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Exhibit 10.10
TERMINATION AGREEMENT
THIS AGREEMENT is made as of the 12th day of January, 2000 by and among
(i) MEDITRUST MORTGAGE INVESTMENTS, INC., a Delaware corporation ("MMI") and NEW
MEDITRUST COMPANY LLC, a Delaware limited liability company, a Delaware limited
liability company ("New Meditrust" and together with MMI, the "Meditrust
Entities"), (ii) HAWTHORN HEALTH PROPERTIES, INC., a California corporation
("Hawthorn"), NATIONAL CARE CENTERS OF HERMITAGE, INC., a Missouri corporation
("Hermitage"), NATIONAL CARE CENTERS, INC., a Missouri corporation ("National
Care Centers"), NATIONAL CARE CENTERS OF LEBANON, INC., a Missouri corporation
("National Care Centers-Lebanon"), SPRINGFIELD RETIREMENT VILLAGE, INC., a
Missouri corporation ("Springfield"), NATIONAL CARE CENTERS OF NIXA, INC., a
Missouri corporation ("Nixa"), NATIONAL CARE CENTERS OF SPRINGFIELD, INC., a
Missouri corporation ("National Care Centers-Springfield") and MT. XXXXXX XXXX
CARE CENTER WEST, INC., a Missouri corporation ("Mt. Xxxxxx" and collectively
with Hawthorn, Hermitage, National Care Centers, National Care Centers-Lebanon,
Springfield, Nixa and National Care Centers-Springfield, the "Borrowers"), (III)
BALANCED CARE CORPORATION, a Delaware corporation ("BCC") and XXXXX MANAGEMENT,
INC., a Missouri corporation ("Xxxxx" and collectively with BCC, the "Balanced
Care Guarantors") and (IV) BALANCED CARE AT XXXXXXXX, INC., a Delaware
corporation (the "Potomac Point Lessee").
W I T N E S S E T H
WHEREAS, MMI is the holder of the lender's interest under the "Loan
Documents" as such term is defined under that certain Loan Agreement, dated as
of August 6, 1996, as amended, by and among MMI and the Borrowers (the "Hawthorn
Loan Agreement") and all capitalized terms used herein and not otherwise defined
herein shall have the same meanings ascribed to such terms under the Hawthorn
Loan Agreement;
WHEREAS, at the request of BCC, MMI was requested to consent to certain
transactions contemplated by that certain Asset Purchase Agreement, dated as of
October 15, 1999, as amended, by and among BCC (on behalf of itself and certain
subsidiaries) and Christian Health Care of Missouri, Inc. (the "BCC/CHC Purchase
Agreement");
WHEREAS, MMI was willing to consent to the transactions contemplated by
the BCC/CHC Purchase Agreement, subject to (i) the satisfaction of certain
conditions more particularly set forth in that certain Omnibus Assignment and
Assumption Agreement, Amendment of Loan Documents, Amendment of Lease Documents,
Termination of Lease Documents, Consent to Assignment and Confirmation of
Guaranties of even date herewith by and among the Borrowers, the wholly-ownned
Subsidiaries of BCC identified on Exhibit K of the Loan Agreement (the "Balanced
Care Lessee"), the Balanced Care Guarantors, MMI, Christian Health Care of
Missouri, Inc. (the "Purchaser"), Cornerstone Properties Investment II, LLC
("CPI"), Cornerstone Health Care, Inc. ("Cornerstone"), Christian Health Care
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Personnel Services, Inc. ("CHC-Personnel"), Christian Health Care, Inc. ("CHC"),
Christian Health Care of Hermitage, Inc., Christian Health Care of Lebanon
North, Inc., Christian Health Care of Springfield West Park, Inc., Christian
Heal Care of Springfield West, Inc., Christian Health Care of Lebanon South,
Inc., Christian Health Care of Springfield East, Inc., Christian Health Care of
Nixa, Inc. and Alington X. Xxxxxxx (the "Consent"), including, without
limitation, the execution and delivery by BCC of a guaranty (the "BCC Loan
Guaranty") of the Loan Obligations and the execution and delivery of that
certain Cross-Default Agreement of even date herewith by and among the Meditrust
Entities, BCC and the Potomac Point Lessee (the "Cross-Default Agreement"); and
WHEREAS, the Balanced Care Guarantors, the Potomac Point Lessee and the
Borrowers shall receive direct and indirect benefits from the consummation of
the transactions contemplated by the BCC/CHC Asset Purchase Agreement.
NOW, THEREFORE, for One Dollar ($1.00) and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, and in
consideration of the mutual covenants set forth herein, the parties hereto
hereby agree as follows:
1. Notwithstanding anything to the contrary set forth in the BCC Loan
Guaranty, MMI acknowledges and agrees that the BCC Loan Guaranty shall terminate
upon the Termination Date (as hereinafter defined) unless (i) a Loan Default or
a Lease Default (as defined under any of the BCC Missouri Leases) has occurred
as of the Termination Date (and has not been waived in writing by MMI) or (ii)
any event, condition and/or state of facts then exists which, with notice and/or
the passage of time, could constitute a Loan Default or Lease Default (and has
not been waived in writing by MMI). Notwithstanding anything to the contrary set
forth in the BCC Lease Guaranties (as such term is hereinafter defined) and
without limiting the terms and provisions of the Omnibus Assignment of
Contracts, the Assignments of Leases or any of the other Loan Documents, the
Borrowers and MMI acknowledge and agree that the BCC Lease Guaranties shall
terminate upon the earlier to occur of (a) the complete payment and performance
of the Loan Obligations or (b) Termination Date unless (x) a Loan Default or a
Lease Default has occurred as of the Termination Date (and has not been waived
in writing by MMI) or (y) any event, condition and/or state of facts then exists
which, with notice and/or the passage of time, could constitute a Loan Default
or Lease Default (and has not been waived in writing by MMI). Without limiting
the terms of the Cross Default Agreement, the Meditrust Entities, BCC and the
Potomac Point Lessee acknowledge and agree that the Cross Default Agreement
shall terminate upon the Termination Date unless (i) a Loan Default or a Lease
Default has occurred as of the Termination Date (and has not been waived in
writing by MMI) or (ii) any event, condition and/or state of facts then exists
which, with notice and/or the passage of time, could constitute a Loan Default
or Lease Default (and has not been waived in writing by MMI).
As used herein, the term "Termination Date" shall mean the later to
occur of (a) December 31, 2000 or (b) the date upon which the Facilities have
achieved a combined Debt
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Coverage Ratio (as hereinafter defined) for the prior fiscal quarter equal to or
greater than 1.1 to 1 (as evidenced by attested Consolidated Financials relating
to the CHC Lessees).
As used herein, the term "Debt Coverage Ratio" shall mean the ratio of
(x) Cash Flow (as hereinafter defined) for each applicable period to (y) the
total of all BCC Rent (as defined under the BCC Missouri Leases) paid or payable
during such period or accrued for such period.
As used herein, the term "Cash Flow" shall mean the Consolidated Net
Income (as defined under the BCC Missouri Leases) or Consolidated Net Loss (as
defined under the BCC Missouri Leases) before federal and state income taxes for
any period plus BCC Rent. Notwithstanding the foregoing, in calculating
Consolidated Net Income or Consolidated Net Loss for the CHC Lessees for any
fiscal quarter, the CHC Lessees shall include, as an expense, the greater of (1)
the aggregate amount of the management fees payable to Cornerstone under the
Management Agreements (as defined under the Consent) for such quarter or (2)
five percent (5%) of the aggregate Gross Revenues (as hereinafter defined)
generated at the Facilities during such fiscal quarter.
As used herein, the term "Gross Revenues" shall collectively refer to
all revenues generated by reason of the operation of the Facilities, whether or
not directly or indirectly received or to be received by the CHC Lessees,
including, without limitation, all patient revenues received or receivable for
the use of, or otherwise by reason of, all rooms, beds and other facilities
provided, meals served, services performed, space or facilities subleased or
goods sold on or from any Facility and further including, without limitation,
except as otherwise specifically provided below, any consideration received
under any subletting, licensing, or other arrangements with any Person relating
to the possession or use of any Facility and all revenues from all ancillary
services provided at or relating to any Facility.
To the extent that any Facility is subleased or occupied by an
Affiliate of any CHC Lessee, Gross Revenues shall include the Gross Revenues of
such sublessee with respect to the premises demised under the applicable
sublease (i.e., the Gross Revenues generated from the operations conducted on
such subleased portion of the applicable Facility) and the rent received or
receivable from such sublessee pursuant to such subleases shall be excluded from
Gross Revenues for all such purposes. As to any sublease between any CHC Lessee
and a non-Affiliate of such CHC Lessee, only the rental actually received by the
applicable CHC Lessee from such non-Affiliate shall be included in Gross
Revenues.
As used herein, the term "BCC Lease Guaranties" shall refer
collectively to those certain guaranties executed and delivered by any Balanced
Care Guarantor for the benefit of the Hawthorn Subsidiaries guarantying the BCC
Missouri Lease Obligations.
2. Notwithstanding anything to the contrary set forth in the BCC Lease
Guaranties or the BCC Loan Guaranty (collectively, the "Guaranties"), but
subject to the terms of the
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paragraph below and without limiting the terms of the Omnibus Assignment of
Contracts and/or the Assignment of Leases, each of the Meditrust Entities and
the Hawthorn Subsidiaries agree that upon the occurrence of Loan Default or a
Lease Default (the date upon which MMI or any of the Hawthorn Subsidiaries, as
applicable, notifies any Balanced Care Guarantor, in writing, that any such
default has occurred is hereinafter referred to as a "Trigger Date"), prior to
any Meditrust Entity or any Hawthorn Subsidiary pursuing any of its respective
rights and/or remedies against any Balanced Care Guarantor and/or the Potomac
Point Lessee, MMI and, to the extent applicable, the Hawthorn Subsidiaries shall
use good faith and reasonable efforts to pursue their respective rights and/or
remedies against (i) the Borrowers (under the Loan Documents), (ii) the CHC
Lessees (under the BCC Missouri Lease Documents) and/or (iii) CHC, CPI and/or
Xxxxxxx (under the Loan Documents and/or the BCC Missouri Lease Documents) for
three (3) months (such three month period commencing upon the Trigger Date is
hereinafter referred to as the "Limitation Period"). After the expiration of the
Limitation Period, subject to the terms of the Omnibus Assignment of Contracts
and the Assignment of Leases, the Meditrust Entities and, to the extent
applicable, the Hawthorn Subsidiaries may pursue their respective rights and/or
remedies against the Balanced Care Guarantors and/or the Potomac Point Lessee
concurrently and/or successively with, or instead of, pursuing any of their
rights and/or remedies against (a) the Borrowers under the Loan Documents and
(b) the CHC Lessees, CHC, CPI and/or Xxxxxxx (collectively, the "CHC Group"), as
the case may be, under any of the Loan Documents and/or the BCC Missouri Lease
Documents, as the case may be. Notwithstanding the foregoing agreement by MMI
and, to the extent applicable, the Hawthorn Subsidiaries to pursue their rights
and remedies as set forth in the first sentence of this Section 2, the Balanced
Care Guarantors and the Potomac Point Lessee specifically acknowledge and agree
that (x) MMI and, to the extent applicable, the Hawthorn Subsidiaries are not
required to exhaust any or all of their respective rights and/or remedies
against (1) the Borrowers or any of the collateral securing the Loan during the
Limitation Period or (2) the CHC Group or any of the collateral securing the BCC
Missouri Leases during the Limitation Period, (y) MMI and, to the extent
applicable, the Hawthorn Subsidiaries may determine, in their sole and absolute
discretion, which rights and/or remedies they shall pursue against the Borrowers
and/or any member of the CHC Group during the Limitation Period and (z) good
faith settlement discussions and/or negotiations with the Borrowers and the CHC
Group during the Limitation Period shall fulfill the obligations of MMI and the
Hawthorn Subsidiaries to pursue their respective rights and remedies against the
Borrowers and/or the CHC Group during the Limitation Period.
Notwithstanding the foregoing, but subject to the terms of the Omnibus
Assignment of Contracts and the Assignment of Leases, the Meditrust Entities and
the Hawthorn Subsidiaries may pursue their respective rights and/or remedies
against any Balanced Care Guarantor and/or the Potomac Point Lessee at any time,
including without limitation, during the Limitation Period, if (i) any Borrower
or any member of the CHC Group shall (a) voluntarily be adjudicated bankrupt or
insolvent, (b) seek or consent to the appointment of a receiver or trustee for
itself or for all or any portion of the Mortgaged Property (c) file a petition
seeking relief under the bankruptcy or other similar laws of the United States,
any state or any
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jurisdiction, (d) make a general assignment for the benefit of creditors or (e)
be unable to pay its debts as such debts mature, (ii) any court shall enter an
order, judgment or decree appointing, without the applicable Borrower's consent
or the applicable member of the CHC Group's consent, as the case may be, a
receiver or trustee for such Borrower or for all or any portion of the Mortgaged
Property or for such member of the CHC Group (or any of its properties) or
approving a petition filed against any Borrower or any member of the CHC Group
which seeks relief under the bankruptcy or other similar laws of the United
States, any state or any jurisdiction, and such order, judgment or decree shall
remain in force, undischarged or unstayed, sixty (60) days after it is entered,
(iii) any Borrower or any member of the CHC Group (or any of their respective
Affiliates), or any Person claiming by or through any Borrower or any member of
the CHC Group ever commences or joins in any suit or other proceeding against
MMI and/or any of the Hawthorn Subsidiaries whether or not relating to the
Mortgaged Property and/or the execution, delivery and performance of any of the
Loan Documents and/or any of the BCC Missouri Lease Documents, (iv) any
proceeding is commenced by any creditor of any Borrower or any member of the CHC
Group which may involve or result in the taking of possession of any property
held by any Borrower or any member of the CHC Group or the foreclosure thereof.
3. Notwithstanding anything to the contrary set forth herein or in any
of the Assignments of Leases or any of the other Loan Documents, the Borrowers,
the Balanced Care Guarantors and the Potomac Point Lessee acknowledge that MMI
is the successor in interest to Hawthorn Subsidiaries under the BCC Missouri
Lease Documents and is entitled to exercise all of the duties, covenants,
obligations, rights (including, without limitation, the exercise of any right of
approval or consent) and/or remedies of the Hawthorn Subsidiaries under the BCC
Missouri Lease Documents, other than the purchase options granted pursuant to
Section 18.4 of the BCC Missouri Leases.
4. Except as expressly set forth herein, this Agreement shall not be
deemed to amend, abridge, limit, modify, release, terminate or otherwise affect
any of the provisions of the Loan Documents or the BCC Missouri Lease Documents.
5. This Agreement shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns.
6. This Agreement shall remain in full force and effect until the
complete payment and performance of the Loan Obligations.
7. This Agreement shall be construed, and the rights and obligations of
the parties hereto shall be determined, in accordance with the laws of the
Commonwealth of Massachusetts. The Borrowers, the Balanced Care Guarantors and
the Potomac Point Lessee hereby consent to personal jurisdiction in the courts
of the Commonwealth of Massachusetts and the United States District Court for
the District of Massachusetts as well as to the jurisdiction of all courts from
which an appeal may be taken from the aforesaid courts, for the
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purpose of any suit, action or other proceeding arising out of or with respect
to this Agreement.
8. This Agreement may be executed in one or more counterparts, each of
which taken together shall constitute an original and all of which shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement under seal
as of the day and year first above written.
WITNESS: MEDITRUST ENTITIES:
-------- -------------------
MEDITRUST MORTGAGE INVESTMENTS, INC., a
Delaware corporation
/s/ Xxxxxxxxx Xxxxxxxxxx By: /s/Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxxxx Xxxxxxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
NEW MEDITRUST COMPANY, LLC, a Delaware
limited liability company
/s/ Xxxxxxxxx Xxxxxxxxxx By: /s/Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxxxx Xxxxxxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
WITNESS: BORROWERS:
-------- ----------
HAWTHORN HEALTH PROPERTIES, INC., a
California corporation
/s/ Xxxxxxxx X Xxxxxxx By: J. Xxxx Xxxxxxxx, Jr.
Name: Xxxxxxxx X. Xxxxxxx Name: J. Xxxx Xxxxxxxx, Jr.
Title: President
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WITNESS: NATIONAL CARE CENTERS OF HERMITAGE,
-------- INC., a Missouri Corporation
/s/ Xxxxxxxx X Xxxxxxx By: J. Xxxx Xxxxxxxx, Jr.
Name: Xxxxxxxx X. Xxxxxxx Name: J. Xxxx Xxxxxxxx, Jr.
Title: President
WITNESS: NATIONAL CARE CENTERS, INC., a Missouri
-------- corporation
/s/ Xxxxxxxx X Xxxxxxx By: J. Xxxx Xxxxxxxx, Jr.
Name: Xxxxxxxx X. Xxxxxxx Name: J. Xxxx Xxxxxxxx, Jr.
Title: President
WITNESS: NATIONAL CARE CENTERS OF LEBANON, INC.,
-------- a Missouri corporation
/s/ Xxxxxxxx X Xxxxxxx By: J. Xxxx Xxxxxxxx, Jr.
Name: Xxxxxxxx X. Xxxxxxx Name: J. Xxxx Xxxxxxxx, Jr.
Title: President
WITNESS: SPRINGFIELD RETIREMENT VILLAGE, INC., a
-------- Missouri corporation
/s/ Xxxxxxxx X Xxxxxxx By: J. Xxxx Xxxxxxxx, Jr.
Name: Xxxxxxxx X. Xxxxxxx Name: J. Xxxx Xxxxxxxx, Jr.
Title: President
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WITNESS: NATIONAL CARE CENTERS OF NIXA, INC., a
-------- Missouri corporation
/s/ Xxxxxxxx X Xxxxxxx By: J. Xxxx Xxxxxxxx, Jr.
Name: Xxxxxxxx X. Xxxxxxx Name: J. Xxxx Xxxxxxxx, Jr.
Title: President
WITNESS: NATIONAL CARE CENTERS OF SPRINGFIELD,
-------- INC., a Missouri corporation
/s/ Xxxxxxxx X Xxxxxxx By: J. Xxxx Xxxxxxxx, Jr.
Name: Xxxxxxxx X. Xxxxxxx Name: J. Xxxx Xxxxxxxx, Jr.
Title: President
WITNESS: MT. XXXXXX XXXX CARE CENTER WEST, INC.,
-------- a Missouri corporation
/s/ Xxxxxxxx X Xxxxxxx By: J. Xxxx Xxxxxxxx, Jr.
Name: Xxxxxxxx X. Xxxxxxx Name:J. Xxxx Xxxxxxxx, Jr.
Title: President
WITNESS: POTOMAC POINT LESSEE:
-------- ---------------------
BALANCED CARE AT XXXXXXXX, INC., a
Delaware corporation
/s/ Xxxxxxxx X. Xxxxxx By: /s/Xxxxx X. Xxxxxx
Name: Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
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WITNESS: BALANCED CARE GUARANTORS:
-------- -------------------------
BALANCED CARE CORPORATION, a
Delaware corporation
/s/ Xxxxxxxx X. Xxxxxx By: /s/Xxxxx X. Xxxxxx
Name: Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
XXXXX MANAGEMENT, INC., a Delaware
corporation
/s/ Xxxxxxxx X. Xxxxxx By: /s/Xxxxx X. Xxxxxx
Name: Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
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