Nursing Home Loan Agreement
Nursing Home Loan Agreement
THIS NURSING HOME LOAN AGREEMENT (hereinafter referred to as the “Agreement”) is made and entered into this [Insert Date], by and between [Your Company Name], with its principal place of business located at [Your Company Address] (hereinafter referred to as the “Lender”), and [Borrower Name], with its principal place of business located at [Borrower Address] (hereinafter referred to as the “Borrower”).
WHEREAS, the Borrower desires to obtain a loan from the Lender for the purpose of financing the operation, acquisition, and/or improvement of a nursing home facility located at [Facility Address], (hereinafter referred to as the “Facility”);
WHEREAS, the Lender has agreed to provide such financing to the Borrower under the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
I. Loan Terms
A. Loan Amount: The Lender agrees to loan the Borrower the principal sum of Five Million Dollars ($5,000,000.00), disbursed in a single lump sum upon closing of this Agreement.
B. Disbursement: The Loan will be disbursed to the Borrower’s designated account within five (5) business days following the execution of this Agreement, subject to the satisfaction of all pre-disbursement conditions specified herein.
C. Repayment: The Borrower shall repay the Loan in sixty (60) equal monthly installments of principal and interest, commencing on [Date], and continuing on the first (1st) day of each subsequent month until the final payment is made on [Date].
D. Interest Rate: The Loan shall accrue interest at an annual rate of 4.5%, calculated on the basis of a 360-day year. Interest payments are due monthly, coinciding with the principal repayment schedule.
E. Late Payment: Any payment not made within ten (10) days of its due date shall incur a late fee of 2% of the overdue amount.
F. Prepayment: The Borrower may prepay the Loan in whole or in part at any time without penalty. Any prepayment shall first be applied to accrued interest and then to the principal amount.
II. Representations and Warranties
A. Organization and Authority: The Borrower is a corporation duly organized, validly existing, and in good standing under the laws of the [State]. It has all necessary corporate power and authority to enter into this Agreement and to carry out its obligations hereunder.
B. Legal Compliance: The Borrower complies with all laws, ordinances, and regulations to which it is subject, including but not limited to those related to the operation and management of the nursing home facility.
C. Financial Statements: The financial statements provided by the Borrower to the Lender fairly represent the financial condition of the Borrower as of the dates of such statements and have been prepared in accordance with generally accepted accounting principles, consistently applied.
III. Covenants
A. Affirmative Covenants:
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Financial Records: The Borrower shall maintain accurate and complete records of its financial condition and operations and shall furnish to the Lender within ninety (90) days of the end of each fiscal year, its audited financial statements.
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Insurance: The Borrower shall maintain, at its expense, comprehensive general liability and property damage insurance on the Facility, with minimum coverage amounts of $1,000,000 per occurrence and $3,000,000 in the aggregate.
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Regulatory Compliance: The Borrower shall comply with all local, state, and federal laws and regulations applicable to the operation of the nursing home facility.
B. Negative Covenants:
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Indebtedness: The Borrower shall not incur additional indebtedness exceeding $500,000 without the prior written consent of the Lender.
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Lien: The Borrower shall not create, incur, assume, or suffer to exist any lien or security interest on the Facility or any part thereof, except for the lien created by this Agreement.
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Divestiture: The Borrower shall not sell, lease, transfer, or otherwise dispose of all or a substantial part of its assets outside the ordinary course of business without the Lender’s prior written consent.
IV. Security and Collateral
A. Collateral Description: As security for the Loan, the Borrower hereby grants to the Lender a first priority security interest in the nursing home facility located at [Facility Address], including all land, buildings, fixtures, and personal property associated with the operation of the facility.
B. Maintenance of Collateral: The Borrower shall maintain the Collateral in good condition and repair and shall not remove or permit the removal of any part of the Collateral from the premises without the Lender’s prior written consent, except in the ordinary course of business.
C. Inspection Rights: The Lender shall have the right, upon reasonable notice and during normal business hours, to inspect the Collateral to ensure compliance with the terms of this Agreement.
V. Events of Default
A. Payment Default: Failure by the Borrower to make any payment due under the terms of this Agreement within ten (10) days of its due date.
B. Covenant Breach: Failure by the Borrower to observe or perform any other covenant, condition, or agreement contained in this Agreement that is not remedied within thirty (30) days after notice of such failure.
C. Insolvency: The Borrower becomes insolvent, admits in writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors.
D. Foreclosure: Any proceedings are instituted by or against the Borrower for the foreclosure of any lien on the Collateral or if the Collateral is seized or becomes subject to a writ or distress warrant.
VI. Miscellaneous
A. Notices: All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service if served personally on the party to whom notice is to be given, or on the third day after mailing if mailed to the party to whom notice is to be given, by first-class mail, registered or certified, postage prepaid, and properly addressed.
B. Entire Agreement: This Agreement, together with any exhibits and schedules attached hereto, constitutes the entire agreement between the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or written, of the parties.
C. Amendment: No amendment, modification, or supplement of any provisions of this Agreement shall be valid unless in writing and signed by both parties.
D. Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the [State] without regard to its conflict of law provisions.
E. Dispute Resolution: Any disputes arising out of or related to this Agreement shall be resolved through binding arbitration in accordance with the rules of the American Arbitration Association, with arbitration to take place in [City/State]
Signatures
IN WITNESS WHEREOF, the parties hereto have executed this Nursing Home Loan Agreement as of the date first above written.
Lender
[Name]
[Date]
Borrower
[Name]
[Date]
