Exhibit 10.1
OPTION, SETTLEMENT AND RELEASE AGREEMENT
THIS OPTION, SETTLEMENT AND RELEASE AGREEMENT is made and entered into
as of the 6th day of February, 2002, by and among IPC ADVISORS S.A.R.L., a
Luxembourg corporation (hereinafter referred to as "Buyer"), BALANCED CARE
CORPORATION, a Delaware corporation (hereinafter referred to as "Balanced
Care"), BALANCED CARE AT XXXXXXXX, INC., a Delaware corporation (the "Potomac
Point Lessee"), BCC DEVELOPMENT AND MANAGEMENT CO., a Delaware corporation (the
"Developer"), BALANCED CARE AT BLYTHEVILLE, INC., a Delaware corporation
("BCC-Blytheville"), BALANCED CARE AT LEWISBURG, INC., a Delaware corporation
("BCC-Lewisburg"), BCC AT LIMA, INC., a Delaware corporation ("BCC-Lima"),
BALANCED CARE AT DILLSBURG, INC., a Delaware corporation ("BCC-Dillsburg"),
BALANCED CARE AT XENIA, INC., a Delaware corporation ("BCC-Xenia"), BCC AT
CHIPPEWA, INC., a Delaware corporation ("BCC-Chippewa"), BALANCED CARE AT
KINGSPORT, INC., a Delaware corporation ("BCC-Kingsport"), BALANCED CARE AT
CHESTERFIELD, INC., a Delaware corporation ("BCC-Chesterfield"), BALANCED CARE
AT HENDERSONVILLE, INC., a Delaware corporation ("BCC-Hendersonville"), BALANCED
CARE AT KNOXVILLE, INC., a Delaware corporation ("BCC-Knoxville"), BALANCED CARE
AT POCAHONTAS, INC., a Delaware corporation ("BCC-Pocahontas"), a Delaware
Corporation BALANCED CARE TENANT (MT), INC., a Delaware corporation, MEDITRUST
ACQUISITION COMPANY II LLC, a Delaware limited liability company (hereinafter
referred to as the "Seller") and LA QUINTA TRS II, INC. a Delaware corporation
(hereinafter referred to as "La Quinta-TRS").
W I T N E S S E T H
WHEREAS, the Seller is the owner of twelve (12) parcels of lands
located in Arkansas, Pennsylvania, Ohio, Virginia and Tennessee and more
particularly described on EXHIBITS A-1 through EXHIBITS A-12 attached hereto and
incorporated herein by reference (collectively, the "Land");
WHEREAS, the Seller acquired title to the Land from its Affiliate (as
hereinafter defined), New Meditrust Company, LLC a Delaware limited liability
company that is now known as THCI Company, LLC ("New Meditrust-LLC"), in March
of 2001 in connection with various transfers of assets made by New Meditrust-LLC
prior to (and in order to effectuate) the sale of the skilled nursing facility
portfolio owned by the Meditrust Entities (as hereinafter defined);
WHEREAS, such sale of that skilled nursing facility portfolio (the
"Nursing Home Sale") was (i) ultimately consummated in April of 2001 by, among
other things, the transfer by Meditrust Healthcare Corporation ("MHC") of all of
the outstanding membership interests in New Meditrust-LLC to Care Realty, L.L.C.
and (ii) part of the Divestiture (as hereinafter defined) announced by La Quinta
Properties, Inc., a Delaware corporation (the "Parent"), that was formerly known
as Meditrust Corporation;
WHEREAS, the Parent, a publicly-traded real estate investment trust,
and certain of its subsidiaries (collectively, the "Meditrust Entities"),
including, without limitation, MHC and its Subsidiaries (as hereinafter defined)
were in the business of investing in health care real estate assets (such as
assisted living facilities) by either (i) acquiring such assets and then leasing
them, on a triple net basis, to health care operators or (ii) providing mortgage
loans to health care operators, which loans were secured by certain assets owned
and/or leased by such health care operators; however, the Parent has previously
publicly announced that Parent and its Subsidiaries desire to divest themselves
of their health care assets (the "Divestiture");
WHEREAS, Buyer is an Affiliate of and the majority shareholder of
Balanced Care;
WHEREAS, the Potomac Point Lessee, the Developer, BCC-Blytheville,
BCC-Lewisburg, BCC-Lima, BCC-Dillsburg, BCC-Xenia, BCC-Chippewa, BCC-Kingsport,
BCC-Chesterfield, BCC-Hendersonville, BCC-Knoxville and BCC-Pocahontas
(collectively, the "BCC Subsidiaries") are all directly owned and controlled by
Balanced Care;
WHEREAS, Balanced Care and the BCC Subsidiaries (collectively, the "BCC
Parties") regularly transact business with each other, with the BCC Parties
providing working capital, financial and management services and benefits and
other services and benefits to and for each other;
WHEREAS, prior to announcing the Divestiture, the Meditrust Entities
entered into various loan and lease transactions involving Balanced Care and
various wholly-owned Subsidiaries of Balanced Care, including, without
limitation, the transactions involving the Leased Property (as hereinafter
defined) and the Tranche 1 Properties (as hereinafter defined);
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WHEREAS, pursuant to the Existing Leases (as hereinafter defined), the
Seller leases the Leased Property to the Existing Lessees (as hereinafter
defined);
WHEREAS, all of the Existing Lessees excluding the Potomac Point Lessee
(collectively, the "Third Party Lessees") are owned by parties that are
unrelated to Balanced Care;
WHEREAS, in accordance with the Existing Lease Documents (as
hereinafter defined), the Developer, on behalf of each Third Party Lessee,
constructed an assisted living or other senior housing facility on the portion
of the Land demised to such Third Party Lessee, with funds advanced under the
Existing Lease Documents;
WHEREAS, each Third Party Lessee engaged one of the BCC Subsidiaries
(other than the Developer and the Potomac Point Lessee) to manage the Facility
(as hereinafter defined) demised to it;
WHEREAS, in addition to advancing funds under the Existing Lease
Documents for the construction of the Facilities demised by the Third Party
Lessees, the applicable Meditrust Entities (i) advanced funds pursuant to the
Notes (as hereinafter defined) to TC Realty Holding Company, a Delaware
corporation, and Black Box Holding Company, a Delaware corporation
(collectively, the "Holding Companies"), the sole shareholders of the Third
Party Lessees, to enable the Holding Companies to make equity contributions to
the Third Party Lessees so that, upon receipt of the equity contributions made
by the Holding Companies to the Third Party Lessees, such Third Party Lessees
could fulfill their respective working capital obligations, including, without
limitation, their Existing Lease Obligations (as hereinafter defined) and (ii)
accepted twelve (12) separate demand notes (collectively, the "Demand Notes")
from Xxxxx X. Xxxxxx and Xxxx X. Xxxx (collectively, the "Shareholders"), the
shareholders of the Holding Companies, as additional security for the Existing
Lease Obligations;
WHEREAS, in order to induce the applicable Meditrust Entities (i) to
enter into and accept the Existing Leases and the other Existing Lease Documents
and (ii) to lend to the Holding Companies the sums advanced under the Notes in
accordance with the terms thereof; which, in turn, induced the Third Party
Lessees to engage the Developer to develop the Facilities demised to the Third
Party Lessees and to engage the other applicable BCC Subsidiaries to manage such
Facilities,
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Balanced Care agreed, pursuant to the Working Capital Assurance Agreements (as
hereinafter defined), to advance to the Third Party Lessees all funds necessary
for the Third Party Lessees to fulfill their working capital obligations
(including, without limitation, all of their rent and other obligations under
the Existing Leases);
WHEREAS, in consideration of Balanced Care's agreement to provide such
working capital to the Third Party Lessees, the Holding Companies granted
Balanced Care options to acquire all of the issued and outstanding capital stock
of the Third Party Lessees (collectively, the "Stock Options"); thus, Balanced
Care and the other BCC Parties each received direct and indirect benefits from
the consummation of the transactions contemplated under the Existing Lease
Documents because they were able to enter into contractual arrangements that
would allow them to develop, manage and ultimately acquire ownership of the
operation of the Facilities on economic terms favorable to Balanced Care and the
other BCC Parties;
WHEREAS, on December 30, 1999, New Meditrust-LLC agreed to sell to the
Buyer and Balanced Care twelve (12) other parcels of land (collectively, the
"Tranche 1 Properties") and Buyer and Balanced Care designated subsidiaries (or
designees) of Balanced Care to take title to the Tranche 1 Properties;
WHEREAS, as part of the consideration paid by the Buyer and Balanced
Care for the Tranche 1 Properties, the Buyer and Balanced Care executed and
delivered to New Meditrust-LLC a Promissory Note, dated as of December 30, 1999,
in the original principal amount of SEVEN MILLION EIGHT HUNDRED ELEVEN THOUSAND
FIFTY-FOUR DOLLARS ($7,811,054) made by the Buyer and Balanced Care to the order
of New Meditrust-LLC (the "Promissory Note");
WHEREAS, as a condition of the consummation of the transaction
involving the Tranche 1 Properties, the Buyer and Balanced Care agreed to
acquire from New Meditrust-LLC an option to acquire a fee simple interest in the
Leased Property and New Meditrust-LLC agreed to grant the Buyer an option to
acquire a fee simple interest in the Leased Property, all in accordance with the
terms and conditions set forth in that certain Option Agreement, dated as of
December 30, 1999, as amended, by and among New Meditrust-LLC, the Buyer and
Balanced Care (the "1999 Option Agreement");
WHEREAS, the 1999 Option Agreement provided, among other things, that
for each Facility (and the applicable portion of the Leased Property relating
thereto) acquired in accordance
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with the terms of the 1999 Option Agreement, a portion of the purchase price
paid with respect thereto would be applied to reduce the Promissory Note;
WHEREAS, the 1999 Option Agreement has expired by its terms without any
exercise thereunder; however, prior to the expiration of the term of the 1999
Option Agreement, there were numerous conversations and letters between the
parties regarding proposed extensions of the 1999 Option Agreement and a dispute
arose between New Meditrust-LLC, Balanced Care and the Buyer as to whether and
on what terms an extension had been granted and as to the outstanding
obligations owed to New Meditrust-LLC under the Promissory Note;
WHEREAS, Balanced Care and the Buyer asserted, among other things, that
New Meditrust-LLC (i) violated its obligations under the 1999 Option Agreement,
in part, to avoid a reduction of the outstanding indebtedness under the
Promissory Note and (ii) failed to provide a waiver of financial covenants under
certain of the Existing Lease Documents so that Lease Defaults (as hereinafter
defined) would exist (which would, in turn, prevent the exercise of the option
under the 1999 Option Agreement as the absence of any Lease Defaults was a
pre-condition to the exercise and consummation of the transactions contemplated
under the 1999 Option Agreement);
WHEREAS, New Meditrust-LLC denied those allegations and asserted, among
other things, that the request for the waiver was not made until after the 1999
Option Agreement had already expired and that the Buyer and Balanced Care had
not exercised the option granted under the 1999 Option Agreement prior to the
expiration thereof;
WHEREAS, notwithstanding the fact that the maturity date has occurred
under the Promissory Note and New Meditrust-LLC has made demand for payment in
full of all amounts outstanding under the Promissory Note, the Buyer and
Balanced Care have not paid the outstanding debt under the Promissory Note;
WHEREAS, New Meditrust-LLC and the Buyer and Balanced Care were unable
to resolve their dispute regarding the 1999 Option Agreement and the Promissory
Note and as part of the Nursing Home Sale, New Meditrust-LLC assigned all of its
right, title and interest under the Promissory Note to La Quinta-TRS ;
WHEREAS, La Quinta-TRS has filed suit against the Buyer and Balanced
Care in the Suffolk Superior Court of the Commonwealth of Massachusetts, seeking
payment of all amounts due under the
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Promissory Note (such suit, captioned La Quinta TRS II, Inc. vs. Balanced Care
Corporation and IPC Advisors S.A.R.L., Civil Action No. 01-2801C is hereinafter
referred to as the "Pending Litigation");
WHEREAS, during the past year, Balanced Care and its Subsidiaries have
experienced cash flow shortfalls at certain of their respective facilities and
businesses (including, without limitation, at the Facilities) and, as a result
of such cash flow shortfalls, have publicly announced, on several occasions,
that they would be unable to meet their various financial obligations,
including, without limitation, (i) Balanced Care's obligations to the Seller to
advance funds under the Working Capital Assurance Agreements and make payments
under the Potomac Point Guaranty (as hereinafter defined) and (ii) the Potomac
Point Lessee's obligation to pay rent under the Potomac Point Lease (as
hereinafter defined);
WHEREAS, such announcements by Balanced Care that it is unable to meet
its debts constitute Lease Defaults under the Existing Leases (collectively, the
"BCC Financial Condition Defaults");
WHEREAS, commencing with the quarter that ended September 30, 2000 and
for each quarter thereafter, the Existing Lessees have failed to maintain the
applicable Rent Coverage Ratio required under the Existing Leases and such
failures to maintain the required Rent Coverage Ratios constitute Lease Defaults
under the Existing Leases (collectively, the "Rent Coverage Defaults");
WHEREAS, commencing with the quarter that ended September 30, 2000 and
for each quarter thereafter, Balanced Care has not maintained the Tangible Net
Worth (as hereinafter defined) required under the Existing Leases and such
failures to maintain the required Tangible Net Worth constitute Lease Defaults
under the Existing Leases (collectively, the "BCC Net Worth Defaults");
WHEREAS, as a consequence of the Rent Coverage Defaults and the BCC Net
Worth Defaults, on November 15, 2000, New Meditrust-LLC notified the Existing
Lessees, the Holding Companies and Balanced Care that New Meditrust-LLC elected
its right to apply the Cash Collateral (including interest thereon through
November 13, 2000) toward the outstanding indebtedness under certain of the
Notes and the Promissory Note;
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WHEREAS, commencing with the month ending on November 30, 2000 and for
each month thereafter, the Holding Companies have failed to make the payments
due under the Notes and such failures to make the monthly payments due under the
Notes constitute Lease Defaults under the Existing Leases (collectively, the
"Note Defaults");
WHEREAS, commencing with the month ending on December 31, 2000 and for
each month thereafter, the Third Party Lessees and the Potomac Point Lessee have
not paid the Existing Base Rent (as hereinafter defined) due under the Existing
Leases and such failures to make the Existing Base Rent payments constitute
Lease Defaults under the Existing Leases (collectively, the "Existing Base Rent
Defaults");
WHEREAS, in addition, the Third Party Lessees and the Potomac Point
Lessee have not paid all of the Existing Additional Rent (as hereinafter
defined) due under the Existing Leases and such failures to make the Existing
Additional Rent payments constitute Lease Defaults under the Existing Leases
(collectively, the "Existing Additional Rent Defaults");
WHEREAS, the amount past due and outstanding (excluding, late fees and
interest accruing on the past due amounts), as of January 31, 2002, under the
Existing Leases and the Notes as a consequence of the Note Defaults and the
Existing Base Rent Defaults is set forth on EXHIBIT G attached hereto and the
amount past due and outstanding, as of September 30, 2001, under the Existing
Leases as a consequence of the Existing Additional Rent Defaults (excluding,
late fees and interest accruing on the past due amounts) is also shown on
EXHIBIT G;
WHEREAS, demand has been made upon Balanced Care under the Working
Capital Assurance Agreements and the Potomac Point Guaranty to advance
sufficient funds to cure the Note Defaults and the Existing Base Rent Defaults,
but Balanced Care has failed to effect such cures and such failures constitute
Lease Defaults under the Existing Leases (collectively, the "BCC Payment
Defaults");
WHEREAS, Balanced Care and its Subsidiaries, as well as the Third Party
Lessees, have continued to experience cash flow shortfalls and, as a result,
Balanced Care, the other BCC Parties and the Third Party Lessees anticipate a
continued future inability to comply with their respective obligations under the
Existing Lease Documents;
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WHEREAS, the Buyer, Balanced Care and the BCC Subsidiaries wish to
avoid the damage to their respective businesses and reputations which may result
from (i) the continued inability by Balanced Care and the BCC Subsidiaries to
comply with their respective obligations under the Existing Lease Documents and
any subsequent exercise by the Seller of its rights and remedies in connection
therewith and (ii) the continued prosecution of the Pending Litigation by La
Quinta-TRS;
WHEREAS, the Seller and La Quinta-TRS (collectively, the "Meditrust
Parties") wish to avoid (i) the damage to the reputation and other goodwill of
the Facilities that may result from any future inability of Balanced Care and
the BCC Subsidiaries to comply with their obligations under the Existing Lease
Documents as a consequence of their deteriorating financial condition and (ii)
the delay and expense attendant to any exercise of their respective rights and
remedies under the Existing Lease Documents and the Promissory Note;
WHEREAS, the Buyer wishes to be granted an option to acquire the Leased
Property so that in connection with any purchase of the Leased Property by the
Buyer, the BCC Parties' business operations with respect to the Facilities may
be restructured on a basis favorable to them, which will, in turn, allow (i)
Balanced Care and the BCC Subsidiaries to improve their deteriorating financial
condition and (ii) the Buyer to protect its investment in Balanced Care;
WHEREAS, as a consequence of the deteriorating financial condition of
the Balanced Care Entities (as hereinafter defined), the Buyer and Balanced Care
have asked for certain financial accommodations from the Meditrust Parties,
including, without limitation, a release from their respective liabilities under
the Promissory Note and arising as a consequence of the Existing Defaults (as
hereinafter defined);
WHEREAS, in order to move forward toward completing the Divesture, the
Seller wishes to resolve the Existing Defaults and sell the Leased Property and
La Quinta-TRS wishes to resolve the Pending Litigation;
WHEREAS, the Seller is willing to grant an option to the Buyer to
acquire the Leased Property at a discounted price and La Quinta-TRS is willing
to settle the Pending Litigation, subject to the terms and conditions
hereinafter set forth, including, without limitation, the payment of the Option
Payment (as hereinafter defined) and the execution and delivery of the
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Master Lease (as hereinafter defined) and the other Master Lease Documents (as
hereinafter defined); and
WHEREAS, all of the parties hereto acknowledge that they shall receive
direct and indirect benefits from the execution and delivery of this Agreement;
NOW, THEREFORE, for and in consideration of the foregoing premises, the
mutual covenants, conditions, representations and undertakings hereinafter set
forth and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS AND MEANINGS. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires, (a)
the terms defined in this Section have the meanings assigned to them in this
Section and include the plural as well as the singular and (b) all references in
this Agreement to designated "Sections" and other subdivisions are to designated
Sections and other subdivisions of this Agreement.
Additional Rent: The Additional Rent as defined under any Lease.
Affiliate: As defined under each of the Leases.
Affiliated Party Subordination Agreements: Collectively, each
Affiliated Party Subordination Agreement as defined under each of the Existing
Leases.
Agreement: This Option, Settlement and Release Agreement, together with
all Exhibits attached hereto, as the same may hereafter be amended, restated and
supplemented from time to time.
Assignment and Assumption Documents: As defined in Section 9.9.
Assignments of Subleases: Collectively, each Assignment of Subleases as
defined under each of the Existing Leases.
Balanced Care: As defined in the preamble of this Agreement and its
successors and assigns.
Balanced Care Entities: Collectively, Balanced Care and its
Subsidiaries.
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Base Rent: The Base Rent as defined under any Lease.
BCC-Blytheville: As defined in the preamble of this Agreement and its
successors and assigns.
BCC-Chesterfield: As defined in the preamble of this Agreement and its
successors and assigns.
BCC-Chippewa: As defined in the preamble of this Agreement and its
successors and assigns.
BCC Closing Certification: As defined in Section 7.
BCC Conditions Subsequent: As defined in Section 9.5 of this Agreement.
BCC-Dillsburg: As defined in the preamble of this Agreement and its
successors and assigns.
BCC Financial Condition Defaults: As defined in the recitals of this
Agreement, together with any failures by Balanced Care from and after the date
hereof through the expiration of the Option Period to pay its debts.
BCC-Hendersonville: As defined in the preamble of this Agreement and
its successors and assigns.
BCC-Kingsport: As defined in the preamble of this Agreement and its
successors and assigns.
BCC-Knoxville: As defined in the preamble of this Agreement and its
successors and assigns.
BCC-Lewisburg: As defined in the preamble of this Agreement and its
successors and assigns.
BCC-Lima: As defined in the preamble of this Agreement and its
successors and assigns.
BCC Net Worth Defaults: As defined in the recitals of this Agreement,
together with any failures by Balanced Care from and after the date hereof
through the expiration of the Option Period to maintain the required Tangible
Net Worth under the Existing Leases.
BCC Option Agreements: Collectively, each BCC Option Agreement as
defined under the Third Party Leases, as affected by the Third Party Agreements.
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BCC Parties: As defined in the recitals of this Agreement and their
respective successors and assigns.
BCC Payment Defaults: As defined in the recitals of this Agreement,
together with any failures by Balanced Care from and after the date hereof to
cure the Note Defaults and the Existing Base Rent Defaults.
BCC-Pocahontas: As defined in the preamble of this Agreement and its
successors and assigns.
BCC Release: As defined in Section 9.5.
BCC Stock Pledge: As defined in the Existing Leases.
BCC Subsidiaries: As defined in the recitals of this Agreement and
their respective successors and assigns.
BCC-Xenia: As defined in the preamble of this Agreement and its
successors and assigns.
Blytheville Facility: The Facility as defined under the Blytheville
Lease.
Blytheville Land: The Land as defined under the Blytheville Lease and
as more particularly described in EXHIBIT A-1 attached hereto and incorporated
herein by reference.
Blytheville Lease: That certain First Amended and Restated Facility
Lease, dated as of December 19, 1997, as amended, by and between Meditrust
Acquisition Corporation II and the Blytheville Lessee.
Blytheville Lessee: TC Realty at Blytheville, Inc., a Delaware
corporation.
Buyer: As defined in the preamble of this Agreement and its permitted
successors and assigns.
Buyer Closing Certification: As defined in Section 6.
Buyer Default: As defined in the Section 14 of this Agreement.
Buyer Documents: Collectively, all documents required hereunder to be
delivered by the Buyer, Balanced Care and/or any Balanced Care Entity.
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Cash Collateral: Collectively, the Cash Collateral as defined under
each of the Existing Leases.
Casualty: Any damage or destruction to any portion of the Leased
Property by reason of fire or other hazard or casualty.
Chesterfield Defaults: Collectively, the failure by the Developer to
complete the Chesterfield Facility on or before the Completion Date (as defined
in the Chesterfield Leasehold Improvement Agreement), together with the breach
of any representation, warranty or covenant under the Chesterfield Leasehold
Improvement Agreement specifically related thereto, including, without
limitation, the Developer's failure to provide certain documentation relating to
the completion of the Chesterfield Facility to the Seller on a timely basis due
to the delay in the completion of the Chesterfield Facility.
Chesterfield Facility: The Facility as defined under the Chesterfield
Lease.
Chesterfield Land: The Land as defined under the Chesterfield Lease and
as more particularly described in EXHIBIT A-9 attached hereto and incorporated
herein by reference.
Chesterfield Lease: That certain Facility Lease Agreement, dated as of
June 30, 1998, by and between Meditrust Company LLC and the Chesterfield Lessee.
Chesterfield Leasehold Improvement Agreement: The Leasehold Improvement
Agreement as defined under the Chesterfield Lease.
Chesterfield Lessee: TC Realty of Chesterfield, Inc., a Delaware
corporation.
Chippewa Facility: The Facility as defined under the Chippewa Lease.
Chippewa Land: The Land as defined under the Chippewa Lease and as more
particularly described in EXHIBIT A-7 attached hereto and incorporated herein by
reference.
Chippewa Lease: That certain Facility Lease Agreement, dated as of
January 7, 1998, by and between Meditrust Acquisition Corporation II and the
Chippewa Lessee.
Chippewa Lessee: TC Realty of Chippewa, Inc., a Delaware corporation.
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Closing: As defined in Section 2 of this Agreement.
Closing Conditions: As defined in Section 2 of this Agreement.
Closing Date: As defined in Section 13.1 of this Agreement.
Code: As defined in Section 5.5 of this Agreement.
Commencement Dates: Collectively, each Commencement Date as defined
under each of the Existing Leases.
Condemnation: A taking by power of eminent domain or conveyance in lieu
thereof of all or any portion of the Land.
Covenant Not to Xxx: As defined in Section 9.6 of this Agreement.
Demand Notes: As defined in the recitals of this Agreement.
Designee: As defined in Section 9.9 of this Agreement.
Developer: As defined in the preamble of this Agreement and its
successors and assigns.
Dillsburg Facility: The Facility as defined under the Dillsburg Lease.
Dillsburg Land: The Land as defined under the Dillsburg Lease and as
more particularly described in EXHIBIT A-5 attached hereto and incorporated
herein by reference.
Dillsburg Lease: That certain Facility Lease Agreement, dated as of
December 31, 1997, by and between Meditrust Acquisition Corporation II and the
Dillsburg Lessee.
Dillsburg Lessee: Black Box of Dillsburg, Inc., a Delaware corporation.
Divestiture: As defined in the recitals of this Agreement.
Environmental Indemnity Agreements: Collectively, each Environmental
Indemnity Agreement as defined under each of the Existing Leases.
Exercise Period: The period from and including the date hereof through
and including the Final Exercise Date.
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Existing Additional Rent: Collectively, the Additional Rent as defined
under each of the Existing Leases.
Existing Base Rent: Collectively, the Base Rent as defined under each
of the Existing Leases.
Existing Base Rent Defaults: As defined in the recitals of this
Agreement.
Existing Defaults: Collectively, the BCC Financial Condition Defaults,
the BCC Net Worth Defaults, the Rent Coverage Defaults, the Note Defaults, the
Existing Base Rent Defaults, the Existing Additional Rent Defaults, the Option
Period Defaults, the Chesterfield Defaults and the BCC Payment Defaults,
together with any breaches of any representations or warranties arising as a
consequence of any of the foregoing.
Existing Guaranties: Collectively, each guaranty executed by Balanced
Care guarantying any portion of the Existing Lease Obligations.
Existing Indebtedness: The outstanding indebtedness evidenced by the
Promissory Note.
Existing Lease Documents: Collectively, the Lease Documents as defined
under each of the Existing Leases.
Existing Lease Obligations: Collectively, the Lease Obligations as
defined under each of the Existing Leases.
Existing Leases: Collectively, the Blytheville Lease, the Lewisburg
Lease, the Lima Lease, the Potomac Point Lease, the Dillsburg Lease, the Xenia
Lease, the Chippewa Lease, the Kingsport Lease, the Chesterfield Lease, the
Hendersonville Lease, the Knoxville Lease and the Pocahontas Lease.
Existing Lessees: Collectively, the Blytheville Lessee, the Lewisburg
Lessee, the Lima Lessee, the Potomac Point Lessee, the Dillsburg Lessee, the
Xenia Lessee, the Chippewa Lessee, the Kingsport Lessee, the Chesterfield
Lessee, the Hendersonville Lessee, the Knoxville Lessee and the Pocahontas
Lessee.
Facilities: Collectively, the Blytheville Facility, the Lewisburg
Facility, the Lima Facility, the Potomac Point Facility, the Dillsburg Facility,
the Xenia Facility, the Chippewa Facility, the Kingsport Facility, the
Chesterfield Facility, the Hendersonville Facility, the Knoxville Facility and
the Pocahontas Facility.
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Final Exercise Date: July 26, 2002.
First Leasehold Mortgages: Collectively, each First Leasehold Mortgage
as defined under each of the Existing Leases (other than the Potomac Point
Lease).
Fixtures: Collectively, all fixtures, fittings, furniture, apparatus,
equipment, machinery and building systems permanently affixed to or incorporated
into any portion of the Leased Property, including, without limitation, all
furnaces, boilers, heaters, electrical equipment, heating, plumbing, lighting,
ventilating, incinerating, air and water pollution control, waste disposal,
air-cooling and air conditioning systems and apparatus and sprinkler systems.
Governmental Authorities: Collectively, all agencies, authorities,
bodies, boards, commissions, courts, instrumentalities, legislatures and offices
of any nature whatsoever of any government, quasi-government unit or political
subdivision, whether with a federal, state, county, district, municipality, city
or otherwise and whether now or hereinafter in existence.
Guarantor: Any guarantor of all or any portion of the Lease
Obligations.
Health Care Approvals: As defined in Section 9.1 of this Agreement.
Hendersonville Facility: The Facility as defined under the
Hendersonville Lease.
Hendersonville Land: The Land as defined under the Hendersonville Lease
and as more particularly described in EXHIBIT A-10 attached hereto and
incorporated herein by reference.
Hendersonville Lease: That certain Facility Lease Agreement, dated as
of June 30, 1998, by and between Meditrust Company LLC and the Hendersonville
Lessee.
Hendersonville Lessee: TC Realty of Hendersonville, Inc., a Delaware
corporation.
Holding Companies: As defined in the recitals of this Agreement and
their respective successors and assigns.
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Impositions: Collectively, all taxes (including, without limitation,
all ad valorem, property, sales, use, single business, gross receipts,
transaction privilege, rent or similar taxes, but, specifically excluding any
income, capital stock, franchise or similar taxes), assessments (including,
without limitation, all assessments for public improvements or benefits, whether
or not commenced or completed prior to the date hereof and whether or not to be
completed prior to the Closing), ground rents, water and sewer rents, water
charges or other rents and charges, excises, tax levies, fees (including,
without limitation, license, permit, inspection, authorization and similar
fees), transfer taxes and recordation taxes imposed as a result of the
conveyance of the Leased Property to the Buyer (or the applicable Designee) or
any assignment or termination of any Lease, and all other governmental charges,
in each case whether general or special, ordinary or extraordinary, or foreseen
or unforeseen, of every character in respect of the Leased Property, which at
any time prior to the sale of the Leased Property in accordance with the terms
hereof, may be assessed or imposed on or in respect of or be a Lien upon (a) the
Seller's interest in the Leased Property, (b) the Leased Property or any rent
therefrom or any estate, right, title or interest therein or (c) any occupancy,
operation, use or possession of, sales from, or activity conducted on, or in
connection with, the Leased Property or the leasing or use of the Leased
Property.
IPC/BCC Conditions Subsequent: As defined in Section 9.4.
IPC/BCC Parties: Collectively, the Buyer, the New Lessee and the BCC
Parties and their respective successors and assigns.
IPC/BCC Release: As defined in Section 9.4.
Kingsport Facility: The Facility as defined under the Kingsport Lease.
Kingsport Land: The Land as defined under the Kingsport Lease and as
more particularly described in EXHIBIT A-8 attached hereto and incorporated
herein by reference.
Kingsport Lease: That certain Facility Lease Agreement, dated as of
June 30, 1998, by and between Meditrust Company LLC and the Kingsport Lessee.
Kingsport Lessee: TC Realty of Kingsport, Inc., a Delaware corporation.
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Knoxville Facility: The Facility as defined under the Knoxville Lease.
Knoxville Land: The Land as defined under the Knoxville Lease and as
more particularly described in EXHIBIT A-11 attached hereto and incorporated
herein by reference.
Knoxville Lease: That certain Facility Lease Agreement, dated as of
June 30, 1998, by and between Meditrust Company LLC and the Knoxville Lessee.
Knoxville Lessee: TC Realty of Knoxville, Inc., a Delaware corporation.
Land: As defined in the recitals of this Agreement and, including,
without limitation, the Blytheville Land, the Lewisburg Land, the Lima Land, the
Potomac Point Land, the Dillsburg Land, the Xenia Land, the Chippewa Land, the
Kingsport Land, the Chesterfield Land, the Hendersonville Land, the Knoxville
Land and the Pocahontas Land.
La Quinta-TRS: As defined in the preamble of this Agreement and its
successors and assigns.
Lease Defaults: Collectively, any and all Lease Defaults as defined
under each of the Leases.
Lease Documents: Collectively, the Lease Documents as defined under
each of the Leases.
Lease Obligations: Collectively, the Lease Obligations as defined under
each of the Leases.
Lease Termination Documents: As defined in Section 9.9 of this
Agreement.
Leased Improvements: Collectively, all buildings, structures, fixtures
and other improvements of every kind including, but not limited to, alleyways
and connecting tunnels, sidewalks, utility pipes, conduits and lines (on-site
and off-site), and parking areas and roadways appurtenant to such buildings and
structures situated upon any portion of the Land, including, without limitation,
the Facilities.
Leased Property: Collectively, the Land, the Related Rights, the Leased
Improvements and the Fixtures.
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Leasehold Improvement Agreements: Collectively, each Leasehold
Improvement Agreement as defined under each of the Existing Leases (other than
the Potomac Point Lease).
Leases: Collectively, the Existing Leases and the Master Lease.
Lessees: Collectively, the Existing Lessees and New Lessee.
Lewisburg Facility: The Facility as defined under the Lewisburg Lease.
Lewisburg Land: The Land as defined under the Lewisburg Lease and as
more particularly described in EXHIBIT A-2 attached hereto and incorporated
herein by reference.
Lewisburg Lease: That certain Facility Lease Agreement, dated as of
December 31, 1997, by and between Meditrust Acquisition Corporation II and the
Lewisburg Lessee. Lewisburg Lessee: Black Box of Lewisburg, Inc., a Delaware
corporation.
Lien: With respect to all or any portion of the Leased Property, any
mortgage, easement, restriction, lien, pledge, collateral assignment,
hypothecation, charge, security interest, title retention agreement, levy,
execution, seizure, attachment, garnishment or other encumbrance of any kind in
respect of all or any portion of the Leased Property, whether or not xxxxxx,
vested or perfected.
Lima Facility: The Facility as defined under the Lima Lease.
Lima Land: The Land as defined under the Lima Lease and as more
particularly described in EXHIBIT A-3 attached hereto and incorporated herein by
reference.
Lima Lease: That certain First Amended and Restated Facility Lease,
dated as of December 31, 1997, by and between Meditrust Acquisition Corporation
II and the Lima Lessee.
Lima Lessee: TC Realty Corporation I, a Delaware corporation.
Managers: Collectively, each Current Manager as defined under each of
the Leases.
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Master Lease: As defined in Section 9.2 of this Agreement.
Master Lease Base Rent: The Base Rent as defined under the Master
Lease.
Master Lease Commencement Date: The date of the commencement of the
term under the Master Lease.
Master Lease Documents: Collectively, the Lease Documents as defined
under the Master Lease.
Master Lease Obligations: Collectively, the Lease Obligations as
defined under the Master Lease.
Meditrust Closing Certification. As defined in Section 5 of this
Agreement.
Meditrust Entities: As defined in the recitals of this Agreement and
their respective successors and assigns.
Meditrust Parties: As defined in the recitals of this Agreement and
their successors and assigns.
Meditrust Release: As defined in Section 9.3.
Merger: As defined in Section 9.1 of this Agreement.
MHC: As defined in the recitals of this Agreement and its successors
and assigns.
New Lessee: As defined in the preamble of this Agreement.
New Meditrust-LLC: As defined in the recitals of this Agreement.
1999 Option Agreement: As defined in the recitals of this Agreement.
Note Defaults: As defined in the recitals of this Agreement, together
with any future failures by the Holding Companies to make any payment due under
the Notes through the expiration of the Option Period.
Notes: Collectively, each Note as defined under each of the Existing
Leases.
Notice: As defined in Section 17.9 of this Agreement.
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Nursing Home Sale: As defined in the recitals of this Agreement.
Option Notice: As defined in Section 2 of this Agreement.
Option Payment: As defined in Section 4.
Option Period: The period from and including the date hereof through
and including August 5, 2002.
Option Period Default: Any failure by any Lessee to pay any Base Rent
or Additional Rent when due during the Option Period.
Option Right: As defined in Section 2 of this Agreement.
Optional Title Matters: As defined in Section 9.11 of this Agreement.
Optional Title Notice: As defined in Section 9.11 of this Agreement.
Parent: As defined in the recitals of this Agreement and its successors
and assigns.
Pending Litigation: As defined in the recitals of this Agreement and
its successors and assigns.
Permits Assignments: Collectively, the Permits Assignment as defined
under each of the Existing Leases.
Permitted Exceptions: Collectively, (a) any sublease entered into (or
consented to) by any Lessee, (b) the matters set forth on Exhibit B of each
Lease and any other encumbrance permitted under each Lease (other than any First
Leasehold Mortgage), (c) Liens of mechanics, laborers, materialmen, suppliers or
vendors, (d) Liens for Impositions, (e) any matters that current surveys of the
Land may disclose and (f) all other Liens other than any Seller Encumbrances.
Person: A corporation, limited liability company, association, trust
(including a business trust), partnership, joint venture, joint stock company,
organization, proprietorship, natural person, government or governmental agency
or political subdivision thereof or any other entity of whatever nature.
Pledgor Pledge Agreement: As defined in the Existing Leases.
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Pocahontas Facility: The Facility as defined under the Pocahontas
Lease.
Pocahontas Land: The Land as defined under the Pocahontas Lease and as
more particularly described in EXHIBIT A-12 attached hereto and incorporated
herein by reference.
Pocahontas Lease: That certain First Amended and Restated Facility
Lease, dated as of December 19, 1997, as amended, by and between Meditrust
Acquisition Corporation II and the Pocahontas Lessee.
Pocahontas Lessee: TC Realty at Pocahontas, Inc., a Delaware
corporation.
Potomac Point Facility: The Facility as defined under the Potomac Point
Lease.
Potomac Point Guaranty: That certain Guaranty, dated as of June 30,
1998, executed by Balanced Care for the benefit of Meditrust Company LLC.
Potomac Point Land: The Land as defined under the Potomac Point Lease
and as more particularly described in EXHIBIT A-4 attached hereto and
incorporated herein by reference.
Potomac Point Lease: That certain Facility Lease Agreement, dated as of
June 30, 1998, by and between Meditrust Company LLC and the Potomac Point
Lessee.
Potomac Point Lease Documents: The Lease Documents as defined under the
Potomac Point Lease.
Potomac Point Lessee: As defined in the preamble of this Agreement and
its successors and assigns.
Primary Intended Use. With respect to any Facility, as defined under
the Lease relating thereto.
Promissory Note: As defined in the recitals of this Agreement.
Purchase Price: As defined in Section 3 of this Agreement.
Related Rights: Collectively, all easements, rights and appurtenances
of every nature and description now or hereafter relating to or benefitting all
or any portion of the Land and the Leased Improvements.
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Released BCC Parties: As defined in Section 9.5 of this Agreement.
Released IPC/BCC Parties: As defined in Section 9.4 of this Agreement.
Released Meditrust Parties: As defined in Section 9.3 of this
Agreement.
Rent: As defined under each of the Leases.
Rent Coverage Defaults: As defined in the recitals of this Agreement,
together with any failures by the Existing Lessees from and after the date
hereof through the expiration of the Option Period to maintain the required Rent
Coverage Ratios under the Existing Leases.
Rent Coverage Ratios: Collectively, the Rent Coverage Ratio as defined
under each of the Existing Leases.
Security Agreements: Collectively, each Security Agreement as defined
under each of the Existing Leases.
Seller: As defined in the preamble of this Agreement and its successors
and assigns.
Seller Default: As defined in Section 14 of this Agreement.
Seller Documents: Collectively, all documents required hereunder to be
delivered by the Seller and/or La Quinta-TRS.
Seller Encumbrance: Any (i) Lien securing a monetary tax (but only to
the extent that such tax is excluded from the definition of Imposition) or other
obligation or undertaking of the Seller or (ii) involuntary Lien caused by the
actions or omissions of the Seller.
Shareholders: As defined in the recitals of this Agreement and their
heirs, executors, administrators, legal representatives, successors and assigns.
Stock Options: As defined in the recitals of this Agreement.
Stock Transfers: Collectively, each Stock Transfer as defined under
each of the Existing Leases (other than the Potomac Point Lease).
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Subsidiary: As defined under each of the Leases.
Tangible Net Worth: As defined under each of the Existing Leases.
Tennessee Assignments of Subleases: Collectively, the Assignment of
Subleases as defined under the Kingsport Lease, the Chesterfield Lease, the
Hendersonville Lease and the Knoxville Lease.
Tennessee Lessees: Collectively, the Kingsport Lessee, the Chesterfield
Lessee, the Hendersonville Lessee and the Knoxville Lessee.
Tennessee Managers: Collectively, BCC-Kingsport, BCC-Chesterfield,
BCC-Hendersonville and BCC-Knoxville.
Tennessee Security Agreement: A security agreement in substantially the
same form as the Security Agreement as defined under the Kingsport Lease.
Termination Date: As defined in Section 17.23 of this Agreement.
Third Party Agreements: Collectively, (i) the letter dated as of
January 16, 2002 from Balanced Care to and accepted by the Dillsburg Lessee, the
Lewisburg Lessee and Black Box Holding Company, (ii) the letter dated as of
January 18, 2002 from Balanced Care to and accepted by the Dillsburg Lessee, the
Lewisburg Lessee and Black Box Holding Company and (iii) the letter dated as of
January 18, 2002 from Balanced Care to and accepted by the Kingsport Lessee, the
Hendersonville Lessee, the Knoxville Lessee, the Chesterfield Lessee, the
Blytheville Lessee, the Pocahontas Lessee, the Chippewa Lessee, the Lima Lessee,
the Xenia Lessee and TC Realty Holding Company.
Third Party Lessees: As defined in the recitals of this Agreement and
their successors and assigns.
Title Objection Notice: As defined in Section 9.11 of this Agreement.
Tranche 1 Properties: As defined in the recitals of this Agreement.
Transaction Documents: Collectively, this Agreement, the Seller
Documents and the Buyer Documents.
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Working Capital Assurance Agreements: Collectively, each Working
Capital Assurance Agreement as defined under the Existing Leases.
Working Capital Loans: Collectively, as defined under the Working
Capital Assurance Agreements.
Working Capital Loan Documents: Collectively, as defined under the
Existing Leases.
Working Capital Payoffs: Collectively, as defined under the Existing
Leases.
Xenia Facility: The Facility as defined under the Xenia Lease.
Xenia Land: The Land as defined under the Xenia Lease and as more
particularly described in EXHIBIT A-6 attached hereto and incorporated herein by
reference.
Xenia Lease: That certain First Amended and Restated Facility Lease,
dated as of January 8, 1998, by and between Meditrust Acquisition Corporation II
and the Xenia Lessee.
Xenia Lessee: TC Realty Corporation IV, a Delaware corporation.
2. OPTION. Subject to the provisions hereof, the Buyer shall have the
right but not the obligation to acquire and the Seller shall have the obligation
to transfer all of its right, title and interest in the Leased Property;
provided, that, at the time of the consummation of the closing of the transfer
of the Leased Property (the "Closing"), subject to Sections 10.1 and 11.1
hereof, (a) the Seller shall have fulfilled all of its obligations hereunder
with respect to the Leased Property and all conditions precedent to the Seller's
obligations to consummate the Closing set forth in Section 11 of this Agreement
shall be satisfied or waived and (b) all of the conditions precedent to the
Buyer's obligation to consummate the Closing set forth in Section 10 of this
Agreement shall be satisfied or waived (the matters referred to in the foregoing
clauses (a) and (b) are collectively referred to herein as the "Closing
Conditions").
The Buyer's right to acquire the Seller's interest in the Leased
Property relating thereto (the "Option Right") shall be exercisable, upon not
less than ten (10) days' prior written notice (the "Option Notice") during the
Exercise Period. Once
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given, the Option Notice shall be irrevocable. Subject to the provisions of
Section 12 hereof, the Closing shall occur on the specific date designated by
the Buyer in the Option Notice, which date shall be (i) within the Exercise
Period and (ii) no earlier than ten (10) days after the date that the Option
Notice is received by the Seller and no later than thirty (30) days thereafter.
3. PURCHASE PRICE. In consideration of (a) the Meditrust Parties'
agreement to enter into this Agreement and grant the Option Right to the Buyer,
(b) La Quinta-TRS' agreement to dismiss the Pending Litigation, (c) the
Meditrust Parties' agreement to the IPC/BCC Release, (d) the Seller's agreement
to the BCC Release, (e) the Seller's agreement (notwithstanding the Existing
Defaults) to consent to the Stock Transfers and (f) the Seller's agreement, in
the event that the Buyer elects to exercise the Option Right in accordance with
the terms hereof, to convey the Leased Property to the Buyer in accordance with
the terms hereof, at the Closing, as long as at the time of the Closing, the
Closing Conditions shall have been satisfied or waived, then, the Buyer shall
(and hereby agrees to) pay to the Seller an amount equal to FORTY-THREE MILLION
($43,000,000) DOLLARS (the "Purchase Price"). The Purchase Price shall be paid
by the Buyer to the Seller at the Closing by wire transfer of funds without
adjustment of any kind or nature except as may be otherwise expressly set forth
herein; provided, however, it is acknowledged and agreed that the Option Payment
shall be applied against the Purchase Price as provided in Section 4 hereof.
Solely for the purposes of determining any applicable transfer taxes payable in
connection with the transfer of the Leased Property, the Purchase Price shall be
allocated amongst the Facilities as set forth on EXHIBIT B attached hereto.
4. OPTION PAYMENT. In consideration of (a) the Meditrust Parties'
agreement to enter into this Agreement and grant the Option Right to the Buyer,
(b) La Quinta-TRS' agreement to dismiss the Pending Litigation, (c) the
Meditrust Parties' agreement to the IPC/BCC Release, (d) the Seller's agreement
to the BCC Release, (e) the Seller's agreement (notwithstanding the Existing
Defaults) to consent to the Stock Transfers and (f) the Seller's agreement, in
the event that the Buyer elects to exercise the Option Right in accordance with
the terms hereof, to convey the Leased Property to the Buyer in accordance with
the terms hereof, at the Closing, as long as at the time of the Closing, the
Closing Conditions shall have been satisfied or waived, simultaneously with the
execution and delivery of this Agreement, the Buyer shall pay the Seller the
non-refundable
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amount of THIRTEEN MILLION ($13,000,000.00) DOLLARS (the "Option Payment"). The
Buyer acknowledges and agrees that the Option Payment is non-refundable and that
the Buyer shall have no rights whatsoever with respect to (and hereby waives all
claims to be entitled to any refund of) the Option Payment; provided, however,
that, notwithstanding the foregoing, in the event that the Buyer elects to
exercise the Option Right granted to the Buyer hereunder in accordance with the
terms of this Agreement, then, if (i) the Closing is consummated in accordance
with the terms hereof on the Closing Date, the Option Payment shall be applied
against the Purchase Price on the Closing Date, (ii) the Closing is not
consummated due solely to a Seller Default, the Option Payment may be refunded
to the Buyer in accordance with the provisions of Section 14 and (iii) the
Closing is not consummated due solely to the Seller's failure to satisfy or
remove any Seller Encumbrance, the Option Payment may be refunded to the Buyer
in accordance with the provisions of Section 12.
Without limiting anything set forth above, the Buyer acknowledges and
agrees that in the event that the Buyer does not elect to exercise the Option
Right or if the Buyer exercises the Option Right in accordance with the terms of
this Agreement, but the conveyance of the Leased Property contemplated hereunder
is not consummated on the Closing Date for any reason whatsoever other than (x)
a Seller Default or (y) a failure to remove or satisfy any Seller Encumbrance,
the Seller shall be entitled to retain the Option Payment made hereunder and the
Buyer shall have no rights whatsoever with respect to (and hereby waives all
claims to be entitled to any refund of) the Option Payment.
5. MEDITRUST PARTIES' REPRESENTATIONS. As a material inducement to (a)
the IPC/BCC Parties to enter into this Agreement, (b) the Buyer to purchase the
Leased Property, (c) Balanced Care to consummate the Stock Options and each
Merger, (d) the New Lessee to execute and deliver the Master Lease and (e) the
IPC/BCC Parties to agree to the Meditrust Release, the Meditrust Parties each
make the following representations and warranties to the IPC/BCC Parties, which
representations and warranties are true as of the date of this Agreement and, as
a condition of the Buyer's obligation to acquire the Leased Property (if the
Buyer exercises its Option Right hereunder), except as otherwise expressly
provided herein, shall be true and correct as of the Closing Date; provided,
that, subject to the provisions of Section 10.1 of this Agreement, such
representations and warranties shall be treated as modified as of the Closing,
and without breach of the foregoing obligation
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of the Meditrust Parties, by the delivery by the Meditrust Parties at the
Closing of a certification in substantially the form attached hereto as EXHIBIT
C and incorporated herein by reference, reflecting the occurrence of any event
or change in the state of facts effective after the date hereof and prior to the
Closing relating to the representations and warranties made by the Meditrust
Parties (the "Meditrust Closing Certification"). The following representations
and warranties (as the same may be modified by any Meditrust Closing
Certification with such modifications being reasonably acceptable to the Buyer)
shall survive the Closing and any earlier termination of this Agreement for a
period of one year.
5.1 Existence; Power; Qualification. The Seller is a limited
liability company duly organized, validly existing and in good standing under
the laws of the state of Delaware. La Quinta-TRS is a Delaware corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Each Meditrust Party has all requisite power and authority to own and
operate its properties and to carry on its businesses as presently operated and
to enter into and carry out the terms of this Agreement and the other
Transaction Documents to which such Meditrust Party is or will be a party. Each
Meditrust Party is, or by the Closing Date will be, in good standing in each
jurisdiction where such qualification is necessary or desirable in order to
carry out its business as presently conducted, except where the failure to so
qualify would not have a material adverse effect on the financial condition and
results of operations of the Meditrust Parties and their respective Subsidiaries
taken as a whole.
5.2 Valid and Binding. Subject to (a) the applicable Lessees
waiving such Lessees' respective rights of first refusal to purchase portions of
the Leased Property pursuant to Section 18.3 of the Leases and (b) with respect
to any Lease to be terminated at the Closing, the applicable Lessee waiving its
option to purchase set forth in Section 18.4 of such Lease, each Meditrust Party
is duly authorized to make and enter into this Agreement and all of the other
Transaction Documents to which it is or will be a party and to perform all of
its obligations hereunder and thereunder. This Agreement has been duly executed
and delivered by each Meditrust Party and is the legal, valid and binding
obligation of each of the Meditrust Parties enforceable against each of the
Meditrust Parties in accordance with its terms. All of the other Transaction
Documents to which any Meditrust Party is or will be a party have been, or will
be as of the date of the execution and delivery thereof by such
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Meditrust Party, duly executed and delivered by such Meditrust Party, and each
is, or will be by the date of such execution and delivery by such Meditrust
Party, a legal, valid and binding obligation of such Meditrust Party,
enforceable against such Meditrust Party in accordance with their respective
terms.
5.3 No Violation. The execution, delivery and performance of
this Agreement and the other Transaction Documents to which any Meditrust Party
is or will be a party and, subject to (a) the applicable Lessees waiving their
respective rights of first refusal to purchase portions of the Leased Property
pursuant to Section 18.3 of the Leases in effect at the Closing and (b) with
respect to any Lease to be terminated at the Closing, the applicable Lessee
waiving its option to purchase set forth in Section 18.4 of such Lease, the
performance of such Meditrust Party's obligations hereunder and thereunder,
including, without limitation, the consummation of the sale of the Leased
Property to the Buyer, shall not result in any breach of, or constitute a
default under, or result in the acceleration of, or constitute an event which,
with the giving of notice or the passage of time, or both, could result in
default or acceleration of any obligation of such Meditrust Party under any
permit, contract, mortgage, lien, lease, agreement, instrument, franchise,
arbitration award, judgment, decree, bank loan or credit agreement, trust
indenture or other instrument to which such Meditrust Party is a party or by
which such Meditrust Party may be bound or affected and do not violate or
contravene any requirements of law.
5.4 Consents and Approvals. Subject to (a) the applicable
Lessees waiving their respective rights of first refusal to purchase portions of
the Leased Property pursuant to Section 18.3 of the Leases in effect at the
Closing and (b) with respect to any Lease to be terminated at the Closing, the
applicable Lessee waiving its option to purchase set forth in Section 18.4 of
such Lease, no consent or approval or other authorization of, or exemption by,
or declaration or filing with, any Person and no waiver of any right by any
Person is required to authorize or permit, or is otherwise required as a
condition of the execution, delivery and performance of any Meditrust Party's
obligations under this Agreement and the other Transaction Documents to which it
is or will be a party.
5.5 FIRPTA Representation. The Seller is not a "foreign
person" as that term is defined in the Internal Revenue Code of 1986, as amended
(the "Code"), and the regulations promulgated pursuant thereto.
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5.6 Nothing Omitted. Neither this Agreement nor any of the
other Transaction Documents to which any Meditrust Party is or will be a party,
nor any certificate, agreement, statement or other document, now or hereafter
prepared or executed by any Meditrust Party and furnished to or to be furnished
to any IPC/BCC Party (or its attorneys) by any Meditrust Party (or its
attorneys) in connection with any Meditrust Party's performance of its
obligations hereunder or under any of such other Transaction Documents contains
or will contain any untrue statement of a material fact relating to such
Meditrust Party or omits or will omit to state a material fact relating to such
Meditrust Party necessary in order to prevent all statements contained herein
and therein relating to such Meditrust Party from being misleading.
5.7 Pending Actions, Notices and Reports. There is no action
or investigation pending or, to the knowledge and belief of the Meditrust
Parties, threatened, anticipated or contemplated (nor, to the knowledge of the
Meditrust Parties, is there any reasonable basis therefor) against or affecting
any Meditrust Party before any Governmental Authority which could prevent or
hinder the consummation of the sale of the Leased Property to the Buyer or the
performance of any Meditrust Party's other obligations hereunder or under the
other Transaction Documents to which any Meditrust Party is or will be a party
or call into question the validity of this Agreement or any of such other
Transaction Documents or any action taken or to be taken hereunder or
thereunder.
5.8 Ownership Interests. The Seller is the current holder of
all of (a) the landlord's interest under all of the Existing Lease Documents
(including, without limitation, all claims relating to the Existing Defaults)
and (b) the seller's interest under the 1999 Option Agreement. La Quinta-TRS is
the current holder of all of the lender's interest under the Promissory Note
(including, without limitation, all claims relating to the Existing
Indebtedness).
5.9 Recitals True and Correct. Each of the recitals set forth
in this Agreement is true and correct in every material aspect.
6. BUYER'S REPRESENTATIONS. As a material inducement to (a) the
Meditrust Parties to enter into this Agreement, (b) the Seller to grant the
Option Right to the Buyer, (c) La Quinta-TRS to dismiss the Pending Litigation
and (d) the Meditrust Parties to agree to the IPC/BCC Release and the BCC
Release, the Buyer makes the following representations and warranties to the
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Meditrust Parties, which representations and warranties are true as of the date
of this Agreement and, as a condition of the Seller's obligation to consummate
the conveyance of the Leased Property to the Buyer, except as otherwise
expressly provided herein, shall be true and correct as of the Closing Date;
provided, that, subject to the provisions of Section 11.1 of this Agreement,
such representations and warranties shall be treated as modified as of the
Closing, and without breach of the foregoing obligation of the Buyer, by the
Buyer's delivery at the Closing of a certification in substantially the form
attached hereto as EXHIBIT D and incorporated herein by reference, reflecting
the occurrence of any event or change in the state of facts effective after the
date hereof and prior to the Closing relating to the representations and
warranties made by the Buyer (the "Buyer Closing Certification"). The following
representations and warranties (as the same may be modified by any Buyer Closing
Certification with such modifications being reasonably acceptable to the Seller)
shall survive the Closing and any earlier termination of this Agreement for a
period of one year.
6.1 Existence; Power; Qualification. The Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the Grand Duchy of Luxembourg. The Buyer has all requisite corporate power to
own and operate its properties and to carry on its business as now conducted and
to enter into and carry out this Agreement and the other Transaction Documents
to which it is or will be a party and is duly qualified to transact business and
is, or by the Closing Date will be, in good standing in each jurisdiction where
such qualification is necessary or desirable in order to carry out its business
as presently conducted and as proposed to be conducted, except where the failure
to so qualify would not have a material adverse effect on the financial
condition and results of operations of the Buyer and its Subsidiaries taken as a
whole.
6.2 Valid and Binding. The Buyer is duly authorized to make
and enter into this Agreement and all of the other Transaction Documents to
which it is or will be a party and to perform all of its obligations hereunder
and thereunder. This Agreement has been duly executed and delivered by the Buyer
and is the legal, valid and binding obligation of the Buyer enforceable against
the Buyer in accordance with its terms. All of the other Transaction Documents
to which the Buyer is or will be a party have been, or will be as of the date of
the execution and delivery thereof by the Buyer, duly executed and delivered
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by the Buyer, and each is, or will be by the date of such execution and delivery
by the Buyer, a legal, valid and binding obligation of the Buyer enforceable in
accordance with its terms.
6.3 No Violation. The execution, delivery and performance of
this Agreement and the other Transaction Documents to which the Buyer is or will
be a party and, subject to (a) the applicable Lessees waiving their respective
rights of first refusal to purchase portions of the Leased Property pursuant to
Section 18.3 of the Leases in effect at the Closing and (b) with respect to any
Lease to be terminated at the Closing, the applicable Lessee waiving its option
to purchase set forth in Section 18.4 of such Lease, the performance of the
Buyer's obligations hereunder and thereunder, including, without limitation, the
consummation of the acquisition of the Leased Property by the Buyer, shall not
result in any breach of, or constitute a default under, or result in the
acceleration of, or constitute an event which, with the giving of notice or the
passage of time, or both, could result in default or acceleration of any
obligation of the Buyer under any permit, contract, mortgage, lien, lease,
agreement, instrument, franchise, arbitration award, judgment, decree, bank loan
or credit agreement, trust indenture or other instrument to which the Buyer is a
party or by which the Buyer may be bound or affected and do not violate or
contravene any requirements of law.
6.4 Consents and Approvals. Other than (i) such consents and
approvals that have already been obtained, (ii) the Health Care Approvals and
(iii) the waivers referred to in Sections 11.4 and 11.5, no consent or approval
or other authorization of, or exemption by, or declaration or filing with, any
Person and no waiver of any right by any Person is required to authorize or
permit, or is otherwise required as a condition of the execution, delivery and
performance of the Buyer's obligations under this Agreement and the other
Transaction Documents to which it is or will be a party.
6.5 Pending Actions, Notices and Reports. There is no action
or investigation pending or, to the knowledge and belief of the Buyer,
threatened, anticipated or contemplated (nor, to the knowledge of the Buyer is
there any reasonable basis therefor) against or affecting the Buyer before any
Governmental Authority which could prevent or hinder the consummation of the
acquisition of the Leased Property by the Buyer or the performance of any of the
Buyer's other obligations hereunder or under any of the other Transaction
Documents to
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which the Buyer is or will be a party or call into question the validity of this
Agreement or any of such other Transaction Documents or any action taken or to
be taken hereunder or thereunder.
6.6 Nothing Omitted. Neither this Agreement nor any of the
other Transaction Documents to which the Buyer is or will be a party, nor any
certificate, agreement, statement or other document, now or hereafter prepared
or executed by the Buyer and furnished to or to be furnished to any Meditrust
Party (or its attorneys) by the Buyer (or its attorneys) in connection with the
Buyer's performance of its obligations hereunder or under any of such other
Transaction Documents, contains or will contain any untrue statement of a
material fact relating to the Buyer or omits or will omit to state a material
fact relating to the Buyer necessary in order to prevent all statements
contained herein and therein from being misleading.
6.7 Ownership Interests. The Buyer and Balanced Care are the
current holders of all of the buyer's interest under the 1999 Option Agreement.
The Buyer is the current holder of all of the borrower's interest under the
Promissory Note.
6.8 Recitals True and Correct. Each of the recitals set forth
in this Agreement is true and correct in every material aspect.
7. BCC PARTIES' REPRESENTATIONS. As a material inducement to (a) the
Meditrust Parties to enter into this Agreement, (b) to the Seller to grant the
Option Right to the Buyer, (c) La Quinta-TRS to dismiss the Pending Litigation
and (d) the Meditrust Parties to agree to the IPC/BCC Release and the BCC
Release, the BCC Parties make the following representations and warranties to
the Seller, which representations and warranties are true as of the date of this
Agreement and, as a condition of the Seller's obligation to consummate the
conveyance of the Leased Property to the Buyer, except as otherwise expressly
provided herein, shall be true and correct as of the Closing Date; provided,
that, subject to the provisions of Section 11.1 of this Agreement, such
representations and warranties shall be treated as modified as of the Closing,
and without breach of the foregoing obligation of the BCC Parties, by the BCC
Parties' delivery at the Closing of a certification in substantially the form
attached hereto as EXHIBIT E and incorporated herein by reference, reflecting
the occurrence of any event or change in the state of facts effective after the
date hereof and prior to the Closing relating to the representations and
warranties made by the BCC
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Parties (the "BCC Closing Certification"). The following representations and
warranties (as the same may be modified by any BCC Closing Certification with
such modifications being reasonably acceptable to the Seller) shall survive the
Closing and any earlier termination of this Agreement for a period of one year.
7.1 Existence; Power; Qualification. Each BCC Party is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Each BCC Party has all requisite corporate power to
own and operate its properties and to carry on its business as now conducted and
to enter into and carry out this Agreement and the other Transaction Documents
to which it is or will be a party and is duly qualified to transact business and
is, or by the Closing Date will be, in good standing in each jurisdiction where
such qualification is necessary or desirable in order to carry out its business
as presently conducted and as proposed to be conducted, except where the failure
to so qualify would not have a material adverse effect on the financial
condition and results of operations of Balanced Care and its Subsidiaries taken
as a whole.
7.2 Valid and Binding. Each BCC Party is duly authorized to
make and enter into this Agreement and all of the other Transaction Documents to
which it is or will be a party and to perform all of its obligations hereunder
and thereunder. This Agreement has been duly executed and delivered by each BCC
Party and is the legal, valid and binding obligation of each BCC Party
enforceable against each BCC Party in accordance with its terms. All of the
other Transaction Documents to which any BCC Party is or will be a party have
been, or will be as of the date of the execution and delivery thereof by such
BCC Party, duly executed and delivered by such BCC Party, and each is, or will
be by the dated of such execution and delivery by such BCC Party, a legal, valid
and binding obligation of such BCC Party enforceable in accordance with its
terms.
7.3 No Violation. The execution, delivery and performance of
this Agreement and the other Transaction Documents to which any BCC Party is or
will be a party and the performance of the BCC Parties' obligations hereunder
and thereunder, including, without limitation, the execution and delivery of the
Master Lease, shall not result in any breach of, or constitute a default under,
or result in the acceleration of, or constitute an event which, with the giving
of notice or the passage of time, or both, could result in default or
acceleration of any obligation of any BCC Party under any
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permit, contract, mortgage, lien, lease, agreement, instrument, franchise,
arbitration award, judgment, decree, bank loan or credit agreement, trust
indenture or other instrument to which any BCC Party is a party or by which any
BCC Party may be bound or affected and do not violate or contravene any
requirements of law.
7.4 Consents and Approvals. Other than (i) such consents and
approvals that have already been obtained, (ii) the Health Care Approvals and
(iii) the waivers referred to in Sections 11.4 and 11.5, no consent or approval
or other authorization of, or exemption by, or declaration or filing with, any
Person and no waiver of any right by any Person is required to authorize or
permit, or is otherwise required as a condition of the execution, delivery and
performance of performance of any BCC Party's obligations under this Agreement
and the other Transaction Documents to which it is or will be a party.
7.5 Pending Actions, Notices and Reports. There is no action
or investigation pending or, to the knowledge and belief of the BCC Parties,
threatened, anticipated or contemplated (nor, to the knowledge of the BCC
Parties, is there any reasonable basis therefor) against or affecting any BCC
Party before any Governmental Authority which could prevent or hinder the
performance by any BCC Party of its obligations hereunder or under any of the
other Transaction Documents to which such BCC Party is or will be a party or
call into question the validity of this Agreement or any of such other
Transaction Documents or any action taken or to be taken hereunder or
thereunder.
7.6 Nothing Omitted. Neither this Agreement, nor any of the
other Transaction Documents to which any BCC Party is or will be a party, nor
any certificate, agreement, statement or other document, now or hereafter
prepared or executed by any BCC Party and furnished to or to be furnished to any
Meditrust Party (or its attorneys) by any BCC Party (or its attorneys) in
connection with such BCC Party's performance of its obligations hereunder or
under any of such other Transaction Documents, contains or will contain any
untrue statement of a material fact relating to any BCC Party or omits or will
omit to state a material fact relating to any BCC Party necessary in order to
prevent all statements contained herein and therein from being misleading.
7.7 Ownership Interests. The Buyer and Balanced Care are the
current holders of all of the buyer's interest under the
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1999 Option Agreement. Neither Balanced Care nor any of the BCC Subsidiaries
have assigned, in whole or in part, any of their right, title and interest in
(and obligations under) any of the Existing Lease Documents from and after the
respective dates of the execution and delivery thereof.
7.8 Recitals True and Correct. Each of the recitals set forth
in this Agreement is true and correct in every material aspect.
8. CONDITION OF THE LEASED PROPERTY
8.1 AS-IS Condition. The IPC/BCC Parties (on behalf of
themselves, their respective Subsidiaries and all Designees) acknowledge that
(a) each Existing Lessee accepted receipt and delivery of the applicable portion
of the Leased Property that it leases from the Seller on or about the applicable
Commencement Date, (b) each of the Lessees, the Developer and the Managers
examined and otherwise acquired knowledge of the condition of the applicable
portion of the Leased Property prior to such date that the applicable Lessee
acquired possession of such portion of the Leased Property and found the same to
be in good order and repair and satisfactory for its purposes, (c) the Lessees,
the Developer and/or the Managers have been in possession of the Leased Property
from and after such dates, (d) the Buyer and Balanced Care, each being an
Affiliate of the Potomac Point Lessee, the Developer and the Managers, have
independent and thorough knowledge of the Leased Property, the title thereto and
all matters affecting the same, (e) the IPC/BCC Parties have each made its own
inquiry and investigation into, and based thereon have formed an independent
judgment concerning the Leased Property and the operation thereof and are not
relying on the Seller for any facts or information with respect thereto and (f)
except for the express representations and warranties contained in this
Agreement or any of the other Transaction Documents, the Seller is not making,
and the IPC/BCC Parties are not relying upon, any representation or warranty,
express or implied, of any nature whatsoever with respect to the Leased
Property. Consequently, the IPC/BCC Parties (on behalf of themselves, their
Subsidiaries and all Designees) waive any and all claims and causes of action,
now or hereafter arising, against the Seller in respect of the condition of the
Leased Property. THE SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, WITH RESPECT TO THE LEASED PROPERTY, EITHER AS TO ITS FITNESS FOR ANY
PARTICULAR PURPOSE OR USE, ITS DESIGN OR CONDITION OR OTHERWISE, OR AS TO
DEFECTS IN THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT;
IT BEING AGREED THAT ALL RISKS RELATING TO THE DESIGN, CONDITION AND/OR
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USE OF THE LEASED PROPERTY ARE TO BE BORNE BY THE BUYER AND THE BCC PARTIES. THE
EXISTING LESSEES, THE DEVELOPER, THE MANAGERS AND THE GUARANTORS HAVE ASSUMED
(PURSUANT TO THE EXISTING LEASE DOCUMENTS), THE NEW LESSEE SHALL ASSUME
(PURSUANT TO THE LEASE DOCUMENTS) AND, AS OF THE CONSUMMATION OF THE CLOSING,
THE BUYER (AND EACH DESIGNEE) ASSUMES ALL RISK OF (I) THE PHYSICAL CONDITION OF
THE LEASED PROPERTY BEING CONVEYED TO THE BUYER (OR TO THE APPLICABLE DESIGNEE),
(II) THE SUITABILITY OF THE LEASED PROPERTY FOR OPERATION IN ACCORDANCE WITH ITS
PRIMARY INTENDED USE, (III) THE COMPLIANCE OR NON-COMPLIANCE OF THE LEASED
PROPERTY WITH ALL APPLICABLE REQUIREMENTS OF LAW, INCLUDING BUT, NOT LIMITED TO,
ENVIRONMENTAL LAWS AND ZONING AND OTHER LAND USE LAWS, (IV) ALL MATTERS THAT A
SURVEY OF THE LAND MAY DISCLOSE AND (V) SUBJECT TO THE SELLER'S PERFORMANCE OF
ITS OBLIGATIONS HEREUNDER, WHETHER TITLE TO THE LEASED PROPERTY IS INSURABLE.
Without limiting the foregoing, the Buyer acknowledges and agrees that, in
connection with the consummation of the conveyance of the Leased Property
contemplated hereunder, in the event that the Buyer obtains or seeks to obtain
title insurance insuring its interest in the Leased Property, the Seller shall
not be obligated to provide any form of representation or indemnification to the
title insurance company issuing such policy; provided, however, that the Seller
shall provide to such title insurance company (1) a copy of its operating
agreement, (2) evidence of its authority to execute and deliver the Transaction
Documents to which it is a party, (3) the certificate of the Seller referred to
in Section 13.2(d) of this Agreement, (4) evidence of the Seller's qualification
to do business in the states where the Leased Property is located, (5)
certificates of good standing relating to the Seller from the states where the
Leased Property is located and from the state of its formation, (6) any of the
other documents listed in Section 13.2(a)-(g) of this Agreement and (7) evidence
of the clearance of or other reasonably satisfactory assurances (that are
customarily given) with respect to any Seller Encumbrance. To the extent that
the satisfactory assurance referred to in the foregoing Clause 7 is an
indemnification, the Seller shall cause La Quinta Properties, Inc. to provide
such indemnification to the title insurance company.
The provisions of this Section 8.1 are not intended to and
shall not be deemed to limit the express provisions set forth in any of the
other Seller Documents.
8.2 Casualty and Condemnation. The Buyer acknowledges and
agrees that if, between the date hereof and the Closing Date, all or any portion
of the Leased Property is
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damaged by any Casualty or if any Condemnation occurs, the Buyer shall
nevertheless remain obligated to perform its agreements hereunder and, to the
extent that the Buyer exercised or exercises its Option Right prior to or
subsequent to such Casualty or Condemnation, to consummate the acquisition of
the Leased Property contemplated hereunder and there shall be no adjustment made
to the Purchase Price as a consequence of such Casualty or Condemnation;
provided, however, that, at the Closing, the Seller shall pay over or assign to
the Buyer, as applicable, all amounts recovered or recoverable by the Seller on
account of any insurance covering such Casualty or all damage awards recovered
or recoverable by the Seller for such Condemnation.
9. COVENANTS OF THE PARTIES
9.1 Consummation of Stock Transfers and Assignment of Potomac
Point Lease. As earlier disclosed in the recitals of this Agreement,
concurrently with the execution and delivery of, and as part of the transactions
evidenced by, the Existing Lease Documents, Balanced Care was granted the right
to acquire the outstanding stock of the Third Party Lessees. Pursuant to the
Existing Leases, the Stock Transfers may be consummated in accordance with the
conditions set forth in Section 19.4 thereof. Among such conditions set forth
therein are (x) the absence of any Lease Defaults and (y) the payment of the
Working Capital Payoffs. Notwithstanding the existence of the Existing Defaults
(which constitute Lease Defaults under the Existing Leases), the Seller is
willing to consent to the consummation of the Stock Transfers subject to certain
conditions set forth herein. Immediately upon the execution and delivery of this
Agreement, Balanced Care agrees, at its sole cost and expense, to take all (or
cause to be taken) actions necessary to consummate the Stock Transfers (it being
acknowledged and agreed that the Stock Transfers need not be consummated
simultaneously). Immediately upon the consummation of the Stock Transfer
relating to any particular Third Party Lessee, Balanced Care agrees, at its sole
cost and expense, to cause such Third Party Lessee to be merged into the New
Lessee (each such merger of a Third Party Lessee into the New Lessee shall be
referred to herein as a "Merger"). The New Lessee shall be engaged in no
business other than the operation of the Facilities. Immediately upon the
execution and delivery of this Agreement, Balanced Care shall diligently and
continuously pursue all health care approvals necessary for each Stock Transfer
and concurrent Merger (collectively, the "Health Care Approvals"). Balanced Care
shall provide the Seller with copies of all
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applications submitted for the Health Care Approvals and all correspondence
relating thereto (concurrently with the submission, delivery or receipt by any
Balanced Care Entity). From time to time, upon request by the Seller, Balanced
Care shall apprise the Seller of the status of its efforts to consummate the
Stock Transfers and obtain the Health Care Approvals and shall take all such
actions with respect thereto that the Seller may request. The consummation of
each Stock Transfer and relating Merger shall be effected in accordance with the
terms of Section 19.4 of the applicable Existing Lease and this Agreement
immediately upon receipt of the necessary Health Care Approvals relating
thereto; provided, however, that, notwithstanding anything to the contrary set
forth in Section 19.4 of the applicable Existing Lease or any BCC Option
Agreement, in connection with the consummation of each Stock Transfer (a) the
New Lessee shall acquire the stock of the applicable Third Party Lessee, (b) the
Deposit Pledge Agreement referenced in the applicable Existing Lease shall be
terminated, (c) instead of the BCC Stock Pledge, Balanced Care shall (i) execute
and deliver a stock pledge agreement, in a form substantially similar to the
Pledgor Pledge Agreement, granting to the Seller a first priority security
interest in all of the issued and outstanding shares of capital stock of New
Lessee and (ii) shall deliver to the Seller the stock certificate(s) evidencing
such pledged shares, along with stock power(s) (in a form acceptable to the
Seller) duly endorsed in blank, (d) the Seller shall cancel the Demand Note (as
defined under the applicable Existing Lease) and release all documents securing
such Demand Note and (e) any guaranty of the tenant's obligations under the
applicable Existing Lease executed and delivered by Balanced Care shall be in
substantially the same form as the Potomac Point Guaranty, but shall not contain
(i) any financial covenants (including, without limitation, any covenants
requiring Balanced Care to maintain any specified Tangible Net Worth or meet any
specified coverage ratio) or (ii) any representations or warranties regarding
the solvency of Balanced Care. The documents to be executed to consummate the
Stock Transfers shall be in form and substance acceptable to the Seller and
shall be substantially similar to the documents executed to effectuate the
transfers of stock of various Affiliates of the Third Party Lessees (that were
tenants of the Tranche 1 Properties) to Balanced Care. The parties hereto
acknowledge and agree that the Holding Companies and the Shareholders are
intended to be third party beneficiaries of the terms and conditions set forth
in this Section 9.1 and, accordingly, shall be entitled to enforce the same to
the
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fullest extent, and in all respects, as if the Holding Companies and the
Shareholders were a party hereto.
Concurrently with or prior to the consummation of the last
Stock Transfer, pursuant to such documents as are reasonably acceptable to
Balanced Care and the Seller, the Potomac Point Lessee shall (i) assign to the
New Tenant (and the New Tenant shall assume) all of the Potomac Point Lessee's
obligations under the Potomac Point Lease Documents and any resident agreements
relating to the Potomac Point Facility and (ii) transfer all personal property
owned by the Potomac Point Lessee to the New Tenant.
9.2 Execution and Delivery of Master Lease Documents. Provided
that the Closing has not yet been consummated, immediately upon the consummation
of the last Stock Transfer and Merger, the Seller and the BCC Parties agree that
the Existing Leases shall be consolidated and amended and restated in their
entirety into a Master Facility Lease Agreement substantially in the form
attached hereto as EXHIBIT F (the "Master Lease"), pursuant to which the Leased
Property shall be leased by the Seller to the New Lessee. Concurrently with the
execution and delivery of the Master Lease, Balanced Care shall cause (a) the
Master Lease Documents to be executed and delivered to the Seller, which shall
include, without limitation, (i) an amendment, restatement and consolidation of
the Existing Guaranties by Balanced Care (guarantying all of the Master Lease
Obligations) or, at the Seller's option, in the event that all of the Stock
Transfers and Mergers are consummated simultaneously with the execution and
delivery of the Master Lease, in lieu of executing an Existing Guaranty relating
to a Third Party Lease as of the date of the consummation of the applicable
Stock Transfer, Balanced Care shall execute and delivery a guaranty of the New
Tenant's obligations under the Master Lease, provided, however, that in either
case, the guaranty executed shall be in substantially the same form as the
Potomac Point Guaranty and shall not contain (x) any financial covenants
(including, without limitation, any covenants requiring Balanced Care to
maintain any specified Tangible Net Worth or to meet any specified coverage
ratio) or (y) any representations or warranties regarding the solvency of
Balanced Care, (ii) a stock pledge agreement, granting to the Seller, to secure
Balanced Care's guaranty of Master Lease Obligations and the New Tenant's
obligations under the Master Lease Documents, a first priority security interest
in all of the issued and outstanding shares of capital stock of New Lessee,
(iii) an amendment, restatement and consolidation of the Assignments of
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Subleases, (iv) an amendment, restatement and consolidation of the Permits
Assignments, (v) an amendment, restatement and consolidation of the Security
Agreements, (vi) an amendment, restatement and consolidation of the Affiliated
Party Subordination Agreements and (vii) an amendment, restatement and
consolidation of the Environmental Indemnity Agreements and (b) legal opinions,
in form and substance satisfactory to the Seller, to be delivered to Seller
evidencing the authority of Balanced Care, the New Lessee and any other
applicable BCC Parties to execute and deliver the Master Lease and the other
Master Lease Documents and the enforceability of such documents.
9.3 Release of Meditrust Parties. Effective as of the date
hereof, each of the IPC/BCC Parties does hereby release, acquit and forever
discharge (a) the Parent and its Subsidiaries (including, without limitation,
the Seller) and Affiliates, (b) New Meditrust-LLC and (c) each of their
respective stockholders, members, beneficiaries, officers, directors, managers,
agents, employees, servants, attorneys and representatives, as well as the
respective heirs, personal representatives, successors and assigns of any and
all of them (the Persons described in the foregoing clauses (a) - (c) are
collectively referred to as the "Released Meditrust Parties") from any and all
claims, demands, debts, actions, causes of action, suits, contracts, agreements,
obligations, accounts, defenses, offsets and liabilities of any kind or
character whatsoever, known or unknown, suspected or unsuspected, in contract or
in tort, at law or in equity, including, without limitation, such claims and
defenses as breach of contract, negligence, breach of any duty of good faith and
fair dealing, causes of action arising out of or construed to be deceptive trade
practices, business torts, breach of warranty, fraud, mistake, duress, usury and
any other claim of so-called "lender liability", which any member of the IPC/BCC
Parties ever had or now has against the Released Meditrust Parties, jointly or
severally, for or by reason of any matter, cause or thing whatsoever occurring
through and including the date hereof relating in whole or in part, directly or
indirectly, to: (i) the Promissory Note; (ii) the 1999 Option Agreement; (iii)
the Existing Lease Documents; (iv) the Leased Property; (v) the Existing
Indebtedness; (vi) any of the transactions contemplated under the 1999 Option
Agreement or any of the Existing Lease Documents; (vii) the performance of any
of the obligations under the Promissory Note, the 1999 Option Agreement and/or
the Existing Lease Documents; (viii) any action or omission by any of the
Released Meditrust Parties (1) in connection with the loan evidenced by the
Promissory Note,
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(2) pursuant to the 1999 Option Agreement or (3) pursuant to the Existing Lease
Documents (including, without limitation, the application by New Meditrust-LLC
of the Cash Collateral toward the outstanding indebtedness under the Notes),
(ix) any other action or omission pertaining to the Leased Property taken on or
before the date hereof by any of the Released Meditrust Parties (excluding,
however, all obligations of the Meditrust Parties arising hereunder) and (x) the
Pending Litigation. The foregoing release shall be referred to herein as the
"Meditrust Release." In addition, so long as the Meditrust Release is in effect,
each of the IPC/BCC Parties agrees not to commence, join in, prosecute or
participate in any suit or other proceeding in a position which is adverse to
any of the Released Meditrust Parties arising directly or indirectly from any of
the foregoing matters; provided, however that the foregoing agreement shall not
prohibit any of the IPC/BCC Parties from commencing any action to enforce its
rights and remedies under any of the Transaction Documents.
The parties hereto acknowledge and agree that the Released
Meditrust Parties are intended to be third party beneficiaries of the terms and
conditions set forth in this Section 9.3 and, accordingly, shall be entitled to
enforce the same to the fullest extent, and in all respects, as if the Released
Meditrust Parties were all parties hereto.
The Meditrust Release shall survive any termination of this
Agreement.
9.4 Release of IPC/BCC Parties. Subject to the paragraph
immediately following this paragraph, effective upon the Seller's receipt of the
Option Payment, each of the Meditrust Parties does hereby release, acquit and
forever discharge each of the IPC/BCC Parties and each of their respective
Subsidiaries, Affiliates, stockholders, beneficiaries, officers, directors,
agents, employees, servants, attorneys and representatives, as well as the
respective heirs, personal representatives, successors and assigns or any and
all of them (collectively, the "Released IPC/BCC Parties") from any and all
claims, demands, debts, actions, causes of action, suits, contracts, agreements,
obligations, accounts, defenses, offsets and liabilities of any kind or
character whatsoever, known or unknown, suspected or unsuspected, in contract or
in tort, at law or in equity, which any of the Meditrust Parties ever had or now
has against the Released IPC/BCC Parties, jointly or severally, for or by reason
of any matter, cause or thing whatsoever occurring through and including the
date hereof relating in whole or in part, directly or indirectly, to:
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(a) the Promissory Note; (b) the 1999 Option Agreement; (c) the Existing
Indebtedness; (d) any of the transactions contemplated under the 1999 Option
Agreement; (e) the performance of any of the obligations under the Promissory
Note or the 1999 Option Agreement; (f) any action or omission by any of the
Released IPC/BCC Parties (i) in connection with the loan evidenced by the
Promissory Note or (ii) pursuant to the 1999 Option Agreement and (g) the
Pending Litigation. The foregoing release shall be referred to herein as the
"IPC/BCC Release". In addition, so long as the IPC/BCC Release is in force and
effect, the Meditrust Parties agree not to commence, join in, prosecute or
participate in any suit or other proceeding in a position which is adverse to
any of the Released IPC/BCC Parties arising directly or indirectly from any of
the foregoing matters.
The IPC/BCC Release and the Covenant Not to Xxx shall be void
ab initio and will be of no force or effect and the Buyer and Balanced Care will
be obligated to pay all of the outstanding indebtedness under the Promissory
Note if any of the IPC/BCC Conditions Subsequent occur. The reinstatement of the
obligations of the Buyer and Balanced Care as aforesaid, the nullification of
the IPC/BCC Release and the abrogation of the Covenant Not to Xxx will not
operate to affect, modify, terminate or otherwise limit the Meditrust Release.
As used herein the term "IPC/BCC Conditions Subsequent" shall mean collectively
(1) in the event that the Buyer or Balanced Care or any of their Affiliates, or
any Person claiming by or through any of them (excluding a trustee in bankruptcy
or a receiver over whom the Buyer or Balanced Care has no control) ever
commences, joins in, assists, cooperates in or participates as an adverse party
or as an adverse witness (subject to compulsory legal process which requires
testimony) in any suit or other proceeding against any Released Meditrust Party
relating to any of the matters covered by Section 9.3 or the execution, delivery
and performance of any of this Agreement (excluding any action or proceeding
initiated by the Buyer in accordance with the provisions of Section 14 to
enforce its rights and remedies in the event of a Seller Default), including,
without limitation, any action challenging the validity of or seeking to rescind
or recover the payment of the Option Payment (other than as expressly allowed
pursuant to Section 12 or Section 14 hereof), (2) in the event that the payment
of the Option Payment is ever rendered void or is rescinded by operation of law
or by final non-appealable order of any court of competent jurisdiction
(including, without limitation, any bankruptcy court of competent jurisdiction)
by reason of an order arising out of any claim or proceeding (excluding any
claim or proceeding initiated
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by the Buyer in accordance with the provisions of Sections 12 or 14 to enforce
its rights and remedies in the event of a Seller Default or a failure by the
Seller to satisfy or remove any Seller Encumbrance) initiated or commenced in
favor of, against, on behalf of, or in concert with, directly or indirectly, the
Buyer or Balanced Care (or any of their Affiliates) or any Person claiming by or
through the Buyer or Balanced Care (including, without limitation, a trustee in
bankruptcy or other party in interest in any bankruptcy proceeding) or any of
their respective agents, employees, representatives, officers, directors,
shareholders, subsidiaries, affiliates, heirs, legal representatives, successors
or assigns and (3) the Meditrust Release is ever rendered void, is rescinded or
adjudicated unenforceable by operation of law or by order of any court of
competent jurisdiction by reason of final non-appealable order arising out of
any claim or proceeding initiated or commenced in favor of, against, on behalf
of, or in concert with, directly or indirectly, the Buyer or Balanced Care (or
any of their Affiliates) or any Person claiming by or through the Buyer or
Balanced Care or any of their respective agents, employees, officers, directors,
shareholders, subsidiaries, affiliates, heirs, representatives, trustees in
bankruptcy, successors or assigns.
The parties hereto acknowledge and agree that the Released
IPC/BCC Parties are intended to be third party beneficiaries of the terms and
conditions set forth in this Section 9.4 and, accordingly, shall be entitled to
enforce the same to the fullest extent, and in all respects, as if the Released
IPC/BCC Parties were all parties hereto.
The IPC/BCC Release shall survive any termination of this
Agreement.
9.5 Release of BCC Parties. Subject to the paragraph
immediately following this paragraph, effective upon the Seller's receipt of the
Option Payment, the Seller does release, acquit and forever discharge the BCC
Parties and each of their respective Subsidiaries, Affiliates, stockholders,
beneficiaries, officers, directors, agents, employees, servants, attorneys and
representatives, as well as the respective heirs, personal representatives,
successors and assigns or any and all of them (collectively, "Released BCC
Parties") from any and all claims, demands, debts, actions, causes of action,
suits, contracts, agreements, obligations, accounts, defenses, offsets and
liabilities of any kind or character whatsoever, known or unknown, suspected or
unsuspected, in contract or in tort, at
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law or in equity, which the Seller ever had or now has against the Released BCC
Parties, jointly or severally, for or by reason of any matter, cause or thing
whatsoever occurring through and including the last day of the Option Period
relating in whole or in part, directly or indirectly, to the Existing Defaults.
The foregoing release shall be referred to herein as the "BCC Release". In
addition, so long as the BCC Release is in effect, the Seller agrees not to
commence, join in, prosecute or participate in any suit or other proceeding in a
position which is adverse to any of the Released BCC Parties arising directly or
indirectly from any of the foregoing matters; provided, however, that the
foregoing agreement shall not prohibit the Seller from commencing any action to
enforce its rights and remedies under any of the Transaction Documents.
The BCC Release shall be void ab initio and will be of no
force or effect and the BCC Parties will be obligated to perform all of their
obligations under the Existing Lease Documents without regard to the BCC Release
(including, without limitation, all obligations relating to and/or arising as a
consequence of the Existing Defaults) in the event that any of the BCC
Conditions Subsequent occur. The reinstatement of the obligations of the BCC
Parties as aforesaid and the nullification of the BCC Release will not operate
to affect, modify, terminate or otherwise limit the Meditrust Release. As used
herein the term "BCC Conditions Subsequent" shall mean collectively (a) in the
event that any of the BCC Parties or any of their Affiliates, or any Person
claiming by or through any of them (excluding a trustee in bankruptcy or a
receiver over whom the BCC Parties have no control) ever commences, joins in,
assists, cooperates in or participates as an adverse party or as an adverse
witness (subject to compulsory legal process which requires testimony) in any
suit or other proceeding against any Released Meditrust Party relating to the
Leased Property or the execution, delivery and performance of any of the
Transaction Documents (excluding any action instituted by any BCC Party to
require the Seller to perform its obligations hereunder), including, without
limitation, any action challenging the validity of or seeking to rescind or
recover the payment of any Option Payment (other than as expressly allowed
pursuant to Section 12 or Section 14 hereof), (b) in the event that the payment
of any Option Payment is ever rendered void or is rescinded by operation of law
or by final non-appealable order of any court of competent jurisdiction
(including, without limitation, any bankruptcy court of competent jurisdiction)
by reason of an order arising out of any claim or proceeding (excluding any
claim or proceeding initiated by the Buyer in
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accordance with Sections 12 or 14 to enforce its rights and remedies in the
event of a Seller Default or a failure by the Seller to satisfy or remove any
Seller Encumbrance) initiated or commenced in favor of, against, on behalf of,
or in concert with, directly or indirectly, any of the BCC Parties (or any of
their Affiliates) or any Person claiming by or through any BCC Party (including,
without limitation, a trustee in bankruptcy or other party in interest in any
bankruptcy proceeding) or any of their respective agents, employees,
representatives, officers, directors, shareholders, subsidiaries, affiliates,
heirs, legal representatives, successors or assigns and (c) the Meditrust
Release is ever rendered void, is rescinded or adjudicated unenforceable by
operation of law or by order of any court of competent jurisdiction by reason of
final non-appealable order arising out of any claim or proceeding initiated or
commenced in favor of, against, on behalf of, or in concert with, directly or
indirectly, any of the BCC Parties (or any of their Affiliates) or any Person
claiming by or through any of the BCC Parties or any of their respective agents,
employees, officers, directors, shareholders, subsidiaries, affiliates, heirs,
representatives, trustees in bankruptcy, successors or assigns.
The Seller acknowledges that, notwithstanding anything to the
contrary set forth in the Leases, as long as the BCC Release is in effect, the
occurrence of an Option Period Default shall not constitute a default or Lease
Default under any of the Leases. The parties hereto acknowledge and agree that
the Released BCC Parties are intended to be third party beneficiaries of the
terms and conditions set forth in this Section 9.5 and, accordingly, shall be
entitled to enforce the same to the fullest extent, and in all respects, as if
the Released BCC Parties were all parties hereto.
The BCC Release shall survive any termination of this
Agreement.
9.6 Dismissal Of Pending Litigation and Covenant Not to Xxx.
Promptly after the execution and delivery of this Agreement and the Seller's
receipt of the Option Payment, La Quinta-TRS agrees to dismiss the Pending
Litigation without prejudice pursuant to a stipulation mutually acceptable to
the Buyer and LaQuinta - TRS.
As long as none of the IPC/BCC Conditions Subsequent have
occurred, La Quinta-TRS agrees to refrain and forbear from commencing,
instituting or prosecuting any lawsuit, action or other proceeding against the
Buyer or Balanced Care arising out
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of, or in connection with, the Promissory Note (the "Covenant Not to Xxx").
9.7 Intentionally Omitted.
9.8 Costs and Fees. The Buyer shall be responsible for payment
of all closing costs in connection with the transfer of the Leased Property,
including, without limitation, recording fees, stamp taxes, document taxes,
transfer fees and any other payments in the nature of or in lieu of transfer
fees.
Each party shall pay all costs incurred by it in connection
with the preparation, negotiation and performance of this Agreement; provided,
however, that, in the event of any litigation between the parties arising under
this Agreement, the prevailing party shall be reimbursed all reasonable costs
incurred in connection with such litigation (including, without limitation,
attorneys' fees and expenses) by the non-prevailing party.
9.9 Designees and Lease Documents. Subject to the Buyer's
retaining all of its other obligations hereunder, in the event that the Buyer
desires to designate one or more nominees (each, a "Designee") to acquire, on
the Closing Date, a fee simple interest in the Leased Property, simultaneously
with the exercise of its Option Right, the Buyer shall notify the Seller in
writing whether the Buyer (a) shall take title to the Leased Property or shall
designate one or more Designees to take title to the Leased Property and (b)
elects to take title (or cause its Designee(s) to take title) to the Leased
Property subject to the applicable Leases. In the event that the Buyer so elects
to take title to the Leased Property subject to the applicable Leases, at the
Closing, the Buyer or its Designee(s) shall assume the Seller's obligations
under the applicable Lease Documents pursuant to an assignment and assumption
agreement and any other documents as are reasonably requested by the Seller
(collectively, the "Assignment and Assumption Documents"). Without limiting the
foregoing, it is acknowledged and agreed that the Assignment and Assumption
Documents shall be in materially the same form as the assignment and assumption
documents entered into between various Balanced Care Entities and the Seller in
connection with the sale of the Tranche 1 Properties.
If the Buyer does not elect to take title (or does not cause
its Designee(s) to take title) to the Leased Property subject to the applicable
Leases, then, at the Closing, (i) the Seller agrees to terminate the applicable
Lease Documents
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pursuant to documents reasonably acceptable to the Seller (collectively, the
"Lease Termination Documents") and (ii) the Buyer agrees to cause the applicable
Lessees to execute such Lease Termination Documents. Without limiting the
foregoing, it is acknowledged and agreed that the Lease Termination Documents
shall be in materially the same form as the lease termination documents entered
into between various Balanced Care Entities and the Seller in connection with
the sale of the Tranche 1 Properties.
The Buyer and Balanced Care acknowledge (and will cause each
applicable Lessee and Designee to acknowledge) that, at the Closing, no other
adjustments will be made under the Lease Documents and/or with respect to the
Leased Property for Impositions, utility costs or any other matter.
9.10 Right of First Refusal and Option to Purchase. In the
event that the Buyer exercises its Option Right with respect to the Leased
Property, at or prior to the Closing, (a) the Buyer and Balanced Care shall
cause the applicable Lessees to waive the rights of first refusal granted to
such Lessees pursuant to Section 18.3 of the applicable Leases and (b) if the
applicable Lease Documents relating to the Leased Property are to be terminated
at the Closing in accordance with the terms of Section 9.9 hereof, the Buyer and
Balanced Care shall cause the applicable Lessees to waive the purchase options
granted to such Lessees pursuant to Section 18.4 of the applicable Leases.
9.11 Title Review. At the Closing, if the Closing Conditions
have been satisfied (or waived), the Seller shall deliver good and marketable
title to the Leased Property (or, if applicable, to any applicable Designee),
free and clear of all Liens other than the Permitted Exceptions. If, on or
before the Closing Date, the Buyer determines that title to the Leased Property
is subject to any matter other than the Permitted Exceptions, the Buyer shall
provide the Seller with written notice that title to the Leased Property is
subject to any matters other than the Permitted Exceptions (the "Title Objection
Notice"). The Title Objection Notice shall identify with specificity the
objections asserted by the Buyer and the Closing Date shall be extended in
accordance with Section 12 of this Agreement in order to allow the Seller to
remove all defects in title.
Notwithstanding anything to the contrary set forth herein, but
without implying, in any way, that (i) the Buyer's obligations hereunder are
subject to a financing contingency or (ii) the Buyer may object to any Permitted
Exceptions or refuse
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to accept title to the Leased Property because the Leased Property is subject to
the Permitted Exceptions; in the event that any Person (including, without
limitation, any Designee) financing the Buyer's acquisition of the Leased
Property refuses to consummate such financing transaction due to the existence
of any Permitted Exceptions (the "Optional Title Matters"), then (1) the Buyer
shall notify the Seller in writing (the "Optional Title Notice") that its lender
refuses to finance the Buyer's acquisition of the Leased Property due to the
Optional Title Matters and (2) the Seller shall cooperate with all reasonable
requests from the Buyer in connection with any efforts made by the Buyer (at the
Buyer's sole cost and expense) to release, remove and/or otherwise correct,
satisfy or address the Optional Title Matters, including, without limitation,
executing and delivering any instrument required because the Seller is the
record title holder to the Leased Property (as long as the Seller is not
required to assume or undertake any obligations under any such instrument or
make any representations regarding the Leased Property).
Notwithstanding anything to the contrary set forth herein, in
the event that the Buyer has exercised its Option Right in accordance with the
terms hereof, any subsequent failure by the Buyer to consummate the Closing in
accordance with the terms hereof because of any Optional Title Matter (provided
that all of the other Closing Conditions precedent to the Buyer's obligation to
consummate the Closing have been satisfied) shall constitute a Buyer Default.
9.12 Use of Purchase Money to Clear Title. To enable the
Seller to deliver title to all or any portion of the Leased Property, the Seller
may, at the time of delivery of the deeds, use all or any portion of the
Purchase Price to clear title of any or all encumbrances or interests, provided,
that all instruments so procured are recorded simultaneously with the delivery
of the deeds or, in the case of institutional liens, provided, that,
arrangements in accordance with customary conveyancing practices are made for a
discharge to be promptly procured, recorded or filed after the delivery of the
deeds.
9.13 Additional Tennessee Documents. Concurrently with the
execution and delivery of this Agreement, each Tennessee Manager agrees to (a)
execute and deliver to Seller, a Tennessee Security Agreement and such financing
statements as the Seller may request to perfect the security interests granted
thereunder and (b) join as a party to the applicable Tennessee Assignment of
Subleases that was executed by the applicable
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Tennessee Lessee that leases the Facility managed by such Tennessee Manager.
9.14 Future Defaults Under Lease Documents. Notwithstanding
anything to the contrary set forth herein, the parties hereto acknowledge and
agree that the existence during the Option Period of any default or breach of
condition under any of the Lease Documents shall not, in any way, abridge,
amend, limit, release or otherwise affect any of the parties' respective rights
and/or obligations hereunder (including, without limitation, the Buyer's right
to exercise the Option Right in accordance with the terms hereof and the
Seller's obligation to convey the Leased Property to the Buyer in accordance
with the terms hereof).
10. THE BUYER'S CONDITIONS PRECEDENT TO THE CLOSING. The Closing
and the Buyer's obligations hereunder and with respect thereto are expressly
contingent and conditional upon the fulfillment, compliance, satisfaction and
performance of each of the following conditions prior thereto, any one or more
of which may be waived or deferred in whole or in part, but only in writing, by
the Buyer at its option and sole discretion. Notwithstanding the foregoing, any
condition precedent to the Closing which has not been fulfilled, complied with,
satisfied or performed at or prior to the Closing Date shall be conclusively
deemed waived if the Buyer consummates the Closing despite the lack of
fulfillment, compliance with, satisfaction or performance of such condition.
10.1 Accuracy of Warranties; Compliance with Covenants.
Notwithstanding anything to the contrary set forth herein, all of the covenants
and agreements made by the Seller in this Agreement with respect to the Leased
Property shall have been fully and timely performed, in all material respects,
and the Buyer shall have received a Meditrust Parties' Closing Certification,
dated as of the Closing Date, reasonably acceptable to the Buyer in all material
respects.
10.2 Absence of Injunction. There shall be no injunction, or
any order of any nature issued by or pending before any Governmental Authority
directing that the conveyance of the Leased Property contemplated by this
Agreement not be consummated.
11. THE SELLER'S CONDITIONS PRECEDENT TO THE CLOSING. The Closing
and the Seller's obligations hereunder and with respect thereto are expressly
contingent and conditional upon the fulfillment, compliance, satisfaction and
performance of each of
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the following conditions prior thereto, any one or more of which may be waived
or deferred in whole or in part, but only in writing, by the Seller at its
option and sole discretion. Notwithstanding the foregoing, any condition
precedent to the Closing which has not been fulfilled, complied with, satisfied
or performed at or prior to the Closing Date shall be conclusively deemed waived
if the Seller consummates the Closing despite the lack of fulfillment,
compliance with, satisfaction or performance of such condition.
11.1 Accuracy of Warranties; Compliance with Covenants.
Notwithstanding anything to the contrary set forth herein, all of the covenants
and agreements made by the Buyer and the BCC Parties in this Agreement shall
have been fully and timely performed, in all material respects, and the Seller
shall have received a Buyer Closing Certification and a BCC Closing
Certification, each dated as of the Closing Date and reasonably acceptable to
the Seller in all material respects.
11.2 Absence of Injunction. There shall be no injunction, or
any order of any nature issued by or pending before any court or Governmental
Agency directing that the conveyance of the Leased Property contemplated by this
Agreement not be consummated.
11.3 Payment of Option Payments . The Option Payment required
to be paid hereunder by the Buyer to the Seller shall have been paid in
accordance with the terms hereof.
11.4 Lessees' Rights of First Refusal. Each Lessee under each
Lease in force and effect as of the Closing shall have waived such Lessee's
right of first refusal to purchase the applicable portion of the Leased Property
pursuant to Section 18.3 of the applicable Lease.
11.5 Lessees' Options to Purchase. In the event that the Buyer
has directed the Seller to terminate any Leases at the Closing, the applicable
Lessees shall have waived such Lessees' rights to purchase the applicable
portion of the Leased Property pursuant to Section 18.4 of the applicable
Leases.
11.6 Terminations or Assignments of Leases. The provisions of
Section 9.9 hereof shall have been satisfied.
11.7 Stock Transfers. The Stock Transfers shall have been
consummated in accordance with the terms of the Existing Leases, as modified by
Section 9.1 hereof; provided, however, that, with respect to any Stock Transfer
that is not consummated
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due to a failure by any Third Party Lessee, any Holding Company or any
Shareholder to perform its or his obligations under the BCC Option Agreements,
the foregoing condition shall be waived by the Seller with respect to such Stock
Transfer.
11.8 Mergers. The Mergers shall have been consummated in
accordance with the terms of Section 9.1 hereof; provided, however, that with
respect to any Merger that is not consummated because the applicable Stock
Transfer is not be consummated due to a failure by any Third Party Lessee, any
Holding Company or any Shareholder to perform its or his obligations under the
BCC Option Agreements, the foregoing condition shall be waived by the Seller
with respect to such Merger.
12. EXTENSION. If the Seller shall be unable to give title to the
Leased Property on the Closing Date, subject only to the Permitted Exceptions,
or if all of the Closing Conditions precedent to the Buyer's obligation to
consummate the acquisition shall not have been satisfied on or before the
Closing Date, the Buyer shall so notify the Seller on or prior to the Closing
Date; whereupon, in order to allow the Seller to so perform or for such Closing
Conditions to be satisfied, the Closing Date shall be extended for a period not
to exceed sixty (60) days. During such extended period of time, the Seller shall
use diligent efforts to remove any Seller Encumbrances and the parties hereto
shall use diligent efforts to cause such Closing Conditions to be satisfied.
At either the original or extended time for performance, the Buyer
shall have the election to accept such title to the Leased Property as the
Seller can deliver (in its then condition) and/or to waive any unsatisfied
Closing Conditions and to pay the Purchase Price without deduction; in which
case, subject to the provisions of Section 10 hereof, the Seller shall convey
such title to the Leased Property as it can deliver and the Closing shall be
consummated in accordance with the terms hereof. In the event that, at the
extended time for performance, (a) the Seller shall be unable to give title to
the Leased Property subject only to the Permitted Exceptions (after using
diligent efforts to satisfy or remove any Seller Encumbrances) and the Buyer
does not elect to accept such title to the Leased Property as the Seller can
deliver and/or (b) the Closing Conditions precedent to the Buyer's obligation to
consummate the acquisition of the Leased Property have not been satisfied or
waived, then, (i) the Buyer's option to acquire the Leased Property shall
terminate as of the Closing Date, as so extended, without recourse to the
parties, except as otherwise provided herein to survive such termination and
(ii) if the
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Buyer does not elect to accept such title to the Leased Property because the
Seller was unable to satisfy or remove any Seller Encumbrance, the Option
Payment shall be refunded to the Buyer by the Seller.
13. CLOSING
13.1 Closing Date. The Closing shall take place at the offices
of Xxxxxx, XxXxxxxxx & Fish, LLP, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx
at 10:00 a.m. on the date specified in the Option Notice in accordance with the
terms of Section 2 hereof or at such other time and place mutually agreed upon
in writing by the Buyer and the Seller (such date of the Closing being referred
to herein as a "Closing Date"). Notwithstanding the foregoing, the Seller and
the Buyer acknowledge that the parties hereto are willing to consummate the
Closing by utilizing a nationally recognized title insurance company designated
by the Buyer as escrow agent for the delivery of the Transaction Documents
required hereunder by mail, subject to such escrow arrangements as are
reasonably acceptable to the Seller and the Buyer.
13.2 Deliveries of the Seller at the Closing. At the Closing,
the Seller shall deliver to the Buyer the following:
(a) Twelve (12) deeds with covenants against only the
actions of the grantor, in substantially the same form as the deeds conveying
the Land to Meditrust Acquisition Corporation II.
(b) Certificate of the Manager of the Seller,
authorizing the conveyance of the Leased Property contemplated hereunder.
(c) The Meditrust Closing Certification, certifying
that, subject to Section 10.1 and the first paragraph of Section 5 of this
Agreement, all of the representations and warranties made by the Seller in this
Agreement are true and correct as of the Closing Date.
(d) Certificate of the Seller, executed under the
pains and penalties of perjury, stating that the Seller is not a "foreign
person", as defined in Section 1445(f) of the Code and the regulations issued
thereunder, in order to comply with Section 1445(b)(2) and the regulations
issued thereunder, in such form as the Buyer may require in its reasonable
discretion or the title insurance company issuing any title policy to the Buyer
(or any Designee) may reasonably require.
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(e) A certification of the information necessary to
complete and file with the Internal Revenue Service a Form 1099-S in connection
with the conveyance of the Land.
(f) Any Lease Termination Documents or Assignment and
Assumption Documents executed by the Seller.
(g) Any other documents required under applicable
local law to (i) convey the Leased Property to the Buyer or the applicable
Designee, (ii) to record any deed or other conveyancing documents and/or (iii)
to terminate or assign any Lease.
(h) Any other applicable Seller Documents to be
executed by the Seller.
13.3 Deliveries of the Buyer at the Closing. At the Closing,
the Buyer shall deliver to the Seller the following:
(a) Payment of the Purchase Price in accordance with
Section 3 hereof.
(b) A Buyer Closing Certification, certifying that,
subject to Section 11.1 and the first paragraph of Section 6 of this Agreement,
all of the representations and warranties made by the Buyer in this Agreement
are true and correct as of the Closing Date.
(c) Certificate of resolutions of the board of
directors of the Buyer, authorizing the transaction contemplated hereby,
certified by the Secretary of the Buyer.
(d) Certificate of the Secretary of the Buyer as to
incumbency and other related matters.
(e) Documents reasonably acceptable to the Seller,
evidencing all requisite corporate authorization needed by the Buyer to
authorize the acquisition of the Leased Property contemplated hereunder.
(f) Any Lease Termination Documents or Assignment and
Assumption Documents executed by the Buyer (or its Designee) and/or the
appropriate Balanced Care Entities.
(g) Any other documents required to be executed by
the Buyer or the applicable Designee(s) under applicable local law to (i)
effectuate the conveyance of the Leased Property to the Buyer or the Designee,
(ii) to record any deed
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or other conveyancing documents and/or (iii) to terminate or assign any Lease.
(h) Any other applicable Buyer Documents to be
executed by the Buyer.
(i) Payment of the amounts due under Section 9.7.
13.4 Deliveries of the BCC Parties at the Closing. At the
Closing, the BCC Parties shall deliver to the Seller the following:
(a) A BCC Closing Certification, certifying that,
subject to the first paragraph of Section 7 of this Agreement, all of the
representations and warranties made by the BCC Parties in this Agreement are
true and correct as of the Closing Date.
(b) Certificates of resolutions of the board of
directors of BCC Parties, authorizing every action taken by the BCC Parties
hereunder, certified by the respective Secretaries of the BCC Parties.
(c) Certificates of the Secretary of BCC Parties as
to incumbency and other related matters.
(d) Documents reasonably acceptable to the Seller,
evidencing all requisite corporate authorization needed by the other BCC Parties
to authorize every action taken by the other BCC Parties hereunder.
(e) Any Lease Termination Documents or Assignment and
Assumption Documents executed by the appropriate Balanced Care Parties.
(f) Any other applicable Buyer Documents to be
executed by any Balanced Care Entity.
14. REMEDIES. The agreements, covenants and obligations of the
Seller under this Agreement shall be deemed of the essence and every breach
thereof material to the Buyer and special, unique and extraordinary so that any
breach thereof shall be deemed to cause the Buyer irreparable injury justifying
a decree of specific performance by a court of competent jurisdiction and not
properly compensable solely by money damages in an action at law. Therefore, in
the event that after the Buyer exercises its Option Right in accordance with the
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terms hereof, the Seller shall fail to consummate the Closing, notwithstanding
the satisfaction or waiver of all of Closing Conditions that are conditions
precedent to the Seller's obligation to consummate the Closing (a "Seller
Default"), the sole remedy, at law or in equity, of the Buyer as a consequence
of any such Seller Default shall be, at the Buyer's Option, to (a) institute an
action for specific performance or (b) receive a full refund by the Seller of
the Option Payment. In the event that the Buyer shall institute any action for
specific performance, the Seller hereby acknowledges that (i) the Buyer does not
have an adequate remedy at law and that specific performance will not constitute
any hardship on the Seller and (ii) if the Buyer prevails on any such action,
the Seller shall reimburse the Buyer for all reasonable out-of-pocket expenses
(including, without limitation, attorneys' fees and expenses) reasonably
incurred by the Buyer in connection with such action.
In the event that after exercising its Option Right in accordance with
the terms hereof, the Buyer shall fail to consummate the Closing,
notwithstanding the satisfaction or waiver of all of Closing Conditions that are
conditions precedent to the Buyer's obligation to consummate the Closing (a
"Buyer Default"), the sole remedy, at law or in equity, of the Seller as a
consequence of any such Buyer Default shall be to terminate this Option
Agreement; and the Seller shall have no right or be entitled to bring an action
for specific performance or for any other damages whatsoever.
The parties hereto acknowledge and agree that notwithstanding the
occurrence of a Seller Default or a Buyer Default, the Meditrust Release, the
IPC/BCC Release and the BCC Release shall each remain in full force and effect.
The provisions of this Section 14 shall survive any termination of this
Agreement.
15. ADJUSTMENTS. Except as otherwise expressly provided herein, no
adjustments to the Purchase Price shall be made between the parties hereto as a
result of the consummation of the conveyance of the Leased Property contemplated
hereunder.
16. SURVIVAL OF PROVISIONS IN THE LEASE DOCUMENTS. Without
limiting the provisions set forth in and except as may otherwise expressly be
provided in Section 9.1 through Section 9.5, Section 9.9 or Section 9.10,
nothing set forth herein shall be deemed to amend or modify any Lease (or any of
the other Lease Documents) or affect any of the Lessees' respective obligations
thereunder, including, without limitation, the (a)
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indemnification provisions of the Leases and the other Lease Documents and (b)
other provisions set forth in the Leases and the other Lease Documents which by
their express terms provide that they will survive the expiration or earlier
termination of the Lease, each of which shall survive and not be deemed waived
by the execution and delivery of this Agreement or the consummation of the
Closing and/or the expiration or earlier termination of any Lease.
17. MISCELLANEOUS.
17.1 No Broker. Each of the parties represents to the others
that no agent, finder or broker has acted for it or was the producing and
effective cause of this Agreement or the transaction contemplated hereby, and
that no commissions or finder's fees are due by it to any third parties. The
Buyer and the BCC Parties agree to jointly and severally indemnify, exonerate
and hold the Meditrust Parties harmless from and against any claim, loss,
damage, cost or liability for any brokerage commission or fee which may be
asserted against the Seller and/or La Quinta-TRS as a result of the Buyer's
and/or any BCC Party's breach of this warranty. The Seller agrees to indemnify,
exonerate and hold the Buyer and the BCC Parties harmless from and against any
claim, loss, damage, cost or liability for any brokerage commission or fee which
may be asserted against the Buyer and/or any BCC Party as a result of the
Seller's and/or La Quinta-TRS' breach of this warranty. The provisions in this
Section shall survive the consummation of the Closing contemplated hereunder or
any earlier termination of this Agreement.
17.2 Voluntary Agreement. The parties hereto each represent
and warrant that they are represented by legal counsel of their own choice, are
fully aware of the terms contained in this Agreement and have voluntarily and
without coercion or duress of any kind entered into this Agreement and the
documents executed in connection with this Agreement. Without limiting the
foregoing, the IPC/BCC Parties further represent and warrant that (a) the BCC
Subsidiaries have operated the Facilities free of any interference by the Seller
or any other Meditrust Entity; (b) neither the Seller nor any other Meditrust
Entity has asserted any control or influence over the BCC Subsidiaries'
operation of the Facilities and (c) the IPC/BCC Parties have dealt with the
Meditrust Parties (and their Affiliates), at all times, independently and at
arm's length.
17.3 Amendment of Existing Lease Documents. This Agreement
shall be deemed to amend the Existing Lease Documents
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solely as expressly set forth herein, and as amended hereby, each of the
Existing Lease Documents is hereby ratified, approved and confirmed in every
aspect and is valid, binding and in full force and effect.
17.4 Waivers by Obligors. The BCC Parties waive notice of
acceptance hereof and, except as otherwise expressly provided in any of the
Existing Lease Documents, the BCC Parties waive: notice of any action taken or
omitted by the Seller in reliance hereon, notice of default with respect to any
of the Existing Lease Obligations, presentment, demands for performance, notice
of any indulgences, notices of extensions or renewals relating to the Existing
Lease Obligations, any suretyship defenses and any and all other notices of
every kind and description in connection with the Existing Lease Obligations,
this Agreement or the Cash Collateral to which they might otherwise be entitled.
The BCC Parties hereby assent to any indulgences, postponements, compromises,
extensions or renewals in connection with the Existing Lease Obligations and to
any discharge, termination, substitution, exchange, increase, release or
surrender of any collateral securing the Existing Lease Obligations or any
Person primarily or secondarily liable to the Seller for the Existing Lease
Obligations. The Seller shall not be required (a) to make demand upon or pursue
or exhaust the Seller's rights or remedies against any Person with respect to
the Existing Lease Obligations, (b) to pursue or exhaust any of the Seller's
rights or remedies with respect to any present or future collateral which the
Seller may hold as security for the Existing Lease Obligations or (c) to
xxxxxxxx such security or resort to any such security in any particular order.
No invalidity, irregularity or unenforceability of all or any
part of the Existing Lease Obligations or of any security therefor shall affect,
impair or be a defense to this Agreement, and this Agreement is the direct,
absolute and primary obligation of the IPC/BCC Parties.
17.5 Waivers. None of the parties hereto shall by any act,
delay, omission or otherwise (including, without limitation, the exercise of any
right or remedy hereunder) be deemed to have waived any of its rights or
remedies hereunder unless such waiver is in writing and signed by the party
sought to be charged, and then, only to the extent specifically set forth
therein. No waiver at any time of any of the terms, conditions, covenants or
warranties of this Agreement shall be construed as a waiver of any other term,
condition, covenant or warranty of this Agreement, nor shall such a waiver in
any one
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instance or circumstance be construed as a waiver of the same term, condition,
covenant or warranty in any subsequent instance or circumstance. No such
failure, delay or waiver shall be construed as creating a requirement that a
party must thereafter, as a result of such failure, delay or waiver, give notice
to the other party that such party does not intend to give a further waiver or
to refrain from insisting upon the strict performance of the terms, conditions,
covenants and warranties set forth in this Agreement before such party can
exercise any of its rights or remedies under this Agreement or as establishing a
course of dealing for interpreting the conduct of and agreements between the
parties.
17.6 Negation of Partnership. The relationship between (a) any
of the IPC/BCC Parties and (b) the Seller and/or La Quinta-TRS is that of
debtors and creditor or landlord and tenant. Nothing contained in this Agreement
will be deemed to create a partnership or joint venture between the Seller or La
Quinta-TRS and any of the IPC/BCC Parties or between the Seller or La Quinta-TRS
and any other Person, or to cause the Seller or La Quinta-TRS to be liable or
responsible in any way to any third party for the actions, liabilities, debts or
obligations of any of the IPC/BCC Parties or any other Person.
17.7 Entire Agreement. This Agreement, together with the
Exhibits attached hereto contains the entire understanding of the parties with
respect to the subject matters hereof and supersedes all prior and other
contemporaneous oral or written understandings and agreements between the
parties hereto.
17.8 Binding Effect; Assignment. This Agreement, shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Neither the Buyer nor any of the BCC Parties
may assign its rights hereunder without the prior written consent of the Seller,
which consent may be withheld in its sole discretion; provided, however, that,
in accordance with the terms of Section 9.9 hereof, upon prior written notice to
the Seller from the Buyer, the Buyer may designate one or more Designees to take
title to all or any portion of the Leased Property to be conveyed hereunder. The
Buyer acknowledges and agrees that notwithstanding any such designation, the
Buyer shall not be released from any of its obligations hereunder. The Seller
acknowledges and agrees that any Designee's obligations shall be limited solely
to acceptance of transfer and delivery of the Leased Property, to be performed
as of the Closing Date and as part of the Closing, and no Designee shall be
responsible for, and, subject to Section 8.1 hereof, the Seller releases each
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Designee from, any and all other agreements, covenants, warranties, obligations
and liabilities of the Buyer hereunder and under the other Buyer Documents,
including, without limitation, the Buyer's obligation to pay the Purchase Price
and all obligations to be performed by the Buyer subsequent to the Closing.
17.9 Notices. Any notice, demand, offer or other writing
required or permitted pursuant to this Agreement shall be in writing (each, a
"Notice"). Any Notice shall be (a) personally delivered, (b) sent by certified
mail, return receipt requested or (c) sent by nationally recognized commercial
overnight delivery service, with provision for a receipt, postage or delivery
charges prepaid and, in each instance, sent simultaneously by facsimile
transmission. Any Notice shall be deemed given when hand delivered, postmarked
or placed in the possession of such mail or delivery service, as the case may be
(provided, that, in each instance, a copy of such Notice was simultaneously sent
by facsimile transmission and received by the intended recipient on the same
day) and shall be addressed as follows:
(i) If to the Buyer:
IPC Advisors S.a.r.l.
00-00 Xxx Xxxxx Xxxxx
Xxxxxxxxxx X-0000
Fax: 000 000 000 000
Attn: X.X. Xxxxxxxx
With copies to:
IPC Advisors S.a.r.l.
c/o Unsworth & Associates
Xxxxxxxxxxx 000
0000 XX
Xxxxxxxxx
Fax: 000-00000000000
Attn: X.X. Xxxxxxxx
and
Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Fax: (000) 000-0000
Attn: Xxxx X. Xxxxxx, Esq.
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(ii) If to the Seller:
Meditrust Acquisition Company II LLC
000 Xxxxx Xxxxxx
Xxxxxxx Xxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx
With copies to:
Meditrust Acquisition Company II LLC
000 Xxxxx Xxxxxx
Xxxxxxx Xxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attn: Xxxxxxx Xxxxxx, Esq.
and
Xxxxxx, XxXxxxxxx & Fish, LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxxxx Xxxxxxx, Esq.
(iii)If to Balanced Care or any other BCC Party:
Balanced Care Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: President
With copies to:
Balanced Care Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxxx, Esq.
and
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Xxxxxxxxxxx & Xxxxxxxx LLP
Xxxxx X. Xxxxxx Building
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Either party shall have the right to change the place to which such notice shall
be given by similar notice sent in like manner to the other party hereto.
Subject to the third sentence of this Section 17.9, any such notice, if sent by
such overnight delivery service, shall be deemed delivered on the earlier of the
date of actual delivery or the next business day following deposit, postage
prepaid, with such overnight delivery service and if delivered by hand delivery
shall be deemed delivered on the date of the actual delivery and if sent by
mail, shall be deemed delivered on the earlier of the third day following
deposit with the U.S. Postal Service or actual delivery.
17.10 Captions. The captions of this Agreement are for
convenience and reference only, and in no way define, describe, extend or limit
the scope or intent of this Agreement or the intent of any provisions hereof.
17.11 Joint Effort. The preparation of this Agreement has been
the joint effort of the parties, and the resulting document shall not be
construed more severely against one of the parties than the other.
17.12 Counterparts. This Agreement may be executed in
counterparts and each executed copy shall be deemed an original which shall be
binding upon all parties hereto.
17.13 Partial Invalidity. If any provision of this Agreement
shall be invalid or unenforceable, the remainder of this Agreement shall not be
affected thereby. Notwithstanding the foregoing, it is the intention of the
parties hereto that if any provision of any of this Agreement is capable of two
(2) constructions, one of which would render the provision void and the other of
which would render the provision valid, then such provision shall be construed
in accordance with the construction which renders such provision valid.
17.14 No Offer. Neither the negotiations to date nor the
preparation of this Agreement shall be deemed an offer by any party to the
other. No such contract shall be deemed
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binding on any party until such party has executed and delivered a written
agreement.
17.15 Amendments. This Agreement may not be amended in any
respect whatsoever except by a further agreement, in writing, fully executed by
each of the parties.
17.16 Exhibits. All Exhibits referred to in this Agreement
shall be incorporated into this Agreement by such reference and shall be deemed
a part of this Agreement as if fully set forth in this Agreement.
17.17 Governing Law. This Agreement including the validity
thereof and the rights and obligations of the parties hereunder shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts (including, without limitation, principles of conflicts of law).
The Buyer and the BCC Parties each hereby consents to personal
jurisdiction in any state or Federal court located within the Commonwealth of
Massachusetts, as well as to the jurisdiction of all courts from which an appeal
may be taken from the aforesaid courts, for the purpose of any suit, action or
other proceeding arising out of or with respect to this Agreement and/or any of
the other Transaction Documents, the negotiation and/or consummation of the
transaction contemplated by the this Agreement and the other Transaction
Documents and/or the performance of any obligation or the exercise of any remedy
under any of the Transaction Documents and the Buyer and the BCC Parties each
expressly waives any and all objections it may have as to venue in any of such
courts.
17.18 Third Parties. Nothing in this Agreement, whether
express or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any Persons other than the parties hereto, their
respective legal representatives, successors and permitted assigns. Except as
otherwise expressly provided in Section 9.1, Section 9.3, Section 9.4 or Section
9.5 hereof, no Person may rely hereon or derive any benefit hereby as a third
party beneficiary or otherwise.
17.19 Further Assurances. From time to time before or after
the Closing, at no additional consideration, the parties hereto each agree that
they will promptly execute and deliver all additional documents and perform (or
cause the performance of) any other acts that may be reasonably requested
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in order to effectuate the intent of this Agreement and to consummate the
transaction contemplated hereby.
17.20 No Solicitation. From the date of this Agreement until
the earlier to occur of (a) a Buyer Default or (b) any termination of this
Agreement, the Seller shall not, directly or indirectly, through any of its
officers, directors, employees, representatives or agents, encourage, solicit or
initiate discussions or negotiations with, or knowingly provide any information
to, any Person (other than the Buyer and its agents and representatives)
concerning the sale of the Leased Property.
17.21 Time of the Essence. Time is of the essence of each and
every term, condition, covenant and warranty set forth herein.
17.22 Rules of Construction. References in this Agreement to
"herein," "hereof" and "hereunder " shall be deemed to refer to this Agreement
and shall not be limited to the particular text in which such words appear. The
use of any gender shall include all genders, and the singular number shall
include the plural and vice versa as the context may require.
17.23 Termination of this Agreement. This Agreement shall
terminate on the date (the "Termination Date") which is the earlier to occur of
(a) 12:01 a.m. on the day after the expiration of the Exercise Period, if the
Buyer has not exercised its Option Right hereunder in accordance with the terms
hereof, (b) the consummation of the conveyance of the Leased Property to the
Buyer (and/or any applicable Designees), (c) 12:01 a.m. on the day after the
Closing Date (as the same may be extended hereunder), if the Buyer exercised the
Option Right hereunder but fails to consummate the acquisition of the Leased
Property and (d) any termination of this Agreement by the Seller as a
consequence of any Buyer Default.
17.24 Publicity. All press releases, filings and other
publicity concerning the transaction contemplated hereby will be subject to
review and approval by the Seller, the Buyer and Balanced Care, such approval
not to be unreasonably withheld or delayed. Such approval shall not be required
if the Person issuing any such publicity reasonably believes it to be necessary
for compliance with law, but such Person shall provide the other parties with
reasonable notice and an opportunity to review same before any such release. The
parties hereto hereby covenant and agree to keep the terms and conditions of
this Agreement confidential except to the extent that disclosure is
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required by law; provided, however, it is acknowledged and agreed that the
parties hereto may disclose this Agreement to their respective lenders, to the
professional advisors and consultants that are advising them or providing
necessary professional services in connection with the transaction contemplated
hereby and to any Governmental Authorities.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals as of the date first above appearing.
SELLER:
MEDITRUST ACQUISITION COMPANY II LLC, a
Delaware limited liability company
By: /s/Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Operating Officer
LA QUINTA-TRS:
LA QUINTA TRS II, INC., a Delaware
corporation
By: /s/Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Operating Officer
BUYER:
IPC ADVISORS S.A.R.L., a Luxembourg
corporation
By: /s/X.X. Xxxxxxxx
--------------------------------------
Name: X.X. Xxxxxxxx
Title: Manager
BALANCED CARE:
BALANCED CARE CORPORATION, a Delaware
corporation
By: /s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President and
Legal Counsel & Assistant Secretary
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BCC SUBSIDIARIES:
BALANCED CARE AT XXXXXXXX, INC., a
Delaware corporation
By: /s/Xxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
BCC DEVELOPMENT AND MANAGEMENT CO., a
Delaware corporation
By: /s/Xxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
BALANCED CARE AT BLYTHEVILLE, INC., a
Delaware corporation
By: /s/Xxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
BALANCED CARE AT LEWISBURG, INC., a
Delaware corporation
By: /s/Xxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
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XXX XX XXXX, XXX., a Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
BALANCED CARE AT DILLSBURG, INC., a
Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
BALANCED CARE AT XENIA, INC., a Delaware
corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
BCC AT CHIPPEWA, INC., a Delaware
corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
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BALANCED CARE AT KINGSPORT, INC., a
Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
BALANCED CARE AT CHESTERFIELD, INC., a
Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
BALANCED CARE AT HENDERSONVILLE, INC., a
Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
BALANCED CARE AT KNOXVILLE, INC., a
Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
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BALANCED CARE AT POCAHONTAS, INC., a
Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
BALANCED CARE TENANT (MT), INC., a
Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Secretary
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EXHIBIT A-1 through A-12
DESCRIPTION OF THE LAND
EXHIBIT B
PURCHASE PRICE ALLOCATION
Allocation of
Facility Purchase Price
Blytheville $ 3,127,273.00
Lewisburg $ 3,127,273.00
Lima $ 3,909,091.00
Potomac Point $ 2,768,939.00
Dillsburg $ 3,583,333.00
Xenia $ 5,342,424.00
Chippewa $ 4,332,576.00
Kingsport $ 2,475,758.00
Chesterfield $ 4,234,848.00
Hendersonville $ 2,345,455.00
Knoxville $ 4,886,364.00
Pocahontas $ 2,866,667.00
TOTAL $43,000,000.00
EXHIBIT C
CERTIFICATE REGARDING THE MEDITRUST
PARTIES' REPRESENTATIONS AND WARRANTIES
Reference is hereby made to that certain Option, Settlement and Release
Agreement, dated as of February 6, 2002 (the "Option Agreement"), by and among
MEDITRUST ACQUISITION COMPANY II LLC, a Delaware limited liability company (the
"Seller"), LA QUINTA TRS II, INC., a Delaware corporation ("La Quinta-TRS"), IPC
ADVISORS S.A.R.L., a Luxembourg corporation (the "Buyer"), BALANCED CARE
CORPORATION, a Delaware corporation ("Balanced Care") and certain subsidiaries
of Balanced Care. Capitalized terms used herein and not otherwise defined herein
shall have the same meanings ascribed to such terms in the Option Agreement. The
undersigned hereby certifies to the Buyer [or the Buyer's Nominee] as follows:
There are no changes in the representations and warranties made by the
Meditrust Parties in the Option Agreement [or, list changes here].
This Certification is being given to the Buyer [or the Buyer's Nominee]
and the BCC Parties incident to the consummation of the sale of the Seller's
interest in the Leased Property and it is intended that the Buyer [or the
Buyer's Nominee] and the BCC Parties shall rely upon the contents and accuracy
of this Certification.
EXECUTED as a sealed instrument as of this day of .
MEDITRUST ACQUISITION COMPANY II
LLC, a Delaware limited liability
company
By:
Name:
Title:
LA QUINTA TRS II, INC., a Delaware
corporation
By:
Name:
Title:
EXHIBIT D
CERTIFICATE REGARDING THE BUYER'S
REPRESENTATIONS AND WARRANTIES
Reference is hereby made to that certain Option, Settlement and Release
Agreement, dated as of February 6, 2002, by and among MEDITRUST ACQUISITION
COMPANY II LLC, a Delaware limited liability company (the "Seller"), LA QUINTA
TRS II, INC., a Delaware corporation, IPC ADVISORS S.A.R.L., a Luxembourg
corporation (the "Buyer"), BALANCED CARE CORPORATION, a Delaware corporation
("Balanced Care") and certain subsidiaries of Balanced Care (the "Option
Agreement"). The undersigned hereby certifies to the Seller and La Quinta-TRS as
follows:
There are no changes in the representations and warranties made by the
Buyer in the Option Agreement [or, list changes here].
This Certification is being given to the Seller and La Quinta-TRS incident
to the consummation of the sale of the Seller's interest in the Leased Property
(as defined under the Option Agreement) and it is intended that the Seller and
La Quinta-TRS shall rely upon the contents and accuracy of this Certification.
EXECUTED as a sealed instrument as of this day of .
IPC ADVISORS S.A.R.L., a Luxembourg
corporation
By:
Name:
Title:
EXHIBIT E
CERTIFICATE REGARDING THE BCC PARTIES'
REPRESENTATIONS AND WARRANTIES
Reference is hereby made to that certain Option, Settlement and Release
Agreement, dated as of February 6, 2002, by and among MEDITRUST ACQUISITION
COMPANY II LLC, a Delaware limited liability company (the "Seller"), LA QUINTA
TRS II, INC., a Delaware corporation ("La Quinta-TRS"), IPC ADVISORS S.A.R.L., a
Luxembourg corporation (the "Buyer"), BALANCED CARE CORPORATION, a Delaware
corporation ("Balanced Care") and certain subsidiaries of Balanced Care (the
"Option Agreement"). All capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to such terms under the Option
Agreement. The undersigned hereby certify to the Seller and La Quinta-TRS as
follows:
There are no changes in the representations and warranties made by the BCC
Parties in the Option Agreement [or, list changes here].
This Certification is being given to the Seller and La Quinta-TRS incident
to the consummation of the sale of the Seller's interest in the Leased Property
and it is intended that the Seller and La Quinta-TRS shall rely upon the
contents and accuracy of this Certification.
EXECUTED as a sealed instrument as of this day of .
BALANCED CARE CORPORATION,
a Delaware corporation
By:
Name:
Title:
BALANCED CARE AT XXXXXXXX, INC., a
Delaware corporation
By:
Name:
Title:
BCC DEVELOPMENT AND MANAGEMENT CO., a
Delaware corporation
By:
Name:
Title:
BALANCED CARE AT BLYTHEVILLE, INC., a
Delaware corporation
By:
Name:
Title:
BALANCED CARE AT LEWISBURG, INC., a
Delaware corporation
By:
Name:
Title:
BCC AT LIMA, INC., a Delaware corporation
By:
Name:
Title:
BALANCED CARE AT DILLSBURG, INC., a
Delaware corporation
By:
Name:
Title:
BALANCED CARE AT XENIA, INC., a Delaware
corporation
By:
Name:
Title:
BCC AT CHIPPEWA, INC., a Delaware
corporation
By:
Name:
Title:
BALANCED CARE AT KINGSPORT, INC., a
Delaware corporation
By:
Name:
Title:
BALANCED CARE AT CHESTERFIELD, INC., a
Delaware corporation
By:
Name:
Title:
BALANCED CARE AT HENDERSONVILLE, INC., a
Delaware corporation
By:
Name:
Title:
BALANCED CARE AT KNOXVILLE, INC., a
Delaware corporation
By:
Name:
Title:
BALANCED CARE AT POCAHONTAS, INC., a
Delaware corporation
By:
Name:
Title:
BALANCED CARE TENANT (MT), INC.,
Delaware corporation
By:
Name:
Title:
EXHIBIT F
FORM OF MASTER LEASE
EXHIBIT G
OUTSTANDING AMOUNTS DUE TO SELLER UNDER THE LEASE DOCUMENTS
Unpaid Existing Unpaid Existing Unpaid Interest
Base Rent Additional Rent Under the Notes
Facility (12/1/2000-1/31/2002) (through 9/30/2001) (through 1/31/2002)
Blytheville $ 437,527 $ 32,070 $ 96,640
Pocahontas $ 427,171 $ 30,714 $113,927
Lima $ 380,169 $ 13,746 $ 24,681
Xenia $ 735,097 $ 7,384 0
Dillsburg $ 424,234 $ 10,610 $ 52,484
Lewisburg $ 273,314 $ 9,488 $ 18,527
Chippewa $ 447,802 $ 13,367 $ 52,984
Potomac Point $ 448,446 $ 2,332 N/A
Hendersonville $ 481,311 $ 7,742 $ 99,561
Chesterfield $ 642,049 $ 2,752 $121,220
Knoxville $ 950,085 $ 5,752 $171,526
Kingsport $ 420,236 $ 5,189 $ 95,119
$6,067,531 $141,145 $846,670
OPTION, SETTLEMENT AND RELEASE AGREEMENT
By and Among
MEDITRUST ACQUISITION COMPANY II LLC
LA QUINTA TRS II, INC.
and
IPC ADVISORS S.A.R.L.
BALANCED CARE CORPORATION
BALANCED CARE AT XXXXXXXX, INC.
BCC DEVELOPMENT AND MANAGEMENT CO.
BALANCED CARE AT BLYTHEVILLE, INC.
BALANCED CARE AT LEWISBURG, INC.
BCC AT LIMA, INC.
BALANCED CARE AT DILLSBURG, INC.
BALANCED CARE AT XENIA, INC.
BCC AT CHIPPEWA, INC.
BALANCED CARE AT KINGSPORT, INC.
BALANCED CARE AT CHESTERFIELD, INC.
BALANCED ARE AT HENDERSONVILLE, INC.
BALANCED CARE AT KNOXVILLE, INC.
BALANCED CARE AT POCAHONTAS, INC.
BALANCED CARE TENANT (MT), INC.
Dated: February 6, 2002
TABLE OF CONTENTS
Page
1. DEFINITIONS AND MEANINGS ........................................... 9
2. OPTION ............................................................. 24
3. PURCHASE PRICE ..................................................... 25
4. OPTION PAYMENT ..................................................... 25
5. MEDITRUST PARTIES' REPRESENTATIONS ................................. 26
5.1 Existence; Power; Qualification ............................. 27
5.2 Valid and Binding ........................................... 27
5.3 No Violation ................................................ 28
5.4 Consents and Approvals ...................................... 28
5.5 FIRPTA Representation ....................................... 28
5.6 Nothing Omitted ............................................. 29
5.7 Pending Actions, Notices and Reports ........................ 29
5.8 Ownership Interests ......................................... 29
5.9 Recitals True and Correct ................................... 29
6. BUYER'S REPRESENTATIONS ............................................ 29
6.1 Existence; Power; Qualification ............................. 30
6.2 Valid and Binding ........................................... 30
6.3 No Violation ................................................ 31
6.4 Consents and Approvals ...................................... 31
6.5 Pending Actions, Notices and Reports ........................ 31
6.6 Nothing Omitted ............................................. 32
6.7 Ownership Interests ......................................... 32
6.8 Recitals True and Correct ................................... 32
7. BCC PARTIES' REPRESENTATIONS ....................................... 32
7.1 Existence; Power; Qualification ............................. 33
7.2 Valid and Binding ........................................... 33
7.3 No Violation ................................................ 33
7.4 Consents and Approvals ...................................... 34
7.5 Pending Actions, Notices and Reports ........................ 34
7.6 Nothing Omitted ............................................. 34
7.7 Ownership Interests ......................................... 34
7.8 Recitals True and Correct ................................... 35
8. CONDITION OF THE LEASED PROPERTY ................................... 35
8.1 AS-IS Condition ............................................. 35
8.2 Casualty and Condemnation ................................... 36
9. COVENANTS OF THE PARTIES ........................................... 37
9.1 Consummation of Stock Transfers and Assignment of
Potomac Point Lease ........................................ 37
9.2 Execution and Delivery of Master Lease Documents ............ 39
9.3 Release of Meditrust Parties ................................ 40
9.4 Release of IPC/BCC Parties .................................. 41
9.5 Release of BCC Parties ...................................... 43
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9.6 Dismissal Of Pending Litigation and Covenant Not to Xxx ..... 45
9.7 Intentionally Omitted ....................................... 46
9.8 Costs and Fees .............................................. 46
9.9 Designees and Lease Documents ............................... 46
9.10 Right of First Refusal and Option to Purchase ............... 47
9.11 Title Review ................................................ 47
9.12 Use of Purchase Money to Clear Title ........................ 48
9.13 Additional Tennessee Documents .............................. 48
9.14 Future Defaults under Lease Documents ....................... 49
10. THE BUYER'S CONDITIONS PRECEDENT TO THE CLOSING .................... 49
10.1 Accuracy of Warranties; Compliance with Covenants ........... 49
10.2 Absence of Injunction ....................................... 49
11. THE SELLER'S CONDITIONS PRECEDENT TO THE CLOSING ................... 49
11.1 Accuracy of Warranties; Compliance with Covenants ........... 50
11.2 Absence of Injunction ....................................... 50
11.3 Payment of Option Payments .................................. 50
11.4 Lessees' Rights of First Refusal ............................ 50
11.5 Lessees' Options to Purchase ................................ 50
11.6 Terminations or Assignments of Lease ........................ 50
11.7 Stock Transfers ............................................. 50
11.8 Mergers ..................................................... 51
12. EXTENSION .......................................................... 51
13. CLOSING ............................................................ 52
13.1 Closing Date ................................................ 52
13.2 Deliveries of the Seller at the Closing ..................... 52
13.3 Deliveries of the Buyer at the Closing ...................... 53
13.4 Deliveries of the BCC Parties at the Closing ................ 54
14. REMEDIES ........................................................... 54
15. ADJUSTMENTS ........................................................ 55
16. SURVIVAL OF PROVISIONS IN THE LEASE DOCUMENTS ...................... 55
17. MISCELLANEOUS ...................................................... 56
17.1 No Broker ................................................... 56
17.2 Voluntary Agreement ......................................... 56
17.3 Amendment of Existing Lease Documents ....................... 56
17.4 Waivers by Obligors ......................................... 57
17.5. Waivers ..................................................... 57
17.6 Negation of Partnership ..................................... 58
17.7 Entire Agreement ............................................ 58
17.8 Binding Effect; Assignment .................................. 58
17.9 Notices ..................................................... 59
17.10 Captions .................................................... 61
17.11 Joint Effort ................................................ 61
17.12 Counterparts ................................................ 61
17.13 Partial Invalidity .......................................... 61
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17.14 No Offer .................................................... 61
17.15 Amendments .................................................. 62
17.16 Exhibits .................................................... 62
17.17 Governing Law ............................................... 62
17.18 Third Parties ............................................... 62
17.19 Further Assurances .......................................... 62
17.20 No Solicitation ............................................. 63
17.21 Time of the Essence ......................................... 63
17.22 Rules of Construction ....................................... 63
17.23 Termination of this Agreement ............................... 63
17.24 Publicity ................................................... 63
EXHIBIT A DESCRIPTION OF THE LAND
EXHIBIT B PURCHASE PRICE ALLOCATION
EXHIBIT C CERTIFICATE REGARDING THE MEDITRUST PARTIES' REPRESENTATIONS AND
WARRANTIES
EXHIBIT D CERTIFICATE REGARDING THE BUYER'S REPRESENTATIONS AND WARRANTIES
EXHIBIT E CERTIFICATE REGARDING THE BCC PARTIES' REPRESENTATIONS AND WARRANTIES
EXHIBIT F FORM OF MASTER LEASE
EXHIBIT G OUTSTANDING AMOUNTS DUE TO SELLER UNDER LEASE DOCUMENTS
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