Exhibit 10.4
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT ("Agreement") is made effective as
of January 31, 2002 ("Effective Date") by and among the following:
[i] HEALTH CARE REIT, INC., a corporation organized under the laws of the
State of Delaware ("HCRI"), having its principal office located at One
SeaGate, Suite 1500, P. O. Xxx 0000, Xxxxxx, Xxxx 00000-0000;
[ii] PENNSYLVANIA BCC PROPERTIES, INC., a corporation organized under the
laws of the Commonwealth of Pennsylvania ("HCRI-PA/BCC" and a
"Landlord"), having its principal office located at One SeaGate, Suite
1500, P. O. Xxx 0000, Xxxxxx, Xxxx 00000-0000;
[iii] HCN BCC HOLDINGS, INC., a corporation organized under the laws of the
State of Delaware ("HCRI-HCN/BCC" and a "Landlord"), having its
principal office located at One SeaGate, Suite 1500, P. O. Xxx 0000,
Xxxxxx, Xxxx 00000-0000;
[iv] HCRI INDIANA PROPERTIES, LLC, a limited liability company organized
under the laws of the State of Indiana ("HCRI-IN" and a "Landlord"),
having its principal office located at One SeaGate, Suite 1500, P. O.
Xxx 0000, Xxxxxx, Xxxx 00000-0000;
[v] FINANCIAL CARE INVESTORS OF LEBANON, LLC, a limited liability company
organized under the laws of the State of Delaware ("FCI-Lebanon" and a
"Tenant"), having its principal office located at 0000 Xxxxx Xxxxx,
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000;
[vi] FINANCIAL CARE INVESTORS OF LOYALSOCK, LLC, a limited liability company
organized under the laws of the State of Delaware ("FCI-Loyalsock" and
a "Tenant"), having its principal office located at 0000 Xxxxx Xxxxx,
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000;
[vii] FINANCIAL CARE INVESTORS OF MORRISTOWN, LLC, a limited liability
company organized under the laws of the State of Delaware
("FCI-Morristown" and a "Tenant"), having its principal office located
at 0000 Xxxxx Xxxxx, Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000;
[viii] FINANCIAL CARE INVESTORS OF OAK RIDGE, LLC, a limited liability company
organized under the laws of the State of Delaware ("FCI-Oak Ridge" and
a "Tenant"), having its principal office located at 0000 Xxxxx Xxxxx,
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000;
[ix] FINANCIAL CARE INVESTORS OF SAGAMORE HILLS, LLC, a limited liability
company organized under the laws of the State of Delaware
("FCI-Sagamore Hills" and a "Tenant"), having its principal office
located at 0000 Xxxxx Xxxxx, Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000;
[x] FINANCIAL CARE INVESTORS OF WESTERVILLE, LLC, a limited liability
company organized under the laws of the State of Delaware
("FCI-Westerville" and a "Tenant"), having its principal office located
at 0000 Xxxxx Xxxxx, Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000;
[xi] BALANCED CARE AT SAXONBURG, INC., a corporation organized under the
laws of the State of Delaware ("Saxonburg" and a "Tenant"), having its
principal office located at 0000 Xxxxx Xxxxx, Xxxxxxxxxxxxx,
Xxxxxxxxxxxx 00000;
[xii] BALANCED CARE AT BLOOMSBURG II, INC., a corporation organized under the
laws of the State of Delaware ("Bloomsburg" and a "Tenant"), having its
principal office located at 0000 Xxxxx Xxxxx, Xxxxxxxxxxxxx,
Xxxxxxxxxxxx 00000;
[xiii] BALANCED CARE AT MERRILLVILLE, INC., a corporation organized under the
laws of the State of Delaware ("Merrillville" and a "Tenant"), having
its principal office located at 0000 Xxxxx Xxxxx, Xxxxxxxxxxxxx,
Xxxxxxxxxxxx 00000;
[xiv] BALANCED CARE AT LEBANON, INC., a corporation organized under the laws
of the State of Delaware ("BCC-Lebanon" and a "Manager"), having its
principal office located at 0000 Xxxxx Xxxxx, Xxxxxxxxxxxxx,
Xxxxxxxxxxxx 00000;
[xv] BALANCED CARE AT LOYALSOCK, INC., a corporation organized under the
laws of the State of Delaware ("BCC-Loyalsock" and a "Manager"), having
its principal office located at 0000 Xxxxx Xxxxx, Xxxxxxxxxxxxx,
Xxxxxxxxxxxx 00000;
[xvi] BALANCED CARE AT MORRISTOWN, INC., a corporation organized under the
laws of the State of Delaware ("BCC-Morristown"
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and a "Manager"), having its principal office located at 0000 Xxxxx
Xxxxx, Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000;
[xvii] BALANCED CARE AT OAK RIDGE, INC., a corporation organized under the
laws of the State of Delaware ("BCC-Oak Ridge" and a "Manager"), having
its principal office located at 0000 Xxxxx Xxxxx, Xxxxxxxxxxxxx,
Xxxxxxxxxxxx 00000;
[xviii] BALANCED CARE AT SAGAMORE HILLS, INC., a corporation organized under
the laws of the State of Delaware ("BCC-Sagamore Hills" and a
"Manager"), having its principal office located at 0000 Xxxxx Xxxxx,
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000;
[xix] BALANCED CARE AT WESTERVILLE, INC., a corporation organized under the
laws of the State of Delaware ("BCC-Westerville" and a "Manager"),
having its principal office located at 0000 Xxxxx Xxxxx, Xxxxxxxxxxxxx,
Xxxxxxxxxxxx 00000;
[xx] BCC DEVELOPMENT AND MANAGEMENT CO., a corporation organized under the
laws of the State of Delaware ("BCC Development" and a "Manager"),
having its principal office located at 0000 Xxxxx Xxxxx, Xxxxxxxxxxxxx,
Xxxxxxxxxxxx 00000;
[xxi] BALANCED CARE CORPORATION, a corporation organized under the laws of
the State of Delaware ("Company"), having its principal office located
at 0000 Xxxxx Xxxxx, Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000; and
[xxii] IPC ADVISORS S.A.R.L., a corporation organized under the laws of
Luxembourg ("IPC"), having its principal office located at 00 xxx Xxxx
Xxxxxxx Xxxxxx, X-0000, Xxxxxxxxxx.
Hereinafter, HCRI and Landlords may be collectively called "HCN",
and Company, Tenants, Managers, and IPC may be collectively called the "BCC
Group".
R E C I T A L S
A. Each Tenant was or is the tenant of certain leased property
located in Lebanon, Montoursville, Saxonburg, and Bloomsburg, Pennsylvania;
Sagamore Hills and Westerville, Ohio; Oak Ridge and Morristown, Tennessee; and
Merrillville, Indiana (collectively called "Property") under separate Lease
Agreements described on Exhibit A attached hereto and incorporated herein
("Leases"). All documents evidencing obligations between HCN, Tenants, Managers
or Company in connection with the Leases may be called collectively "Lease
Documents". HCRI-PA/BCC terminated the
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Lebanon, Loyalsock, Saxonburg and Bloomsburg Leases as of February 26, 2001, and
HCRI-HCN/BCC terminated the Morristown, Oak Ridge, Sagamore Hills, and
Westerville Leases as of February 26, 2001. HCRI conveyed the Merrillville
Leased Property and assigned the Merrillville Lease to HCRI-IN as of June 16,
2001.
B. HCRI-PA/BCC and HCRI-HCN/BCC also extended to FCI-Lebanon,
FCI-Loyalsock, FCI-Morristown, FCI-Oak Ridge, FCI-Sagamore Hills, and
FCI-Westerville ("FCI Borrowers") loans in the amounts specified on Exhibit A
("FCI Loans") subject to the terms of the Loan Agreements described on Exhibit A
("FCI Loan Agreements"). The FCI Loans are each evidenced by Notes described on
Exhibit A ("FCI Notes"). The FCI Loans are secured by leasehold mortgages ("FCI
Leasehold Mortgages") against the Lebanon, Loyalsock, Morristown, Oak Ridge,
Sagamore Hills, and Westerville Leases ("FCI Leases") and security interests in
substantially all the personal property of the FCI Borrowers. All documents
executed by the FCI Borrowers as evidence of or security for the FCI Loans may
be called collectively the "FCI Loan Documents".
C. HCRI extended to Merrillville a loan in the amount
specified on Exhibit A ("Merrillville Loan") subject to the terms of the Loan
Agreement described on Exhibit A ("Merrillville Loan Agreement"). The
Merrillville Loan is evidenced by the Note described on Exhibit A ("Merrillville
Note"). The Merrillville Loan is secured by a leasehold mortgage against the
Merrillville Lease and a security interest in substantially all the personal
property of Merrillville. All documents executed by Merrillville as evidence of
or security for the Merrillville Loan may be called collectively the
"Merrillville Loan Documents".
D. HCRI extended to Company a loan in the amount specified on
Exhibit A ("Company Loan"). The Company Loan is evidenced by the Note described
on Exhibit A ("Company Note"). The Company Loan is secured by the FCI Leasehold
Mortgages. All documents executed by Company as evidence of or security for the
Company Loan may be called collectively the "Company Loan Documents".
E. Company guaranteed [i] Tenants' obligations under the
Leases pursuant to the Unconditional and Continuing Lease Guaranties described
on Exhibit A; [ii] the repayment of the FCI Loans pursuant to Unconditional
Continuing Guaranties described on Exhibit A; and [iii] the repayment of the
Merrillville Loan pursuant to the Unconditional Continuing Guaranty described on
Exhibit A (collectively called "Guaranties").
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F. Tenants currently operate the facilities identified on
Exhibit A ("Facilities") and located on the Property. The Facilities are managed
by Managers under separate management agreements between Managers and Tenants as
described on Exhibit A ("Management Agreements").
G. Tenants failed to pay rent and interest in full and failed
to satisfy financial covenants under the Lease Documents, the FCI Loan
Documents, and the Company Loan Documents (collectively called "Defaults"). As a
result, HCRI-PA/BCC and HCRI-HCN/BCC terminated the FCI Leases, the Saxonburg
Lease, and the Bloomsburg Lease. In addition, HCRI-PA/BCC and HCRI-HCN/BCC
accelerated payment of the FCI Loans, and HCRI accelerated payment of the
Company Loan.
H. HCRI and Company attempted to resolve the Defaults by
entering into a Master Lease Offer dated March 12, 2001, as supplemented by
letters dated April 25, 2001 and June 13, 2001 (collectively called "Initial
Master Lease Offer"). In connection with the Initial Master Lease Offer, Company
executed and delivered to HCRI a note in the original principal amount of
$216,867.00 to fund, in part, the acquisition of personal property for the
Westerville Facility ("Westerville Note"). The Initial Master Lease Offer and
the Westerville Note may be collectively called the "Initial Settlement
Documents". Company was unable to perform its obligations under the Initial
Settlement Documents.
I. As a result of the failure of Company to perform its
obligations under the Initial Settlement Documents, HCRI, HCRI-PA/BCC, and
HCRI-HCN/BCC commenced actions against Tenants (excluding Merrillville) and
Company seeking, among other remedies, judgments for possession of the Property
(excluding the Merrillville Property) and collection of amounts due under the
FCI Loans, the Company Loan, and the Initial Settlement Documents (collectively
called "HCN Litigation").
J. Company and HCRI have now agreed to resolve the Defaults
and the HCN Litigation pursuant to the terms of a second Master Lease Offer
dated December 21, 2001 ("Second Master Lease Offer"). The Second Master Lease
Offer provides for [i] payment of funds to HCRI; [ii] assignment of the FCI
Loans, the Company Loan, and the Merrillville Loan from HCN to IPC; [iii]
termination of the Merrillville Lease and transfer of operations of the
Merrillville, Westerville, Oak Ridge, and Morristown Facilities ("Transfer
Facilities") to new operators designated by HCRI; [iv] execution of a Master
Lease between HCRI-PA/BCC and HCRI-HCN/BCC and Balanced Care Tenant (HCN), Inc.
for the Lebanon, Montoursville, Bloomsburg, Saxonburg, and Sagamore Hills
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Properties ("Master Lease Properties"); and [v] a mutual release of liability in
connection with the Defaults under Lease Documents. Company and HCRI shall
perform their obligations under the Second Master Lease Offer subject to the
terms of this Agreement.
NOW THEREFORE, in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree to the following.
1. Recitals. The Recitals set forth above are true and correct
and incorporated into this Agreement. Nothing contained in the Recitals or
elsewhere in this Agreement shall be deemed an admission of any liability by any
party hereto.
2. Consideration. The parties hereto each acknowledge that it
is receiving fair and reasonably equivalent value in exchange for any
consideration it is providing to the other party under this Agreement. The
parties intend that any transfers of value to be made by one party to the other
under or in connection with this Agreement shall constitute a contemporaneous
exchange for new value being provided under the terms of this Agreement by such
party to the other.
3. Sub-Debt Purchase. Under the Second Master Lease Offer, IPC
purchased the FCI Loans, the Merrillville Loan, and the Company Loan
(collectively called "Sub-Debt Loans") for a purchase price of $5,000,000.00
("Sub-Debt Purchase Price"). IPC delivered the Sub-Debt Purchase Price to HCRI
on December 21, 2001. HCN assigned the FCI Notes, FCI Loan Agreement,
Merrillville Loan, Merrillville Loan Agreement, and Company Note (collectively
called "Loan Documents") to IPC pursuant to an Assignment of Notes and Loan
Documents dated December 26, 2001.
4. Settlement Payment. As a material part of the consideration
for the agreements, accommodations and commitments being made by HCN pursuant to
this Agreement, [i] Company made a payment by wire transfer to HCRI in the
amount of $250,000.00 on January 8, 2002; and [ii] commencing on February 10,
2002 and continuing thereafter on the 10th calendar day of each month thereafter
up through and including January 10, 2003, Company shall pay $20,833.33 to HCRI
by wire transfer.
5. Settlement Note. Under the Second Master Lease Offer,
Company executed and delivered a promissory note in favor of HCRI in the
original principal amount of $1,500,000.00 ("Settlement Note"). The Settlement
Note will be secured by a
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leasehold mortgage against Balanced Care Tenant (HCN), Inc.'s leasehold interest
in the Master Lease Properties. The Settlement Note was executed and delivered
by Company to HCRI on December 21, 2001. The Settlement Note and the Settlement
Payments from Company to HCN are in consideration for, among other things, the
releases contemplated herein, the dismissal of the HCN Litigation, and the
transfer of operations of the Transfer Facilities to the New Operators (defined
below).
6. Sub-Debt Waivers. On December 21, 2001, HCN agreed pursuant
to the Second Master Lease Offer that [i] all defaults under the Loan Documents
or other writings evidencing obligations between HCN, Tenants, Managers, and
Company with respect to the Sub-Debt Loans (collectively called "Sub-Debt
Documents") shall be deemed cured, including without limitation any defaults
under the Lease Documents resulting from any defaults under the Sub-Debt
Documents (collectively called "Indebtedness Cross Defaults"); [ii] all rights
and remedies with respect to the Defaults under the Sub-Debt Loans or arising
under the Sub-Debt Documents shall be irrevocably waived, including without
limitation, the Indebtedness Cross Defaults; [iii] all contingencies, payments,
liabilities or obligations in connection with the Defaults under the Sub-Debt
Loans or arising under the Sub-Debt Documents shall be deemed satisfied in full,
including without limitation, the Indebtedness Cross Defaults; [iv] the HCN
Litigation filed in connection with the Defaults under the Sub-Debt Loans or
arising under the Sub-Debt Documents, including without limitation, the
Indebtedness Cross Defaults, shall be dismissed without prejudice pursuant to a
notice of dismissal acceptable to the parties hereto to be filed on the day
following the day on which this Agreement and all documents related to this
Agreement are executed and delivered to HCN ("Closing"), except HCN agrees that
it will never again pursue any claims under the Sub-Debt Loans or the Sub-Debt
Documents unless the purchase and sale of the Sub-Debt Loans are subsequently
rendered void; and [v] all contingencies, payments, liabilities or obligations
under the Sub-Debt Loans and the Sub-Debt Documents, including without
limitation, all principal and accrued but unpaid interest, shall be deemed
satisfied in full as between the BCC Group and HCN (but not IPC). The foregoing
restriction on pursuing claims shall not be binding upon IPC as the assignee of
the Sub-Debt.
7. Release Agreement. In consideration of this Agreement, the
purchase of the Sub-Debt Loans, the Settlement Payment, and the Settlement Note,
the BCC Group and HCN shall execute and deliver to each other a Release
Agreement in the form of Exhibit B attached hereto ("Release").
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8. Transfer of Operations of Transfer Facilities.
(a) Effective as of January 9, 2002 (the "RMI
Transfer Date"), the operation of the Westerville Facility and the Merrillville
Facility (collectively called "OH/IN Facilities") were transferred to Retirement
Management, Inc. pursuant to the following documents: Operations Transfer
Agreement, Interim Management Agreement, Assignment and Assumption Agreement,
and Xxxx of Sale (collectively called "RMI Transfer Documents").
(b) On or before January 31, 2002, but subject to
such extensions as are mandated by State licensing requirements, the operation
of the Oak Ridge Facility and the Morristown Facility (collectively called the
"TN Facilities") will be transferred to Home Quality Management, Inc. effective
as of the transfer date for the TN Facilities (the "HQM Transfer Date"). In
connection with the transfer of operations of the TN Facilities, Company and the
Tenants and Managers of the TN Facilities shall enter into transfer documents
with HQM in form and substance substantially similar to the RMI Transfer
Documents, subject to the good faith negotiations of the parties and State
licensing requirements. Retirement Management, Inc. and Home Quality Management,
Inc. may be collectively called the "New Operators".
9. Mechanic's Liens. The BCC Group shall obtain the release of
any mechanic's liens or litigation related to the construction of a Transfer
Facility that was filed of record prior to the Transfer Date for such Transfer
Facility.
10. Master Lease. On or before January 31, 2002, HCRI-PA/BCC,
HCRI-HCN/BCC, and Balanced Care Tenant (HCN), Inc., a wholly owned subsidiary of
Company, shall enter into a Master Lease Agreement for the Master Lease
Properties, subject to the terms and conditions contained in the Second Master
Lease Offer.
11. Westerville Settlement. Company shall use commercially
reasonable efforts to diligently pursue settlement with respect to St. Xxxx Fire
and Marine Company in connection with the Westerville Facility ("Westerville
Settlement") pursuant to that certain Settlement Agreement and Mutual Release
dated January 11, 2002 among BCC Development and Management Co., the St. Xxxx
Companies, and the other parties named therein. Company shall use any funds it
receives in connection with the Westerville Settlement as follows: first to pay
reasonable legal costs incurred by a member of the BCC Group in connection with
the Westerville Settlement, second to pay Company's remaining construction costs
in connection with the completion of the
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Westerville Facility, and third, to HCRI up to a maximum of $416,867.00.
12. Lease Waivers. Effective upon Closing, HCN agrees that [i]
all defaults under the Lease Documents shall be deemed cured; [ii] all rights
and remedies with respect to the Defaults under the Lease Documents shall be
irrevocably waived; [iii] all contingencies, payments, liabilities or
obligations in connection with the Defaults under the Lease Documents shall be
deemed satisfied in full; and [iv] the HCN Litigation filed in connection with
the Defaults under the Lease Documents shall be dismissed with prejudice
pursuant to notices of dismissal acceptable to the parties hereto to be filed on
the day after Closing.
13. BCC Representations and Warranties. In order to induce HCN
to enter into this Agreement, the BCC Group represents and warrants to HCN as
follows as of the Effective Date:
13.1 Authorization. The execution and delivery of this
Agreement and all related agreements and documents executed by the BCC Group and
the consummation of the transactions contemplated hereby have been duly
authorized by all necessary parties.
13.2 No Consent. To the BCC Group's knowledge, no consent or
approval of any person or entity or Federal, state or local governmental body or
agency is required for the BCC Group to execute and deliver this Agreement or to
perform its obligations hereunder except for those consents that have already
been obtained and for the licenses to be granted to New Operators.
13.3 No Violation. The execution and delivery of this
Agreement by the BCC Group and the consummation of the transactions contemplated
hereby do not violate or breach any organizational document of any member of the
BCC Group or any contract, agreement, order, judgment, consent decree or law by
which the BCC Group or any of its assets are bound.
13.4 Legal Proceedings. Except for the HCN Litigation and
except as provided on Exhibit C, there is no action, injunction, suit, or other
legal proceeding presently pending or, to the knowledge of the BCC Group,
threatened against any member of the BCC Group in excess of $25,000.00 which is
not covered by insurance that would materially adversely affect the validity or
enforceability of this Agreement against any member of the BCC Group or the
business, financial condition or assets of any member of the BCC Group.
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13.5 Bankruptcy. No voluntary or involuntary proceeding under
11 U.S.C. or any federal or state law relating to bankruptcy, insolvency or the
relief of debtors has been filed by or against any member of the BCC Group and
no proceeding has been commenced in which the appointment of a receiver, trustee
or custodian with respect to any of the Facilities has been requested.
13.6 No Transfer of Claims. The BCC Group has not assigned,
transferred, or conveyed, in whole or part, any of the claims, demands, debts,
actions, causes of action, suits, contracts, agreements, obligations, accounts,
defenses or offsets that are being released in the Release Agreement.
14. HCN Representations and Warranties. In order to induce the
BCC Group to enter into this agreement, HCN represents and warrants to the BCC
Group as follows as of the Effective Date:
14.1 Authorization. The execution and delivery of this
Agreement and all related agreements and documents executed by HCN and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary parties.
14.2 No Assignment of Claims. Except for the assignment of the
Sub-Debt Loans and Sub-Debt Documents, HCN has not assigned, transferred, or
conveyed, in whole or in part, any of the claims, demands, debts, actions,
causes of action, suits, contracts, agreements, obligations, accounts, defenses
or offsets that are being released in the Release Agreement.
15. Further Assurances. Each of the parties hereto agrees to
execute and deliver any and all further agreements, documents, assignments,
bills of sale and instruments necessary to effectuate this Agreement and the
transactions referred to herein or contemplated hereby or reasonably requested
by the other party to perfect or evidence their rights hereunder. Tenants shall
deliver to HCN (or to an escrow agent specified by HCN) an original executed
termination of any Memorandum or Notice of Lease for each Lease in recordable
form and in form acceptable to HCN. At Closing (for the Master Lease Facilities)
and on the applicable dates that the New Operators occupy the Transfer
Facilities (or such other date that may be required for regulatory purposes for
the Transfer Facilities) Tenant and Managers shall deliver to HCN evidence of
the termination of the Management Agreements.
16. Confidentiality; Public Disclosure. The parties agree to
maintain the terms of this Agreement and all negotiations relating to the
subject matter of this Agreement as confidential
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among the BCC Group and HCN, except [i] for disclosure to their respective
professional advisors and consultants who agree to be bound by the provisions
hereof; [ii] disclosures required under the Securities Exchange Act of 1934 and
the Securities Act of 1933 and the regulations promulgated thereunder, including
without limitation, the filings of exhibits (collectively called "SEC
Disclosures"); and [iii] if, on the advice of counsel, the disclosing party is
required to do so for compliance with law, but the disclosing party shall
provide the nondisclosing party with prompt prior notice so the nondisclosing
party may seek a protective order or other appropriate remedy. The disclosing
party agrees to disclose only such portion of the information that is legally
required to be disclosed and take all reasonable steps to preserve the
confidentiality of the remaining information. Except for any SEC Disclosures or
as otherwise required by law, no member of the BCC Group or HCN will issue or
cause to be issued any announcement, press release or other statement concerning
this Agreement or the subject matter of this Agreement to the persons employed
at the Facilities, residents of the Facilities, the press or the general public
without the prior written approval [i] of HCN for any such communication by any
member of the BCC Group, and [ii] of Company for any such communication by HCN.
Except for SEC Disclosures, Company and HCN shall agree on disclosures for
public dissemination. All approvals shall not be unreasonably withheld,
conditioned or delayed.
17. BCC Group Event of Default. The failure of the BCC Group
to perform any covenant or to conform to any warranty or representation under
this Agreement will constitute an Event of Default (without any notice, grace or
cure period) under this Agreement ("BCC Group Event of Default").
18. HCN Rights and Remedies. Upon the occurrence of any BCC
Group Event of Default and at any time thereafter until HCN waives the default
in writing or the default is cured, at HCN's option, without declaration, notice
of dishonor, protest, noting for protest, or any other notice, or demand of any
kind (all of which the BCC Group hereby waive), HCN may proceed against the BCC
Group, jointly and severally, at law or in equity, to collect all damages
(including consequential damages), losses, liabilities and expenses (including,
without limitation, reasonable attorneys' and other professionals' fees and
court costs) incurred in connection with or arising from an BCC Group Event of
Default and, in addition, may obtain the remedy of specific performance. This
Section 18 shall not limit the provisions of the Release and to the extent that
there is a conflict between any
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provision in this Agreement and the Release, the Release shall control.
19. HCN Event of Default. The failure of HCN to perform any
covenant or to conform to any warranty or representation under this Agreement
will constitute an Event of Default (without any notice, grace or cure period)
under this Agreement ("HCN Event of Default").
20. BCC Group Rights and Remedies. Upon the occurrence of any
HCN Event of Default and at any time thereafter until the BCC Group waives the
default in writing or the default is cured, at the BCC Group's option, without
declaration, notice of dishonor, protest, noting for protest, or any other
notice, or demand of any kind (all of which HCN hereby waives), the BCC Group
may proceed against HCN, jointly and severally, at law or in equity, to collect
all damages (including consequential damages), losses, liabilities and expenses
(including, without limitation, reasonable attorneys' and other professionals'
fees and court costs) incurred in connection with or arising from an HCN Event
of Default and, in addition, may obtain the remedy of specific performance. This
Section 20 shall not limit the provisions of the Release and to the extent that
there is a conflict between any provision in this Agreement and the Release, the
Release shall control.
21. Voluntary Agreement. The BCC Group represents and warrants
that [i] each is represented by legal counsel (or has knowingly declined legal
counsel) in regard to the transaction provided for by this Agreement and that
such counsel has explained to each of them the significance of the terms, and
the meaning and effect of this Agreement and all other related documents; [ii]
each is fully aware and clearly understands all of the terms and provisions
contained in this Agreement and in all other related documents; [iii] each has
voluntarily, with full knowledge and without coercion or duress of any kind
entered into this Agreement and the documents executed in connection with this
Agreement; [iv] each is not relying on any representations either written or
oral, express or implied, made to any of them by HCN other than as set forth in
this Agreement; [v] this Agreement reflects a proposal that the BCC Group made
to HCN on their own initiative; and [vi] the consideration received by the BCC
Group to enter into this Agreement and the arrangement contemplated by this
Agreement has been actual and sufficient.
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22. Miscellaneous.
22.1 Transaction Costs. Each party shall be responsible for
its own costs and expenses in connection with this Agreement and the
transactions contemplated hereby, including, without limitation, HCN legal fees
provided, however, the BCC Group shall pay all recording and title costs and any
HCN legal fees in excess of $10,000.00 but subject to a maximum liability of
$15,000.00.
22.2 Governing Law. The laws of the State of Ohio shall govern
the construction of this Agreement and the rights and duties of the parties
hereunder. If any provision of this Agreement or the application thereof to
anyone or any circumstances shall be adjudged invalid or unenforceable to any
extent, the application of the remainder of the provisions of this Agreement
shall not be affected thereby. Each provision of this Agreement shall be valid
and enforceable to the fullest extent permitted by law.
22.3 Time is of the Essence. Time is of the essence in the
performance of this Agreement.
22.4 Entire Agreement; Amendment; Waiver. This Agreement, the
Second Master Lease Offer, the Master Lease and any other documents contemplated
hereunder constitute the entire understanding between the parties with respect
to the subject matter hereof, superseding all negotiations, prior discussions
and preliminary agreements. In the event of a conflict between any provision of
the Second Master Lease Offer and any provision of this Agreement, this
Agreement shall control. This Agreement may not be modified or amended except in
writing signed by the parties hereto. No waiver of any term, provision or
condition of this Agreement in any one or more instances, shall be construed as
a further or continuing waiver of any such term, provision or condition of this
Agreement. No failure to act shall be construed as a waiver of any term,
provision, condition or rights granted hereunder.
22.5 Joint Venture; Third Party Beneficiaries. Nothing
contained herein shall be construed as forming a joint venture or partnership
between the parties hereto with respect to the subject matter hereof. The
parties hereto do not intend that any third party, other than the New Operators,
shall have any rights under this Agreement.
22.6 Captions. The section headings contained herein are for
convenience only and shall not be considered or referred to in resolving
questions of interpretation.
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22.7 Counterparts. This Agreement may be executed and
delivered via facsimile and in one or more counterparts and all such
counterparts taken together shall constitute a single original Agreement.
23. Notices. All notices hereunder shall be in writing, and
delivered personally, or by nationally recognized overnight courier service, or
by United States mail, postage prepaid, to the addresses set forth below or to
such other address as may hereafter be provided in writing to the other party:
HCN: Health Care REIT, Inc.
Xxx Xxx Xxxx, Xxxxx 0000
X. X. Xxx 0000
Xxxxxx, Xxxx 00000-0000
Attention: Xxxx X. Xxxxx, Vice President and
Corporate Secretary
BCC Group: Balanced Care Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Interim CEO
with a copy to:
Balanced Care Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Senior Vice President and Legal
Counsel
All notices shall be deemed to be given upon the earlier of actual receipt or
three days after deposit in the United States mail or one day after deposit with
a nationally recognized overnight courier.
24. CONSENT TO JURISDICTION. EACH MEMBER OF THE BCC GROUP
HEREBY IRREVOCABLY SUBMITS AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION AND
VENUE OF ANY STATE OR FEDERAL COURT HAVING JURISDICTION OVER XXXXX COUNTY, OHIO
FOR ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY MATTER ARISING FROM OR
RELATED TO [I] THIS AGREEMENT; [II] THE RELEASE; [III] ANY OTHER DOCUMENTS
CONTEMPLATED HEREUNDER; OR [IV] ANY OTHER AGREEMENT, DOCUMENT OR INSTRUMENT
RELATING TO OR SECURING ANY OF THE FOREGOING. EACH MEMBER OF THE BCC GROUP
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR
PROCEEDING. EACH MEMBER OF THE BCC GROUP AGREES THAT A FINAL JUDGMENT IN ANY
SUCH
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ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER
JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
25. WAIVER OF JURY TRIAL. HCN AND EACH MEMBER OF THE BCC GROUP
WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY OF
THEM AGAINST THE OTHER ON ALL MATTERS ARISING OUT OF THIS AGREEMENT, THE RELEASE
OR ANY OTHER DOCUMENTS RELATING TO OR SECURING ANY OF THE FOREGOING.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-15-
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the Effective Date.
HCN: HEALTH CARE REIT, INC.
By:/s/Xxxx X. Xxxxx
Title: Vice President
and Corporate Secretary
LANDLORDS: PENNSYLVANIA BCC PROPERTIES, INC.
By:/s/Xxxx X. Xxxxx
Title: Vice President
and Corporate Secretary
HCN BCC HOLDINGS, INC.
By:/s/Xxxx X. Xxxxx
Title: Vice President
and Corporate Secretary
HCRI INDIANA PROPERTIES, LLC
By:/s/Xxxx X. Xxxxx
Title: Vice President
and Corporate Secretary
TENANTS: FINANCIAL CARE INVESTORS OF LEBANON, LLC
By:/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President and
Secretary
FINANCIAL CARE INVESTORS OF LOYALSOCK, LLC
By:/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President and
Secretary
FINANCIAL CARE INVESTORS OF MORRISTOWN, LLC
By:/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President and
Secretary
FINANCIAL CARE INVESTORS OF OAK RIDGE, LLC
By:/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President and
Secretary
FINANCIAL CARE INVESTORS OF SAGAMORE HILLS, LLC
By:/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President and
Secretary
FINANCIAL CARE INVESTORS OF WESTERVILLE, LLC
By:/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President and
Secretary
BALANCED CARE AT SAXONBURG, INC.
By:/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President and
Secretary
BALANCED CARE AT BLOOMSBURG II, INC.
By:/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President and
Secretary
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BALANCED CARE AT MERRILLVILLE, INC.
By:/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President and
Secretary
MANAGERS: BALANCED CARE AT LEBANON, INC.
By:/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President and
Secretary
BALANCED CARE AT LOYALSOCK, INC.
By:/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President and
Secretary
BALANCED CARE AT MORRISTOWN, INC.
By:/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President and
Secretary
BALANCED CARE AT OAK RIDGE, INC.
By:/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President and
Secretary
BALANCED CARE AT SAGAMORE HILLS, INC.
By:/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President and
Secretary
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BALANCED CARE AT WESTERVILLE, INC.
By:/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President and
Secretary
BCC DEVELOPMENT AND MANAGEMENT CO.
By:/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President and
Secretary
COMPANY: BALANCED CARE CORPORATION
By:/s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Senior Vice President,
Legal Counsel, and
Assistant Secretary
IPC: IPC ADVISORS S.A.R.L.
By:/s/X.X. Xxxxxxxx
Title: Manager
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EXHIBIT A
Leases
Tenants Facility Types Facilities
Landlords Agreements (Date) (Units, Beds) Locations
Financial Care Investors of Lebanon, LLC Lease Agreement Personal care facility Outlook Pointe at Lebanon
(9/22/98); (56 units, 60 beds) 000 Xxxxxx Xxxxx
Xxxxxxxxxxxx BCC Properties, Inc. First Amendment Xxxxxxx, Xxxxxxxxxxxx 00000
(9/30/99) County: Lebanon
("Lebanon Facility")
Financial Care Investors of Loyalsock, Lease Agreement Personal care facility Outlook Pointe at Loyalsock
LLC (9/22/98); (56 units, 60 beds) 0000 Xxxx Xxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Pennsylvania BCC Properties, Inc. (9/30/99) County: Lycoming
("Loyalsock Facility")
Financial Care Investors of Morristown, Lease Agreement Assisted care living Outlook Pointe at Morristown
LLC (9/22/98); facility 0000 Xxxxxxx Xxxxx
First Amendment (60 units, 66 beds) Xxxxxxxxxx, Xxxxxxxxx 00000
HCN BCC Holdings, Inc. (9/30/99) County: Xxxxxxx
("Morristown Facility")
Financial Care Investors of Oak Ridge, Lease Agreement Assisted care living Outlook Pointe at Oak Ridge
LLC (9/22/98); facility 000 Xxxxx Xxxxxx Xxxx
First Amendment (58 units, 62 beds) Xxx Xxxxx, Xxxxxxxxx 00000
HCN BCC Holdings, Inc. (9/30/99) County: Xxxxxxxx
("Oak Ridge Facility")
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Leases
Tenants Facility Types Facilities
Landlords Agreements (Date) (Units, Beds) Locations
Financial Care Investors of Sagamore Lease Agreement Residential care Outlook Pointe at Sagamore Hills
Hills, LLC (9/22/98); facility 000 Xxxx Xxxxxx Xxxx
First Amendment (103 units, 214 beds) Xxxxxxxx Xxxxx, Xxxx 00000
HCN BCC Holdings, Inc. (9/30/99) County: Summit
("Sagamore Hills Facility")
Financial Care Investors of Lease Agreement Residential care Outlook Pointe at Westerville
Westerville, LLC (9/22/98); facility 000 Xxxxxx Xxxx
First Amendment (106 units, 106 beds) Xxxxxxxxxxx, Xxxx 00000
HCN BCC Holdings, Inc. (9/30/99) County: Franklin
("Westerville Facility")
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Leases
Tenants Facility Types Facilities
Landlords Agreements (Date) (Units, Beds) Locations
Balanced Care at Bloomsburg II, Inc. Lease Agreement Skilled nursing Balanced Care, Bloomsburg
(3/15/99); facility 0000 Xxxxx Xxxx
Xxxxxxxxxxxx BCC Properties, Inc. First Amendment (36 units, 66 beds) Xxxxxxxxxx, Xxxxxxxxxxxx 00000
(9/30/99) County: Columbia
("Bloomsburg Facility")
Balanced Care at Saxonburg, Inc. Lease Agreement Assisted living Outlook Pointe at Saxonburg
(3/15/99); (personal care 000 Xxxxx Xxxxx
Xxxxxxxxxxxx BCC Properties, Inc. First Amendment boarding home) Xxxxxxxxx, Xxxxxxxxxxxx 00000
(9/30/99) (77 units, 103 beds) County: Xxxxxx
("Saxonburg Facility")
Balanced Care at Merrillville, Inc. Master Lease Residential care Outlook Pointe at Merrillville
Agreement facility 000 Xxxx 00xx Xxxxxx
XXXX Xxxxxxx Properties, LLC (10/1/00); (63 units, 86 beds) Xxxxxxxxxxxx, Xxxxxxx 00000
Amendment to Master County: Lake
Lease Agreement ("Merrillville Facility")
(10/1/00)
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Loans
Borrowers Agreements Notes
Lenders (Date) (Date) Amount
Financial Care Investors of Lebanon, LLC Loan Agreement Amended and Restated $686,800.00
(9/22/98); Note (10/31/00)
Pennsylvania BCC Properties, Inc. First Amendment
(9/30/99);
Second Amended and
Restated Loan Agreement
(10/31/00)
Financial Care Investors of Loyalsock, LLC Loan Agreement; Amended and Restated $674,050.00
First Amendment Note (10/31/00)
Pennsylvania BCC Properties, Inc. (9/30/99);
Second Amended and
Restated Loan Agreement
(10/31/00)
Financial Care Investors of Morristown, LLC Loan Agreement; Amended and Restated $692,000.00
First Amendment Note (10/31/00)
HCN BCC Holdings, Inc. (9/30/99);
Second Amended and
Restated Loan Agreement
(10/31/00)
-8-
Loans
Borrowers Agreements Notes
Lenders (Date) (Date) Amount
Financial Care Investors of Oak Ridge, LLC Loan Agreement; Amended and Restated $697,948.00
First Amendment Note (10/31/00)
HCN BCC Holdings, Inc. (9/30/99);
Second Amended and
Restated Loan Agreement
(10/31/00)
Financial Care Investors of Sagamore Hills, LLC Loan Agreement; Amended and Restated $1,243,550.00
First Amendment Note (10/31/00)
HCN BCC Holdings, Inc. (9/30/99);
Second Amended and
Restated Loan Agreement
(10/31/00)
Financial Care Investors of Westerville, LLC Loan Agreement; Amended and Restated $1,313,675.00
First Amendment Note (10/31/00)
HCN BCC Holdings, Inc. (9/30/99);
Second Amended and
Restated Loan Agreement
(10/31/00)
Balanced Care at Merrillville, Inc. Loan Agreement Note $1,000,000.00
(10/1/00) (10/1/00)
Health Care REIT, Inc.
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Loans
Borrowers Agreements Notes
Lenders (Date) (Date) Amount
Balanced Care Corporation N/A Note $900,000.00
(10/31/00)
Health Care REIT, Inc.
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Guaranties
Agreements
Guarantor (Date) Guaranteed Obligations
Balanced Care Corporation Unconditional and Payment and performance of Bloomsburg's obligations
Continuing Lease Guaranty under the Bloomsburg Lease
(3/15/99)
Balanced Care Corporation Unconditional and Payment and performance of Saxonburg's obligations
Continuing Lease Guaranty under the Saxonburg Lease
(3/15/99)
Balanced Care Corporation Unconditional and Payment and performance of Merrillville's
Continuing Guaranty obligations under the Merrillville Lease and the
(10/1/00) Merrillville Loan
Balanced Care Corporation Unconditional and Payment and performance of FCI-Lebanon's obligations
Continuing Lease Guaranty under the Lebanon Lease
(10/31/00)
Balanced Care Corporation Unconditional and Payment and performance of FCI-Loyalsock's
Continuing Lease Guaranty obligations under the Loyalsock Lease
(10/31/00)
Balanced Care Corporation Unconditional and Payment and performance of FCI-Morristown's
Continuing Lease Guaranty obligations under the Morristown Lease
(10/31/00)
Balanced Care Corporation Unconditional and Payment and performance of FCI-Oak Ridge's
Continuing Lease Guaranty obligations under the Oak Ridge Lease
10/31/00)
Balanced Care Corporation Unconditional and Payment and performance of FCI-Sagamore Hills'
Continuing Lease Guaranty obligations under the Sagamore Hills Lease
(10/31/00)
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Balanced Care Corporation Unconditional and Payment and performance of FCI-Westerville's
Continuing Lease Guaranty obligations under the Westerville Lease
(10/31/00)
Balanced Care Corporation Unconditional and Payment and performance of FCI-Lebanon's obligations
Continuing Guaranty under the FCI Loan extended to FCI-Lebanon
(10/31/00)
Balanced Care Corporation Unconditional and Payment and performance of FCI-Loyalsock's
Continuing Guaranty obligations under the FCI Loan extended to
(10/31/00) FCI-Loyalsock
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Guaranties
Agreements
Guarantor (Date) Guaranteed Obligations
Balanced Care Corporation Unconditional and Payment and performance of FCI-Morristown's
Continuing Guaranty obligations under the FCI Loan extended to
(10/31/00) FCI-Morristown
Balanced Care Corporation Unconditional and Payment and performance of FCI-Oak Ridge's
Continuing Guaranty obligations under the FCI Loan extended to FCI-Oak
(10/31/00) Ridge
Balanced Care Corporation Unconditional and Payment and performance of FCI-Sagamore Hills'
Continuing Guaranty obligations under the FCI Loan extended to
(10/31/00) FCI-Sagamore Hills
Balanced Care Corporation Unconditional and Payment and performance of FCI-Westerville's
Continuing Guaranty obligations under the FCI Loan extended to
(10/31/00) FCI-Westerville
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Management Agreements
Agreements Facility Types Facilities
Managers (Date) (Units, Beds) Locations
Balanced Care at Lebanon, Inc. Management Agreement Personal care facility Outlook Pointe at Lebanon
(9/30/98) (56 units, 60 beds) 000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
County: Lebanon
("Lebanon Facility")
Balanced Care at Loyalsock, Inc. Management Agreement Personal care facility Outlook Pointe at Loyalsock
(9/30/98) (56 units, 60 beds) 0000 Xxxx Xxxx Xxxxx
Xxxxxxxxxxxxx,
Xxxxxxxxxxxx 00000
County: Lycoming
("Loyalsock Facility")
Balanced Care at Morristown, Inc. Management Agreement Assisted care living Outlook Pointe at Morristown
(9/30/98) facility 0000 Xxxxxxx Xxxxx
(60 units, 66 beds) Xxxxxxxxxx, Xxxxxxxxx 00000
County: Xxxxxxx
("Morristown Facility")
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Balanced Care at Oak Ridge, Inc. Management Agreement Assisted care living Outlook Pointe at Oak Ridge
(9/30/98) facility 000 Xxxxx Xxxxxx Xxxx
(58 units, 62 beds) Xxx Xxxxx, Xxxxxxxxx 00000
County: Xxxxxxxx
("Oak Ridge Facility")
Balanced Care at Sagamore Hills, Inc. Management Agreement Residential care Outlook Pointe at Sagamore
(9/30/98) facility Hills
(103 units, 214 beds) 000 Xxxx Xxxxxx Xxxx
Xxxxxxxx Xxxxx, Xxxx 00000
County: Summit
("Sagamore Hills Facility")
Balanced Care at Westerville, Inc. Management Agreement Residential care Outlook Pointe at
(9/30/98) facility Westerville
(106 units, 106 beds) 000 Xxxxxx Xxxx
Xxxxxxxxxxx, Xxxx 00000
County: Franklin
("Westerville Facility")
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Management Agreements
Agreements Facility Types Facilities
Managers (Date) (Units, Beds) Locations
BCC Development and Management Co. Agreement to Provide Skilled nursing Balanced Care, Bloomsburg
Management Services Between facility 0000 Xxxxx Xxxx
Balanced Care at Bloomsburg (36 units, 66 beds) Bloomsburg, Pennsylvania
II, Inc. and BCC Development 17815
and Management Co. County: Columbia
(1/2/98) ("Bloomsburg Facility")
BCC Development and Management Co. Agreement to Provide Assisted living Outlook Pointe at Saxonburg
Management Services Between (personal care 000 Xxxxx Xxxxx
Balanced Care at Saxonburg, boarding home) Saxonburg, Pennsylvania
Inc. and BCC Development and (77 units, 103 beds) 16056
Management Co. County: Xxxxxx
(10/31/97) ("Saxonburg Facility")
BCC Development and Management Co. Agreement to Provide Residential care Outlook Pointe at
Management Services Between facility Merrillville
Balanced Care at (63 units, 86 beds) 000 Xxxx 00xx Xxxxxx
Merrillville, Inc. and BCC Xxxxxxxxxxxx, Xxxxxxx 00000
Development and Management Co. County: Lake
(10/24/00) ("Merrillville Facility")
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