pursuant to the terms of the Indenture.  The source of funds available to the Borrower to make the Loan Payments will be the revenues generated by the operation of the Facility (the “Gross Revenues”).

 

The Series 2012 Bonds will be special obligations of the Issuer, payable solely from the revenues, receipts, funds or moneys pledged therefor pursuant to, and from any amounts otherwise available under, the Indenture, all of which (except the Rebate Fund) will be held by the Trustee for the equal and ratable benefit of all holders of the Series 2012 Bonds.

 

Pursuant to a Guaranty Agreement, dated as of April 12, 2012 (the “AdCare Guaranty Agreement”), AdCare Health Systems, Inc. (“AdCare”), the Borrower’s ultimate corporate parent, will guarantee the prompt payment and performance, as and when due, of the Loan Payments, and the Borrower’s other obligations under the Loan Agreement.

 

As security for its obligations under the Loan Agreement, the Borrower will, pursuant to an Open-End Mortgage, Assignment of Leases and Rents and Security Agreement, dated as of April 12, 2012 (the “Security Agreement”): (i) grant the Trustee (subject to Permitted Encumbrances) a first lien on and security interest in all of the land, buildings and other improvements that constitute the Facility, and in and to the Lease Payments and all of the Borrower’s other personal property now or hereafter located in the Facility; and (ii) collaterally assign the Lease to the Trustee (the Lease and such other property being herein referred to collectively as the “Mortgaged Property”).

 

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As security for its obligations in respect of the Series 2012 Bonds, the Issuer will, pursuant to the Indenture, assign and pledge to the Trustee, for the equal and ratable benefit of all holders of the Series 2012 Bonds, all of the Issuer’s right, title and interest in, to and under the Loan Agreement, the AdCare Guaranty Agreement, and the Security Agreement (except for the “Reserved Rights” of the Issuer, such as the right to receive administrative fees, costs and expenses and certain notices, the right to give certain consents, and its rights to indemnification and to enforce public purpose covenants).

 

The exclusion of interest on the Series 2012A Bonds, from the gross income of the recipients thereof for federal income tax purposes, is based upon the Facility’s providing “residential rental property” as such term is defined in Section 142(d) of the Internal Revenue Code of 1986, as amended (the “Code”).  Certain conditions must be satisfied, and must continue to be satisfied, in order for such exclusion of interest to be effective.  Accordingly, the Borrower will enter into a Land Use Restriction Agreement, dated as of April 12, 2012 (the “Land Use Agreement”), in which the Borrower will covenant that it will cause the Facility to comply with the requirements of Section 142(d) of the Code, and that it will not knowingly take or permit any action to be taken that would adversely affect the exemption of interest on the Series 2012A Bonds from federal income taxation.

 

The Series 2012 Bonds will be limited obligations of the Issuer, payable solely from the revenues, receipts, funds or moneys pledged therefor, and from any amounts otherwise available under the Indenture for the payment thereof, including those derived under the Loan Agreement and the Security Agreement, and those on deposit in all funds and accounts held under the Indenture (except the Rebate Fund), all of which will be held by the Trustee for the equal and ratable benefit of all holders of the Series 2012 Bonds.  (The Indenture, the Loan Agreement, the Security Agreement, the Land Use Agreement, and the other documents delivered by or on behalf of the Issuer or the Borrower pursuant to the provisions of any of the Indenture, the Loan Agreement, or the Security Agreement are hereinafter sometimes referred to collectively as the “Transaction Documents”.)

 

Pursuant to a Continuing Disclosure Undertaking (the “Disclosure Agreement”), the Borrower and the Operator will each agree to provide certain financial information and operating data relating to it, annually, and to provide notices of the occurrence of certain enumerated events.

 

SECTION 1.   PURCHASE AND SALE OF THE SERIES 2012 BONDS

 

Based upon the terms and conditions and upon the representations herein set forth, the Underwriter hereby agrees to purchase from the Issuer, and the Issuer hereby agrees to sell and deliver to the Underwriter, for further sale by the Underwriter, on a best-efforts basis, all (but not less than all) of the $7,230,000 aggregate principal amount of the Series 2012 Bonds, which will have such maturities and bear interest at such rates as are set forth in Exhibit A attached hereto, for an aggregate purchase price of $6,974,133.00 ($7,230,000.00 for the Series 2012 Bonds, less (a) original issue discount of $114,882.00 and (b) an underwriter discount of $140,985.00 The Borrower has also agreed to pay an Underwriting and Marketing Fee to the Underwriter for services related to the offer and sale of the Series 2012 Bonds in the amount of $292,815.00.

 

The Underwriter agrees to sell the Series 2012 Bonds at no more than the initial offering prices or yields set forth in the Official Statement (as defined in Section 3 hereof).  The Underwriter reserves the right to change the initial sale prices or yields as the Underwriter shall deem necessary in connection with the sale of the Series 2012 Bonds and to offer and sell the Series 2012 Bonds to or with certain dealers (including

 

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dealers depositing the Series 2012 Bonds into unit investment trusts) and others at prices lower than the initial offering prices or yields set forth in the Official Statement.  The Underwriter also reserves the right (i) to over-allot or effect transactions that stabilize or maintain the market price of the Series 2012 Bonds at a level above that which might otherwise prevail in the open market, and (ii) to discontinue such stabilizing, if commenced, at any time.

 

SECTION 2.  DELIVERY OF THE SERIES 2012 BONDS AND CLOSING

 

At 10:00 a.m. (Eastern Time) on April 12, 2012, or at such other time or on such earlier or later date as to which we may mutually agree (the “Closing Date”), the Issuer will cause to be delivered to the Underwriter, at the offices of The Depository Trust Company, in New York, New York, or such other place as to which we may mutually agree, the Series 2012 Bonds in definitive or typewritten form (all the Series 2012 Bonds to be in fully registered form and in such authorized denominations, and shall be registered in such names, as the Underwriter may request at least three (3) business days prior to the Closing Date, duly executed and authenticated, and there will be delivered to the Underwriter at such offices, or to such other place as to which we may mutually agree, the other documents hereinafter mentioned.  It is anticipated that CUSIP identification numbers will be printed on the Series 2012 Bonds, but neither the failure to print such numbers on any Series 2012 Bond nor any error with respect thereto shall constitute cause for a failure or refusal by the Underwriter to accept delivery of the Series 2012 Bonds in accordance with the terms of this Bond Purchase Agreement.  On the Closing Date, the Underwriter will accept delivery of the Series 2012 Bonds and pay the purchase price of the Series 2012 Bonds to the Issuer in federal or other immediately available funds by wire or check.

 

SECTION 3.  OFFICIAL STATEMENT

 

(a)           Delivery and Use; 15c2-12 Representations.  The Borrower shall deliver or cause to be delivered to the Underwriter, at the sole expense of the Borrower, and promptly after the acceptance by the Issuer and the Borrower of this Bond Purchase Agreement (but in no event later than the date of the Closing), such number of copies of the Official Statement, which shall be dated the date of the Closing (the “Official Statement”), relating to the Series 2012 Bonds, as the Underwriter may reasonably request.  The Borrower shall also deliver to the Underwriter, at the sole expense of the Borrower, no later than seven (7) business days after the date of this Bond Purchase Agreement (or within such shorter period as may be required by the Underwriter in order to comply with the provisions of Rule 15c2-12 and other applicable security laws, rules and regulations), additional copies of the Official Statement in final form (including all documents incorporated by reference therein) and any amendment or supplement thereto, in such quantities as the Underwriter may reasonably request in order to comply with the obligations of the Underwriter pursuant to the rules of the Municipal Securities Rulemaking Board (the “MSRB”) and Rule 15c2-12.  The Issuer agrees to notify the Underwriter of any material changes that become known to the Issuer that relate to the Issuer and which might affect the accuracy and completeness of the Official Statement, and the Borrower agrees to notify the Underwriter of any material changes that become known to the Borrower and which might affect the accuracy and completeness of the Official Statement, in either case for a period of ninety (90) days after the date on which the Official Statement has been filed with the MSRB’s Electronic Municipal Market Access system (“EMMA”).

 

Promptly upon its receipt of the Official Statement, the Underwriter shall file the Official Statement, and any amendment and supplement thereto, with EMMA, and shall pay any fees required in connection

 

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therewith.  The Underwriter agrees to send to the MSRB or its designee, within the time required under Rule G-32 and all applicable rules of the MSRB the necessary copies of the Official Statement.

 

By its acceptance of this Bond Purchase Agreement, the Issuer and the Borrower, to the extent each is a party thereto, authorize the use, in connection with the sale of the Series 2012 Bonds, of copies of the Official Statement and the Transaction Documents.  The Issuer and the Borrower acknowledge and ratify the distribution by the Underwriter of the Official Statement in connection with the sale of the Series 2012 Bonds, and the Issuer and the Borrower hereby deem the Official Statement final.

 

SECTION 4.  REPRESENTATIONS AND AGREEMENTS OF THE UNDERWRITER

 

The Underwriter represents to and agrees with the Issuer and the Borrower that, as of the date hereof:

 

(a) The Underwriter is a Florida corporation duly organized, validly existing and in good standing under the laws of its state of organization, having all requisite power and authority to carry on its business as now constituted.

 

(b) The Underwriter has received all information with respect to the Issuer, the Borrower, the Project, and the Facility that it has requested from the Issuer and the Borrower in order to purchase the Series 2012 Bonds.

 

(c) The documents relating to the sale of the Series 2012 Bonds have been reviewed by the Underwriter and contain terms acceptable to, and agreed to by, the Underwriter.

 

(d) The Underwriter has the requisite authority to enter into this Bond Purchase Agreement.  This Bond Purchase Agreement has been duly executed and delivered by the Underwriter and, assuming the due authorization, execution and delivery by the other parties hereto, is the binding and valid obligation of the Underwriter, enforceable in accordance with its terms, except that the enforceability hereof may be limited by applicable bankruptcy, insolvency, moratorium or other similar laws or equitable principles affecting creditors’ rights or remedies generally.

 

(e) The Underwriter has not entered into any undisclosed financial or business relationships, arrangements or practices required to be disclosed in the Official Statement pursuant to Securities and Exchange Commission Rule Nos. 33-7049 and 34-33741, FR-42, File No. S7-4-94 (March 9, 1994), or required to be disclosed in the Official Statement pursuant to the MSRB rules.

 

(f) The Underwriter will offer the Series 2012 Bonds only pursuant to the Official Statement and will not make any statements in connection with the offering and sale of the Series 2012 Bonds that are inconsistent with the information contained in the Official Statement.

 

(g) The Underwriter will comply with all registration and qualification requirements, which are applicable to the Underwriter and its offering of the Series 2012 Bonds, under any securities or “blue sky” laws of any jurisdiction.

 

(h) The Underwriter will not make any untrue or misleading statement in connection with the offering and sale of the Series 2012 Bonds, and will ensure that all information contained in the Official Statement under the caption “UNDERWRITING” is true and correct in all material respects and does not

 

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omit any statement necessary in order to make the statements therein, in light of the circumstances in which they were made, not misleading.

 

(i) The Underwriter will perform its responsibilities as underwriter for the Series 2012 Bonds under applicable federal and state securities laws, including, without limitation, its obligation to review the Official Statement and to make such investigation as may be appropriate in order to have a reasonable basis for concluding that the Official Statement does not contain any untrue statement of a material fact and does not omit any material fact necessary in order to make the statements therein, in light of the circumstances in which they were made, not misleading.

 

SECTION 5.  REPRESENTATIONS AND AGREEMENTS OF THE ISSUER

 

The Issuer represents to and agrees with the Underwriter that, as of the date hereof and the date of the Closing:

 

(a)           Official Statement.  The statements and information in the Official Statement under the headings “SUMMARY STATEMENT — The Issuer”, “THE ISSUER” and “LITIGATION — The Issuer” are, and such statements and information in the Preliminary Official Statement, dated March 29, 2012 (the “Preliminary Official Statement”), as of its date were, true, correct and complete in all material respects, and such information and statements in the Official Statement do not, and such information and statements in the Preliminary Official Statement as of its date did not, include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make such statements and information, in light of the circumstances under which they are, or were made, not misleading.

 

(b)           Existence.  The City of Springfield, Ohio (the “Issuer”), is a municipal corporation, duly organized and existing under, and by virtue of, the Constitution and laws of the State of Ohio and its City Charter.  Pursuant to Section 133.51 of the Ohio Revised Code, and Article VIII, Section 16, of the Ohio Constitution (together, the “Act”), and an ordinance passed by the Issuer, the Issuer has the power to issue revenue bonds, such as the Series 2012 Bonds, for the purpose, among others, of financing the acquisition and rehabilitation of assisted living facilities.

 

(c)           Authority.  The Issuer has the requisite power and authority (i) to take all actions set forth in the Act, (ii) to adopt the Bond Ordinance and enter into the Indenture, the Loan Agreement and this Bond Purchase Agreement, (iii) to issue and execute the Series 2012 Bonds as provided in the Indenture, and to execute and deliver the Indenture, the Loan Agreement, and this Bond Purchase Agreement, and (iv) to enter into and consummate all other transactions contemplated on the Issuer’s part by the Series 2012 Bonds, the Indenture, the Loan Agreement, this Bond Purchase Agreement and the Official Statement.

 

(d)           Adoption of Bond Ordinance, Etc.  On March 27, 2012, the Commission of the Issuer authorized the issuance of the Series 2012 Bonds pursuant to an ordinance, after determining that the Project was a proper purpose for its issuance of bonds under the Act. The Bond Ordinance and the respective forms of the Indenture, the Series 2012 Bonds, the Loan Agreement and this Bond Purchase Agreement were adopted or approved, as the case may be, at a duly convened meeting of the Issuer, with respect to which all legally required notices were duly given to all members of the Issuer, and at which meetings quorums were present and acting at the time of the adoption or approval, as the case may be, thereof, and the Bond Ordinance remains in full force and effect as of the date hereof.

 

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(e)           Due Execution and Delivery of Documents.  This Bond Purchase Agreement has been duly executed and delivered by the Issuer and, when executed and delivered by the other parties hereto, will be, and the Loan Agreement, and the Indenture, when executed and delivered by the Issuer and the other parties thereto, will be, legal, valid and binding agreements of the Issuer, enforceable in accordance with their terms, subject as to enforcement of remedies to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws in effect from time to time affecting the rights of creditors generally and to the availability of equitable relief and, in the case of this Bond Purchase Agreement, applicable securities laws.

 

(f)            No Conflicts.  The acceptance, execution and delivery of this Bond Purchase Agreement, the adoption of the Bond Ordinance, the execution and delivery of the Series 2012 Bonds, the Indenture, and the Loan Agreement, and the compliance with the provisions hereof and thereof, do not and will not violate or conflict with any resolution adopted by the Issuer’s City Commissioners and, to the knowledge of the Issuer, do not and will not conflict with or violate, or result in or constitute a breach of or default under, any indenture, mortgage, deed of trust, guaranty, loan, agreement or other instrument to which the Issuer is a party or by which the Issuer or any of its property is bound, which would have a materially adverse effect on the transactions contemplated by this Bond Purchase Agreement, or, to the knowledge of the Issuer, conflict with or violate any provision of any law, administrative rule or regulation, or any judgment, order or decree to which the Issuer or any of its property is subject.

 

(g)           Limited Obligations.  The Series 2012 Bonds will be limited obligations of the Issuer, payable solely from the revenues, receipts, funds or moneys pledged therefor, and from any amounts otherwise available under the Indenture for the payment thereof, including those derived under the Loan Agreement, and the Security Agreement, and those on deposit in all funds and accounts held under the Indenture (except the Rebate Fund), all of which will be held by the Trustee for the equal and ratable benefit of all holders of the Series 2012 Bonds.  The Series 2012 Bonds will not be in any way a debt, liability or obligation, legal, moral or otherwise, of the Issuer, the State of Ohio, The City of Springfield, or any other political subdivision of the State of Ohio.  Neither the general credit of the Issuer nor the general credit or taxing power of the State of Ohio, The City of Springfield, or any other political subdivision of the State of Ohio will be pledged to the payment of the principal of the Series 2012 Bonds or the interest or any premium thereon or other costs incidental thereto.

 

(h)           Defaults.  The Issuer, to the best of its knowledge, has never defaulted and is not now in default with respect to, any bonds, notes or other obligations which it has issued, except any of the foregoing that were issued in a “conduit” financing in which neither the general credit of the Issuer nor the general credit nor taxing power of the State of Ohio or any political subdivision of the State of Ohio was pledged to the payment thereof.

 

(i)            Qualification of Bonds Under Blue Sky Laws.  The Issuer will furnish and will continue to furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request from time to time to qualify and to continue to qualify the Series 2012 Bonds for offering and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate and to determine the eligibility of the Series 2012 Bonds for investment under the laws of such states and other jurisdictions.  Provided, however, that (i) the Issuer will not be required to execute a special or general consent to service of process or qualify as a foreign corporation in connection with any such qualification in any jurisdiction, and (ii) the Issuer shall not be obligated to pay any expenses or costs (including, without limitation, legal fees) incurred in connection with such qualification.

 

It is specifically understood and agreed that the Issuer makes no representation as to the

 

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financial position or business condition of the Borrower and does not represent or warrant as to the correctness, completeness or accuracy of any of the statements, information (financial or otherwise), representations or certifications furnished or to be made and furnished by the Borrower in connection with the execution and delivery of the Loan Agreement or the consummation of the transactions contemplated thereunder or in connection with the sale of the Series 2012 Bonds.

 

SECTION 6.  REPRESENTATIONS, WARRANTIES, COVENANTS OF THE BORROWER

 

The Borrower represents to and agrees with the Underwriter that:

 

(a)           Corporate Status.  The Borrower is, and will continue to be, a limited liability company, duly organized, validly existing, in good standing under the laws of the State of Georgia, with full power to own its properties and conduct its business in the State of Ohio, as described in the Official Statement.

 

(b)           Official Statement.  As of the date of acceptance hereof by the Borrower, the statements and information in the Official Statement under the headings  “SUMMARY STATEMENT”, “THE BORROWER”, “THE OPERATOR”, “ADCARE”, “THE FACILITY”, “PLAN OF FINANCING”, “SOURCES OF PAYMENT AND SECURITY FOR THE SERIES 2012 BONDS”, “FINANCIAL COVENANTS”, “FORECASTED DEBT SERVICE COVERAGE”, “CERTAIN RISKS OF INVESTMENT” and “LITIGATION” (as it relates to the Borrower), and the information and forecasts set forth in APPENDIX B are true, correct and complete in all material respects, and such information and statements in the Official Statement do not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make such statements and information, in light of the circumstances under which they are or were made, not misleading.

 

(c)           Litigation.  Other than any items disclosed in the Official Statement, there is no claim, action, temporary restraining order, injunction, suit, proceedings, 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 the Borrower’s knowledge, threatened against or affecting, or involving the Borrower or its properties or businesses, or any securities of, the Borrower nor, to the best of the Borrower’s knowledge, is there any basis therefor, (i) contesting the existence, status or powers of the Borrower, or (ii) seeking to prohibit, restrain or enjoin the sale of the Series 2012 Bonds or the use of the Official Statement, or (iii) challenging the validity or enforceability of any of the Transaction Documents to which the Borrower is a party, the Disclosure Agreement or this Bond Purchase Agreement or any other document required by the terms of any thereof to be executed and delivered by the Borrower (collectively, the “Borrower’s Transaction Documents”), or contesting the power and authority of the Borrower to execute and deliver or to consummate the transactions contemplated on the Borrower’s part by the Borrower’s Transaction Documents or the Official Statement, or (iv) wherein an unfavorable decision, ruling or finding would adversely affect the financial condition or the operation of the Borrower or the transactions contemplated on the Borrower’s part by the Borrower’s Transaction Documents or the Official Statement.

 

(d)           Authority.  The Borrower has full power and authority to execute and deliver, and to perform its obligations under, the Borrower’s Transaction Documents, and to enter into and carry out the transactions contemplated on the Borrower’s part by such documents and by the Official Statement.

 

(e)           Due Authorization.  The Borrower by proper action has duly authorized (A) the

 

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execution and delivery of, and the due performance of its obligations under the Borrower’s Transaction Documents, and (B) the taking of any and all actions as may be required on the part of the Borrower to carry out, give effect to and consummate the transactions contemplated by the Borrower’s Transaction Documents and by the Official Statement.  The Borrower will take all actions necessary or appropriate to consummate the transactions contemplated on the Borrower’s part by the aforesaid documents.

 

(f)            Due Execution and Delivery of Documents.  This Bond Purchase Agreement has been duly executed and delivered by the Borrower and is, and when executed and delivered by the other parties thereto, if any, the Borrower’s Transaction Documents, will be, legal, valid and binding agreements of the Borrower enforceable in accordance with their terms, subject as to enforcement of remedies to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws in effect from time to time affecting the rights of creditors generally and to the availability of equitable relief and, in the case of this Bond Purchase Agreement, applicable securities laws.  At or prior to the date of Closing, the Borrower’s Transaction Documents shall have been duly authorized, executed and delivered by the Borrower.

 

(g)           No Conflicts.  The acceptance, execution and delivery of this Bond Purchase Agreement, the approval of the Borrower’s Transaction Documents, and the compliance with the provisions hereof and thereof, do not and will not conflict with or violate, or result in or constitute a breach of or default under the Borrower’s operating agreement or under any indenture, mortgage, deed of trust, guaranty, loan agreement or other instrument to which the Borrower is a party or by which the Borrower or any of its property is bound, which would have a materially adverse affect on the transactions contemplated by this Bond Purchase Agreement or conflict with or violate any provision of any law, administrative rule or regulation, or, to the best of the Borrower’s knowledge, any judgment, order or decree to which the Borrower or any of its property is subject.

 

(h)           Qualification of Bonds Under Blue Sky Laws.  The Borrower will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request to qualify the Series 2012 Bonds for offering and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate and to determine the eligibility of the Series 2012 Bonds for investment under the laws of such states and other jurisdictions, and will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Series 2012 Bonds; provided, however, that the Borrower will not be required to execute a special or general consent to service of process or qualify as a foreign company in connection with any such qualification in any jurisdiction.

 

(i)            Governmental Filings.  The Borrower has made all filings with, and has obtained all approvals and consents from, all federal, state and local regulatory agencies having jurisdiction to the extent, if any, required by any provision of law or regulation applicable to the Borrower to be made or to be obtained in connection with the execution and delivery of the Borrower’s Transaction Documents, the performance of the Borrower’s obligations thereunder or hereunder and the consummation of the transactions contemplated on the Borrower’s part thereby or hereby and by the Official Statement.

 

(j)            Governmental Approvals.  No approval, permit, consent, authorization or order of any court or any governmental or public agency, authority or person not already obtained or effected (other than any approvals that may be required under the Blue Sky laws of any jurisdiction) is required with respect to the Borrower in connection with the performance by the Borrower of its obligations under the Borrower’s Transaction Documents.

 

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(k)           Certificates and Representations.  Any certificate signed by an authorized representative of the Borrower delivered to the Underwriter at the Closing shall be deemed a representation and warranty by the Borrower to such parties as to the statements made therein.  The Borrower covenants that between the date hereof and the Closing it will not take any action that will cause the representations and warranties made herein to be untrue as of the Closing.

 

SECTION 7.  INDEMNIFICATION

 

(a)           Scope of Indemnification by the Borrower.  The Borrower hereby agrees to indemnify, protect, defend and hold harmless the Issuer, each official, trustee, member, agent, servant, officer, city commissioner, employee and attorney of the Issuer and the Underwriter, each director, officer and employee thereof, and each person, if any, who controls the Underwriter or the Issuer within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended (an “Indemnified Party”), against all losses, claims, damages, liabilities or expenses, whether joint or several, to which any such Indemnified Party may become subject, under any statute or regulation at law or in equity or otherwise insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact set forth in the Official Statement, or any amendment or supplement thereof, or the Preliminary Official Statement, or arise out of or are based upon (i) the omission or alleged omission to state therein a material fact required to be stated therein or which is necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading in any material respect, and will reimburse any legal or other expenses reasonably incurred by any such Indemnified Party in connection with investigating or defending any such loss, claim, damage, liability or action.   Provided, however, that such indemnity shall not inure to the benefit of the Issuer, or any person controlling the Issuer, as aforesaid, in respect of any written material furnished by the Issuer for use in the sections of the Preliminary Official Statement and Official Statement captioned “SUMMARY STATEMENT — The Issuer”, “THE ISSUER” and “LITIGATION — The Issuer”, or (ii) any act, failure to act, or misrepresentation by any person in connection with the issuance, sale, or delivery of the Series 2012 Bonds.  And provided further, that such indemnity shall not extend to any Indemnified Party if the loss, claim, damage or liability is caused by the gross negligence or willful misconduct of the Indemnified Party.  This indemnity agreement shall not be construed as a limitation on any other liability that the Borrower may otherwise have to any Indemnified Party, provided that in no event shall the Borrower be obligated for double indemnification.

 

(b)           Procedure.  An Indemnified Party shall, promptly after the receipt of notice of the commencement of any action against such Indemnified Party in respect of which indemnification may be sought against the Borrower notify the Borrower in writing of the commencement thereof.  Failure of the Indemnified Party to give such notice will reduce the liability of the Borrower by the amount of damages attributable to the failure of the Indemnified Party to give such notice to the Borrower, but the omission to notify the Borrower of any such action shall not relieve the Borrower from any liability that it may have to such Indemnified Party otherwise than under this section.  In case any such action shall be brought against an Indemnified Party and such Indemnified Party shall notify the Borrower of the commencement thereof, the Borrower may, or if so requested by such Indemnified Party shall, participate therein or assume the defense thereof, with counsel satisfactory to such Indemnified Party (it being understood that, except as hereinafter provided, the Borrower shall not be liable for the expenses of more than one separate counsel representing the Indemnified Parties in such action), and after notice from the Borrower to such Indemnified Party of an election so to assume the defense thereof, the Borrower will not be liable to such Indemnified Party under this Section for any legal or other expenses subsequently incurred by such Indemnified Party in connection

 

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with the defense thereof other than reasonable costs of investigation; provided, however, that unless and until the Borrower assumes the defense of any such action at the request of such Indemnified Party, the Indemnified Party shall have the right to participate at its own expense in the defense of any such action.  If the Borrower shall not have employed counsel to take charge of the defense of any such action, or if an Indemnified Party shall have reasonably concluded that there may be defenses available to it or other Indemnified Parties that are different from or additional to those available to the Borrower (in which cases the Borrower shall not have the right to direct the defense of such action on behalf of such Indemnified Party) or to other Indemnified Parties, legal and other expenses, including the expenses of separate counsel incurred by such Indemnified Party shall be borne by the Borrower.

 

(c)           Underwriter’s Agreement.  The Underwriter agrees, at its expense, to indemnify, promptly defend (by counsel reasonably satisfactory to the Issuer) and hold harmless the Issuer, the Issuer’s city commissioners, officers, employees and each person, if any, who has the power, directly or indirectly, to direct or cause the direction of the management and policies of the Issuer, from and against any and all losses, claims, damages, demands, liabilities, costs or expenses, including reasonable attorneys’ fees and expenses, if such losses, claims, damages, demands, liabilities, costs or expenses arise out of, or are materially increased by, or would not exist but for, a breach by the Underwriter of its duties under, or failure to abide by any of its covenants in, this Bond Purchase Agreement.

 

SECTION 8.  CONDITIONS OF UNDERWRITER’S OBLIGATIONS

 

The Underwriter has entered into this Bond Purchase Agreement in reliance upon the representations and agreements of the Issuer and the Borrower herein and the performance by the Issuer and the Borrower of their respective obligations hereunder, both as of the date hereof and as of the Closing Date.  The Underwriter’s obligations under this Bond Purchase Agreement are and shall be subject to the following further conditions:

 

(a) Conditions at or Prior to Closing.  Receipt by the Underwriter of the following documents at or prior to the Closing:

 

(i) The opinion of Sell & Melton, L.L.P., Bond Counsel, dated the date of Closing, with respect to the matters, and substantially to the effect, as set forth in Exhibit B, attached hereto and made a part hereof;

 

(ii) The opinion of Holt, Ney, Zatcoff & Wasserman, LLP, counsel for the Borrower, dated the date of Closing, in form and substance satisfactory to the Underwriter;

 

(iii) The opinion of Squire, Sanders (US) L.L.P., counsel to the Issuer, dated the date of Closing, addressed to the Issuer, Bond Counsel, the Underwriter and the Trustee in form and substance acceptable to the Underwriter;

 

(iv) The opinion of John T. Lynch, Jr., as counsel to and solely for the benefit of the Underwriter dated the date of Closing and addressed to the Underwriter, in form and substance acceptable to the Underwriter;

 

(v) A certificate, dated the Closing Date, signed by an authorized official of the Issuer,

 

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and satisfactory to the Underwriter, to the effect that (A) each of the representations and warranties of the Issuer contained in this Bond Purchase Agreement, the Indenture and the Loan Agreement is true, accurate and complete on the Closing Date as if made on and as of the Closing Date, and (B) each of the agreements of the Issuer to be complied with and each of the obligations of the Issuer to be performed hereunder and under the Bond Ordinance, the Indenture and the Loan Agreement on or prior to the Closing Date have been complied with and performed;

 

(vi) A certificate of the Borrower, dated the Closing Date, signed by an authorized officer of the Borrower, and satisfactory to the Underwriter, to the effect that (A) each of the representations and warranties of the Borrower contained in this Bond Purchase Agreement is true, accurate and complete on the Closing Date as if made on and as of the Closing Date, (B) each of the agreements of the Borrower to be complied with and each of the obligations to be performed by the Borrower hereunder and under the Borrower’s Transaction Documents on or prior to the Closing Date have been complied with and performed, and (C) as of the Closing Date, there has been no material adverse change in the status, business, condition or prospects (financial or otherwise) of the Borrower;

 

(vii) A copy, certified by a duly authorized officer of the Borrower to be correct, complete and as in effect on the date of Closing, of each of the Borrower’s organizational documents, operating agreement, and resolution authorizing the transactions contemplated hereby;

 

(viii) A copy, certified by a duly authorized officer of the Issuer, of the Bond Ordinance, and an executed counterpart of each of the Indenture and the Loan Agreement, each of which documents, including the Bond Ordinance, shall be in full force and effect;

 

(ix) A certificate, dated the date of the Closing, which shall be true and correct as of such date, signed by an authorized officer of the Trustee, in form and substance satisfactory to counsel for the Underwriter, to the effect that (A) the duties and obligations under the Indenture of the Trustee, as trustee, registrar and paying agent for the Series 2012 Bonds, have been duly accepted by the Trustee, (B) the acceptance by the Trustee of its duties and obligations under the Indenture, and compliance with the provisions thereof will not conflict with or constitute a breach of or default under any law, administrative regulation, consent decree or any agreement or other instrument to which it is subject, and (C) all approval, consents and orders of any governmental authority or agency having jurisdiction in the matter which would constitute a condition precedent to the performance by the Trustee of its obligations under the Indenture have been obtained and are in full force and effect;

 

(x) A mortgagee’s title insurance policy insuring the lien of the Trustee, as mortgagee under the Security Agreement, in the amount of $7,230,000, with only such exceptions as shall be Permitted Encumbrances (as defined in the Loan Agreement); and

 

(xi) Duly executed copies of the Guaranty Agreement, the Borrower’s Transaction Documents, the Land Use Agreement, and the Disclosure Agreement, and such additional certificates (including, by way of example, appropriate “no litigation” certificates and “arbitrage” certificates), opinions of counsel, appraisals, surveys, environmental assessments, instruments or other documents as the Underwriter may reasonably request.

 

(b)           Failure to Satisfy Conditions.  If there shall be a failure to satisfy any of the conditions to the Underwriter’s obligations contained in this Bond Purchase Agreement, or if the Underwriter’s obligations shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond

 

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Purchase Agreement shall terminate and none of the Underwriter, the Issuer or the Borrower shall have any further obligation hereunder, except as provided in Section 10 hereof.

 

SECTION 9.  TERMINATION

 

The Underwriter shall have the right to terminate this Bond Purchase Agreement by notifying the Issuer and the Borrower of its election to do so, if at the time of such notification, between the date hereof and the Closing Date, (i) legislation shall be enacted by the Congress of the United States or adopted by either House thereof or a decision by a court of the United States or the Tax Court of the United States shall be rendered or a ruling regulation or official statement by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or other governmental agency shall be made, with respect to the federal taxation of revenues or other income of the general character expected to be derived under the Indenture by the Issuer or of interest received on securities of the general character of the Series 2012 Bonds, which would have the effect of changing, directly or indirectly, the federal income tax consequences of receipt of interest on securities of the general character of the Series 2012 Bonds in the hands of the holders thereof, and which in the reasonable opinion of the Underwriter would materially adversely affect the  marketability of the Series 2012 Bonds; (ii) there shall have occurred any new outbreak of hostilities or other unforeseen national or international calamity or crisis, the effect of such new outbreak, calamity or crisis on the financial markets of the United States being such in the reasonable judgment of the Underwriter as to materially adversely affect the marketability of the Series 2012 Bonds; (iii) there shall be in force a general suspension of trading on the New York Stock Exchange or minimum or maximum prices for trading shall have been fixed and be in force or maximum ranges for prices for securities shall have been required and be in force on the New York Stock Exchange, whether by virtue of a determination by that Exchange or by order of the Securities and Exchange Commission or any other governmental authority having jurisdiction; (iv) a general banking moratorium shall have been established by federal or Ohio authorities; (v) any event, not caused by the Underwriter, shall have occurred or shall exist which, in the reasonable opinion of the Underwriter, makes untrue or incorrect, as of such time, in any material respect, any material statement or information contained in the Official Statement or makes the Official Statement inadequate by reason of the omission of information which should be reflected therein in order to make the statements and information contained therein not misleading as of such time; (vi) a stop order, ruling, regulation or official statement by or on behalf of the Securities and Exchange Commission shall be issued or made to the effect that the issuance, offering or sale of the Series 2012 Bonds, or of obligations of the general character of the Series 2012 Bonds as contemplated hereby, is in violation of any provision of the 1933 Act, the Securities Exchange Act of 1934, as amended, or the Trust Indenture Act of 1939, as amended; or (vii) the Underwriter’s due diligence examination in respect of the issuance of the Series 2012 Bonds shall have revealed any fact or circumstance that, in the reasonable judgment of the Underwriter, would materially and adversely affect the marketability of the Series 2012 Bonds.

 

SECTION 10.  PAYMENT OF EXPENSES

 

(a)           Payment by the Borrower.  Except as provided in Paragraph (b) below, the Borrower shall pay all expenses incident to the sale of the Series 2012 Bonds, including but without limitation, (i) the cost of the preparation (including printing, duplicating and distribution) of this Bond Purchase Agreement, the Transaction Documents, the Disclosure Agreement, the Preliminary Official Statement, the Official Statement and any amendment or supplement thereto, (ii) the cost of the preparation, printing, execution, authentication and delivery of the Series 2012 Bonds, (iii) the cost of preparation of any Blue Sky Surveys, (iv) the CUSIP Service Bureau service charge for the assignment of CUSIP numbers for the Series 2012

 

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Bonds and the Municipal Securities Rulemaking Board fee, and (v) the fees of the Underwriter, Bond Counsel, Underwriter’s Counsel, the Borrower’s Counsel, the Issuer’s Counsel, and any other counsel, experts or consultants retained by the Borrower, the Trustee or the Underwriter.

 

(b)           Payment by Underwriter.  Except as provided in the foregoing Paragraph (a), the Underwriter shall pay the cost of all regulatory expenses incurred by the Underwriter in connection with its and distribution of the Series 2012 Bonds.

 

SECTION 11.  NOTICES

 

Any notices or other communication to be given under this Bond Purchase Agreement may be given by delivering the same in writing as follows:

 

	
As   to the Issuer:
    	
The   City of Springfield, Ohio
    
	
 
    	
76   East High Street
    
	
 
    	
Springfield,   Ohio 45502
    
	
 
    	
 
    
	
 
    	
Attn:   Mark Beckdahl, Director of Finance
    
	
 
    	
 
    
	
As   to the Borrower:
    	
Eaglewood   Property Holdings, LLC
    
	
 
    	
Two   Buckhead Plaza
    
	
 
    	
3050   Peachtree Road NW, Suite 355
    
	
 
    	
Atlanta,   Georgia 30305
    
	
 
    	
 
    
	
 
    	
Attn:   Christopher F. Brogdon, Manager
    
	
 
    	
 
    
	
As   to the Underwriter:
    	
Lawson   Financial Corporation
    
	
 
    	
3352   E. Camelback Road
    
	
 
    	
Phoenix,   Arizona 85018
    
	
 
    	
 
    
	
 
    	
Attention:   Robert W. Lawson, President
    

 

or to such different address written notice of which is given to each of the other parties hereto.

 

SECTION 12.    PARTIES IN INTEREST AND SURVIVAL OF REPRESENTATIONS

 

(a)           Parties in Interest.  This Bond Purchase Agreement is made solely for the benefit of the Issuer, the Borrower and the Underwriter (including their respective successors or assigns), and no other person, partnership, association or corporation shall acquire or have any right hereunder or by virtue hereof.

 

(b)           Survival of Representations.  All representations and agreements of the Issuer and the Borrower in this Bond Purchase Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Underwriter and all representations and agreements of the Issuer, the Borrower and the Underwriter shall survive the delivery of and payment for the Series 2012 Bonds.

 

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SECTION 13.  MISCELLANEOUS

 

(a)           Headings.  The headings of the Sections and Paragraphs of this Bond Purchase Agreement are inserted for convenience only and shall not be deemed to be a part hereof.

 

(b)           Governing Law.  This Bond Purchase Agreement shall be governed by and construed in accordance with the laws of the State of Ohio.

 

(c)           Counterparts.  This Bond Purchase Agreement may be executed, accepted and approved in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute and accept or approve this Bond Purchase Agreement by signing any such counterpart.

 

If you agree with the foregoing, please sign the enclosed counterpart of this Bond Purchase Agreement and return it to the Underwriter.  This Bond Purchase Agreement shall become a binding agreement by and among the Issuer, the Borrower and the Underwriter when at least one counterpart of this Bond Purchase Agreement shall have been signed by or on behalf of each of the parties hereto.

 

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
LAWSON   FINANCIAL CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert W. Lawson
    
	
 
    	
 
    	
Robert   W. Lawson
    
	
 
    	
 
    	
President
    

 

15

 

	
Accepted   as of the date first
    	
 
    
	
above   written:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
THE   CITY OF SPRINGFIELD, OHIO
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   [ILLEGIBLE]
    	
 
    
	
 
    	
Director   of Finance
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
EAGLEWOOD   PROPERTY HOLDINGS, LLC
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Christopher F. Brogdon
    	
 
    
	
 
    	
Christopher   F. Brogdon
    	
 
    
	
 
    	
Manager
    	
 
    

 

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