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Exhibit 10.3
SECOND AMENDMENT TO
ASSET PURCHASE AGREEMENT
THIS SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT (this "Amendment") is
entered into this 30th day of November, 1999, between Balanced Care Corporation,
a Delaware corporation ("BCC"), for itself and for each of its subsidiaries
(each a "Subsidiary" and collectively the "Subsidiaries," and together with BCC
the "Seller") listed on Exhibit A, each with corporate offices at 0000 Xxxxx
Xxxxx, Xxxxxxxxxxxxx, XX 00000 except as otherwise set forth on Exhibit A; and
Christian Health Care of Missouri, Inc., a Missouri nonprofit corporation, with
offices at 000 X. 0xx Xxxxxx, Xxxxx X, Xxxxxx, Xxxxxxxx 00000, or its permitted
nominees ("Purchaser").
RECITALS:
WHEREAS, Seller and Purchaser entered into that certain Asset Purchase
Agreement dated as of October 15, 1999 (the "Asset Purchase Agreement") relating
to the purchase and sale of certain assets more particularly described therein;
WHEREAS, Seller and Purchaser entered into that First Amendment to Asset
Purchase Agreement dated as of October 21, 1999 (the "First Addendum").
Hereinafter, the Asset Purchase Agreement and the First Addendum shall
hereinafter collectively be referred to as the Asset Purchase Agreement; and
WHEREAS, the parties have agreed to amend certain provisions of the Asset
Purchase Agreement.
NOW, THEREFORE, for good and valuable consideration paid by each of the
parties hereto to the other, the receipt and sufficiency of which is hereby
acknowledged and in consideration of the covenants and agreements set forth
herein, the parties hereto agree as follows:
1. Undefined Terms. Any term used but not defined herein shall have the
meaning ascribed to such term in the Asset Purchase Agreement.
2. Amendment of Article I. (a) Article I of the Asset Purchase Agreement is
hereby amended to add the following definitions:
1.33A "Guaranty" shall mean that certain Agreement of Guaranty,
Suretyship, and Indemnity dated as of the Closing Date referenced in
Section 3.1.2 whereby the Purchaser shall unconditionally guarantee the
Purchaser's obligations under the terms and conditions of the Promissory
Note and the Second Promissory Note. The Guaranty shall be in a form
mutually agreeable between BCC and Purchaser.
1.45A-1 "Meditrust" shall mean Meditrust Corporation, a Delaware
corporation, together with its affiliates and their respective successors
and assigns, including, without limitation, Meditrust Mortgage
Investments, Inc.
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1.54A "Prepayment" shall have the meaning given to such term in Section
11.10.
1.54B "Promissory Note" shall mean that certain promissory note dated as
of the Closing Date referenced in Section 3.1.2 made by Purchaser payable
to the order of BCC in the original principal amount of $525,000, having
such other terms and conditions as are more specifically set forth
therein. The Promissory Note shall be in a form mutually agreeable between
BCC and Purchaser.
1.65A "Second Mortgage" shall mean that certain deed of trust dated as of
the Closing Date referenced in Section 3.1.2 granted by Purchaser in favor
of BCC encumbering the Owned Facilities and securing the Purchaser's
obligations under the Second Promissory Note and Guaranty, having such
other terms and conditions as are more specifically set forth therein. The
lien of the Second Mortgage shall be subordinate only to the lien of the
deed of trust granted by Purchaser in favor of its lender. The Second
Mortgage shall be in a form mutually agreeable between BCC and Purchaser.
1.65B "Second Promissory Note" shall mean that certain promissory note
dated as of the Closing Date referenced in Section 3.1.2 made by Purchaser
payable to the order of BCC in the original principal amount of
$2,000,000, having such other terms and conditions as are more
specifically set forth therein. The Second Promissory Note shall be in a
form mutually agreeable between BCC and Purchaser.
(b) Section 1.46 of Article I is hereby amended and restated in its entirety to
read as follows:
1.46 "Other Agreements" shall mean the Lease Guaranty Fee Agreement(s)
(if necessary and required due to the guaranty obligations of BCC
required by Seller's landlords and lenders), the Second Promissory
Note, the Second Mortgage and the other agreements set forth on
Schedule 1.46, including any other agreements executed and delivered
under or in connection therewith.
3. Amendment of Section 2.1.2. Section 2.1.2 of the Asset Purchase Agreement is
hereby amended and restated in its entirety to read as follows:
2.1.2 Equipment, Machinery and Other Tangible Personal Property. All
machinery, equipment, leasehold improvements, automobiles, supplies, office
furniture and office equipment, computing and telecommunications equipment and
other items of personal property that are owned or leased by Seller located at
any of the Facilities or the Seller's regional office headquarters in
Springfield, Missouri and used in connection with the Business, including but
not limited to those described in Schedule 2.1.2 hereto.
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4. Amendment of Section 3.1.2. Section 3.1.2 of the Asset Purchase Agreement is
hereby amended and restated in its entirety to read as follows:
3.1.2 Form of Payment. The Purchase Price (subject to any adjustments as
set forth in Schedule 2.1.3) shall be paid by Purchaser as follows:
(i) Escrow Amount. $250,000 (the "Escrow Amount") to be paid
by Purchaser to Escrow Agent on the date of execution of
this Agreement and held by Escrow Agent pursuant to the
terms and subject to the conditions of the Deposit Escrow
Agreement and this Agreement. The Seller and Purchaser
shall simultaneously herewith enter into a Deposit Escrow
Agreement substantially in the form attached to Exhibit C
hereto.
(ii) Cash Consideration. $6,425,000 in cash (Purchase Price less
the Escrow Amount, less the original principal amount of the
Promissory Note, less the original principal amount of the
Second Promissory Note), by wire transfer of immediately
available funds to BCC at the time of Closing.
(iii) Promissory Note. At Closing, Purchaser shall deliver the
Promissory Note to BCC in the original principal amount of
$525,000 (unless Purchaser, in its sole discretion, agrees to
pay the entire Purchase Price in cash consideration at
Closing). The Promissory Note shall provide for the payment of
interest at a rate equal to ten percent (10%) per annum.
Commencing on the 1st day of the first calendar month
immediately following Closing and continuing on the first day
of each month for the next forty-eight (48) months, Purchaser
shall make payments of principal and interest on the
outstanding principal amount of the Promissory Note based on
an amortization of forty-eight (48) months. On the maturity
date, all principal and accrued but unpaid interest under the
Promissory Note shall be immediately due and payable in full.
In addition and as additional security for the repayment of
the Promissory Note, the principal(s) of Purchaser and Seller
shall enter into the Guaranty.
(iv) Second Promissory Note. At Closing, Purchaser shall deliver
the Second Promissory Note to BCC in the original principal
amount of $2,000,000 (unless Purchaser, in its sole
discretion, agrees to pay the entire Purchase Price in cash
consideration at Closing). The Second Promissory Note shall
provide for the payment of interest at a rate equal to eight
and three/quarters percent (8.75%) per annum. Commencing on
the 1st day of the first calendar month immediately following
Closing and continuing on the first day of each month
thereafter including June 1, 2000, Purchaser shall make
payments of interest only on the outstanding principal
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amount of the Second Promissory Note. Commencing on July 1,
2000 and continuing thereafter on the first day of each month
including June 1, 2002, Purchaser shall make payments of
principal and interest on the outstanding principal amount of
the Second Promissory Note based on an amortization of
twenty-four (24) months. On June 1, 2002, all principal and
accrued but unpaid interest under the Second Promissory Note
shall be immediately due and payable in full. Notwithstanding
the foregoing, in the event Purchaser pays off the existing
lease and loan obligations in favor of Meditrust with respect
to the Facilities, all principal and accrued but unpaid
interest under the Second Promissory Note shall be immediately
due and payable in full. There will be no penalty for
prepayment under the Second Promissory Note. As additional
security for the repayment of the Second Promissory Note, the
principal(s) of Purchaser shall enter into the Guaranty. In
addition and as additional security for the repayment of the
Second Promissory Note, Purchaser shall use commercially
reasonable efforts to obtain approval from its lender for
Purchaser to grant the Second Mortgage in favor of BCC.
5. Amendment of Section 7.7. The last sentence of Section 7.7 is hereby amended
and restated in its entirety to read as follows:
The Parties agree to finalize the form and content of the Lease Guaranty
Fee Agreement on terms mutually acceptable to both Parties on or before
Closing.
6. Amendment of Article XI. A new Section 11.10 is hereby added to Article XI,
which reads in its entirety as follows:
11.10. Prepayment of Hawthorn Loan. On the Closing Date, Purchaser
shall make a prepayment on Seller's behalf on the $41,385,000 loan from
Meditrust to Hawthorn Health Properties, Inc. in an amount equal to
$4,000,000 (the "Prepayment"). In the event Closing does not occur, the
Prepayment shall be returned by Meditrust to Purchaser. Notwithstanding
the foregoing, in the event Meditrust does not require or otherwise waives
the Prepayment requirement at Closing, Purchaser shall be required to pay
Seller $2,000,000 in cash consideration at Closing in lieu of entering
into the Second Promissory Note as contemplated and set forth in Section
3.1.2(iv) above.
7. Counterparts. This Amendment may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument. A counterpart may consist
of a signature page of this Agreement.
8. Successors and Assigns. This Amendment shall be binding upon the parties
hereto and their respective successors and assigns.
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9. Force and Effect of Amendment. Except as specifically amended, modified or
supplemented as set forth in this Amendment, the Asset Purchase Agreement
remains in full force and effect and is hereby ratified by the parties hereto
and thereto.
10. Governing Law. The validity and interpretation of this Amendment shall be
construed in accordance with, and governed by, the internal laws of the State of
Missouri, without regard to principles of conflicts of laws.
[THE NEXT PAGE FOLLOWING IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, intending to be legally bound hereby, the parties
hereto have caused this Amendment to be signed in their respective names by an
officer thereof duly authorized as of the date first above written.
WITNESS: PURCHASER:
CHRISTIAN HEALTH CARE OF MISSOURI, INC.
/s/ Xxx Xxxxx By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
/s/ Title: President
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WITNESS: SELLER:
BALANCED CARE CORPORATION, for itself and
for each of the Subsidiaries
/s/ Xxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
/s/ Xxxxx X. Xxxxx Title: Chairman & CEO
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